VESSEL PURCHASE AGREEMENT
among
WISCONSIN & MICHIGAN STEAMSHIP COMPANY
and
GRAND RIVER NAVIGATION COMPANY, INC.
and
RAND LL HOLDINGS CORP.
Dated February 14, 2008
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..................................................
1
ARTICLE II PURCHASE
AND SALE OF ASSETS.................................. 8
2.1
Sale
and Transfer of Assets.....................................
8
2.2
Retained Assets.................................................
9
2.3
Assignability and Consents......................................
9
2.4
Short-Term License..............................................
9
ARTICLE III
LIABILITIES..................................................
10
3.1
Assumption of Liabilities.......................................
10
3.2
Retained Liabilities............................................
10
ARTICLE IV PURCHASE
PRICE............................................... 10
4.1
Payment.........................................................
10
4.2
Purchase Price Allocation.......................................
11
ARTICLE V
CLOSING AND DELIVERIES.......................................
11
5.1
Closing.........................................................
11
5.2
Delivery of Vessels.............................................
11
5.3
Documents to be Delivered by the Company........................
11
5.4
Documents to be Delivered by Buyer..............................
13
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY................
14
6.1
Organization and Standing; Citizenship..........................
14
6.2
Authorization, Validity and Effect..............................
14
6.3
No
Conflict; Required Filings and Consents......................
14
6.4
Financial Statements............................................
15
6.5
Title; Sufficiency of Assets; Condition.........................
16
6.6
[Intentionally Omitted].........................................
17
6.7
Compliance with Laws............................................
17
6.8
Permits.........................................................
17
6.9
Employee Plans..................................................
18
6.10
Contracts
and Loans............................................. 19
6.11
Legal
Proceedings............................................... 19
6.12
Insurance.......................................................
19
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
6.13
Labor
Relations and Employment Issues........................... 19
6.14
Environmental Matters...........................................
20
6.15
Conduct of
Business in Ordinary Course.......................... 21
6.16
Taxes...........................................................
21
6.17
No
Brokers......................................................
22
6.18
Pooling
Arrangement............................................. 22
6.19
No Other Representations or
Warranties.......................... 22
ARTICLE VII REPRESENTATIONS
AND WARRANTIES OF BUYER AND RAND............. 22
7.1
Organization and Standing.......................................
22
7.2
Authorization, Validity and Effect..............................
22
7.3
No
Conflict; Required Filings and Consents......................
23
7.4
Citizenship.....................................................
23
7.5
No
Brokers......................................................
23
ARTICLE VIII COVENANTS AND
AGREEMENTS..................................... 23
8.1
Confidentiality.................................................
23
8.2
Transfer Taxes..................................................
23
8.3
Records; Reasonable Access......................................
24
8.4
Commercially Reasonable Efforts; Cooperation....................
25
8.5
Employee Matters................................................
25
8.6
Hazardous Substance-Containing Materials........................
29
ARTICLE IX
REMEDIES.....................................................
29
9.1
Survival........................................................
29
9.2
Indemnification by Buyer........................................
30
9.3
Indemnification by the Company..................................
30
9.4
Exclusive Remedy................................................
31
9.5
Limitations on Indemnification Payments.........................
31
9.6
Procedures......................................................
32
9.7
Specific Performance............................................
34
9.8
Subrogation.....................................................
34
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
9.9
Adjustment to Purchase Price....................................
35
ARTICLE X TAX
MATTERS.................................................. 35
10.1
Cooperation; Audits.............................................
35
ARTICLE XI
MISCELLANEOUS AND GENERAL....................................
35
11.1
Expenses........................................................
35
11.2
Successors
and Assigns.......................................... 35
11.3
Third
Party Beneficiaries....................................... 35
11.4
Notices.........................................................
36
11.5
Complete
Agreement.............................................. 37
11.6
Captions........................................................
37
11.7
Amendment.......................................................
37
11.8
Governing
Law................................................... 37
11.9
Severability....................................................
37
11.10
Construction....................................................
37
11.11
Counterparts....................................................
