VESSEL PURCHASE AGREEMENT
THIS VESSEL PURCHASE AGREEMENT (this "Agreement") is entered into as
of May 5, 2005 (the "Effective Date"), by and between General Electric
Capital Corporation, a corporation organized under the laws of Delaware
(the "Buyer"), and Torch Offshore, Inc., a Delaware corporation ("Torch
Offshore"), Torch Offshore, LLC, a Delaware limited liability company
("Torch, LLC" and, jointly with Torch Offshore, the "Seller"), and Torch
Express, LLC ("Torch Express") a Louisiana limited liability company.
RECITALS
WHEREAS, Seller and Seller's affiliate, Torch Express (Torch
Express, together with Seller, "Debtors") are indebted to Buyer in the
amount of not less than $21,835,595.75 as of January 7, 2005 plus
attorneys' fees and related expenses (the "Debt"), which indebtedness is
represented by (i) that certain promissory note executed by Torch, LLC,
dated March 21, 2003 in the principal amount of $9,250,000.00, and
guaranteed by Torch Offshore and Torch Express, the payment of which is
secured by, among other things, that certain first preferred ship mortgage
in the principal amount of $9,250,000.00 executed by Torch, LLC, dated
March 21, 2003, on the vessel M/V Midnight Eagle, recorded with the U.S.
Coast Guard National Vessel Documentation Center ("NVDC") in Book 03-61,
page 292, and by that certain preferred fleet mortgage dated December 17,
2003 in the principal amount of $9,250,000.00 on the vessel M/V Midnight
Gator recorded with the NVDC on December 18, 2003 in Batch Number 181843,
Document ID No. 1598179, and by that certain financing statement recorded
with the Delaware Secretary of State at file number 3075660, all as more
fully set forth in the loan and security documentation pertaining thereto,
and (ii) that certain promissory note executed by Seller and Torch
Express, dated December 17, 2003 in the principal amount of $15,000,000,
the payment of which is secured by that certain first preferred ship
mortgage in the principal amount of $24,250,000.00 executed by Torch
Offshore, dated December 17, 2003, on the vessel M/V Midnight Wrangler,
recorded with the Vanuatu Maritime Authority on December 19, 2003 and
recorded at Book PM 24, page 86, and by a first preferred fleet mortgage
in the original principal amount of $15,000,000.00 executed by Torch, LLC,
dated December 17, 2003, on the vessels M/V Midnight Eagle and M/V
Midnight Gator, recorded with the NVDC on December 18, 2003 in Batch
Number 181834, Document ID No. 1598161, and by those certain financing
statements recorded with the Delaware Secretary of State at file numbers
33335240 and 33335661, all as more fully set forth in the loan and
security documentation pertaining thereto (collectively, all of the
foregoing are the "GE Capital Security Interests";
WHEREAS, certain of Buyer's collateral, the M/V Midnight Eagle and
M/V Midnight Wrangler, has been seized in an attempt by Buyer to cause the
satisfaction of Debtors' obligations to Buyer;
WHEREAS, on January 7, 2005 (the "Petition Date"), each of the
Debtors' petitioned for relief under chapter 11 of title 11 of the United
States Code; and
WHEREAS, Debtors have reached an arrangement whereby Seller will
sell to Buyer and Buyer will purchase from Seller all of Buyer's
collateral, subject to acquisition by a higher bidder at an auction
conducted in Debtors' bankruptcy case.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and of other valuable consideration, the
receipt of which is hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
The following terms employed in this Agreement have the meanings set
forth as follows:
"Agreement" has the meaning set forth in the Preamble.
"Allowed Custodia Legis Expenses" means all allowed custodia legis
expenses directly related to the preservation of a Vessel from and after
the commencement of the Bankruptcy Cases, as determined by the Bankruptcy
Court.
"Allowed Secured Claims" means any Lien on a Vessel superior in rank
to the GE Capital Security Interests, as determined by the Bankruptcy
Court in a final non-appealable order.
"Approval Order" means an order of the Bankruptcy Court, in form and
substance reasonably acceptable to the Buyer in all material respects,
approving the Transaction and all of the terms and conditions contemplated
hereby, which order (i) shall be in full force and effect and (ii) shall
not have been stayed, reversed, modified or amended in any respect and, if
the Approval Order is the subject of a pending appeal, the consummation of
the Transaction shall not be the subject of a presently effective stay
pending appeal.
"Auction" means the Bankruptcy Court auction for the Sale Assets to
be held in accordance with the Bidding Procedures Order.
"Bankruptcy Case" means Seller's chapter 11 cases currently pending
before the Bankruptcy Court.
"Bankruptcy Code" means title 11 of the United States Code, as
heretofore and hereafter amended, and codified as 11 U.S.C. sections 101,
et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Eastern District of Louisiana and any other court having jurisdiction over
the Bankruptcy Case.
"Bidding Procedures" means bidding procedures established by the
Bankruptcy Court and set forth in the Bidding Procedures Order.
"Bidding Procedures Hearing" means the hearing to be scheduled and
conducted by the Bankruptcy Court to consider approval of the Bidding
Procedures.
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"Bidding Procedures Order" means an order of the Bankruptcy Court in
the form of Exhibit "A" annexed here to or as otherwise agreed by Buyer,
establishing the Bidding Procedures.
"Business Days" are days on which banks are open in the place of
Closing provided in Section 2.2.
"Buyer" has the meaning set forth in the Preamble.
"Buyer's Authorized Representative" has the meaning set forth in
Section 10.5.
"Claimants" has the meaning set forth in Section 6.5.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Competing Bidder" has the meaning set forth in Section 3.2(a).
