As filed with the Securities and Exchange Commission on October 25, 1996.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TRICO MARINE SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 4424 72-1252405
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Identification No.)
organization) Classification Code)
610 Palm Street
Houma, Louisiana 70364
(504) 851-3833
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Victor M. Perez
Vice President and Chief Financial Officer
Trico Marine Services, Inc.
2401 Fountainview Drive, Suite 626
Houston, Texas 77057
(713) 780-9926
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
William B. Masters T. Mark Kelly
Jones, Walker, Waechter, Poitevent, Vinson & Elkins L.L.P.
Carrere & Denegre, L.L.P. 2300 First City Tower
201 St. Charles Avenue 1001 Fannin Street
New Orleans, Louisiana 70170 Houston, Texas 77002
(504) 582-8000 (713) 758-2222
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [x]
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed
maximum Amount of
Title of each class of aggregate registration
securities to be registered offering price<F1><F2> fee
_______________________________________________________________________________
Common Stock, par value $0.01 per share $92,500,000 $28,031
===============================================================================
<F1> Includes shares which the Underwriters have the option to purchase to
cover over-allotments, if any.
<F2> Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
____________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION, DATED OCTOBER 25, 1996
2,000,000 Shares
[Logo] Trico Marine Services, Inc.
Common Stock
($.01 par value)
Of the 2,000,000 shares of Common Stock, $.01 par value per share (the
"Common Stock"), of Trico Marine Services, Inc. ("Trico" or the "Company")
offered hereby (the "Offering"), 650,000 shares are being sold by the Company
and 1,350,000 by the Selling Stockholders. See "Principal and Selling
Stockholders." The Company will not receive any proceeds from the sale of
shares by the Selling Stockholders.
The Common Stock is traded on the Nasdaq National Market under the symbol
"TMAR." On October 24,1996, the last reported sale price of the Common
Stock was $35.50 per share.
The Common Stock offered hereby involves a high degree of risk. See
"Risk Factors" beginning on page 8.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
==============================================================================
Underwriting Proceeds to
Price Discounts and Proceeds to Selling
to Public Commissions<F1> Company<F2> Stockholders
______________________________________________________________________________
Per Share ........ $ $ $ $
______________________________________________________________________________
Total<F3> ........ $ $ $ $
==============================================================================
<F1> See "Underwriting" for indemnification arrangements.
<F2> Before deducting estimated expenses of $400,000 payable by the Company.
<F3> The Selling Stockholders have granted to the Underwriters a 30-day
option to purchase up to an additional 300,000 shares of Common Stock
solely to cover over-allotments, if any. If this option is exercised
in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Selling Stockholders will be $________,
$________ and $________, respectively. The Company will not receive
any proceeds from shares of Common Stock sold by the Selling
Stockholders. See "Underwriting" and "Principal and Selling
Stockholders."
The shares of Common Stock offered hereby are being offered by the several
Underwriters named herein, subject to prior sale and acceptance by the
Underwriters and subject to their right to reject any order in whole or in
part. It is expected that the Common Stock will be available for delivery
on or about November _____, 1996 at the offices of Schroder Wertheim & Co.
Incorporated, New York, New York.
Schroder Wertheim & Co.
Raymond James & Associates, Inc.
Simmons & Company
International
November _____, 1996
<PAGE>
[Picture of two Trico Lift Boats and a supply boat providing
maintenance and installation services on a production platform.]
[Picture of the Roe River, a 211-foot supply boat owned by Trico.]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE
THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS
MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS ON THE NASDAQ
NATIONAL MARKET IN ACCORDANCE WITH RULE 10b-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SEE
"UNDERWRITING."
<PAGE>
PROSPECTUS SUMMARY
This summary is qualified in its entirety by the more
detailed information and the consolidated financial statements
and notes thereto appearing elsewhere in this Prospectus.
Unless the context indicates otherwise, any reference in this
Prospectus to "Trico" or the "Company" refers to Trico Marine
Services, Inc. and its predecessor, together with the
consolidated subsidiaries of Trico Marine Services, Inc. Unless
otherwise indicated, all information in this Prospectus assumes
that the Underwriters' over-allotment option is not exercised.
THE COMPANY
General
Trico provides a broad range of marine support services to
companies in the oil and gas industry conducting offshore
exploration, production and construction operations. The
Company is a leading operator of marine support vessels in the
U.S. Gulf of Mexico (the "Gulf") and also conducts international
operations offshore Brazil. Since the Company's initial public
offering in May 1996, Trico has acquired 14 supply boats at an
aggregate cost of $54.6 million. As a result, Trico is now the
third largest owner of supply boats operating in the Gulf with a
total vessel fleet of 62 vessels, including 31 supply boats, six
lift boats, 16 crew boats and nine line handling boats.
Management believes that the Company's expanded supply boat
fleet will enable it to take further advantage of recent
industry-wide increases in supply boat day rates and utilization
in the Gulf. The Company's average supply boat day rate
increased 54% to $4,256 during the three months ended June 30,
1996 from the comparable 1995 period, while the average
utilization rate increased to 98% from 69%.
All of Trico's vessels are located in the Gulf with the
exception of the line handling boats that operate under long-
term charters offshore Brazil. The services provided by Trico's
diversified fleet include transportation of drilling materials,
supplies and crews to offshore facilities and support for the
construction, installation, maintenance and removal of those
facilities. Trico has focused on providing high quality,
responsive service while maintaining a low cost structure. In
addition, the quality of Trico's fleet and the strength of its
experienced management team have allowed the Company to develop
and maintain long-term customer relationships.
The Company is the successor to several companies formed in
the 1980's by Thomas E. Fairley and Ronald O. Palmer to own,
manage and operate offshore marine support vessels. In 1993,
Messrs. Fairley and Palmer organized Trico with Berkshire
Partners LLC, a Boston-based private equity investment firm
(together with its affiliates, "Berkshire"), to acquire vessels
owned by Chrysler Capital Corporation ("Chrysler"), the majority
of which were operated by the Company. Messrs. Fairley and
Palmer have over 40 years of combined experience in the marine
support services industry, during which they have been
responsible for the acquisition, construction or major
refurbishment of approximately 100 vessels.
Business Strategy
The Company's strategy is to enhance its position as a
leading supplier of marine support services by pursuing
acquisition opportunities in the Gulf and selectively
diversifying into certain international markets with additional
growth potential. The Company implements this strategy by:
Maintaining a large, diversified fleet. The size and
diversity of Trico's fleet enables the Company to provide oil
and gas companies operating in the Gulf a broad range of
services, including marine support for exploration, development,
production, construction, repair operations and platform
removal.
<PAGE>
Focusing on the Gulf of Mexico. Trico intends to maintain
its current focus on the Gulf. Levels of oil and gas
exploration, development and production activities in the Gulf
have increased during 1996 as a result of several factors,
including: (i) improvements in exploration technologies, such
as computer-aided exploration and 3-D seismic, have increased
drilling success rates in the region; (ii) improvements in
subsea completion and production technologies have led to
increased deep water drilling and development; (iii) expansion
of the region's production infrastructure has improved the
economics of developing smaller oil and gas fields; and (iv) the
short reserve life characteristic of Gulf gas production which
requires continuous drilling to replace reserves and maintain
production. Maintenance, repair and salvage activity related to
older production platforms and infrastructure in the shallow
areas of the Gulf has also increased, and based on recent
increases in applications for permits, the Company also expects
continued higher levels of these activities. These higher
overall activity levels have led to increased demand for the
Company's services and higher overall vessel utilization and day
rates in the Gulf.
Participating in the consolidation of the industry. The
number of supply boats available for service in the Gulf
decreased from a peak of approximately 700 in 1985 to
approximately 275 in September 1996. During the same period,
the number of companies operating supply boats of at least 150
feet in length decreased from approximately 80 to 16. Trico's
management believes that the Company will benefit from the
smaller overall supply boat fleet and consolidation of industry
competitors. Since the Company's initial public offering in May
1996, the Company has acquired 14 supply boats for $54.6
million, including four supply boats purchased in May 1996 for
$11.0 million with a portion of the proceeds of the initial
public offering and a total of ten supply boats purchased in two
separate transactions in October 1996 for $43.6 million. Trico
intends to continue to participate in this consolidation by
pursuing additional fleet acquisition opportunities in the Gulf
as well as opportunistic purchases of individual vessels.
The Company also believes that legal, regulatory and
economic barriers to entry will limit the number of vessels that
are capable of returning to the Gulf from overseas markets.
Although vessels may be remobilized to the Gulf from overseas
locations by certain of the Company's competitors or converted
from alternative uses, management believes that existing U.S.
government regulations, mobilization costs and overseas
opportunities will limit the number of such vessels for the
foreseeable future.
Reconfiguring and upgrading the fleet. Trico has
reconfigured and upgraded the capabilities of its vessel fleet
to meet market demands for larger, better equipped vessels. In
particular, it has disposed of those vessels it considers to be
less profitable such as smaller crew boats, and upgraded certain
other vessels. In 1995, the Company completed a $6.0 million
capital upgrade program that included (i) lengthening three
supply boats from 165 feet to 180 feet and one from 165 feet to
190 feet and enhancing these boats' cargo capacity, (ii)
rebuilding a crew boat and (iii) drydocking and refurbishing
several other vessels. Substantial downtime was incurred in
1995 from this program, which adversely impacted the Company's
results of operations. In January 1995, Trico also acquired a
sixth lift boat to further position the Company to participate
in the oil and gas industry's requirement to maintain, repair
and salvage the more than 3,000 production platforms in the
Gulf. The Company also intends to pursue opportunities to
acquire existing vessels and refurbish and expand their
capacities to support deep water exploration and development in
the Gulf. For example, in March 1996, Trico acquired a 180 foot
supply boat, which is being refurbished, lengthened to 220 feet
and will be available for service in the beginning of 1997.
<PAGE>
Expanding into selected international markets. While
Trico's primary market is the Gulf, the Company seeks to expand
into selected international markets which management believes
are attractive, long-term markets for the Company's services.
As part of this strategy, in March 1996 Trico acquired eight
line handling vessels and an operations facility in Brazil and
has redeployed one of its line handling vessels from the Gulf to
Brazil. These vessels operate under long-term charters for
Petrobras, the Brazilian national oil company, and support the
oil offloading operations from production facilities to tankers
in the Campos Basin offshore Brazil, including transporting
supplies and materials to and between deep water platforms. In
addition, Trico was the successful bidder for the contract to
build and operate an advanced "small water area twin hull" crew
boat (the "SWATH vessel") which will be used to transport up to
250 passengers to offshore platforms for Petrobras under a five
year contract. After successful model tank tests, construction
on the SWATH vessel began in October 1996 with operations
expected to commence at the end of 1997. The Company believes
that Brazil presents an attractive long-term market because of
the Brazilian government's goal of increasing its offshore oil
production and the anticipated participation by foreign
companies in its exploration and production activities. The
Company intends to pursue other opportunities to expand its
operations in this market.
The Company is incorporated under the laws of Delaware. Its
principal office is located at 610 Palm Street, Houma, Louisiana
70364, and its telephone number is (504) 851-3833.
THE OFFERING
Common Stock offered:
By the Company 650,000 shares
By the Selling Stockholders 1,350,000 shares
Total 2,000,000 shares
Common Stock outstanding after the
Offering 7,461,439 shares<F1>
Use of proceeds To repay indebtedness
incurred under the
Company's bank credit
facility to fund a
portion of the purchase
price of ten supply
boats in October 1996.
The Company will not
receive any of the
proceeds from the sale
of Common Stock by the
Selling Stockholders.
See "Use of Proceeds."
Nasdaq National Market symbol TMAR
Risk factors The Common Stock offered
hereby involves a high
degree of risk. See
"Risk Factors."
_______________________
<F1> Gives effect to the Offering, but does not include
838,012 shares of Common Stock issuable upon exercise of
outstanding options held by officers, directors and
employees. See "Management -- Stock Incentive Plans."
<PAGE>
SUMMARY FINANCIAL AND OPERATING DATA
The following table sets forth summary financial and operating
data as of the dates and for the periods indicated. The
following data should be read in conjunction with "Selected
Consolidated Financial and Operating Data," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's consolidated financial statements
and notes thereto.
<TABLE>
<CAPTION>
1993<F1>
_________________________________
Six months Year ended Two months
ended June 30 December 31 ended Ten months
___________________ _______________________ December 31, ended
1996 1995 1995 1994 1993 October 28, 1993
_________ _________ __________ __________ _____________ _______________
(unaudited) (Financial data in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Total revenues $ 19,495 $ 12,152 $ 26,698 $ 29,034 $ 6,145 $ 26,871
Direct operating expenses:
Direct labor and other
operating expenses 9,965 8,109 16,520 16,458 2,952 15,509
Management fees 418 278 468 707 90 1,002
General and administrative 1,385 1,280 2,509 2,057 256 1,412
Amortization of marine
inspection costs 897 523 1,930 1,490 222 1,176
Other 169 306 545 764 33 875
Revenue less direct operating _______
expenses - - - - - $ 6,897
Depreciation $ 1,818 $ 1,928 $ 2,740 $ 2,786 502 =======
_________ _ _______ __________ __________ __________
Operating income (loss) 4,843 (272) 1,986 4,772 2,090
Interest expense 1,660 1,902 3,850 3,767 620
Amortization of deferred
financing costs 187 187 381 344 60
Gain on sale of vessel - (223) (244) - -
Other income, net (41) (56) (32) (51) -
Income tax expense (benefit) 1,055 (708) (670) 226 564
Extraordinary item, net of
taxes (917) - - - -
__________ __________ ___________ ___________ ____________
Net income (loss) $1,065 $(1,374) $ (1,299) $ 486 $ 846
========== ========== =========== ========== ============
Net income (loss) per share $ 0.23 $ (0.45) $ (0.43) $ 0.16 $ 0.28
========== ========== =========== ========== ============
Weighted average common shares 4,545 3,050 3,051 3,010 3,020
========== ========== =========== ========== ============
Statement of Cash Flows Data:
Net cash provided by (used in
operating activities $2,299 $ 3,293 $ 6,411 $ 6,666 $(2,116)
Net cash provided by (used
in investing activities (17,266) (2,266) (6,121) 968 (45,511)
Net cash provided by (used
in) financing activities 15,138 (2,108) (943) (6,059) 47,822
Other Financial Data:
EBITDA<F2> $7,558 $2,179 $ 6,656 $ 9,048 $ 2,814
Operating Data:
Supply boats:
Average number of vessels 17.3 16.0 16.0 16.0 16.0 16.0
180 feet and above 17.3 12.0 13.0 12.0 12.0 12.0
165 feet - 4.0 3.0 4.0 4.0 4.0
Average vessel
utilization rate<F3> 93% 74% 78% 77% 90% 85%
180 feet and above 93% 86% 89% 83% 89% 92%
165 feet - 39% 32%<F4> 59% 95% 64%
Average vessel day rate<F5> $3,887 $ 2,882 $ 3,060 $3,057 $ 3,253 $ 2,833
Lift boats:
Average number of vessels 6.0 5.9 5.9 5.0 5.0 5.0
Average vessel utilization
rate<F3> 61% 42% 45% 57% 57% 70%
Average vessel day rate<F5> $4,710 $ 4,697 $ 4,656 $5,017 $ 4,970 $ 4,735
Crew/line handling
boats:<F6>
Average number of vessels 21.7 17.5 17.8 22.3 23.0 24.0
Average vessel utilization
rate<F3> 94% 79% 89% 82% 91% 93%
Average vessel day rate<F5> $1,527 $ 1,462 $ 1,482 $1,465 $ 1,500 $ 1,401
</TABLE>
<PAGE>
June 30, 1996
__________________________________________
Actual Pro Forma<F7> As Adjusted<F8>
__________ _______________ ________________
Balance Sheet Data: $ 6,016 $ 6,016 $ 6,016
Working capital
Property and equipment, net 56,423 100,073 100,073
Total assets 72,676 116,326 116,326
Long-term debt - 40,500 19,094
Stockholders' equity 62,668 62,668 84,074
________________________
<F1> Reflects the historical results of operations of
the Company for the two months ended
December 31, 1993 and the historical results of
operations of the vessels acquired by the
Company from Chrysler on October 29, 1993, for
the ten months ended October 28, 1993.
Accordingly, interest expense, other income,
net, income tax expense, depreciation and
amortization and net income are not presented
for such vessels because such items would be
based on Chrysler's historical costs and
borrowings and are not relevant to the ongoing
results of the Company. See Note 1 of the notes
to the Company's consolidated financial
statements.
<F2> As used herein, EBITDA is operating income plus
depreciation and amortization of marine
inspection costs. EBITDA is frequently used by
security analysts and is presented here to
provide additional information about the
Company's operations. EBITDA should not be
considered as an alternative to net income as an
indicator of the Company's operating performance
or as an alternative to cash flows as a better
measure of the Company's liquidity.
<F3> Average utilization rates are average rates for
all vessels based on a 365-day year. Vessels
are considered utilized when they are being
operated or mobilized/demobilized under
contracts with customers. See "Management's
Discussion and Analysis of Financial Condition
and Results of Operations."
<F4> 1995 utilization of 165-foot supply boats was
lower due primarily to the Company's capital
upgrade program, which resulted in approximately
500 lost available vessel days while the vessels
were being lengthened and upgraded.
<F5> Average day rates are the average of revenue per
day per vessel under contract.
<F6> Average utilization and day rates for all line
handling vessels reflect the contract rates for
the Company's unconsolidated Brazilian operating
company.
<F7> Pro Forma to reflect the acquisition of ten
supply boats in October 1996 and an aggregate
$40.5 million in borrowings under the Company's
Bank Credit Facility (as defined herein) to
finance a portion of the purchase price.
<F8> As adjusted to give effect to the Offering (at
an assumed offering price of $35.50 per share)
and the application of the estimated net
proceeds as described under "Use of Proceeds."
<PAGE>
RISK FACTORS
An investment in the Common Stock offered
hereby involves a high degree of risk. Prospective
investors should carefully consider the following
risk factors, in addition to the other information
contained in this Prospectus.
Industry Volatility; Geographic Concentration
The Company's operations depend on levels of
activity in offshore oil and gas exploration,
development and production, particularly in the
Gulf where the majority of the Company's operations
are conducted. The level of exploration and
development activity has traditionally been
volatile as a result of fluctuations in oil and gas
prices and their uncertainty in the future. A
significant or prolonged reduction in oil or
natural gas prices in the future would likely
depress offshore drilling and development activity
and reduce the demand for the Company's marine
support services. A substantial reduction of
activity in the Gulf could have a material adverse
effect on the Company's financial condition and
results of operations. See "Business -- The
Industry."
Competition
The Company's business is highly competitive.
Competition in the marine support services industry
primarily involves factors such as (i) price,
service and reputation of vessel operators and
crews, (ii) the availability of vessels of the type
and size needed by the customer and (iii) the
quality of equipment. In the Gulf, the Company
competes with both large and small companies.
Certain of these competitors have significantly
greater financial resources than the Company. In
addition, certain of the Company's competitors are
building new specialized supply boats greater than
200 feet in length, crew boats greater than 120
feet in length and lift boats with leg lengths in
excess of 200 feet. Continued new construction of
supply, crew and lift boats by the Company's
competitors and redeployment of existing vessels to
the Gulf could increase the levels of competition
within these vessel classes. See "Business --
Competition."
Operating Risks and Insurance
Marine support vessels are subject to
operating risks such as catastrophic marine
disaster, adverse weather conditions, mechanical
failure, collisions, oil and hazardous substance
spills and navigation errors. The occurrence of
any of these events may result in damage to or loss
of Company vessels and such vessels' tow or cargo
or other property and injury to passengers and
personnel. Such occurrences may also result in a
significant increase in operating costs or
liability to third parties. See "-- Government
Regulation." The Company maintains insurance
coverage against certain of these risks, which
management considers to be customary in the
industry. There can be no assurance, however, that
the Company's existing insurance coverage can be
renewed at commercially reasonable rates or that
such coverage will be adequate to cover future
claims that may arise. See "Business --
Insurance."
Government Regulation
The Company's operations are materially
affected by federal, state and local regulation, as
well as certain international conventions and
private industry organizations. These regulations
govern worker health and safety and the manning,
construction and operation of vessels. These
organizations establish safety criteria and are
authorized to investigate vessel accidents and
recommend approved safety standards. The failure
to comply with the requirements of any of these
laws or the rules or regulations of these agencies
and organizations could have a material adverse
effect on the Company. See "Business -- Government
Regulation."
