VESSEL PURCHASE AND SALE AGREEMENT
THIS VESSEL PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into
as of June 22, 1998 by and between Trans-Pacific Shipping Co. ("SELLER") and
Schnitzer Steel Industries, Inc., ("BUYER").
RECITALS
A. SELLER is the owner of the vessel called M/V PACDUKE, O.N. 5242, and all
tackle, equipment and machinery appertaining thereto (the "Vessel").
B. SELLER and BUYER were parties to a Charter Party dated May 27, 1993, and
certain addenda thereto, relating to the Vessel (collectively, the "1993
Agreement").
C. SELLER and BUYER desire to restate their mutual obligations regarding
the Vessel and to supplant the terms of the 1993 Agreement. In furtherance
thereof, on this same date, SELLER and BUYER have entered into a Charter Party
whereby BUYER has hired the Vessel for a period of five (5) years.
D. SELLER desires to sell and BUYER desires to purchase the Vessel upon the
expiry of the Charter Party subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and subject to the
conditions set forth below, the parties agree as follows:
1. Purchase of Vessel. Upon the expiry of the Charter Party, or on any date
prior thereto agreed to by the parties, SELLER will sell and BUYER will buy the
Vessel "as is, where is" at the Closing (as that term is defined below).
2. Purchase Price. The purchase price for the Vessel is Two Million Five
Hundred Thousand One Hundred dollars ($2,500,100), exclusive of all sales and
use taxes and fees associated with the transfer of ownership of the Vessel to
BUYER, which such taxes and fees shall be the responsibility of BUYER at the
Closing (the "Purchase Price"). The Charter Party requires BUYER to pay SELLER
$2,500,000 in prepaid hire. The parties agree that this amount shall be credited
against the Purchase Price at the Closing. BUYER shall pay the remainder of the
Purchase Price to SELLER at the Closing.
3. Other Expenses.
a. BUYER shall be responsible for paying all expenses incurred in
obtaining any government, class or other approval of the sale of the Vessel.
-2-
b. At the Closing, BUYER shall pay to SELLER an amount sufficient to
cover SELLER's liability for taxes and fees, if any, as set forth in Paragraph 2
above.
c. BUYER shall be responsible for all port charges, including, but not
limited to, wharfage, dockage and harbor entrance fees, incurred or assessed by
any port authority in connection with the delivery of the Vessel to BUYER.
d. BUYER shall be responsible for all transportation charges,
including crew wages and bunkers, associated with the delivery of the Vessel to
the location of the Closing.
4. Closing. The term "Closing" as used in this Agreement shall mean the
delivery of the Vessel by SELLER to BUYER upon satisfaction of BUYER's
obligations under this Agreement. The Closing shall occur on a date and at a
location as the parties shall mutually agree prior to the expiry of the Charter
Party.
5. Delivery; Transfer of Title. Subject to BUYER's performance of the
obligations required by this Agreement, at the Closing, SELLER shall deliver to
BUYER, and BUYER shall take possession of, the Vessel with everything belonging
to her on board at a berth or place agreed to by the parties pursuant to
Paragraph 4 above. Simultaneously, SELLER shall deliver to BUYER an executed
Xxxx of Sale in the form attached to this Agreement as "Exhibit A", whereupon
title to the Vessel shall pass to
-3-
BUYER, and all documents in SELLER's possession or control, including but not
limited to, certificates of inspection, classification, load line and
maintenance records.
6. Liability and Indemnity. After the Closing, BUYER shall assume all risk
of loss of the Vessel and shall, except with respect to the warranty of title
set forth in Xxxxxxxxx 0 xxxxx, xx barred from instituting any claim, action,
suit or proceeding against SELLER, its parent corporation and their officers,
directors, employees, representatives, successors and assigns, arising out of or
in connection with the Vessel, or the use or condition thereof. Additionally,
after the Closing, BUYER shall defend and indemnify SELLER and its parent
corporation and their officers, directors, employees, representatives,
successors and assigns, from any claims, actions and liabilities arising out of
or in connection with BUYER's ownership of the Vessel.
7. Warranty of Title. At the Closing, SELLER will warrant that it has title
to the Vessel, free and clear of all liens and encumbrances, and will indemnify,
defend and hold harmless BUYER from and against any liability, cost or expense
arising out of or in connection with any breach in this warranty of title.
8. Warranty and Consequential Damage Disclaimer. At the Closing, BUYER
shall purchase the Vessel on an "as is, where is" basis, and, except for the
warranty of title set forth in
-4-
Paragraph 7 above, with no warranties, either express or implied, given by
SELLER.
