Vessel Purchase Agreement: Definition & Sample

Trustpilot

A vessel purchase agreement, or boat purchase agreement, is a legal contract between the buyer and seller of an ocean-going vessel. These agreements outline the rights and obligations of both parties, as well as any specific provisions agreed upon by them. For instance, a provision might say that if the ship has not been delivered to the buyer after 180 days from when it was due, then they can cancel their obligation to buy it.

The purchaser will also be entitled to any money paid up front for chartering agreements or other expenses incurred before delivery date, which are usually specified in advance under "condition precedent" clauses. This type of clause is common in all types of contracts where timeframes are important - for example construction projects or film production deals with actors who may have other commitments on certain dates.

Given the normal size of these transactions, it is important to work with a lawyer to make sure you have an ironclad agreement in place to protect your rights.

Common Sections in Vessel Purchase Agreements

Below is a list of common sections included in Vessel Purchase Agreements. These sections are linked to the below sample agreement for you to explore.

Vessel Purchase Agreement Sample

VESSEL PURCHASE AGREEMENT

C.S. LIFTBOATS, INC.

HERCULES OFFSHORE, LLC

In respect of the

(U.S. COAST GUARD OFFICIAL NUMBER

TABLE OF CONTENTS

ARTICLE 1 SALE AND PURCHASE OF THE VESSEL

Sale and Purchase of the Vessel 1 Payment of the Purchase Price 1 “As Is, Where Is” Sale Language 4

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER

Organization, Existence and Corporate Power 5 Authorization and Execution 5 No Conflict 5 Title; No Encumbrances 5 Litigation 5 Condition of Vessel 6

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE BUYER

Organization, Existence and Corporate Power 6 Authorization and Execution 6 No Conflict 6 Litigation 6

ARTICLE 4 TERMINATION

Termination 7 Effect of Termination; Survival 7

ARTICLE 5 MISCELLANEOUS

Indemnities 7 Due Diligence 8 Usage of Vessel Prior to Closing 9 Further Cooperation 9 Expenses 9 Amendments and Waivers 9

Survival 9

Severability; Counterparts 9 Governing Law 10 Successors and Assigns 10

Entire Agreement and Cancellation of Prior Agreements 10

Definitions Specifications of the Vessel

Certificate of Acceptance of Delivery

THIS VESSEL PURCHASE AGREEMENT (this “Agreement” ), dated as of August 4, 2005, is entered into by and between C.S. Liftboats, Inc. , a Louisiana corporation (the “Seller” ), whose principle place of business is 13933 Pumping Plant Road, Abbeville, Louisiana 70510, and Hercules Offshore, LLC. , a Delaware limited liability company, (the “Buyer” ), whose principle place of business is 2929 Briarpark Drive, Suite 435, Houston, Texas, 77042 (each of the Buyer and the Seller, being referred to individually as a “Party” and collectively as the “Parties” ).

WHEREAS , the Seller is the owner of the liftboat M/V Joshua, United States Coast Guard Official Number 1164414 (the “M/V Joshua” );

WHEREAS , the Seller desires to sell to the Buyer the M/V Joshua together with its engines, tackle, general outfit, navigational, electronic, radar, communication and other associated equipment, appliances, spare parts and other items appurtenant or related to the Vessel, whether on board or ashore, as set out on Exhibit B hereto (the M/V Joshua and all such equipment and spare parts being referred to collectively as the “Vessel” ) upon the terms and conditions set forth herein; and

WHEREAS , the Buyer desires to purchase the Vessel on the terms set forth herein.

NOW THEREFORE , in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Buyer and the Seller hereby agree as follows:

SALE AND PURCHASE OF THE VESSEL

How ContractsCounsel Works Hiring a lawyer on ContractsCounsel is easy, transparent and affordable. 1. Post a Free Project Complete our 4-step process to provide info on what you need done. 2. Get Bids to Review Receive flat-fee bids from lawyers in our marketplace to compare. 3. Start Your Project Securely pay to start working with the lawyer you select.

