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EXHIBIT 10.1
CONTRIBUTION AGREEMENT
This Contribution Agreement (this "Agreement") is entered into
as of the 15th day of January, 2001 by and among Torch, Inc., a Louisiana
corporation ("Torch"), Friends of Lime Rock LP, a Delaware limited partnership
("Friends of Lime Rock"), Riverside Investments LLC, a Delaware limited
liability company ("Riverside" and, together with Friends of Lime Rock, "Lime
Rock"), and Torch Offshore, Inc., a Delaware corporation (the "Company").
WHEREAS, Torch is the holder of 1,000 shares (the "Initial
Shares") of common stock, par value $0.01 per share, of the Company ("Torch
Common Stock");
WHEREAS, Torch is the holder of all the issued and outstanding
common membership interest (the "Common Interest") of Torch Offshore, L.L.C., a
Delaware limited liability company ("Torch LLC"); and
WHEREAS, Lime Rock is the holder of all the issued and
outstanding preferred membership interests (the "Preferred Interest") in Torch
LLC; and
WHEREAS, Torch and Lime Rock together hold all of the issued
and outstanding membership interests in Torch LLC; and
WHEREAS, Torch and Lime Rock each desire to contribute their
membership interests in Torch LLC to the Company in accordance with the terms of
this Agreement;
NOW, THEREFORE, in consideration of the representations and
warranties and other good and valuable consideration, the parties hereto hereby
agree as follows:
Section 1. REPRESENTATIONS AND WARRANTIES
1.1. Each of Friends of Lime Rock and Riverside hereby represents and
warrants to Torch that:
(a) Organization and Good Standing. Each of Friends of Lime
Rock and Riverside is a limited partnership or limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full limited partnership or
limited liability company power and authority to own, operate and lease
its assets in the manner currently owned, operated and leased by it.
The outstanding Preferred Interest in Torch LLC is owned beneficially
and of record by Friends of Lime Rock and Riverside, free and clear of
all liens, charges, encumbrances, rights of others, mortgages, pledges
or security interests and, except as provided in the Limited Liability
Agreement of Torch LLC, dated as of May 5, 2000 (the "LLC Agreement"),
is not subject to any agreements or understandings with respect to the
voting or transfer of any of the Preferred Interest. Except as set
forth in the LLC Agreement, there are no outstanding subscriptions,
options, convertible securities, warrants or calls of any kind issued
or granted by, or binding upon, such party to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or equity
interest in Torch LLC. Such party has full legal right to sell, assign
and transfer the Preferred Interest owned by it to the
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Company and will, upon delivery of a certificate or certificates
representing such Preferred Interest to the Company, transfer to the
Company title to such Preferred Interest, free and clear of any liens,
charges, encumbrances, rights of others, mortgages, pledges or security
interests.
(b) Authority and Approval. The execution and delivery of this
Agreement by such party, the performance by it of all the terms and
conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby by it have been duly authorized and
approved by any requisite limited partnership or limited liability
company action on the part of such party. This Agreement constitutes
the legal, valid and binding obligation of such party enforceable
against such party in accordance with its terms, subject to applicable
bankruptcy, insolvency or other similar laws relating to or affecting
the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).
1.2. Torch hereby represents and warrants to each of Friends of Lime
Rock and Riverside that:
(a) Organization and Good Standing. Torch is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Louisiana and has full corporate power and authority to
own, operate and lease its assets in the manner currently owned,
operated and leased by it. The outstanding Common Interest in Torch LLC
is owned beneficially and of record by Torch, free and clear of all
liens, charges, encumbrances, rights of others, mortgages, pledges or
security interests and is not subject to any agreements or
understandings with respect to the voting or transfer of any of the
Common Interest. There are no outstanding subscriptions, options,
convertible securities, warrants or calls of any kind issued or granted
by, or binding upon, Torch to purchase or otherwise acquire or to sell
or otherwise dispose of any security of or equity interest in Torch
LLC. Torch has full legal right to sell, assign and transfer the Common
Interest owned by it to the Company and will, upon delivery of a
certificate or certificates representing such Common Interest to the
Company, transfer to the Company title to such Common Interest, free
and clear of any liens, charges, encumbrances, rights of others,
mortgages, pledges or security interests.