9. Insurance. During the term of the Charter Party and until BUYER takes
title to the Vessel, SELLER shall maintain in full force and effect the marine
hull and machinery insurance and marine protection and indemnity insurance that
it presently has in place on the Vessel, or shall obtain insurance comparable
thereto. Such insurance shall contain appropriate endorsements naming BUYER as
an additional insured. SELLER shall furnish BUYER evidence satisfactory to BUYER
of the insurance required by this Paragraph 9. BUYER shall reimburse SELLER for
the cost of the insurance premiums. If SELLER fails to keep in full force or
effect or to provide any or all insurance required by this Paragraph 9, BUYER
shall have the right to obtain that insurance and pay the premiums for it.
10. Costs and Expenses. During the term of the Charter Party, BUYER shall
bear all costs and capital expenses relating to the operation and maintenance of
the Vessel, including, but not limited to, wages, maintenance, supplies and
equipment costs, and fuel and lubricant expenses, as if it were the owner of the
Vessel. BUYER shall promptly reimburse SELLER for any such costs and expenses
paid by SELLER.
11. Total or Partial Loss. In the event the Vessel becomes an actual or
constructive total loss during the term of
-5-
the Charter Party, BUYER shall be entitled to recover all of the insurance
proceeds received by SELLER on account of the loss.
12. General Provisions.
a. The terms of this Agreement shall inure to the benefit of and be
binding upon the parties, their directors, officers, assigns, agents, employees,
legal representatives and successors-in-interest.
b. Captions used in this Agreement are for convenience of reference
only and shall have no legal effect or meaning in the construction or
enforcement of this Agreement.
c. This Agreement constitutes the entire agreement between the parties
and supersedes and cancels all prior agreements and communications, whether
written or oral, on the subject matter of this Agreement. The terms of Paragraph
6, Liability and Indemnity; Xxxxxxxxx 0, Xxxxxxxx of Title; and Xxxxxxxxx 0,
Xxxxxxxx and Consequential Damage Disclaimer, shall survive transfer of title of
the Vessel from SELLER to BUYER.
d. The terms of this Agreement shall be construed and enforced in
accordance with the laws of the State of Oregon. The parties agree that in the
event of any dispute concerning their respective rights and obligations under
this Agreement, the dispute will be resolved by arbitration in Multnomah County,
-6-
Oregon before a panel of three (3) arbitrators who are licensed to practice law
in the State of Oregon. SELLER shall select one (1) arbitrator; BUYER shall
select one (1) arbitrator; and the two (2) arbitrators chosen by the parties
shall select the third arbitrator. The arbitrators shall follow the American
Arbitrations Association ("AAA") Commercial Arbitration rules with Expedited
Procedures in effect on the date hereof, as modified by this Agreement. There
shall be no substantive motions or discovery. The hearing shall take place
ninety (90) days from a party's arbitration demand and shall be concluded within
three (3) days. The decision of the arbitrators will be final and binding on the
parties. The prevailing party in any arbitration will be entitled to an award of
its reasonable attorneys' fees, costs and expenses incurred in preparation for
and through the arbitration and on any appeal therefrom and enforcing this
arbitration provision or the arbitrators' determination.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first appearing above.
TRANS-PACIFIC SHIPPING CO.
By: /s/ XXXXXXX XXXXXX
-------------------------------------
Its: President
--------------------------------
SCHNITZER STEEL INDUSTRIES, INC.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------
Its: President
--------------------------------
-7-
EXHIBIT A
XXXX OF SALE
Reference is made to the Purchase Agreement (the "Agreement"), dated
as of June 22, 1998, by and between Trans-Pacific Shipping Co., a Liberian
corporation ("Seller"), and Schnitzer Steel Industries, Inc., an Oregon
corporation ("Buyer").
Seller, for good and valuable consideration paid to it by Buyer, the
receipt of which is hereby acknowledged, does hereby grant, bargain, sell,
transfer, assign and convey to Buyer, its successors and assigns, all of
Seller's right, title and interest in and to the Liberian flag vessel M.V.
PACDUKE (the "Vessel"), subject to the terms of the Agreement.
TO HAVE AND TO HOLD said Vessel forever, together with all of Seller's
right, title and interest in such Vessel.
IN WITNESS WHEREOF, the undersigned have duly executed this Xxxx of
Sale on behalf of Seller as of the ____ day of ___________, 2003.
TRANS-PACIFIC SHIPPING CO.
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
President
