EXHIBIT 10.3
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
ULTRAPETROL (BAHAMAS) LIMITED,
as Buyer
AND
LAIF XI LTD.
as Seller
Dated as of March 21, 2006
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TABLE OF CONTENTS
PAGE
ARTICLE I PURCHASE OF OWNERSHIP INTEREST...........................1
1.1 Purchase of LAIF UP Offshore Shares by Buyer.....................1
1.2 Purchase Price...................................................2
1.3 Closing..........................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER.................2
2.1 Power and Authority..............................................2
2.2 Authorization and Enforceability.................................2
2.3 No Conflicts.....................................................3
2.4 No Consents......................................................3
2.5 Company Organization and Capitalization..........................3
2.6 Subsidiaries.....................................................4
2.7 Litigation; Observance of Agreements, Statutes and Orders........4
2.8 Title to Property; Leases........................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER..................8
3.1 Representations and Warranties of Buyer..........................8
3.2 Organization, Power and Authority................................8
3.3 Authorization and Enforceability.................................8
3.4 No Conflicts.....................................................8
3.5 Consents.........................................................9
3.6 Litigation; Observance of Agreements, Statutes and Orders........9
3.7 Investment Intent................................................9
3.8 Accredited Investor.............................................10
3.9 Brokers' or Finders' Fees.......................................10
3.10 Seller's Representation.........................................10
ARTICLE IV CERTAIN COVENANTS.......................................10
4.1 Cooperation.....................................................10
4.2 Conduct of Company Business.....................................10
4.3 Buyer's Access and Inspection...................................12
ARTICLE V PUT OPTION..............................................12
5.1 Buyer's Put Option..............................................12
5.2 Notification....................................................12
5.3 Exercise of Put Option..........................................12
5.4 Conditions Precedent to Exercise of Put Option..................13
ARTICLE VI CONDITIONS TO CLOSING...................................13
6.1 Conditions Precedent to Obligations of Buyer....................13
6.2 Conditions Precedent to Obligations of Seller...................14
ARTICLE VII INDEMNIFICATION.........................................14
7.1 Survival of Representations, Warranties and Indemnities.........14
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TABLE OF CONTENTS
(continued)
PAGE
7.2 Indemnification.................................................14
ARTICLE VIII MISCELLANEOUS...........................................15
8.1 Notices.........................................................15
8.2 Entire Agreement................................................16
8.3 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies.....................................16
8.4 Assignability; Binding Effect...................................16
8.5 Governing Law; Submission to Jurisdiction Waiver of
Jury Trial...................................................16
8.6 Counterparts....................................................17
8.7 Further Assurances..............................................17
8.8 Severability....................................................17
8.9 Exhibit and Schedules...........................................17
8.10 Captions........................................................18
8.11 Interpretation..................................................18
8.12 Third Parties...................................................18
8.13 Expenses........................................................18
8.14 Knowledge.......................................................18
8.15 Specific Performance............................................18
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Schedules
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Schedule I Defined Terms
Schedule 2.5 Shareholders Contracts
Schedule 2.6 Subsidiaries
Schedule 2.8(a) Assets
Schedule 2.8(b) Real Property/Leaseholds
Schedule 2.10 Indebtedness; Other Liabilities
Schedule 2.11 Material Contracts
Schedule 2.14 Employees
Schedule 2.15 Transactions with Affiliates
Exhibits
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Exhibit A Form of Note
Exhibit B Form of Pledge
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 21, 2006 (this
"Agreement"), by and between (i) ULTRAPETROL (BAHAMAS) LIMITED ("Ultrapetrol"),
a Bahamas corporation ("Buyer"), as buyer and (ii) LAIF XI LTD., a Bermudan
company ("Seller"), as seller.
W I T N E S S E T H
WHEREAS, Ultrapetrol is the record and beneficial owner of 12,499,881
shares of common stock, par value 0.01 per share, of UP Offshore (Bahamas)
Limited, a Bahamas corporation ("UP Offshore"), which represents, in the
aggregate, twenty-seven and seventy-eight on-hundredths of one percent (27.78%)
of the issued and outstanding capital stock in UP Offshore; and
WHEREAS, LAIF is the record and beneficial owner of 30,000,000 shares
of common stock, par value 0.01 per share, of UP Offshore, which represents, in
the aggregate, sixty-six and sixty-seven one-hundredths of one percent (66.67%)
of the issued and outstanding common stock in UP Offshore (the "LAIF UP Offshore
Shares");
WHEREAS, Seller desires to sell and transfer to Buyer the LAIF UP
Offshore Shares, and Buyer wishes to purchase the LAIF UP Offshore Shares, upon
the terms and subject to the conditions herein contained; and
WHEREAS, capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in Schedule I hereto.
NOW, THEREFORE, in consideration of the mutual covenants described
below and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto hereby covenant and agree as follows:
ARTICLE I
PURCHASE OF OWNERSHIP INTEREST
1.1 Purchase of LAIF UP Offshore Shares by Buyer.
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Upon the terms and subject to the conditions of this Agreement Seller
shall, at the Closing, sell and transfer the LAIF UP Offshore Shares to Buyer,
free and clear of any and all Liens, and Buyer shall purchase, the LAIF UP
Offshore Shares for the consideration provided for in Section 1.2, which shall
represent, immediately after Closing and the consummation of all of the other
transactions contemplated hereunder, sixty-six and sixty-seven one hundredths of
one percent (66.67%) of the issued and outstanding common stock of UP Offshore.
Seller and Buyer shall execute and deliver at the Closing all documentation
reasonably necessary to effect the sale and transfer of the LAIF UP Offshore
Shares as provided for in this Agreement.
1.2 Purchase Price.
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In consideration of the sale and transfer of the UP Offshore Shares as
set forth in Section 1.1, Buyer shall pay to Seller the sum of Forty-Eight
Million United States Dollars (US$48,000,000.00) (the "Purchase Price"), which
amount shall be payable as follows: At the Closing, Buyer shall issue to Seller
a promissory note (the "Note") in the form attached hereto as Exhibit A, in an
amount equal to the Purchase Price. The Note shall be due and payable upon the
earlier of (i) the initial public offering of the common stock of the Buyer on a
recognized stock exchange (the "IPO") and (ii) September 30, 2006. The Note
shall be non-interest-bearing and shall be secured by a first-ranking pledge
over the LAIF UP Offshore Shares, such pledge to be substantially in the form of
Exhibit B hereto.
1.3 Closing.
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Subject to satisfaction or waiver of the conditions set forth in
Article V, the sale and transfer of the LAIF UP Offshore Shares shall take place
on such date on or prior to March 24, 2006, as may be designated in writing on
not less five (5) days' prior notice from Buyer to Seller, at the offices of
Xxxxxx & Xxxxxx LLP, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at a
closing (the "Closing") at 10:00 a.m., local time, or, or such other place, time
or date as the parties may mutually agree in writing (such time and date being
referred to herein as the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Representations and Warranties of Seller. Seller hereby represents and
warrants as to the matters pertaining solely to itself and, to the best of its
Knowledge, as to UP Offshore, its Subsidiaries and to any other matter below, to
the Buyer that:
2.1 Power and Authority.
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Seller has the full right, power and authority to enter into this
Agreement and to transfer, convey and sell to Buyer at the Closing the LAIF UP
Offshore Shares. Seller is the sole owner of, and has good, valid, and
marketable title to the LAIF UP Offshore Shares, free and clear of any and all
Liens and, upon consummation of the purchase contemplated hereby, Buyer will
acquire from Seller good, valid and marketable title to the LAIF UP Offshore
Shares, free and clear of all Liens.
2.2 Authorization and Enforceability.
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The execution, delivery and performance of this Agreement has been duly
authorized by all necessary action on the part of Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by: (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally; and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
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2.3 No Conflicts.
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Neither the execution, delivery and performance of this Agreement nor
the consummation of any of the transactions contemplated hereunder will:
(a) conflict with or result in any violation of or constitute a breach
of any of the terms or provisions of, or result in the acceleration of any
obligation under, or constitute a default under any provision of, the articles
of incorporation or bylaws or other organizational documents of either Seller or
UP Offshore, or any mortgage, bond, indenture, agreement, franchise, license,
permit or other instrument or obligation to which either Seller or UP Offshore
is a party or subject or by which any of their respective assets or properties
may be bound except as contained in the agreements listed in Schedule 2.5;
(b) result in the creation of any Lien upon any of the assets or
properties of either Seller or UP Offshore; or
(c) violate any Legal Requirement against, affecting or binding upon,
The Seller or UP Offshore or upon any of their respective assets or properties.
2.4 No Consents.
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All consents, approvals or authorizations of, or registrations, filings
or declarations with, any Governmental Authority or any other Person, if any,
required in connection with the execution, delivery or performance by either
Seller of this Agreement or the transactions provided for herein have been or at
the Closing will have been obtained by such Seller and will be in full force and
effect.