38
<PAGE>
SCHEDULES AND EXHIBITS
Schedules
---------
Schedule 2.1(b)
Vessels
Schedule 2.1(e) Acquired
Contracts
Schedule 4.2
Purchase Price Allocation
Schedule 6.3(a)
Conflicts
Schedule 6.3(b) Required Consents of the
Company
Schedule 6.4(c)
Undisclosed Liabilities
Schedule 6.4(d) Current
Assets
Schedule 6.5(a) Title
Exceptions
Schedule 6.5(b) List of
Personal Property and Fixtures
Schedule 6.5(d) Condition
of Vessels
Schedule 6.5(f) Vessel
Permits
Schedule 6.5(g) Vessel
Information
Schedule 6.5(h) Class
Schedule 6.7
Compliance with Laws
Schedule 6.8
Permits
Schedule 6.9(a) Employee
Plans
Schedule 6.10(a) Contracts and
Purchase Orders
Schedule 6.10(b) Indebtedness
Schedule 6.11
Legal Proceedings
Schedule 6.12
Insurance
Schedule 6.13(b) Labor
Relations
Schedule 6.13(d) Employees
Schedule 6.14
Environmental Matters
Schedule 6.15
Conduct of Business
Schedule 6.16
Taxes
Schedule 7.3(b) Required
Consents of Buyer
Exhibits
--------
Exhibit A Form of Bill of
Sale
Exhibit B Form of Coast
Guard Bill of Sale for Vessels
Exhibit C Form(s) of
Assignment and Assumption Agreement(s)
Exhibit D Form of Protocol
of Delivery and Acceptance
Exhibit E Form of Escrow
Agreement
<PAGE>
VESSEL PURCHASE AGREEMENT
This
VESSEL PURCHASE AGREEMENT (this "Agreement"), dated February
___,
2008, is entered into among Wisconsin & Michigan Steamship
Company, a Michigan
corporation (the "Company"), Grand River Navigation Company, Inc.,
a Delaware
corporation ("Buyer"), and, solely for purposes of Article VII and
Article IX
hereof, Rand LL Holdings Corp., a Delaware corporation
("Rand").
RECITALS
A. The
Company is engaged in the business (the "Business") of owning
and
operating the Vessels (as hereinafter defined).
B. The
Company and Lower Lakes Transportation Company ("LLTC") are
party
to that certain Time Charter Agreement, dated on or about August 1,
2006 (the
"Time Charter Agreement"), pursuant to which LLTC has exercised its
option to
purchase, or cause its designee to purchase, the Vessels and
Equipment (as
herein defined) by delivery of a Notice of Exercise dated February
___, 2008.
C. The
Company and Buyer desire to effectuate the sale of the Vessels
and
Equipment in accordance with the terms of this Agreement. Rand
desires to assist
its Affiliate, Buyer, in completing the purchase of the Vessels and
Equipment.
NOW,
THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth
herein, and
subject to the terms and conditions set forth herein, the Company
and Buyer
hereby agree as follows:
ARTICLE I
DEFINITIONS
For
purposes of this Agreement:
"Acquired
Assets" has the meaning set forth in Section 2.1.
"Actions"
means any suit, claim, charge, complaint, legal proceeding,
administrative proceeding or arbitration proceeding before any
Governmental
Authority and any suit, claim, charge, complaint, arbitration
proceeding or
legal proceeding by any other Person.
"Acquired
Contracts" has the meaning set forth in Section 2.1(e).
"Acquired
Purchase Orders" means all purchase orders issued by the
Company
prior to the Closing Date that are attributable to goods and
services to be
delivered to or for the Vessels or performed on the Vessels after
the Closing
Date.
"Acquired
Sales Orders" means all orders received by the Company for
which
services have not been provided as of the Closing Date.
<PAGE>
"Affiliate" means with respect to any Person, any Person that
directly or
indirectly controls, is controlled by or is under common control
with such
Person.
"Agreement" has the meaning set forth in the preamble.
"AMO"
means the American Maritime Officers Union.
"AMO CBA"
means the Collective Bargaining Agreement dated August 1, 2003,
between ONCO and the AMO, as assumed by the Company in connection
with the ONCO
Purchase Agreement.
"Assumed
Liabilities" has the meaning set forth in Section 3.1.
"Assignment and Assumption Agreements" has the meaning set forth
in
Section 5.3(d).
"Balance
Sheet" has the meaning set forth in Section 6.4(a).
"Balance
Sheet Date" has the meaning set forth in Section 6.4(a).
"Business"
has the meaning set forth in the recitals.
"Buyer"
has the meaning set forth in the preamble.
"Buyer
Indemnitees" has the meaning set forth in Section 9.3.
"Claims
Notice" has the meaning set forth in Section 9.6(a)(i).
"Closing"
has the meaning set forth in Section 5.1.
"Closing
Date" has the meaning set forth in Section 5.1.
"Code"
means the Internal Revenue Code of 1986, as amended, and the
rules
and regulations promulgated thereunder.
"Company"
has the meaning set forth in the preamble.
"Company
Employees" means Union Employees and Non-Union Employees.
"Company
Proposed Settlement Offer" has the meaning set forth in Section
9.6(a)(ii).
"Company's
Knowledge" means the actual knowledge of senior management of
the Company as of the Closing Date, and such knowledge that any of
those persons
should have acquired in the reasonable discharge of his or her
employment
responsibilities.
"Confidentiality Agreement" has the meaning set forth in Section
8.1.
"Consent"
means any consent, approval, authorization, qualification,
waiver, registration or notification required to be obtained from,
filed with or
delivered to a Governmental Authority or any other Person in
connection with the
consummation of the transactions provided for herein.
2
<PAGE>
"Contracts" means all executory contracts, leases, licenses and
other
agreements (including any amendments and other modifications
thereto), whether
oral or written, to which the Company is a party or third party
beneficiary
excluding the Purchase and Sale Orders.
"Delivery
Protocol" has the meaning set forth in Section 5.3(p).
"Direct
Claim" has the meaning set forth in Section 9.6(b).
