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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 14, 1996
SEAL FLEET, INC.
(Exact name of Registrant as specified in charter)
Nevada
(State or other jurisdiction of incorporation)
0-5667 74-1670096
(Commission File Number) (IRS Employer Identification No.)
3305 Avenue S, Galveston, Texas 77550
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (409) 763-8878
Not Applicable
(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant
(a) Name of the new controlling person.
Hvide Marine Incorporated ("Hvide") purchased all of the
outstanding Class B Voting Common Stock ("Class B Stock") and 212,655
shares of Class A Voting Common Stock ("Class A Stock") of Seal Fleet,
Inc. (the "Company" or "Registrant") from Three R Trusts (the "Trusts")
and simultaneously sold all Class B Stock and 37,600 shares of Class A
Stock to First Magnum Corporation ("Magnum"), a Florida corporation
owned by Thomas M. Ferguson ("Ferguson"). Ownership of 100% of the
Class B Stock entitles Magnum to elect a simple majority of the
Company's Board of Directors.
(b) Date of the transaction by which Magnum became a controlling
person.
August 14, 1996.
(c) Brief description of the transaction.
The Trusts entered into an agreement whereby Hvide purchased all of
the Trusts' Company stock as well as certain other assets. The Trusts
sold 212,655 shares (10.72%) of the Company's Class A Stock and 50,000
shares (100%) of the Class B Stock to Hvide. Hvide simultaneously sold
37,600 shares of the Class A Stock and all of the Class B Stock
purchased from the Trusts to Magnum.
Magnum had also offered to purchased 277,778 shares of the
Company's Class A Stock held in treasury for $100,000 following
consummation of its purchase from Hvide as part of Magnum's plan
to capitalize the Company. This purchase was consummated on August
19, 1996.
(d) Percentage of the Company's voting securities owned by the
controlling person after the transaction.
Hvide acquired 212,655 shares (10.72%) of the Company's Class A
Stock and 50,000 shares (100%) of Class B Stock from the Trusts.
Hvide then sold 37,600 (1.9%) shares of Class A Stock and 50,000
shares (100%) of Class B Stock to Magnum.
Following Magnum's purchase of the shares from Hvide, and following
Magnum's purchase of 277,778 shares of Class A Stock held in treasury,
Magnum currently owns 50,000 shares (100%) of Class B Stock and 315,378
shares (13.9%) of Class A Stock.
(e) Basis of control if other than by ownership of voting
securities.
By virtue of owning 100% of the Class B Stock, Magnum is
entitled to elect a simple majority of the Company's Board of
Directors.
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(f) Amount and source of consideration used to acquire control.
The Class B Stock was acquired by Hvide at a nominal cost and then
sold to Magnum at a nominal cost. The 212,655 shares of Class A Stock
were purchased by Hvide at a nominal cost and the 37,600 shares thereof
then sold to Magnum were sold at a nominal cost. Magnum's purchase of
277,778 shares of Class A Stock was for a cost of $100,000. Hvide used
internally generated operating funds to purchase the Company stock from
the Trusts. Magnum's source of funds for the purchase from Hvide was
internally generated operating funds and external funds were used for
the $100,000 paid for the treasury shares.
(g) Names of those from whom control was assumed.
The 50,000 shares of Class B Stock and 212,655 shares of Class A
Stock acquired by Hvide was purchased from the Trusts.
The 50,000 shares of Class B Stock and 37,600 shares of Class
A Stock acquired by Magnum was purchased from Hvide. The 277,778
share of Class A Stock acquired by Magnum was purchased from the
Company.
(h) Description of arrangements or understandings between members of
both former and new control groups and their associates concerning
election of directors or other matters.
All directors and officers of the Company resigned upon the sale of
stock to Hvide and Magnum. Three new directors nominated by Magnum
were appointed to fill the vacancies on the Board of Directors of the
Company and the size of the Board of Directors was reduced to five,
with two vacancies yet to be filled. Mr. Thomas M. Ferguson and Mr.
Donald L. Caldera were named as Class B Directors and Mr. J. Erik Hvide
was named a Class A Director. Ferguson was appointed as President and
Chief Executive Officer of the Company, Mr. Caldera was appointed as
Chairman of the Board of Directors and Mr. James S. Goodner was named
Chief Financial Officer, Secretary and Treasurer of the Company.
Item 2. Acquisition and Disposition of Assets.
(a) Date of acquisition.
August 14, 1996
(b) Manner of disposition.
The Company sold certain assets for cash.
(c) Brief description of the assets involved.
The Company sold three marine supply vessels and related marine
assets, including inventory and contracts for the charter of the
vessels. In addition, crews of the vessels were terminated by the
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Company and became employees of the purchaser.
(d) Nature and amount of consideration received.
The purchase price was $10,075,000, paid in cash on the date of the
sale.
(e) Principle followed in determining the amount of the
consideration.
The parties negotiated the sales price, which is believed to
approximate current market value.
(f) Names of the persons to whom the assets were sold.
Hvide Marine Incorporated, a Florida corporation.
(g) Relationships, if any, between the buyers of the assets
and the Company, any of the Company's affiliates, any director or
officer of the Company, or any associates of any of the Company's
officers or directors.
Prior to the sale there was no relationship between the Company and
Hvide. After the sale of the assets and the transfer of shares to
Hvide and Magnum described in Item 1, Hvide owns 175,055 shares of the
Company's Class A Stock. Hvide's chairman, Mr. J. Erik Hvide, became a
Class A Director of the Company and Mr. Donald L. Caldera, a Vice
President of Hvide, became a Class B Director and Chairman of the Board
of Directors of the Company. Magnum became a controlling shareholder
of the Company and Ferguson, Magnum's President and sole shareholder,
became a Class B Director, President and Chief Executive Officer of the
Company. Ferguson is also a principal of a consulting firm engaged by
Hvide.
Item 7. Financial Statements and Exhibits
(a) Financial Information
Proforma financial information required pursuant to Article 11
of Regulation S-X will be filed within 60 days of the filing of
this report.
(b) Exhibits
1. Asset Purchase Agreement dated March 29, 1996 among Hvide
Marine Incorporated, Seal Fleet, Inc., South Corporation, Seal (GP),
Inc., Sealcraft Operators, Inc. and Thomas M. Ferguson.
2. Amendment No. 1 to Asset Purchase Agreement, dated July 23,
1996, among Hvide Marine Incorporated, Seal Fleet, Inc., South
Corporation, Seal (GP), Inc., Sealcraft Operators, Inc., Thomas M.
Ferguson and First Magnum Corporation.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: August 29, 1996.
Seal Fleet, Inc.
By: /s/James S. Goodner, Chief Financial Officer
Secretary and Treasurer
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement made and entered into as of the
29th day of March, 1996 by and among Hvide Marine Incorporated, a
Florida corporation, ("Purchaser"), Seal Fleet, Inc., a Nevada
corporation, ("Seal Fleet"), Sealcraft Operators, Inc., a Texas
corporation, Seal GP, Inc., a Delaware corporation, and South
Corporation, a Delaware corporation (collectively, "Sellers"), and
Thomas M. Ferguson ("Transferee").
Whereas, Sellers are the owners of the Assets described and
defined below; and
Whereas, Sellers desire to sell the Assets to Purchaser and
Purchaser desires to purchase the Assets from Sellers on the terms
hereinafter set forth.
