SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1998
Commission File Number 333-42039
SEABULK AMERICA PARTNERSHIP, LTD.
(Exact name of registrant as specified in its charter)
Florida 59-2324484
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2200 Eller Drive, P.O. Box 13038
Ft. Lauderdale, Florida 33316
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 523-2200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES . NO X.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE
None.
The Registrant meets the conditions set forth in General Instructions
(I)(1)(a) and (b) of Form 10-K (as modified by prior no-action relief to
unrelated parties) and is therefore filing this form using the reduced
disclosure format specified therein.
- --------------------------------------------------------------------------------
<PAGE>
SEABULK AMERICA PARTNERSHIP, LTD.
FORM 10-K
Table of Contents
<TABLE>
<CAPTION>
Item Page
Part I
<S> <C> <C>
1 Business........................................................................................... 1
2 Properties......................................................................................... 1
3 Legal Proceedings.................................................................................. 1
4 Submission of Matters to a Vote of Security Holders................................................ 1
Part II
5 Market for Registrant's Common Equity and Related Stockholder Matters.............................. 2
6 Selected Financial Data............................................................................ 2
7 Management's Narrative Analysis of the Results of Operations...................................... 2
7A Quantitative and Qualitative Disclosures About Market Risk......................................... 3
8 Financial Statements............................................................................... 3
9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................................................... 3
Part III
10 Directors and Executive Officers of the Registrant................................................. 4
11 Executive Compensation............................................................................. 4
12 Security Ownership of Certain Beneficial Owners and Management..................................... 4
13 Certain Relationships and Related Transactions..................................................... 4
Part IV
14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.................................... 5
</TABLE>
<PAGE>
PART I
Item 1. Business
Seabulk America Partnership, Ltd. (the "Company"), a Florida limited
partnership and an indirect 81.59%-owned subsidiary of Hvide Marine Incorporated
(the "Parent"), is a pass-through investment entity, the only asset of which is
a 41.67% limited partnership interest in Seabulk Transmarine Partnership, Ltd.
("STPL"). STPL's primary asset is the Seabulk America, a 46,300 deadweight ton
chemical product carrier.
STPL provides marine transportation services to companies that
transport specialty chemicals in the U.S. domestic trade by time chartering the
Seabulk America to such companies. STPL time charters the Seabulk America to
Ocean Specialty Tankers Corporation ("OSTC"), an indirect wholly owned
subsidiary of the Parent, which in turn markets the vessel directly to companies
in the chemical industry. Under the charter with OSTC, the current charter hire
for the Seabulk America is $28,400 per day.
Item 2. Properties
The Company's operations are conducted at the Parent's principal
offices located in Fort Lauderdale, Florida, where the Parent leases
approximately 36,000 square feet of office and shop space under a lease that
expires in 2009.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted pursuant to General Instruction I to Form 10-K (the
"Instruction")
1
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's equity securities are not publicly traded. The Company
files reports under the Securities Exchange Act of 1934 (the "Exchange Act") due
to its status as a non-wholly owned subsidiary guarantor of the Parent's 83/8%
Senior Notes due 2008.
Seabulk Tankers, Ltd., an indirect wholly owned subsidiary of the
Parent, owns an 81.59% general partnership interest in the Company and Stolt
Tankers (U.S.A.), Inc., an unaffiliated third party, owns a 18.41% limited
partnership interest in the Company. The Company's partnership agreement allows
for distributions to be made to the partners at any time based on the partners'
percentage ownership of the partnership assets without priority or preference.
No distributions have been made to the partners since the Company's formation
and the Company does not intend to make distributions in the future. In
addition, the Company is restricted from making distributions in certain
circumstances by covenants contained in the Parent's credit facility and senior
notes documentation.
Item 6. Selected Financial Data
Omitted pursuant to the Instruction.
Item 7. Management's Narrative Analysis of the Results of Operations
This discussion should be read in conjunction with the Company's
historical financial statements and the related notes thereto included
elsewhere in this report.
Forward-Looking Information
Certain statements in the following analysis contain "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act. All statements other than statements of
historical fact included in this discussion are forward-looking statements.
Although the Company believes the expectations and beliefs reflected in such
forward-looking statements are reasonable, it can give no assurance that they
will prove to have been correct.
General
The Company is an investment vehicle, the sole asset of which is a
41.67% limited partnership interest in STPL. The assets and revenues of the
Company represent a small portion of the assets and revenues of the Parent. For
the year ended December 31, 1998, the assets and revenues of the Company
respectively represented .28% and 0% of the consolidated assets and revenues of
the Parent.
Results of Operations
Year Ended December 31, 1998 Compared with the Year ended December 31, 1997
The Company has no revenues and minimal overhead expenses. Any income
or loss is derived from its equity investment in STPL (see the financial
statements of STPL included at the end of this report beginning on page S-1).
2
<PAGE>
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements
The Company's Financial Statements are listed in Item 14(a)(1),
included at the end of this report on Form 10-K beginning on page F-1, and
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
3
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Omitted pursuant to the Instruction.
Item 11. Executive Compensation
Omitted pursuant to the Instruction.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Omitted pursuant to the Instruction.
Item 13. Certain Relationships and Related Transactions
Omitted pursuant to the Instruction.
4
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) (1) List of Financial Statements. The following is a list of the
Company's financial statements included at the end of this report on Form 10-K
beginning on page F-1:
Report of Independent Certified Public Accountants
Balance Sheets as of December 31, 1997 and 1998
Statements of Operations for the Years Ended December 31, 1996, 1997
and 1998
Statements of Changes in Partners' Capital for the Years Ended
December 31, 1996, 1997 and 1998
Statements of Cash Flows for the Years Ended December 31, 1996, 1997
and 1998
Notes to Financial Statements
(2) List of Financial Statement Schedules. The following is a list
of the financial statement schedules included at the end of this report on Form
10-K beginning on page S-1:
Report of Independent Certified Public Accountants
Balance Sheets as of December 31, 1997 and 1998
Statements of Operations for the Years Ended December 31, 1996, 1997
and 1998
Statements of Changes in Partners' Capital for the Years Ended
December 31, 1996, 1997 and 1998
Statements of Cash Flows for the Years Ended December 31, 1996, 1997
and 1998
Notes to Financial Statements
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the fiscal
year covered by this report on Form 10-K.
(c) List of Exhibits. The following is a list of exhibits furnished.
Copies of exhibits will be furnished upon written request at a charge of $.25
per page plus postage.
Exhibit
Number Exhibit
3.1 Supplemental Affidavit and Amended and Restated Certificate of Limited
Partnership of Seabulk America Partnership, Ltd.
3.2(a) Limited Partnership Agreement of Seabulk America Partnership, Ltd.
3.2(b) Amendment to Limited Partnership Agreement of Seabulk America Partneship,
Ltd., dated September 26, 1990
4.1 (1)Indenture, dated February 19, 1998, among Hvide Marine Incorporated, the
Subsidiary Guarantors named therein and the Bank of New York as Trustee.
5
<PAGE>
10.1 (2)(3) Tanker Time Charter Party, dated December 15, 1989, between Seabulk
Transmarine Partnership, Ltd. and Ocean Specialty Tankers
Corporation, with respect to the Seabulk America.
27 Financial Data Schedule.
(1) Incorporated herein by reference to the Registration Statement on
Form S-4 (Registration No. 333-42039) filed with the Commission on
March 18, 1998.
(2) Incorporated herein by reference to the Registration Statement on
Form S-1 (Registration No. 33-78166) filed with the Commission on
April 26, 1994.
(3) Materials from this document have been omitted and separately filed
with the Commission pursuant to a confidential treatment request.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SEABULK AMERICA PARTNERSHIP, LTD.
By: SEABULK TANKERS, LTD.
its General Partner
By: HVIDE MARINE TRANSPORT, INCORPORATED
its General Partner
By: /s/ J. ERIK HVIDE
J. Erik Hvide
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ J. ERIK HVIDE Chairman of the Board, March 31, 1999
- --------------------------------------
J. Erik Hvide President, Chief Executive
Officer and Director
(principal executive officer)
/s/ JOHN H. BLANKLEY Executive Vice March 31, 1999
- --------------------------------------
John H. Blankley President -- Chief Financial
Officer and Director
(principal financial officer)
/s/ EUGENE F. SWEENEY Executive Vice President-- Chief March 31, 1999
- --------------------------------------
Eugene F. Sweeney Operating Officer and Director
</TABLE>
7
<PAGE>
Report of Independent Certified Public Accountants
The Partners
Seabulk America Partnership, Ltd.
We have audited the accompanying balance sheets of Seabulk America Partnership,
Ltd. as of December 31, 1997 and 1998, and the related statements of operations,
changes in partners' equity and cash flows for each of the three years in the
period ended December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Seabulk America Partnership,
Ltd. at December 31, 1997 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As more fully described in Note 2,
the Partnership's general partner is a wholly owned subsidiary of Hvide Marine
Incorporated (HMI). On a consolidated basis, HMI believes that it will not be in
compliance with certain covenants of a loan agreement as of March 31, 1999.
Because of the aforementioned conditions relating to HMI, and the uncertainties
surrounding its plans to address its liquidity problems, HMI's actions could
have a substantial effect on the Partnership's assets; therefore, there is also
substantial doubt about whether the Partnership will continue as a going
concern. The financial statements of the Partnership do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.
/s/ ERNST & YOUNG LLP
Miami, Florida
February 5, 1999,
except for Note 2,
as to which the date
is March 31, 1999
F-1
<PAGE>
Seabulk America Partnership, Ltd.
Balance Sheets
<TABLE>
<CAPTION>
Year Edned December 31,
1997 1998
--------------- ---------------
(In thousands)
<S> <C> <C>
Assets
Cash and cash equivalents......................................... $ 1 $ 1
Investment in affiliate........................................... 2,723 3,143
--------------- ---------------
Total assets................................................... $ 2,724 $ 3,144
=============== ===============
Liabilities and partners' equity
Due to affiliates, net............................................ 20 23
Commitments and contingencies
Partners' equity.................................................. 2,704 3,121
--------------- ---------------
Total liabilities and partners' equity......................... $ 2,724 $ 3,144
=============== ===============
</TABLE>
See accompanying notes.