(b) Authority and Approval. The execution and delivery of this
Agreement by Torch, the performance by it of all the terms and
conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby by it have been duly authorized and
approved by any requisite corporate action on the part of Torch. This
Agreement constitutes the legal, valid and binding obligation of Torch
enforceable against Torch in accordance with its terms, subject to
applicable bankruptcy, insolvency or other similar laws relating to or
affecting the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).
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1.3. The Company hereby represents and warrants to each of Friends of
Lime Rock and Riverside that:
(a) Organization and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and
authority to own, operate and lease its assets in the manner currently
owned, operated and leased by it. The shares of Torch Common Stock to
be issued at the Closing have been duly authorized and, when issued and
delivered in accordance with this Agreement, will be validly issued and
outstanding and will be fully paid and nonassessable. The issuance and
delivery of the shares of Torch Common Stock at the Closing is not
subject to any preemptive right of any stockholder of the Company or to
any right of first refusal or other similar right in favor of any
person.
(b) Authority and Approval. The execution and delivery of this
Agreement by the Company, the performance by it of all the terms and
conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby by it have been duly authorized and
approved by any requisite corporate action on the part of the Company.
This Agreement constitutes the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency or other similar
laws relating to or affecting the enforcement of creditors' rights
generally and to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(c) Capitalization. The authorized common stock of the Company
consists of 100,000,000 shares of Torch Common Stock and 10,000,000
shares of preferred stock, par value $0.01 per share (the "Preferred
Stock"). The Initial Shares are the only shares of Torch Common Stock
issued and outstanding, all of which are owned beneficially and of
record by Torch, free and clear of all liens. There are no shares of
Preferred Stock issued or outstanding, and no options, warrants or
other securities convertible or exercisable for the Torch Common Stock.
The Initial Shares have been validly issued, are fully paid and
nonassessable and are free of preemptive rights.
Section 2. CAPITAL CONTRIBUTIONS
2.1. At the Closing, Torch will contribute to the Company the Common
Interest in exchange for such number of shares of Torch Common Stock that, when
aggregated with the Initial Shares, equals 90.06% of the total number of issued
and outstanding shares of Torch Common Stock excluding any shares of Torch
Common Stock issued in a Qualified Public Offering (as defined in the LLC
Agreement).
2.2. At the Closing, Lime Rock will contribute to the Company the
Preferred Interest in exchange for such number of shares of Torch Common Stock
equal to 9.94% of the total number of issued and outstanding shares of Torch
Common Stock excluding any shares of Torch Common Stock issued in a Qualified
Public Offering. Upon each Distribution Accrual Date (as defined in the LLC
Agreement), any accrued and unpaid dividends on the Preferred Interest will
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be paid to Lime Rock. At the Closing, any unpaid dividends on the Preferred
Interest, accruing daily from the last Distribution Accrual Date, will be paid
to Lime Rock in cash.
Section 3. CLOSING
The closing of the transactions contemplated hereby (the "Closing")
will be held at the offices of Xxxxx Xxxxx L.L.P., Houston, Texas, concurrent
with the Company's completion of a Qualified Public Offering after all
conditions set forth in Section 4 have been satisfied or waived.
Section 4. CONDITIONS TO CLOSING
The obligations of Torch and Lime Rock under Section 2 and the Closing
are subject to the satisfaction or waiver of the following conditions:
(a) The representations and warranties of the parties
contained herein shall be true and correct when made and as of the date
of the Closing, and all covenants to be performed by any party under
this Agreement shall have been performed.
(b) The Company shall have completed a Qualified Public
Offering.
(c) Lime Rock and Torch shall have received an opinion of
Xxxxxx Xxxxxxxx LLP reasonably satisfactory to each of Lime Rock and
Torch as to the qualification of the transactions contemplated by this
Agreement under Section 351(a) of the Internal Revenue Code.
Section 5. TERMINATION
5.1. Termination. This Agreement may be terminated at any time prior to
the Closing: (a) by the mutual written consent of the Company, Torch and Lime
Rock; or (b) by the Company, Torch or Lime Rock if the Closing shall not have
occurred on or before June 30, 2001.