The Company's operations also are subject to
federal, state and local laws and regulations which
control the discharge of pollutants into the
environment and which otherwise relate to
environmental protection. Substantial costs may be
incurred in complying with such laws and
regulations, and noncompliance can subject the
Company to substantial liabilities. There can be
no assurance that such costs and liabilities will
not be incurred. The Company's operations are
subject to the Outer Continental Shelf Lands Act,
and regulations promulgated thereunder, which
regulate the activities of offshore service
vessels, require vessel owners and operators to
demonstrate financial and operational
responsibility and provide for certain limitations
on the liability of vessel owners and operators.
The Company's operations are also subject to the
Federal Water Pollution Control Act of 1972, as
amended, which imposes strict controls against the
discharge of oil and other pollutants into surface
waters within its jurisdiction. Any hazardous
substances transported by the Company are subject
to regulation under the Resource Conservation and
Recovery Act and the Hazardous Materials
Transportation Act. Numerous other environmental
laws and regulations also apply to the operations
of the Company, and such laws and regulations are
subject to frequent change. The Company's
insurance policies provide coverage for accidental
occurrence of seepage and pollution or clean-up and
containment of the foregoing.
Any violation of such laws or regulations
could result in significant liability to the
Company, and any amendment to such laws or
regulations that mandates more stringent compliance
standards would likely cause an increase in the
Company's vessel maintenance expenses. See
"Business -- Environmental Regulations."
Seasonality
Marine operations conducted in the Gulf are
seasonal and depend, in part, on weather
conditions. Historically, Trico has enjoyed its
highest utilization rates during the second and
third quarters, as mild weather provides favorable
conditions for offshore exploration, development
and construction. Utilization rates typically have
reached their lowest levels in the first quarter,
when offshore marine activity generally declines as
oil and gas companies complete internal annual
exploration budget reviews. Adverse weather
conditions during the winter months generally
curtail offshore development operations and can
particularly impact lift boat utilization rates.
Accordingly, the results of any one quarter are not
necessarily indicative of annual results or
continuing trends. See "Management's Discussion
and Analysis of Financial Condition and Results of
Operations."
Age of Fleet
Because of overcapacity within the marine
support services industry on a worldwide basis,
there has been no significant construction of
supply boats since 1983. As of October 15, 1996,
the average age of the Company's vessels (based on
the date of construction) was approximately 16
years. Management believes that after a vessel has
been in service for approximately 30 years, repair,
vessel certification and maintenance costs may
become no longer economically justifiable. There
can be no assurance that the Company will be able
to maintain its fleet by extending the economic
life of existing vessels through major
refurbishment or by acquiring new or used vessels.
See "Business -- The Company's Fleet."
International Operations
The Company's international operations are
subject to a number of risks inherent with any
business operating in foreign countries. These
risks include, among others, political instability,
potential vessel seizure, nationalization of
assets, currency restrictions and exchange rate
fluctuations, import-export quotas and other forms
of public and governmental regulation, all of which
are beyond the control of the Company.
Historically, the Company's operations have not
been affected materially by such conditions or
events, but if the Company's international
operations expand, the exposure to these risks will
also increase. Although it is impossible to
predict the nature and the likelihood of any events
of these types, if such an event should occur, it
could have a material adverse effect on the
Company's financial condition and results of
operations.
Limitations on Foreign Ownership of Company Stock
Under the Merchant Marine Act of 1920, as
amended, if persons other than U.S. citizens own in
the aggregate in excess of 25% of the Company's
outstanding stock, the Company's U.S. flagged
vessels would lose the privilege of engaging in the
transportation of merchandise in the U.S. coastwise
trade. To assure the Company's continued ability
to engage in U.S. coastwise trade, the Company's
certificate of incorporation contains provisions
designed to assure that not more than 24% of the
outstanding shares of Common Stock are owned by
persons who are not U.S. citizens. The certificate
of incorporation provides that any transfer or
purported transfer of shares of Common Stock that
would result in the ownership by persons who are
not U.S. citizens of more than 24% of the then
outstanding shares of Common Stock will not become
effective against the Company, and the Company has
the power to deny voting and dividend rights with
respect to such shares. See "Business --
Government Regulation" and "Description of Capital
Stock -- Certain Charter and By-Law Provisions."
Dependence on Key Personnel
The Company depends on the continued services
of Thomas E. Fairley, its Chairman of the Board and
Chief Executive Officer, Ronald O. Palmer, its
Executive Vice President, Victor M. Perez, its
Chief Financial Officer, and other key management
personnel. The loss of any of these persons could
adversely affect the Company's operations. See
"Management."
Dividends
The Company presently intends to retain any
earnings to meet its working capital requirements
and finance the expansion of its business
operations. Therefore, the Company does not plan
to pay cash dividends to its stockholders in the
foreseeable future. See "Dividend Policy."
<PAGE>
USE OF PROCEEDS
The estimated net proceeds to the Company
from the Offering (at an assumed offering price of
$35.50 per share), after deducting the estimated
underwriting discounts and commissions and expenses
of the offering, will be approximately $21.4
million.
The Company intends to use the net proceeds
of the Offering to repay indebtedness incurred
under its revolving credit facility with First
National Bank of Boston, Hibernia National Bank and
First National Bank of Commerce (the "Bank Credit
Facility") in connection with the Company's recent
acquisition of ten supply boats. See
"Capitalization" and "Management's Discussion and
Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
Following the Offering, the Company will have
approximately $19.1 million in outstanding
indebtedness under the Bank Credit Facility, which
provides a revolving line of credit of $50.0
million. The Bank Credit Facility matures in
October 2002 and bears interest at LIBOR plus 1-
1/2% per annum (currently approximately 7%), with a
fee of 3/8% per annum on the undrawn portion. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and
Capital Resources."
The Company will not receive any proceeds
from the sale of Common Stock by the Selling
Stockholders.
PRICE RANGE OF COMMON STOCK
The Common Stock is traded on the Nasdaq
National Market under the symbol "TMAR." The
following table sets forth the high and low closing
sales prices per share of the Common Stock, as
reported by the Nasdaq National Market for each
fiscal quarter since trading in the Common Stock
began on May 16, 1996.
1996 High Low
_____ ________ _______
Second Quarter
(commencing May 16, 1996) $ 23 1/2 $ 19 3/4
Third Quarter 30 1/2 21 1/2
Fourth Quarter
(through October 24, 1996) 36 1/4 29 1/2
On October 24, 1996, the last reported sales
price of the Common Stock on the Nasdaq National
Market was $35.50 per share. On October 24, 1996,
there were 40 record holders of the Common Stock.
DIVIDEND POLICY
The Company presently intends to retain its
earnings to meet its working capital requirements
and finance the expansion of its business
operations. Therefore, the Company does not plan
to pay cash dividends to its stockholders in the
foreseeable future. In addition, the Bank Credit
Facility contains provisions that prohibit the
Company from paying dividends on its Common Stock.
The Company is also a holding company which
conducts its business through its two principal
subsidiaries. As a result, the Company's cash flow
and consequent ability to make dividend payments
primarily depend on the earnings and cash flow of
its subsidiaries and on dividends and other
payments therefrom. Any future determination to
pay cash dividends will be made by the Board of
Directors in light of the Company's earnings,
financial position, capital requirements, credit
agreements and such other factors as the Board of
Directors deems relevant at that time. See "Risk
Factors -- Dividends."
<PAGE>
CAPITALIZATION
The following table sets forth the
consolidated unaudited capitalization of the
Company at June 30, 1996, and on a pro forma basis
giving effect to the $40.5 million borrowed under
the Bank Credit Facility to fund a portion of the
purchase price of ten supply boats and as adjusted
to give effect to the sale of the Common Stock
offered hereby (at an assumed offering price of
$35.50 per share) and the application of the
proceeds thereof as described under "Use of
Proceeds." The information in the table should be
read in conjunction with the Company's consolidated
financial statements and notes thereto included
elsewhere herein.
<TABLE>
<CAPTION>
June 30, 1996
___________________
Actual Pro Forma As Adjusted
_________ ______________ _____________
(Dollars in thousands)
<S> <C> <C> <C>
Long-term debt, including current maturities:
Bank Credit Facility $ - $ 40,500 $ 19,094
Stockholders' equity:
Preferred stock, $.01 par value per share;
5,000,000 shares authorized; no shares outstanding - - -
Common stock, $.01 par value per share;
15,000,000 shares authorized; 6,883,471
issued and 6,811,439 outstanding (actual), and
7,533,471 shares issued and 7,461,439 outstanding
(pro forma and as adjusted)<F1> 69 69 75
Additional paid-in capital 61,502 61,502 82,902
Retained earnings 1,098 1,098 1,098
Treasury stock (72,032 shares) (1) (1) (1)
_______________ ___________ ___________
Total stockholders' equity 62,668 62,668 84,074
_______________ _____________ ______________
Total capitalization $ 62,668 $103,168 $ 103,168
=============== ============= ==============
______________________
<F1> Gives effect to the Offering, but does not include an aggregate
of 838,012 shares of Common Stock issuable upon exercise of
outstanding options. See "Management -- Stock Incentive Plans."
</TABLE>
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following table sets forth selected
consolidated financial and operating data for the
dates and periods indicated. The financial
information for each of the years ended December
31, 1995 and 1994 and the two month period ended
December 31, 1993 and as of December 31, 1995, 1994
and 1993 is derived from the Company's audited
consolidated financial statements and notes
thereto. The selected consolidated financial data
as of June 30, 1996 and 1995 and for the six month
periods then ended are derived from the unaudited
consolidated statements of the Company for such
periods. In the opinion of management, the
unaudited financial statements of the Company
reflect all adjustments (consisting of only normal
recurring adjustments) necessary for fair
presentation of the financial condition and results
of operations for these periods. The financial
information for the ten month period ending October
28, 1993 and each of the years ended December 31,
1992 and 1991 reflects operating results for the
vessels acquired by the Company from Chrysler in
October 1993. This information should be read in
conjunction with the consolidated financial
statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and
Results of Operations."
<TABLE>
<CAPTION>
Year ended December 31,
_____________________________________________________
Six months Two months Ten months
ended June 30 ended ended
___________________ December 31, October 28,
1996 1995 1995 1994 1993<F1> 1993<F1> 1992<F1> 1991<F1>
_________ _________ __________ __________ _____________ ____________ ___________ ___________
(unaudited) (Financial data in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total revenues $ 19,495 $ 12,152 $ 26,698 $ 29,034 $ 6,145 $ 26,871 $17,988 $22,992
Direct operating expenses:
Direct labor and other
operating expenses 9,965 8,109 16,520 16,458 2,952 15,509 12,611 13,412
Management fees 418 278 468 707 90 1,002 749 788
General and administrative 1,385 1,280 2,509 2,057 256 1,412 1,338 1,404
Amortization of marine
inspection costs 897 523 1,930 1,490 222 1,176 1,099 1,041
Other 169 306 545 764 33 875 367 22
Revenue less direct operating _______ ________ __________
expenses - - - - - $ 6,897 $1,824 $ 6,325
Depreciation $ 1,818 $ 1,928 $ 2,740 $ 2,786 502 ======= ======== ==========
_________ _ _______ __________ __________ __________
Operating income (loss) 4,843 (272) 1,986 4,772 2,090
Interest expense 1,660 1,902 3,850 3,767 620
Amortization of deferred
financing costs 187 187 381 344 60
Gain on sale of vessel - (223) (244) - -
Other income, net (41) (56) (32) (51) -
Income tax expense (benefit) 1,055 (708) (670) 226 564
Extraordinary item, net of
taxes (917) - - - -
__________ __________ ___________ ___________ ____________
Net income (loss) $1,065 $(1,374) $ (1,299) $ 486 $ 846
========== ========== =========== ========== ============
Net income (loss) per share $ 0.23 $ (0.45) $ (0.43) $ 0.16 $ 0.28
========== ========== =========== ========== ============
Weighted average common shares 4,545 3,050 3,051 3,010 3,020
========== ========== =========== ========== ============
Statement of Cash Flows Data:
Net cash provided by (used in
operating activities $2,299 $ 3,293 $ 6,411 $ 6,666 $(2,116)
Net cash provided by (used
in investing activities (17,266) (2,266) (6,121) 968 (45,511)
Net cash provided by (used
in) financing activities 15,138 (2,108) (943) (6,059) 47,822
Other Financial Data:
EBITDA<F2> $7,558 $2,179 $ 6,656 $ 9,048 $ 2,814
1993<F1>
__________________________
Six Months Year Ended Two Months Ten Months
ended June 30, December 31, ended ended
________ ________ _______ ________ December 31, October 28,
1996 1995 1995 1994 1993 1993
Operating Data: _______ ________ _______ _________ _______ ________
(Financial data in thousands, except per share amounts)
Supply boats:
Average number of vessels 17.3 16.0 16.0 16.0 16.0 16.0
180 feet and above 17.3 12.0 13.0 12.0 12.0 12.0
165 feet - 4.0 3.0 4.0 4.0 4.0
Average vessel
utilization rate<F3> 93% 74% 78% 77% 90% 85%
180 feet and above 93% 86% 89% 83% 89% 92%
165 feet - 39% 32%<F4> 59% 95% 64%
Average vessel day rate<F5> $3,887 $ 2,882 $ 3,060 $3,057 $ 3,253 $ 2,833
Lift boats:
Average number of vessels 6.0 5.9 5.9 5.0 5.0 5.0
Average vessel utilization
rate<F3> 61% 42% 45% 57% 57% 70%
Average vessel day rate<F5> $4,710 $ 4,697 $ 4,656 $5,017 $ 4,970 $ 4,735
Crew/line handling
boats:<F6>
Average number of vessels 21.7 17.5 17.8 22.3 24.0 24.0
Average vessel utilization
rate<F3> 94% 79% 89% 82% 91% 93%
Average vessel day rate<F5> $1,527 $ 1,482 $ 1,482 $1,465 $ 1,500 $ 1,401
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
June 30, December 31,
_________ _____________________________
1996 1995 1994 1993
_________ ________ ______ __________
(in thousands)
<S> <C> <C> <C> <C>
Balance Sheet Data:
Working capital (deficit),
including current maturities
of long-term debt $ 6,016 $ (844) $ 1,550 $ (2,704)
Property and equipment, net 56,423 39,264 38,508 45,191
Total assets 72,676 52,113 51,419 55,207
Long-term debt - 36,780 35,452 37,560
Stockholders' equity 62,668 5,712 7,002 6,450
</TABLE>
________________________
<F1> Reflects the historical results of operations of
the Company for the two months ended
December 31, 1993 and the historical results of
operations of the vessels acquired by the
Company from Chrysler on October 29, 1993, for
the ten months ended October 28, 1993.
Accordingly, interest expense, other income,
net, income tax expense, depreciation and
amortization and net income are not presented
for such vessels because such items would be
based on Chrysler's historical costs and
borrowings and are not relevant to the ongoing
results of the Company. See Note 1 of the notes
to the Company's consolidated financial
statements.
<F2> As used herein, EBITDA is operating income plus
depreciation and amortization of marine
inspection costs. EBITDA is frequently used by
security analysts and is presented here to
provide additional information about the
Company's operations. EBITDA should not be
considered as an alternative to net income as an
indicator of the Company's operating performance
or as an alternative to cash flows as a better
measure of the Company's liquidity.
<F3> Average utilization rates are average rates for
all vessels based on a 365-day year. Vessels
are considered utilized when they are being
operated or mobilized/demobilized under
contracts with customers. See "Management's
Discussion and Analysis of Financial Condition
and Results of Operations."
<F4> 1995 utilization of 165-foot supply boats was
lower due primarily to the Company's capital
upgrade program, which resulted in approximately
500 lost available vessel days while the vessels
were being lengthened and upgraded.
<F5> Average day rates are the average of revenue per
day per vessel under contract.
<F6> Average utilization and day rates for all line
handling vessels reflect the contract rates for
the Company's unconsolidated Brazilian operating
company.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The Company's results of operations are
affected primarily by day rates and fleet
utilization. While marine support vessels service
existing oil and gas production platforms as well
as exploration and development activities,
incremental demand depends primarily upon the level
of drilling activity, which in turn is related to
both short-term and long-term trends in oil and gas
prices. As a result, trends in oil and gas prices
may significantly affect utilization and day rates.
Due to the Company's concentration in the Gulf,
where natural gas comprises approximately 70% of
oil and gas production, the Company's activities
are more affected by the price of natural gas than
oil. Generally, a decline in gas prices has led
historically to a reduction in offshore drilling
and lower demand for offshore vessels. Recently,
however, this relationship has been less pronounced
due to a number of industry trends, including
advances in technology that have increased drilling
success rates and efficiency and vessel attrition.
In addition, over the past two years the Company
has expanded and reconfigured its fleet to more
effectively service market demand and improve its
profitability. The following table sets forth (i)
average U.S. natural gas prices, (ii) the average
number of offshore rigs under contract in the Gulf,
(iii) vessel utilization rates for the Company and
(iv) vessel day rates for the Company for the
periods indicated.
<TABLE>
<CAPTION> 1995 1996
___________________________________ _________________
1993<F1> 1994 Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr.1 Qtr.2
__________ _________ _________ ________ ________ _________ ________ ________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. natural gas prices<F2> $2.12 $1.92 $1.51 $1.63 $1.54 $2.06 $3.44 $2.45
Rigs under contract in the
Gulf<F3> 112 126 120 127 131 142 139 148
Average Company vessel
utilization rate:<F4>
Supply boats (total) 86% 77% 79% 69% 75% 87% 88% 98%
Supply boats (180 feet and
above) 92% 83% 88% 84% 86% 95% 88% 98%
Supply boats (165 feet)<F5> 70% 59% 52% 25% 28% --- --- ---
Lift boats 68% 57% 42% 41% 48% 49% 58% 64%
Crew/line handling boats<F6> 92% 82% 79% 87% 91% 98% 96% 93%
Average Company vessel day
rate:<F7>
Supply boats $2,899 $3,057 $2,981 $2,771 $3,101 $3,322 $3,415 $4,256
Lift boats 4,752 5,017 4,624 4,735 4,523 4,718 4,840 4,591
Crew/line handling boats<F6> 1,413 1,465 1,505 1,422 1,474 1,525 1,530 1,525
</TABLE>
________________
<F1> Reflects the historical operating statistics of
the Company for the two months ended December 31,
1993 and for the vessels acquired by the Company
from Chrysler on October 29, 1993, for the ten
months ended October 28, 1993.
<F2> Average Henry Hub cash price in $/MMBtu, as
reported in Natural Gas Week.
<F3> Average Gulf of Mexico mobile offshore rig count,
as reported by Offshore Data Services.
<F4> Average vessel utilization rate for the Company
is calculated by dividing the total number of
days for which a vessel is under contract in a
period by the total number of days in such
period.
<F5> Following the completion of the 1995 capital
upgrade program, all of the Company's supply
boats were at least 180 feet in length.
Subsequent to June 30, 1996, the Company
purchased two fleets totalling ten supply boats
which included two supply boats under 180 feet in
length.
<F6> Average utilization and day rates for all line
handling vessels reflect the contract rates for
the Company's unconsolidated Brazilian operating
company.
<F7> Average vessel day rate for the Company is
calculated by dividing a vessel's total period
revenues by the total number of days such vessel
was under contract during such period.
The Company's day rates and utilization rates are
also affected by the size, configuration and
capabilities of the Company's fleet. In the case of
supply boats, the deck space and liquid mud and dry bulk
cement capacity are important attributes. For crew
boats, size and speed are important factors, and in the
case of lift boats, longer leg length and greater crane
capacity add versatility and marketability. During 1994
and 1995, the Company reconfigured its fleet by
disposing of several small crew boats (100 feet) and
other vessels, the majority of which were sold to
operators outside the marine support industry.
Since the Company's initial public offering in May
1996, the Company has acquired 14 supply boats for $54.6
million. In May 1996, the Company acquired four supply
boats for $11.0 million with a portion of the proceeds
of the initial public offering. In October 1996, the
Company acquired in two separate transactions a total of
ten supply boats for $43.6 million. These acquisitions,
coupled with the acquisition in March 1996 of the Stones
River, which will be available for service in the
beginning of 1997, have increased the Company's supply
boat fleet from 16 at the end of 1995 to 31.
The Company's operating costs primarily are a
function of fleet size and utilization levels. The most
significant direct operating costs are wages paid to
vessel crews, maintenance and repairs and marine
insurance. Generally, increases or decreases in vessel
utilization only affect that portion of the Company's
direct operating costs that is incurred when the vessels
are active. As a result, direct operating costs as a
percentage of revenues may vary substantially due to
changes in day rates and utilization.