F-2
<PAGE>
Seabulk America Partnership, Ltd.
Statements of Operations
<TABLE>
<CAPTION>
December 31,
--------------------------------------------
1996 1997 1998
------------- ------------- --------------
(In thousands)
<S> <C> <C> <C>
Expenses:
Professional fees.............................................. $ -- $ -- $ 2
Other.......................................................... 1 1 1
Interest expense............................................... 1 1 --
------------ ------------- -------------
Total Expenses.............................................. 2 2 3
Equity income (loss) in earnings of affiliates.................... (964) (233) 420
------------ ------------- -------------
Net Income (loss)................................................. $ (966) $ (235) $ 417
============ ============= =============
</TABLE>
See accompanying notes.
F-3
<PAGE>
Seabulk America Partnership, Ltd.
Statements of Changes in Partners' Capital
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Capital
-------------------------------------------
(in thousands)
<S> <C> <C> <C>
Partners' capital at December 31, 1995............................ $ 1,714 $ 2,191 $ 3,905
Net loss for the year ended December 31, 1996.................. (788) (178) (966)
------------ ------------- -------------
Partners' capital at December 31, 1996............................ 926 2,013 2,939
Net loss for the year ended December 31, 1997.................. (192) (43) (235)
------------ ------------- -------------
Partners' capital at December 31, 1997............................ 734 1,970 2,704
Net income for the year ended December 31, 1998................ 341 77 417
------------ ------------- -------------
Partners' capital at December 31, 1998............................ $ 1,075 $ 2,047 $ 3,121
============ ============= =============
</TABLE>
See accompanying notes.
F-4
<PAGE>
Seabulk America Partnership, Ltd.
Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31,
1996 1997 1998
------------- ------------- --------------
(In thousands)
<S> <C> <C> <C>
Operating activities
Net income (loss)................................................. $ (966) $ (235) $ 417
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Undistributed (earnings) loss of affiliates................... 964 233 (420)
Changes in operating assets and liabilities:
Due to affiliates........................................... 2 2 3
------------ ------------- -------------
Net cash provided by operating activities......................... -- -- --
Change in cash and cash equivalents............................... -- -- --
Cash and cash equivalents at beginning of year.................... 1 1 1
------------ ------------- -------------
Cash and cash equivalents at end of year.......................... $ 1 $ 1 $ 1
============ ============= =============
</TABLE>
See accompanying notes.
F-5
<PAGE>
Seabulk America Partnership, Ltd.
Notes to Financial Statements
December 31, 1998
1. Description of Business and Significant Accounting and Reporting Policies
Description of Business. Seabulk America Partnership, Ltd. (SAPL or the
Partnership), a Florida limited partnership, was formed on September 14, 1983
pursuant to a partnership agreement (the Agreement), to own and operate the U.S.
flagged vessel #4102 and engage in any other maritime-related activities
relating to the ownership, operation or use of such vessel. In May 1989, the
Partnership contributed the vessel #4102 to Seabulk Transmarine Partnership,
Ltd. (STPL) in exchange for a 66.67% investment in STPL. In September 1990, the
Partnership reduced its investment in STPL to a 41.67% limited partnership
interest. STPL, a Florida limited partnership, owns and operates a chemical
transportation carrier, the Seabulk America, within the United States domestic
trade. The partners of the Partnership include Seabulk Tankers, Ltd. (STL), a
Florida limited partnership (81.59%), as sole general partner, and Stolt Tankers
(U.S.A.), Inc., as limited partner (18.41%). STL is a wholly owned subsidiary of
Hvide Marine Incorporated (HMI or the Parent), a Florida Corporation.
Cash and Cash Equivalents. The Partnership considers to be cash
equivalents all highly liquid investments with a maturity of three months or
less when purchased.
Investment. The Partnership's investment in STPL is accounted for
using the equity method.
Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Income Taxes. No provision for income taxes has been recorded since
SAPL is a partnership and taxable income or loss accrues to the Partners.
2. Issues Affecting Liquidity
STL is a wholly owned subsidiary of Hvide Marine Incorporated (HMI or
the Parent), a Florida Corporation.
HMI does not expect to be in compliance, as of March 31, 1999, with one
or more covenants contained in its Restated and Revolving Credit and Term Loan
Agreement, as amended ("Credit Facility"). See Note 6. HMI's management and the
Credit Facility lenders are engaged in discussions to resolve this matter. In
the event the parties are unable to reach an agreement, the lenders are
entitled, at their discretion, to exercise certain remedies including
acceleration of repayment. There can be no assurance that the Credit Facility
lenders will provide HMI with an amendment or waiver of the defaults. In
addition, HMI's Senior Notes contain provisions under which repayment of the
outstanding principal amount of $300.0 million, plus accrued interest, could be
accelerated in the event that repayment of the Credit Facility is accelerated.
In the event that the Credit Facility lenders elect to exercise their
right to accelerate repayment or exercise other remedies, such actions would
have a material adverse effect on HMI, its operations and its financial
condition. Furthermore, there can be no assurance that HMI would be successful
in identifying or consummating financing necessary to satisfy the obligations
which would become immediately due and payable. As a result of the uncertainty
related to these matters, the obligations with respect to the Credit Facility
are considered to be current liabilities of HMI at December 31, 1998 and HMI has
a deficit in working capital. These matters raise substantial doubt about HMI's
ability to continue as a going concern. These conditions also raise substantial
doubt about the Partnership's ability to continue as a going concern. In
addition to continuing to negotiate with the Credit Facility lenders to obtain
waivers or amendments, HMI has various plans to increase liquidity.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome
of this uncertainty.
3. Partnership Agreement
The general partner is responsible for the management of the
Partnership. Pursuant to the Agreement, the general partner and the limited
partners (collectively referred to as the Partners) are required to make capital
contributions at such times and in such amounts as the general partner requests
by notice. No additional capital contributions have been required for 1996, 1997
or 1998. The Partners are not entitled to withdraw any part of the capital
account or to receive any distribution of the Partnership except as specifically
provided in the Agreement. All net income or net losses of the Partnership are
to be allocated to the capital accounts in proportion to their interests. The
Partnership terminates on September 13, 2008, unless sooner terminated,
liquidated or dissolved by law or pursuant to the Agreement or unless extended
by amendment to the Agreement.
F-6
<PAGE>
4. Transactions with Affiliates
Balances due (to) from affiliates at December 31, 1997 and 1998 consist
of the following (in thousands):
1997 1998
------------- --------------
Due to HMI.............................. $ (31) $ (34)
Due to STL.............................. (2) (2)
Due from STPL........................... 13 13
------------- -------------
$ (20) $ (23)
============= =============
The amount payable to HMI represents a net balance as the result of
various transactions between the Partnership and HMI. There are no terms of
settlement associated with the account balance. The balance is primarily the
result of the Partnership's participation in the Parent's central cash
management program, wherein substantially all the Partnership's cash receipts
are remitted to the parent and substantially all cash disbursements are funded
by the Parent.
HMI provides various administrative services to the Partnership. It is
HMI's policy to charge these expenses on the basis of direct usage. In the
opinion of management, this method is reasonable.
An analysis of transactions in the Due to HMI account for each of the
three years in the period ended December 31, 1998 follows (in thousands):
<TABLE>
<CAPTION>
1996 1997 1998
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Balance at beginning of year $(27) $(29) $(31)
Allocated interest expense (1) (1) --
Miscellaneous other administrative expenses (1) (1) (3)
===================== ===================== =====================
Balance at end of year $(29) $(31) $(34)
===================== ===================== =====================
Average balance during the year $(28) $(30) $(33)
===================== ===================== =====================
</TABLE>
F-7
<PAGE>
5. Guarantees of Indebtedness of Others
In February 1998, the HMI completed an offering of $300.0 million of
8.375% senior notes (the Senior Notes). Interest on the Senior Notes is payable
semi-annually in arrears on February 15 and August 15. The Senior Notes mature
on February 15, 2008 and are redeemable, in whole or in part, at the option of
HMI on or after February 15, 2003. The Senior Notes are guaranteed by the
Partnership and certain other HMI subsidiaries; including HMI's economic
ownership interest in STPL's operating vessel, the Seabulk America.
HMI's Credit Facility provides revolving credit of up to $175 million,
based upon certain conditions, including HMI's compliance with a leverage ratio,
as defined. The Credit Facility also provides for a term loan in the amount of
$150 million. The Credit Facility provides that borrowings thereunder will be
secured by HMI-owned vessels, including the Seabulk America, having an appraised
value of at least $600.0 million and by substantially all other assets of HMI
and its subsidiaries. The revolving and term loan portions mature on February
12, 2003 and March 31, 2005, respectively. At December 31, 1998, HMI's
outstanding indebtedness under the revolving portion of the Credit Facility was
approximately $135.0 million, and approximately $118.0 million was outstanding
under the term loan portion of the Credit Facility. The Partnership and certain
subsidiaries of HMI jointly and severally guarantee the repayment of HMI's
indebtedness under the Credit Facililty; however, the guarantee is limited to
HMI's 67% ownership interest in the Seabulk America.
The Credit Facility contains certain covenants that must be satisfied
by the HMI consolidated group, of which the Partnership is a member. The Credit
Facility, among other things, (i) requires the consolidated group to meet
certain financial tests, including tests requiring the maintenance of minimum
leverage ratios, debt service coverage ratios, and indebtedness to tangible net
worth ratios; (ii) limits the creation or incurrence of certain liens; (iii)
limits the incurrence of additional indebtedness; (iv) limits certain
investments; and (v) restricts certain payments, including dividends.