"Debt" has the meaning set forth in the Recitals.
"Debtors" has the meaning set forth in the Recitals.
"Effective Date" has the meaning set forth in the Preamble.
"Equipment" means with respect to any vessel (i) said Vessel's
machinery, engines, lay installation equipment, tower, reels, cranes,
tensioners, spares, consumables, motors, generators, riggings,
attachments, accessories, fixtures, replacement parts and other
appurtenances and equipment associated therewith, whether on board or
ashore; (ii) all surveys, inspection records, safety logs and maintenance
and navigation records relating to the Vessel; and (iii) all owner's and
operator's manuals related to, or used or usable by the Vessel. Without
limitation of the foregoing, the meaning of term "Equipment" shall
include, (a) in the case of the MV Midnight Wrangler, the four (4) reels
and the modular lay system, including all components thereof, as further
described in Exhibit C hereto, (b) in the case of the M/V Midnight Eagle,
the American Crane, Model 5299 and the Xxxxxxx hydraulic pedestal crane as
further described in Exhibit C hereto to the extent deemed encumbered by
the GE Capital Security Interests, and (c) in the case of the M/V Midnight
Gator, the two (2) Caterpillar Model 3512-D1 (S/N 50Y00958 and S/N
50Y00962) engines driving skid mounted jet pumps as described in Exhibit C
hereto.
"GE Capital Security Interests" shall have the meaning set forth in
the Recitals.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Sale Assets or to the execution, delivery
or performance of this Agreement.
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"Governmental Authority" means any national government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any other governmental entity with authority
over the Buyer or Seller or the operation of the Vessels.
"Law" means any statute, law, rule, regulation, ordinance, order or
code, now or hereafter in effect, and any judicial or administrative
interpretation thereof by a Governmental Authority or otherwise, including
any judicial or administrative order, consent decree or judgment.
"Lien" or "Liens" means any mortgage, lien (statutory or other),
pledge, security interest, encumbrance, hypothecation, assignment for
security, or deposit arrangement or other security agreement or adverse
claim to ownership of the Vessels or the Equipment of any kind or nature
whatsoever, recorded or unrecorded.
"M/V Midnight Eagle" means that certain steel pipe laying/burying
barge Midnight Eagle including all of her Equipment, a vessel registered
and flagged under the laws of the United States of America, Official
Number 588872, and owned by Torch, LLC, as described on Exhibit "C"
attached hereto and made a part hereof.
"M/V Midnight Gator" means that certain shallow water jet/bury barge
Midnight Gator including all of her Equipment, a vessel registered and
flagged under the laws of the United States of America, Official Number
1131254, and owned by Torch, LLC, as described on Exhibit "C" attached
hereto and made a part hereof.
"M/V Midnight Wrangler" means that certain construction/pipe lay
vessel Midnight Wrangler including all of her Equipment, a vessel
registered and flagged under the laws of the Republic of Vanuatu, Official
Number 1480, and owned by Torch Offshore, as described on Exhibit "C"
attached hereto and made a part hereof
"Preferred Claims" has the meaning set forth in Section 3.1(a).
"Party" or "Parties" means, in the singular, Seller or Buyer as the
context requires, and, in the plural, Seller and Buyer.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, a
limited liability company, or other entity or a government or any agency
or political subdivision thereof.
"Purchase Price" has the meaning set forth in Section 3.1.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational
or governing documents of such Person, and any law applicable to or
binding upon such Person or any of its properties or to which such Person
or any of its properties is subject.
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"Sale Assets" has the meaning set forth in Section 2.1.
"Sale Hearing" means the hearing to be scheduled and conducted by
the Bankruptcy Court to consider approval and entry of the Approval Order.
"Sale Motion" means the motion or motions of Seller, in form and
substance reasonably acceptable to Buyer, seeking approval and entry of
the Bidding Procedures Order and the Approval Order and scheduling of the
Bidding Procedures Hearing and the Sale Hearing.
"Security Deposit" has the meaning set forth in Section 3.2(a).
"Security Deposit Escrow Agent" means X.X. Xxxxxx Trust Company,
National Association, or such other entity agreed to by the parties.
"Security Deposit Escrow Agreement" means that certain Security
Deposit Escrow Agreement, substantially in the form attached hereto as
Exhibit "B".
"Seller" has the meaning set forth in the Preamble.
"Torch Express" has the meaning given to it in the Recitals.
"Transaction" means the purchase and sale of the Sale Assets, along
with any other transactions contemplated in this Agreement or related
thereto.
"Vessels" means, collectively, the M/V MIDNIGHT WRANGLER, the M/V
MIDNIGHT EAGLE, vessel M/V MIDNIGHT GATOR, as identified on Exhibit "C"
attached hereto and made a part hereof, and "Vessel" means, individually,
any one of the Vessels.
ARTICLE II
PURCHASE AND SALE OF SALE ASSETS; THE CLOSING
2.1 Sale and Purchase. Seller hereby agrees to sell to Buyer, and
Buyer hereby agrees to purchase from the Seller, effective as of the
Closing Date, the Vessels (collectively, the "Sale Assets"). Any
equipment, machinery or other items currently leased or rented by Seller
shall be excluded from the Sale Assets and shall not form a part of this
Transaction.
2.2 The Closing. The closing of the purchase and sale of the Sale
Assets (the "Closing") will take place as soon as reasonably practicable
after entry of the Approval Order, during normal business hours at the
offices of Heller, Draper, Xxxxxx, Xxxxxxx & Horn, L.L.C. in New Orleans,
Louisiana or at such other venue as the Seller may select. The Parties
shall use all reasonable efforts to cause the Closing to occur within ten
(10) Business Days following the entry of the Approval Order (such date,
the "Closing Date").