2.5 Company Organization and Capitalization.
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(a) UP Offshore is a corporation, duly organized, validly existing and
in good standing under the laws of the Commonwealth of the Bahamas and is duly
qualified to do business and is in good standing in each jurisdiction in which
such qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
UP Offshore has the power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact. Other than the articles of incorporation and
the by-laws of UP Offshore and the Shareholders Agreement (the "Shareholders
Agreement") among the Buyer, the Seller and Comintra Enterprises Ltd. (which
shareholders agreement is being restated contemporaneously herewith to remove
the Seller as a party thereto) and agreements listed on Schedule 2.5, there are
no other agreements or documents to which UP Offshore or either Seller is a
party with respect to the governance or capitalization of UP Offshore,
(b) The authorized capital stock of UP Offshore consists solely of
60,000,000 shares of common stock, par value $0.01 and 20,000,000 shares of
preferred stock. As of the date hereof and as of the Closing Date, there are and
shall be 45,000,000 shares of common stock issued and outstanding as well as
3,000,000 shares of Series A preferred stock with a par value of $0.01 per share
issued and outstanding in favor of International Finance Corporation and such
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shares constitute all of the issued and outstanding shares of the capital stock
of UP Offshore. All such shares have been duly authorized, validly issued and
are fully paid and non-assessable. Upon consummation of the Closing, Seller will
sell to the Buyer sixty-six and sixty-seven one hundredths of one percent
(66.67%) of the issued and outstanding common stock of UP Offshore owned by the
Seller.
(c) Other than the Warrant Agreement, dated June 4, 2003 (scheduled
under Schedule 2.15), to the Seller's Knowledge, there are no outstanding
obligations, warrants, options or other rights to subscribe for or purchase from
UP Offshore, or other contracts or commitments providing for the issuance of or
the granting of rights to acquire, any equity interest in UP Offshore, or any
securities or other instruments convertible into or exchangeable for the
foregoing.
(d) Except as listed in Schedule 2.5 and except for the rights of Buyer
hereunder, no Person has any right of first refusal, preemptive right,
subscription right or similar right with respect to any stock, securities or
equity interest in UP Offshore.
2.6 Subsidiaries.
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(a) Exhibit 2.6 sets forth a complete and accurate organizational chart
of UP Offshore and all of its Subsidiaries, listing for each Subsidiary its
name, indicating its type of entity, the jurisdiction of its incorporation or
organization, and its ownership structure.
(b) Other than the Subsidiaries, there are no other corporations,
partnerships, joint ventures, associations or other entities in which UP
Offshore or any Subsidiary owns, of record or beneficially, any direct or
indirect equity or other interest or any right (contingent or otherwise) to
acquire the same. Neither UP Offshore nor any Subsidiary is a member of any
partnership nor is UP Offshore or any Subsidiary a participant in any joint
venture or similar arrangement.
(c) Each Subsidiary: (i) is duly organized, validly existing and in
good standing under the Laws of its jurisdiction of organization, (ii) has all
necessary power and authority to own, operate or lease the properties and assets
owned, operated or leased by such Subsidiary and to carry on its business as it
has been and is currently conducted by such Subsidiary, and (iii) is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary or desirable, other
than those jurisdictions as to which the failure to be so licensed, qualified or
in good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(d) All corporate actions taken by each Subsidiary have been duly
authorized and no Subsidiary has taken any action that in any respect conflicts
with, constitutes a default under or results in a violation of any provision of
its Certificate of Incorporation or By-laws (or similar organizational
documents).
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2.7 Litigation; Observance of Agreements, Statutes and Orders.
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(a) There are no actions, investigations, demands, suits or proceedings
pending or threatened against or affecting UP Offshore, any officer, director or
employee of UP Offshore or any property or business of UP Offshore, the validity
of this Agreement or the rights of Sellers to enter into this Agreement or
consummate the transactions contemplated hereby in any court or agency or before
any arbitrator of any kind or before or by any Governmental Authority, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) UP Offshore is not in default under or in violation of any term of
any agreement or instrument to which it is a party or by which it is bound, or
any Legal Requirement, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(c) As of the date hereof and as of the Closing Date, no officer,
director or employee of UP Offshore is or will be subject to any non-competition
agreement, restrictive covenant or any other agreement restricting such person's
ability to work for, provide services to, or otherwise participate in UP
Offshore's business as currently contemplated.
2.8 Title to Property; Leases.
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(a) UP Offshore has good and sufficient title to its owned personal
properties, tangible and intangible, and valid, binding and enforceable
leasehold interests in its leased personal properties that individually or in
the aggregate are Material, in each case free and clear of Liens other than in
respect of the mortgages on the vessels securing the indebtedness identified on
Schedule 2.10. All such personal property, other than vessels currently under
construction, is in working condition, ordinary wear and tear excepted. Such
properties constitute all of the personal properties necessary to operate UP
Offshore's business as currently conducted. All leasehold interests and
agreements of UP Offshore to such personal property are subsisting and
enforceable in accordance with their terms and, there does not exist thereunder
any default or event or condition which, after notice or lapse of time or both,
would constitute a default thereunder or which would have a Material Adverse
Effect on UP Offshore. Schedule 2.8(a) sets forth a brief description of all of
the assets of UP Offshore having a value in excess of Ten Thousand Dollars
($10,000).
(b) UP Offshore has good and marketable title to all of its owned real
property, if any, and valid, binding and enforceable leasehold interests in its
leased real property, if any, that individually or in the aggregate are
Material, in each case free and clear of all Liens. Schedule 2.8(b) sets forth a
description of all real property owned by UP Offshore. All leasehold interests
and agreements of UP Offshore to its real property are subsisting and, there
does not exist thereunder any default or event or condition which, after notice
or lapse of time or both, would constitute a default thereunder or which would
have a Material Adverse Effect on UP Offshore. UP Offshore enjoys peaceful and
undisturbed possession under its leases of real property. Schedule 2.8(b) sets
forth a description of all leasehold interests in real property held by UP
Offshore.
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2.9 Intellectual Property.
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The only Intellectual Property owned by UP Offshore is the common law
trademark of its name and the registered domain name for its internet website.
UP Offshore is the exclusive owner of its Intellectual Property free and clear
of any Liens. To the Knowledge of the Sellers, the rights of UP Offshore in the
Intellectual Property it owns do not conflict with or infringe on the rights of
any other Person, and the Sellers have not received any claim or written notice
from any Person to such effect.
2.10 Indebtedness; Other Liabilities.
--------------------------------
Schedule 2.10 sets forth a complete and correct statement of the
Indebtedness of UP Offshore as of the date hereof. UP Offshore is not in default
with respect to any such Indebtedness, or any instrument or agreement relating
thereto. UP Offshore does not have any Indebtedness or liability, absolute or
contingent, liquidated or unliquidated, whether due or to become due, which is
not reflected on Schedule 2.10.
2.11 Material Contracts.
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Schedule 2.11 sets forth a list of Material Contracts of UP Offshore as
of the date hereof. The Seller has made available to Buyer for its review a
correct and complete copy of each such Material Contract. With respect to each
such Material Contract: (i) such contract is legal, valid, binding, enforceable,
and in full force and effect, (ii) such contract will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby, and (iii) to
the Knowledge of Sellers, no party is in breach or default, and no event has
occurred which with notice or lapse of time or both would constitute a breach or
default, or permit termination, modification, or acceleration, under such
contract.
2.12 No Material Misstatements or Omissions; Disclosure.
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No representation or warranty of the Seller in this Agreement contains
or will contain any untrue statement of a material fact nor shall such
representations and warranties taken as a whole omit any statement necessary in
order to make any material statement contained herein not misleading. There is
no fact that has not been disclosed hereunder to Buyer that might reasonably be
expected to have or result in a Material Adverse Effect on or with respect to UP
Offshore.
2.13 Broker's or Finder's Fees.
--------------------------
No broker, finder or similar agent has been employed by or on behalf of
the Seller, and no person or entity with which the Seller has had any dealings
or communications of any kind is entitled to any brokerage commission, finder's
fee or any similar compensation, in connection with this Agreement or the
transactions contemplated hereby.
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2.14 Employees and Labor Relations.
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There is no labor strike, work stoppage or slowdown, picketing,
boycott, lockout or other labor dispute either pending or threatened, against UP
Offshore or affecting its business or which would in any way interfere with or
impair in any Material respect the operation or the conduct of UP Offshore's
business. UP Offshore is in compliance in all Material respects with all
applicable federal, state, and local laws respecting employment, fair employment
practices and fair labor standards, including, without limitation, race, age,
sex, religion, color, national origin, disability and sexual orientation.
Schedule 2.14 sets forth a list of all employees of UP Offshore.
2.15 Affiliate Transactions.
-----------------------
Schedule 2.15 contains an accurate and complete listing of all
contracts, leases, agreements or understandings, whether written or oral, with
or on behalf of any Affiliate of UP Offshore to which UP Offshore is a party or
is otherwise bound. None of such contracts, leases, agreements or understandings
contain terms that are more favorable than terms that would be obtainable from a
Person other than an Affiliate or that have been entered into by UP Offshore
other than in the ordinary course of business. Except as disclosed on Schedule
2.15, UP Offshore does not have any agreement, arrangement or understanding with
any of its Affiliates, the cancellation or termination of which would have a
Material Adverse Effect on UP Offshore.
2.16 Compliance with Laws.
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UP Offshore is in Material compliance with all Legal Requirements and
UP Offshore has not received notice of any complaint or order alleging any
Material non-compliance by UP Offshore with respect to any such Legal
Requirements.