In addition to these variable costs, the Company
incurs fixed charges related to the depreciation of its
fleet and costs for the routine drydock inspection,
maintenance and repair designed to ensure compliance
with U.S. Coast Guard regulations and to maintain
American Bureau of Shipping ("ABS") certification for
its vessels. Maintenance and repair expense and marine
inspection amortization charges are generally determined
by the aggregate number of drydockings and other repairs
undertaken in a given period. Costs incurred for
drydock inspection and regulatory compliance are
capitalized and amortized over the period between such
drydockings, typically two to three years.
Results of Operations
The table below sets forth by vessel class, the
average day, and utilization rates for the Company's
vessels and the average number of vessels owned during
the periods indicated. The ten supply boats acquired by
the Company in October 1996 and the Stones River are not
included in the financial or operating data for the
periods presented below.
<TABLE>
<CAPTION> Six Months ended
June 30, Years ended December 31,
_______________________ ______________________________________
1996 1995 1995 1994 1993<F1>
_________ __________ __________ ___________ ____________
<S> <C> <C> <C> <C> <C>
Average vessel day rates:
Supply boats $3,887 $2,882 $3,060 $3,057 $2,899
Lift boats 4,710 4,697 4,656 5,017 4,752
Crew/line handling
boats<F2> 1,527 1,462 1,482 1,465 1,413
Average vessel utilization
rate:
Supply boats 93% 74% 78% 77% 86%
Supply boats (180 93% 86% 89% 83% 92%
feet and above)
Supply boats (165 feet) - 39% 32% 59% 70%
Lift boats 61% 42% 45% 57% 68%
Crew/line handling
boats<F2> 94% 79% 89% 82% 92%
Average number of vessels:
Supply boats 17.3 16.0 16.0 16.0 16.0
Lift boats 6.0 5.9 5.9 5.0 5.0
Crew/line handling boats 21.7 17.5 17.8 22.3 25.9
Total available vessel days<F3>:
Supply boats 2,950 2,571 4,999 5,464 5,456
Lift boats 909 951 1,843 1,626 1,475
Crew/line handling
boats 3,754 3,060 5,583 7,440 8,794
__________ ________ _________ _________ _________
Total available vessel days 7,613 6,582 12,425 14,530 15,725
========== ========= ========= ========= =========
</TABLE>
__________________________
<F1> Reflects the historical operating statistics of the Company for
the two months ended December 31, 1993 and for the vessels
acquired by the Company from Chrysler on October 29, 1993, for
the ten months ended October 28, 1993.
<F2> Average utilization and day rates for all line handling vessels
reflect the contract rates for the Company's unconsolidated
Brazilian operating company.
<F3> Total available vessel days are the total days that vessels are
available for charter and not being drydocked, repaired or
upgraded.
<PAGE>
Comparison of Six Months Ended June 30, 1996 and 1995
Revenues for the six months ended June 30, 1996
were $19.5 million, an increase of 60.4% compared to
$12.2 million in revenues for the six months ended June
30, 1995. This increase was principally due to the
improved average day rates and utilization for the
Company's supply boats, the growth of the Company's
vessel fleet, both in the Gulf and Brazil, and the
completion of the Company's vessel upgrade program which
adversely impacted vessel utilization in 1995.
All classes of vessels in the Company's fleet
reported higher utilization during the first six months
of 1996 compared to the same period in 1995. The
greatest increase was experienced by the Company's
supply boats, which averaged 93% utilization for the
period, up from 74% for the same period in 1995. Supply
boat day rates for the first six months of 1996 rose
34.9% to $3,887, compared to $2,822 for the comparable
1995 period. The significant improvement in utilization
and day rates is due to both the improved market
conditions in the Gulf and the substantial downtime
incurred in 1995 for the vessel upgrade program.
During 1995, the Company began and completed a
major capital upgrade program, in which three of the
supply vessels were lengthened from 165 feet to 180
feet, and one from 165 feet to 190 feet, with the boats'
capacity for liquid mud and bulk cargo also increased.
Additionally, the Company rebuilt and lengthened a crew
boat, which was placed in service in November 1995, and
acquired a sixth lift boat in January 1995. Completion
of these capital projects enabled the Company to begin
fiscal 1996 with a larger, enhanced fleet of vessels
which, in addition to the benefit of improved market
conditions, has resulted in higher day rates and higher
overall fleet utilization. In May 1996, the Company
also acquired four supply boats located in the Gulf with
a portion of the proceeds from its initial public
offering. The increase in revenues for the six month
period reflects the addition of these four vessels for a
portion of the second quarter.
Utilization for the Company's lift boats increased
to 61% in the first six months of 1996 from 42% during
the same period in 1995. The lift boats experienced
unusually low utilization in the first half of 1995 due
to dry docking related downtime and weak market
conditions which existed in the first half of 1995. The
Company's lift boats are operated by Power Offshore,
Inc. ("Power Offshore"), a leading operator of lift
boats in the Gulf. Management and incentive fees
payable to Power Offshore in the first six months of
1996 totaled $418,000 as compared to $220,000 for the
same period in 1995. See "Business - Lift Boat
Management."
Finally, utilization for the crew and line-
handling boats increased to 94% from 79% for the
comparable 1995 period. This increase was due to
improved market conditions in the Gulf for crew boats,
the addition of the rebuilt 125 foot crew boat and the
sale of three small 100 foot crew boats, as the Company
continued to upgrade and reconfigure its vessel fleet,
and the addition in March 1996 of eight line handling
vessels working under long-term charters offshore
Brazil.
Direct labor and other operating expenses were
$10.6 million during the first half of 1996 compared to
$8.7 million for the first half of 1995, due primarily
to increased labor, repair and maintenance costs
associated with the expanded vessel fleet. Due to the
increase in revenues, direct vessel operating expenses
decreased as a percentage of revenues from 71.5% in the
first half of 1995 to 54.1% in the corresponding period
of 1996.
Depreciation expense decreased to $1.8 million for
the first six months of 1996 from $1.9 million for the
comparable 1995 period, due to increased depreciation in
1995 caused by the allocation of a portion of the 1993
vessel acquisition costs to assets which have short
depreciable lives and were fully depreciated in the
second quarter of 1995. Amortization of marine
inspection costs increased to $897,000 from $523,000 in
the first six months of 1996 due to the amortization of
increased dry docking and marine inspection costs
incurred in 1995.
General and administrative expenses increased to
$1.4 million in the first six months of 1996 from $1.3
million for the same period in 1995, due to additions of
personnel in connection with the growth in the Company's
vessel fleet and Brazilian operations. General and
administrative expenses, as a percentage of revenues,
decreased from 10.5% in the first half of 1995 to 7.1%
in the corresponding 1996 period as the increase in
revenues and additions to the vessel fleet did not
require proportionate increases in administrative
expenses.
Interest expense decreased to $1.7 million for the
first six months of 1996, from $1.9 million for the
first six months of 1995. The decrease in interest
expense was due to the prepayment of all outstanding
borrowings under the Company's previous credit facility
in May 1996 with proceeds from the initial public
offering. Average bank debt outstanding decreased to
$22.8 million in the first six months of 1996 compared
to $26.8 million for the same period in 1995. In the
first half of 1995, the Company recorded a gain on the
sales of certain crew boats of $223,000.
In the first six months of 1996, the Company had
income tax expense of $1.1 million compared to an income
tax benefit in the amount of $708,000 for the first six
months of 1995.
As a result of the prepayment of all debt
outstanding under the Company's previous credit facility
and its 9% subordinated notes in the second quarter of
1996, the Company recorded an extraordinary charge of
$917,000, net of taxes of $494,000, for the write-off of
unamortized debt issuance costs.
Comparison of Year Ended December 31, 1995 to Year Ended
December 31, 1994
The Company's revenues declined 8.0% to $26.7
million in 1995, compared to $29.0 million in 1994.
This decrease was primarily due to a reduction in the
number of total days that the Company's vessels were
available for work due to the Company's capital upgrade
program, lower lift boat utilization and the reduction
in the size of the fleet of crew boats. Total available
vessel days, which are the total days vessels are
available for charter and not being drydocked, repaired
or upgraded, decreased 14.6% from a total of 14,530 in
1994 to 12,425 in 1995. During 1995, four of the
Company's supply boats were temporarily removed from
service, drydocked and lengthened from 165 feet to 180
feet or greater as part of the Company's capital upgrade
program. Available vessel days were also reduced by the
sale of several small crew boats during 1994 and 1995 as
part of the Company's strategy to focus on larger, more
profitable vessels. Management believes that the larger
crewboats (110 feet and above) and the larger supply
boats (180 feet and above) tend to be more profitable,
as they command higher day rates and enjoy higher
utilization rates than the smaller vessels, with
approximately the same operating costs. Management also
believes that the larger supply boats are less
vulnerable to decreases in utilization during market
downturns. Average utilization for the 180 foot and
larger supply boats was 89.0% in 1995 as compared to
78.0% for the entire supply boat fleet.
The Company's lift boats experienced unusually low
utilization rates in 1995 due to weather-related
downtime from an abnormally large number of tropical
storms and hurricanes which entered the Gulf during the
year. The reduction in the average day rates for the
lift boats was due to the acquisition of a sixth lift
boat at the beginning of the fiscal year which was
smaller than other lift boats in the fleet, thereby
commanding a lower day rate. Management and incentive
fees paid to Power Offshore in 1995 totalled $468,000 as
compared to $707,000 for the year ended December 31,
1994 due to the lower level of revenues and operating
income for the lift boats during the year.
Direct labor and other operating expenses were
unchanged from 1995 to 1994 at $16.5 million.
Generally, direct operating expenses do not change in
direct proportion to revenues because vessel day rates
may increase or decrease without corresponding changes
in operating expenses.
Depreciation expense decreased slightly from $2.8
million in 1994 to $2.7 million in 1995, as the capital
improvements made on the Company's vessels and the
acquisition of a lift boat at the beginning of the year
were offset by the sale of several vessels in 1994 and
1995. Amortization of marine inspection costs increased
29.5% in 1995 to $1.9 million from $1.5 million in the
prior year due to the increase in drydocking and marine
inspection costs for the year.
General and administrative expenses rose 22.0%
from $2.1 million in 1994 to $2.5 million in 1995
because of an increase in administrative and other
shore-based personnel in anticipation of higher activity
levels, and personnel required to support the Company's
capital upgrade program and on-going operations.
Interest expense from the Company's bank debt was
$2.7 million in 1995 as compared to $2.8 million in
1994, due to lower average bank debt outstanding of
$26.6 million in 1995, as compared to $30.5 million in
1994, and $278,000 in compensation received for the
early termination of an interest rate swap arrangement.
While the Company repaid $5.3 million of outstanding
indebtedness during the year, additional bank borrowings
of $4.5 million were used to partially fund the
Company's 1995 capital upgrade program and the
acquisition of a lift boat. Interest expense on the 9%
subordinated notes increased from $1.0 million to $1.1
million. In 1995 the Company had $381,000 in
amortization expense for deferred financing costs,
compared to $344,000 in 1994, from the 1993 vessel
acquisition financing.
The Company recorded a $670,000 income tax benefit
in 1995, as compared to a $226,000 income tax expense in
1994 due to the loss before income taxes for the year.
Comparison of Year Ended December 31, 1994 to the Ten
Months Ended October 28, 1993 and Two Months Ended
December 31, 1993
The year ended December 31, 1994 reflected the
first full year of the Company's operations after the
acquisition of the vessels from Chrysler on October 29,
1993. Historical results for 1993 for the Company are
for the two months ended December 31, 1993 ("Two Month
Period"). Prior to October 29, 1993, historical data
represent the 10 month results of operations ("Ten Month
Period") for the vessels acquired from Chrysler.
Accordingly, interest expense, depreciation and
amortization are not discussed below for the Ten Month
Period because such items would be based on Chrysler's
historical costs and borrowings and are not relevant to
the ongoing results of the Company.
During the year ended December 31, 1994, revenues
were $29.0 million, compared to revenues for the Ten
Month Period and the Two Month Period of $26.9 million
and $6.1 million. Vessel direct labor and other
operating expenses in 1994 were $16.5 million, compared
to $15.5 million for the Ten Month Period and $3.0
million for the Two Month Period. Management and
incentive fees paid to Power Offshore totalled $707,000
in 1994 as compared to $1.0 million and $90,000 for the
Ten Month Period and Two Month Period, respectively.
General and administrative expenses were $2.1
million for 1994, reflecting the first full year of the
Company's operations, compared to $256,000 for the Two
Month Period and $1.4 million for the Ten Month Period.
Amortization expense for drydocking and marine
inspection costs were $1.5 million for 1994 compared to
$222,000 for the Two Month Period and $1.2 million for
the Ten Month Period. Depreciation expense was $2.8
million compared to $502,000 for the Two Month Period.
Interest expense for 1994 was $3.8 million,
consisting of $2.8 million of interest expense on the
Company's bank debt associated with the acquisition of
vessels and $1.0 million in unpaid, deferred interest on
the Company's 9% subordinated notes, compared to
$620,000 for the Two Month Period. The Company had
$344,000 in amortization of deferred financing costs in
1994, compared to $60,000 for the Two Month Period,
reflecting the amortization of fees and expenses in
connection with the vessel acquisition financing.
Liquidity and Capital Resources
The Company's strategy has been to reduce its
financial leverage incurred in connection with the 1993
vessel acquisition from Chrysler, while adding value by
reconfiguring, upgrading and expanding its vessel fleet
to improve operating capability. As part of this
strategy, in May 1996 the Company completed its initial
public offering which improved the Company's financial
condition and enabled the Company to prepay all of its
senior and subordinated debt, acquire four supply
vessels in the Gulf and establish the Bank Credit
Facility, which provides a $50.0 million line of credit
that may be used for additional vessel acquisitions,
vessel improvements and working capital.
Funds during the first six months of 1996 were
provided by $48.4 million in net proceeds from the
initial public offering, $6.2 million in borrowings
prior to the initial public offering under the Company's
previous credit facility and $2.3 million in funds from
operating activities. During the period, the Company
repaid $38.9 million of debt, including $6.0 million of
the 9% subordinated notes, and made capital expenditures
totalling $17.3 million.
Capital expenditures in the first six months of
1996 consisted primarily of $11.0 million for the
acquisition of four supply vessels in the Gulf completed
in May 1996, and $4.2 for the Company's acquisition of
line handling boats and a 40% interest in a marine
operating company in Brazil in March 1996. Other
expenditures consisted of U.S. Coast Guard dry docking
costs, the remaining expenditures on one supply boat
which was lengthened as part of the 1995 vessel upgrade
program, and a portion of the acquisition and upgrade
costs of the Stones River. The Stones River was
acquired in March 1996 and is being lengthened to 220
feet and outfitted with bulk capacity of 7,800 cubic
feet and liquid mud capacity of 2,300 barrels. This
vessel will be available for service in the first
quarter of 1997 at an estimated total cost of $4.2
million.
During the fiscal year ended December 31, 1995,
the Company made $7.5 million in capital expenditures,
consisting of approximately $6.0 million for the
upgrade, drydocking and improvement of its vessels and
$1.5 million for the acquisition of a lift boat. The
Company also made $5.3 million in required principal
payments on its bank debt. Funds during the period were
provided from the Company's operating activities, which
generated approximately $6.4 million, borrowings of $4.5
million under the Company's previous bank credit
facility, and $1.3 million in proceeds from the sale of
certain vessels. As a result of the Company's
significant capital improvements, the Company was
required to manage closely its cash position.
The Company's Bank Credit Facility, which provides
a revolving line of credit up to $50.0 million, matures
in October 2002 and bears interest at LIBOR plus 1-1/2%
per annum (currently approximately 7%), with a fee of
3/8% per annum on the undrawn portion. The Bank Credit
Facility is collateralized by certain of the Company's
existing vessels and related assets and requires the
Company to maintain certain financial ratios. In
connection with the Company's acquisition of ten supply
boats in October 1996, the Company borrowed $40.5
million under the Bank Credit Facility to fund a portion
of the purchase price.
The Company was the successful bidder for the
contract to build and operate the SWATH vessel which
will be used to transport up to 250 passengers to
offshore platforms for Petrobras under a five-year
contract. After successful model tank tests,
construction on the SWATH vessel began in October 1996
and operations are expected to commence at the end of
1997. The Company plans to obtain long-term financing
for the vessel's $11.0 million cost through the Maritime
Administration's Title XI ship financing program for
which the Company has a pending application.
Following the application of the net proceeds from
the Offering to repay indebtedness outstanding under the
Bank Credit Facility, the Company will have
approximately $19.1 million of outstanding indebtedness
under the Bank Credit Facility (assuming an offering
price of $35.50 per share). The Company believes its
capital expenditures for the remainder of 1996 will
total approximately $8.5 million, including the Stones
River upgrade project, a portion of the construction
cost of the SWATH vessel, and the acquisition of a
larger docking and maintenance facility in Houma,
Louisiana to replace its present rented facility. See
"Business - Vessel Support Facility." The Company's
capital requirements historically have been for the
acquisition of marine vessels, maintenance and
improvements to vessels and debt service. The Company
believes that cash generated from operations and
availability under the Bank Credit Facility will provide
sufficient funds for identified capital projects and
working capital requirements. However, the Company's
strategy is to acquire other vessel fleets or single
vessels in order to expand its presence both in the Gulf
and certain selected international markets such as
Brazil. Depending upon the size of such future
acquisitions, the Company may require additional debt
financing, possibly in excess of its current credit
facility or additional equity.
New Accounting Standards
SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" was issued in March 1995 and is effective
for fiscal years beginning after December 15, 1995.
SFAS No. 121 establishes accounting standards for the
impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be
held and used and for long-lived assets and certain
identifiable intangibles to be disposed of. SFAS No.
123, "Accounting for Stock-Based Compensation" was
issued in October 1995 and is effective for fiscal years
beginning after December 15, 1995. SFAS No. 123
establishes financial accounting and reporting standards
for stock-based employee compensation plans. This
statement requires transactions to be accounted for
based on the fair value of the consideration received or
the fair value of the equity instruments issued,
whichever is more reliably measurable. This statement
does allow pro forma amounts to be disclosed by
companies which continue to apply the prior accounting
provisions for stock-based compensation. Management is
currently evaluating the alternatives available upon
implementing this statement, but expects to adopt only
the pro forma disclosure provisions. The Company does
not believe that implementation of these accounting
standards, which have been issued but are not yet
effective, will have a material effect on the Company's
financial position, results of operations or cash flows.
Forward-Looking Statements
This Prospectus, particularly the sections
entitled "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business,"
contains certain forward-looking statements and other
statements that are not historical facts concerning,
among other things, market conditions, the demand for
marine support services and future capital expenditures.
There can be no assurance that the Company has
accurately identified and properly weighed all of the
factors which affect market conditions and demand for
the Company's vessels, that the public information upon
which the Company has relied is accurate or complete or
that the Company's analysis of the market and demand for
its vessels is correct and, as a result, the strategy
based on such analysis will be successful. See "Risk
Factors" for a more detailed summary of factors which
could affect future results.
<PAGE>
BUSINESS
General
Trico provides a broad range of marine support
services to companies in the oil and gas industry
conducting offshore exploration, production and
construction operations. The Company is a leading
operator of marine support vessels in the Gulf and
conducts international operations offshore Brazil.
Since the Company's initial public offering in May 1996,
Trico has acquired 14 supply boats at an aggregate cost
of $54.6 million. As a result, Trico is now the third
largest owner of supply boats operating in the Gulf with
a total vessel fleet of 62 vessels, including 31 supply
boats, six lift boats, 16 crew boats and nine line
handling boats. Management believes that the Company's
expanded supply boat fleet will enable it to take
further advantage of recent industry-wide increases in
supply boat day rates and utilization in the Gulf. The
Company's average supply boat day rate increased 54% to
$4,256 during the three months ended June 30, 1996 from
the comparable 1995 period, while the average
utilization rate increased to 98% from 69%. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations."
All of Trico's vessels are located in the Gulf
with the exception of the line handling boats that
operate under long-term charters offshore Brazil. The
services provided by Trico's diversified fleet include
transportation of drilling materials, supplies and crews
to offshore facilities and support for the construction,
installation, maintenance and removal of those
facilities. Trico has focused on providing high
quality, responsive service while maintaining a low cost
structure. In addition, the quality of Trico's fleet
and the strength of its experienced management team have
allowed the Company to develop and maintain long-term
customer relationships.