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ARTICLE III
PURCHASE PRICE; ADJUSTMENTS
3.1 Purchase Price.
(a) The aggregate amount (such amount, as adjusted pursuant to any
other provisions of this Agreement, referred to as the "Purchase Price")
to be paid by Buyer to Seller for the Sale Assets is U.S. $18,360,000.00,
allocated as follows: (i) $11,520,000.00 to M/V Midnight Wrangler; (ii)
$5,760,000.00 to M/V Midnight Eagle; and (iii) $1,080,000.00 to M/V
Midnight Gator, or such higher amount as may be bid by Buyer or a
competing bidder at the Auction. Seller acknowledges and agrees that (1)
Buyer shall be entitled to bid in its Debt in lieu of cash at the Auction
with respect to any one or more of the Vessels, (2) in the event Buyer is
the successful bidder with respect to any Vessel, Buyer shall be obligated
to pay the following expenses (collectively, the "Preferred Claims"): (i)
all Allowed Custodia Legis Expenses; (ii) all Allowed Secured Claims; and
(iii) an administrative fee to Seller of $75,000 for services rendered in
maintaining and in marketing the sale and soliciting of bids for the
Vessels (the "Administrative Fee"), which shall be allocated as follows:
(i) $47,058.82 to M/V Midnight Wrangler; (ii) $23,529.41 to M/V Midnight
Eagle; and (iii) $4,411.76 to M/V Midnight Gator. In the event Buyer is
the successful bidder with respect to any Vessel, Debtors shall receive a
credit against the Debt equal to Buyer's approved bid price for the Vessel
less the amount of all Preferred Claims. Such credit shall be applied
against the Debt in the following manner: (x) first against the
outstanding balance of principal and interest due by Debtors to Seller as
of the commencement of the Bankruptcy Case; (y) second, against any unpaid
post-petition interest (including any penalties and/or default interest);
and (z) third, against reasonable attorneys' fees and all other expenses
incurred by Seller in connection with the collection of the Debt and
foreclosure and sale of the Vessels, in each case, as approved by the
Bankruptcy Court.
(b) In the event a person other than Buyer is the successful bidder
at the Auction with respect to one or more of the Vessels, the Purchase
Price shall be paid in cash at the Closing, the cash proceeds of the
Purchase Price shall be deposited into the registry of the Bankruptcy
Court and the amount thereof, plus any accrued interest, shall be
distributed first to the payment of all Preferred Claims, and second to
the Buyer until the Debt has been fully satisfied, and the balance shall
remain in the registry of the Bankruptcy Court to be distributed as the
Bankruptcy Court may order.
(c) Except for the Administrative Fee, in no event shall Debtors or
any successor in interest of Debtors including, without limitation, any
trustee in bankruptcy in the Bankruptcy Case, seek or be entitled to costs
or expenses of administration of Debtors' Bankruptcy Case against any of
the Vessels pursuant to Section 506 (c) of the Bankruptcy Code or
otherwise.
3.2 Security Deposit.
(a) In the event that a Person other than Buyer wishes to submit a
competing bid to purchase one or more of the Vessels for cash at the
Auction pursuant to the
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Bidding Procedures Order, such Person (a "Competing Bidder") shall execute
the Security Deposit Escrow Agreement with Seller and shall pay a deposit
(the "Security Deposit") equal to 10% Purchase Price allocated to each
Vessel bid upon by such Person by wire transfer to an escrow account in
the U.S. to be established with the Security Deposit Escrow Agent and held
pursuant to the Bidding Procedures Order. The Competing Bidder shall be
responsible for all costs and fees of the Security Deposit Escrow Agent.
Buyer shall not be required to execute a Security Deposit Escrow Agreement
or place a Security Deposit.
(b) Upon the termination of this Agreement for any reason other than
a breach by the Competing Bidder of its obligations hereunder, the
Competing Bidder shall be entitled to the return of the Security Deposit
plus any interest earned thereon pursuant to the terms of the Security
Deposit Escrow Agreement, and the Parties shall provide joint written
instructions to the Security Deposit Escrow Agent to such effect.
(c) In the event of a termination of the Agreement due to a breach
by a Competing Bidder of said Competing Bidder's obligations under this
Agreement, the Competing Bidder shall forfeit its Security Deposit (plus
any interest earned thereon). The forfeited Security Deposit shall be
considered as a portion of the sale proceeds with respect to one or more
of the Vessels (as applicable) and shall be distributed as follows: [One
of the following alternatives, as approved by the Court:
Alternative A:
to the Seller.
Alternative B:
to satisfy the Allowed Secured Claims, if any, and GE Capital Security
Interests pertaining to each Vessel, with the balance, if any, distributed
to the Seller.
(d) If a Closing occurs with a Competing Bidder, then at the
Closing, the Seller and the Competing Bidder shall provide joint written
instructions to the Security Deposit Escrow Agent to release the Security
Deposit and Seller shall credit the Security Deposit plus any accrued
interest thereon against the Purchase Price paid at Closing.
ARTICLE IV
CLOSING DELIVERIES
4.1 Closing Deliveries of Seller. On the Closing Date, in exchange for the
Purchase Price, Seller shall deliver the following to Buyer:
(a) A certificate evidencing resolutions of the Board of Directors
of the Seller, certified by the Secretary or other appropriate officer or
agent of the Seller, duly authorizing the execution, delivery and
performance of this Agreement and other transaction documents;
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(b) A xxxx of sale for the Vessels in a form recordable in the U.S.