Now therefore, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable
consideration, the parties agree as follows:
1. Sale and Assignment of Assets. Sellers agree to sell,
transfer and assign to Purchaser, and Purchaser agrees to purchase
and accept, the following property:
(a) the vessels listed on Schedule 1(a) (the "Owned
Vessels" or an "Owned Vessel"), together with the Owned
Vessels' respective engines, tackle, winches, cordage,
general outfit, electronic and navigation equipment,
spares, stores and other appurtenances and appliances
(whether aboard or not aboard);
(b) to the extent transferable, the bareboat charters
(the Bareboat Charters") under which Sellers operate the
vessels listed on Schedule 1(b) (the "Chartered Vessels")
(the Owned Vessels and the Chartered Vessels collectively
being referred to as the "Vessels"); and
(c) all of Sellers' inventory of spare or replacement
parts, stores and other equipment, supplies or material
designated for any of the Vessels (the "Inventory").
Sellers further agree to assign to Purchaser those charters
(whether bareboat, time or otherwise) and vessel service agreements
between Sellers and their customers pursuant to which Sellers are
operating the Vessels at the time of Closing (together with the
Bareboat Charters, the "Assigned Contracts"). To the extent that
any of the Assigned Contracts are by their terms not assignable,
Sellers shall cooperate with Purchaser in obtaining the required
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consents to the assignment of such Assigned Contracts, or, if such
consents cannot be obtained, assist Purchaser in securing a new
contract for the continued services of the Vessel(s) covered
thereby. Purchaser agrees to perform all of Sellers' obligations
under the Assigned Contracts from and after Closing.
The Owned Vessels, the Inventory, and the Assigned Contracts
are hereinafter collectively referred to as the "Assets."
Notwithstanding anything contained herein to the contrary, the
Assets shall not include insurance on the Assets or commissions, or
accounts receivable generated by the operation of the Vessels up to
the Closing Date (as defined below), as the Closing Date may be
extended pursuant to the terms of this Agreement.
2. Purchase Price. Purchaser will purchase the Assets for
the price of Six Million Three Hundred Thousand Dollars
($6,300,000) (the "Purchase Price"), payable as provided in
Paragraph 4. The portion of the Purchase Price allocable to each
of the Assets to be sold hereunder is set forth in the Disclosure
Letter of even date herewith between Seal Fleet and Purchaser (the
"Disclosure Letter").
3. Closing. The closing of the sale of the Assets (the
"Closing") shall occur at the offices of Butler & Binion, L.L.P.,
1000 Louisiana, Houston, Texas 77002 within 30 days of the Meeting,
as hereinafter defined, but not later than August 15, 1996 (the
"Closing Date"). The Closing Date may be extended from time to
time by the mutual consent of the parties. In the event that the
Closing does not occur on or before the Closing Date, as the
Closing Date may have been extended pursuant to this paragraph,
this Agreement shall automatically terminate, and thereafter
neither party shall have any further liability to the other
hereunder. If Closing does not occur by the Closing Date for any
reason other than failure of Seal Fleet's shareholders to approve
this transaction as required under Paragraph 11(b), a failure by
Seal Fleet to satisfy or waive either of the conditions set forth
in Paragraph 11(j), or a material breach by any of the Sellers of
any provision of this Agreement, Purchaser shall pay to Seal Fleet
the sum of $100,000 on the earlier of 30 days after the Meeting or
August 15, 1996, which amount is intended to reimburse Seal Fleet
for some of its costs and expenses in connection with this
Agreement and the preparation of the Proxy Materials (as
hereinafter defined) and is not intended as a penalty or liquidated
damages; provided however, that so long as Seal Fleet shall submit
this transaction to its shareholders, no breach of Paragraph 5,
paragraphs (d) and/or (e) shall have occurred for purposes of this
paragraph.
4. Payment of the Purchase Price. The Purchase Price shall
be paid by Purchaser as follows: (a) $100,000 upon execution of
this Agreement (the Deposit") and (b) $6,200,000 at Closing by wire
transfer to an account designated by Sellers. The Purchase Price
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shall be disbursed as may be directed by Sellers and/or the holders
of any mortgages, security interests, liens or other encumbrances
against the Assets that are to be discharged and satisfied out of
such cash portion. Sellers shall provide Purchaser with written
wiring and disbursement instructions at least three business days
prior to Closing. In the event the transactions contemplated by
this Agreement are not consummated on or before the Closing Date,
the Deposit shall not be refunded to Purchaser; provided, however,
if such failure to consummate the transactions is due to the
failure of Seal Fleet's shareholders to approve this transaction as
required under Section 11(b), a failure by Seal Fleet to satisfy or
waive either of the conditions set forth in Paragraph 11(j), or a
material breach by any of the Sellers of any provision of this
Agreement, the Deposit shall be refunded to Purchaser on August 15,
1996; provided however, that so long as Seal Fleet shall submit
this transaction to its shareholders, no breach of Paragraph 5,
paragraphs (d) and/or (e) shall have occurred for purposes of this
paragraph. If Closing has not occurred by the Closing Date for any
other reason, Seal Fleet shall keep the Deposit.
5. Title; Warranties; Disclaimers. Sellers jointly and
severally represent and warrant that they have, and will have as of
the time of Closing, good and lawful title to the whole of the
Assets respectively owned by each of them, and that such Assets
will be sold pursuant to this Agreement free and clear of any
mortgages, pledges, liens, privileges, security interests,
encumbrances, attachments or to the best of Sellers' knowledge,
other charges of any nature or kind whatsoever (collectively,
"Liens"); provided, however, that inchoate liens available under
maritime law and contractual obligations do not constitute Liens.
Sellers further represent and warrant, jointly and severally that
the Owned Vessels are not, and will not be at the time of Closing,
subject to any charter or other agreement (with the exception of
the Assigned Contracts that will be assigned to Purchaser pursuant
to this Agreement) that permits any person to utilize the services
of such Vessels, or any of them, the breach of which by Sellers
could give rise to a Lien. All existing Liens, and any Liens
accruing between the date of this Agreement and the time of Closing
(with the exception of such of the Liens as Purchaser may expressly
agree, at its sole option, to assume or to take subject to), shall
be released on or before the Closing Date by fully executed
satisfactions, releases, termination statements or other documents
necessary to discharge such Liens of record and recordable with the
United States Coast Guard, Recorder of Mortgages or other filing
officer with whom such Liens have been recorded.
Sellers further warrant that, as of the Closing Date, (a) any
and all licenses or certificates under which the Owned Vessels are
currently operated, or that are required by applicable law, vessel
classification societies or the insurance underwriters for the
Owned Vessels shall be valid and in full force and effect for the
Owned Vessels to operate (as currently operated), including,
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without limitation, the Owned Vessels' Certificates of
Documentation and Certificates of Inspection; and (b) that each of
the Owned Vessels shall be, to the knowledge of Sellers, in the
condition required by the issuing agency or society for such
licenses or certificates to remain valid and in full force and
effect, except if required to be reissued by applicable law or
regulation upon conveyance of the Vessels.
Purchaser hereby acknowledges that it has received and
reviewed the Assigned Contracts. Sellers make no representations
or warranties with respect to the Assigned Contracts.
Except for the foregoing warranties, the sale of the Assets
shall be made on an "as is, where is" basis, without any warranties
whatsoever as to the fitness, condition, seaworthiness or
suitability of the Assets for any particular purpose, and Purchaser
hereby waives any and all other warranties including, but not
limited to warranties regarding fitness for the purpose intended,
and all implied warranties of condition, whether arising in tort,
contract, redhibition or otherwise.
6. Representations, Warranties and Covenants of Sellers.
Sellers jointly and severally represent, warrant and covenant as
follows:
(a) Citizenship. Sellers are each citizens of the
United States within the meaning of Section 2 of the Shipping Act,
1916, as amended (46 U.S.C. section 802).
(b) Due Organization. Sellers are corporations duly
organized, validly existing and in good standing under the laws of
their respective states of incorporation.