The Industry
Marine Support Vessels
Marine support vessels are primarily used to
transport personnel, equipment and supplies to drilling
rigs and to support the construction and ongoing
operation of offshore oil and gas production platforms.
The principal services provided are the transportation
of equipment, fuel, water and supplies to offshore
facilities; transfer of personnel between shore bases
and offshore facilities; provision of work platforms and
cranes for offshore construction and towing services for
drilling rigs and platforms. The principal types of
vessels operated by the Company and its competitors can
be summarized as follows:
Supply Boats. Supply boats are generally at least
150 feet in length and serve drilling and production
facilities and support offshore construction and
maintenance work. Supply boats are differentiated from
other types of vessels by cargo flexibility and
capacity. In addition to transporting deck cargo, such
as pipe or drummed materials, supply boats transport
liquid mud, potable and drilling water, diesel fuel, dry
bulk cement and dry bulk mud. Accordingly, supply boats
which have large liquid mud and dry bulk cement
capacity, as well as large areas of open deck space, are
generally in higher demand than vessels without those
capabilities. However, other characteristics such as
maneuverability, fuel efficiency, anchor handling
ability and firefighting capacity may also be in demand
in certain circumstances. All but two of the supply
boats owned by the Company are at least 180 feet in
length.
Lift Boats. Lift boats are self-propelled, self-
elevating and self-contained vessels which can
efficiently assist offshore platform construction and
well servicing tasks that traditionally have required
the use of larger, more expensive, mobile offshore
drilling units or derrick barges. For example, lift
boats can dismantle offshore rigs, set production
facilities and handle a variety of tasks for existing
platform upgrade work. These boats have also been used
successfully as the main work platform for applications
such as diving and salvaging, and have been used as an
adjacent support platform for applications ranging from
crew accommodations to full workovers on existing
platforms. Typically lift boats command higher day
rates but experience lower average utilization rates
than other classes of marine support vessels. Lift
boats have different water depth capacities, with leg
lengths ranging from 65 to 200 feet. The Company's lift
boats have leg lengths ranging from 130 to 170 feet,
enabling them to operate in water depths where the
majority of the offshore structures currently in the
Gulf are located.
Crew Boats. Crew boats are generally at least 100
feet in length and are chartered principally for the
transportation of personnel and light cargo, including
food and supplies, to and among production platforms,
rigs and other offshore installations. These boats can
be chartered together with supply boats as support
vessels for drilling or construction operations, and
also can be chartered on a stand-alone basis to support
the various requirements of offshore production
platforms. Crew boats are constructed from aluminum,
and as a result generally have useful lives beyond those
of steel-hulled supply boats. Crew boats also provide a
cost-effective alternative to airborne transportation
services, and can operate reliably in virtually all
types of weather conditions. Generally, utilization and
day rates for crew boats are more stable than those of
other types of vessels because crew boats are typically
used to provide services for production platforms and
construction projects, as well as for exploration and
drilling activities. The majority of the Company's crew
boats are the larger 120-foot vessels.
Line Handling Boats. Line handling boats are
generally outfitted with special equipment to assist
tankers while they are loading from single buoy mooring
systems. These vessels support oil off-loading
operations from production facilities to tankers and
transport supplies and materials to and between
deepwater platforms.
Market Supply and Demand Characteristics
There has been minimal new construction of
offshore supply boats since the early 1980s, resulting
in substantial worldwide vessel attrition over the past
ten years as vessels have reached the end of their
useful lives. The number of offshore supply boats
available for service in the Gulf decreased from a peak
of approximately 700 in 1985 to approximately 275 in
September 1996. During the same period, the number of
companies operating supply boats of at least 150 feet in
length decreased from approximately 80 to 16. Although
vessels may be remobilized to the Gulf from overseas
locations by certain of the Company's competitors or
converted from alternative uses, management believes
that existing U.S. government regulations, mobilization
costs and overseas opportunities will limit the number
of supply boats that are capable of returning to the
Gulf from overseas in the foreseeable future. However,
any new construction or redeployment of existing vessels
to the Company's markets could increase the levels of
competition within this vessel class. Before any
significant new construction begins, management believes
that day rates will need to increase from current levels
to provide a satisfactory return on investment.
Management estimates that the worldwide fleet of
lift boats totals 134 vessels, of which 90 operate in
the Gulf. Of these 90 lift boats, only 12 are 160 feet
or greater in leg length, two of which are owned by the
Company, and there are three lift boats greater than 200
feet in leg length presently under construction.
Management also estimates that there are presently
32 crew boat operators in the Gulf, with a total fleet
of approximately 250 vessels of 100 feet or greater in
length. Trico's management believes that there are
approximately 14 crew boats greater than 120 feet in
length presently under construction.
While marine support service vessels service
existing oil and gas production platforms as well as
exploration and development activities, incremental
vessel demand depends primarily upon the level of
drilling activity, which in turn depends on oil and gas
prices. As a result, utilization and day rates
generally correlate to oil and gas prices. The
Company's operations are concentrated in the Gulf, which
is one of the largest natural gas producing areas in the
United States. Natural gas currently accounts for
approximately 70% of all hydrocarbon production in the
Gulf, and as a result, activity in this region is highly
dependent upon natural gas prices.
Offshore exploration and production activity in
Brazil is concentrated in the deep water Campos Basin,
located 60 to 100 miles from the Brazilian coast. Over
50 fields have been discovered in this Basin, including
an estimated 600 producing offshore oil wells. A number
of fields in the Campos Basin are being produced using
floating production facilities. In addition,
exploration activity has expanded south to the Santos
Basin and to the northeastern and northern continental
shelves. The establishment by the Brazilian government
of national requirements for self-sufficiency in oil
production should ensure that Petrobras' high level of
exploration and production activity will continue. The
Brazilian government's intention to allow foreign
participation in such exploration and production should
also result in additional activity.
Business Strategy
The Company's strategy is to enhance its position
as a leading supplier of marine support services by
pursuing acquisition opportunities in the Gulf and
selectively diversifying into certain international
markets with additional growth potential. The Company
implements this strategy by:
Maintaining a large, diversified fleet. The size
and diversity of Trico's fleet enables the Company to
provide oil and gas companies operating in the Gulf a
broad range of services, including marine support for
exploration, development, production, construction,
repair operations and platform removal.
Focusing on the Gulf of Mexico. Trico intends to
maintain its current focus on the Gulf. Levels of oil
and gas exploration, development and production
activities in the Gulf have increased recently as a
result of several factors, including: (i) improvements
in exploration technologies, such as computer-aided
exploration and 3-D seismic, have increased drilling
success rates in the region; (ii) improvements in subsea
completion and production technologies have led to
increased deep water drilling and development; (iii)
expansion of the region's production infrastructure has
improved the economics of developing smaller oil and gas
fields; and (iv) the short reserve life characteristic
of Gulf gas production which requires continuous
drilling to replace reserves and maintain production.
Maintenance, repair and salvage activity related to
older production platforms and infrastructure in the
shallow areas of the Gulf has also increased, and based
on recent increases in applications for permits, the
Company also expects continued higher levels of these
activities. These higher overall activity levels have
led to increased demand for the Company's services and
higher overall vessel utilization and day rates in the
Gulf.
Participating in the consolidation of the
industry. The number of supply boats available for
service in the Gulf decreased from a peak of
approximately 700 in 1985 to approximately 275 September
1996. During the same period, the number of companies
operating supply boats of at least 150 feet in length
decreased from approximately 80 to 16. Trico's
management believes that the Company will benefit from
the smaller overall supply boat fleet and consolidation
of industry competitors. Since the Company's initial
public offering in May 1996, the Company has acquired 14
supply boats for $54.6 million, including four supply
boats purchased in May 1996 for $11.0 million with a
portion of the proceeds of the initial public offering
and a total of ten supply boats purchased in two
separate transactions in October 1996 for $43.6 million.
Trico intends to continue to participate in this
consolidation by pursuing fleet acquisition
opportunities in the Gulf as well as opportunistic
purchases of individual vessels.
The Company also believes that legal, regulatory
and economic barriers to entry will limit the number of
vessels that are capable of returning to the Gulf from
overseas markets. Although vessels may be remobilized
to the Gulf from overseas locations by certain of the
Company competitors or from alternative uses, management
believes that existing U.S. government regulations,
mobilization costs and overseas opportunities will limit
the number of such vessels for the foreseeable future.
Reconfiguring and upgrading the fleet. Trico has
reconfigured and upgraded the capabilities of its vessel
fleet to meet market demands for larger, better equipped
vessels. In particular, it has disposed of those
vessels it considers to be less profitable such as
smaller crew boats, and upgraded certain other vessels.
In 1995, the Company completed a $6.0 million capital
upgrade program that included (i) lengthening three
supply boats from 165 feet to 180 feet and one from 165
feet to 190 feet and enhancing these boats' cargo
capacity, (ii) rebuilding a crew boat and (iii)
drydocking and refurbishing several other vessels.
Substantial downtime was incurred in 1995 from this
program, which adversely impacted the Company's results
of operations; however, the Company expects that the
upgrade will result in higher day rates and utilization
for these vessels in the future. In January 1995, Trico
also acquired a sixth lift boat to further position the
Company to participate in the oil and gas industry's
requirement to maintain, repair and salvage the more
than 3,000 production platforms in the Gulf. The
company also intends to pursue opportunities to acquire
existing vessels and refurbish and expand their
capacities to support deep water exploration and
development in the Gulf. For example, in March 1996,
Trico acquired a 180 foot supply boat, which is being
refurbished, lengthened to 220 feet and will be
available for service in the beginning of 1997.
Expanding into selected international markets.
While Trico's primary market is the Gulf, the Company
seeks to expand into selected international markets
which management believes are attractive, long-term
markets for the Company's services. As part of this
strategy, in March 1996 Trico acquired eight line
handling vessels and an operations facility in Brazil
and has redeployed one of its line handling vessels from
the Gulf to Brazil. These vessels operate under long-
term charters for Petrobras, the Brazilian national oil
company, and support the oil offloading operations from
production facilities to tankers in the Campos Basin
offshore Brazil, including transporting supplies and
materials to and between deep water platforms. In
addition, Trico was the successful bidder for the
contract to build and operate an advanced "small water
area twin hull" crew boat (the "SWATH vessel") which
will be used to transport up to 250 passengers to
offshore platforms for Petrobras under a five year
contract. After successful model tank tests,
construction on the SWATH vessel began in October 1996
with operations expected to commence at the end of 1997.
The Company believes that Brazil presents an attractive
long-term market because of the Brazilian government's
goal of increasing its offshore oil production and the
anticipated participation by foreign companies in its
exploration and production activities. The Company
intends to pursue other opportunities to expand its
operations in this market.
The Company's Fleet
Set forth below is the Company's internal
allocation of its charter revenues and charter revenues
less direct operating expenses for each of the periods
indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
___________________________________ _______________________________
1996 % 1995 % 1995 % 1994 %
______ _______ _______ _______ _______ ______ _______ ______
(unaudited, in thousands) (unaudited, in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charter Revenues:
Supply boats $11,423 59% $ 6,124 51% $ 13,868 52% $ 13,753 47%
Lift boats 3,400 17% 2,349 19% 5,054 19% 5,944 21%
Crew boats 4,652 24% 3,658 30% 7,735 29% 9,198 32%
___________ ________ __________ ______ ________ _____ ________ ____
Total Fleet........... $19,475 100% $12,131 100% $ 26,657 100% $ 28,895 100%
=========== ======== ========== ====== ======== ===== ======== =====
Charter Revenues less direct
operating expenses:<F1>
Supply boats $6,770 75% $ 2,570 68% $ 6,599 68% $ 6,570 56%
Lift boats $1,109 12% 512 14% 1,125 12% 2,481 21%
Crew boats $1,213 13% 662 18% 1,945 20% 2,679 23%
___________ _________ __________ ______ ________ _____ __________ _____
Total Fleet........... $9,092 100% $ 3,744 100% $ 9,669 100% $ 11,730 100%
=========== ========= ========== ====== ======== ===== ========== =====
</TABLE>
___________________
<F1> Charter revenues less direct vessel labor and other operating
expenses and vessel management fees.
The table set forth below provides information
regarding the vessels currently owned or operated by the
Company.
Horse
Supply Vessels: Length Power Year Built
__________________ __________ __________ ____________
Stones River<F1> 220' 4300 1980(1996)*
Roe River 211' 4300 1979(1992)*
Cedar River<F2> 195' 2550 1975(1985)*
Oak River<F2> 195' 4000 1974(1989)*
York River<F3> 192' 2250 1982
Big Horn River 191' 4000 1980
Cane River 190' 2200 1981(1995)*
Hudson River<F2> 190' 2500 1975
James River 190' 2200 1982(1988)*
Red River<F3> 187' 2250 1982
Pearl River<F3> 187' 2250 1982
Flint River<F3> 187' 2250 1982
Buffalo River 185' 2400 1979(1994)*
Rain River 185' 2200 1979(1995)*
Elm River<F2> 185' 3000 1981
Rush River<F2> 185' 3000 1980
Miami River 181' 2200 1977(1995)*
Savannah River 181' 2200 1977(1996)*
Maple River<F2> 180' 2200 1982
Charles River 180' 2200 1982
Manatee River 180' 2200 1977
Powder River 180' 2200 1982
Southern River 180' 3400 1977(1995)*
Sun River 180' 3500 1980(1991)*
Truckee River 180' 2200 1980
Wolf River 180' 2200 1983
White River 180' 3500 1980(1991)*
Ruby River<F2> 180' 2200 1978
Big Blue River<F2> 180' 2200 1982
Fall River<F2> 170' 2200 1979
Llano River<F2> 170' 2200 1977(1989)*
Lift Boats: Leg Horse
_____________ Length Power Year Built
__________ ________ _____________
Gulf Island I 170' N/A 1983
Gulf Island VIII 170' N/A 1985(1990)*
Gulf Island VII 145' N/A 1986
Gulf Island IX 145' N/A 1982(1991)*
Power V 135' N/A 1986
Gulf Island III 130' N/A 1982
Horse
Crew Boats: Length Power Year Built
____________ _________ __________ ______________
Cimarron River 125' 2700 1980(1995)*
Battle River 120' 2700 1979
Colorado River 120' 2700 1978
Concord River 120' 2700 1977
Firehold River 120' 2700 1979
Fox River 120' 2293 1980
Green River 120' 2293 1981
Platte River 120' 2700 1980
Ramzi River 120' 2700 1980
Snake River 120' 2700 1980
Whisky River 110' 2700 1982
Cumberland River 110' 2700 1980
Wabash River 105' 2025 1982
Freedom River 105' 2025 1981
Angelina River 105' 2025 1980
American River 100' 2025 1980
Horse
Line Handling Boats: Length Power Year Built
_____________________ _________ _________ _____________
Silver River 125' 1500 1978
Red Fox<F4> 116' 1200 1980
Alliance Trader<F4> 110' 1200 1982
Alliance Tempest<F4> 110' 1200 1982
Fernanda M.<F4> 110' 1200 1984
Jesse O<F4> 110' 1200 1982
Amazon River<F4> 110' 1450 1976
Parana River<F4> 110' 1450 1976
Islander IV (operated but not 110' 1200 1981
owned)
Walker I<F4><F5> 105' 1350 1977
___________________
* Year of major refurbishment (expenditures in
excess of $350,000). Because crew boats have
aluminum hulls, major refurbishment is not
necessary. In 1995, the Cimarron River crew boat
was rebuilt and lengthened from 110 to 125 feet.
In 1995 and 1996, four supply boats were
refurbished and lengthened.
<F1> In March 1996, the Company acquired this 180-foot
supply boat, which is being refurbished and
lengthened to 220 feet and will be equipped with
added bulk capacity. The Company expects the
vessel to be available for service in the
beginning of 1997.
<F2> Acquired by the Company in October 1996.
<F3> Acquired by the Company in May 1996.
<F4> Acquired by the Company in March 1996. All line
handling boats, except the Islander IV, are
located in Brazil and operate under long-term
charters with Petrobras.
<F5> The Walker I is owned by the Company's affiliate
located in Brazil, of which the Company owns a 40%
interest.
Vessel Support Facility
Trico presently leases a 2.0 acre site for its
corporate offices and operating base in Houma,
Louisiana. In October 1996, the Company entered into a
contract to acquire a 62.5 acre docking and maintenance
facility in Houma, Louisiana located on the intercoastal
waterway that provides direct access to the Gulf for
$1.5 million. The Company is currently in the process
of conducting title and environmental due diligence. If
the results of this review are satisfactory, the Company
will acquire the facility and relocate its Houma
operations in the first quarter of 1997.
Vessel Maintenance
The Company incurs routine drydock inspection,
maintenance and repair costs under U.S. Coast Guard
Regulations and to maintain ABS certification for its
vessels. In addition to complying with these
requirements, the Company has implemented its own
comprehensive vessel maintenance program which
management believes will help Trico to continue to
provide its customers with well maintained, reliable
vessels. Every 30 to 60 days, independent mechanics
perform a preventive maintenance inspection on the
engines in each vessel in the Company's fleet. The
Company then uses written reports prepared by such
independent mechanics to determine when it is necessary
to overhaul a particular engine. In addition, after
every 300 to 600 hours of engine use, engine oil samples
are analyzed by an outside firm and reviewed by the
Company port engineer responsible for maintaining the
vessel. Finally, a daily computer-generated record of
all services performed on each vessel allows management
to recognize and evaluate patterns in a particular
engine's performance, as does the written log kept daily
by each vessel engineer. In 1995, the Company incurred
approximately $2.1 million in dry-docking and marine
inspection costs and $595,000 for the first six months
of 1996. See "-- Government Regulation."
Customers and Charter Terms
The Company has entered into master service
agreements with approximately 140 of its customers,
including a majority of the major and independent oil
companies operating in the Gulf. Substantially all of
the Company's charters in the Gulf are short-term
contracts (30-60 days) or spot contracts (less than 30
days) and all are cancelable upon short notice. Because
of renewals, the stated duration of charters frequently
has little relationship to the actual time vessels are
chartered to a particular customer. Charters are
obtained through competitive bidding or, with certain
customers, through negotiation. The percentage of
revenues attributable to an individual customer varies
from time to time, depending upon the level of oil and
gas exploration and development activities undertaken by
a particular customer, the availability and suitability
of the Company's vessels for the customer's projects,
and other factors, many of which are beyond the
Company's control. For the fiscal year ended December
31, 1994, approximately 10% of the Company's total
revenues were received from Seagull Energy Corporation
and for the year ended December 31, 1995, approximately
14% of the Company's total revenues were received from
Vastar Resources, Inc. and approximately 11% from Unocal
Corporation.
Lift Boat Management
All of the Company's lift boats are managed by
Power Offshore, a leading operator of lift boats in the
Gulf, pursuant to a management agreement that expires in
March 1999. Power Offshore receives a management fee of
10% of the managed lift boats' monthly gross income and
is eligible to receive an incentive fee of up to three
percent of gross monthly income, based on a percentage
of the managed vessels' net operating income. Total
management and incentive fees paid to Power Offshore
cannot exceed 13% of the lift boats' gross monthly
income. The Company is also required to reimburse Power
Offshore for all operating expenses relating to the
managed lift boats, excluding marketing, general and
administrative, and insurance expenses. In addition,
Power Offshore has a right of first refusal if the
Company intends to sell any of the vessels that are
managed by Power Offshore to a third party. The Company
presently has no intention of selling any of its lift
boats.
Competition
The Company's business is highly competitive.
Competition in the marine support services industry
primarily involves factors such as (i) price, service
and reputation of vessel operators and crews, (ii)
availability of vessels of the type and size needed by
the customer and (iii) the quality of equipment. In the
Gulf, the Company competes with both large and small
companies. Although some of the Company's principal
competitors are significantly larger and have
significantly greater financial resources than the
Company, management believes that Trico's operating
capabilities and reputation enable it to compete
effectively with other fleets in the markets in which
the Company operates. In addition, certain of the
Company's competitors are building new specialized
supply boats greater than 200 feet in length, crew boats
greater than 120 feet in length and lift boats with leg
lengths in excess of 200 feet. Continued new
construction of these boats by the Company's competitors
and redeployment of existing vessels to the Gulf could
increase levels of competition within these vessel
classes. See "Risk Factors -- Competition."
Government Regulation
The Company's operations are materially affected
by federal, state and local regulation, as well as
certain international conventions and private industry
organizations. These regulations govern worker health
and safety and the manning, construction and operation
of vessels. For example, the Company is subject to the
jurisdiction of the U.S. Coast Guard, the National
Transportation Safety Board, the U.S. Customs Service
and the Maritime Administration of the U.S. Department
of Transportation, as well as private industry
organizations such as the American Bureau of Shipping.