Coast Guard National Vessel Documentation Center with respect to M/V
Midnight Eagle and M/V Midnight Gator and in the Vanuatu Maritime Ship
Registry with respect to M/V Midnight Wrangler, duly notarially attested,
transferring the Vessels free and clear of all Liens ;
(c) A current Certificate of Ownership and Encumbrances issued by
the appropriate Governmental Authorities of the United States of America
(with respect to M/V Midnight Eagle and M/V Midnight Gator) and the
Republic of Vanuatu (with respect to M/V Midnight Wrangler) showing the
current record owners of the Vessels and stating that the Vessels are free
from all registered Liens; and
(d) Any additional documents reasonably required by the appropriate
Governmental Authorities for the purpose of re-documenting Seller's
ownership of the Vessels with the Vanuatu Ship Registry (with respect to
the M/V Midnight Wrangler) and with the U.S. Coast Guard National Vessel
Documentation Center (with respect to the M/V Midnight Eagle and the M/V
Midnight Gator) free and clear of all Liens, claims and interests,
provided Buyer notifies the Seller of any such documents as soon as
possible after the date of this Agreement.
4.2 Closing Deliveries of Buyer. On the Closing Date, in exchange for the
Sale Assets, Buyer shall deliver the following to Seller:
(a) A certificate evidencing resolutions of the Board of Directors
of the Buyer, certified by the Secretary or other appropriate officer or
agent of the Buyer, duly authorizing the execution, delivery and
performance of this Agreement and other documents relating hereto.
Notwithstanding the preceding sentence, Debtors shall waive the delivery
requirement of this subsection (a) on the Closing Date with respect to
General Electric Capital Corporation; and
(b) The Purchase Price, which shall be paid in accordance with
Section 3.1 hereof.
ARTICLE V
REPRESENTATIONS OF BUYER
5.1 Organization, Power and Status of the Buyer. Buyer is (i) an entity
duly formed, validly existing and in good standing under the laws of the State
of Delaware, and (ii) duly authorized, to the extent necessary, to do business
in each jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except for any failure to be so
qualified that would not have a material adverse effect upon Buyer's ability to
perform its obligations under the Agreement. Buyer has all requisite corporate
power and authority to own and operate the property it purports to own and to
carry on its business as now being conducted and as proposed to be conducted in
respect of the purchase of the Sale Assets.
5.2 Authorization, Enforceability, Execution and Delivery. Buyer has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Agreement and each other related document to which it is
a party. All actions on the part of
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Buyer that are required for the authorization, execution, delivery and
performance of the Agreement and each other related document to which it is a
party, in each case, have been duly and effectively taken, and the execution,
delivery and performance of its obligations under this Agreement and each such
other document do not require the approval or consent of any Person, except for
such consents and approvals as have been or will be obtained on or prior to the
Closing Date, which is the date the Sale Assets will be delivered by Seller to
Buyer. This Agreement and each such other document related to the Agreement to
which Buyer is a party constitutes its legal, valid and binding obligation,
enforceable against it in accordance with the terms thereof, except as such
enforceability (i) may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights and remedies generally and (ii) is subject to general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
5.3 No Conflicts; Laws and Consents; No Default. Neither the execution,
delivery and performance of this Agreement nor the consummation of the
Transaction nor performance of or compliance with the terms and conditions
hereof (i) contravenes any Requirement of Law applicable to Buyer or (ii)
constitutes a default under any document related hereto to which Buyer is a
party, except for any such contravention or default that would not have a
material adverse effect upon Buyer's ability to perform its obligations under
this Agreement. Buyer is in compliance in all material respects with and not in
default under any and all Requirements of Law applicable to Buyer, the terms and
provisions of the Agreement and any other related documents to which Buyer is a
party.
5.4 Government Approvals. All Governmental Approvals that are required to
be obtained in the name of Buyer in connection with the execution, delivery and
performance by Buyer of the Agreement and the related documents have been
obtained and are in effect on the Closing Date.
ARTICLE VI
REPRESENTATIONS OF SELLER
6.1 Organization, Power and Status of the Seller. Seller is (i) an entity
duly formed, validly existing and in good standing under the laws of Delaware,
and (ii) duly authorized, to the extent necessary, to do business in each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except for any failure to be so
qualified that would not have a material adverse effect upon Seller's ability to
perform its obligations under the Agreement. Seller has all requisite corporate
power and authority to own and operate the property it purports to own and to
carry on its business as now being conducted and as proposed to be conducted in
respect of the sale of the Sale Assets.
6.2 Authorization, Enforceability, Execution and Delivery. Seller has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Agreement and each other related document to which it is
a party. Subject to entry of the Approval Order, all actions on the part of
Seller that are required for the authorization, execution, delivery and
performance of this Agreement, and each other related document to which it is a
party, in each case, has been duly and effectively taken, and the execution,
delivery and performance of its obligations under this Agreement and each such
other document does not
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require the approval or consent of any Person, except for such consents and
approvals as have been obtained on or prior to the Closing, which is the time
the Sale Assets will be delivered by Seller to Buyer. Each of this Agreement and
each such other document to which Seller is a party constitutes its legal, valid
and binding obligation, enforceable against it in accordance with the terms
thereof, except as such enforceability (i) may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights and remedies generally, and (ii)
is subject to general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
6.3 No Conflicts; Laws and Consents; No Default. Neither the execution,
delivery and performance of this Agreement nor the consummation of the
Transaction nor performance of or compliance with the terms and conditions
hereof (i) contravenes any Requirement of Law applicable to Seller or (ii)
constitutes a default under any document, related hereto to which Seller is a
party, except for any such contravention or default that would not have a
material adverse effect upon Seller's ability to perform its obligations under
this Agreement. Seller is in compliance in all material respects with and not in
default under any and all Requirements of Law applicable to Seller, the terms
and provisions of the Agreement or any other related documents to which Seller
is a party.