"Employee
Plans" has the meaning set forth in Section 6.9(a).
"Environment" means surface or subsurface soil or strata, surface
waters
(including lakes, streams, creeks, marshes and wetlands),
sediments, navigable
waters, groundwater, land, and indoor or ambient air.
"Environmental Claim" means any Action or any written notice,
demand,
allegation or charge by any Person relating to or arising out of
the Business or
the Acquired Assets alleging a violation of, noncompliance with or
liability
under any Environmental Law, or common law with respect to
Hazardous Substances.
The term includes such Actions and claims seeking damages for
damage to real or
personal property, personal injury, bodily injury or disease
(including death)
and damage to natural resources including, without limitation, any
cleanup,
removal, containment or other remediation required by any
Environmental Law
(whether or not such cleanup has been required or requested by any
Governmental
Authority), as well as Actions and claims for equitable or
injunctive relief.
"Environmental Law" means any Law, including common law, or
Order
concerning the liability for, or protection of, human health (with
respect to
handling of or exposure to Hazardous Substances), pollution,
natural resources
and the Environment, including, without limitation any such Law or
binding
obligation: (i) related to the presence, Releases or threatened
Releases of any
Hazardous Substance on, at, or to the Environment; and (ii)
governing the
manufacture, processing, use, treatment, storage, management,
disposal, loading,
off-loading, shipping, transport or handling of or exposure to
Hazardous
Substances. Such Environmental Laws shall include, but are not
limited to, the
federal Resource Conservation and Recovery Act; the Solid Waste
Disposal Act;
the Comprehensive Environmental Response, Compensation and
Liability Act; the
Emergency Planning and Community Right to Know Act; the Federal
Water Pollution
Control Act; the Clean Water Act; the Oil Pollution Act; the Clean
Air Act; the
Safe Drinking Water Act, the Toxic Substances Control Act; the
Hazardous
Materials Transportation Act; the environmental provisions of the
Occupational
Safety and Health Act to the extent that they apply to the Vessels;
and any
other similar foreign, federal, state or local Laws, in each case
as are or may
be amended or superseded.
"Environmental Liabilities" means any actual, alleged or
contingent
liability or obligation (i) arising from the violation, or alleged
violation on
or prior to the Closing Date of any Environmental Law or
Environmental Permit;
(ii) arising from the Release on or prior to the Closing Date or
threatened
Release on or prior to the Closing Date of Hazardous Substances at,
on, in,
under or from the Vessels; (iii) arising from exposure of any
Person to
Hazardous Substances on or prior to the Closing Date; or (iv)
arising from the
Release or threatened Release of Hazardous Substances at, on, in,
under or from
the Real Property.
3
<PAGE>
"Environmental Permits" means licenses, permits, authorizations,
consents,
certificates of authority, qualifications or similar document or
authority
required by or issued by any Governmental Authority under
Environmental Laws.
"ERISA"
means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA
Affiliate" means, with respect to the Company, (i) any
corporation
which at, or at any time within six (6) years prior to, the Closing
Date is or
was a member of the same controlled group of corporations (within
the meaning of
Section 414(b) of the Code) as the Company; (ii) any partnership,
trade or
business (whether or not incorporated) which at, or any time within
six (6)
years prior to, the Closing Date is or was under common control
(within the
meaning of Section 414(c) of the Code) with the Company; (iii) any
entity, which
at, or at any time within six (6) years prior to, the Closing Date
is or was a
member of the same affiliated service group (within the meaning of
Section
414(m) of the Code) as the Company, any corporation described in
clause (i) or
any partnership, trade or business described in clause (ii); and
(iv) any entity
which at, or at any time within six (6) years prior to, the Closing
Date is or
was required to be aggregated with the Company under Section 414(o)
of the Code.
"Financial
Statements" has the meaning set forth in Section 6.4(a).
"Fit Out
Expenses" means all costs and expenses actually incurred by the
Company to stock and supply any of the Vessels in preparation for
the sailing
season pending as of the date of this Agreement, if a sailing
season is then
pending, and all direct labor, material and other direct costs
actually incurred
by the Company relating to the startup and preparation of any of
the Vessels for
such sailing season if then pending.
"GAAP"
means United States generally accepted accounting principles
applied on a consistent basis.
"General
Enforceability Exceptions" means (i) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar Laws
affecting the
enforcement of creditors' rights generally from time to time in
effect and (ii)
the availability of equitable remedies (regardless of whether
enforceability is
considered in a proceeding at law or in equity).
"Governmental Authority" means any government or political
subdivision,
whether federal, state, local or foreign, or any agency or
instrumentality of
any such government or political subdivision, any
quasi-governmental authority,
or any federal, state, local or foreign court or official of any of
the
foregoing. Without limiting the foregoing, the term specifically
includes the
U.S. Coast Guard, the U.S. Environmental Protection Agency, the
Ohio
Environmental Protection Agency, the U.S. Department of Labor, the
IRS and the
U.S. Department of Transportation.