These organizations establish safety criteria and are
authorized to investigate vessel accidents and recommend
improved safety standards. See "Risk Factors --
Government Regulation."
The U.S. Coast Guard regulates and enforces
various aspects of marine offshore vessel operations,
such as classification, certification, routes,
drydocking intervals, manning requirements, tonnage
requirements and restrictions, hull and shafting
requirements and vessel documentation. Coast Guard
regulations require that each of the Company's vessels
be drydocked for inspection at least twice within a five
year period. Management believes the Company is in
compliance in all material respects with all U.S. Coast
Guard Regulations.
Under the Merchant Marine Act of 1920, as amended,
the privilege of transporting merchandise or passengers
in domestic waters extends only to vessels that are
owned by U.S. citizens and are built in and registered
under the laws of the U.S. A corporation is not
considered a U.S. citizen unless, among other things, no
more than 25% of any class of its voting securities are
owned by non-U.S. citizens. If Trico should fail to
comply with these requirements, during the period of
such noncompliance it would not be permitted to continue
operating its vessels in U.S. coastwise trade. See
"Risk Factors -- Limitation on Foreign Ownership of
Company Stock" and "Description of Capital Stock --
Certain Charter and By-Law Provisions."
Environmental Regulations
The Company's operations are subject to a variety
of federal and state statutes and regulations regarding
the discharge of materials into the environment or
otherwise relating to environmental protection.
Included among these statutes are the Clean Water Act,
the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), the Outer Continental Shelf
Lands Act ("OCSLA") and the Oil Pollution Act of 1990
("OPA"). See "Risk Factors--Government Regulation."
The Clean Water Act imposes strict controls on the
discharge of pollutants into the navigable waters of the
U.S., and imposes potential liability for the costs of
remediating releases of petroleum and other substances.
The Clean Water Act provides for civil, criminal and
administrative penalties for any unauthorized discharge
of oil and other hazardous substances in reportable
quantities and imposes substantial potential liability
for the costs of removal and remediation. Many
states have laws which are analogous to the Clean Water
Act and also require remediation of accidental releases
of petroleum in reportable quantities. The Company's
vessels routinely transport diesel fuel to offshore rigs
and platforms, and also carry diesel fuel for their own
use. The Company's supply boats transport bulk chemical
materials used in drilling activities, and also
transport liquid mud which contains oil and oil by-
products. All offshore companies operating in the U.S.
are required to have vessel response plans to deal with
potential oil spills.
RCRA regulates the generation, transportation,
storage and disposal of onshore hazardous and non-
hazardous wastes, and requires states to develop
programs to ensure the safe disposal of wastes. The
Company generates non-hazardous wastes and small
quantities of hazardous wastes in connection with
routine operations, and management believes that all of
the wastes it generates are handled in compliance with
RCRA and analogous state statutes.
CERCLA contains provisions dealing with
remediation of releases of hazardous substances into the
environment and imposes strict, joint and several
liability for the costs of remediating environmental
contamination upon owners and operators of contaminated
sites where the release occurred and those companies who
transport, dispose of or who arrange for disposal of
hazardous substances released at the sites. Although
the Company handles hazardous substances in the ordinary
course of business, the Company's management is not
aware of any hazardous substance contamination for which
it may be liable.
OCSLA provides the federal government with broad
discretion in regulating the release of offshore
resources of oil and gas production. Because the
Company's operations rely on offshore oil and gas
exploration and production, if the government were to
exercise its authority under OCSLA to restrict the
availability of offshore oil and gas leases, such an
action could have a material adverse effect on the
Company's financial condition and the results of
operations.
OPA contains provisions specifying responsibility
for removal costs and damages resulting from discharges
of oil into navigable waters or onto the adjoining
shorelines. Among other requirements, OPA requires
owners and operators of vessels over 300 gross tons to
provide the U.S. Coast Guard with evidence of financial
responsibility to cover the costs of cleaning up oil
spills from such vessels. The Company currently owns
and operates 11 vessels over 300 gross tons, for which
satisfactory evidence of financial responsibility has
been provided to the U.S. Coast Guard.
Management believes the Company is in compliance
in all material respects with all applicable
environmental laws and regulations to which it is
subject. Moreover, operation of Company vessels in
foreign territories, such as the nine line handling
vessels which are operating under long-term charters
offshore Brazil, are potentially subject to similar
regulatory controls concerning environmental protection.
Management of the Company believes that compliance with
any existing environmental requirements of foreign
governmental bodies has not materially affected the
Company's capital expenditures, earnings or competitive
position.
Insurance
The operation of the Company's vessels is subject
to various risks, such as catastrophic marine disaster,
adverse weather conditions, mechanical failure,
collision and navigation errors, all of which represent
a threat to personnel safety and to Company vessels and
cargo. The Company maintains insurance coverage against
certain of these risks, which management considers to be
customary in the industry. Although management believes
that the Company's insurance coverage is adequate and
the Company has not experienced a loss in excess of its
policy limits, there can be no assurance that the
Company will be able to maintain adequate insurance at
rates which management considers commercially
reasonable, nor can there be any assurance such coverage
will be adequate to cover all claims that may arise.
Legal Proceedings
The Company is involved in various legal and other
proceedings which are incidental to the conduct of its
business. Management believes that none of these
proceedings, if adversely determined, would have a
material adverse effect on the Company's financial
condition, results of operations or cash flow.
Employees
As of October 15, 1996, the Company had
approximately 440 employees, including approximately 403
operating personnel and approximately 37 corporate,
administrative and management personnel. These
employees are not unionized or employed pursuant to any
collective bargaining agreement or any similar
arrangement. Management believes that the Company's
relationship with its employees is satisfactory.
<PAGE>
MANAGEMENT
Executive Officers and Directors
The following table sets forth certain information
as of October 15, 1996 with respect to the Company's
executive officers and directors.
Name Age Position
Thomas E. Fairley 48 Chairman of the Board, President and
Chief Executive Officer
Ronald O. Palmer 49 Executive Vice President, Director
Benjamin F. Bailar 62 Director
Carl Ferenbach 54 Director
Garth H. Greimann 41 Director and Assistant Secretary
Edward C. Hutcheson, Jr. 51 Director
Victor M. Perez 43 Vice President, Chief Financial Officer
and Treasurer
Michael D. Cain 47 Vice President--Marketing
Kenneth W. Bourgeois 48 Vice President and Controller
Thomas E. Fairley, who co-founded Trico Operators
with Mr. Palmer in 1980, has been Chairman of the Board
and President of the Company since October 1993. From
1978 to 1980, Mr. Fairley served as Vice President of
Trans Marine International ("TMI"), an offshore marine
service company and wholly-owned subsidiary of GATX
Leasing Corporation ("GATX"). From 1975 to 1978, Mr.
Fairley served as General Manager of International
Logistics, Inc. ("ILI"), a company engaged in the
offshore marine industry. For more than five years
prior to joining ILI, Mr. Fairley held various positions
with Petrol Marine Company, an offshore marine service
company.
Ronald O. Palmer has been a director of the
Company since October 1993 and Executive Vice President
since February 1995. Mr. Palmer joined with Mr. Fairley
in founding Trico Operators in 1980, and served as Vice
President, Treasurer, and Chief Financial Officer until
February 1995. From 1974 to 1980, Mr. Palmer was
employed by GATX Leasing where he was responsible for
the marketing of financial leases for industrial and
marine equipment in eight southwestern states and all
marine activity of TMI in the Gulf.
Benjamin F. Bailar has been a director of the
Company since 1994. Dean Bailar has served as the Dean
of the Jones Graduate School of Administration at Rice
University since 1987. Dean Bailar is also a director
of U.S. Can Corporation, Dana Corporation and Smith
International, Inc.
Carl Ferenbach has been a director of the Company
since 1994. He has been a managing director of
Berkshire and its predecessor since 1983, and serves as
a director of The Wisconsin Central Transportation
Corporation, U.S. Can Corporation and Tranz Rail
Holdings Limited.
Garth H. Greimann has been a director of the
Company since 1993. Mr. Greimann was a Vice President
of Berkshire's predecessor from 1989 through 1993 and
has been a managing director of Berkshire and its
predecessor since 1994. Prior to joining Berkshire, Mr.
Greimann was a Vice President of the First National Bank
of Boston. Mr. Greimann also serves as a director of
The Profit Recovery Group, Inc.
Edward C. Hutcheson, Jr. has been a director of
the Company since 1994. Mr. Hutcheson serves as
President and Chief Executive Officer of Castle Tower
Corporation, one of the largest independent owners and
operators of communications towers in the U.S. From
1990 to 1993, he was President and Chief Operating
Officer of Baroid Corporation, an energy services and
equipment provider.
Victor M. Perez has served as Vice President,
Chief Financial Officer and Treasurer of the Company
since February 1995. From 1990 to 1995, Mr. Perez
served as Senior Vice President-Corporate Finance of
Offshore Pipelines, Inc. Mr. Perez was Vice President-
Investments for Graham Resources, Inc., from August 1987
to October 1990 and from January 1976 to August 1987
served as a Vice President with InterFirst Bank Dallas
in its international and energy banking group.
Michael D. Cain has served as Trico's Vice
President-Marketing since February 1993. From 1986 to
1993, Mr. Cain served as Marketing Manager of Trico
Operators. Prior to 1986, Mr. Cain served in the same
capacity for Seahorse, Inc., an offshore marine services
company.
Kenneth W. Bourgeois has served as Trico's Vice
President and Controller since October 1993. Mr.
Bourgeois also served as Controller of Trico Operators
from December 1981 to October 1993. From 1972 to
December 1981, Mr. Bourgeois worked for George Engine
Company, Inc., where he held the position of Assistant
Controller and subsequently, Director of Internal
Auditing. From 1969 to 1972, Mr. Bourgeois was employed
by Price Waterhouse & Co. Mr. Bourgeois is a Certified
Public Accountant.
The Company's Certificate and Bylaws provide for
the Board of Directors to be divided into three classes
of directors with each class to be as nearly equal in
number of directors as possible, serving staggered
three-year terms. The terms of the Class I directors,
Mr. Palmer and Mr. Greimann, will expire in 1997. The
terms of the Class II directors, Mr. Ferenbach and Mr.
Hutcheson, will expire in 1998. The terms of the Class
III directors, Mr. Fairley and Dean Bailar, will expire
in 1999. Each director serves until the end of his term
or until his successor is elected and qualified. See
"Description of Capital Stock -- Certain Charter and
Bylaw Provisions --- Classified Board of Directors."
Director Compensation
Each director who is not an employee of the
Company is paid an annual director's fee of $12,500 plus
$500 for each board or committee meeting attended. All
directors are reimbursed for reasonable out-of-pocket
expenses incurred in attending board and committee
meetings.
Committees
The Company's Board of Directors has established
an Audit Committee and a Compensation Committee. The
Audit Committee reviews the Company's annual audit and
meets with the Company's independent public accountants
to review the Company's internal controls and financial
management practices. The current members of the Audit
Committee are Dean Bailar and Mr. Greimann.
The Compensation Committee recommends to the Board
of Directors compensation for the Company's key
employees, administers the Company's stock incentive
plans and performs such other functions as may be
prescribed by the Board of Directors. The current
members of the Compensation Committee are Messrs.
Ferenbach and Hutcheson.
Executive Compensation
The following table summarizes the compensation
that the Company paid to its Chief Executive Officer and
each of its most highly compensated executive officers
for the year ended December 31, 1995. No other employee
of the Company earned more than $100,000 in 1995.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
_______________
1995 Annual Compensation No. of Shares
_____________________________________ Underlying
Name and Other Annual Options All Other
Principal Position Salary Bonus Compensation Granted Compensation
___________________ ________ _________ _______________ ______________ _______________
<S> <C> <C> <C> <C> <C>
Thomas E. Fairley
President and
Chief Executive
Officer 150,000 --- 3,750<F2> --- ---
Ronald O. Palmer
Executive Vice
President 150,000 --- 3,750<F2> --- ---
Victor M. Perez
Vice President,
Chief Financial
Officer and
Treasurer<F1> 123,750 --- --- 151,265 ___
__________________________
<F1> Mr. Perez joined the Company in February 1995.
<F2> Represents contributions to the Company's 401(k) Plan.
</TABLE>
Stock Incentive Plans
1996 Stock Incentive Plan. In April 1996, the
Company adopted the 1996 Stock Incentive Plan (the "1996
Plan") to provide long-term incentives to its key
employees, including officers and directors who are
employees of the Company (the "Eligible Employees").
Under the 1996 Plan, which is administered by the
Compensation Committee of the Board of Directors, the
Company may grant Eligible Employees incentive stock
options, non-qualified stock options, restricted stock,
stock awards or any combination thereof (the
"Incentives"). The Compensation Committee will
establish the exercise price of any stock options
granted under the Incentive Plan, provided that the
exercise price may not be less than the fair market
value of the Common Stock on the date of grant. The
option exercise price may be paid in cash, in Common
Stock held for at least six months, in a combination of
cash and Common Stock, or through a broker-assisted
exercise arrangement approved by the Compensation
Committee.
A total of 200,000 shares of Common Stock are
available for issuance under the 1996 Plan. Incentives
with respect to no more than 50,000 shares of Common
Stock may be granted to any single Eligible Employee in
one calendar year. Proportionate adjustments will be
made to the number of shares subject to the 1996 Plan,
including the shares subject to outstanding Incentives,
in the event of any recapitalization, stock dividend,
stock split, combination of shares or other change in
the Common Stock. In the event of such adjustments, the
purchase price of any outstanding option will be
adjusted as and to the extent appropriate, in the
reasonable discretion of the Compensation Committee, to
provide participants with the same relative rights
before and after such adjustment.
All outstanding Incentives will automatically
become exercisable and fully vested and all performance
criteria will be deemed to be waived by the Company upon
(a) a reorganization, merger or consolidation of the
Company in which the Company is not the surviving
entity, (b) the sale of all or substantially all of the
assets of the Company, (c) a liquidation or dissolution
of the Company, (d) a person or group of persons, other
than Berkshire and any employee benefit plan of the
Company, becoming the beneficial owner of 30% or more of
the Company's voting stock or (e) the replacement of a
majority of the Board in a contested election (a
"Significant Transaction"). The Committee also has the
authority to take several actions regarding outstanding
Incentives upon the occurrence of a Significant
Transaction, including requiring that outstanding
options remain exercisable only for a limited time,
providing for mandatory conversion of outstanding
options in exchange for either a cash payment or Common
Stock, making equitable adjustments to Incentives or
providing that outstanding options will become options
relating to securities to which a participant would have
been entitled in connection with the Significant
Transaction if the options had been exercised.
As of the date of the Prospectus, options to
purchase 110,500 shares of Common Stock have been
granted under the 1996 Plan to employees of the Company,
including currently exercisable options to purchase
10,000 shares to each of Messrs. Fairley, Palmer and
Perez that have a ten-year term and an exercise price of
$16.00 per share.
1993 Stock Option Plan. The Company's 1993 Stock
Option Plan was adopted in October 1993 (the "1993
Plan") and provides for the granting of "incentive stock
options," as such term is defined in Section 422 of the
Internal Revenue Code, and nonqualified stock options,
each in such amounts, on such terms, and to such Company
employees as the Compensation Committee may determine.
A total of 727,512 shares are reserved for issuance
pursuant to the 1993 Plan.
All options are nontransferable other than by will
or pursuant to the laws of descent and distribution.
Options are exercisable only while the optionee is
employed by the Company (or under certain circumstances
for a short time thereafter). If an optionee becomes
disabled or dies while employed by the Company the
option is exercisable prior to the last day of the
twelfth month following the date of termination of such
optionee's employment. Any option which is exercisable
following termination of employment is exercisable only
to the extent that such option was exercisable on the
termination date. All options granted under the 1993
Plan expire ten years from the date of grant and have an
exercise price equal to the fair market value of the
Common Stock at the date of grant.
As of the date of the Prospectus, options to
purchase 727,512 shares of Common Stock have been
granted under the 1993 Plan, including options to
purchase 252,107 shares to Mr. Fairley, 252,107 shares
to Mr. Palmer and 151,265 shares to Mr. Perez. All of
the options granted as of the date of the Prospectus
under the 1993 Plan are currently exercisable, have a
ten year term and an exercise price of $1.82 per share.
Noncompetition, Nondisclosure and Severance Agreements
All officers of the Company serve at the
discretion of the Company's Board of Directors.
However, the Company entered into Noncompetition,
Nondisclosure and Severance Agreements with certain
members of senior management which generally provide
that such officers shall not, during the period of their
employment with the Company and for one year thereafter,
engage in any capacity in a business substantially
similar to that of the Company, request or cause any
Company customer to cancel or terminate any business
relationship with the Company or attempt to persuade any
Company employee or consultant to terminate his, her or
its relationship with the Company. These agreements
also prohibit the disclosure of confidential information
and provide severance benefits under certain
circumstances. If the officer's employment is
terminated for any reason other than cause, defined as
(i) a conviction or a plea of nolo contendere to a
felony, (ii) gross negligence in the performance of the
officer's duties, continuing after the officer's receipt
of notice of such gross negligence from the Company,
(iii) a material violation of the noncompetition,
nondisclosure and severance agreement or (iv) gross
misconduct on the officer's part that is injurious to
the Company, he will receive one year's salary, any cash
bonus still payable from the year preceding the
officer's termination and any non-cash benefits that he
received prior to termination. The officer will receive
the same severance package in the event of a change in
control that is not initiated by someone who is or has
been an employee of the Company. In the case of a
change in control initiated by a present or past Trico
employee, the officer has the option either to receive
the severance package or continue in his position with
the Company.
Limitation of Directors' Liability and Indemnification
In accordance with the Delaware General
Corporation Law, the Company's Certificate of
Incorporation (the "Certificate") contains provisions
eliminating the personal liability of the directors to
the Company and its stockholders for monetary damages
for breaches of their fiduciary duties as directors to
the fullest extent permitted by Delaware law. By virtue
of these provisions, under current Delaware law a
director of the Company will not be personally liable
for monetary damages for a breach of his or her
fiduciary duty except for liability for (a) a breach of
his or her duty of loyalty to the Company or to its
stockholders, (b) acts or omissions not in good faith or
that involve intentional misconduct or a knowing
violation of law, (c) dividends or stock repurchases or
redemptions that are unlawful under Delaware law and (d)
any transaction from which he or she receives an
improper personal benefit. In addition, the Certificate
provides that if Delaware law is amended to authorize
the further elimination or limitation of the liability
of a director, then the liability of the directors shall
be eliminated or limited to the fullest extent permitted
by Delaware law, as amended. These provisions pertain
only to breaches of duty by directors as directors and
not in any other corporate capacity, such as officers,
and limit liability only for breaches of fiduciary
duties under Delaware corporate law and not for
violations of other laws such as the federal securities
laws.
As a result of the inclusion of such provisions,
stockholders may be unable to recover monetary damages
against directors for actions taken by them that
constitute negligence or gross negligence or that are in
violation of their fiduciary duties, even though it may
be possible to obtain injunctive or other equitable
relief with respect to such actions. If equitable
remedies are found not to be available to stockholders
in any particular case, stockholders may not have any
effective remedy against the challenged conduct. These
provisions may have the effect of reducing the
likelihood of derivative litigation against directors
that might have benefitted the Company.
The Company believes that such provisions are
necessary to attract and retain qualified individuals to
serve as directors. In addition, such provisions will
allow directors to perform their duties in good faith
without concern for the application of monetary
liability on a retrospective basis in the event that a
court determines their conduct to have been negligent or
grossly negligent.
The Company's Bylaws require the Company to
indemnify its officers and directors against expenses
and costs, judgments, settlements and fines incurred in
the defense of any claim, including any claim brought by
or in the right of the Company, to which they were made
parties by reason of being or having been officers or
directors.
In addition, each of the Company's directors has
entered into an indemnity agreement that provides that
the Company will indemnify the directors against any
costs and expenses, judgments, settlements and fines
incurred in connection with any claim involving a
director by reason of his position as a director;
provided that the director meets certain standards of
conduct for claims that (i) have been successfully
defended or (ii) two impartial directors have determined
with respect to the conduct giving rise to such claim,
that the officer or director acted in good faith. No
indemnification may be made, however, for claims in
which the officer or director has been adjudicated in a
final judgment to be liable to the Company except to the
extent that the court finds indemnification to be
proper.