2.17 Environmental Matters.
----------------------
Seller has no Knowledge of any claim and has not received any notice of
any claim, and no proceeding has been instituted raising any claim against UP
Offshore or any of its properties now or formerly owned, leased or operated by
it or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Seller has no Knowledge of any
facts which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to properties now or formerly owned, leased or operated by UP
Offshore or to other assets or their use, except, in each case, such as could
not reasonably be expected to result in a Material Adverse Effect. UP Offshore
has not stored any Hazardous Materials on properties now or formerly owned,
leased or operated by it other than in the ordinary course of business nor has
it disposed of any Hazardous Materials in a manner contrary to any Environmental
Laws in each case in any manner that could reasonably be expected to result in a
Material Adverse Effect. All buildings on all real properties now owned, leased
or operated by UP Offshore are in compliance with applicable Environmental Laws,
except where failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
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2.18 Securities Law.
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In reliance on the investment representations contained in Sections 3.7
and 3.8, the offer, issuance, sale and delivery of the UP Offshore Shares, as
provided in this Agreement, are exempt from the registration requirements of the
Securities Act and all applicable state securities laws, and are otherwise in
compliance with such laws. Neither UP Offshore nor any Person acting on its
behalf has taken or will take any action which might subject the sale or
transfer of the UP Offshore Shares to the registration requirements of Section 5
of the Securities Act.
2.19 Registration Under Exchange Act.
--------------------------------
UP Offshore has not registered any class of its securities pursuant to
Section 12 of the Exchange Act and no such registration is required by the
Exchange Act. UP Offshore is not under any obligation to register, under the
Securities Act, any of its presently outstanding securities or any securities
which may hereafter be issued.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Representations and Warranties of Buyer.
----------------------------------------
Buyer hereby represents and warrants to The Seller that:
3.2 Organization, Power and Authority.
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Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the Bahamas, and is duly qualified to do business and
is in good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Buyer has the power
and authority to transact the business it transacts and Buyer has the power and
authority to execute and deliver this Agreement and to perform the provisions
hereof.
3.3 Authorization and Enforceability.
---------------------------------
The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate action on the part of Buyer, and
constitutes the legal, valid and binding obligation of Buyer enforceable against
Buyer in accordance with its terms, except as such enforceability may be limited
by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally; and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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3.4 No Conflicts.
-------------
Neither the execution, delivery and performance of this Agreement nor
the consummation of any of the transactions contemplated hereunder will:
(a) conflict with or result in any violation of or constitute a breach
of any of the terms or provisions of, or result in the acceleration of any
obligation under, or constitute a default under any provision of, the
certificate of incorporation, the by-laws or other organizational document of
Buyer, or any mortgage, bond, indenture, agreement, franchise, license, permit
or other instrument or obligation to which Buyer is a party or subject or by
which any of its assets or properties may be bound; or
(b) violate any Legal Requirement against, affecting or binding upon,
Buyer or upon any of its assets or properties.
In addition to the Articles of Incorporation and By-Laws of UP
Offshore, regarding any document or matter listed in any Schedule under Article
2 hereof, Buyer (i) acknowledges having received and reviewed such document or
matter, (ii) has taken such document or matter into consideration in entering
into this Agreement and (iii) Seller has no further obligation under any such
document or matter.
3.5 Consents.
---------
All consents, approvals or authorizations of, or registrations, filings
or declarations with, any Governmental Authority or any other Person, if any,
required in connection with the execution, delivery or performance by Buyer of
this Agreement or the transactions provided for herein have been or at the
Closing will have been obtained by Buyer and will be in full force and effect.
3.6 Litigation; Observance of Agreements, Statutes and Orders.
----------------------------------------------------------
(a) There are no actions, investigations, demands, suits or proceedings
pending or, to the Knowledge of Buyer, threatened against or affecting Buyer
that, individually or in the aggregate, could reasonably be expected materially
to impair the ability of Buyer to perform its obligations under this Agreement
or affect the validity or enforceability of this Agreement.
(b) Buyer is not in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority or
is in violation of any applicable law, ordinance, rule or regulation of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected materially to impair the ability of
Buyer to perform its obligations under this Agreement or affect the validity or
enforceability of any of this Agreement.
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3.7 Investment Intent.
------------------
Buyer is acquiring the LAIF UP Offshore Shares for its own account, for
investment purposes and not with a view to its distribution within the meaning
of the Securities Act and the rules and regulations promulgated thereunder.
Buyer will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of any of the LAIF UP Offshore Shares (or
solicit any offers to buy, purchase, or otherwise acquire any of the LAIF UP
Offshore Shares), except in compliance with the Securities Act.
3.8 Accredited Investor.
--------------------
Buyer is an "accredited investor" (as that term is defined in Rule 501
of Regulation D under the Securities Act) and by reason of its business and
financial experience, it has such Knowledge, sophistication and experience in
business and financial matters as to be capable of evaluating the merits and
risks of the prospective investment, is able to bear the economic risk of such
investment and is able to afford a complete loss of such investment. Buyer has
had an opportunity to investigate the business and financial condition of Seller
and UP Offshore, to ask questions of Seller and UP Offshore and to obtain such
information as Buyer requires from Seller and UP Offshore.
3.9 Brokers' or Finders' Fees.
--------------------------
No broker, finder or similar agent has been employed by or on behalf of
Buyer, and no person or entity with which Buyer has had any dealings or
communications of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation, in connection with this Agreement or the
transactions contemplated hereby.
3.10 Seller's Representations.
-------------------------
Buyer has no knowledge of any representation or warranty of Seller set
forth in Article II that is not true and correct in all material respects.
3.11 Warrant Agreement.
------------------
Buyer acknowledges that the Purchase Price has been agreed between
Buyer and Seller taking into consideration the full effect, if any, that the
Warrant Agreement dated June 4, 2003 may have, now or in the future, on the
number of issued and outstanding common stock of UP Offshore, and that the Buyer
has no claim against the Seller in connection with the Warrant Agreement, now or
in the future.
ARTICLE IV
CERTAIN COVENANTS
4.1 Cooperation.
------------
Each of the parties shall use its respective reasonable best efforts
and will cooperate with each other to secure all necessary consents, approvals,
authorizations,
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assumptions and waivers from third parties as shall be required in order to
enable the transactions contemplated hereby to be effected, and each of the
parties shall otherwise use its respective reasonable best efforts to cause the
consummation of such transactions in accordance with the terms and conditions
hereof and to cause all conditions contained in this Agreement over which it has
control to be satisfied.
4.2 Conduct of Company Business.
----------------------------
After the date of this Agreement and through the Closing Date, except
with the consent of Buyer, Seller agrees to, and after the Closing Date through
the date that is the earlier of (i) the exercise of Buyer's Put Option, and (ii)
satisfaction of all obligations under the Note, except with the written consent
of the Seller, Buyer agrees to, and shall cause UP Offshore, to:
(a) operate in the ordinary course of business;
(b) refrain from making or causing to be made any change in the
certificate of incorporation, bylaws and any other organizational documents of
UP Offshore;
(c) not acquire by merging or consolidating with, or agreeing to merge
or consolidate with, or purchase substantially all of the stock or assets of, or
otherwise acquire, any business or any corporation, partnership, association or
other business organization or division thereof;
(d) not enter into any partnership, joint venture or similar type of
arrangement;
(e) not issue or agree to issue any additional shares of the capital
stock of UP Offshore or ownership interests or other equity interests or
securities convertible into or exchangeable for or other rights with respect to
ownership interests or other equity interests of UP Offshore;
(f) not declare or pay any dividends or make any other distribution in
cash or property on its capital stock or purchase or redeem, directly or
indirectly, any shares of its capital stock;
(g) except as otherwise provided by law or GAAP, refrain from making or
causing to be made any change in the accounting methods, principles or practices
of UP Offshore;
(h) not enter into, terminate or modify any contract, transaction, or
commitment, other than in the ordinary course of business or pursuant to
presently existing plans, arrangements or agreements other than charters in
respect of any vessel owned, directly or indirectly, by UP Offshore or advances
to or settlements with shipyards for vessels currently under construction;
(i) not: (a) sell, transfer, license, lease or otherwise dispose of or
encumber any of its properties or assets, other than in the ordinary course of
business or pursuant to presently existing plans, arrangements or agreements
disclosed herein or in a schedule hereto; (b) cancel
11
any debt or waive or compromise any claim or right, except in the ordinary
course of business or pursuant to presently existing plans, arrangements or
agreements disclosed herein or in a schedule hereto; (c) enter into any
employment agreement or grant any increase in the compensation of officers or
employees, (d) make any capital expenditure or commitment, other than pursuant
to presently existing plans, arrangements or agreements disclosed herein or in a
schedule hereto; (e) establish any new Plan; or (f) incur, assume or guarantee
any Indebtedness which will constitute a liability of UP Offshore as of the
Closing Date other than such Indebtedness incurred in the ordinary course of
business and not to exceed at any one time U.S.$2,000,000
(j) Buyer will not modify the UP Offshore Amended and Restated Common
Shareholders Agreement dated as of December 5, 2003 by and among Seller, Buyer,
Comintra and UP Offshore (the "Common Shareholders Agreement") without Seller's
consent until all obligations under the Note have been satisfied. Buyer and
Seller agree to undertake all actions required by Seller to accede to such
Common Shareholders Agreement in the event the Pledge is exercised.
4.3 Buyer's Access and Inspection.
------------------------------
The Seller shall cause UP Offshore to allow Buyer and its authorized
representatives reasonable access from and after the date hereof and prior to
the Closing Date to the properties, books, Material Contracts, and records of UP
Offshore for the purpose of making such investigation as Buyer may reasonably
desire, and The Seller shall cause UP Offshore to furnish Buyer such information
concerning UP Offshore and its affairs as Buyer may reasonably require.