HMI does not expect to be in compliance, as of March 31, 1999, with one
or more covenants contained in the Credit Facility. HMI management and the
Credit Facility lenders are engaged in discussions to resolve this matter. In
the event the parties are unable to reach agreement, the lenders are entitled,
at their discretion, to exercise certain remedies, which would adversely affect
the operations of the Partnership.
6. Income Taxes
The Partnership has received a ruling from the Internal Revenue Service
that it will be classified as a partnership for Federal Income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.
The following is a reconciliation of reported net income (loss) and
federal taxable loss (in thousands):
<TABLE>
<CAPTION>
1996 1997 1998
------------ ------------- --------------
<S> <C> <C> <C>
Net income (loss) as reported..................................... $ (966) $ (235) $ 417
Equity loss in Partnership..................................... (331) (616) (659)
------------ ------------- -------------
Federal taxable loss.............................................. $ (1,297) $ (851) $ (242)
============ ============= =============
</TABLE>
The following is a reconciliation between the Partnership's reported amounts
and federal tax basis of net assets and liabilities (in thousands):
1997 1998
------------- -------------
Net assets, as reported.......................... $ 2,704 $ 3,122
Equity in subsidiary partnership.............. (10,502) (11,662)
------------- -------------
Net deficit, tax basis........................... $ (7,798) $ (8,540)
============= =============
F-8
<PAGE>
Report of Independent Certified Public Accountants
The Partners
Seabulk Transmarine Partnership, Ltd.
We have audited the accompanying balance sheets of Seabulk Transmarine
Partnership, Ltd. as of December 31, 1997 and 1998, and the related statements
of operations, changes in partners' capital and cash flows for each of the three
years in the period ended December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Seabulk Transmarine
Partnership, Ltd. at December 31, 1997 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As more fully described in Note 2,
certain of the Partnership's partners are directly or indirectly owned by Hvide
Marine Incorporated (HMI). On a consolidated basis, HMI believes that it will
not be in compliance with certain covenants of a loan agreement as of March 31,
1999. Because of the aforementioned conditions relating to HMI, and the
uncertainties surrounding its plans to address its liquidity problems, HMI's
actions could have a substantial effect on the Partnership's assets; therefore,
there is also substantial doubt about whether the Partnership will continue as a
going concern. The financial statements of the Partnership do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.
/s/ ERNST & YOUNG LLP
Miami, Florida
February 5, 1999,
except for Note 2,
as to which the date
is March 31, 1999
S-1
<PAGE>
Seabulk Transmarine Partnership, Ltd.
Balance Sheets
<TABLE>
<CAPTION>
Year Ended December 31,
1997 1998
--------------- ---------------
(in thousands)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents...................................... $ 16 $ 30
Insurance claim and receivables................................ 14 --
Inventory, spare parts and supplies............................ 1,320 1,320
Prepaid expenses and deferred costs............................ 312 304
--------------- ---------------
Total current assets........................................ 1,662 1,654
Vessel and improvements........................................... 43,806 48,577
Less accumulated depreciation..................................... (9,810) (11,258)
--------------- ---------------
33,996 37,319
Deferred costs, net............................................... 426 160
--------------- ---------------
$ 36,084 $ 39,133
=============== ===============
Liabilities and partners' equity
Current liabilities:
Accrued liabilities........................................... $ 741 $ 3,896
--------------- ---------------
Total current liabilities......................................... 741 3,896
Due to affiliates, net............................................ 31,777 30,658
Other long term obligations....................................... 109 113
Commitments and contingencies
Partners' equity.................................................. 3,457 4,466
--------------- ---------------
$ 36,084 $ 39,133
=============== ===============
</TABLE>
See accompanying notes.
S-2
<PAGE>
Seabulk Transmarine Partnership, Ltd.
Statements of Operations
<TABLE>
<CAPTION>
December 31,
--------------------------------------------
1996 1997 1998
------------- ------------- --------------
(in thousands)
<S> <C> <C> <C>
Revenues $ 10,193 $ 10,329 $ 10,505
Operating expenses:
Crew payroll and benefits...................................... 2,761 2,741 2,725
Repairs and maintenance........................................ 755 685 732
Insurance ..................................................... 715 471 305
Consumables.................................................... 303 254 282
Other.......................................................... 241 448 18
------------ ------------- -------------
Total operating expenses.................................... 4,775 4,599 4,062
Selling, general and administrative expenses:
Salaries and benefits.......................................... 133 169 188
Professional fees.............................................. 1,581 2,284 1,275
Guarantee fee.................................................. 222 149 12
Allocated overhead............................................. 518 535 550
Other.......................................................... 30 28 73
------------ ------------- -------------
Total overhead expenses..................................... 2,484 3,165 2,098
Depreciation...................................................... 1,400 1,439 1,448
------------ ------------- -------------
Income from operations............................................ 1,534 1,126 2,897
Interest expense.................................................. 4,150 1,649 2,163
Other income (expense)............................................ 304 (36) 275
------------ ------------- -------------
Net income (loss)................................................. $ (2,312) $ (559) $ 1,009
============ ============= =============
</TABLE>
See accompanying notes.
S-3
<PAGE>
Seabulk Transmarine Partnership, Ltd.
Statements of Changes in Partners' Capital
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Capital
-------------------------------------------
(in thousands)
<S> <C> <C> <C>
Partners' capital at December 31, 1995............................ $ 2,917 $ 3,411 $ 6,328
Net loss for the year ended December 31, 1996.................. (763) (1,549) (2,312)
------------ ------------- -------------
Partners' capital at December 31, 1996............................ 2,154 1,862 4,016
Net loss for the year ended December 31, 1997.................. (185) (374) (559)
------------ ------------- -------------
Partners' capital at December 31, 1997............................ 1,969 1,488 3,457
Net income for the year ended December 31, 1998................ 333 676 1,009
------------ ------------- -------------
Partners' capital at December 31, 1998............................ $ 2,302 $ 2,164 $ 4,466
============ ============= =============
</TABLE>
See accompanying notes.
S-4
<PAGE>
Seabulk Transmarine Partnership, Ltd.
Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31,
1996 1997 1998
------------- ------------- --------------
(in thousands)
<S> <C> <C> <C>
Operating activities
Net income (loss)................................................. $ (2,312) $ (559) $ 1,009
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation.................................................. 1,400 1,439 1,448
Amortization of drydocking costs.............................. 318 292 240
Amortization of debt issuance costs........................... 234 176 --
Changes in operating assets and liabilities:
Accounts receivable......................................... 1,262 182 14
Other assets................................................ 43 (776) 35
Due to affiliates........................................... 1,603 635 (1,119)
Accrued and other liabilities............................... 178 415 3,159
------------ ------------- -------------
Net cash provided by operating activities......................... 2,726 1,804 4,786
Investing activity
Purchase of property.............................................. (196) (359) (4,772)
Financing activity
Principal payments on allocated term loan borrowings.............. (2,521) (1,446) --
------------ ------------- -------------
Change in cash and cash equivalents............................... 9 (1) 14
Cash and cash equivalents at beginning of year.................... 8 17 16
------------ ------------- -------------
Cash and cash equivalents at end of year.......................... $ 17 $ 16 $ 30
============ ============= =============
</TABLE>
See accompanying notes.
S-5
<PAGE>
Seabulk Transmarine Partnership, Ltd.
Notes to Financial Statements
December 31, 1998
1. Organization and Description of Business
Organization. Seabulk Transmarine Partnership, Ltd. (STPL or the
Partnership), a Florida limited partnership, was formed on August 30, 1985
pursuant to a partnership agreement (the Agreement), to own and operate a
chemical transportation carrier, the Seabulk America. The general partner of the
Partnership is Seabulk Tankers, Ltd. (STL), a Florida limited partnership (33%)
and the limited partners are STL (0.33%), Seabulk America Partnership Ltd.
(SAPL), a Florida limited partnership (41.67%) and Stolt Tankers (U.S.A) Inc.,
(25%). STL and SAPL are 100%- and 82%-owned subsidiaries of Hvide Marine
Incorporated (HMI), a Florida corporation.
Description of Business. The Seabulk America is used to transport
chemicals primarily from chemical manufacturing plants and storage facilities
along the U.S. Gulf of Mexico coast to industrial users in and around the
Atlantic and Pacific coast ports. The Partnership time charters, to Ocean
Specialty Tanker Corp. (OSTC), which is 100% owned by HMI.
2. Issues Affecting Liquidity
STL and SAPL are 100%- and 82%-owned subsidiaries of Hvide Marine
Incorporated (HMI), a Florida corporation.
HMI does not expect to be in compliance, as of March 31, 1999, with one
or more covenants contained in its Restated and Revolving Credit and Term Loan
Agreement, as amended ("Credit Facility"). See Note 6. HMI's management and the
Credit Facility lenders are engaged in discussions to resolve this matter. In
the event the parties are unable to reach an agreement, the lenders are
entitled, at their discretion, to exercise certain remedies including
acceleration of repayment. There can be no assurance that the Credit Facility
lenders will provide HMI with an amendment or waiver of the defaults. In
addition, HMI's Senior Notes contain provisions under which repayment of the
outstanding principal amount of $300.0 million, plus accrued interest, could be
accelerated in the event that repayment of the Credit Facility is accelerated.
In the event that the Credit Facility lenders elect to exercise their
right to accelerate repayment or exercise other remedies, such actions would
have a material adverse effect on HMI, its operations and its financial
condition. Furthermore, there can be no assurance that HMI would be successful
in identifying or consummating financing necessary to satisfy the obligations
which would become immediately due and payable. As a result of the uncertainty
related to these matters, the obligations with respect to the Credit Facility
are considered to be current liabilities of HMI at December 31, 1998 and HMI has
a deficit in working capital. These matters raise substantial doubt about HMI's
ability to continue as a going concern. These conditions also raise substantial
doubt about the Partnership's ability to continue as a going concern. In
addition to continuing to negotiate with the Credit Facility lenders to obtain
waivers or amendments, HMI has various plans to increase liquidity.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome
of this uncertainty.