(c) Corporate Authority. Each of the Sellers: (i)
subject to the approval of their respective shareholders, has full
corporate power and authority necessary to sell the Assets owned by
it to be transferred pursuant to this Agreement, and the execution
and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, does not and will not conflict
with any provisions of its Articles of Incorporation, By-Laws,
Resolutions of Board of Directors or other governing corporate
documents; (ii) has been duly authorized by its Board of Directors;
(iii) has taken all corporate actions necessary for this Agreement
to constitute its valid and binding obligation, enforceable in
accordance with its terms, subject only to the approval of the
shareholders of each Seller; except as limited by (aa) the rights
of the United States under the Federal Tax Lien Act of 1966, as
amended; (bb) principles of equity, which may limit the
availability of equitable remedies; and (cc) bankruptcy,
insolvency, reorganization, fraudulent conveyance and other similar
laws.
(d) Proxy Statement. Seal Fleet shall use its
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reasonable efforts to prepare and file with the Securities and
Exchange Commission (the "Commission") within four weeks of the
date hereof a proxy statement (the "Proxy Statement") for a meeting
(the "Meeting") of its shareholders to vote upon a resolution
approving this Agreement and the transactions contemplated hereby.
Except for the information supplied by Purchaser and Transferee,
for which such parties are responsible and Sellers make no
representations, Seal Fleet covenants that the Proxy Statement will
not contain any untrue statement of a material fact or omit to
state a material fact concerning Seal Fleet, the Assets, or the
transactions contemplated by this Agreement. Prior to the filing
of the Proxy Statement, Seal Fleet shall provide a draft thereof to
Purchaser for its comments and thereafter shall promptly furnish
Purchaser with copies of all correspondence with the Commission
relating thereto. Seal Fleet and Purchaser shall consult with each
other with respect to the Proxy Statement and each supplement or
amendment thereto, and Seal Fleet shall afford Purchaser a
reasonable opportunity to comment upon disclosure relating to
Purchaser or its affiliates and shall ensure that such disclosure
is reasonably satisfactory to Purchaser.
(e) Shareholder Approval. Subject to all applicable
laws and regulations, Seal Fleet shall promptly submit the
transactions contemplated by this Agreement for the approval of its
shareholders. Subject to its fiduciary duties, the Board of
Directors of Seal Fleet has agreed to recommend to its shareholders
approval of the transactions contemplated by this Agreement, and
Seal Fleet shall use its reasonable efforts to obtain shareholder
approval of such transactions.
(f) Registration Statement. Sellers shall provide to
Purchaser all information reasonably requested by Purchaser
necessary for its preparation of the Registration Statement, as
hereinafter defined, and warrant that all such information shall be
accurate and complete.
(g) Public Announcements. Sellers and Purchaser shall
consult with each other prior to the issuance by any party of any
press release or any written statement with respect to this
Agreement or the transactions contemplated hereby.
(h) Other Agreements. Sellers' execution and delivery
of this Agreement, and the consummation of the transactions
contemplated hereby, does not and will not conflict with any loan
agreement, mortgage, security agreement, indenture, or other
contract, agreement or instrument to which any of the Sellers is a
party, or by which they may otherwise be bound, other than any such
agreements that will be terminated at or prior to Closing or as to
which consent will be obtained.
(i) Violation of Orders. Sellers' execution and
delivery of this Agreement, and the consummation of the
transactions contemplated hereby, does not and will not conflict
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with any order, arbitration award, judgment or decree, if any, to
which any of the Sellers is a party or by which it may be bound.
(j) Pending Claims. Except as set forth in the
Disclosure Letter, there are no claims, demands, actions, suits or
proceedings at law, in admiralty or in equity, against any of the
Sellers, against the Owned Vessels in rem, or against any of the
remaining Assets to be transferred hereunder (including any
counterclaim, any arbitration proceeding, or any administrative or
other proceeding or investigation by or before any governmental
agency), whether pending or, to Sellers' knowledge, threatened
(collectively, the "Actions"), that could give rise to a Lien,
attachment, seizure, forfeiture, or other encumbrance against any
of the Assets, or which otherwise relate to, or materially affect,
any of the Assets to be conveyed hereunder or any of the Sellers'
ability to convey them. Except as set out in the Disclosure
Letter, the Actions described in the Disclosure Letter are covered
by insurance issued by the underwriters identified, and there has
been no denial of coverage or reservations of rights by such
underwriters with respect to such Actions except as noted in the
Disclosure Letter.
(k) Governmental Approval. No registration with, or
approval of, any governmental agency or commission is necessary for
the execution, delivery or performance by Sellers of the terms of
this Agreement other than those that have been or will be duly made
or obtained prior to Closing.
(l) Hazardous Materials. Sellers have the Department of
Transportation and Environmental Protection Agency permits
described in the Disclosure Letter. Sellers make no representation
or warranty with respect to the use, generation, transfer, storage,
or disposal of any hazardous waste, toxic substance or related
materials ("Hazardous Materials") or any friable asbestos or any
substance containing asbestos ("Asbestos Substance") in, on, under,
from or about the Assets, Purchaser agreeing to satisfy itself as
to such matters. Seller agrees to notify Purchaser upon any
release or threatened release of Hazardous Materials in, on, under
or about any Vessel to be sold hereunder from the date hereof up to
the time of Closing, and upon receiving notice of the initiation of
any proceeding or inquiry with respect to such a release or
threatened release by any governmental agency or other authority no
matter when initiated. For the purposes of this representation and
warranty, Hazardous Materials shall include substances defined as
"hazardous substances" or "toxic substances" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C.A. 9601, et seq., The Resource Conservation and
Recovery Act, 42 U.S.C.A. 6901, et seq., The Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 5101, et seq.,
and any regulation promulgated under the authority of such acts.
(m) Repayment of Indebtedness. On or before the Closing
Date, Sellers shall (i) reduce their indebtedness to Three R Trusts
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("Three R Trusts") and their affiliates to $3,000,000 plus any
amounts owing for receivables and payables arising from the
management of Three R Trusts' vessels and (ii) agree to the
conversion of such $3,000,000 of indebtedness of Sellers to Three
R Trusts and their affiliates in the amount of $3,000,000 to a term
note ("Three R Trusts Note") having a principal amount of
$3,000,000 and bearing interest at 10% per annum, with principal
and interest payable monthly in arrears based upon a 60-month
amortization schedule for a 36-month period, and with any remaining
principal and interest due on the last day of the 37th month. Such
term note shall on the Closing Date represent all indebtedness of
Sellers to Three R Trusts or their affiliates except for accounts
receivable and accounts payable with respect to management of the
Three R Trusts vessels.
(n) Schedules. The Schedules attached to and made a
part hereof and the Disclosure Letter will be true and correct as
of the date of Closing, except for changes in the ordinary course
of business. The Disclosure Letter will be updated at Closing.
(o) Conduct of Business. Prior to the Closing Date,
unless Purchaser shall have consented in writing thereto, Sellers:
(i) shall conduct their operations, including operation and
maintenance of the Vessels, according to their usual, regular and
ordinary course, and (ii) shall not (aa) incur or obligate
themselves to incur any capital expenditure in excess of $50,000,
incur any long-term indebtedness in addition to that outstanding on
the date hereof or any other indebtedness other than in the
ordinary course of business; (bb) make any loans, advances or
capital contributions to, or investments in, any other person,
except a Seller, other than travel or other advances to employees
consistent with past practice; or (cc) assume, guarantee, endorse
or otherwise become liable or responsible for the obligations of
any person, except to endorse checks for collection or deposit in
the ordinary course of business. Notwithstanding the foregoing,
nothing in this paragraph shall prohibit Sellers from undertaking
the transactions referenced in Paragraphs 6(m) and 10(m).