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth as of October 15,
1996 certain information regarding beneficial ownership
of the Common Stock by (i) each stockholder known by the
Company to be the beneficial owner of more than 5% of
the outstanding Common Stock after giving effect to the
Offering, (ii) each director of the Company, (iii) each
of the Company's executive officers, (iv) all of the
Company's directors and executive officers as a group
and (v) the Selling Stockholders. Unless otherwise
indicated, the Company believes that the stockholders
listed below have sole investment and voting power with
respect to their shares based on information furnished
to the Company by such owners.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to Owned Prior to
Offering<F2> Offering<F2><F3>
_________________________ Shares to ________________________
Name of beneficial owner<F1> Number Percent be Sold Number Percent
____________________________ ______________ __________ ___________ ___________ ___________
<S> <C> <C> <C> <C> <C>
Berkshire Fund III, A 1,961,762 27.6% 1,296,930 664,832 8.9%
Limited Partnership
Thomas E. Fairley 356,949<F4> 4.8% - 356,949<F4> 4.6%
Ronald O. Palmer 356,949<F4> 4.8% - 356,949<F4> 4.6%
Benjamin F. Bailar 23,032 * - 23,032 *
Carl Ferenbach 2,081,232<F5> 29.3% 1,350,000<F5>731,232<F5> 9.8%
Garth H. Greimann 2,081,232<F6> 29.3% 1,350,000<F6>731,232<F6> 9.8%
Edward C. Hutcheson, Jr. 23,032 * - 23,032 *
Victor M. Perez 167,009<F7> 2.3% - 167,009<F7> 2.2%
Michael D. Cain 29,317<F8> * - 29,317<F8> *
Kenneth W. Bourgeois 29,317<F8> * - 29,317<F8> *
Bradley M. Bloom 16,462 * 10,883 5,579 *
Caroline M. Clifford Present
Interest Trust 5,488 * 3,628 1,860 *
Catherine K. Clifford Present
Interest Trust 5,488 * 3,628 1,860 *
John C. Clifford Present
Interest Trust 5,485 * 3,626 1,859 *
Russell L. Epker 16,462 * 10,883 5,579 *
Richard K. Lubin Daughters'
Trusts 16,458 * 10,880 5,578 *
Kevin T. Callaghan 6,141 * 4,060 2,081 *
Jane Brock-Wilson 6,141 * 4,060 2,081 *
Robert J. Small 717 * 474 243 *
Ian K. Loring 717 * 474 243 *
Ross M. Jones 717 * 474 243 *
Dawson-Samberg Capital
Management, Inc.<F10> 425,900 6.0% - 425,900 5.7%
All directors and executive
as a group(9 persons) 3,066,837<F9> 39.1% 1,350,000<F9>1,716,837<F9>20.9%
</TABLE>
___________________________
* Less than one percent
<F1> The address of Berkshire Fund III, A Limited Partnership, Mr.
Ferenbach and Mr. Greimann is c/o Berkshire Partners LLC, One
Boston Place, Boston, Massachusetts 02108. The address of Mr.
Fairley is c/o Trico Marine Services, Inc., 610 Palm Street,
Houma, Louisiana 70364. The address of Mr. Palmer is c/o Trico
Marine Services, Inc., 2401 Fountainview, Suite 626, Houston,
Texas 77057. The address of Dawson-Samberg Capital Management,
Inc. is 354 Pequot Avenue, Southport, Connecticut 06490.
<F2> Shares subject to options exercisable within 60 days of September
30, 1996 are deemed outstanding for computing the percentage of
Common Stock owned by a person holding such options and for the
percentage owned by all directors and executive officers as a
group but are not deemed outstanding for computing the ownership
percentage of any other person.
<F3> The difference reflected in the table above from the amounts
shown as being owned prior to the Offering is attributable solely
to shares of Common Stock that will be sold by the Selling
Stockholders in the Offering. Messrs. Fairley, Palmer, Perez,
Bourgeois, Cain, Hutcheson and Bailar have agreed to sell,
collectively, the first 206,500 shares (approximately 20 % of the
shares of Common Stock owned by each of them, except in the case
of Messrs. Hutcheson and Bailar) of Common Stock required to
cover over-allotments, if any. Berkshire has agreed to sell up
to the remaining 93,500 shares to cover over-allotments, if any.
<F4> Includes options to purchase 262,107 shares which are currently
exercisable, and 17,724 shares owned by Trico Nautical, Inc., a
corporation controlled by Messrs. Fairley and Palmer.
<F5> Includes 1,961,762 and 664,832 shares, respectively, which may be
deemed to be beneficially owned by Mr. Ferenbach as a result of
his relationship with Berkshire Fund III, A Limited Partnership,
and 90,904 and 37,834 shares, respectively, held by Berkshire
affiliates from whom Mr. Ferenbach has a power of attorney with
respect to such shares. Mr. Ferenbach disclaims beneficial
ownership of such shares. All shares listed under "Shares to be
Sold" are such shares.
<F6> Includes 1,961,762 and 664,832 shares, respectively, which may be
deemed to be beneficially owned by Mr. Greimann as a result of
his relationship with Berkshire Fund III, A Limited Partnership
and 108,842 and 55,772 shares, respectively, held by Berkshire
affiliates from whom Mr. Greimann has a power of attorney with
respect to such shares. Mr. Greimann disclaims beneficial
ownership of such shares. All shares listed under "Shares to be
Sold" are such shares.
<F7> Includes options to purchase 161,265 shares which are currently
exercisable.
<F8> Includes options to purchase 24,406 shares which are currently
exercisable.
<F9> Includes 2,042,038 and 692,038 shares respectively, which may be
deemed to be beneficially owned by certain directors as a result
of their relationship with Berkshire. Beneficial ownership of
such shares is disclaimed. All shares listed under "Shares to be
Sold" are such shares. Also includes options to purchase 734,291
shares which are currently exercisable.
<F10>Dawson-Samberg Capital Management, Inc. through its affiliates
shares investment and voting power with respect to all the shares
indicated, based on copies of filings made with the Securities
and Exchange Commission provided to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management Agreement
On October 29, 1993, the Company entered into a
management agreement with Berkshire pursuant to which
the Company paid a monthly fee of $16,666 and reimbursed
Berkshire for its out of pocket expenses in exchange for
management and other consulting services rendered by
Berkshire in the areas of financial and strategic
corporate planning. In addition, pursuant to the
management agreement, Berkshire received a financial
advisory fee of $370,000 in October 1993. Upon
consummation of the Company's initial public offering,
the management agreement was terminated, and the Company
is no longer required to pay the monthly fee.
Stockholder Notes
The Company issued approximately $10.8 million in
aggregate principal amount of its 9% subordinated notes
to those shareholders who purchased Common Stock prior
to the initial public offering (the "Initial
Shareholders") in amounts proportionate to such
stockholders' equity investment in the Company, of which
$9,445,171 was issued to Berkshire Fund III, A Limited
Partnership, $226,700 to Trico Nautical Inc., a
corporation owned by Messrs. Fairley and Palmer,
$112,490 to each of Messrs. Fairley and Palmer, $79,391
to Mr. Ferenbach, $66,665 to each of Messrs. Bailar and
Hutcheson, $29,538 to Mr. Greimann, $16,667 to Mr. Perez
and $12,900 to each of Messrs. Cain and Bourgeois.
Interest on the 9% subordinated notes was payable
semiannually in additional 9% subordinated notes equal
to 100% of the aggregate amount of interest due. As a
result, the Company had approximately $13.5 million
principal amount of 9% subordinated notes outstanding at
the time of the Company's initial public offering.
The Company repaid approximately $6.0 million of
indebtedness under its 9% subordinated notes owned by
Berkshire with proceeds from the Company's initial
public offering. All of the approximately $7.5 million
of indebtedness that remained under the 9% subordinated
notes was exchanged for a number of shares of Common
Stock equal to such amount divided by the initial public
offering price per share. Berkshire received
approximately 409,324 of the approximate 467,613 shares
issued upon the conversion of the 9% subordinated notes.
Shareholders Agreement
The Company has entered into an agreement (the
"Shareholders Agreement") with all of the Initial
Shareholders, pursuant to which such holders have
limited rights to require the Company to register such
shares under the Securities Act. Under the Shareholders
Agreement, Berkshire is entitled to two demand
registration rights, upon the request of holders of at
least 50% of the stock held by Berkshire; provided that
Berkshire agrees to register at least $10 million worth
of Common Stock in such offering. If Berkshire makes
such a demand, all other Initial Shareholders are
entitled to include their shares in such registration.
If the Company proposes to register any Common
Stock under the Securities Act in connection with a
public offering, all of the Initial Shareholders,
including Berkshire, may require the Company to include
all or a portion of the holder's shares issued prior to
the initial public offering. The Company has agreed to
pay all the expenses of any registration under the
Shareholders Agreement, other than underwriters'
discounts and commissions. In accordance with the terms
of the Shareholders Agreement, the Company will pay all
expenses of the Selling Stockholders in connection
with the Offering except underwriting discounts and
commissions.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company
consists of 15 million shares of common stock, $.01 par
value per share (the "Common Stock"), and 5 million
shares of preferred stock, $.01 par value per share,
issuable in series (the "Preferred Stock"). As of
October 15, 1996, 6,811,439 shares of Common Stock were
outstanding and held by approximately 40 holders of
record, and no shares of Preferred Stock were
outstanding. The following description of the capital
stock of the Company is qualified in its entirety by
reference to the Company's Certificate of Incorporation
(the "Certificate") and Bylaws, copies of which are
filed or incorporated by reference as exhibits to the
registration statement of which this Prospectus forms a
part.
Common Stock
Each holder of Common Stock is entitled to one
vote for each share of Common Stock held of record on
all matters on which stockholders are entitled to vote;
stockholders may not cumulate votes for the election of
directors. Subject to any preferences accorded to the
holders of the Preferred Stock, if and when issued by
the Board of Directors, holders of Common Stock are
entitled to dividends at such times and in such amounts
as the Board of Directors may determine. The Company
has never paid cash dividends on its Common Stock and
does not intend to pay dividends for the foreseeable
future. In addition, the Company's credit arrangements
contain provisions which prohibit the Company from
paying dividends on its Common Stock. See "Risk Factors
- -- Dividends." Upon the dissolution, liquidation or
winding up of the Company, after payment of debts,
expenses and the liquidation preference plus any accrued
dividends on any outstanding shares of Preferred Stock,
the holders of Common Stock will be entitled to receive
all remaining assets of the Company ratably in
proportion to the number of shares held by them.
Holders of Common Stock have no preemptive, subscription
or conversion rights and are not subject to further
calls or assessments, or rights of redemption by the
Company. The outstanding shares of Common Stock are,
and the shares of Common Stock being sold in the
Offering will be, validly issued, fully paid and
nonassessable.
Preferred Stock
The Company's Board of Directors has the
authority, without approval of the stockholders, to
issue shares of Preferred Stock in one or more series
and to fix the number of shares and rights, preferences
and limitations of each series. Among the specific
matters that may be determined by the Board of Directors
are the dividend rights, the redemption price, if any,
the terms of a sinking fund, if any, the amount payable
in the event of any voluntary liquidation, dissolution
or winding up of the affairs of the Company, conversion
rights, if any, and voting powers, if any.
One of the effects of the existence of authorized
but unissued Common Stock and undesignated Preferred
Stock may be to enable the Board of Directors to make
more difficult or to discourage an attempt to obtain
control of the Company by means of a merger, tender
offer, proxy contest or otherwise, and thereby to
protect the continuity of the Company's management. If,
in the exercise of its fiduciary obligations, the Board
of Directors were to determine that a takeover proposal
was not in the Company's best interest, such shares
could be issued by the Board of Directors without
stockholder approval in one or more transactions that
might prevent or make more difficult or costly the
completion of the takeover transaction by diluting the
voting or other rights of the proposed acquiror or
insurgent stockholder group, by creating a substantial
voting block in institutional or other hands that might
undertake to support the position of the incumbent Board
of Directors, by effecting an acquisition that might
complicate or preclude the takeover, or otherwise. In
this regard, the Company's Certificate grants the Board
of Directors broad power to establish the rights and
preferences of the authorized and unissued Preferred
Stock, one or more series of which could be issued
entitling holders (i) to vote separately as a class on
any proposed merger or consolidation, (ii) to cast a
proportionately larger vote together with the Common
Stock on any such transaction or for all purposes, (iii)
to elect directors having terms of office or voting
rights greater than those of other directors, (iv) to
convert Preferred Stock into a greater number of shares
of Common Stock or other securities, (v) to demand
redemption at a specified price under prescribed
circumstances related to a change of control or (vi) to
exercise other rights designated to impede a takeover.
The issuance of shares of Preferred Stock pursuant to
the Board of Directors' authority described above may
adversely effect the rights of holders of the Common
Stock.
In addition, certain other charter provisions that
are described below may have the effect of either alone,
in combination with each other, or with the existence of
authorized but unissued capital stock of making more
difficult or discouraging an acquisition of the Company
deemed undesirable by the Board of Directors.
Certain Charter and Bylaw Provisions
Classified Board of Directors. The Company's
Certificate and Bylaws divide the members of the Board
of Directors into three classes of directors with each
class to be as nearly equal in number of directors as
possible, serving staggered three-year terms. See
"Management -- Executive Officers and Directors."
Size of the Board of Directors; Removal of
Directors; Filing of Vacancies on the Board of
Directors. The Company's Certificate and Bylaws provide
that the number of directors shall be fixed from time to
time by the Board of Directors, but shall not be fewer
than the number required by Delaware law. Under the
Company's Certificate, a vote of 80% of the outstanding
shares of capital stock entitled to vote generally in an
election of directors (the "Voting Stock") is required
to remove a director, and a director may only be so
removed for cause involving fraud or a violation of the
duty of loyalty as determined by a final judgment of a
court of competent jurisdiction. The Company's
Certificate and Bylaws also provide that a newly created
directorship resulting from an increase in the number of
directors may be filled by the Board of Directors and
any vacancies on the Board of Directors resulting from
death, resignation, removal or other cause may be filled
only by the affirmative vote of both (a) a majority of
the remaining directors then in office and (b) a
majority of all Continuing Directors (as defined below),
voting as a separate group. In addition, these
provisions specify that any director elected to fill a
vacancy on the Board of Directors will serve for the
remainder of the full term of the class of directors in
which the new directorship was created or in which the
vacancy occurred.
Stockholder Action by Unanimous Consent. Under
Delaware law, unless a corporation's certificate of
incorporation specifies otherwise, most action that
could be taken by its stockholders at an annual or
special meeting may be taken, instead, without a meeting
and without notice to or a vote of other stockholders,
if a consent in writing is signed by holders of
outstanding stock having voting power that would be
sufficient to take such action at a meeting at which all
outstanding shares were present and voted. The
Company's Certificate provides that stockholder action
may be taken only at an annual or special meeting of
stockholders or by unanimous written consent. As a
result, stockholders may not act upon any matter except
at a duly called meeting or by unanimous written
consent.
Amendment of the Bylaws. Under Delaware law, the
power to adopt, amend or repeal bylaws is conferred upon
the stockholders; however, a corporation may in its
certificate of incorporation also confer upon the board
of directors the power to adopt, amend or repeal its
bylaws. The Company's Certificate and Bylaws grant the
Board of Directors the power to adopt, amend and repeal
the Bylaws at any regular or special meeting of the
Board of Directors but only upon the affirmative vote of
both (i) a majority of the directors then in office and
(ii) a majority of the Continuing Directors, voting as a
separate group. The Company's stockholders may adopt,
amend or repeal the Bylaws but only at any regular or
special meeting of stockholders by an affirmative vote
of 80% of the Voting Stock.
Advance Notice of Stockholder Nominations and
Stockholder Business. The Company's Bylaws permit
stockholders to nominate a person for election as a
director or bring other matters before a stockholders'
meeting only if such stockholder has been, for at least
one year, the beneficial owner of at least 1% of Voting
Stock and only if written notice of such intent to
nominate or bring business before a meeting is given as
described below.
The notice from a stockholder intending to
nominate a person for election as a director or to
propose other matters at a stockholders' meeting must be
furnished to the Company's Secretary not more than 270
days and not less than 60 days in advance of the first
anniversary of the preceding year's annual stockholders'
meeting, subject to certain exceptions applicable
principally to special meetings. In addition, the
notice must contain information, including the name, age
and address of the stockholder proposing such action and
any persons acting in concert with such stockholder, the
number of shares of Voting Stock held by the stockholder
and the dates such stock was acquired, and a
representation by such stockholder that he or she is a
holder of record of the Company's capital stock and
intends to appear at the meeting in person and make the
nomination or bring up the specified matter.
In the case of nominations for directors, the
notice must also include (i) the name, age, address and
principal occupation of each nominee, (ii) a description
of all arrangements between the nominating stockholder
and each nominee, (iii) other information required to be
included in a proxy statement pursuant to the proxy
rules of the Securities and Exchange Commission and (iv)
the consent of each nominee to serve as a director of
the Company if elected and an affidavit of each such
nominee certifying that such nominee meets the
qualifications necessary to serve as a director of the
Company. In the case of other proposed business, the
notice must set forth a brief description of the
business, the reasons for conducting such business at
the meeting and any material interest of the stockholder
therein. The Chairman of the stockholders' meeting will
have the power to disregard any nomination or other
matter that fails to comply with these procedures. In
addition, the Company's Secretary may require any
stockholders submitting a notice of intent to make a
nomination or bring up other business to furnish such
documentary information as may be necessary to determine
that such stockholder has been for at least one year the
beneficial owner of at least 1% of the Voting Stock.
With respect to any proposal by a stockholder to
bring before a meeting any matter other than the
nomination of directors, the Company's Bylaws provide
that the Company may disregard proposals that (i) are
substantially duplicative of a prior-received proposal
to be voted upon at an upcoming meeting, (ii) deal with
substantially the same subject matter as a prior
proposal that was voted upon within the preceding five
years and that failed to receive affirmative votes in
excess of certain specified levels, which range,
depending on the circumstances, between 3% and 10% or
(iii) in the judgment of the Board of Directors, are not
proper subjects for action by stockholders under
Delaware law.
Amendment of Certain Provisions of the Certificate
of Incorporation. Under Delaware law, unless the
certificate of incorporation specifies otherwise, a
corporation's certificate of incorporation may be
amended by the affirmative vote of the majority of the
stockholders. The Company's Certificate requires the
affirmative vote of 80% of the Voting Stock to amend,
alter or repeal certain provisions of the Certificate
regarding (i) stockholder unanimous written consents,
(ii) the classification, filling of vacancies and
removal of members of the Board of Directors, (iii) the
limitation of liability of directors, (iv) business
combinations and (v) amendments to the Certificate and
the Bylaws.
Special Meetings of the Stockholders. The
Company's Bylaws permit the stockholders to call special
meetings of the stockholders only upon the written
request to the Company's Secretary of the beneficial
owners of at least 25% of the outstanding Voting Stock.
This provision requires the request to set forth a brief
description of the action proposed to be taken at such
special meeting and the reasons for the action, the name
and address of each beneficial owner composing the group
making the request, any material interest that each such
person making the request may have in the matter, the
number of shares of Voting Stock of which each such
person is the beneficial owner and the dates upon which
each person acquired his or her stock, a representation
that at least one such beneficial owner or a
representative thereof intends to appear in person at
such meeting to propose the action specified in the
request and, if the proposed action includes a proposal
to amend the Company's Certificate or Bylaws, the
language of the proposed amendment. The Secretary may
require any person or persons submitting a request to
furnish documentary support of the claim that the person
or persons as a group beneficially owns at least 25% of
the outstanding Voting Stock. The Secretary may also
refuse to call a special meeting unless the request is
made in compliance with the foregoing procedures.
Business Combinations. Delaware law provides that
a merger, sale of substantially all of the assets or
dissolution of a company requires the approval of the
holders of a majority of the outstanding capital stock.
Pursuant to the Company's Certificate, if one of these
transactions or certain issuances, reclassifications or
other transactions affecting the Company's capital stock
involves an Interested Stockholder (as defined below),
the transaction must be approved (i) by a majority of
both the directors then in office and a majority of the
Continuing Directors (as defined below), voting as a
separate group and (ii) by the affirmative vote of (A)
the holders of 80% of the Voting Stock, voting together
as a single class, and (B) 75% of the Voting Stock other
than Voting Stock beneficially owned by the Interested
Stockholder. An Interested Stockholder is any person
who (i) is a beneficial owner of 10% of the Voting Stock
or (ii) is an affiliate of the Company and, at any time
within two years prior to the date in question, was a
beneficial owner of 10% or more of the then outstanding
Voting Stock, other than the Company or its
subsidiaries, or any person owning any shares of the
capital stock of the Company as of the date of filing of
the Company's Certificate and any person whose
beneficial ownership of any capital of the Company
arises solely as a result of a trusteeship or a
custodial relationship with any employee stock ownership
or other employee benefit plan of the Company. A
Continuing Director is any member of the Board of
Directors who is not an Interested Stockholder or an
affiliate thereof and (i) was a director prior to the
time the Interested Stockholder became an Interested
Stockholder or (ii) was recommended or elected by a
majority of the Continuing Directors at a meeting at
which a quorum consisting of a majority of the
Continuing Directors was present. In the absence of an
Interested Stockholder, the Continuing Directors shall
mean all the directors then in office.