3. Partnership Agreement
The general partner is responsible for the management of the
Partnership. Pursuant to the Agreement, the general partner and the limited
partners (collectively referred to as the Partners) are required to make capital
contributions at such times and in such amounts as the general partner requests
by notice. No additional capital contributions have been required for 1996, 1997
or 1998. The Partners are not entitled to withdraw any part of his capital
account or to receive any distribution of the Partnership except as specifically
provided in the Agreement. All net income or net losses of the Partnership are
to be allocated to the capital accounts in proportion to their interests. The
Partnership terminates on August 30, 2010, unless sooner terminated, liquidated
or dissolved by law or pursuant to the Agreement or unless extended by amendment
to the Agreement.
S-6
<PAGE>
4. Summary of Significant Accounting and Reporting Policies
Revenues. The Partnership's vessel is time-chartered to Ocean Specialty
Tankers Corporation, a wholly owned subsidiary of HMI. Revenues from time
charters are earned and recognized on a daily basis. Accounts receivable are
billed and collected by OSTC pursuant to the time-charter agreement and remitted
to the Partnership when the voyage expenses are paid. Accordingly, amounts due
are included in Due to/from affiliates (see note 3).
Cash and Cash Equivalents. The Partnership considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.
Insurance Claims Receivable. Insurance claims receivable represent
costs incurred in connection with insurable incidents for which the Partnership
expects to be reimbursed by the insurance carrier(s), subject to applicable
deductibles. Deductible amounts related to covered incidents are expensed in the
period of occurrence of the incident.
Inventory, Spare Parts and Supplies. Inventory, spare parts and
supplies are stated at the lower of cost, determined on a basis that
approximates the last-in, first-out method, or market.
Deferred Costs. Periodically, the Partnership's vessel is drydocked for
major repairs and maintenance which cannot be performed while the vessel is
operating. Drydocking costs are deferred and amortized over the period to the
next drydocking, generally 30 to 36 months. At December 31, 1997 and 1998,
deferred costs include unamortized drydocking of approximately $641,000 and
$401,000, respectively.
Long-Lived Assets. The Partnership accounts for long-lived assets
pursuant to Statement of Financial Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Management reviews long-lived assets
for impairment whenever events or changes in circumstances indicate the assets
may be impaired. The Partnership, based on current circumstances, does not
believe that any long-lived assets are impaired at December 31, 1998.
Property. The vessel and improvements are stated at cost less
accumulated depreciation. Major renewals and improvements are capitalized and
replacements, maintenance and repairs that do not improve or extend the lives of
the assets are expensed. Depreciation is computed on the straight-line method
over estimated useful lives ranging from 5 - 29 years, as determined by the Oil
Pollution Act of 1990 and other factors.
Income Taxes. No provision for income taxes has been recorded since
STPL is a partnership and taxable income or loss accrues to the Partners.
Reclassifications. Certain amounts from the prior year's financial
statements have been reclassified to conform with the current year's
presentation.
S-7
<PAGE>
5. Transactions with Affiliates
Balances due (to) from affiliates at December 31, 1997 and 1998 consist of the
following (in thousands):
1997 1998
--------------------------
Due to HMI $(33,212) $(33,554)
Due from STL 338 338
Due from OSTC 1,062 2,523
Other, net 35 35
==========================
Total due to affiliates $(31,777) $(30,658)
==========================
The amount payable to HMI represents a net balance as the result of
various transactions between the Partnership and HMI. There are no terms of
settlement associated with the account balance. The balance is primarily the
result of the Partnership's participation in HMI's central cash management
program, wherein substantially all the Partnership's cash receipts are remitted
to HMI and substantially all cash disbursements are funded by the parent. Other
transactions include miscellaneous other administrative expenses incurred by HMI
on behalf of the Partnership.
HMI provides various administrative services to the Partnership,
including legal assistance and technical expertise on ship management and
maintenance. It is HMI's policy to charge these expenses and all other central
operating costs, first on the basis of direct usage when identifiable, with the
remainder allocated pursuant to the terms of the Agreement. Amounts charged by
HMI include a monthly management fee, as set forth in the Agreement, which is
adjusted annually based on changes in the Consumer Price Index. HMI also charges
interest based on the amount due to HMI. In the opinion of the Partnership's
management, this method of allocation is reasonable.
An analysis of transactions in the Due to HMI account for each of the
three years in the period ended December 31, 1998 follows: (in thousands)
<TABLE>
<CAPTION>
1996 1997 1998
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Balance at beginning of year $ (6,834) $ (8,472) $ (33,212)
Net cash remitted to (received from) HMI 10,193 (12,390) 10,780
Allocated management fees (518) (535) (550)
Allocated guarantee fee (222) (149) (12)
Allocated interest expense (4,150) (1,649) (2,163)
Operating expenses (4,775) (4,599) (4,062)
Professional fees (1,580) (2,284) (1,275)
Miscellaneous administrative expenses (586) (3,134) (3,060)
--------------------- --------------------- ---------------------
Balance at end of year $ (8,472) $ (33,212) $ (33,554)
===================== ===================== =====================
Average balance during the year $ (7,653) $ (20,842) $ (33,383)
===================== ===================== =====================
</TABLE>
Prior to December 1998, the Partnership had a stand-by letter of credit
in the amount of $5,600,000 available for the benefit of the Partnership
provided by HMI (the Letter of Credit). The Letter of Credit was
S-8
<PAGE>
collateral for a surety bond to fund any final award relating to a shipyard's
claims. The Letter of Credit was terminated in December 1998 (see Note 7).
Included on the accompanying statements of operations are guarantee fees
primarily related to the Letter of Credit.
The time charter to OSTC extends through May 2000 and provides for
charter hire at a rate of $22,000 per day plus supplemental hire based on the
vessel's earnings value, as defined. The aggregate charter hire pursuant to this
charter agreement for 1996, 1997 and 1998 was approximately $10,193,000,
$10,329,000, and $10,505,000, respectively, and is included as revenues in the
accompanying statements of operations.
6. Guarantees of Indebtedness of Others
In February 1998, HMI completed an offering of $300.0 million of 8.375%
senior notes (the Senior Notes). Interest on the Senior Notes is payable
semi-annually in arrears on February 15 and August 15. The Senior Notes mature
on February 15, 2008 and are redeemable, in whole or in part, at the option of
HMI on or after February 15, 2003. The Senior Notes are guaranteed by the
Partnership and certain other HMI subsidiaries; however the Partnership's
guarantee is limited to HMI's economic ownership interest in the Partnership of
approximately 67%.
HMI's Credit Facility provides revolving credit of up to $175 million,
based upon certain conditions, including HMI's compliance with a leverage ratio,
as defined. The Credit Facility also provides for a term loan in the amount of
$150 million. The Credit Facility provides that borrowings thereunder will be
secured by HMI-owned vessels, including the Seabulk America, having an appraised
value of at least $600.0 million and by substantially all other assets of HMI
and its subsidiaries. The revolving and term loan portions mature on February
12, 2003 and March 31, 2005, respectively. At December 31, 1998, HMI's
outstanding indebtedness under the revolving portion of the Credit Facility was
approximately $135.0 million, and approximately $118.0 million was outstanding
under the term loan portion of the Credit Facility. The Partnership and certain
subsidiaries of HMI jointly and severally guarantee the repayment of HMI's
indebtedness under the Credit Facility; however, the Partnership's guarantee is
limited to HMI's 67% ownership interest in the Seabulk America.
The Credit Facility contains certain covenants that must be satisfied
by the HMI consolidated group, of which the Partnership is a member. The Credit
Facility, among other things, (i) requires the consolidated group to meet
certain financial tests, including tests requiring the maintenance of minimum
leverage ratios, debt service coverage ratios, and indebtedness to tangible net
worth ratios; (ii) limits the creation or incurrence of certain liens; (iii)
limits the incurrence of additional indebtedness; (iv) limits certain
investments; and (v) restricts certain payments, including dividends.
HMI does not expect to be in compliance, as of March 31, 1999, with one
or more covenants contained in the Credit Facility. HMI management and the
Credit Facility lenders are engaged in discussions to resolve this matter. In
the event the parties are unable to reach agreement, the lenders are entitled,
at their discretion, to exercise certain remedies, which would adversely affect
the operations of the Partnership.
7. Commitments and Contingencies
In 1990, the Partnership withheld approximately $2,400,000 from a
shipyard relating to delays and other problems encountered in the construction
of the Partnership's vessel. In 1993, the shipyard filed a claim to recover
approximately $6,100,000 for additional construction costs allegedly due the
shipyard. The proceeding was settled in the fourth quarter of 1998. Under the
terms of the settlement, all claims were dismissed with prejudice in
consideration of the payment to the shipyard $4,750,000 in installments from
December 1998 to May 1999. As part of
S-9
<PAGE>
the settlement, a $5,600,000 bond previously provided by HMI was released and a
related letter of credit provided as collateral to the bond was terminated.
Included in accrued liabilities on the accompanying December 31, 1998 balance
sheet is $3,750,000 due the shipyard in 1999 representing the final payment
under the settlement agreement.
8. Employee Benefit Plans
The Partnership has adopted HMI's Section 401(k) retirement plan (the
Plan) for substantially all of its employees. Subject to certain dollar
limitations, employees may contribute a percentage of their salaries to this
Plan, and the Partnership will match a portion of the employees' contributions.
Profit sharing contributions by the Partnership to the Plan are discretionary.
Expense under the Plan for 1996, 1997 and 1998 was approximately $167,000,
$168,000 and $169,000, respectively.
9. Business Risks
Risks and Uncertainties. The Partnership's operating results and
financial condition may vary in the future depending on a number of factors. The
following factors may impact the Partnership's business, results of operations
and financial condition.
Significant Customers. The Partnership derived 100% of its revenues
from OSTC, an affiliated entity. Although there are no indications that this
relationship will change, the loss of OSTC as a customer could have an adverse
effect on the Partnership's results of operations.