6.4 Taxes. As of the Closing Date, Seller shall have filed, or caused to
be filed, all tax and information returns that are required to have been filed
by it in any jurisdiction with respect to the Sale Assets and has paid, or
caused to be paid, all taxes shown to be due and payable on such returns and all
other taxes or assessments payable by it with respect to the Sale Assets, to the
extent the same have become due and payable, but excluding any taxes the Seller
is contesting in good faith and by appropriate proceedings, provided such
contest, if determined adversely, would not subject the Sale Assets to imminent
forfeiture or sale or result in the imposition of any Lien thereon.
6.5 Good Title. At the Closing Date, Seller will have good and marketable
title to the Vessels. The Approval Order will provide that the Sale Assets are
being sold to Buyer free and clear of any Liens and other interests pursuant to
Sections 363(b)(1) and 363(f) of the Bankruptcy Code. In this connection, Seller
represents that as of the Closing Date it shall have identified to Buyer all
known Lien holders, Lien claimants, interest holders or creditors who have
previously asserted, or to Seller's knowledge may assert a lien, claim,
encumbrance or interest against the Vessels (collectively, "Claimants") and that
such Claimants have received good and sufficient notice of the Sale Motion and
the Sale Hearing.
6.6 U.S. Citizenship. Seller is a citizen of the United States within the
meaning of Section 2 of the Shipping Act of 1916, as amended, and the
regulations promulgated pursuant thereto, qualified to engage in the coastwise
trade of the United States.
ARTICLE VII
EXCLUSION OF WARRANTIES; NO ASSUMPTION OF LIABILITIES
7.1 Exclusion of Warranties. The Sale Assets will be sold by order of the
Bankruptcy Court free and clear of all Liens, mortgages and encumbrances of any
kind. Except as set forth
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above, Buyer shall take the Vessels "AS IS, WHERE IS," at the time title passes
to Buyer without any warranty or representation by Seller whatsoever, express or
implied, including without limitation as to title, the design, quality,
condition, merchantability or seaworthiness, or as to the fitness of the Vessels
for any particular purpose or trade, and the bills of sale referred to in
Sections 4.1(c) and 4.1(d) shall so provide. Buyer hereby represents that it has
had full opportunity to inspect the Vessels as of the Effective Date, and will,
except as otherwise provided in this Agreement, accept the Vessels upon the
satisfaction by Seller of Section 8.2 and by Buyer of Section 8.1 of this
Agreement. After the Closing, Seller shall have no obligation with respect to
the Sale Assets. Buyer's execution of the documentation at Closing shall be
conclusive evidence of Buyer's acceptance of the condition of the Sale Assets.
7.2 No Assumption of Liabilities. Except for the Preferred Claims or as
otherwise expressly provided herein, Buyer will not assume, and hereby expressly
disclaims any assumption of, any debts, liabilities or obligations (absolute or
contingent) of any kind of Debtors, including but not limited to (i) accounts
payable, (ii) indebtedness for money borrowed, (iii) income taxes, payroll
taxes, withholding taxes, franchise taxes, and other taxes except for sales,
value added or use taxes payable by Buyer with regard to the Sale Assets, (iv)
claims, litigation, liabilities or obligations arising out of or relating to the
operations of Debtors, (v) liabilities or obligations of any kind in respect of
any past or present stockholders, directors, officers, employees or consultants
of the Debtors, whether under any contract or agreement, pursuant to any pension
plan or employee benefit plan or welfare plan, or otherwise, (vi) liabilities or
obligations relating to recapture or any depreciable deduction, and/or (vii) any
other liabilities or obligations of or relating to Debtors.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Buyer's Conditions Precedent. The Buyer's obligation to accept the
Sale Assets from the Seller and to pay the Purchase Price in accordance with
this Agreement is subject to fulfillment on or before the Closing Date of the
following conditions precedent, all documents to be in form and substance
reasonably satisfactory to the Buyer:
(a) All Governmental Approvals that are required to be obtained in
the name of Buyer in connection with the execution, delivery and
performance by Buyer of the Agreement and the related documents have been
obtained and are in effect at Closing;
(b) Seller has made all filings and has received all material
consents, waivers and approvals from all Governmental Authorities, third
parties and such other entities, as necessary for the consummation of the
Transaction;
(c) Seller's representations and warranties in Article VI of this
Agreement are true and correct in all material respects;
(d) Seller has not contracted the Vessels;
(e) Seller has completed all deliveries it is required to make under
Section 4.1; and
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(f) Seller has complied in all material respects with its
obligations under this Agreement.
8.2 Seller's Conditions Precedent. The Seller's obligation to sell the
Sale Assets and deliver the Vessels to Buyer on the Closing Date is subject to
fulfillment of the following conditions precedent on or before the Closing Date,
all documents to be in form and substance reasonably satisfactory to Seller:
(a) Seller has made all filings and has received all material
consents, waivers and approvals from all Governmental Authorities, third
parties and such other entities, as necessary for the consummation of the
Transaction;
(b) Buyer's representations and warranties in Article V of this
Agreement are true and correct in all material respects;
(c) Buyer has paid Seller the Purchase Price in accordance with this
Agreement;
(d) Buyer has made all deliveries required under Section 4.2 of this
Agreement; and
(e) Buyer has complied in all material respects with its obligations
under this Agreement.
