Opinion ID: 815021
Heading Depth: 2
Heading Rank: 1

Heading: Negotiations Lead to Vessel Sales Agreement

Text: On September 8, 2006, International Marine, L.L.C.1 entered into a Vessel Sales Agreement (“VSA”) with Delta Towing, L.L.C. (“Delta”) wherein International purchased two tugboats from Delta for $4 million. The companies’ agreement was preceded by several months of negotiations between International’s president, Stephen Williams, and counsel, Peter Rouse, and the treasurer of Delta’s parent company, Darren Vorst. Throughout the negotiations, Williams was clear that the vessels were for “in house” use and would not be used to compete with Delta. Delta initially declined to sell the vessels because it intended to use them to grow its business, but ultimately agreed to sell them subject to its standard non-compete language. The signed VSA includes a liquidated damages provision (“LD Provision”) that, inter alia, provided for a $250,000 payment for, inter alia, each violation of the non-competition clause. This figure had been the subject of significant negotiations between Rouse and Delta, and its magnitude had dropped significantly over several rounds of negotiations, from a starting figure of $4 million per violation.