Concentrations of Credit Risk. Financial instruments which potentially
subject the Partnership to concentrations of credit risk consist principally of
cash in banks, amounts due from OSTC and insurance claims receivable. The credit
risk associated with cash in banks is considered low due to their credit
quality. The credit risk associated with amounts due from OSTC is considered low
due to the ongoing credit evaluations of their trade customers and generally
does not require collateral. The credit risk associated with insurance claims
receivable is considered low due to the credit quality and funded status of the
insurance pools in which the Partnership participates.
Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Litigation. The Partnership is sometimes named as a defendant in
litigation, usually relating to claims for bodily injuries or property damage.
The Partnership maintains insurance coverage against such claims to the extent
deemed prudent by management and applicable deductible amounts are accrued at
the time of the incident. The Partnership believes that there are no existing
claims of a potentially material adverse nature.
Unions and Collective Bargaining Agreements. Members of the crew of the
Seabulk America are subject to collective bargaining agreements. Management
considers relations with employees to be satisfactory, however, if these
relations were to deteriorate it could have an adverse effect on the
Partnership's operating results.
S-10
<PAGE>
10. Income Taxes
The Partnership has received a ruling from the Internal Revenue Service
that it will be classified as a partnership for federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of the Partners.
The following is a reconciliation of reported net income (loss) and
Federal taxable loss (in thousands):
<TABLE>
<CAPTION>
1996 1997 1998
------------- ------------- --------------
<S> <C> <C> <C>
Net income (loss) as reported..................................... $ (2,312) $ (559) $ 1,009
Add (deduct):.....................................................
Depreciation differences....................................... (1,206) (1,159) (1,805)
Drydocking amortization differences............................ 318 (324) 240
Change in vacation and bonus accruals.......................... 88 2 (3)
Other.......................................................... 5 2 (14)
------------ ------------- -------------
Federal taxable loss.............................................. $ (3,107) $ (2,038) $ (573)
============ ============= =============
</TABLE>
The following is a reconciliation between the Partnership's reported
amounts and federal tax basis of net assets and liabilities (in thousands):
<TABLE>
<CAPTION>
1997 1998
------------- --------------
<S> <C> <C>
Net assets, as reported......................................................... $ 3,457 $ 4,466
Accruals and prepaid items.................................................. 79 123
Depreciation................................................................ (19,736) (21,541)
Deferred costs.............................................................. 641 (401)
Vessel basis difference..................................................... (6,168) (6,168)
------------- -------------
Net deficit, tax basis.......................................................... $ (21,727) $ (23,521)
============= =============
</TABLE>
S-11
SUPPLEMENTAL AFFIDAVIT
AND
AMENDED AND RESTATED
CERTIFICATE OF LIMITED PARTNERSHIP
OF
SEABULK AMERICA PARTNERSHIP, LTD.
Originally filed with the Secretary of State on September 19, 1983.
THE UNDERSIGNED Partners hereby make, acknowledge, and file this Certificate of
Limited Partnership for SEABULK AMERICA PARTNERSHIP, LTD., a Florida limited
partnership, hereinafter referred to as the "Partnership".
1. Name of Partnership: The name of the Partnership is SEABULK AMERICA
PARTNERSHIP, LTD.
2. Character of Business: The business and purpose of the Partnership
are (a) to acquire title to the U.S.-flagged barge named "4102" (as may be
renamed), to provide for its reconstruction into a self-propelled vessel and to
provide for its management and operation; (b) to purchase, reconstruct, manage,
operate, charter or lease the U.S.-flagged barge named "4102" (as may be
renamed) and qualified to operate in the U.S.-foreign trade; (c) to engage in
any and all maritime-related activities relating to the ownership, operation and
use of the U.S.-flagged barge named "4102" (as may be renamed) and entitled to
operate the U.S.-foreign trade; and (d) to invest in stocks, bonds and
securities, and to engage without limitation, in the purchase and sale of, and
dealing in, stocks, bonds, notes, and to open such checking and savings accounts
with banking institutions as may be necessary to conduct the business of the
Partnership.
3. Location and Principal Place of Business: The principal place of
business of the
<PAGE>
Partnership shall be located at 2200 Eller Drive, Fort Lauderdale, Florida
33316, or at such other place or places as the General Partner may designate and
as agreed to by the Limited Partner.
4. Name and Place of Residence of Partners:
(a) The name and address of the General Partner is SEABULK TANKERS,
LTD., 2200 Eller Drive, Fort Lauderdale, Florida 33316.
(b) The name and address of the Limited Partner is: Stolt Tankers
(U.S.A.), Inc.; 8 Sound Shore Drive; Greenwich, Connecticut 06836.
5. Term: The Partnership shall commence on the date the Original
Certificate of Limited Partnership for this limited partnership was filed with
the Florida Secretary of State (September 19, 1983) and shall continue in
existence for a period of until twenty-five (25) years from said date, unless
sooner terminated, liquidated, or dissolved by law or as provided in the Limited
Partnership Agreement (the "Partnership Agreement") or unless extended by
amendment to the Partnership Agreement.
6. Contribution of Limited Partner: The Limited Partner shall
contribute the amount of $671,733.40 in cash as its initial capital contribution
to the Partnership.
7. Additional Contributions: The Limited Partner agrees to contribute
to the capital of the Partnership at such times and in such amounts as the
General Partner may from time to time request by notice to the Limited Partner,
its proportionate share (based upon its initial capital contribution as set
forth in Section 6 above and Section 4.01 of the Partnership Agreement) of costs
incurred and necessary for the reconstruction of the barge "4102", for general
and administrative expenses, and for other expenses incurred in connection with
other activities in which the Partnership is authorized to engage in.
8. Return of Contributions: The initial contribution of each Partner is
to be returned in accordance with the Partnership Agreement.
9. Division of Profits: Net profits and losses of the Partnership for any
year shall be
<PAGE>
allocated to Partners in accordance with the Partnership Agreement.
10. Assignee of Limited Partner: No limited Partner shall have a right
to assign any part of his partnership interest, except as provided in the
Partnership Agreement.
11. Additional Limited Partners: No additional Limited Partners may be
admitted, except with the consent of all Partners and in accordance with the
Partnership Agreement.
12. Right to Priority: No Limited Partner shall have the right to
priority over any other Limited Partner with respect to contributions or with
respect to compensation by way of income, except as may be provided in the
Partnership Agreement.
13. Continuation of Business Partnership: The bankruptcy, death,
incapacity or resignation of any General Partner, (if there shall at the time of
such event then be more than one General Partner) shall not have the effect of
terminating the Partnership and the other General Partner shall continue to
serve as the General Partner, if any, and if there are none, and if the Limited
Partner does not admit a new General Partner or Partners to the Partnership in
accordance with the provisions of the Partnership Agreement, the Partnership
will terminate as provided in the Limited Partnership Agreement.
14. Return of Contribution Other Than Cash: No Limited Partner shall
have the right to demand and receive property other than cash in return for his
contribution.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
as of the 26th day of September, 1990.
WITNESSES:
GENERAL PARTNER:
/s/ DIANNE MITCHELL SEABULK TANKERS, LTD.
By: Hvide Marine Transport, Incorporated
its sole General Partner
/s/ KAREN S. HUTTER By: /s/ GENE DOUGLAS
LIMITED PARTNERS:
<PAGE>
STOLT TANKERS (U.S.A.), INC.
By: Seabulk Tankers, Ltd.
sole general partner of
SEABULK AMERICA PARTNERSHIP, LTD.
attorney-in-fact
/s/ DIANNE MITCHELL By: Hvide Marine Transport, Incorporated
its sole General Partner
/s/ KAREN S. HUTTER By:/s/ GENE DOUGLAS
Vice President
STATE OF FLORIDA )
) ss:
COUNTY OF BROWARD )
SWORN TO BEFORE ME, the undersigned authority, personally appeared Gene
Douglas, the Vice President of HVIDE MARINE TRANSPORT, INCORPORATED, sole
general partner of SEABULK TANKERS, LTD., personally known to me to be the
person described in and who executed the foregoing instrument in such capacity,
and he acknowledged before me that he executed the same for the uses and
purposes in said instrument set forth and that same was the act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal as of
the26th day of September, 1990.
/s/ DIANNE MITCHELL
Notary Public
(SEAL)
STATE OF FLORIDA )
) ss:
COUNTY OF BROWARD )
SWORN TO BEFORE ME, the undersigned authority, personally appeared Gene
Douglas, the Vice Presidnet of HVIDE MARINE TRANSPORT, INCORPORATED, sole
general partner of SEABULK TANKERS, LTD., (both for itself and as
attorney-in-fact for Stolt Tankers (U.S.A.), Inc.) personally known to me to be
the person described in and who executed the foregoing instrument in such
capacity, and he acknowledged before me that he executed the same for the uses
and purposes in said instrument set forth and that same was the act and deed of
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal as of
the 26th day of September, 1990.
/s/ DIANNE MITCHELL
Notary Public
(SEAL)
LIMITED PARTNERSHIP AGREEMENT
SEABULK AMERICA PARTNERSHIP, LTD.
THIS AGREEMENT of Limited Partnership made this 14th day of September,
1983, among SEABULK TANKERS, LTD. (hereinafter referred to as General Partner),
and STOLT TANKERS (U.S.A.), Inc (herein referred to as "Limited Partner"). (The
General Partner and the Limited Partner are sometimes collectively referred to
herein as the "Partners").
ARTICLE I
GENERAL ORGANIZATION
1.01 Organization. The parties hereto hereby form a Limited Partnership
pursuant to Chapter 620, Florida Statutes, (herein called the "Partnership").