ARTICLE IX
SELLER'S BANKRUPTCY
9.1 Procedure for Approval of Transaction.
(a) Sale Motion. Seller shall file the Sale Motion seeking entry of
the Approval Order and deadlines for filing and service of objections and
responses to the relief requested in the Sale Motion on or before April
22, 2005, and arrange for setting of the Bidding Procedures Hearing on a
date that is no later than March 31, 2005, and arrange for setting of the
Sale Hearing on a date that is no later than June 8, 2005.
(b) Proposal and Submission of Approval Order. In connection with
the Sale Motion, Seller shall propose and submit to the Bankruptcy Court
for execution at the Sale Hearing, the Approval Order.
(c) Cooperation. Buyer and Seller shall cooperate with filing and
prosecuting the Sale Motion and obtaining entry of the Bidding Procedures
Order and the Approval Order.
(d) Marketing and Inspection Pending Sale. From the Effective Date
of this Agreement and until the Transaction contemplated thereby is
consummated Debtors and their agents, representatives and affiliates shall
be permitted to, and Seller shall have the responsibility and obligation
to, provide notice to all creditors, other parties in interest
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and any prospective buyers of the Sale Assets of the Transaction, the
Agreement, the Bidding Procedures Hearing, Auction, Sale Hearing and any
bidding procedures related thereto, respond to any inquiries or offers to
purchase the Sale Assets and perform any and all other acts related
thereto which are consistent with the bidding procedures and related
Bankruptcy Court-authorized auction for the Sale Assets or required under
the Bankruptcy Code or other applicable law, including, without
limitation, supplying information relating to the Sale Assets or the
Transaction to prospective bidders.
9.2 Conditions to Closing relating to Bankruptcy. In addition to the
conditions to Closing set forth in Sections 8.1 and 8.2, the obligations of the
Parties to close under this Agreement shall be subject to the satisfaction at or
prior to the Closing of the following conditions:
(a) The Bankruptcy Court shall have entered the Approval Order,
which order shall not have been stayed, reversed, modified or amended in
any respect and, if the Approval Order is the subject of a pending appeal,
the consummation of the Transaction shall not be the subject of a
presently effective stay pending appeal;
(b) The Bankruptcy Court shall have entered the Bidding Procedures
Order and Seller shall have complied in all materials respects with the
requirements of the Bidding Procedures Order;
(c) All consents, waivers, approvals and authorizations of third
parties as are necessary to consummate the Transaction shall have been
obtained for both parties;
(d) If required pursuant to the terms of this Agreement, the
approval of the appropriate Texas court authorizing the appointment of a
substitute custodian for the M/V Wrangler has been obtained; and
(e) Seller shall have given notice of the Sale Motion, Bidding
Procedures Hearing, Auction and Sale Hearing as reasonably requested by
Buyer and required by the Bankruptcy Code or applicable Bankruptcy Rules.
ARTICLE X
TRANSFER OF TITLE AND DELIVERY OF VESSELS
10.1 Transfer of Title. Title and risk of loss of or damage to the Sale
Assets will pass from the Seller to the Buyer at the time of Closing.
10.2 Inspections and Due Diligence. The Buyer has inspected and accepted
the Vessels' classification records. The Buyer has also inspected the Vessels
and has accepted the Vessels and the Equipment following this inspection. The
sale is outright and definite, subject only to the terms and conditions of this
Agreement.
10.3 Notices; Time and Place of Delivery. Seller shall deliver the M/V
Midnight Wrangler at a safe and accessible berth or anchorage at the Port of
Sabine, at an offshore location or at such other safe and accessible berth or
anchorage to which the Vessel is moved pursuant to Section 12.1(a). Seller shall
deliver the M/V Midnight Eagle and M/V Midnight Gator at a safe
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and accessible berth or anchorage at Debtors' Dulac, Louisiana facility or at an
offshore location, or such other location in Louisiana as Buyer and Seller shall
mutually agree. Any Equipment not aboard the Vessels at the time of Closing
shall be delivered at its location at the time of the Closing, which location
Seller shall notify to Buyer in advance of the Closing.
10.4 Buyer Responsibilities Upon Delivery. Immediately upon delivery,
Buyer shall have and assume all responsibility and liability as to any tugboats
or other boats or related equipment necessary to secure the Vessels at their
berths or transfer the Vessels to other berths at Buyer's choice. Buyer will
secure all necessary arrangements and approvals or other appropriate
governmental or regulatory authority regarding the berthing or transfer of the
Vessels upon delivery by Seller.
10.5 Delivery Procedure. Seller shall deliver the Vessels to a duly
authorized representative of Buyer ("Buyer's Authorized Representative"), which
shall be effective as of the Closing and acknowledged by Buyer.
10.6 Spares/bunkers, etc. All spare parts and spare equipment belonging to
the Sale Assets, used or unused, whether on board or not, shall become Buyer's
property. Forwarding charges, if any, shall be for Buyer's account. Seller is
not required to replace spare parts which are taken out of spare and used as
replacement prior to delivery, but the replaced items shall be the property of
Buyer. Seller may take ashore crockery, plates, cutlery, linen and other
articles bearing Seller's flag or name, provided Seller replaces same with
similar unmarked items. Library, forms, etc., exclusively for use in Seller's
Vessels, shall be excluded without compensation. Captain's, Officers' and Crew's
personal belongings including the slop chest are excluded from the Transaction,
as well as any leased or rented items.
10.7 Name/Markings. Upon reasonable time after delivery, Buyer shall
change the name of the Vessels and alter all funnel markings.