ARTICLE V
PUT OPTION
5.1 Buyer's Put Option.
-------------------
Seller hereby grants to Buyer an irrevocable option (the "Put Option")
to cause Seller (or a wholly owned subsidiary of Seller to be designated by
Seller) to purchase from Buyer all, but not less than all, of the LAIF UP
Offshore Shares for the Purchase Price. The Purchase Price may be paid in full
by Seller surrendering the Note to Buyer. The Put Option shall commence on the
first Business Day following the Closing and shall terminate upon the earlier of
(i) the IPO, (ii) September 30, 2006, and (iii) satisfaction of all obligations
under the Note.
5.2 Notification.
-------------
From and after the date hereof and prior to the Closing Date, Seller
shall promptly notify Buyer at any time that Seller becomes aware that any
representation or warranty made by Seller in or pursuant to this Agreement is
untrue or inaccurate in any Material respect and shall promptly notify Buyer of
any Material Adverse Effect on UP Offshore and of any governmental complaints,
investigations, hearings or proceedings which would have a Material Adverse
Effect on UP Offshore. Without limiting the generality of the foregoing, Seller
shall promptly notify
12
Buyer of any of the events, conditions or circumstances described in Sections
2.7(a), (b) and (c), in each case without regard to any qualification as to
Material Adverse Effect.
5.3 Exercise of Put Option.
-----------------------
The Put Option shall be exercised by the Buyer's delivery to Seller of
a written notice no later September 23, 2006 of the Buyer's intent to cause
Seller (or its designee) to purchase all, but not less than all, of the LAIF UP
Offshore Shares (the "Put Option Notice"). Upon the exercise of the Put Option,
Seller (or its designee) shall purchase, and the Buyer shall sell no earlier
than seven days after the date of the Put Option Notice and no later than
September 30, 2006 (the "Put Option Closing Date"), the LAIF UP Offshore Shares,
free and clear of any Liens, at which time the Note shall be cancelled and the
certificates for the LAIF UP Offshore Shares shall be delivered to Seller,
together with such instruments of transfer as are necessary to vest title to the
LAIF UP Offshore Shares in Seller. The Seller and Buyer each hereby agree that
in the event the Buyer exercises the Put Option, the Buyer and Seller shall
undertake all actions required by Seller to accede to the Common Shareholders
Agreement.
5.4 Conditions Precedent to Exercise of Put Option.
-----------------------------------------------
Buyer and Seller hereby agree that it shall be a condition precedent to
the exercise of the Put Option that (i) the IPO process shall have been
terminated by mutual agreement of Buyer's shareholders or, in any event, the IPO
shall not have occurred by September 15, 2006, (ii) no breach of the
representations made by the Buyer hereunder shall have occurred.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of Buyer.
---------------------------------------------
The obligation of Buyer to purchase the LAIF UP Offshore Shares
pursuant to this Agreement is subject to the fulfillment, prior to or at the
Closing, of each of the following conditions (any or all of which may be waived
in whole or in part by Buyer):
(a) all representations and warranties made by Seller to Buyer shall be
true and correct in all material respects as of the date hereof and as of the
time of the Closing with the same effect as though made again at and as of that
time;
(b) Seller shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by Seller prior to or at the Closing;
(c) there shall be no actions, suits or proceedings pending or, to
Seller's Knowledge, threatened against or affecting Seller or UP Offshore or any
property of UP Offshore in any court or before any arbitrator of any kind or
before or by any Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
13
(d) all notifications, consents, authorizations, approvals and
clearances from the Board of Directors of Buyer and each Governmental Authority
and any other Person required to be made or obtained, in connection with the
transactions provided for in this Agreement shall have been made or obtained on
terms satisfactory to Buyer;
(e) all proceedings to be taken in connection with the transactions
contemplated by this Agreement and all documents incident thereto shall be
reasonably satisfactory in form and substance to Buyer and its counsel, and
Buyer shall have received copies of all such documents and other evidence as it
or its counsel may reasonably request in order to establish the consummation of
such transactions and the taking of all proceedings in connection therewith;
(f) since the date of this Agreement there shall have been no Material
Adverse Effect to UP Offshore; and
(g) Seller shall have delivered, to Buyer, stock certificates
representing the LAIF UP Offshore Shares, accompanied by powers duly endorsed or
executed in blank, and all other documents necessary to transfer to Buyer the
LAIF UP Offshore Shares free and clear of any Lien.
6.2 Conditions Precedent to Obligations of Seller.
----------------------------------------------
The obligation of Seller to sell and transfer the LAIF UP Offshore
Shares pursuant to this Agreement is subject to the fulfillment, prior to or at
the Closing, of each of the following conditions (any or all of which may be
waived in whole or in part by Seller):
(a) all representations and warranties of Buyer to Seller shall be true
and correct in all material respects as of the date hereof and at and as of the
time of the Closing with the same effect as though those representations and
warranties had been made at and as of that time;
(b) Buyer shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by Buyer prior to or at the Closing;
(c) Buyer shall have duly executed and delivered the Note to Seller as
set forth in Section 1.2 hereof; and
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ARTICLE VII
INDEMNIFICATION
7.1 Survival of Representations, Warranties and Indemnities.
--------------------------------------------------------
The representations and warranties of Seller and Buyer contained in
Articles II and III, respectively, shall survive the Closing for a period of
three (3) years.
7.2 Indemnification.
----------------
(a) Seller agrees to indemnify, defend and hold harmless Buyer, its
Affiliates and, if applicable, their respective directors, officers,
shareholders, employees, attorneys, accountants, agents and representatives and
their heirs, successors and assigns from and against any and all Damages based
upon, arising out of or otherwise in respect of (i) any inaccuracy in or any
breach of any representation or warranty, of Seller contained in this Agreement
or (ii) the failure of Seller to perform or observe fully any covenant,
agreement or provision to be performed or observed by Seller pursuant to this
Agreement.
(b) Buyer agrees to indemnify, defend and hold harmless Seller, its
Affiliates and, if applicable, its respective directors, officers, shareholders,
employees, attorneys, accountants, agents and representatives and their heirs,
successors and assigns from and against any and all Damages based upon, arising
out of or otherwise in respect of (i) any inaccuracy in or any breach of any
representation or warranty, of Buyer contained in this Agreement, or (ii) the
failure of Buyer to perform or observe fully any covenant, agreement or
provision to be performed or observed by Buyer pursuant to this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices.
--------
Any notice or other communications hereunder must be in writing and
shall be deemed to have been duly given and received on the day on which it is
served by personal delivery upon the party for whom it is intended, on the third
Business Day after it is mailed by registered or certified mail, return receipt
requested, on the Business Day after it is delivered to a national courier
service for next day delivery addressed to the party for whom it is intended, or
on the Business Day on which it is sent by facsimile; provided that the telecopy
is promptly confirmed by telephone confirmation thereof, to the person at the
address set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
To Buyer:
Ultrapetrol (Bahamas) Limited
Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxxxx
Xxxx Xxx Xx.
15
Nassau, Bahamas
X.X. Xxx XX-00000
Xxxx: Assistant Secretary
Facsimile: (000) 000-0000
To Seller:
LAIF XI Ltd.
00 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00
Bermuda
Attn: Xxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
EMP Global L.L.C.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxx/Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
8.2 Entire Agreement.
-----------------
This Agreement (including the Exhibit and Schedules attached hereto or
referred to herein) contains the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements, written or oral, with respect thereto.
8.3 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies.
---------------------------------------------------------------------------
This Agreement may be amended, superseded, cancelled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of either Seller or Buyer in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of either Seller or Buyer of any such right, power or
privilege, or any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
8.4 Assignability; Binding Effect.
------------------------------
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement and the rights and obligations of the parties hereunder
shall not be assignable by a party hereto without the prior written consent of
the other party.
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8.5 Governing Law; Submission to Jurisdiction Waiver of Jury Trial.
---------------------------------------------------------------
(a) THE INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
CONTROLLED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(b) ANY JUDICIAL PROCEEDING BROUGHT WITH RESPECT TO THIS AGREEMENT MUST
BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK OR ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK LOCATED IN
THE CITY OF NEW YORK, AND, EACH PARTY: (I) ACCEPTS UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT, AND
AGREES TO BE BOUND BY ANY FINAL, NON-APPEALABLE JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT; (II) IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM PROVIDED, HOWEVER,
THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS
SECTION 7.5 (B) AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE
JURISDICTION OF SAID COURTS OR THE STATE OF NEW YORK OTHER THAN FOR SUCH
PURPOSE; AND (III) AGREES THAT PROCESS IN ANY SUCH ACTION, IN ADDITION TO ANY
OTHER METHOD PERMITTED BY LAW, MAY BE SERVED UPON IT BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY AT THE ADDRESS
DESIGNATED BY SUCH PARTY IN SECTION 7.1 HEREOF, AND SUCH SERVICE SHALL BE DEEMED
EFFECTIVE AS IF PERSONAL SERVICE HAD BEEN MADE UPON IT WITHIN NEW YORK COUNTY.
(c) THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING
OUT OF, RELATED TO OR IN CONNECTION WITH THIS AGREEMENT.
8.6 Counterparts.
-------------
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one and
the same instrument.