1.02 Statutory Requirement. The parties hereto shall simultaneously
herewith execute a Certificate of Limited Partnership and cause such certificate
to be filed in the appropriate office and, thereafter, execute and cause to be
filed and otherwise published such original or amended certificates all
evidencing the formation and operation of this Limited Partnership whenever the
same may be required under the laws of the State of Florida and of any other
states where the Partnership shall determine to do business. The General Partner
is hereby authorized and empowered by the Limited Partner to prepare, file and
publish either the original or any amended or modified Certificates of Limited
Partnership as may be necessary or desirable, and the Limited Partner
specifically designates and appoints the General Partner, for and on its behalf
as its attorneys for the exclusive purposes of signing and attesting to such
original or amended Certificates of Limited Partnership. The creation of the
foregoing power of attorney is coupled with an interest and shall be
irrevocable.
1.03 Purposes of Partnership. The purpose of the Partnership shall be as
follows:
(a) To acquire title to the U.S.-flagged barge named "4102" (as may be
renamed), to provide for its reconstruction into a self-propelled vessel and to
provide for its management and operation;
(b) To purchase, construct, reconstruct, manage, operate, charter or
lease the U.S.-flagged barge named "4102" (as may be renamed) and qualified to
operate in the U.S.-foreign trade;
(c) To engage in any and all maritime-related activities relating to
the ownership, operation and use of the U.S.-flagged barge named "4102" (as may
be renamed) and entitled to operate in the U.S.-foreign trade; and
(d) To invest in stocks, bonds and securities, and to engage without
limitation, in the purchase and sale of, and dealing in, stocks, bonds, notes,
and to open such checking and savings accounts with banking institutions as may
be necessary to conduct the business of the Partnership.
<PAGE>
ARTICLE II
NAME, LOCATION AND PARTNERS
2.01 Name of Limited Partnership. The name of the Limited Partnership
is SEABULK AMERICA PARTNERSHIP, LTD. The business of the Partnership shall be
conducted under such name and under such variations of this name as may be
necessary to comply with the laws of other states within which the Partnership
may do business or make investments.
2.02 Fictitious Name Certificates. The General Partner shall promptly
execute and duly file with the proper offices in each state in which the
Partnership may conduct the activities hereinafter authorized one or more
certificates as required by the Fictitious Names Act or similar statute in
effect as to each such state in which such activities are so conducted.
2.03 Location of Principal Place of Business. The principal place of
business shall be located at 1900 Southeast 17th Street Causeway, Fort
Lauderdale, Florida, 33316, or at such other place or places as the General
Partner may designate and as agreed to by the Limited Partner.
2.04 Names and Addresses or Places of Residence of Partners. The names
and place of residence of the General Partner and the Limited Partner are as
follows:
General Partner: Address:
Seabulk Tankers, Ltd. 1900 S.E. 17th Street
Fort Lauderdale, FL 33316
Limited Partner: Address:
Stolt Tankers (U.S.A.), Inc. c/o Stolt-Nielsen, Inc.
8 Sound Shore Drive
Greenwich CT 06836
ARTICLE III
TERM
3.01 Term of Partnership. The Partnership shall commence on the date
that a Certificate of Limited Partnership is duly filed as required by law, and
shall continue in existence for a period of twenty-five (25) years from the date
of said filing, unless sooner terminated, liquidated, or dissolved by law or as
hereinafter provided or unless extended by amendment to this Limited Partnership
Agreement.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 Initial Capital Contributions. As its initial capital
contribution, the General Partner shall contribute fifty-one percent (51%) of
its ownership interest in the barge "4102" to the Partnership, the value of
which the parties hereto acknowledge to be $1,860,858.48. This contribution
shall represent a fifty-one percent (51%) equity interest in the Partnership. As
its
<PAGE>
initial capital contribution to the Partnership, Stolt Tankers (U.S.A.), Inc.
shall contribute $1,787,883.64, which amount represents a forty-nine percent
(49%) interest in the Partnership.
4.02 Additional Capital Contributions. Each of the General Partner and
the Limited Partner agree to contribute to the capital of the Partnership at
such times and such in amounts as the General Partner may from time to time
request by notice to the Limited Partner, its proportionate share (based upon
its initial capital contribution as set forth in Section 4.01 hereof) of costs
incurred and necessary for the reconstruction of the barge "4102", for general
and administrative expenses, and for other expenses incurred in connection with
other activities in which the Partnership is authorized to engage in
4.03 Percentage Ownership of the Partnership Assets. The percentage
interest of the General Partner and the Limited Partner in the partnership
assets is as follows:
Percentage
General Partner:
Seabulk Tankers, Ltd. 51%
Limited Partner:
Stolt Tankers (U.S.A.), Inc. 59%
4.04 Capital Account. Each Partner shall have a capital account which shall
be credited with:
(a) The amount of its capital contribution pursuant to Sections 4.01 and
4.02 hereof; and
(b) The amount of net profits (as defined in Section 5.01
below) allocated to such Partner pursuant to its equity interest as set forth in
Section 4.01 hereof; and shall be debited with:
(i) The amount of net losses (as defined in Section 5.01 below) allocated
to such Partner pursuant to equity interest as set forth in Section 4.01 hereof;
and
(ii) All amounts distributed to such Partner pursuant to Article V hereof.
Whenever it is necessary to determine the capital account of any Partner for
purposes of this Agreement, the capital account of the Partner shall be
determined after giving effect to the allocation for the Partnership's current
year (or the portion thereof ending on the date of such determination) of net
profits or net losses in accordance with Section 5.02 and all distributions for
such year pursuant to Section 5.03. A Partner shall not be entitled to withdraw
any part of his capital account or to receive any distribution of the
Partnership except as specifically provided in this Agreement.
ARTICLE V
DISTRIBUTIONS
5.01 Definition of Net Profits and Net Losses. The terms "net profits"
and "net losses" as used in this Agreement shall mean the net profits and the
net losses of the Partnership as
<PAGE>
determined under generally accepted accounting principles by a
nationally-recognized firm of independent certified public accountants servicing
the Partnership account.
5.02 Division of Net Profits and Net Losses. All net profits and net
losses of the Partnership shall be allocated to the General Partner and the
Limited Partner, in a percentage equal to that set forth in Section 4.03.
5.03 Division of Cash Flow. The cash flow of the Partnership shall be
the net profits and net losses of the Partnership as defined in Section 5.01
above, plus depreciation and other noncash charges deducted in determining such
net profits and net losses, minus principal payments on all mortgages, and any
other cash expenditures which have not been deducted in determining the net
profits and net losses of the Partnership, and minus any amount reasonably
determined by the General Partner, after consultation with the Limited Partner,
as being required to maintain sufficient working capital and a reasonable
reserve for repairs, replacement, or other reasonable contingencies. The cash
flow, as so determined, may be distributed by the General Partner to all the
Partners in a percentage equal to that set forth in Section 4.03. There shall be
no obligation to return to the General Partner or to the Limited Partner, or to
any one of them, any part of the respective capital contributions for so long as
the Partnership continues in existence. Neither the General Partner nor the
Limited Partner shall be entitled to any priority or preference over any other
Partner as to the distribution of the cash flow of the Partnership.
ARTICLE VI
OWNERSHIP OF PROPERTY
6.01 Ownership. All property, including all improvements thereto,
acquired by the Partnership shall be owned by the Partners in a percentage equal
to that set forth in Section 4.03, such ownership being subject to the terms and
provisions of this Agreement. Each Partner hereby expressly waives the right to
require partition of any Partnership property or any part thereof.
ARTICLE VII
BOOKS, ACCOUNTS AND RECORDS
7.01 Partnership Accounting Year. The Partnership's books and records
and all required income tax returns shall be kept or made on the basis of a
fiscal year to be determined by the General Partner. The General Partner, after
consultation with the Limited Partner, shall determine whether the cash of
accrual method of accounting is to be used in keeping the Partnership records.
7.02 Books and Records. The General Partner shall keep at the principal
place of business and make available to all partners at any time during normal
business hours, true and correct books of account and all other Partnership
records. The copying by a Partner or his designated agent, of any part or all
parts of such records is specifically authorized. Within forty-five (45) days
after the close of each month of each fiscal year of the Partnership, the
General Partner shall furnish to all Partners unaudited financial statements of
the Partnership. Within ninety (90) days after the close of each fiscal year of
the Partnership, the General Partner shall furnish to all Partners financial
statements for the Partnership audited by a firm of nationally-recognized
independent public accountants and a full and detailed financial report on the
<PAGE>
business operations of the Partnership for and during the entire preceding year.
In addition, within ninety (90) days after the close of each fiscal year of the
Partnership, the General Partner shall furnish to all Partners any additional
information needed or necessary to complete their federal and state income tax
returns, including statements of the net distributable income or loss to each
Partner from the operation of the Partnership. The cost of all of the above
duties and services to be performed by the General Partner shall be deemed an
expense of the Partnership.
7.03 Partnership Bank Account. The General Partner shall receive all
monies of the Partnership and shall deposit the same in one or more Partnership
bank accounts. All expenditures by the General Partner on partnership interests
shall be made by checks or other debits drawn against the Partnership bank
account. Withdrawals from the Partnership bank accounts shall be made on such
signature or signatures and on such terms and conditions as the General Partner
shall authorize.
ARTICLE VIII
POWERS AND LIABILITIES OF THE GENERAL PARTNER
8.01 Powers. The Partnership shall have the power to reconstruct,
operate, acquire, charter out, hold, mortgage, sell or otherwise dispose of the
barge "4102" (to be known as the "Seabulk America" after reconstruction) to
borrow money, to give evidence of indebtedness, and to execute and deliver such
instruments and documents and to take such other action as the General Partner,
after consultation with the Limited Partner, shall from time to time deem
necessary and appropriate in connection with carrying out the purpose of the
Partnership.
8.02 Management. The General Partner shall manage and operate the business
of the Partnership and shall have full discretion in the management and
operation thereof, subject to the approval of the Limited Partner as to specific
action set forth in Section 12.02 hereof. The General Partner shall use due
diligence to carry out the purposes and business of the Partnership and shall
devote to the Partnership business such time as it shall determine to be
required for its welfare and success. The General Partner agrees to provide
frequent, periodic information to the Limited Partner regarding the
Partnership's financial condition and business activities.