(p) Opinion. Seal Fleet shall use its reasonable
efforts to obtain the oral and written opinions referenced in
11(j). Seal Fleet shall notify Purchaser in writing on or before
April 19, 1996 that Seal Fleet has either (i) obtained such oral
opinion or (ii) terminated this Agreement due to failure to obtain
such oral opinion. Failure by Seal Fleet to provide such notice
shall cause the condition set forth in Paragraph 11(j) to be
waived.
7. Representations, Warranties and Covenants of Purchaser.
Purchaser represents, warrants and covenants as follows:
(a) Citizenship. Purchaser is a citizen of the United
States within the meaning of Section 2 of the Shipping Act, 1916,
as amended (46 U.S.C. Section 802).
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(b) Due Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Florida and is qualified to do business in the State
of Texas.
(c) Authority. Purchaser: (i) has all corporate power
and authority necessary to purchase the Assets to be transferred
pursuant to this Agreement and the execution and delivery of this
Agreement, and the consummation of the transactions contemplated
hereby does not and will not conflict with any provisions of the
Articles of Incorporation, By-Laws, Resolutions of Board of
Directors or other governing corporate documents of Purchaser; (ii)
has been duly authorized by its Board of Directors to execute this
Agreement and to consummate the transactions contemplated hereby;
and (iii) has taken all corporate action necessary for this
Agreement to constitute its valid and binding obligation of
Purchaser, enforceable in accordance with its terms.
(d) Registration Statement. Purchaser intends to
prepare and file with the Commission an amendment to its
registration statement (the "Registration Statement") relating to
the initial public offering of its securities the proceeds of which
will be used, in part, to provide the financing referenced in
Paragraph 15. Except for information supplied by Sellers, for
which such parties are responsible and Purchaser makes no
representation, Purchaser covenants that the Registration Statement
will not contain any untrue statement of a material fact or omit to
state a material fact concerning Purchaser or the transactions
contemplated by this Agreement. Prior to filing the Registration
Statement, Purchaser shall provide a draft thereof to Sellers for
their comments and thereafter shall promptly furnish Sellers with
copies of all correspondence with the Commission relating thereto.
Purchaser shall afford Sellers a reasonable opportunity to comment
upon disclosure relating to Sellers or their affiliates and shall
ensure that such disclosure is reasonably satisfactory to Sellers.
Sellers' receipt and review of drafts of the Registration Statement
and correspondence with the Commission relating thereto shall not
in any way relieve Purchaser of its obligations described above or
its indemnification obligations set out herein. Sellers shall not
be obligated to review or verify the accuracy or completeness of
such Registration Statement or verify that such Registration
Statement complies with any applicable laws, statutes, regulations,
rulings, requirements or orders of any governmental entity.
(e) Proxy Statement. Purchaser shall provide to Seal
Fleet all information requested by Seal Fleet necessary for its
preparation of the Proxy Statement, and warrants that all such
information shall be accurate and complete.
(f) Public Announcements. Purchaser and Sellers shall
consult with each other prior to the issuance by any party of any
press release or any written statement with respect to this
Agreement or the transactions contemplated hereby.
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(g) Other Agreements. Purchaser's execution and
delivery of this Agreement, and the consummation of the
transactions contemplated hereby, does not and will not conflict
with any loan agreement, mortgage, security agreement, indenture,
or other contract or agreement to which Purchaser is a party, or by
which it may otherwise be bound, other than certain agreements with
lenders whose approval is a condition precedent to Purchaser's
obligation to purchase the Assets. Purchaser has agreed to
purchase all of the Class B Common Stock of Seal Fleet from Three
R Trusts and to sell those shares to Transferee or an entity
controlled by him; Purchaser will not sell such shares to any other
person or entity. In connection with the sale of such shares to
Transferee, Purchaser shall cause Transferee to represent and
warrant that he has no plans or arrangements that may result in a
further change in control of Seal Fleet. Purchaser shall use its
best efforts to cause Transferee to operate Seal Fleet and its
subsidiaries as a going enterprise and business for the benefit of
all of Seal Fleet's shareholders in accordance with the business
plan attached hereto as Schedule 8(g), as refined pursuant to
Paragraph 8(g).
(h) Violation of Orders. Purchaser's execution and
delivery of this Agreement, and the consummation of the
transactions contemplated hereby, does not and will not conflict
with any order, arbitration award, judgment or decree, if any, to
which Purchaser is a party, or by which it may be bound.
(i) Governmental Approval. No registration with, or
approval of, any governmental agency or commission is necessary for
the execution, delivery or performance of the terms of this
Agreement other than those that have been or will be duly made or
obtained prior to Closing.
(j) Solvency of Seal Fleet. Purchaser does not intend
to liquidate, or to permit Transferee to liquidate, Seal Fleet or
any of its subsidiaries or place into, permit to be placed into, or
permit to be entered into by Seal Fleet or any of its subsidiaries,
any type of insolvency proceeding, including any type of
liquidation, receivership, bankruptcy, reorganization, assignment
for the benefit of creditors, or any other type of creditor,
fraudulent transfer or insolvency proceeding or action under
federal or state statutory or common laws.
8. Representations, Warranties and Covenants of Transferee.
Transferee hereby represents, warrants, and covenants as follows:
(a) Status. Transferee is an individual residing in
Palm Beach, Florida and a citizen of the United States.
(b) Authority. Transferee: (i) has all requisite power
and authority necessary to purchase the Seal Fleet Shares, as
hereinafter defined, to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby; and (ii) this
<PAGE>
Agreement constitutes a valid and binding obligation of Transferee,
enforceable in accordance with its terms.
(c) Proxy Statement. Transferee shall provide to Seal
Fleet all information requested by Seal Fleet necessary for its
preparation of the Proxy Statement, and warrants that all such
information shall be accurate and complete.
(d) Other Agreements. Transferee's execution and
delivery of this Agreement, and the consummation of the
transactions contemplated hereby, does not and will not conflict
with any loan agreement, mortgage, security agreement, indenture,
or other contract or agreement to which Transferee is a party, or
by which he may otherwise be bound, other than certain agreements
with lenders whose approval is a condition precedent to
Transferee's obligation to purchase the Class B Common Stock of
Seal Fleet.
(e) Violation of Orders. Transferee's execution and
delivery of this Agreement, and the consummation of the
transactions contemplated hereby, does not and will not conflict
with any order, arbitration award, judgment or decree, if any, to
which Transferee is a party, or by which he may be bound.
(f) Governmental Approval. No registration with, or
approval of, any governmental agency or commission is necessary for
the execution, delivery or performance by Transferee of the terms
of this Agreement other than those that have been or will be duly
made or obtained prior to Closing.
(g) Business Plan. If the transactions provided for in
this Agreement are consummated and Transferee becomes the owner of
the Seal Fleet Shares (as hereinafter defined), Transferee will
cause Seal Fleet to undertake the Business Plan set out on Schedule
8(g). Transferee agrees to refine Schedule 8(g) on or before April
12, 1996. Any such refinement shall be subject to the approval of
Seal Fleet in its sole discretion, which approval shall be given in
writing no later than April 17, 1996. Transferee does not intend
to liquidate Seal Fleet or any of its subsidiaries or place into,
permit to be placed into, or permit to be entered into by Seal
Fleet or any of its subsidiaries, any type of insolvency
proceeding, including any type of liquidation, receivership,
bankruptcy, reorganization, assignment for the benefit of
creditors, or any other type of creditor, fraudulent transfer or
insolvency proceeding or action under federal or state statutory or
common laws.