Section 1.1 Sale and Purchase of the Vessel . Upon the terms and subject to the conditions of this Agreement, the Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, all right, title and interest in and to the Vessel for the cash sum of Twelve Million Five Hundred Thousand U.S. Dollars (US$12,500,000.00) (the “Purchase Price” ). The Seller shall be liable for any and all taxes, fees, levies and other charges that may be payable, assessed or levied by any Government Authority as a result of the sale and purchase of the Vessel (collectively, the “Taxes” ).

Section 1.1(a) Payment of the Purchase Price .

(i) Upon execution of the Main Terms Summary by the Buyer and the Seller on July 28, 2005, Buyer delivered to Seller a non-refundable deposit in the sum of One Million Two Hundred Fifty Thousand U.S. Dollars (US$1,250,000.00) ( “the Deposit” ). This deposit was paid by wire transfer of same day funds in accordance with the following wire transfer instructions:

Receiving Bank ABA:

Regions Bank 800 South Lewis Street New Iberia, LA 70560

Beneficiary: Account Name — C.S. Liftboats, Inc.

Account Number — 4701146765

(ii) Upon closing of the Purchase of the Vessel the Deposit will be credited toward the Purchase Price. The balance of the Purchase Price in the amount of Eleven Million Two Hundred Fifty Thousand US Dollars ($11,250,000.00 US dollars) shall be paid to the Seller concurrently with the Closing by way of wire transfer of same day funds wired to the Seller’s account referred to in paragraph 1.1(a) above when the closing conditions set out in Section 1.2(b) have been met;

Section 1.2 Closing .

(a) The closing (the “Closing” ) of the purchase and sale of the Vessel shall take place in accordance with the terms of this Agreement at New Iberia, Louisiana at the Regions Bank, located at 800 South Lewis Street, New Iberia, Louisiana, on a business day to be mutually agreed by the Buyer and the Seller (the “Closing Date” ) on or before August 28, 2005 . On or before the Closing Date, the Buyer and the Seller shall comply with their respective obligations set out in this Section 1.2.

(b) Closing Conditions and Deliveries of the Buyer . The obligation of the Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of the following closing conditions: (i) the Seller has completed its closing deliveries set out in Section 1.2(c); (ii) the representations and warranties of the Seller shall have been true and correct when made and shall be true and correct as of the Closing with the same force and effect as if made as of the Closing, and the covenants and agreements contained in this Agreement to be complied with by the Seller on or before the Closing shall have been complied with in all material respects; Upon satisfaction of the above, the Buyer shall deliver to the Seller: (A) the Purchase Price less the Deposit; and (B) a certificate from the Buyer dated the Closing Date and signed by a duly authorized officer thereof certifying that: (1) the representations and warranties of the Buyer were true and correct when made and are true and correct as of the Closing Date; and (2) the Buyer has complied in all material respects with all of its covenants and agreements contained in this Agreement.

(c) Closing Deliveries of the Seller . At the Closing, the Seller shall deliver, or shall cause to be delivered:

a bill of sale fully executed by the Seller and notarized (the “Bill of Sale” ), as required, pursuant to which the Seller shall or shall cause to be transferred, sold, conveyed, assigned and delivered to the Buyer all right, title and interest in and to the Vessel free and clear of all Encumbrances

(as hereinafter defied) and in such form as is required by the United States Coast Guard National Vessel Documentation Center (the “NVDC” );