8.7 Further Assurances.
-------------------
Each of Seller and Buyer shall, at the request of the other party, at
any time and from time to time following the Closing promptly execute and
deliver, or cause to be executed and delivered, all such further instruments and
take all such further action as each party may reasonably request to confirm or
carry out the provisions and intent of this Agreement.
17
8.8 Severability.
-------------
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
8.9 Exhibit and Schedules.
----------------------
All Schedules and Exhibits attached hereto are hereby incorporated in
and made a part of this Agreement as if set forth in full herein. All references
herein to the Exhibits and Schedules shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
8.10 Captions.
---------
The article and section titles or captions contained in this Agreement
or in any Schedule or Exhibit attached hereto or referred to herein are for
convenience only, shall not be deemed a part of this Agreement and shall not
affect the meaning or interpretation of this Agreement. All references herein to
Sections shall be deemed references to such parts of this Agreement, unless the
context shall otherwise require.
8.11 Interpretation.
---------------
The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. The terms "Dollars" and
"$" shall mean United States dollars. Personal pronouns, when used in this
Agreement, whether in the masculine, feminine or neuter gender, shall include
all other genders, and the singular shall include the plural, and vice versa.
8.12 Third Parties.
--------------
Except as specifically set forth or referred to herein, nothing herein
expressed or implied is intended or shall be construed to confer upon or give to
any Person other than the parties hereto and their successors or assigns and the
beneficiaries of contractual indemnification expressly set forth herein, any
rights or remedies under or by reason of this Agreement.
8.13 Expenses.
---------
Buyer shall bear any and all transfer taxes in connection with the sale
and transfer of the LAIF UP Offshore Shares to Buyer. Except as otherwise
provided for in this Agreement, Seller, on the one hand, and Buyer, on the other
hand, shall each pay its respective costs and expenses incurred by each of them
or on their behalf in connection with the negotiation, execution and delivery of
this Agreement and the transactions contemplated hereby, including, without
limitation, the fees and expenses of their own financial consultants,
accountants and counsel.
18
8.14 Knowledge.
----------
As used in this Agreement, "Knowledge" means the actual knowledge of
the subject entity.
8.15 Specific Performance.
---------------------
The parties agree and acknowledge that money damages are not an
adequate remedy for violations of this Agreement and each of Seller and Buyer
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance of this Agreement.
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
ULTRAPETROL (BAHAMAS) LIMITED
By: /s/ Xxxxxxx Xxxxxxxx R.
------------------------------
Name: Xxxxxxx Xxxxxxxx R.
Title: Director
LAIF XI LTD.
By: /s/ Xxxxx Xxxxxx
------------------------------
Name: Xxxxx Xxxxxx
Title: Attorney-in-Fact
SCHEDULE I
----------
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 50% or more of any class of voting or equity interests of UP
Offshore or any Subsidiary or any Person of which UP Offshore and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
50% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of UP Offshore.
"Agreement" has the meaning set forth in the preamble.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City are required or authorized to be
closed.
"Buyer" has the meaning set forth in the preamble.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" has the meaning set forth in Section 1.3.
"Closing Date" has the meaning as set forth in Section 1.3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Damages" means any and all losses, liabilities, obligations, demands,
claims, actions, cause of actions, costs, expenses, damages and judgments,
including, without limitation, reasonable attorneys' fees and expenses.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental restrictions relating
to pollution or the protection of the environment including, but not limited to,
ambient air, surface water, ground water, navigable waters, waters of the
contiguous zone, ocean waters and international waters or the release of any
materials into the environment, including but not limited to those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Financial Statements" has the meaning set forth in Section 2.11
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America, consistently applied except as
otherwise disclosed.
"Governmental Authority" means with respect to any Person,
(a) the government of
(i) the United States of America or any state or other
political subdivision thereof; or
(ii) any jurisdiction in which such Person or any of its
Subsidiaries conducts all or any part of its business, or which
asserts jurisdiction over any properties of such Person or any of
its Subsidiaries; or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
2
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (f) hereof.
3
Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Indemnified Party" has the meaning set forth in Section 7.3.
"Indemnifying Party" has the meaning set forth in Section 7.3.
"IPO" has the meaning set forth in Section 1.2.
"Intellectual Property" means all of the following: patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, tradenames, tradestyles, patent and trademark applications and
licenses and rights thereunder, and all other rights under any of the foregoing,
all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to xxx for past,
present, and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill, customer and other lists,
in whatever form maintained; and trade secret rights, copyright rights, patent
rights, rights in works of authorship, and contract rights relating to computer
software programs, in whatever form created or maintained.
"Intellectual Property Rights" means the rights or interest of any
Person in or to any Intellectual Property.
"Legal Requirement" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements of Governmental Authorities.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance or rights of others, or any
interest or title of any vendor, lessor, lender or other secured party to or of
such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person
(including in the case of stock, stockholder agreements, voting trust agreements
and all similar arrangements).
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of UP Offshore.
"Material Adverse Effect" means with respect to a Person, a material
adverse effect on (a) the business, operations, affairs, financial condition,
assets, properties or prospects of such Person and its Subsidiaries taken as a
whole, or (b) the ability of such Person to perform its obligations under this
Agreement, or (c) the validity or enforceability of this Agreement.
"Material Contract" means:
4
(i) any agreement for the lease of personal property to or from
UP Offshore providing for lease payments in excess of
[$10,000] per annum;
(ii) any agreement for the purchase or sale of raw materials,
commodities, supplies, products, or other personal property,
or for the furnishing or receipt of services, the
performance of which will extend over a period of more than
one year or involve consideration in excess of [$10,000];
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement under which UP Offshore has created, incurred,
assumed, or guaranteed any indebtedness for borrowed money,
or any capitalized lease obligation, in excess of [$10,000]
or under which it has granted a Lien with respect to any of
its assets;
(v) any collective bargaining agreement;
(vi) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing
annual compensation in excess of [$50,000]; and
(vii) any other agreement the performance of which involves
consideration in excess of [$10,000].
"Notice of Claim" has the meaning set forth in Section 7.3.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or any other
company or entity or a government or agency or political subdivision thereof.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA.
"Preferred Stock" means any class of capital stock or other equity
interests of a Person that is preferred over any other class of capital stock or
equity interests of such Person as to the payment of dividends or the payment of
any amount upon liquidation or dissolution of such Person.
"Purchase Price" has the meaning set forth in Section 1.2.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Seller" has the meaning set forth in the preamble.
"Shareholders Agreement" has the meaning set forth in Section 2.5(a).
5
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership, limited liability
company or joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership, limited
liability company or joint venture can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of UP Offshore.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Taxes" means (A) all income taxes (including any tax on or based upon
net income, gross income, income as specially defined, earnings, profits or
selected items of income, earnings or profits) and all gross receipts, sales,
use, ad valorem, transfer, franchise, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property or windfall profits
taxes, alternative or add-on minimum taxes, customs duties and other taxes of
any kind whatsoever, together with all interest and penalties, additions to tax
and other additional amounts imposed by any taxing authority (domestic or
foreign) on such entity, and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of being
a "transferee" (within the meaning of Section 6901 of the Code or any other
applicable law) of another entity, a member of an affiliated or combined group,
a contract or otherwise.
"UP Offshore Shares" has the meaning set forth in the second recital.
6
SCHEDULE 2.5
SHAREHOLDERS CONTRACTS
1. Amended and Restated Common Subscription Agreement dated as of December 5,
2003 by and among Buyer, Seller, Comintra and UP Offshore.
2. Amended and Restated Common Shareholders Agreement, dated as of December 5,
2003 by and among, Buyer, Seller, Comintra and UP Offshore.
3. Preference Shareholders Agreement, dated June 24, 2003 by and among IFC,
Seller, Buyer, Ultrapetrol, Comintra and UP Offshore.
4. Preference Subscription Agreement, dated as of June 24, 2003 by and between
IFC and UP Offshore and the Warrant Agreement, dated June 4, 2003.
5. Warrant Agreement dated June 4, 2003 between UP Offshore (Bahamas) Ltd. and
Ultrapetrol (Bahamas) Ltd.