"Hazardous
Substance" means any pollutant, substance, contaminant,
chemical, toxic, hazardous or noxious substance, material, gas,
compound or
waste for which liability, standards of conduct, standards for
presence in the
Environment or standards of exposure are imposed pursuant to any
Law concerning
liability for, or protection of, human health, natural resources or
the
Environment, including, without limitation, any oil, petroleum and
petroleum
products and constituents thereof, explosives, asbestos-containing
materials,
mercury, radioactive materials and polychlorinated biphenyls.
4
<PAGE>
"Indemnifying Party" has the meaning set forth in Section
9.6(a)(i).
"Indemnitee" has the meaning set forth in Section 9.6(a)(i).
"Indemnity
Notice" has the meaning set forth in Section 9.6(b).
"Indemnity
Response" has the meaning set forth in Section 9.6(b).
"Indemnity
Response Period" has the meaning set forth in Section 9.6(b).
"IRS"
means the Internal Revenue Service.
"Jones
Act" has the meaning set forth in Section 8.5(f).
"Labor
Contracts" means the USW CBA and the AMO CBA to which the
Company
is or was, from and after August 1, 2006, a party.
"Laws"
means any law, statute, code, ordinance, regulation, and any
binding Order or rule of any foreign, federal, state or local
Governmental
Authority. The term specifically includes Environmental Laws.
"Liens"
means any lien, pledge, claim, charge, security interest,
mortgage, charter, right to possession by a third person, option,
title
retention agreement, lease, adverse claim against title, title
exception, title
reservation, easement, right of occupation, condemnation, right of
preemption,
right of first refusal, restriction on use, privilege or other
encumbrance, or
any contract to create any of the foregoing.
"LLTC" has
the meaning set forth in the recitals.
"Losses"
has the meaning set forth in Section 9.2.
"Material
Adverse Effect" means, with respect to the Company, Buyer, or
Rand, as applicable, a material adverse effect on the business,
results of
operations, financial condition, assets or properties thereof, and
any event,
change effect or development which would reasonably be expected,
individually or
in the aggregate, with the passage of time, to constitute such a
material
adverse effect, but excludes (a) any effect resulting from general
economic
conditions in the United States, and (b) any effect affecting
companies in the
industry in which the Company, Buyer, or Rand, as applicable,
conducts its
business generally.
"National
City Financing Documentation" means the Credit and Security
Agreement, dated on or about August 1, 2006, between the Company
and National
City Commercial Capital Company, LLC, and the other "Loan
Documents" (as defined
in the Credit and Security Agreement), as such Credit and Security
Agreement and
Loan Documents exist on the date of the Time Charter Agreement and
without
giving effect to any amendment, modification or waiver thereto or
thereunder
after such date unless such amendment, modification or waiver has
been consented
to in writing by the "Charterer" under the Time Charter
Agreement.
5
<PAGE>
"NatCity
Payoff Amount" means the payoff amount specified in the NatCity
Payoff Letter.
"NatCity
Payoff Letter" means a letter from the lender or agent under
the
National City Financing Documentation, in form and substance
reasonably
satisfactory to the Company and Buyer, setting forth the total
amount of
Indebtedness outstanding as of the Closing Date under the National
City
Financing Documentation, and providing instructions for the payment
thereof.
"Non-Union
Employees" means employees of the Company who provide services
to the Business and who are not covered by the Labor Contracts.
"ONCO"
means Oglebay Norton Marine Services Company, L.L.C., a
Delaware
limited liability company.
"ONCO
Purchase Agreement" means the Asset Purchase Agreement, dated on
or
about August 1, 2006, among ONCO, Oglebay Norton Company, and the
Company.
"Order"
means any order, judgment, ruling, injunction, assessment,
award,
decree or writ of any Governmental Authority and the results of any
arbitration
proceeding with respect to a collective bargaining agreement.
"Permits"
means any license, permit, registration, franchise, variance,
exemption, Order approval, authorization, consent, certificate,
certificate of
authority, American Bureau of Shipping certificate, Coast Guard
certificate,
qualification, order or similar document or authority required,
issued or
granted by any Governmental Authority. The term includes
Environmental Permits.
"Permitted
Liens" means (a) Liens for Taxes, assessments and other charges
of Governmental Authorities to the extent not yet due and payable
or being
contested in good faith by appropriate proceedings for which
collection or
enforcement against the property is stayed and (b) Liens imposed by
Law and
incurred in the ordinary course of business for obligations to
landlords,
carriers, warehousemen, laborers, materialmen and the like to the
extent not yet
due and payable or being contested in good faith by appropriate
proceedings for
which collection or enforcement against the property is stayed;
provided that
the term "Permitted Liens" shall not include any Liens imposed on
any of the
Vessels.
"Person"
means any individual, sole proprietorship, partnership,
corporation, limited liability company, joint venture,
unincorporated society or
association, trust or other legal entity or Governmental
Authority.
"Purchase
and Sale Orders" means all executory purchase and sale orders
entered into by the Company in the ordinary course of the
Business.
"Purchase
Price" has the meaning set forth in Section 4.1.
6
<PAGE>
"Rand" has
the meaning set forth in the preamble.