ARTICLE XI
TAXES
Any tax (including sales tax), fees and expenses in connection with the
transfer of the Sale Assets to Buyer and the registration under the Buyer's flag
shall be paid exclusively by the Buyer. Ad valorem taxes on the Sale Assets
accrued prior to the Closing shall be the responsibility of Seller. Ad valorem
taxes on the Sale Assets accruing after the Closing shall be the responsibility
of Buyer.
ARTICLE XII
CUSTODY, LOCATION AND XXXXXXX OF VESSELS PENDING SALE
12.1 Preamble. The Vessel M/V Midnight Wrangler is currently under arrest
and in the possession and custody of the United States Marshal for the Eastern
District of Texas. The M/V Midnight Wrangler is currently located in the Sabine
Pass at a dock operated by Gulf Copper. The M/V Midnight Eagle is currently
located at Debtors' facilities in Dulac, Louisiana and is being monitored by
employees of Debtors. The Vessels M/V Midnight Eagle and M/V Midnight Gator are
not under arrest and are currently located at Debtors' facility in Dulac and
14
are being monitored by employees of Debtors. Pending the sale of the Vessels
contemplated by this Agreement, the custody, location and xxxxxxx of the Vessels
shall be as follows:
(a) M/V Midnight Wrangler. The M/V Midnight Wrangler shall remain
under arrest, although Buyer may seek to relocate this Vessel to a lay
berth in order to reduce the custodia legis expenses, which such lay berth
shall be acceptable to Seller. The Seller, subject to compliance with
applicable governing body or insurance regulations, confirms that Seller
has no opposition to the reduction of the crew to the minimal number
acceptable to Buyer. Buyer, at its expense, shall have the right to have a
representative aboard the M/V Midnight Wrangler at all times. Seller and
Buyer shall cooperate in the filing of an appropriate joint motion with
the Bankruptcy Court and/or Texas court to implement the foregoing consent
custodial arrangement. In the event that Buyer is required to advance the
costs of dockage of the Vessel, any such advances shall be deemed custodia
legis expenses. Nothing herein shall be construed to restrict Seller and
Buyer's right to contest any expenses alleged to have been incurred by any
person, including, without limitation, C-Mar America, Inc., in respect of
any of the Vessels, including whether any such expenses constitute
custodia legis expenses or give rise to a Lien on the Vessel;
(b) M/V Midnight Eagle. The M/V Midnight Eagle shall remain at
Debtors' facilities in Dulac, Louisiana at no cost to Buyer. Unless
otherwise agreed between Buyer and Seller, Seller shall continue to
provide routine maintenance to this Vessel in the same manner as Seller
has since the filing of the Bankruptcy Case, and the M/V Midnight Eagle
shall at all times remain at said facility in Dulac, Louisiana. Buyer, at
its expense, shall have the right to have a representative aboard the M/V
Midnight Eagle at all times. Buyer has taken the position that the
American Crane, Model 5299 and Xxxxxxx hydraulic pedestal crane
(collectively, the "Cranes") listed as machinery belong to M/V Midnight
Eagle in the Xxxxx X. Xxxxx & Associates, Inc. condition and valuation
survey dated January 30, 2003 is encumbered by Buyer's preferred ship
mortgage and perfected UCC security interest in the M/V Midnight Eagle.
Seller has advised that Regions Bank claims a competing security interest
in the Cranes. Buyer specifically reserves its secured claim in the
Cranes, which, if not amicably resolved, shall be referred to the
Bankruptcy Court for adjudication; and
(c) M/V Midnight Gator. The Vessel Midnight Gator shall remain in
the possession and custody of Seller and shall at all times remain at
Debtors' facilities in Dulac, Louisiana at no cost to Buyer. Unless
otherwise agreed between Buyer and Seller, Seller shall continue to
provide maintenance to the M/V Midnight Gator in the same manner as Seller
has since the commencement of the Bankruptcy Case, and the M/V Midnight
Gator shall at all times remain at said facility in Dulac, Louisiana.
Buyer, at its expense, shall have the right to have a representative
aboard the M/V Midnight Gator at all times. Seller shall return to the M/V
Midnight Gator one of the two (2) Caterpillar Model 3512-D1 (S/N 50Y00958
and S/N 50Y00962) engines driving skid mounted jet pumps removed from the
Vessel or pay to Buyer the fair market value thereof as determined by
Xxxxxx, Xxxxxx & Xxxxxxx.
15
12.2 Insurance Requirements. Until the Sale of the Vessels has been
approved by the Bankruptcy Court, Seller shall keep and maintain all required
hull and machinery and P&I insurance on the Vessels as required by Buyer's
mortgages referred to in the Recitals to this Agreement.
12.3 Covenant Not to Remove. Seller covenants and agrees that it will not
remove or permit the removal of any equipment or appurtenances from the Vessels
that are encumbered by Buyer's preferred ship mortgages and/or UCC security
interests. Seller further covenants that to the extent any equipment or
appurtenances that were encumbered by Buyer's preferred ship mortgages and/or
security interests were removed and are still owned by the Debtors, such
equipment and appurtenances shall be placed back aboard or otherwise segregated
at a mutually agreed location and sold with the respective Vessels. Seller
further agrees to allow Buyer to confirm compliance with the requirements
hereof.
12.4 Reservation of Rights Under Insurance Policies. Buyer reserves all of
its rights as loss payee/additional insured under the insurance policies for the
Vessels and as assignee of the right to insurance payments with respect to any
claim, loss or damage relating to the Vessels, including, without limitation,
its right to collect all recoverable insurance proceeds due as a result of the
casualty suffered by the M/V Midnight Wrangler in December 2004 resulting in
damage to her deck and modular lay system.