9. Hart-Scott-Rodino Filing. Sellers agree to provide to
Three R Trusts information about Sellers necessary to file with the
Antitrust Division of the United States Department of Justice and
the Federal Trade Commission a Notification and Report Form ("HSR
Filing") in accordance with the notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
<PAGE>
(the ``HSR Act"), and Purchaser agrees to use reasonable efforts to
achieve the prompt termination or expiration of the waiting period
or any extension thereof provided for under the HSR Act as a
prerequisite to the consummation of the transactions provided for
herein.
10. Conditions Precedent to Purchaser's Obligation.
Purchaser's obligation to purchase the Assets is expressly
conditioned upon the occurrence of each of the following events:
(a) the simultaneous closing of the purchase and sale of
those vessels listed in Schedule 1(a) in accordance with the Asset
Purchase Agreement between Purchaser, Three R Trusts, Ross Seal
Partners, Ltd., Bengal Seal Partners, Ltd., Baffin Seal Partners,
Ltd., and Baltic Seal Partners, Ltd. dated as of the date hereof
(the "Three R Trusts Agreement");
(b) the simultaneous closing of the sale of 20,000
shares of Seal Fleet Class A Common Stock and 50,000 shares of Seal
Fleet Class B Common Stock owned by Three R Trusts (the "Seal Fleet
Shares") to Transferee in accordance with that certain Stock
Purchase Agreement between Purchaser and Transferee, dated as of
the date hereof, a copy of which is attached to the Disclosure
Letter;
(c) approval of the transactions contemplated by this
Agreement by Purchaser's lenders;
(d) receipt by Purchaser from Sellers' independent
public accountants of a certificate or letter to the effect that
such accountants will audit at the expense of Purchaser financial
statements of the Assets for the fiscal years 1992, 1993 and 1994
and consent to the inclusion or incorporation of their report on
such audited financial statements in an initial or other public
offering document, subject to such accountants' normal due
diligence procedures with respect to consents;
(e) if an HSR filing is made, compliance with the filing
requirements under the HSR Act and expiration or termination of the
applicable waiting period;
(f) approval of this Agreement and the transactions
contemplated hereby by the Seal Fleet shareholders as provided in
Paragraph 11(b);
(g) satisfaction of the condition precedent described in
Paragraph 15;
(h) Sellers' representations and warranties being true
and correct as of the Closing Date, as the Closing Date may be
extended under the terms of this Agreement;
(i) delivery by Sellers at Closing of those documents
<PAGE>
described in Paragraph 13;
(j) timely receipt by Purchaser of any information
requested pursuant to Paragraph 6(f);
(k) Purchaser having had a reasonable opportunity to
review and comment on the Proxy Statement as provided in Paragraph
6(d);
(l) closing of the transactions contemplated by this
Agreement by the Closing Date; and
(m) Seal Fleet and Three R Trusts having entered into an
agreement having the terms set forth in Schedule 10(m) hereto on or
before the Closing Date.
11. Conditions Precedent to Sellers' Obligation. Sellers'
obligation to sell the Assets is expressly conditioned upon the
occurrence of each of the following events:
(a) Purchaser's and Transferee's representations and
warranties being true and correct as of the Closing Date, as the
Closing Date may be extended under the terms of this Agreement;
(b) approval of this Agreement, the transactions
contemplated hereby, the change in control of Seal Fleet, and the
change in Seal Fleet's business by the holders of a majority of the
outstanding shares of Seal Fleet Class A Common Stock excluding
those shares of Seal Fleet Class A Common Stock owned by Three R
Trusts, and a majority of the shares of Seal Fleet Class B Common
Stock:
(c) if an HSR filing is made, compliance with the filing
requirements under the HSR Act and expiration or termination of the
applicable waiting period;
(d) delivery by Purchaser at Closing of the documents
described in Paragraph 13;
(e) timely receipt by Sellers of the information
requested pursuant to Paragraphs 7(e) and 8(c);
(f) the results of an independent survey of the Assets
not showing a value in excess of the Purchaser Price:
(g) Sellers having had a reasonable opportunity to
review and comment upon the Registration Statement pursuant to
Paragraph 7(d);
(h) closing of the transactions contemplated by this
Agreement by the Closing Date;
(i) payment and/or release of all indebtedness of
<PAGE>
Sellers to Three R Trusts in excess of $3,000,000, and conversion
of $3,000,000 of debt to a note complying with Paragraph 6(m), and
guaranteed by Purchaser pursuant to that certain Absolute Guaranty
and Purchase Agreement that is an exhibit to the Three R Trusts
Agreement ("the Guaranty");
(j) receipt by Seal Fleet of an oral opinion from an
investment banking firm acceptable to the board of directors of
Seal Fleet in its discretion by April 19, 1996 and a written
opinion confirming such oral opinion prior to mailing its Proxy
Statement, provided that if such oral opinion has not been received
by April 19, 1996, Sellers may terminate this Agreement by so
notifying Purchaser in writing; and
(k) receipt of Transferee's refined Schedule 8(g),
approved by Sellers, on or before April 17, 1996.
12. Delivery. On the Closing Date, Sellers shall deliver the
Assets to Purchaser or its nominee, which shall be a citizen of the
United States within the meaning of Section 2 of the Shipping Act,
1916, as amended (46 U.S.C. Section 802), as follows:
(a) the Owned Vessels (including all spares, stores and
equipment aboard and appurtenant thereto) shall be delivered to
Purchaser at a location or locations mutually agreeable to Sellers
and Purchaser in federal waters outside the territorial limits of
Louisiana or Texas. If any of the Owned Vessels is employed on the
date of Closing, the place of delivery shall be at its work site,
if outside of territorial waters, or at the point outside
territorial waters nearest to its work site. If the delivery is at
any place other than the location where a particular Owned Vessel
may be employed at the time of Closing, Purchaser shall pay to
Sellers all of Sellers' additional cost of crew, lube and fuel
incidental to such delivery. Sellers shall prepare and deliver
written instructions to the Master of each Owned Vessel, or such
person as may be in control of such Owned Vessel, as may be
necessary to deliver possession of each Owned Vessel to Purchaser.
(b) any Inventory shall be delivered to Purchaser at
Sellers' designated facilities on the date of Closing.
(c) all documentation necessary to effect constructive
delivery of the Assigned Contracts will be provided to Purchaser at
Closing.
13. Execution of Instruments. At Closing, the parties shall
execute and deliver, or cause the execution and delivery of, any
and all documents reasonably required in order to consummate the
transactions described herein on terms and conditions reasonably
satisfactory to Sellers and Purchaser, including the following:
(a) Sellers shall deliver to Purchaser at the Closing:
<PAGE>
(i) certified resolutions of the Boards of
Directors and shareholders of each of the Sellers authorizing
the transactions described in this Agreement;
(ii) valid and sufficient Bills of Sale, in a form
recordable with the United States Coast Guard, transferring
title to the Owned Vessels to Purchaser and containing such
warranties of title and disclaimers as set forth hereinabove,
including the warranties and disclaimers contained in
Paragraph 5, in the form attached as Schedule 13(a)(ii);
(iii) instructions to the Master or other person in
control of each Owned Vessel as may be necessary to deliver
possession of the respective Owned Vessel to Purchaser;
(iv) Certificates of Documentation for each Owned
Vessel;
(v) satisfactions of any Liens against the Owned
Vessels or other Assets sufficient to convey clear title to
such Assets to Purchaser;
(vi) Abstracts of Title, on form CG-1332, or the
equivalent, for each of the Owned Vessels, issued by the
United States Coast Guard within fifteen (15) days prior to
Closing, showing each Owned Vessel to be free and clear of all
recorded liens and encumbrances (other than those for which
executed satisfactions or termination statements will be
furnished at Closing);
(vii) any and all U.S. Coast Guard documentation
reasonably required in connection with the sale and purchase
hereunder;
(viii) valid and sufficient Bills of Sale conveying
title to the Inventory to Purchaser, containing such
warranties of title and disclaimers as set forth hereinabove,
including the warranties and disclaimers contained in
Paragraph 5, in the form attached as Schedule 13(a)(viii); and
(ix) valid and sufficient assignments of the
Assigned Contracts, containing the warranties and disclaimers
set forth herein, subject to those limitations contained in
Paragraph 1 of this Agreement.