"Release"
or "Releases" means any releasing, spilling, discharging,
emitting, leaking, pumping, injecting, pouring, dumping, disposing,
discharging,
dispersing, emptying, leaching or migrating into the
Environment.
"Replacement Financing Documentation" means such credit, loan,
security
and other agreements entered into by the Company with the consent
of the
"Charterer" under the Time Charter Agreement with respect to
indebtedness
obtained by the Company to refinance or replace the indebtedness
under the
National City Financing Documentation, as such agreements exist as
of the date
of such refinancing or replacement and without giving effect to any
amendment,
modification or waiver thereto or thereunder after the date of such
refinancing
or replacement unless such amendment, modification or waiver has
been consented
to in writing by the "Charterer" under the Time Charter
Agreement.
"Replacement Subordinated Debt Financing Documentation" means such
credit,
loan, security and other agreements entered into by the Company
with the consent
of the "Charterer" under the Time Charter Agreement with respect to
indebtedness
obtained by the Company to refinance or replace the indebtedness
under the
Subordinated Debt Financing Documentation, as such agreements exist
as of the
date of such refinancing or replacement and without giving effect
to any
amendment, modification or waiver thereto or thereunder after the
date of such
refinancing or replacement unless such amendment, modification or
waiver has
been consented to in writing by the "Charterer" under the Time
Charter
Agreement.
"Responsible Party" has the meaning set forth in Section
9.6(a)(i).
"Retained
Assets" has the meaning set forth in Section 2.2.
"Retained
Liabilities" has the meaning set forth in Section 3.2.
"Sale
Notice" has the meaning set forth in Section 8.7(a).
"Seller
Indemnitees" has the meaning set forth in Section 9.2.
"Subordinated Debt Financing Documentation" means the Senior
Subordinated
Note Purchase Agreement, dated on or about August 1, 2006, by and
among the
Company, Rand Finance Inc. and Oglebay Norton Company, and the
other "Purchase
Documents" (as defined in the Senior Subordinated Note Purchase
Agreement), as
such Senior Subordinated Note Purchase Agreement and Purchase
Documents exist on
the date of the Time Charter Agreement and without giving effect to
any
amendment, modification or waiver thereto or thereunder after such
date unless
such amendment, modification or waiver has been consented to in
writing by the
"Charterer" under the Time Charter Agreement.
"Sub Debt
Payoff Amount" means the payoff amount specified in each Sub
Debt Payoff Letter.
"Sub Debt
Payoff Letter" means a letter from each lender under the
Subordinated Debt Financing Documentation, in form and substance
reasonably
7
<PAGE>
satisfactory to the Company and Buyer, setting forth the total
amount of
Indebtedness owed to such lender as of the Closing Date under the
Subordinated
Debt Financing Documentation, and providing instructions for the
payment
thereof.
"Tax" or
"Taxes" means any net income, alternative or add-on minimum
tax,
gross income, gross receipts, sales, use, ad valorem, value added,
transfer,
franchise, profits, license, withholding, payroll, employment,
excise,
severance, stamp, occupation, capital stock, premium, property
(real or
personal), environmental or windfall profit tax, custom, vehicle,
boat, vessel
or other title or registration, duty or other tax, governmental
fee, levy,
tariff or other like assessment or charge of any kind whatsoever,
together with
any interest, penalties, additions to tax or additional amounts
imposed by any
Taxing Authority.
"Tax
Returns" means all Tax returns, statements, reports, elections,
schedules, claims for refund and forms.
"Taxing
Authority" means any Governmental Authority responsible for the
administration or imposition of any Tax.
"Third
Party Claim" has the meaning set forth in Section 9.6(a)(i).
"Time
Charter Agreement" has the meaning set forth in the recitals.
"Transfer
Taxes" has the meaning set forth in Section 8.2.
"Union
Employees" means employees of the Company performing services
for
the Business who are covered by the Labor Contracts.
"USW"
means the United Steelworkers of America.
"USW CBA"
means the Labor Agreement dated October 10, 2007, between the
USW and the Company.
"USW MOU"
means the Memorandum of Understanding dated October 10, 2007,
between the USW and the Company.
"Vessels"
has the meaning set forth in Section 2.1(b).
"Winter
Work" means any and all maintenance or other work performed
with
respect to any of the Vessels after the Vessels have been laid up
at the
conclusion of the last completed navigation season (but excluding
any
maintenance or other work associated with the lay-up of the
Vessels).