ARTICLE XIII
TERMINATION
13.1 Termination. In addition to any other termination rights set forth in
this Agreement, this Agreement may be terminated at any time at or prior to the
Closing, as follows:
(a) In writing, by mutual consent of the Parties;
(b) In the event the Sale Hearing is not held on or before May 31,
2005, or the Bidding Procedures Hearing is not held on or before May 4,
2005 (unless otherwise agreed to in writing by Buyer); or
(c) In the event the Bankruptcy Court fails to execute or enter the
Bidding Procedures Order on or before May 6, 2005 or fails to enter the
Approval Order on or before June 30, 2005, as contemplated by this
Agreement.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Amendment. This Agreement may be amended from time to time by written
agreement signed by the Parties.
14.2 Severability. If any provision of this Agreement is held to be in
conflict with any Law or is otherwise held to be unenforceable for any reason
whatsoever, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein
16
contained invalid, inoperative or unenforceable to any extent whatsoever. The
invalidity of any one or more phrases, sentences, clauses or sections of this
Agreement shall not affect the remaining portions of this Agreement, or any part
thereof.
14.3 Notices. Unless otherwise provided in this Agreement, any Notice
permitted or required hereunder must be sent by (i) personal delivery, (ii)
expedited delivery service with proof of delivery, (iii) United States
registered or certified mail, postage prepaid, or (iv) telecopy (provided that
the telecopy is confirmed by mail in the manner previously described), addressed
as follows:
If to the Buyer to:
General Electric Capital Corporation
c/o
Xxxxxx X. Bella
GE Capital - Capital Funding, Inc.
000 Xxxxxxx 0, Xxxxx 00
Xxxxxxx, XX 00000-0000
Telefax: 229-1992
and
Xxxxxx X. Xxx
GE Commercial Finance
000 Xxxx Xxxxxx Xx., XX 00-000
Xxxxxxx, XX 00000
Telefax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Xx., Esq.
King, XxXxxxx & XxXxxxx, P.L.L.C.
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telefax: (000) 000-0000
If to the Seller to:
Torch Express, L.L.C.
c/o Torch Offshore, Inc.
c/o Xxxxx Xxxxxx, Chief Restructuring Advisor
Telecopier: (000) 000-0000
c/o Xxxxxx Xxxxxx, Manager
Telecopier: (504) 367-8605
000 Xxxxxxx Xxxxxx, Xxxxx 000
00
Xxxxxx, Xxxxxxxxx 00000
with a copy to:
Heller, Draper, Xxxxxx, Xxxxxxx & Xxxx, L.L.C.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Any purported Notice by e-mail shall be without effect. All Notices
required under this Agreement should specifically state that this is a "Notice
pursuant to Section 14.3 of this Agreement."
14.4 Captions. The captions or headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement.
14.5 No Partnership. Nothing herein contained shall be deemed or construed
to create a partnership or joint venture between the Parties.
14.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which shall be deemed to be an original. Such counterparts shall constitute one
and the same agreement.
14.7 General Interpretive Principles. Except as otherwise expressly
provided or unless the context otherwise requires, the defined terms in this
Agreement shall include the plural as well as the singular, and the use of any
gender herein shall be deemed to include any other gender.
14.8 Punitive, Consequential, and Special Damages. Under no circumstances
shall either Party be liable to the other for any punitive, consequential, or
special damages.
14.9 Further Assurances. The Seller and the Buyer agree to take all
necessary action and to deliver or cause to be delivered on the Closing Date and
at such other times thereafter any such additional certificates, documents or
instruments as either of them may reasonably request for the purposes of
carrying out this Agreement and the transactions contemplated hereby.
14.10 Entire Agreement. This Agreement, including any Exhibits attached
hereto, constitutes the entire understanding and agreement among the parties
with respect to the subject matter of this Agreement, and supersedes all prior
and contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written, except as contained in this Agreement.
Except as specifically set forth herein, this Agreement is not dependent upon
the existence of any other agreement.
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14.11 Finders or Broker's Fees. With the exception of their respective
financial advisors, each of Buyer (on the one hand), and Seller (on the other
hand), represents and warrants that neither it nor any of its respective
affiliates has dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement, other than Bridge Associates, LLC
("Bridge") and Xxxxxxx Xxxxx & Associates ("RJA"). Notwithstanding any prior or
subsequent orders of the Bankruptcy Court authorizing the employment and
retention of Bridge and RJA, and their right to any fees in connection with the
sale of the Vessels, Buyer shall have the sole and absolute discretion as to
whether any fees are received by Bridge or RJA out of the sale proceeds of the
Vessels.
14.12 No Assignment. This Agreement may not be assigned in whole or in
part by Seller or Buyer, except that Buyer may assign this Agreement to a wholly
owned subsidiary of Buyer; provided, however, that in the event of such
permitted assignment, Buyer shall not be relieved of its obligations hereunder
and further, the assignee shall assume the obligations of Buyer hereunder.
14.13 Governing Law. Except for issues relating to ownership of the
Vessels and recorded liens on the Vessels, which shall be governed by the laws
of the jurisdiction of their respective registrations, the Agreement will be
governed by and interpreted in accordance with the laws of the State of
Louisiana, without giving effect to the principles of conflicts of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF both parties have hereunto placed their signatures on
the day and year first written above.
SELLER:
TORCH OFFSHORE, L.L.C.
BY: ______________________
ITS: ______________________
TORCH OFFSHORE, INC.
BY: ______________________
ITS: ______________________
TORCH EXPRESS, L.L.C.
BY: ______________________
ITS: ______________________
BUYER:
GENERAL ELECTRIC CAPITAL
` CORPORATION
BY: ______________________
ITS: ______________________