SCHEDULE 2.6
SUBSIDIARIES
-----------------------
|UP Offshore (Bahamas)|
| Ltd. |----------------------
| (Bahamas) | |
----------------------- |
| |
|-------------------|---------|-------------------| |
100% | 100% | | 100% | |0.01%
\|/ \|/ | \|/ |
---------------------- --------------- | 1% --------------------- |
|UP Offshore (Panama)| | UP Offshore | |------- |UP Offshore Uruguay| |
| S.A. | | (Holdings) | | | S.A | |
| (Panama) | | Ltd. | | | (Uruguay) | |
---------------------- --------------- | --------------------- |
| | |
|----------------|-----------------|-------------------| |--------------------------|
100% | 100% | 100% | | 100% | 99% 99.99% |
\|/ \|/ \|/ \|/ \|/ \|/
-------------------- ----------------- ---------------- ------------------ ----------------------- -------------------
|Pampero Navigation| |Packet Maritime| |Padow Shipping| |UP Offshore (UK)| |Agriex Agenciamentos,| |UP Offshore Apoio|
| Inc. | | Inc. | | Inc. | | Ltd. | | Afretamentos e | | Maritimo Ltda. | ---
| (Panama) | | (Panama) | | (Panama) | |(United Kingdom | |Apoio Maritimo Ltda. | | (Brazil) | |
-------------------- ----------------- ---------------- ------------------ | (Brazil) | ------------------ |
| | ----------------------- | | |
| | | | |
| | ----------------- | |
\|/ \|/ \|/ \|/ \|/
----------------- ----------------- --------------- ------------------- -----------------
| UP XXXXXXXXX | | UP SAFIRA | |UP TOPAZIO + | |UP Offshore Apoio| |UP AGUA-MARINHA|
| FMV: $24 | | FMV: $24 | | 2 PSV TBN | | Maritimo | | FMV: $24 |
|Balance:[$28.4 | |Balance: $24.8 | | FMV: $72 | | (Panama) Inc. | | Balance: $14.9|
----------------- ----------------- | FREE | | (Panama) | | |
--------------- ------------------- -----------------
1 Agriex Agenciamentos, Afretamentos e Apoio Maritimo Ltda. Brasil
2 Packet Maritime Inc. Panama
3 Padow Shipping Inc. Panama
4 Pampero Navigation Inc Panama
5 UP Offshore (Holdings) Ltd Bahamas
6 UP Offshore (Panama) SA Panama
7 UP Offshore (UK) Ltd. UK
0 XX Xxxxxxxx Xxxxx Xxxxxxxx (Xxxxxx) Inc. Panama
9 UP Offshore Apoio Maritimo Ltda. Brasil
10 UP Offshore Uruguay S.A. Uruguay
SCHEDULE 2.8(a)
ASSETS
VESSEL NAME FLAG OWNER YR BUILT
1 UP XXXXXXXXX PANAMA PACKET MARITIME INC. 2005
2 UP SAFIRA PANAMA PADOW SHIPPING INC. 2005
3 UP AGUA-MARINHA BRASIL UP OFFSHORE APOIO MARITIMO LTDA. 2005
4 UP TOPAZIO BRASIL UP OFFSHORE APOIO MARITIMO LTDA. est 2006
5 EI 483 BRASIL UP OFFSHORE APOIO MARITIMO LTDA. est 2006
6 EI 483 BRASIL UP OFFSHORE APOIO MARITIMO LTDA. est 2007
LOA M BEAM M DEPTH M GRT NRT HP CLASSIFICATION
1 75.78 16.6 7.8 2,919 1,371 3,418 LLOYD'S REGISTER
2 75.78 16.6 7.8 2,919 1,371 3,418 LLOYD'S REGISTER
3 75.78 16.6 7.8 2,927 1,371 3,418 DET NORSKE VERITAS
4 75.78 16.6 7.8 2,927 1,371 3,418 DET NORSKE VERITAS
5 75.78 16.6 7.8 2,927 1,371 3,418 DET NORSKE VERITAS
6 75.78 16.6 7.8 2,927 1,371 3,418 DET NORSKE VERITAS
2
SCHEDULE 2.8(b)
REAL PROPERTY/LEASEHOLDS
EDIFICIO LEBLON OFFICE TOWER
XXXXXXX XXXXXXX XX XXXXX XX 0000
XXX XX XXXXXXX, XXXXXX
UP OFFSHORE APOIO MARITIMO LTDA. / RENTAL CONTRACT OF SUITE 301 - OWNER: XXXXX
XXXXXXX XXXXXXX XX XXXXXXXXX
Term: 30 months
Starts: January 6, 2004
End: July 5, 2006
Rent: R$ 4,500 (Brazilian Reais four thousand and five hundred) payable monthly
Penalty on rent due: 10% on balance due
% interest on rent due (after 30 days): 1% (monthly) (adjusted by inflation)
Rent is reviewed on a yearly basis. UP Offshore is to pay following expenses:
electricity, natural gas, tap water, etc.
UP OFFSHORE APOIO MARITIMO LTDA. / RENTAL CONTRACT FOR SUITE 302 - OWNER:
XXXXXXX XXXX XXXXXXX XX XXXXXXXXX
Term: 30 months
Starts: January 6, 2004
End: July 6, 2006
Rent: R$ 2,500 (Brazilian Reais two thousand and five hundred) payable monthly
Penalty on rent due: 10% on balance due
% interest on rent due (after 30 days): 1% (monthly) (adjusted by inflation)
Rent is reviewed on a yearly basis. UP Offshore is to pay following expenses:
electricity, natural gas, tap water, etc.
UP OFFSHORE APOIO MARITIMO LTDA. / RENTAL CONTRACT OF SUITES 304 - 305 - OWNER
XXXXX XXXXXXXXX XXXXXXXXX
Term: 30 months + 30 months automatic extension except prior notice
Starts: January 15, 2004
End: June 15, 2006
Rent: R$ 5,400 (Brazilian Reais five thousand and four hundred) payable monthly
as a total for both offices
Penalty on rent due: 10% on balance due
% interest on rent due (after 30 days): 1% (monthly) (adjusted by inflation)
3
UP OFFSHORE APOIO MARITIMO LTDA. / RENTAL CONTRACT FOR SUITE 303 - OWNER: XXXXX
XXXXX BOGGISS
Term: 30 months
Starts: January 6, 2004
End: July 6, 2006
Rent: R$ 2,500 (Brazilian Reais two thousand and five hundred) payable monthly
Penalty on rent due: 10% on balance due
% interest on rent due (after 30 days): 1% (monthly) (adjusted by inflation)
Rent is reviewed on a yearly basis. UP Offshore is to pay following expenses:
electricity, natural gas, tap water, etc.
Rest of the terms in all four contracts are as per industry standard
4
SCHEDULE 2.10
INDEBTEDNESS; OTHER LIABILITES
o LOAN AGREEMENT (1) DATED 27TH APRIL 2005 o LOAN AGREEMENT (2) DATED 17TH JANUARY 2006
DVB BANK AG (LENDER) DVB BANK AG (LENDER
UP OFFSHORE (PANAMA) S.A. (BORROWER) UP OFFSHORE APOIO MARITIMO LTDA (BORROWER
AMOUNT $30 MILLION AMOUNT $15 MILLION
SECURED BY 1ST PANAMANIAN MORTGAGES SECURED BY 1ST BRASILIAN MORTGAGES
UP XXXXXXXXX UP AGUA-MARINHA
UP SAFIRA
UP SAFIRA SECURED BY 2ND PANAMANIAN MORTGAGE
UP XXXXXXXXX
UP SAFIRA
o SHIPBUILDING CONTRACT FOR HULL # EI 482 (UP TOPAZIO) o LOAN AGREEMENT DATED 3RD DECEMBER 2002\
o SHIPBUILDING CONTRACT FOR HULL # EI 483 (UP TBN) BEWEEN IFC (LENDER) AND
o SHIPBUILDING CONTRACT FOR HULL # E1 484 (UP TBN) UP OFFSHORE APOIO MARITIMO LTDA (BORROWER)
TO FINANCE THE BRAZILIAN NEWBUILDINGS
(UNDRAWN AS OF THE DATE HEREOF)
DATED 9TH JUNE 2003
BETWEEN ESTALEIRO ILHA S/A (BUILDER) o PREFERENCE SHAREHOLDER AGREEMENT DATED
AND UP OFFSHORE APOIO MARITIMO LTDA (BUYER) JUNE 24, 2003 BY AND BETWEEN INTERNATIONAL
FINANCE CORPORATION, LAIF XI LTD., ULTRAPETROL
(BAHAMAS) LTD., COMINTRA ENTERPRISE LTD. AND
UP OFFSHORE (BAHAMAS) LTD.
AS AMENDED 22ND NOVEMBER 2005
5
SCHEDULE 2.11
MATERIAL CONTRACTS
1. SHIPBUILDING CONTRACT FOR HULL # EI 482 (UP TOPAZIO)
SHIPBUILDING XXXXXXXX XXX XXXX # XX 000 (XX XXX)
SHIPBUILDING XXXXXXXX XXX XXXX # XX 000 (XX XXX)
DATED 9TH JUNE 2003
BETWEEN ESTALEIRO ILHA S/A (BUILDER) AND UP OFFSHORE APOIO MARITIMO LTDA (BUYER)
AS AMENDED 22ND NOVEMBER 2005
2. TIMECHARTER FOR UP AGUA-MARINHA DATED FEBRUARY 20, 2006
PETROLEO BRASILEIRO S.A. (PETROBRAS) (CHARTERER)
UP OFFSHORE APOIO MARITIMO LTDA (OWNER) FOR A PERIOD OF SIX MONTHS FROM MARCH
2006
3. (A) BAREBOAT CHARTER AGREEMENT DATED JANUARY 25, 2005 FOR UP XXXXXXXXX
BETWEEN PACKET MARITIME INC (OWNER) AND CORNAMUSA (DEMISE OWNER)
3. (B) BAREBOAT CHARTER AGREEMENT DATED FEBRUARY 26, 2005 FOR UP SAFIRA
BETWEEN PADOW SHIPPING INC (OWNER) AND CORNAMUSA (DEMISE OWNER)
4. SHIP MANAGEMENT AGREEMENT DATED 20TH MARCH 2006 FOR UP AGUA-MARINHA BEWTEEN
RAVENSCROFT SHIP MANAGEMENT INC (MANAGER) AND UP OFFSHORE APOIO MARITIMO
LTDA (OWNER)
5. ADMINISTRATION AGREEMENT DATED 25TH JUNE, 2003 BETWEEN UP OFFSHORE
(BAHAMAS) LTD. AND ULTRAPETROL (BAHAMAS) LTD.