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Sale
and Transfer of Assets. Subject to Section 2.2 and Section 2.3,
at the Closing, Buyer shall purchase and acquire from the Company,
and the
Company shall sell, transfer, convey, assign and deliver to Buyer,
all of the
8
<PAGE>
Company's right, title and interest in, under and to all of the
following
assets, properties and rights owned by the Company and used
primarily in the
operation of the Business, free and clear of all Liens other than
Permitted
Liens (collectively, the "Acquired Assets"):
(a) Prepaids. All prepaid expenses, advance payments, deposits
and
other
current assets (excluding cash, cash equivalents and accounts
receivable
associated with any of the Vessels);
(b) Vessels. The three (3) Great Lakes shipping vessels owned by
the
Company,
as described on Schedule 2.1(b), together with all machinery,
engines,
instruments, rigging, anchors, chains, cables, tackle, apparel,
accessories, equipment, radio installation and navigational
equipment,
inventory,
stores, bunkers, spare parts and all other appurtenances used
in or
relating to the Vessels, whether or not on board (collectively,
the
"Vessels");
(c) Equipment. All machinery and equipment, spare parts,
supplies,
tangible
personal property and fixtures that are held for use in
connection
with operation of the Vessels;
(d) Business Records. Except for the minute books and other
corporate
record books, accounting records, and personnel records, all
books and
records, including all files, forms, accounts, correspondence,
production
records, customer lists, customer records and information,
customer
prospects, sales plans, business plans, referral sources,
accounting
and operations manuals and procedures, studies, reports or
summaries,
ship designs, surveys, engineering drawings and data, all
equipment
manuals, written warranties, maintenance records and other
similar
documents and other books and records (including all
environmental
documents,
studies, asbestos surveys, audits and reports and Phase I and
Phase II
environmental assessment or investigation reports relating to
the
Vessels
commissioned by the Company) relating primarily to the Vessels;
(e) Contracts. All rights, benefits and interests of the Company
in
and to all
Contracts identified on Schedule 2.1(e) (the "Acquired
Contracts");
(f) Software and Licenses. All rights, benefits and interests of
the
Company,
to the extent transferable, in and to the Maptech software
associated
with each Vessel, the EASYLOAD software associated with each
Vessel,
and software on personal computers that are included in the
Acquired
Assets, together with all rights, benefits and interests of the
Company in
and to the licenses associated therewith to the extent
transferable, which licenses shall be included in the Acquired
Contracts;
(g) Purchase and Sale Orders. All rights, benefits and interests
of
the
Company in and to the Acquired Purchase Orders and the Acquired
Sale
Orders;
(h) Permits. All Permits relating to the Vessels owned or held
by
the
Company to the extent transferable to Buyer; and
(i) Claims Against Third Parties. All claims of the Company
against
any third
party relating to the Acquired Assets, whether choate or
inchoate,
known or unknown, contingent or noncontingent, but not
including
claims
that would constitute Retained Assets.
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2.2
Retained Assets. Notwithstanding the provisions of Section 2.1 to
the
contrary, the Company shall retain and Buyer shall not purchase or
acquire from
the Company any of the assets, properties, rights or interests of
the Company
not specifically listed in Section 2.1 above (collectively, the
"Retained
Assets"), including all rights, claims and benefits of the Company
in, to, or
under all insurance policies maintained by or for the benefit of
the Company.
2.3
Assignability and Consents. Notwithstanding anything herein to
the
contrary, this Agreement shall not constitute an agreement to sell,
convey,
assign, sublease or transfer any Acquired Asset if any attempted
sale,
conveyance, assignment, sublease or transfer of such asset, without
the Consent
of the other Person to such transfer, would constitute a breach by
the Company
with respect to such Acquired Asset. If such Consent is not
obtained, or if an
attempted assignment thereof would be ineffective or would
materially affect the
rights of Buyer or the Company, the Company shall cooperate with
Buyer in any
arrangement designed to provide for Buyer's enjoyment of the
benefits under any
such Acquired Assets, including, without limitation, enforcement
for the benefit
of Buyer of any and all rights of the Company under or relating to
such Acquired
Assets.
ARTICLE III
LIABILITIES
3.1
Assumption of Liabilities. Buyer shall assume, effective as of
the
Closing, and shall thereafter pay, perform and discharge as and
when due the
following liabilities and obligations of the Company (collectively,
the "Assumed
Liabilities"):
(a) Contracts. All liabilities and obligations of the Company
arising
under the terms of the Acquired Contracts, in each case solely
to
the extent
that (i) such liabilities and obligations are attributed to
periods
after the Closing and (ii) payment in respect of such
liabilities
and
obligations has not been made by LLTC pursuant to the terms of
the
Time
Charter Agreement;
(b) Purchase and Sale Orders. All liabilities and obligations of
the
Company
outstanding under the Acquired Purchase Orders and the Acquired
Sale
Orders solely to the extent that (i) such liabilities and
obligations
are
attributed to periods after the Closing and (ii) payment in respect
of
such
liabilities and obligations has not been made by LLTC pursuant to
the
terms of
the Time Charter Agreement; and
(c) Expenses of the Business. All accounts payable associated
with
the
Business and other liabilities and obligations of the Company
arising
out of or
relating to the Company's ownership or operation of the
Acquired
Assets or
the Business on or prior to the Closing Date which were the
obligation
of LLTC to pay under the Time Charter Agreement but which, as
of the
Closing Date, have not been paid by LLTC in accordance with the
Time
Charter Agreement.