This additional voting requirement does not apply
if the transaction has been approved by a majority of
the Continuing Directors, or if all of the following
conditions have been met: (i) the aggregate amount of
consideration received per share by the holders meet
certain "fair price" criteria, (ii) prior to the
consummation of the transaction (a) there has been no
failure to declare or pay dividends on any outstanding
Preferred Stock or Common Stock, (b) the Interested
Stockholder has not received the benefits (except
proportionately as a stockholder) of any loans, advances
or other financial assistance or tax advantages provided
by the Company, and (c) the Interested Stockholder has
not caused any material change in the Company's equity
capital structure and (iii) the Interested Stockholder
has not become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction
that resulted in such Interested Stockholder becoming an
Interested Stockholder or as a result of a pro rata
stock dividend.
The Company is also subject to Section 203 of the
Delaware General Corporation Law, which prohibits
Delaware corporations from engaging in a wide range of
specified transactions with any interested stockholder,
defined to include, among others, any person other than
such corporation and any of its majority-owned
subsidiaries who own 15% or more of any class or series
of stock entitled to vote generally in the election of
directors, unless, among other exceptions, the
transaction is approved by (i) the Board of Directors
prior to the date the interested stockholder obtained
such status or (ii) the holders of two-thirds of the
outstanding shares of each class or series of stock
entitled to vote generally in the election of directors,
not including those shares owned by the interested
stockholder.
The provisions described above may tend to deter
any potential unfriendly offers or other efforts to
obtain control of the Company that are not approved by
the Board of Directors and thereby deprive the
stockholders of opportunities to sell shares of Common
Stock at prices higher than the prevailing market price.
On the other hand, these provisions will tend to assure
continuity of management and corporate policies and to
induce any person seeking control of the Company or a
business combination with the Company to negotiate on
terms acceptable to the then elected Board of Directors.
Limitations on Foreign Ownership of Company Stock.
The Company's Certificate contains provisions designed
to assure that not more than 24% of its outstanding
shares of Common Stock are owned by persons who are not
U.S. citizens. The Certificate provides that any
transfer or purported transfer of shares of Common Stock
that would result in the ownership by persons who are
not U.S. citizens of more than 24% of the then
outstanding shares of Common Stock will not become
effective against the Company and the Company has the
power to deny voting and dividend rights with respect to
such shares and, at its option, to redeem such shares.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common
Stock is Chemical Mellon Shareholder Services, L.L.C.
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the
Underwriting Agreement, each of the Underwriters named
below, and each of the Underwriters for whom Schroder
Wertheim & Co. Incorporated, Raymond James & Associates,
Inc. and Simmons & Company International are acting as
Representatives (the "Representatives") has severally
agreed to purchase from the Company and the Selling
Stockholders an aggregate of 2,000,000 shares of Common
Stock at the price to public less the underwriting
discounts set forth on the cover page of this
Prospectus, in the amounts set forth below opposite
their respective names.
Underwriters Number of shares to be
purchased
_______________ _______________________
Schroder Wertheim & Co. Incorporated
Raymond James & Associates, Inc.
Simmons & Company International
________________
Total 2,000,000
================
The Underwriting Agreement provides that the
Underwriters' obligation to pay for and accept delivery
of the shares of Common Stock offered hereby is subject
to certain conditions precedent and that the
Underwriters will be obligated to purchase all such
shares, excluding shares covered by the over-allotment
option, if any are purchased. The Underwriters have
informed the Company that no sales of Common Stock will
be confirmed to discretionary accounts.
The Company has been advised by the Underwriters
that they propose initially to offer the Common Stock to
the public at the public offering price set forth on the
cover page of this Prospectus and to certain dealers at
such price, less a concession not in excess of $
per share. The Underwriters may allow and such dealers
may reallow a concession not in excess of $
per share to certain other brokers and dealers. After
the Offering, the public offering price, the concession
and reallowances to dealers and other selling terms may
be changed by the Underwriters.
The Selling Stockholders have granted to the
Underwriters an option exercisable for 30 days after the
date of this Prospectus to purchase up to 300,000
additional shares of Common Stock to cover
overallotments, if any, at the same price per share to
be paid by the Underwriters for the other shares of
Common Stock offered hereby. If the Underwriters
purchase any such additional shares pursuant to the
overallotment option, each Underwriter will be
committed, subject to certain conditions, to purchase a
number of the additional shares of Common Stock
proportionate to such Underwriter's initial commitment.
The Company, its directors and executive officers,
and certain stockholders who will beneficially own an
aggregate of 1,671,907 shares of the Common Stock
outstanding after the Offering (including shares
issuable upon currently exercisable options) have agreed
with the Representatives, for a period of 120 days after
the date of this Prospectus, not to issue, sell, offer
to sell, grant any options for the sale of, or otherwise
dispose of any shares of Common Stock or any rights to
purchase shares of Common Stock (other than stock issued
or options granted pursuant to the Company's stock
incentive plans and stock sold pursuant to the exercise
of the option granted to the Underwriters to cover over-
allotments), without the prior written consent of the
Representatives.
The Company and the Selling Stockholders have
agreed to indemnify the Underwriters against certain
liabilities that may be incurred in connection with the
sale of the Common Stock, including liabilities arising
under the Securities Act, and to contribute to payments
that the Underwriters may be required to make with
respect thereto.
In connection with the Offering, certain
Underwriters and selling group members who are
qualifying registered market makers on the Nasdaq
National Market may engage in passive market making
transactions in the Common Stock on the Nasdaq National
Market in accordance with Rule 10b-6A under the
Securities Exchange Act of 1934, during the two business
day period before commencement of offers or sales of the
Common Stock offered hereby. Passive market making
transactions must comply with certain volume and price
limitations and be identified as such. In general, a
passive market maker may display its bid at a price not
in excess of the highest independent bid for the
security, and if all independent bids are lowered below
the passive market maker's bid, then such bid must be
lowered when certain purchase limits are exceeded.
NOTICE TO ONTARIO RESIDENTS
The distribution of the shares of Common Stock in
the Province of Ontario, Canada is being made only on a
private placement basis and is exempt from the
requirement that the Company prepare and file a
prospectus with the relevant Canadian securities
regulatory authorities. Accordingly, any resale of the
shares of Common Stock must be made in accordance with
applicable securities laws, which may require resales to
be made in accordance with exemptions from registration
and prospectus requirements. Purchasers are advised to
seek legal advice prior to any resale of the shares of
Common Stock.
Each Ontario purchaser who receives a purchase
confirmation regarding the purchase of shares of Common
Stock will be deemed to represent to the Company and to
the dealer from whom such confirmation is received that
such purchaser is entitled under applicable Ontario
securities laws to purchase such shares of Common Stock
without the benefit of a prospectus qualified under such
securities law.
Ontario purchasers of shares of Common Stock
should consult their own legal and tax advisors with
respect to the tax consequences of an investment in the
shares of Common Stock in their particular circumstances
and with respect to the eligibility of the shares of
Common Stock for investment by the purchaser under
relevant Canadian legislation.
The securities being offered are those of a
foreign issuer and Ontario purchasers will not receive
the contractual right of action prescribed by Section 32
of the Regulation under the Securities Act (Ontario).
As a result, Ontario purchasers must rely on other
remedies that may be available, including common law
rights of action for damages or recision or rights of
action under the civil liability provisions of the U.S.
federal securities laws.
All of the Company's directors and officers as
well as the experts named herein may be located outside
of Canada and, as a result, it may not be possible for
Ontario purchasers to effect service of process within
Canada upon the Company or such persons. All or a
substantial portion of the assets of the Company and
such persons may be located outside of Canada and, as a
result, it may not be possible to satisfy a judgment
against the Company or such persons in Canada or to
enforce a judgment obtained in Canadian courts against
the Company or persons outside of Canada.
LEGAL MATTERS
The validity of the Common Stock offered hereby
will be passed upon for the Company by Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., New
Orleans, Louisiana. Vinson & Elkins L.L.P., Houston,
Texas, will pass upon certain legal matters for the
Underwriters.
EXPERTS
The consolidated balance sheet as of December 31,
1995 and 1994 and the consolidated statements of
operations, stockholders' equity and cash flows for the
years ended December 31, 1995 and 1994 and the period
from October 29, 1993 to December 31, 1993 of the
Company and the statement of revenues less direct
operating expenses for the period January 1, 1993
through October 28, 1993 of the Acquired Vessels
included in this Prospectus, and related financial
statement schedule have been included herein in reliance
on the reports of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as
experts in accounting and auditing.
AVAILABLE INFORMATION
The Company has filed with the Securities and
Exchange Commission (the "Commission") a Registration
Statement on Form S-1 (the "Registration Statement")
under the Securities Act with respect to the Common
Stock being offered pursuant to this Prospectus. This
Prospectus does not contain all information set forth in
the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of
the Commission. Statements contained herein concerning
the provisions of any documents are not necessarily
complete and, in each instance, reference is made to the
copy of such document filed or incorporated by reference
as an exhibit to the Registration Statement.
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other
information with the Commission. The Registration
Statement, as well as such reports, proxy statements and
other information filed with the Commission by the
Company can be inspected and copied at the public
reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, and at the regional offices of the
Commission at the following locations: New York
Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10048 and Chicago Regional Office, 500
West Madison Street, Suite 1400, Chicago, Illinois
60621-2511. Copies of such material may be obtained
from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, DC 20549, at
prescribed rates. The Commission maintains a Web site
that contains reports, proxy and information statements
and other information regarding issuers that file
electronically with the Commission (http://www.sec.gov).
The Company's Common Stock is traded on the Nasdaq
National Market. Reports, proxy statements and other
information may also be inspected at the offices of the
National Association of Securities Dealers, Inc. at 1735
K Street, N.W., Washington, D.C. 20006.
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
CONSOLIDATED FINANCIAL STATEMENTS:
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES AND THE
ACQUIRED VESSELS
Report of Independent Accountants........................... F-2
Consolidated Balance Sheet at December 31, 1995 and
1994........................................................ F-3
Consolidated Statement of Operations for the years ended
December 31, 1995 and 1994 and the period October 29, 1993
through December 31, 1993................................... F-4
Statement of Revenues less Direct Operating Expenses of the
Acquired Vessels for the period January 1, 1993 through
October 28, 1993............................................ F-4
Consolidated Statement of Stockholders' Equity for the years
ended December 31, 1995 and 1994 and the period October 29,
1993 through December 31, 1993.............................. F-5
Consolidated Statement of Cash Flows for the years ended
December 31, 1995 and 1994 and the period October 29, 1993
through December 31, 1993................................... F-6
Notes to Consolidated Financial Statements.................. F-7
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED):
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheet at June 30, 1996 and
December 31, 1995............................................ F-17
Consolidated Statement of Operations for the six months
ended June 30, 1996 and 1995................................. F-18
Consolidated Statement of Cash Flows for the six months
ended June 30, 1996 and 1995................................. F-19
Notes to Consolidated Financial Statements................... F-20
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of Trico Marine Services, Inc.:
We have audited the accompanying consolidated balance sheet
of Trico Marine Services, Inc. and Subsidiaries (the "Company") as of
December 31, 1995 and 1994, and the related consolidated statements of
operations, stockholders' equity and cash flows for the years ended
December 31, 1995 and 1994 and the period October 29, 1993 through
December 31, 1993, and the statement of revenues less direct operating
expenses of the fleet of forty-nine vessels acquired by Trico Marine
Services, Inc. ("Acquired Vessels") as more fully described in Note 1
for the period January 1, 1993 through October 28, 1993.
These financial statements are the responsibility of the Company'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 audits 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 management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
The accompanying statement of revenues less direct operating expenses of the
Acquired Vessels was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in the
registration statement on Form S-1 of Trico Marine Services, Inc.) as
described in Note 1 and are not intended to be a complete presentation of the
results of operations for the Acquired Vessels.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Trico Marine Services, Inc. and Subsidiaries at December 31, 1995 and 1994,
and the results of their operations and their cash flows for the years ended
December 31, 1995 and 1994 and the period October 29, 1993 through December
31, 1993, and the revenues less direct operating expenses of the Acquired
Vessels for the period January 1, 1993 through October 28, 1993, in conformity
with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
New Orleans, Louisiana
March 27, 1996, except for
Note 14 as to which the date is
April 29, 1996
F-2
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
------ 1995 1994
------- -------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 1,117 $ 1,770
Accounts receivable, net.................................. 7,417 7,747
Prepaid expenses and other current assets................. 156 241
------- -------
Total current assets.................................... 8,690 9,758
------- -------
Property and equipment, at cost:
Marine vessels............................................ 44,603 42,494
Transportation and other.................................. 856 432
------- -------
45,459 42,926
Less accumulated depreciation and amortization.............. 6,195 4,418
------- -------
Net property and equipment................................ 39,264 38,508
------- -------
Other assets, net........................................... 4,159 3,153
------- -------
$52,113 $51,419
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable.......................................... $ 3,656 $ 1,988
Accrued expenses.......................................... 2,878 2,220
Current portion of long-term debt......................... 3,000 4,000
------- -------
Total current liabilities............................... 9,534 8,208
------- -------
Long-term debt.............................................. 23,695 23,500
Subordinated debt and accrued interest thereon.............. 13,085 11,952
Deferred income taxes, net.................................. 87 757
------- -------
Total liabilities....................................... 46,401 44,417
------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 15,000,000 shares authorized,
issued 3,123,371 and 3,118,788 shares, outstanding
3,051,339 and 3,046,756 shares at December 31, 1995 and
1994, respectively......................................... 31 31
Additional paid-in capital................................ 5,649 5,640
Retained earnings......................................... 33 1,332
Treasury stock, at par value, 72,032 shares............... (1) (1)
------- -------
Total stockholders' equity.............................. 5,712 7,002
------- -------
$52,113 $51,419
======= =======
</TABLE>
The accompanying notes are integral part of these consolidated financial
statements.
F-3
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 AND THE PERIOD
OCTOBER 29, 1993 THROUGH DECEMBER 31, 1993
ACQUIRED VESSELS
STATEMENT OF REVENUES LESS DIRECT OPERATING EXPENSES
FOR THE PERIOD JANUARY 1, 1993 THROUGH OCTOBER 28, 1993
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMPANY ACQUIRED VESSELS
-------------------------------- ----------------
For the For the
Period period
October 29, January 1,
For the year ended 1993 through 1993 through
December 31, December 31, October 28,
1995 1994 1993 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Charter fees.......................................................... $ 26,657 $ 28,895 $ 6,125 $ 26,871
Other vessel income................................................... 41 139 20 --
--------- --------- --------- --------
Total revenues...................................................... 26,698 29,034 6,145 26,871
--------- --------- --------- --------
Operating expenses:
Direct labor and other operating expenses............................. 16,520 16,458 2,952 15,509
Management fees....................................................... 468 707 90 1,002
General and administrative............................................ 2,509 2,057 256 1,412
Amortization of marine inspection costs............................... 1,930 1,490 222 1,176
Other................................................................. 545 764 33 875
--------- --------- --------- --------
Total operating expenses............................................ 21,972 21,476 3,553 19,974
--------- --------- --------- --------
Revenues less direct operating expenses................................. -- -- -- $ 6,897
======== ========= ========= ========
Depreciating expense.................................................... 2,740 2,786 502
--------- --------- ---------
Operating income........................................................ 1,986 4,772 2,090
Interest expense........................................................ 3,850 3,767 620
Amortization of deferred financing costs................................ 381 344 60
Gain on sale of vessels................................................. (244) -- --
Other income, net....................................................... (32) (51) --
--------- --------- ---------
Income (loss) before income taxes....................................... (1,969) 712 1,410
Income tax expense (benefit)............................................ (670) 226 564
--------- --------- ---------
Net income (loss)....................................................... $ (1,299) $ 486 $ 846
========= ========= =========
Weighted average common shares outstanding.............................. 3,050,688 3,010,285 3,019,609
========= ========= =========
Net income (loss) per average common share outstanding.................. $ (0.43) $ 0.16 $ 0.28
========= ========= =========
</TABLE>
The accompanying notes are an integral part for these consolidated financial
statements.
F-4
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
AND THE PERIOD OCTOBER 29, 1993 THROUGH DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Common Stock Additional Treasury Stock
__________________ Paid-in Retained _______________
Shares Dollars Capital Earnings Shares Par Value
________ _________ ________ _________ _______ _________
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock
on October 29, 1993.... 3,025,300 $30 $5,472 $ -- -- $--
Issuance of common
stock.................. 56,815 1 102 -- -- --
Contribution of treasury
stock.................. -- -- -- -- 72,032 1
Net income.............. -- -- -- 846 -- --
--------- --- ------ ------ ------ ---
Balance, December 31,
1993................... 3,082,115 31 5,574 846 72,032 1
Issuance of common
stock.................. 36,673 -- 66 -- -- --
Net income.............. -- -- -- 486 -- --
--------- --- ------ ------- ------ ---
Balance, December 31,
1994................... 3,118,788 31 5,640 1,332 72,032 1
Issuance of common
stock.................. 4,583 -- 9 -- -- --
Net loss................ -- -- -- (1,299) -- --
--------- --- ------ ------- ------ ---
Balance, December 31,
1995................... 3,123,371 $31 $5,649 $ 33 72,032 $ 1
========= === ====== ======= ====== ===
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
TRICO MARINE SERVICES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 AND
THE PERIOD
OCTOBER 29, 1993 THROUGH DECEMBER 31,
1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 29,
1993 THROUGH
DECEMBER 31,
1995 1994 1993
------- ------ ------------
<S> <C> <C> <C>
Net income (loss)............................. $(1,299) $ 486 $ 846
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization............... 5,111 4,620 783
Deferred income taxes....................... (670) 577 180
Interest on subordinated debt............... 1,117 1,009 165
Gain on sale of vessels..................... (244) -- --
Provision for doubtful accounts............. 240 240 --
Change in operating assets and liabilities:
Accounts receivable......................... 91 (549) (7,438)
Prepaid expenses and other current assets... 25 72 (353)
Accounts payable and accrued expenses....... 2,327 191 4,018
Other, net.................................... (287) 20 (317)
------- ------ -------
Net cash provided by (used in) operating
activities............................... 6,411 6,666 (2,116)
------- ------ -------
Cash flows from investing activities:
Purchases of property and equipment......... (5,343) (379) (45,306)
Deferred marine inspection costs............ (2,115)(1,792) --
Proceeds from sale of vessels............... 1,337 3,139 --
Purchase of 50% of Trico Marine Operators,
Inc. common stock.......................... -- -- (205)
------- ------ -------
Net cash provided by (used in) investing
activities............................... (6,121) 968 (45,511)
------- ------ -------
Cash flows from financing activities:
Proceeds from issuance of common stock...... 9 66 5,390
Proceeds from issuance of long-term debt and
subordinated debt.......................... 4,517 2,883 44,136
Repayment of long-term debt................. (5,305)(9,000) --
Deferred financing costs and other.......... (164) (8) (1,704)
------- ------ -------
Net cash provided by (used in) financing
activities............................... (943)(6,059) 47,822
------- ------ -------
Net increase (decrease) in cash and cash
equivalents................................... (653) 1,575 195
Cash and cash equivalents at beginning of
period........................................ 1,770 195 --
------- ------ -------
Cash and cash equivalents at end of period.... $ 1,117 $1,770 $ 195
======= ====== =======
Supplemental information:
Income taxes paid........................... $ -- $ 396 $ --
======= ====== =======
Income taxes refunded....................... $ 326 $ 38 $ --
======= ====== =======
Interest paid............................... $ 2,187 $2,079 $ 456
======= ====== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND DESCRIPTION OF ACQUISITION:
Trico Marine Services, Inc. (the "Company") commenced operations on October
29, 1993 at which time it acquired a wholly-owned subsidiary of the Company,
Trico Marine Assets, Inc. ("Trico Assets") purchased a fleet of 49 vessels
including forty supply and crew boats, five lift boats, and four other
vessels, including a tug and a barge (collectively referred to as the
"Acquired Vessels") from Marine Asset Management Corporation ("MAMC"), a
wholly-owned subsidiary of Chrysler Capital Corporation, pursuant to a
Purchase Agreement dated as of October 29, 1993. Concurrently, the Company
acquired 100% of the common stock of Trico Marine Operators, Inc. ("Trico
Operators"). These acquisitions (the "Acquisition") were consummated in a
series of transactions as follows:
. Berkshire Fund III, a Limited Partnership, and other affiliated investors
purchased 2,871,615 shares of the Company's common stock for $5,220,600
cash. Concurrently, 148,845 shares of the Company's common stock were
purchased by certain members of Trico Operators' management for $65,600
cash and their 50% stock ownership in Trico Operators. An additional
4,840 shares of common stock were issued as payment of transaction fees
to a third party.