6
SCHEDULE 2.14
EMPLOYEES
Xxxxxxxx Xxxxxxx, Secretary
Xxxxxx Xxxxxxx - Keyboard Operator
Xxx Xxxxx Xxxx - Maid, cleaner and coffee girl
Xxxxxxx Xxxxxx - Commercial Assistant, Brazil Operations
SCHEDULE 2.15
TRANSACTIONS WITH AFFILIATES
1. (A) BAREBOAT CHARTER AGREEMENT DATED JANUARY 25, 2005 FOR UP XXXXXXXXX
BETWEEN PACKET MARITIME INC (OWNER) AND CORNAMUSA (DEMISE OWNER)
1. (B) BAREBOAT CHARTER AGREEMENT DATED FEBRUARY 26, 2005 FOR UP SAFIRA
BETWEEN PADOW SHIPPING INC (OWNER) AND CORNAMUSA (DEMISE OWNER)
2. ADMINISTRATION AGREEMENT DATED 25TH JUNE, 2003 BETWEEN UP OFFSHORE
(BAHAMAS) LTD AND ULTRAPETROL (BAHAMAS) LTD
3. WARRANT AGREEMENT DATED 4TH JUNE, 2003 BETWEEN UP OFFSHORE (BAHAMAS) LTD
AND ULTRAPETROL (BAHAMAS) LTD.
4. SHIP MANAGEMENT AGREEMENT DATED 20TH MARCH 2006 FOR UP AGUA-MARINHA BETWEEN
RAVENSCROFT SHIP MANAGEMENT INC (MANAGER)
AND UP OFFSHORE APOIO MARITIMO LTDA (OWNER)
5. PREFERENCE SUBSCRIPTION AGREEMENT DATED JUNE 24, 2003 BETWEEN THE IFC AND
UP OFFSHORE (BAHAMAS) LTD
6. PREFERENCE SHAREHOLDERS AGREEMENT DATED JUNE 24, 2003 BETWEEN THE IFC, LAIF
XI LTD, ULTRAPETROL (BAHAMAS) LTD, COMINTRA ENTERPRISES LTD, AND UP
OFFSHORE (BAHAMAS) LTD
7. AMENDED AND RESTATED COMMON SHAREHOLDERS AGREEMENT DATED DECEMBER 5TH, 2003
BETWEEN LAIF XI LTD, ULTRAPETROL (BAHAMAS) LTD, COMINTRA ENTERPRISES LTD,
AND UP OFFSHORE (BAHAMAS) LTD
2
EXHIBIT A
PROMISSORY NOTE
New York, New York US$48,000,000
March 21, 2006
FOR VALUE RECEIVED, the undersigned, ULTRAPETROL (BAHAMAS) LIMITED, a
corporation organized and existing under the laws of The Bahamas (the "Buyer"),
hereby promises to pay to the order of LAIF XI LTD., a company organized under
the laws of Bermuda (the "Seller"), or as it may otherwise direct, the principal
sum of Forty-Eight Million United States Dollars (US$48,000,000). The Borrower
shall repay the indebtedness represented by this Note as provided in that
certain stock purchase agreement dated as of March 21, 2006 (the "Stock Purchase
Agreement") made by and between (i) the Buyer and (ii) the Seller. This Note
shall not bear interest, and may be prepaid on such terms as provided in the
Stock Purchase Agreement.
Words and expressions used herein and defined in the Stock Purchase
Agreement shall have the same meaning herein as therein defined.
This Note is payable in U.S. Dollars to the Seller, as the Seller may
direct, in immediately available same day funds.
If this Note or any payment required hereunder becomes due and payable
on a day which is not a Banking Day the due date thereof shall be extended until
the next following Banking Day, unless such next following Banking Day falls in
the following month, in which case such payment shall be payable immediately
preceding the Banking Day.
This Note is the Note referred to in, and is entitled to the security
and benefits of, the Stock Purchase Agreement and the Pledge Agreement referred
to therein.
Presentment, demand, protest and notice of dishonor of this Note or any
other notice of any kind are hereby expressly waived.
EACH OF THE BUYER AND, BY ITS ACCEPTANCE HEREOF, SELLER HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS NOTE.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to principles of
conflicts of law.
IN WITNESS WHEREOF, the Buyer has executed and delivered this
Promissory Note on the date and year first above written.
ULTRAPETROL (BAHAMAS) LIMITED
By:
-------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Company Secretary
2
EXHIBIT B
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made this 21st day
of March, 2006, by and among ULTRAPETROL (BAHAMAS) LIMITED, a company organized
under the laws of The Bahamas (the "Pledgor), as pledgor, and LAIF XI LTD., a
company organized under the laws of Bermuda (the "Pledgee"), as pledgee,
pursuant to the terms of that certain stock purchase agreement (the "Stock
Purchase Agreement") dated as of March , 2006 made by and between the Pledgor,
as buyer, and the Pledgee, as seller, in connection with the Pledgor's purchase
of 30,000,000 shares of common stock of UP Offshore (Bahamas) Limited ("UP
Offshore" or "Pledged Company").
WITNESSETH:
-----------
WHEREAS:
Pursuant to the terms of the Stock Purchase Agreement, the Buyer has
executed and delivered a promissory note (the "Note") of even date herewith in
the amount of $48,000,000 in payment of the purchase price of the Pledged Shares
(as defined below);
As of the date hereof, the Buyer is the registered and beneficial owner
of 42,499,881 shares of capital stock of UP Offshore of which it is pledging the
30,000,000 of such shares acquired from the Pledgee (the "Pledged Shares");
Pursuant to the terms of the Stock Purchase Agreement, the Buyer shall
execute and deliver to the Pledgee, as security for the obligations of the Buyer
under the Stock Purchase Agreement and the Note, a pledge of all of Pledgor's
right, title and interest in and to the Pledged Shares;
NOW, THEREFORE, in consideration of the premises set forth herein, the
Pledgors agree with the Pledgee as follows:
Defined Terms. Unless otherwise defined herein, terms defined in the
Stock Purchase Agreement shall have the same meanings when used herein.
Grant of Security. As security for the full and prompt payment of the
Note to the Pledgee and the performance of the Pledgor's obligations under the
Stock Purchase Agreement (collectively, the "Obligations"), the Pledgor hereby
pledges, assigns, transfers and delivers to the Pledgee the Pledged Shares and
hereby grant to the Pledgee a first lien on, and first security interest in, the
Pledged Shares.
Pledge Documents. Concurrently with the execution of this Pledge
Agreement, the Pledgor shall execute and deliver to the Pledgee an Irrevocable
Proxy in favor of the Pledgee in respect of the Pledged Shares in the form set
out in Exhibit A hereto (the "Irrevocable Proxy") and shall deliver to the
Pledgee the certificates representing the Pledged Shares together with signed,
undated instruments of transfer (the "Instruments of Transfer") pertaining
thereto duly executed in blank.
Representations and Warranties. The Pledgor represents and warrants
that:
it is the legal and beneficial owner of, and has good and marketable
title to, its respective Pledged Shares, subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance
whatsoever, except the lien and security interest created by this Pledge
Agreement and the delivery of the Pledged Shares to the Pledgee;
it has full power, authority and legal right to execute, deliver and
perform this Pledge Agreement and to create the collateral security interest for
which this Pledge Agreement provides;
the Pledged Shares have been duly and validly issued and are fully paid
and nonassessable;
this Pledge Agreement constitutes a valid obligation of the Pledgor,
legally binding upon it and enforceable in accordance with its terms;
no consent of any other party that has not been obtained is required in
connection with the execution, delivery, performance, validity, enforceability
or enforcement of this Pledge Agreement, and no consent, license, approval or
authorization of, or registration or declaration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery, performance, validity, enforceability or enforcement of this Pledge
Agreement; and
the execution, delivery and performance of this Pledge Agreement will
not violate or contravene any provision of any existing law or regulation or
decree of any court, governmental authority, bureau or agency having
jurisdiction in the premises or of the charter documents of the Pledgor or of
any mortgage, stock purchase agreement, security agreement, contract,
undertaking or other agreement to which the Pledgor is a party or which purports
to be binding upon it or any of its properties or assets and will not result in
the creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of its properties or assets pursuant to the provisions of any
such mortgage, stock purchase agreement, security agreement, contract,
undertaking or other agreement;
Covenants. The Pledgor hereby covenants that during the continuance of
this Pledge Agreement:
it shall warrant and defend the right and title of the Pledgee
conferred by this Pledge Agreement in and to its Pledged Shares at the cost of
the Pledgor against the claims and demands of all persons whomsoever;
except as herein provided, without the prior written consent of the
Pledgee, it shall not sell, assign, transfer, charge, pledge or encumber in any
manner any part of its Pledged Shares or suffer to exist any encumbrance on its
Pledged Shares;
without the prior written consent of the Pledgee, other than as
contemplated by the Stock Purchase Agreement, it shall not amend or modify any
organizational
2
document, by-law or other corporate governance agreement (including any
shareholders' agreement) relating to the Pledged Company; and
without the prior written consent of the Pledgee, it shall not vote its
Pledged Shares in favor of the consolidation, merger, dissolution, liquidation
or any other corporate reorganization of the Pledged Company.
Delivery of Additional Interests. If the Pledgor shall become entitled
to receive or shall receive any share certificates, option or rights, whether as
a dividend in respect of, in substitution of, or in exchange for any of the
Pledged Shares, the Pledgor agrees to accept the same as the agent of the
Pledgee and to hold the same in trust for the benefit of the Pledgee and to
deliver the same forthwith to the Pledgee in the exact form received, with the
endorsement of the Pledgor when necessary and/or appropriate undated instruments
of transfer duly executed in blank, and irrevocable proxy to be held by the
Pledgee, subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Shares on the
liquidation or dissolution of any Pledged Company shall be paid over to the
Pledgee to be held by it as additional collateral security for the Obligations.