3.2
Retained Liabilities. Other than the Assumed Liabilities, the
Company
shall retain, and Buyer shall not assume, or be responsible or
liable with
10
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respect to, any other liabilities or obligations of the Company
(collectively
the "Retained Liabilities"). The Buyer will acquire the Acquired
Assets free and
clear of all such liabilities and obligations and the Company shall
remain
responsible for and will duly and timely pay, perform and discharge
in full all
Retained Liabilities.
ARTICLE IV
PURCHASE PRICE
4.1
Payment. In full consideration for the sale and transfer of the
Acquired Assets to Buyer, at the Closing, the following shall
occur: Buyer shall
(a) assume the Assumed Liabilities, (b) pay to the Company, by bank
wire
transfer of immediately available funds to an account or accounts
designated in
writing by the Company, an amount equal to (i) the total amount of
principal,
interest and other amounts outstanding under the National City
Financing
Documentation or Replacement Financing Documentation, as
applicable, plus (ii)
the total amount of principal, interest and other amounts
outstanding under the
Subordinated Debt Financing Documentation or Replacement
Subordinated Debt
Financing Documentation, as applicable, plus (iii) $400,000, plus
(iv) an amount
equal to sixteen percent (16%) simple interest per year (based on a
365-day
year) on the amount set forth under clause (iii) of this Section
4.1 for the
period from the date of the "Closing" under the ONCO Purchase
Agreement through
the Closing Date (such assumption together with the amount of the
foregoing
payment is referred to as the "Purchase Price"). The Company
directs Buyer to
pay, for the Company's account, from the Purchase Price (x) an
amount equal to
the NatCity Payoff Amount in accordance with the NatCity Payoff
Letter, and (y)
an amount equal to the Sub Debt Payoff Amount in accordance with
the Sub Debt
Payoff Letters.
4.2
Purchase Price Allocation. The Purchase Price shall be allocated
in
accordance with Schedule 4.2. Buyer and the Company covenant to
prepare and file
their respective Tax Returns in a manner consistent with such
allocation and not
to take any position in any Tax Return, or examination or other
administrative
or judicial proceeding relating to any Tax Return, or for financial
purposes
that is inconsistent with such allocation unless required by Law.
Buyer and the
Company each shall file with it federal income tax return an
appropriate IRS
Form 8594 reflecting such allocation.
ARTICLE V
CLOSING AND DELIVERIES
5.1
Closing. The closing of the transactions contemplated hereby
(the
"Closing") will take place at the offices of Katten Muchin Rosenman
LLP, 575
Madison Avenue, New York, New York 10022, concurrently with the
execution of
this Agreement (the "Closing Date"). All proceedings to be taken
and all
documents to be executed and delivered by all parties at the
Closing will be
deemed to have been taken and executed simultaneously and no
proceedings will be
deemed to have been taken nor documents executed or delivered until
all have
been taken, executed and delivered.
5.2
Delivery of Vessels. The Vessels are presently at the locations
where
they have been laid up for the winter season, and Buyer will take
delivery of
the Vessels in those locations.
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<PAGE>
5.3
Documents to be Delivered by the Company. As indicated below, on
the
Closing Date, the Company shall deliver or cause to be delivered to
Buyer:
(a) copies of the resolutions of the board of directors of the
Company
and its shareholders, authorizing and approving this Agreement,
the other
agreements contemplated hereby to which the Company is a party
and the
transactions contemplated hereby or thereby;
(b) a bill of sale transferring the Acquired Assets (other than
the
Vessels)
to Buyer, duly executed by the Company, in the form attached
hereto as
Exhibit A;
(c) a bill of sale transferring each Vessel to be transferred
to
Buyer,
duly executed by the Company and recordable by the National
Vessel
Documentation Center, in the form of Coast Guard Form CG-1340
attached
hereto as
Exhibit B;
(d) a duly executed counterpart of an instrument or instruments
of
assignment
and assumption assigning the entire right, title and interest
of the
Company in, to and under the Acquired Contracts, the Acquired
Purchase
Orders, and the Assumed Liabilities to Buyer, in the form or
forms
attached hereto as Exhibit C (the "Assignment and Assumption
Agreements");
(e) the Consents listed on Schedule 6.3(b);
(f) satisfactions of all mortgages on Vessels to be transferred
on
such dates
in a form recordable with the National Vessel Documentation
Center,
and otherwise acceptable to Buyer;
(g) a Certificate of Ownership of Vessel for each Vessel issued
by
the
National Vessel Documentation Center on Coast Guard Form
CG-1330;
(h) releases, including termination statements under the
Uniform
Commercial
Code of any financing statements filed against any Acquired
Assets to
be transferred to Buyer on such dates, evidencing discharge,
removal
and termination of all Liens (other than Permitted Liens) to
which
the
Acquired Assets being transferred to Buyer are subject;
(i) good standing certificates of the Company from the
Company's
jurisdiction of incorporation dated no earlier than seven (7) days
prior
to the
Closing Date;
(j) an Abstract of Title for each Vessel issued by the National
Vessel
Documentation Center on Coast Guard Form CG-1332;
(k) all classification and operating certificates (for hull,
engines,
anchors, chains, etc.), as well as plans and specifications
which
are on
board or in the Company's possession for each Vessel being
transferred on such dates;