5.2. Effect of Termination. In the event of termination of this
Agreement as provided in Section 5.1, written notice thereof shall forthwith be
given by the terminating party to the other parties, and this Agreement shall
thereupon terminate and become void and have no effect, no party shall have
liability to any other party in respect of this Agreement, and the transactions
contemplated hereby shall be abandoned without further action by the parties
hereto; provided, that such termination shall not relieve any party of any
liability for any willful breach of any covenant or agreement contained in this
Agreement.
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Section 6. MISCELLANEOUS PROVISIONS
6.1. Certificate of Incorporation, Bylaws and Other Actions. Until the
earlier of the Closing or the termination of this Agreement, the Company agrees
that (i) it will not amend its Certificate of Incorporation or its Bylaws,
attached hereto as Exhibit A and Exhibit B, respectively, without the consent of
Lime Rock and (ii) it will not take any action that, if such action were to be
taken by Torch LLC, would, under the terms of the LLC Agreement, require the
consent or approval of Lime Rock or any director or manager designated thereby,
without the consent of Lime Rock.
6.2. Over-allotment Option. The Company, Torch, and Lime Rock agree
that, pursuant to the over-allotment option granted to the underwriters in the
Company's initial Qualified Public Offering (the "Over-allotment Option"), Torch
and Lime Rock will each be permitted to sell a pro rata share of their Torch
Common Stock, unless the managing underwriter in good faith determines that the
inclusion of such shares will adversely affect the pricing or success of the
offering. Torch's and Lime Rock's pro rata share will be 90.06% and 9.94%,
respectively, of the total number of shares available to be sold pursuant to the
Over-allotment Option.
6.3. Registration Rights Agreement. Effective as of the date of the
Closing, the Company shall grant registration rights in accordance with Exhibit
G to the LLC Agreement.
6.4. Entire Agreement; Binding Effect; Amendment; Waivers. This
Agreement constitutes the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings between the
parties, both written and oral, relating to the subject matter of this
Agreement. Each and all of the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors and assigns. This
Agreement may be amended, modified or supplemented if, but only if, that
amendment, modification or supplement is in writing and signed by each party
hereto. No waiver of any right under this Agreement shall be effective unless
evidenced in writing and executed by the party entitled to the benefits thereof.
The waiver of any of the terms and conditions hereof shall not be construed or
interpreted as, or deemed to be, a waiver of any other term or condition hereof;
nor shall any waiver of any single breach or default of any provision hereof be
construed, deemed or interpreted as a waiver of any other breach or default
hereunder occurring before or after that waiver.
6.5. No Third-Party Beneficiaries. No provision of this Agreement is
intended, or shall be construed, deemed or interpreted, to confer on any person
or entity not a party hereto any rights or remedies hereunder.
6.6. Application of Delaware Law. This Agreement shall be governed by
and construed and enforced in accordance with the substantive laws of the State
of Delaware.
6.7. Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument.
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6.8 Expenses. The Company agrees to reimburse Lime Rock for reasonable
fees and expenses, including, but subject to a cap of $30,000, the reasonable
fees of not more than one counsel for Lime Rock, incurred in effecting the
transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
TORCH, INC.
By: /s/ XXXX X. XXXXXXXXXX
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Name: Xxxx X. Xxxxxxxxxx
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Title: Chief Executive Officer
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RIVERSIDE INVESTMENTS LLC
By: The Beacon Group Energy Investment Fund
II, L.P., its sole member
By: Beacon Energy Investors II, L.P., its
general partner
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
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Title: Partner
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FRIENDS OF LIME ROCK LP
By: Lime Rock Partners LLC,
its general partner
By: /s/ XXXX X. XXXXXXXX
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Name: Xxxx X. Xxxxxxxx
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Title: Managing Member
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Accepted and Agreed to:
TORCH OFFSHORE, INC.
By: /s/ XXXX X. XXXXXXXXXX
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Name: Xxxx X. Xxxxxxxxxx
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Title: Chief Executive Officer
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