8.03 Responsibility of General Partner. The General Partner shall
exercise due diligence in managing the affairs of the Partnership. Always,
unless fraud, deceit, gross negligence, or a wrongful taking shall be involved,
the General Partner shall not be liable or obligated to the Limited Partner for
any mistake of fact or judgment made by the General Partner in operating the
business of the Partnership, which results in any loss to the Partnership or its
Partners. The General Partner does not, in any way, guarantee the return of the
Limited Partner's capital or a profit from the operations of the Partnership.
Neither shall the General Partner be responsible to the Limited Partner because
of a loss of his investment or a loss in operations. The General Partner shall
devote such attention and business capacity to the affairs of the Partnership as
may be reasonably necessary. In this connection, the parties hereby acknowledge
that any General Partner may be the Manager or General Partner of other
partnerships or entities and may continue to manage other partnerships or
entities, and may continue to engage in other distinct or related businesses,
including the investment in or ownership or development of such business,
whether or not competitive with the business of the Partnership.
<PAGE>
8.04 Indemnification. The General Partner shall be indemnified by the
Partnership from any loss or damage incurred by the General Partner by reason of
any act performed or omitted by it if its conduct was consistent with sound
business practices and it reasonably believed the act or omission to be in
furtherance of the interest of the Partnership; provided, however, that nothing
contained herein shall in any manner increase the liability of the Limited
Partner beyond its obligation to make its capital contributions to the
Partnership, as provided for herein.
ARTICLE IX
POWER OF ATTORNEY
9.01 Appointment of General Partner. The Limited Partner hereby
constitutes and appoints the General Partner, the true and lawful attorney for
the undersigned to act in his behalf as provided for hereinabove, and to make,
execute, sign, acknowledge, and file a Certificate of Limited Partnership or
amendments thereto, and, upon termination of the Partnership a Certificate of
Dissolution as required under the laws of the State of Florida, and to include
therein all information required by the laws of the State of Florida, also make,
execute, sign, acknowledge, and file such other instruments as may be required
under the laws of the State of Florida, and the General Partner undertakes to
perform all such acts necessary and desirable for the protection of the Limited
Partner.
ARTICLE X
COMPENSATION OF THE GENERAL PARTNER
10.01 Compensation. The General Partner shall be compensated for the
performance of its duties and functions under this Agreement. Such compensation
will be made on a monthly basis and shall be the actual costs and expenses of
operating the partnership.
10.02 Re-Evaluation of Compensation. Compensation of the General
Partner shall be subject to review and approval every three (3) years by all the
Partners.
ARTICLE XI
ADMISSION OF NEW PARTNERS
11.01 Admission of New Partners. New general partners may be admitted
to the Partnership with the written consent of all Partners. In the event that
new general partners are admitted into the Partnership, the share of each new
general partner and all other partners in the net profits and losses shall be in
such proportion as may be agreed upon between all the partners and the new
general partners. With the written consent of all Partners, new limited partners
may be admitted into the partnership upon the payment of such capital
contribution and upon such terms as the General Partner shall decide. In the
event that net limited partners are admitted into the Partnership, the share of
each new limited partner in the net profits and losses shall be in such
proportion as may be determined by the General Partner.
11.02 Compliance with Laws. Notwithstanding the provisions of Section
11.01, no new partners shall be admitted in violation of any of the U.S.
maritime laws or statutes nor which
<PAGE>
would, in consideration of the business of the Partnership, result in a
violation of the Merchant Marine Act, 1936, as amended.
11.03 Change in Maritime Statutes Concerning Foreign Equity Interest.
In the event the United States Congress enacts legislation permitting a fifty
percent (50%) or greater participation by non-U.S. citizens in the ownership of
a U.S.-flagged vessel (within the meaning of the Shipping Act, 1916, as amended
or as may hereafter be amended), the Limited Partner shall then have the option
to purchase from the General Partner a one percent (1%) equity limited
partnership interest in the Partnership to increase its total equity limited
partner's interest to fifty percent (50%). The purchase price for such option
shall be equal to the then-equivalent value of said one percent (1%) interest as
it relates to the then-current capital accounts referred to in Section 4.04
hereof.
ARTICLE XII
POWERS, RIGHTS AND RESTRICTIONS ON LIMITED PARTNERS
12.01 Restrictions on Limited Partners. The Limited Partner shall not
have either the obligation or the right to take part, directly or indirectly, in
the active management of the business of the Partnership and the Limited Partner
is not authorized to do or perform any act, thing, or deed in the name of or for
or on behalf of either the General Partner or the Partnership. The Limited
Partner is not authorized to and shall not, directly or indirectly, have a voice
in or take part in the business affairs or business operations of the
Partnership, except as specifically provided for in Section 12.03 of this
Article XII and otherwise in this Agreement, or receive any compensation as such
Partner. The Limited Partner is not authorized to and shall not be permitted to
do any act, deed, or thing which will cause such Limited Partner to be
classified as a General Partner of the Partnership. The foregoing shall not
apply to a General Partner who has acquired a Limited Partner's interest in
accordance with the terms of this Agreement.
12.02 Financing Arrangements. Any financing arrangements in connection
with the payment for the reconstruction costs of the barge "4102" shall not be
entered into by the General Partner without first obtaining the approval of the
Limited Partner.
ARTICLE XIII
LIABILITY OF LIMITED PARTNERS
13.01 Liability. The liability of the Limited Partners with regard to
the Partnership in all respects is restricted and limited to the amount of the
actual capital contributions (and loans, if any) that each Limited Partner
agrees to make to the Partnership.
ARTICLE XIV
LOANS TO THE PARTNERSHIP
14.01 Loans to the Partnership. Nothing herein shall prevent or act
against a General or Limited Partner loaning money to the Partnership on a
promissory note or similar evidence of indebtedness for a reasonable rate of
interest. Any Partner loaning money to the Partnership shall have the same
rights and risks regarding the loan as would any person or entity making the
loan who was not a Partner of the Partnership.
<PAGE>
ARTICLE XV
TRANSFERS OF PARTNERSHIP INTEREST
15.01. Prohibition Against Transfer. Except as hereinafter set forth,
no Limited Partner shall sell, assign, transfer, encumber, or otherwise dispose
of any interest in the Partnership without the written consent of the General
Partners. (Provided, however, that this restriction shall not apply to such
transactions between the Limited Partner and any of its subsidiaries).
15.02 Sales. Should the Limited Partner desire to sell or assign its
interest in the Partnership (other than to any of its subsidiaries), it shall
first notify the General Partner of such desire to so sell or assign its
interest. The General Partner shall thereupon have a right of first refusal to
purchase such partnership interest at the same purchase price and on the same
terms and conditions as the proposed bona fide third-party purchaser or
assignee. Provided always that any purchaser shall expressly assume any rights,
liabilities and responsibilities of the Limited Partner in the Partnership and
shall execute any documents necessary to effect such assumption and release. Any
purported sale or assignment not in accordance with the provisions of Section
11.02 and this Section 15.02 shall be null and void.
ARTICLE XVI
TERMINATION OR DISSOLUTION
16.01 Termination Upon Withdrawal, Bankruptcy, Death, or Incapacity of
General Partner. The General Partner, upon at least six (6) months prior written
notice, effective as of the last day of any fiscal year of the Partnership, may
voluntarily withdraw from the Partnership as General Partner and such withdrawal
shall have the effect of terminating the Partnership as of the close of business
on such last day. (Provided, however, that upon voluntary withdrawal of such
General Partner, such General Partner, and prior to such termination, the
Limited Partner may designate a new general partner, subject to such new general
partner meeting all citizenship and other criteria of the U.S. Maritime
Administration and other applicable governmental agencies, including that
criteria dealing with de facto control. If such new general partner is so
appointed, subject to the requirements set forth above: (a) the Partnership
shall continue, but the Partnership name and any of its assets shall be changed
to delete "Seabulk"; (b) the new general partner shall expressly assume all
rights, liabilities and responsibilities of the prior General Partner in the
Partnership, shall release the General Partner from any such liabilities and
responsibilities, and shall execute any documents necessary to effect such
assumption and release; and (c) the prior General Partner shall be immediately
paid for its interest in the Partnership assets, which payment shall be the fair
market value of the prior General Partner's interest in the Partnership as
determined by a competent appraisal.)
The bankruptcy, death, incapacity, or resignation of one
General Partner (if there shall at the time of such event then be more than one
General Partner) shall not have the effect of terminating the Partnership and
the other General Partner shall continue to serve as the General Partner. Upon
the bankruptcy, death, incapacity, or resignation of the General Partner, the
Partnership shall terminate as of the close of business on the last day of the
fiscal year in which such event occurs.
16.02 Voluntary Termination - Effect of Bankruptcy, Dissolution, Death
or Incapacity of Limited Partner. The Partnership may be terminated upon any
date specified in a notice of termination, signed by the General Partner.
(Provided, however, that upon voluntary
<PAGE>
withdrawal of such General Partner, and prior to such termination, the Limited
Partner may designate a new general partner, subject to such new general partner
meeting all citizenship and other criteria of the U.S. Maritime Administration
and other applicable governmental agencies, including that criteria dealing with
de facto control and subject also to fulfilling the name change, assumption,
release and payment provisions as set forth in 16.01(a), (b) and (c) above.) The
bankruptcy, dissolution, death or incapacity of a Limited Partner shall have no
effect on the life of the Partnership, which shall continue. (Provided, however,
that upon such bankruptcy, dissolution or incapacity of a Limited Partner, the
General Partner may designate a new limited partner subject to such new limited
partner meeting all citizenship and other criteria of the U.S. Maritime
Administration and applicable governmental agencies, including that criteria
dealing with de facto control. If such new limited partner is so appointed,
subject to the requirements set forth above (a) the new limited partner shall
expressly assume all rights, liabilities and responsibilities of the prior
Limited Partner in the Partnership, shall release the Limited Partner from any
such liabilities and responsibilities, and shall execute any documents necessary
to effect such assumption and release; and (b) the prior Limited Partner shall
be immediately paid for its interest in the Partnership assets, which payment
shall be the fair market value of the prior Limited Partner's interest in the
Partnership as determined by a competent appraisal.)