(b) Purchaser shall deliver to Sellers at Closing:
(i) resolutions of the Board of Directors of
Purchaser authorizing the transactions described in this
Agreement;
(ii) evidence of wire transfers representing payment
of the cash portion of the Purchase Price in conformity with
<PAGE>
the payment and disbursement instructions tendered to
Purchaser by Sellers as provided for in Paragraph 4 of this
Agreement;
(iii) any and all U.S. Coast Guard documentation
reasonably required of Purchaser in connection with the
consummation of the sale and purchase hereunder; and
(iv) an assumption of the obligations of Sellers
under the Assigned Contracts.
14. Risk of Loss. All risk of loss of the Assets prior to
Closing shall be borne by Sellers, with Sellers retaining any and
all insurance proceeds arising from such loss. All risk of loss of
the Assets subsequent to the Closing shall be borne by Purchaser.
In the event of a total loss or constructive total loss to any of
the Owned Vessels prior to Closing, the Purchase Price shall be
reduced by the amount of the insurance payment for such vessel.
Should any Owned Vessel be damaged prior to the Closing, but not
deemed a constructive total loss, Sellers shall convey the Owned
Vessel to Purchaser in its damaged condition with a full and valid
assignment to Purchaser of any and all insurance proceeds payable
as the result of such damage under Sellers' existing insurance
policies.
15. Financing. In addition to the conditions precedent to
the Purchaser's obligations set forth in Paragraph 10, Purchaser's
obligation to purchase the Assets is further conditioned upon
Purchaser's obtaining of financing of the purchase, under terms and
conditions reasonably acceptable to Purchaser in its discretion.
Purchaser shall use its best efforts to obtain such financing and
to perform and cooperate fully with such procedures as may be
required by underwriters, regulators, and/or lenders for such
financing to be secured.
16. Brokers. No agent, broker, person or firm acting on
behalf of Purchaser or Sellers or under their authority is or will
be entitled to an advisory fee, brokerage commission, finder's fee
or like payment in connection with the transactions contemplated by
this Agreement.
17. Expenses. Sellers and Purchaser agree that, except as
otherwise provided herein, each shall bear and shall be solely
responsible for all their own costs and expenses, including their
attorneys' fees, incurred in connection with the transactions
contemplated by this Agreement. Purchaser has agreed to pay for
the vessel audit and any other reasonable accounting or auditing
expenses for development of information for the Registration
Statement.
18. Taxes. Sellers jointly and severally represent and
warrant that the sale of the Assets will be an occasional sale for
the purposes of Texas sales and use taxation, that they are engaged
<PAGE>
principally in the offshore service vessel industry, and that they
are not now, nor have they been in the past, engaged in the
business of the purchase and sale of vessels and related equipment.
Any previous sales of vessels made by Sellers, or any of them, have
been sales of depreciated, obsolete or surplus vessels or equipment
as an incident of the business described above, and Sellers have
never been assessed, nor required to remit, sales taxes in
connection with any such sale.
All 1996 ad valorem taxes with respect to the Assets shall be
the responsibility of Purchaser.
19. Indemnity. (a) Sellers hereby agree jointly and
severally to indemnify, defend and hold Purchaser, and its agents,
attorneys, representatives, employees, officers, directors,
shareholders, successors and assigns (collectively "Purchaser
Parties" and individually a "Purchaser Party"), harmless of and
from any and all claims, actions, demands, losses, liabilities,
penalties, damages and expenses (including, but not limited to, all
court costs and expenses, and reasonable attorneys' fees, whether
incurred in the defense of such claims, suits, actions and demands
or in enforcing this indemnification provision and whether or not
a lawsuit is filed) (collectively "Costs") arising from or relating
to (a) any breach of any representation, warranty, or covenant of
Sellers herein, (b) any liens on the Owned Vessels asserted by any
suppliers, towers, repairers, owners of cargo, or any other party
or parties that is or may constitute a contract lien or lien for
necessaries to the extent such liens accrue or arise for
obligations incurred or necessaries procured prior to Closing, no
matter when such liens are asserted, (c) any lien on the Owned
Vessels related to any maritime tort occurring before Closing
(including claims of passengers, cargo owners and other persons),
but excluding any liens relating to any Hazardous Materials (as
herein defined), and (d) violation of any federal or state
securities law relating to the Proxy Statement (except for any
violation due to the inaccuracy or incompleteness of information
supplied by Purchaser or Transferee for use in the Proxy Statement)
or the inaccuracy or incompleteness of information supplied by
Sellers for use in the Registration Statement, all as more fully
set out below. Purchaser agrees to indemnify, defend, and hold
Sellers and their respective agents, attorneys, representatives,
employees, officers, directors, shareholders, successors and
assigns (collectively "Sellers' Parties" and individually "Sellers'
Party"), harmless of and from any and all Costs arising from or
relating to (a) any breach of any representation, warranty, or
covenant of Purchaser herein, (b) violation of any federal or state
securities law relating to the Registration Statement (except for
any violation due to the inaccuracy or incompleteness of
information supplied by Sellers for use in the Registration
Statement) or the inaccuracy or incompleteness of information
supplied by Purchaser for use in the Proxy Statement, all as more
fully set out below, and (c) the Assigned Contracts after Closing.
Transferee agrees to indemnify, defend, and hold Purchaser Parties
<PAGE>
and Sellers' Parties harmless of and from any and all Costs arising
from or relating to (a) any breach of any representation, warranty,
or covenant of Transferee herein, and (b) violation of any federal
or state securities law relating to the Registration Statement or
the Proxy Statement due to the inaccuracy or incompleteness of
information supplied by Transferee for use in the Registration
Statement or the Proxy Statement, all as more fully set out below.
(b)(i) Sellers will indemnify and hold Purchaser
Parties harmless against any and all Costs, including but not
limited to, any and all expense incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever in connection with any
investigation or inquiry of, or action or proceeding that may be
brought against any Purchaser Party arising out of or based upon
any untrue statements or alleged untrue statements of material fact
or omissions of material fact necessary to make the statements made
not misleading contained in (x) any information furnished by
Sellers for inclusion in Purchaser's Registration Statement or
Prospectus, or (y) any proxy materials of Sellers soliciting a vote
in favor of the transactions described herein (the "Proxy
Materials"); provided, however, that the foregoing indemnity (i)
shall not apply in respect of any statement or omission made in
reliance upon and in conformity with written information furnished
to Sellers by Purchaser or Transferee in connection with the Proxy
Materials; or (ii) with respect to any Preliminary Prospectus if,
at or prior to the sale of the shares covered by the Preliminary
Prospectus, Sellers shall have informed Purchaser in writing of the
untrue or incomplete statement furnished by Sellers to Purchaser,
or (iii) if prior to the Meeting of shareholders of Seal Fleet,
Seal Fleet shall have delivered to its shareholders amended Proxy
Materials not containing the untrue or incomplete statement of
material fact. If Purchaser shall notify Sellers of the
incompleteness or inaccuracy of any information provided by
Purchaser after the Proxy Materials have been sent to Seal Fleet's
shareholders, Purchaser shall be responsible for all costs
associated with any necessary amendment to the Proxy Materials and
resoliciting the vote of the Seal Fleet shareholders.