Collateral. All property at any time pledged to the Pledgee hereunder
by the Pledgor (whether described herein or not) and all income therefrom and
proceeds thereof, are herein collectively sometimes called the "Collateral".
Voting Rights. The Pledgee shall, as the Pledgee and as the holder of
the Irrevocable Proxy, receive notice to vote the Pledged Shares at its own
discretion at, any annual or special meeting, as the case may be, of the
shareholders of the Pledged Company, provided, however, that the Pledgee shall
not exercise such right to vote until such time that default shall have occurred
in the payment or performance of the Obligations and not been remedied to the
Pledgee's satisfaction or waived in writing or any of the security created by or
pursuant to this Pledge Agreement shall be imperiled or jeopardized in a manner
deemed material by the Pledgee.
9. Incorporation by Reference. This Pledge Agreement shall be read
together with the Stock Purchase Agreement, but in the case of any conflict with
the Stock Purchase Agreement, the Stock Purchase Agreement shall prevail.
3
10. Enforcement/Satisfaction of Obligation. The security constituted by
this Pledge Agreement shall become immediately enforceable if, subject to the
exercise of the Buyer's Put Option contained in the Stock Purchase Agreement,
the Note shall not have been paid and either (i) the IPO shall not have occurred
by September 30, 2006 or (ii) the IPO shall have been abandoned. At any time
after the security constituted by this Pledge Agreement shall have become
enforceable as aforesaid, whereupon the security constituted by this Pledge
Agreement shall become enforceable, the Pledgee shall be entitled, without
further notice to the Pledgor to endorse the Instrument of Transfer in its own
name and to Cause the Company to register the Pledged Shares in the name of the
Pledgee as owner. In such event, the Pledgee hereby acknowledges that such
transfer of the Pledged Shares shall constitute satisfaction of the Obligations
and the Pledgor shall be relieved of any further liability or claim hereunder,
under the Stock Purchase Agreement or under the Note.
11. No Duty on Pledgee. The Pledgee shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.
12. Termination. When all of the Obligations shall have been fully
satisfied, or upon the successful completion of the IPO, as such term is defined
in the Stock Purchase Agreement, the Pledgee agrees that it shall forthwith
release each Pledgor from its Obligations hereunder and the Pledgee, at the
request and expense of the Pledgor, will promptly execute and deliver to the
Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and the Irrevocable Proxy shall terminate
forthwith and be delivered to such Pledgor forthwith together with the other
items furnished to the Pledgee pursuant to Section 3 hereof.
13. Changes in Writing; Successors and Assigns. None of the terms or
provisions of this Pledge Agreement may be waived, altered, modified or amended
except by an instrument in writing, duly executed by the Pledgee. This Pledge
Agreement and all obligations of the Pledgor hereunder shall be binding upon the
successors and assigns of the Pledgor and shall, together with the rights and
remedies of the Pledgee hereunder, inure to the benefit of the Pledgee, its
respective successors and assigns.
14. Notices. Every notice or demand under this Agreement shall be in
writing (including prepaid overnight courier, facsimile transmission or similar
writing). Every notice or demand shall be sent as follows:
If to the Pledgor: Ultrapetrol (Bahamas) Limited
Ocean Centre, Montague Foreshore
East Bay St.
Nassau, Bahamas
X.X. Xxx XX-00000
Xxxx: Company Secretary
Facsimile: (000) 000-0000
If to the Pledgee: LAIF XI Ltd.
00 Xxxxxxxx Xx.
Xxxxxxxx, XX 00
0
Xxxxxxx
Xxxx: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
With a copy to: EMP Global L.L.C.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxx/Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by facsimile, when such facsimile is transmitted to the telecopy number
specified in this Section and telephonic confirmation of receipt thereof is
obtained or (ii) if given by mail, prepaid overnight courier or any other means,
when received at the address specified in this Section or when delivery at such
address is refused.
5
15. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts of law thereof.
16. Submission to Jurisdiction. The Pledgor hereby irrevocably submits
to the jurisdiction of the courts of the State of New York and of the United
States District Court for the Southern District of New York in any action or
proceeding brought against it by the Pledgee under this Pledge Agreement or
under any document delivered hereunder and hereby irrevocably agrees that valid
service of summons or other legal process on it may be effected by serving a
copy of the summons and other legal process in any such action or proceeding on
the Pledgor by mailing or delivering the same by hand to the Pledgor at the
address indicated for notices in Section 19. The service, as herein provided, of
such summons or other legal process in any such action or proceeding shall be
deemed personal service and accepted by the Pledgor as such, and shall be legal
and binding upon the Pledgor for all the purposes of any such action or
proceeding. Final judgment against the Pledgor in any such legal action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment. The Pledgor will advise the Pledgee promptly of any change
of address for the purpose of service of process. Notwithstanding anything
herein to the contrary, the Pledgee may bring any legal action or proceeding in
any other appropriate jurisdiction.
17. WAIVER OF JURY TRIAL. THE PLEDGOR AND THE PLEDGEE HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS PLEDGE AGREEMENT.
18. Severability. If any provision hereof is invalid and unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Pledgees in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity and unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
19. Counterparts. This Pledge Agreement may be signed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
20. Headings. In this Pledge Agreement, Section headings are inserted
for convenience of reference only and shall be ignored in the interpretation of
this Pledge Agreement.
6
IN WITNESS whereof, the parties hereto have caused this Pledge
Agreement to be duly executed the day and year first above written.
ULTRAPETROL (BAHAMAS) LIMITED
By: /s/ Xxxxxxx Xxxxxxxx R.
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
LAIF XI LTD.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-Fact
7
EXHIBIT A
---------
IRREVOCABLE PROXY
The undersigned, the registered and beneficial owner of the below
described shares of capital stock of UP Offshore (Bahamas) Ltd., a company
incorporated under the laws of Bahamas (the "Company"), hereby makes,
constitutes and appoints LAIF XI, Ltd., (the "Pledgee") with full power to
appoint a nominee or nominees to act hereunder from time to time, the true and
lawful attorney and proxy of the undersigned to vote the 30,000,000 shares of
the issued and outstanding shares of capital stock in the Company represented by
Certificate(s) No. _________at all annual and special meetings of members of the
Company or take any action by written consent with the same force and effect as
the undersigned might or could do, hereby ratifying and confirming all that the
said attorney or its nominee or nominees shall do or cause to be done by virtue
hereof.
The said stock has been pledged (the "Pledge") to the Pledgee pursuant
to a Pledge Agreement dated the date hereof between the undersigned and the
Pledgee.
This power and proxy is coupled with an interest and is irrevocable and
shall remain irrevocable so long as the Pledge is outstanding and is in full
force and effect.
IN WITNESS whereof, the undersigned has caused this instrument to be
duly executed this [ ] day of March , 2006.
ULTRAPETROL (BAHAMAS) LIMITED.
By:
-----------------------------
Name:
Title:
8
September 21, 2006
LAIF XI Ltd.
00 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00
Xxxxxxx
RE: LETTER AGREEMENT REGARDING STOCK PURCHASE AGREEMENT BY AND
BETWEEN ULTRAPETROL (BAHAMAS) LIMITED AND LAIF XI LTD.
Ladies and Gentlemen:
We refer to that certain stock purchase agreement, dated as of March 21,
2006 (the "Stock Purchase Agreement"), by and between (i) ULTRAPETROL (BAHAMAS)
LIMITED, a Bahamas corporation ("Buyer"), as buyer and (ii) LAIF XI LTD., a
Bermudan company ("Seller"), as seller. Unless otherwise defined herein, terms
defined in the Stock Purchase Agreement shall have the same meanings when used
herein.
This letter agreement will confirm that in accordance with Section 8.3 of
the Stock Purchase Agreement and at our request, the Seller hereby consents to
amend (i) Sections 1.2, 5.1(ii), 5.3 and 10 of the Stock Purchase Agreement,
replacing "September 30, 2006" with "October 31, 2006" in each instance; (ii)
Section 5.3 of the Stock Purchase Agreement, replacing "September 23, 2006" with
"October 24, 2006" and (iii) Section 5.4 of the Stock Purchase Agreement,
replacing "September 15, 2006" with "October 21, 2006".
This will further confirm that, except as expressly affected hereby, the
Stock Purchase Agreement is in all respects ratified and confirmed and all
terms, provisions and conditions thereof shall remain in full force and effect.
Please signify your agreement to the foregoing by countersigning this
letter in the space provided. This letter agreement may be executed in any
number of counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one agreement. Delivery of an executed
counterpart of a signature page of this letter agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This letter agreement shall be governed by, and construed in accordance
with, the laws of the State of New York. Kindly indicate your acceptance and
agreement with the foregoing by executing this letter in the space indicated
below.
Yours faithfully,
ULTRAPETROL (BAHAMAS) LIMITED
By: /s/ Xxxxxx Xxxxxxxx R.
---------------------------
Name:Xxxxxx Xxxxxxxx R.
Title: Attorney-in-Fact
Accepted and Agreed:
LAIF XI LTD.
By: /s/ Xxxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Attorney-in-Fact