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<PAGE>
(l) any such additional documents, including but not limited to
the
Certificate of Documentation issued by the National Vessel
Documentation
Center on
Coast Guard Form CG-1270 for each Vessel, as may reasonably be
required
by the competent authorities for the purpose of documenting the
Vessels
under 46 United States Code Section 12101 et seq. in the name
of
the Buyer,
endorsed for the United States coastwise and registry trades;
(m) confirmation of class certificates for each of the Vessels
(free
and clear
of any recommendations affecting class) issued by the American
Bureau of
Shipping Classification issued no earlier than three (3) days
prior to
the Closing Date;
(n) two (2) originals of the Protocol of Delivery and
Acceptance
confirming
the date and time of delivery of the Vessels from the Company
to Buyer,
duly executed by the Company, in the form attached here as
Exhibit D
("Delivery Protocol");
(o) complete and accurate originals (or if no original exists,
a
copy) of
all Acquired Contracts, Acquired Purchase Orders, Acquired Sale
Orders,
and all books and records described in Section 2.1(d);
(p) sufficient copies of a letter on the Company's letterhead
and
signed by
an officer of the Company addressed to warehousemen and bailees
of the
Company holding, storing or warehousing any of the Acquired
Assets
to the
effect that Buyer has purchased, or otherwise has legal power
and
authority
over, such assets and the warehouseman or bailee may do with
the
assets as
the Buyer may thereafter direct, such letter to otherwise be in
form and
substance mutually agreeable to Buyer and the Company; and
5.4
Documents to be Delivered by Buyer. At the Closing, Buyer shall
deliver or cause to be delivered to the Company:
(a) as contemplated in Section 4.1, the Purchase Price;
(b) copies of the resolutions of the Board of Directors or
other
governing
body of Buyer, authorizing and approving this Agreement, the
other
agreements contemplated hereby to which Buyer is a party and
the
transactions contemplated hereby or thereby;
(c) a counterpart of the Assignment and Assumption Agreements,
duly
executed
by Buyer;
(d) an Escrow Agreement, duly executed by Buyer and the
Company,
substantially in the form attached hereto as Exhibit E;
(e) a counterpart of the Delivery Protocol for each Vessel to
be
delivered
to Buyer on such date, duly executed by Buyer.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to Buyer as follows:
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<PAGE>
6.1
Organization and Standing; Citizenship. The Company is duly
organized,
validly existing and in good standing under the laws of Michigan.
The Company is
duly qualified to do business, and is in good standing, in each
jurisdiction in
which the character of the properties owned or leased by it or in
which the
conduct of the Business requires it to be so qualified, except
where the failure
to be so qualified or to be in good standing would not have a
Material Adverse
Effect on the Company. The Company is a "citizen of the United
States" within
the meaning of Section 2 of the Shipping Act, 1916, as amended, for
the purpose
of owning and operating the Vessels in the coastwise trade of the
United States.
6.2
Authorization, Validity and Effect. The Company has the
requisite
corporate power and authority to execute and deliver this Agreement
and all
agreements and documents contemplated hereby to be executed and
delivered by it,
and to consummate the transactions contemplated hereby and thereby.
The
execution and delivery of this Agreement and such other agreements
and documents
and the consummation of the transactions contemplated herein and
therein, have
been duly and validly authorized by all necessary corporate action
on the part
of the Company. This Agreement has been duly and validly executed
and delivered
by the Company and constitutes the legal, valid and binding
obligation of the
Company. This Agreement is enforceable against the Company in
accordance with
its terms, except as limited by the General Enforceability
Exceptions.
6.3 No
Conflict; Required Filings and Consents.
(a) Neither the execution and delivery of this Agreement by the
Company,
nor the consummation by the Company of the transactions
contemplated herein, nor compliance by the Company with any of
the
provisions
hereof, will (i) conflict with or result in a breach of any
provisions
of the articles of incorporation, by-laws or other governing
documents
of the Company, (ii) except as set forth on Schedule 6.3(a),
constitute
or result in the breach or violation of any term, condition or
provision of, or
constitute a default under (without regard to
requirements of notice, passage of time or elections of any
Person), or
give rise
to any right of termination, cancellation or acceleration with
respect
to, or result in the creation or imposition of a Lien upon any
of
the
Acquired Assets, pursuant to any note, bond, mortgage,
indenture,
license,
agreement, lease or other instrument or obligation to which it
is
a party or
by which the Company or the Acquired Assets may be subject, or
(iii)
subject to receipt of the requisite approvals referred to on
Schedule
6.3(a), violate any Order, Permit or Law applicable to the
Company
the Business or the Acquired Assets or give any third party or
Governmental Authority the right to revoke, withdraw, suspend,
cancel,
terminate
or modify any Permit held by the Company, or (iv) give any
Person the
right to challenge any of the transactions contemplated by this
Agreement
or to exercise any remedies or obtain any relief under any Laws
or Orders
to which the Company or any of the Acquired Assets may be
subject.
(b) Other than as set forth on Schedule 6.3(b), no C