(b)(ii) Purchaser will indemnify and hold Sellers'
Parties harmless against any and all Costs, including but not
limited to, any and all expense incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever in connection with any
investigation or inquiry of, or action or proceeding that may be
brought against any Sellers' Party arising out of or based upon any
untrue statements or alleged untrue statements of material fact or
omissions of material fact necessary to make the statements made
not misleading contained in (x) any information furnished by
Purchaser for inclusion in Seal Fleet's Proxy Materials, or (y) any
Preliminary Prospectus, Registration Statement or Prospectus of
Purchaser, and any amendments thereto; provided, however, that the
<PAGE>
foregoing indemnity (i) shall not apply in respect of any statement
or omission made in reliance upon and in conformity with written
information furnished to Purchaser by Sellers in connection with
such Preliminary Prospectus, Registration Statement or Prospectus,
or (ii) with respect to any Proxy Materials if, prior to the
Meeting, Purchaser shall have notified Sellers in writing of the
untrue or incomplete statement furnished by Purchaser, or (iii) if
Purchaser shall have delivered an amended Prospectus to each buyer
of shares which does not contain any untrue statements of material
fact or omissions necessary to make the statements made not
misleading. If Sellers shall notify Purchaser of the inaccuracy or
incompleteness of any information supplied by Sellers after a
Registration Statement has been declared effective, Sellers shall
be responsible for all costs associated with any necessary
amendment to the Registration Statement.
(b)(iii) Transferee will indemnify and hold Sellers'
Parties harmless against any and all Costs, including but not
limited to, any and all expense incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever in connection with any
investigation or inquiry of, or action or proceeding that may be
brought against any Sellers' Party arising out of or based upon any
untrue statements or alleged untrue statements of material fact or
omissions of material fact necessary to make the statements made
not misleading contained in any information furnished by Transferee
for inclusion in the Proxy Materials; provided, however, that the
foregoing indemnity shall not apply if, prior to the Meeting of the
shareholders of Seal Fleet, Transferee shall have notified Seal
Fleet in writing of the untrue or incomplete statement furnished by
Transferee. If Transferee notifies Seal Fleet of the inaccuracy or
incompleteness of information supplied by him after Proxy Materials
have been sent to shareholders, Transferee shall be responsible for
all costs associated with any necessary amendment to the Proxy
Materials and resoliciting a vote of shareholders.
(c) If any action, inquiry, investigation, claim or
proceeding is brought against any person in respect of which
indemnity may be sought pursuant to this section, such person
("Indemnified Party") shall, promptly after formal notification of,
or receipt of service of process for, such action, inquiry,
investigation, claim or proceeding, notify in writing the party or
parties against which indemnification is to be sought
("Indemnifying Party") of the institution of such action, inquiry,
investigation, claim or proceeding, and the Indemnifying Party,
upon the request of the Indemnified Party, shall have the right to
and shall assume the defense of such action, inquiry,
investigation, claim or proceeding, including the employment of
counsel (reasonably satisfactory to such Indemnified Party) and
payment of expenses. No indemnification provided for in this
Paragraph 19 shall be available to any Indemnified Party for any
matter as to which the Indemnified Party shall have failed to give
such notice. Such Indemnified Party shall have the right to employ
<PAGE>
its own counsel, at its expense, unless the employment of such
counsel at the cost of the Indemnifying Party is authorized in
writing by the Indemnifying Party or such Indemnifying Party shall
not have assumed the defense of such matter and employed counsel to
have charge of the defense of such action, inquiry, investigation,
claim or proceeding. The Indemnifying Party shall not be liable
for any settlement of any action, inquiry, investigation, claim or
proceeding effected without its written consent, nor shall the
Indemnifying Party effect any settlement in respect of which any
Indemnified Party is required to take any action or pay any
damages, without the written consent of the Indemnified Party.
20. Employment of Sellers' Personnel. At the Closing,
Purchaser will offer employment to the officers and crew members of
the Vessels employed by Sellers on the Closing Date, as the Closing
Date may be extended pursuant to this Agreement, provided that such
persons qualify for hiring under Purchaser's customary terms and
conditions of employment. All employees hired will be retained
under compensation packages commensurate with the compensation
package in force for comparable personnel currently employed by
Seabulk Offshore, Ltd. All personnel hired pursuant to this
paragraph shall be hired as employees at will.
21. Non-Competition; Non-Disclosure. Sellers jointly and
severally acknowledge that a material consideration and inducement
for Purchaser to enter into this Agreement, and the transactions
contemplated herein, is the assignment of the Assigned Contracts,
and the agreement of Sellers not to compete with Purchaser in the
operation of supply vessels, except for its own business support.
Accordingly, Sellers agree that, for a period of two years
following the Closing, Sellers shall not compete with Purchaser or
any other, affiliate, subsidiary or parent of Purchaser in
connection with the operation of supply vessels in the U.S. Gulf of
Mexico. The term "compete" as used in this paragraph shall include
not only direct competition by Sellers or any of them with
Purchaser, but also the ownership, management, operation, or
participation in the ownership, management, operation, or control
by Sellers of any entity operating supply vessels for others in the
U.S. Gulf of Mexico.
In addition to the foregoing, for a period of two years after
the Date of Closing, Sellers shall not disclose, without the
written consent of Purchaser, any customer lists, financial
information, vessel capability data, trade secrets, proprietary
information or any other matters that could, in any manner,
adversely affect the business of Purchaser, or its parent,
subsidiaries or affiliates (the "Information"), unless: (1) such
Information becomes known to the general public or to the marine
industry; (2) Sellers are required to disclose such Information by
law, subpoena or other legal process, or (3) such Information is
not related to Sellers' business of operating supply vessels.
Sellers acknowledge that any breach of the obligations stated
<PAGE>
in this Paragraph may result in damages to Purchaser that are not
reasonably susceptible to quantification. Accordingly, in the
event of the actual or threatened breach of any of the provisions
of this paragraph by any of the Sellers, Purchaser shall be
entitled to obtain a temporary restraining order, an injunction or
other appropriate equitable relief restraining Sellers, or any of
them, from continued violation of these provisions. Nothing in
this Agreement shall be construed to prohibit Purchaser from
pursuing any other available remedies for such breach or threatened
breach, including the recovery of damages therefor. The provisions
of this Paragraph shall survive the Closing.
22. Reimbursement. Seal Fleet agrees to reimburse Purchaser
for any principal and/or interest due on the Three R Trusts Note
and paid by Purchaser pursuant to the Guaranty because Seal Fleet
did not make any payment due from it under the Three R Trusts Note.
23. Notices. All notices given under any provision of this
Agreement shall be in writing and deemed to have been given, and
duly given, when:
(a) Served by: (i) facsimile or telex to be confirmed by
certified, first class mail, (ii) personal delivery, (iii) mailed
by certified, first class mail, return receipt requested, postage
prepaid, or (iv) forwarded by Federal Express, Airborne Express,
United Parcel Service or other established and reputable courier
service; and
(b) Properly addressed to the Sellers or the Buyer, as
the case may be, as follows;
(i) In case of notice to Sellers:
c/o Seal Fleet, Inc.
3305 Avenue S
Galveston, Texas 77550
Attn: John Bissell
Fax: (409) 763-8892
With a copy to:
Butler & Binion, L.L.P.
1000 Louisiana
Houston, Texas 77002
Attn: Gail J. McDonald, Esq.