(ii) a “Satisfaction of Mortgage” or other release document executed by Regions Bank, P.O. Box 11240, New Iberia, La. U.S.A. ( “Regions Bank” ), discharging fully the $50,000,000.00 mortgage (the “Mortgage” ) granted in favor of Regions Bank on the Vessel in such form as is satisfactory to the Buyer and is required by the NVDC;
(iii) a release document discharging UCC lien numbers 47-205-0475; and 47-205-0476 on the Vessel in favor of Regions Bank in such form as is satisfactory to the Buyer;
(iv) any other document, instrument or action required to cancel any and all other Encumbrances on the Vessel or any collateral relating to the Vessel in favor of any person, including, without limitation, Regions Bank;
(v) a good standing certificate from the Secretary of State for the State of Louisiana dated as of the Closing Date certifying that the Buyer is in good standing and is authorized to do business in Louisiana;
(vi) a certificate from the Seller and the shareholders of the Seller dated the Closing Date and signed by a duly authorized officer and the shareholders thereof certifying that: (A) the representations and warranties of the Seller were true and correct when made and are true and correct as of the Closing Date; and (B) the Seller has complied in all material respects with all of its covenants and agreements contained in this Agreement;
(vii) executed copies of such documents, if any, provided prior to the Closing Date by the Buyer to the Seller to facilitate the Buyer’s registration of the Vessel with the United States Coast Guard or such other jurisdiction chosen by the Buyer;
(viii) the Vessel safely afloat at a dockside at or near the Port of New Iberia, Louisiana, or such other location to be mutually agreed by the Parties;
(ix) a receipt for the Purchase Price upon issuance of the Closing Certificate;
(x) a true and complete certified copy of the resolution(s) duly and validly adopted by the shareholders and Board of Directors of the Seller evidencing their authorization of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby;

Any technical or regulatory documentation pertaining to the Vessel which the Seller may have in its possession and which is not already aboard the Vessel, including, without limitation, ABS certificates, loadline certificates, radio licenses, operating manuals and engineering drawings.

The Buyer shall also be entitled to retain a hard copy of the Vessel’s preventative maintenance records, provided that this documentation may be provided to the Buyer onboard the Vessel;

(xii) A fax copy or original of a Certificate of Ownership from the NVDC dated on the Closing Date showing the Vessel to be free from Encumbrances; and
(xiii) All documentation necessary to transfer any warranties on any of the equipment comprising the Vessel to the extent that the Seller has the benefit of any such warranties.

(d) Risk of Loss . Risk of loss or damage to the Vessel shall pass to the Buyer at the Closing Time. Prior to the Closing Time, the Seller shall be responsible for and shall bear any and all risk of loss or damage to the Vessel. If during the period between the date hereof and the Closing Time, there is an actual total casualty loss, constructive total casualty loss or compromised total casualty loss (collectively, a “Total Loss” ) of the Vessel, the Seller shall provide written notice to the Buyer of such Total Loss. In such event, this Agreement shall terminate entirely upon written notice from Buyer to Seller electing to terminate, which notice must be delivered to Seller by 5:00 PM, Houston, Texas time, on the fifth Business Day after Seller has notified Buyer of such Total Loss.

(e) Delivery . Concurrently with the delivery of the Bill of Sale, (i) the Seller shall deliver to the Buyer, and the Buyer shall accept from the Seller, the Vessel free from Encumbrances, and (ii) each party shall acknowledge such delivery and acceptance by executing and delivering the Certificate of Acceptance and Delivery, attached hereto as Exhibit C (the “Certificate of Acceptance” ). Title to the Vessel shall pass to the Buyer as of the time specified in the Certificate of Acceptance (the “Closing Time” ). In respect of that property, if any, forming part of the Rig which does not fall within the Bill of Sale, the Seller and the Buyer hereby agree that title shall be deemed to pass to Buyer as of the Closing Time without further documentation or action by either party.

Section 1.3 “As Is, Where Is” Sale Language . The Vessel shall be sold on an “as is, where is” basis and the Buyer shall be required to, and shall, accept delivery of the Vessel from the Seller in such condition; provided, however , that the Vessel shall be in the Condition set forth in Section 2.7. Additionally, the Buyer acknowledges that the Vessel in not currently United States Coast Guard approved or ABS Class certified and the Buyer shall be required to accept delivery of the Vessel from the Seller in such condition. Except as set forth in Subsections 2.4 and 2,7 and herein, no representations or warranties, either expressed or implied, are made with respect to the maintenance, repair, condition, design, operation, seaworthiness, value, marketability, merchantability, usefulness or suitability, for any purpose, of the Vessel, including without limitation, (a) any implied or expressed warranty of merchantability, (b) any implied or expressed warranty of fitness for a particular purpose, and (c) any claim by the Buyer for damages because of or related to any defects, whether known or unknown, with respect to the physical condition of the Vessel.

REPRESENTATIONS AND WARRANTIES OF SELLER