16.03 Effect of a Termination of the Partnership. Upon the termination
of the Partnership, regardless of how it is terminated, the affairs of the
Partnership shall be wound up by the General Partner. If for any reason there is
no General Partner, or if they refuse to serve, or are incapable of serving, the
holders of a majority of interests of the Limited Partnership may appoint or
designate a Trustee-in-Liquidation who shall serve to wind up the affairs of the
Partnership. The Trustee-in-Liquidation need not be a commercial corporate
trustee, need not be bonded, and may be a Limited Partner. Whoever serves to
wind up the affairs of the Partnership, the following procedure shall be
followed:
Upon such termination, the assets of the Partnership shall be
applied as follows: to payment of the outstanding Partnership liabilities,
although an appropriate reserve may be maintained and the amount determined by
the General Partner or Trustee-in-Liquidation for any contingent liability until
said contingent liability is satisfied, and the balance of such reserve, if any,
shall be distributed, together with any other sum remaining after payment of the
outstanding Partnership liabilities, to the Partners in the following order of
priority:
(1) To the Limited Partner in an amount not to exceed its
capital account, which capital account shall include the Limited Partner's
proportionate share of any profits or losses from the sale of Partnership
assets.
(2) Balance to the General Partner(s).
Nothing contained in this Agreement shall defeat the right of either a Limited
or a General Partner to require and to have a court-supervised winding up,
liquidation, and dissolution of the Partnership. No Partner shall be entitled to
demand a distribution be made to him in the Partnership property, but the
General Partner may make or direct property distributions to be made, using the
property's fair market value as of the time of distribution as the basis of
making the distribution
<PAGE>
ARTICLE XVII
MISCELLANEOUS
17.01 Unauthorized Transactions. During the time of the organization or
continuance of this Limited Partnership, the Limited Partner hereof shall not do
any one of the following: (a) use the name of the Partnership (or any
substantially similar name) or any trademark or trade name adopted by the
Partnership, except in the ordinary course of the Partnership business; (b)
disclose to any nonpartner any of the Partnership business practices, trade
secrets, or any other information not generally known to the business community;
(c) do any other act or deed with the intention of harming the business
operations of the Partnership; (d) do any act contrary to this Limited
Partnership Agreement; (e) do any act which would make it impossible to carry on
the intended or ordinary business of the Partnership; (f) confess a judgment
against the Partnership; (g) abandon or wrongfully transfer or dispose of
Partnership Property, real or personal; (h) admit another person or entity as a
General or Limited Partner; or (i) assign, transfer, sell, or pledge his limited
partnership interest except as provided for in Section 15.02 hereof.
17.02 Amendment. This Agreement may be amended or modified by the
Partners from time to time but only by a written instrument executed by the
General Partner and the holders of two-thirds (2/3) of the Limited Partnership
interests
17.03 Notices. Except as may be otherwise specifically provided in this
Agreement, all notices required or permitted hereunder shall be in writing by
either telex or cable and shall be deemed to be delivered after receipt of same
by the other party at such party's respective address set forth in Section 2.04
hereof or at such other respective address as may have been theretofore
specified by written notice by such party.
17.04 Meetings. Except in emergency situations, meetings of the
Partners shall be held not less than fifteen (15) days nor more than thirty (30)
days after receipt of written notice from the General Partner.
17.05 Applicable Law. This Agreement shall be construed under and in
accordance with the laws of the State of Florida.
17.06 Other Instruments. The parties hereto covenant and agree that
they will execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the Partnership
created by this Agreement.
17.07 Headings. The headings used in this Agreement are used for
administrative purposes only and do not constitute substantive matters to be
considered in construing the terms of this Agreement.
17.08 Parties Bound. This Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and assigns where permitted
by this Agreement.
17.09 Legal Construction. If any one or more of the provisions
contained in this Partnership Agreement for any reason are held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision thereof
<PAGE>
and this Partnership Agreement shall be construed as if such invalid, illegal,
or unenforceable provision had never been contained herein.
17.10 Counterparts. This Partnership Agreement may be executed in any
number of counterparts and each such counterpart shall for all purposes be
deemed to be an original.
17.11 Gender. Wherever the context shall so require, all words herein
in the male gender shall be deemed to include the female or neuter gender, all
singular words shall include the plural words, and all plural words shall
include the singular.
17.12 Arbitration. Any dispute arising under this Agreement or the
performance thereof shall be settled by arbitration in Miami, Florida. The party
requesting arbitration shall serve upon the other party a written demand for
arbitration with the name and address of the arbitrator appointed by it, and
such other party shall within 20 days thereafter appoint an arbitrator, and the
two arbitrators so named shall appoint a third, and the decision or award of any
two shall be final and binding upon the parties. Should the party upon whom the
demand for arbitration is served fail or refuse to appoint an arbitrator within
20 days, the single arbitrator shall have the right to decide alone, and his
decision or award shall be final and binding upon the parties. The arbitrators
shall have the discretion to impose the cost of the arbitration upon the losing
party, or divide it between the parties on any terms which may appear just. Any
decision or award rendered hereunder may be made and entered as a rule or
judgment of any Court in any country having jurisdiction. The arbitrators shall
be commercial men.
IN WITNESS WHEREOF, each party has executed this Agreement or a
counterpart hereof on the 14th day of September, 1983.
GENERAL PARTNER
SEABULK TANKERS, LTD.
By: Hvide Marine Transport, Incorporated
its sole general partner
By: _________________________________
LIMITED PARTNER
STOLT TANKERS (U.S.A.), Inc.
By: __________________________________
AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT
OF
SEABULK AMERICA PARTNERSHIP, LTD.
THIS AMENDMENT to Limited Partnership Agreement made this 26th day of September,
1990 among SEABULK TANKERS, LTD. (hereinafter referred to as "General Partner')
and STOLT TANKERS (U.S.A.), INC. (hereinafter referred to as "Limited Partner").
(The General Partner and the Limited Partner are sometimes collectively referred
to herein as the "Partners").
W I T N E S S E T H :
WHEREAS, the Partners entered into a Limited Partnership Agreement
dated the 14th day of September, 1983 (the "Agreement") providing for the
formation and structure of SEABULK AMERICA PARTNERSHIP, LTD. (the
"Partnership");
WHEREAS, on the 31st day of May, 1989, the Partnership transferred its
interest in the vessel "4102" to Seabulk Transmarine Partnership, Ltd. ("STPL")
for use in the reconstruction of the wrecked tank vessel "Fuji", since renamed
SEABULK AMERICA, in exchange for which the Partnership received a 66.67% Limited
Partnership interest in STPL;
WHEREAS, upon redelivery of the SEABULK AMERICA, employment of the
vessel in the coastwise trade of the United States is the most profitable
employment of the vessel for the Partnership and for STPL;
WHEREAS, in order for the SEABULK AMERICA to be legally entitled to
trade in the coastwise trade, the ownership of the Partnership must be
restructured to reduce the Limited Partner's interest to 25% or less;
WHEREAS, the General Partner, pursuant to Section 9.01 of the
Agreement, has been granted the power of attorney to carry out its
responsibilities to the Partnership on behalf of the Limited Partner and is
required pursuant to that section to perform all acts necessary and desirable
for the protection of the Limited Partner; and
<PAGE>
WHEREAS, in order to fulfill its obligations to the Partnership and the
Limited Partner, the General Partner is effecting a distribution by the
Partnership to the Limited Partner of a portion of the Partnership's limited
partnership interest in STPL representing a 25% limited partnership interest in
STPL and a 30.59% reduction in the limited partnership interest of the Limited
Partner in the Partnership from 49% to 18.41%, all so as to legally qualify the
SEABULK AMERICA to operate in the U.S. coastwise trade.
NOW, THEREFORE, in consideration of the premises and the sum of Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Partners agree as follows:
1. Section 2.04 of the Agreement is hereby deleted in its entirety and
the following is substituted in its stead:
"2.04 Names and Addresses or Places of Residence of Partners. The names
and place of residence of the General Partner and the Limited Partner are as
follows:
General Partner Address
Seabulk Tankers, Ltd. 2200 Eller Drive
Fort Lauderdale, FL 33316
Stolt Tankers c/o Stolt-Nielsen, Inc.
(U.S.A.), Inc. 8 Sound Shore Drive
Greenwich, CT 06836
2. Section 4.03 of the Agreement is hereby deleted in its entirety and
the following is substituted in its stead:
"4.03 Percentage Ownership of the Partnership Assets. The percentage
interest of the General Partner and the Limited Partner in the Partnership
assets is as follows:
General Partner: Percentage
Seabulk Tankers, Ltd. 81.59%
<PAGE>
Limited Partner:
Stolt Tankers (U.S.A.), Inc. 18.41%
3. It is acknowledged that Seabulk America Partnership, Ltd. (by and
through its general partner Seabulk Tankers, Ltd.) is executing this Amendment
in its capacity as attorney-in-fact for Stolt Tankers (U.S.A.), Inc. as provided
for in the Agreement;
4. Except for the foregoing amendments, the Limited Partnership
Agreement is hereby ratified and confirmed and shall remain in full force and
effect.
IN WITNESS WHEREOF, each party has executed this Amendment or a
counterpart hereof as of the 26th day of September, 1990.
GENERAL PARTNER:
SEABULK TANKERS, LTD.
By: Hvide Marine Transport, Incorporated
its sole general partner
By: /s/ GENE DOUGLAS
Vice President
LIMITED PARTNER:
STOLT TANKERS (U.S.A.), INC.
By: Seabulk Tankers, Ltd.
sole general partner of
SEABULK AMERICA PARTNERSHIP,
LTD.
attorney-in-fact
By: Hvide Marine Transport, Incorporated
its sole general partner
By: /s/ GENE DOUGLAS
Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
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0
0
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</TABLE>