Fax: (713) 237-3202
(ii) In case of notice to Purchaser:
Hvide Marine Incorporated
2200 Eller Drive
Ft. Lauderdale, FL 33316
Attn: Vice President-Legal and
General Counsel
Fax: (954) 527-1772
<PAGE>
(iii) In case of notice to Transferee:
Thomas M. Ferguson
c/o First Stanford Corporation
125 Worth Avenue, Suite 318
Palm Beach, Florida 33480
Fax: (407)635-7349
24. Severability. If any provision of this Agreement is held
to be invalid or unenforceable, in any respect, such invalidity or
unenforceability shall not affect or impair the validity or
enforceability of the remaining provisions of this Agreement, but,
to the contrary, this Agreement shall be construed as if such
invalid or unenforceable provision had never been contained herein.
25. Modification; Amendment. This Agreement may only be
modified or amended in writing by an instrument executed by each
party hereto.
26. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one and
the same instrument.
27. Assignment; Survival. Purchaser may, in its discretion,
assign all or any portion of its rights hereunder to Seabulk
Offshore Ltd. or any other affiliate of Purchaser. This Agreement
may not be assigned by any of the Sellers except upon the prior
written consent of Purchaser or its assignees. Upon any assignment
of this Agreement by Purchaser or Seller, the assignee or successor
shall be deemed the Purchaser or Seller, respectively, under this
Agreement and shall be deemed to have assumed all of the
obligations and to have made all of the representations and
warranties of such entities set forth herein. All indemnities,
warranties, remedies and obligations of Sellers in favor of
Purchaser, or of Purchaser in favor of Sellers, shall survive any
such assignment, the execution of this Agreement, and the Closing.
Notwithstanding the foregoing, assignment by Purchaser shall not
relieve Purchaser of its obligations to Sellers. Transferee may
not assign any portion of his rights hereunder.
28. Governing Law Jurisdiction. This Agreement shall be
governed by the laws of the State of Texas, and, when applicable,
the general maritime law of the United States. Purchaser, Sellers
and Transferee irrevocably submit to the exclusive jurisdiction of
the United States District Court for the Southern District of
Texas, Galveston Division, or, if jurisdiction is found lacking in
such court, then the court of general jurisdiction of the State of
Texas, Galveston County, for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction
contemplated hereby. Purchaser, Sellers and Transferee agree to
commence any action, suit or proceeding relating hereto in the
United States District Court for the Southern District of Texas,
Galveston Division, or if the jurisdiction is found lacking in such
<PAGE>
court, the court of general jurisdiction of the State of Texas,
Galveston County. Purchaser, Sellers and Transferee irrevocably
and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the United States District
Court of the Southern District of Texas, Galveston Division or if
jurisdiction is found lacking in such court, then the court of
general jurisdiction of the State of Texas, Galveston County, and
hereby irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient
forum.
29. Incorporation; Entire Agreement. This Agreement includes
any and all Schedules annexed hereto, all of which are incorporated
herein by this reference. This Agreement constitutes the entire
understanding of the parties and supersedes any and all other
agreements, written or oral, with respect to the subject matter
hereof.
In Witness Whereof, the parties have executed this Agreement
on the date first hereinabove written.
Sellers:
Seal Fleet, Inc.
By: /s/ John W. Bissell, President
Sealcraft Operators, Inc.
By: /s/ John W. Bissell, President
Seal GP, Inc.
By: /s/ John W. Bissell, President
South Corporation
By: /s/ John W. Bissell, President
Purchaser:
Hvide Marine Incorporated
By: /s/ Gene Douglas, Vice President
/s/ Thomas M. Ferguson
<PAGE>
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
This Amendment No. 1 to Asset Purchase Agreement made and entered
into as of the 23rd day of July, 1996 by and among Hvide Marine
Incorporated, a Florida corporation, Seal Fleet, Inc., a Nevada
corporation, Sealcraft Operators, Inc., a Texas corporation, Seal GP,
Inc., a Delaware corporation, and South Corporation, a Delaware
corporation, First Magnum Corporation, a Florida corporation, and
Thomas M. Ferguson.
Whereas, the parties hereto, having entered into that certain
Asset Purchase Agreement dated as of March 29, 1996 (the "Agreement"),
desire to amend the Agreement upon the terms hereinafter set forth; and
Whereas Thomas M. Ferguson intends to transfer of his interest
under the Asset Purchase Agreement to First Magnum Corporation, a
Florida corporation.
Now therefore, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consid-
eration, the parties agree as follows:
1. Paragraph 2 of the Agreement is amended to read in its
entirety as follows:
2. Purchase Price. Purchaser will purchase the Assets for
the price of Nine Million Six Hundred Thousand ($9,600,000) (the
"Purchase Price"), payable as provided in Paragraph 4. The
portion of the Purchase Price allocable to each of the Assets
to be sold hereunder is set forth in the Disclosure Letter dated
as of March 29, 1996 between Seal Fleet and Purchaser (the
"Disclosure Letter").
2. The first sentence of Paragraph 4 of the Agreement is amended
to read in its entirety as follows:
The Purchase Price shall be paid by Purchaser as follows: (a)
$100,000, upon execution of this Agreement (the "Deposit") and (b)
$9,500,000 at Closing by wire transfer to an account designated by
Sellers.
3. Subparagraph (m) of Paragraph 6 of the Agreement is amended
to read in its entirety as follows:
(m) Repayment of Indebtedness. On or before the Closing
Date, Sellers shall repay all indebtedness to the Three R Trusts.
4. Paragraph 7 is amended to add the following representation
and warranty:
<PAGE>
(k) Transaction with Three R Trusts. Purchaser has entered
into an amendment to the Three R Trusts Agreement (as hereinafter
defined) whereby Purchaser will pay $16,000,000 for the five
vessels purchased and for 50,000 shares of Class B and 212,655
shares of Class A common stock of Seal Fleet purchased. No other
consideration, payment or inducement has been or will be paid to
the Three R Trusts or the partnerships that own the vessels
beneficially owned by the Three R Trusts.
5. Subparagraph (i) of Paragraph 11 of the Agreement is amended
to read in its entirety as follows:
(i) payment and/or release of all indebtedness of Sellers to
Three R Trusts.
6. Paragraph 20 of the Agreement is amended to read in its
entirety as follows:
20. Employment of Sellers' Personnel. At the Closing,
Purchaser will offer employment to certain administrative
employees of Sellers and to the officers and crew members of the
Vessels employed by Sellers on the Closing Date, as the Closing
Date may be extended pursuant to this Agreement, provided that
such persons qualify for hiring under Purchaser's customary terms
and conditions of employment. All employees hired will be
retained under compensation packages commensurate with the
compensation package in force for comparable personnel currently
employed by Seabulk Offshore, Ltd. All personnel hired pursuant
to this paragraph shall be hired as employees at will. Purchaser
will provide to Sellers at Closing the sum of Four Hundred Fifty
Thousand Dollars ($475,000) to be utilized by the Sellers to
assist in downsizing its operations, as appropriate, and in
mitigating any dislocation associated with such downsizing, such
amount to be allocated in Sellers' sole discretion.
7. Except to the extent amended by the foregoing Paragraphs 1
through 6 of this Amendment No. 1, the provisions of the Agreement
shall remain in full force and effect.
8. This Amendment may be executed in multiple counterparts, each
of which shall be deemed to be an original, but all of which together
shall constitute but one and the same instrument.
In Witness Whereof, the parties have executed this Amendment No. 1
on the date first hereinabove written.
Sellers:
Seal Fleet, Inc.
By: /s/ John Bissell, President
<PAGE>
Sealcraft Operators, Inc.
By: /s/ John Bissell, President
Seal GP, Inc.
By: /s/ John Bissell, President
South Corporation
By: /s/ John Bissell, President
Purchaser:
Hvide Marine Incorporated
By: /s/ Donald L. Caldera, Executive Vice President
First Magnum Corporation
By: /s/ Thomas M. Ferguson, President