. Trico Assets entered into a Revolving Credit and Term Loan Agreement (the
"Credit Agreement") with The First National Bank of Boston and received
$33,000,000 of loan proceeds.
. The Company issued $10,432,580 of 9% Subordinated Notes proportionally to
the Company's stockholders for $10,189,316 cash and $243,264 of
inventories and other assets. An additional $16,000 of 9% Subordinated
Notes were issued as payment of transaction fees to a third party.
. Trico Assets purchased the Acquired Vessels and related inventories and
supplies for cash in the amount of $45,795,000 provided from proceeds of
the Credit Agreement and an intercompany loan from the Company.
Simultaneously, the Company purchased the remaining 50% stock ownership
in Trico Operators from MAMC for $205,000 cash.
. The Company and Berkshire Partners entered into a management agreement
pursuant to which Berkshire Partners received a financial advisory fee of
$370,000 on October 29, 1993.
The Acquisition has been accounted for by the purchase method of accounting
and substantially all of the purchase price has been allocated to the Acquired
Vessels based upon their relative fair value. There was no goodwill. The
operating results of the Acquired Vessels and Trico Operators are included in
the Company's consolidated results of operations from the acquisition date.
Subsequent to the Acquisition, management of Trico Operators continued
employment with the Company.
Concurrent with the Acquisition, the stockholders of the Company entered
into a Shareholders Agreement which contains provisions allowing members of
Trico Operators' management to require the Company to purchase their common
stock upon death or disability, retirement or termination. The Company's
requirement to repurchase these shares is eliminated upon a public stock
offering of the Company.
The Company is engaged in the ownership and operation of a diversified fleet
of supply boats, lift boats, crew boats, and other specialty service vessels,
providing support services to the offshore oil and gas industry primarily in
the Gulf of Mexico and also, offshore Mexico and Brazil. The Company's
financial position, results of operations and cash flows are affected
primarily by day rates and fleet utilization in the Gulf of Mexico which
primarily depend on the level of drilling activity, which in turn is dependent
upon both short-term and long-term trends in oil and natural gas prices.
The accompanying statement of revenues less direct operating expenses of the
Acquired Vessels was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission
F-7
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(for inclusion in the registration statement on Form S-1 of Trico Marine
Services, Inc.) and is not intended to be a complete presentation of the
results of operations for the Acquired Vessels.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation Policy
The consolidated financial statements of the Company include the accounts of
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
Cash and Cash Equivalents
All highly liquid debt instruments with original maturity dates of less than
three months when purchased are considered to be cash equivalents.
Property and Equipment
Marine vessels, transportation and other equipment are stated at cost.
Depreciation for financial statement purposes is provided on the straight-line
method, assuming 10% salvage value for marine vessels. Marine vessels are
depreciated over a useful life of twenty-five to thirty years from the date of
construction. Remaining lives generally range from ten to fifteen years. Major
modifications which extend the useful life of marine vessels are capitalized
and amortized over the adjusted remaining useful life of the vessel.
Maintenance and repair cost is charged to expense as incurred. When marine
vessels or equipment are sold or otherwise disposed of, their cost and the
accumulated depreciation are removed from the accounts and any gain or loss is
recognized. Marine vessel spare parts are stated at average cost.
Drydocking expenditures in conjunction with marine inspections are
capitalized and amortized on a straight-line basis over the period to be
benefited (generally 24 to 36 months).
The Company allocated a portion of the purchase price of the Acquired
Vessels to marine inspection costs and is amortizing the costs over a period
of 19 to 39 months.
Income Taxes
The Company accounts for income taxes using the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes." Deferred income taxes are provided at the currently enacted income tax
rates for the difference between the financial statement and income tax bases
of assets and liabilities.
Revenue and Expense Recognition
Charter revenue is earned and recognized on a daily rate basis. Operating
costs are expensed as incurred.
Deferred Financing Costs
Deferred financing costs include costs associated with the issuance of the
Company's debt and are being amortized on a straight-line basis over the life
of the related debt agreement.
F-8
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Direct Operating Expenses
Direct operating expenses principally include crew costs, insurance, repairs
and maintenance, drydocking charges, casualty losses and general and
administrative expense incurred by the management company.
Earnings Per Share
The Company's earnings per share has been calculated using the weighted
average number of shares of common stock outstanding during the year. Common
stock equivalents during the years ended December 31, 1995 and 1994 and the
period October 29, 1993 through December 31, 1993 had no material dilutive
effect on net income per average common share.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Reclassifications
Certain prior-period amounts have been reclassified to conform with the
presentation shown in the current year's financial statements. These
reclassifications had no effect on net income (loss) or total stockholders'
equity.
3. ACCOUNTS RECEIVABLE:
The Company's accounts receivable, net consists of the following at December
31, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Trade receivables, net of allowance for doubtful accounts
of $480 and $240 in 1995 and 1994, respectively........... $6,975 $7,299
Insurance and other ........................................ 442 448
------ ------
Accounts receivable, net................................... $7,417 $7,747
====== ======
</TABLE>
The Company, as agent, bills trade accounts receivables on behalf of the
vessels it operates under agreements with third parties. The Company's
receivables are primarily due from entities operating in the oil and gas
industry in the Gulf of Mexico.
Approximately $628,000 and $1,100,000 of accounts receivable at December 31,
1995 and 1994, respectively, is due from oil and gas drilling companies in
Mexico. These amounts are billed and collected in U.S. dollars.
F-9
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
4. OTHER ASSETS:
The Company's other assets, net consists of the following at December 31,
1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Deferred marine inspection costs, net of accumulated
amortization of $1,459 and $352 in 1995 and 1994,
respectively.............................................$2,378 $1,440
Deferred financing costs, net of accumulated amortization
of $785 and $404 in 1995 and 1994, respectively.......... 1,104 1,332
Marine vessels spare parts................................ 386 364
Other..................................................... 291 17
------ ------
Other assets, net......................................... $4,159 $3,153
====== ======
</TABLE>
5. LONG-TERM DEBT AND SUBORDINATED DEBT:
The Company's long-term debt and subordinated debt consists of the following
at December 31, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Revolving loan, interest at a base interest rate plus
1.75% (10.25% at December 31, 1995) payable quarterly,
principal due December 31, 1997....................... $ 800 $ 1,500
Term Loan A, interest at a base interest rate plus
1.75% (10.25% at December 31, 1995), interest and
principal installments payable quarterly with final
payment due December 31, 1999......................... 21,195 23,000
Term Loan B, interest at a base rate plus 2.75% (11.25%
at December 31, 1995) payable quarterly, principal due
December 31, 1999..................................... 4,700 3,000
------- -------
26,695 27,500
Less current maturities................................ (3,000) (4,000)
------- -------
23,695 23,500
9% Subordinated Notes and accrued interest thereon, due
March 31, 2001........................................ 13,085 11,952
------- -------
$36,780 $35,452
======= =======
</TABLE>
The annual maturities of long-term debt, as amended, are (in thousands):
<TABLE>
<S> <C>
1996.............................................................. $ 3,000
1997.............................................................. 4,800
1998.............................................................. 4,000
1999.............................................................. 4,000
2000.............................................................. 10,895
Thereafter........................................................ 13,085
-------
$39,780
=======
</TABLE>
On October 29, 1993 the Company entered into the Credit Agreement with The
First National Bank of Boston. Availability under the revolving loan is based
on the Company's accounts receivable and was limited to
F-10
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
$4 million during 1993 and 1994 and was to be reduced by $1 million at both
December 31, 1995 and 1996. In 1993, the Company paid a closing fee of
$965,000 in connection with the Credit Agreement. On December 30, 1994, the
Company amended its Revolving Credit and Term Loan Agreement ("First
Amendment"). Availability under the revolving credit loan was increased to $6
million, with a reduction of $2 million effective June 29, 1995 at which time
the Company had the right to convert the revolving loan into its Term Loan B.
Principal repayments of the Term Loans A and B and the revolving credit were
also extended. The Company incurs a commitment fee of 0.5% per annum on the
unused amount. Substantially all of the Company's assets serve as collateral
for the Credit Agreement. The Credit Agreement contains certain covenants
requiring the Company to maintain debt coverage ratios and net worth levels,
limits capital expenditures and prohibits equity distributions. As of December
31, 1995, the Company was in compliance with these covenants or had obtained
appropriate effective waivers in the event of noncompliance through subsequent
amendment of the Credit Agreement.
Effective June 28, 1995, the Company amended its Credit Agreement ("Second
Amendment") to establish $5 million of availability under the revolving credit
loan and extend principal payments. Under the Second Amendment, the Company
had the right to convert $2 million of outstanding amounts under the revolving
credit loan into its Term Loan B effective October 31, 1995. The Company
converted $1.7 million of its outstanding revolving credit loan into its Term
Loan B prior to December 31, 1995 ($300,000 of amounts outstanding under the
revolving credit loan were converted into its Term Loan B subsequent to
December 31, 1995). Effective March 6, 1996, the Company amended its Credit
Agreement ("Third Amendment") to provide for an increased total credit
facility, extend principal payments and restructure other portions of the
Credit Agreement. The Third Amendment contains a revolving credit facility and
term loan provisions. A $3 million revolving credit facility, which matures in
July 1997 bears interest at 1.75% above a base rate. The Third Amendment
contains $33,000,000 of term loans in three separate tranches. Tranche A,
representing $27,300,000 bears interest at 1.75% above a base rate. Tranche B,
representing $4,200,000, which has been utilized by the Company to fund the
Brazilian Acquisition (see Note 13), bears interest at 1.75% above a base
rate. Tranche C, representing $1,500,000, bears interest at 1.75% above a base
rate and may be utilized to fund a specific project in Brazil described in the
Third Amendment. The term loans mature in December 2000. Interest on all
amounts outstanding under the Third Amendment is payable monthly with
quarterly principal payments beginning in March 1996. The Company incurs a 1/2
of 1% commitment fee on the unused portion of the amounts outstanding under
the Third Amendment. Beginning in April 1997, the Company must prepay amounts
outstanding under the term loans in the amount of 75% of excess cash flow, as
defined. The Third Amendment contains certain covenants requiring the Company
to maintain a certain debt coverage ratio and net worth levels, limits capital
expenditures and prohibits equity distributions. The Third Amendment contains
a maximum prepayment penalty of approximately $150,000 should the Company
prepay all amounts outstanding under this amendment. The maturities of debt
outstanding under the Credit Agreement as of December 31, 1995 have been
adjusted to reflect the maturities of the Company's obligations with respect
to the Third Amendment.
On October 29, 1993, the Company also sold a series of 9% Subordinated Notes
to its shareholders in the same proportion as their common stock ownership.
Holders of the 9% Subordinated Notes are only permitted to receive payments of
interest in the form of 9% Deferred Interest Notes on a semi-annual basis
until all debt under the Credit Agreement is retired. Concurrent with the
First Amendment, the Company also amended its Subordinated Notes agreement
whereby the maturities of its Subordinated Notes were extended to February 29,
2000. Concurrent with the Third Amendment, the Company also amended its
Subordinated Notes agreement whereby the maturities of its Subordinated Notes
were extended to March 31, 2001.
In December 1993, FSC Corp., a wholly-owned subsidiary of The First National
Bank of Boston, purchased 56,815 shares of the Company's common stock and
$196,710 of the 9% Subordinated Notes for $300,000.
F-11
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In order to minimize floating interest rate risk, the Company has entered
into the following agreements. During 1993, the Company purchased an interest
rate swap on a notional amount of $10 million. Under the swap, the Company
received a floating interest rate based on the Company's Term Loan A interest
rate and paid a fixed rate of 8.25%, interest settlements occurred quarterly.
The agreement was terminated in 1995 and the Company received $278,000 as
compensation for the early termination of its interest rate swap which was
amortized into interest expense over the remaining original life of the swap.
Concurrent with the termination of the above swap, the Company paid $125,000,
which will be amortized to interest expense over the two year life of the
agreement, to enter into an interest rate corridor on a notional amount of $15
million. Under the corridor, the Company's effective rate of interest on the
notional amount will not exceed 10.25%, as defined, if the floating rate does
not exceed 11.50%. If the floating rate exceeds 11.50%, the Company pays the
floating rate. The Company is exposed to certain losses in the event of non-
performance by the counter-party to the corridor. Management believes the
Company's exposure is not significant.
6. INCOME TAXES:
The components of income tax expense (benefit) of the Company for the
periods ended December 31, 1995, 1994 and 1993, are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
------ ----- ----
<S> <C> <C> <C>
Current income taxes:
U.S. federal income taxes.......................... $ -- $(317) $346
State income taxes................................. -- (34) 38
Deferred income taxes:
U.S. federal income taxes.......................... (667) 572 157
State income taxes................................. (3) 5 23
------ ----- ----
$ (670) $ 226 $564
====== ===== ====
</TABLE>
The Company's deferred income taxes at December 31, 1995 and 1994 represents
the tax effect of the following temporary differences between the financial
reporting and income tax accounting bases of its assets and liabilities (in
thousands):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Accumulated depreciation and amortization................. $7,811 $5,166
Alternative minimum tax credit carryforwards.............. (29) (29)
Net operating loss carryforward........................... (7,300) (3,998)
Other..................................................... (395) (382)
------ ------
Deferred income tax liability, net........................ $ 87 $ 757
====== ======
</TABLE>
Reconciling items which represent the difference between income taxes
computed at the Federal statutory tax rate and the provision for income taxes
are primarily the result of state income taxes.
The net operating loss carryforwards for Federal and state tax purposes of
approximately $21 million begin to expire in 2009. Realization is dependent on
generating sufficient taxable income prior to expiration of the loss
carryforwards. Although realization is not assured, management believes that
it is more likely than not that all net operating loss carryforwards will be
fully realized. The amount of the deferred tax asset considered realizable,
however, could be reduced in the near term if estimates of future taxable
income during the carryforward period are not achieved.
F-12
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (CONTINUED)
7. COMMON STOCK OPTION PLANS:
Pursuant to the Company's 1993 Stock Option Plan ("Option Plan") and the
Company's 1993 Key Employee Stock Option Plan ("Employee Option Plan," and
together with the Option Plan, the "Option Plans"), the Company is authorized
to grant incentive and nonqualified stock options to selected officers and
other key employees of the Company. The Compensation Committee of the Board of
Directors has the discretionary authority, subject to certain plan
specifications, to determine the amounts and other terms of such stock
options.
A total of 727,512 shares of the Company's common stock have been reserved
for issuance pursuant to the Option Plan. As of December 23, 1993, certain
affiliates of Berkshire Partners contributed 72,032 shares of the Company's
common stock to the Company. The Company reserved these shares for issuance
pursuant to the Employee Option Plan. These shares have been recorded as
treasury stock at par value.
Options to purchase 576,247 shares of the Company's common stock were
granted to officers and key members of management of the Company on October
29, 1993 at $1.818 per share, the original purchase price of the common stock,
and accordingly, no expense was recognized. Options to purchase 151,265 shares
of the Company's common stock were granted to an officer of the Company on
February 22, 1995 at the October 29, 1993 original cost of the common stock,
which was determined by the Board of Directors to be the fair market value of
the Company's stock at that time, and accordingly, no expense was recognized.
Of the options granted, 180,078 vest yearly in 25% increments beginning on
October 31, 1994, with the options fully vested upon the earlier of October
31, 1997, or at the time of a "Qualified Public Offering" of the Company's
stock, as defined. The remaining options vest and become exercisable upon the
earlier of ten years from the date of grant or the achievement of specified
returns on investment, as defined, for certain investors in the Company or,
for options representing 255,710 shares, the consummation of an "initial
public offering," as defined. The options all expire not later than ten years
from the date of grant. As of December 31, 1995, 1994 and 1993, 90,039, 45,020
and 0, respectively of the option shares were exercisable; no shares were
exercised.
8. OTHER RELATED PARTY TRANSACTIONS:
Prior to the Acquisition, Trico Operators and an affiliate of MAMC managed
certain of the Acquired Vessels owned by MAMC pursuant to operating and
management agreements. Trico Operators received management and incentive fees
from MAMC. Trico Operators and the affiliate were reimbursed for all direct
operating costs and allocated general, administrative and overhead expenses.
Amounts earned and reimbursed under these agreements were as follows (in
thousands):
<TABLE>
<CAPTION>
JANUARY 1, 1993
THROUGH
OCTOBER 28, 1993
----------------
<S> <C>
Management and incentive fees charged by Trico
Operators.............................................. $ 310
Reimbursed general and administrative costs to Trico
Operators.............................................. $1,086
Reimbursed general and administrative costs to an
affiliate of MAMC...................................... $ 326
</TABLE>
Pursuant to an agreement effective October 29, 1993 (the "Berkshire
Agreement"), Berkshire Partners is entitled to receive $16,666 each month for
five years for providing certain management and other consulting services. The
Berkshire Agreement is automatically renewable on an annual basis after the
initial five year period upon agreement of the parties. Upon consummation of a
public offering, the Berkshire Agreement will be terminated.
F-13
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
During December 1994, the Company appointed two independent directors. These
two directors purchased 36,673 shares of the Company's common stock at the
original cost of the common stock. The two directors, also each purchased
approximately $67,000 of the Company's 9% Subordinated Notes.
During February 1995, an officer of the Company purchased 4,583 shares of
the Company's common stock at the original cost of the common stock and
approximately $17,000 of the Company's 9% Subordinated Notes.
9. PROFIT SHARING PLAN:
The Company has a defined contribution profit sharing plan that covers
substantially all employees who qualify as to age and length of service. As of
January 1, 1995, the Company included 401(k) provisions into this plan. In
1995, the Company's contributions to the plan were based on one quarter of the
first five percent of participant contributions plus a discretionary amount.
The Company expensed contributions to the plan for the periods ended December
31, 1995, 1994 and 1993 of $66,000, $60,500 and $9,300, respectively.
10. CONTINGENCIES:
Effective October 29, 1993, Trico Assets entered into an agreement with an
unrelated company to provide management and operating services for the five
lift boats purchased from MAMC. The agreement provides for management and
incentive fees to be paid to the unrelated company based on gross monthly
income and the achievement of specified returns, respectively. Pursuant to the
agreement, the operator has been granted a right of first refusal on any sale
of the lift boats.
In the ordinary course of business, the Company is involved in certain
personal injury, pollution and property damage claims and related threatened
or pending legal proceedings. Management, after review with legal counsel and
insurance representatives, is of the opinion these claims and legal
proceedings will be settled within the limits of the Company's insurance
coverages. At December 31, 1995 and 1994, the Company has accrued a liability
in the amount of $1,570,000 and $880,000, respectively, based upon the
insurance deductibles that management believes it may be responsible for
paying in connection with these matters. The amounts the Company will
ultimately be responsible for paying in connection with these matters could
differ materially in the near term from amounts accrued.
11. OTHER INFORMATION:
The Company maintains cash deposits with banks in excess of federally
insured limits. The Company has not experienced any losses in such accounts.
For the year ended December 31, 1995, approximately 14% and 11% of the
Company's total revenues were received from two oil and gas companies and 43%
of the Company's total revenues were from its top five customers. For the year
ended December 31, 1994, approximately 10% of the Company's total revenues
were received from another oil and gas company and 43% of the Company's total
revenues were from its top five customers.
Shortly after the Acquisition, in November 1993, one of the Acquired Vessels
was severely damaged during its use, which damage was fully insured. The
casualty loss settlement information related to this vessel was considered
when allocating the purchase price, and therefore, no gain related to this
damaged vessel was recognized. Additionally, at the time of the Acquisition,
the Company determined that certain vessels would be sold within one year. The
Company applied the difference between sales proceeds related to those vessels
sold during 1994 and the carrying value of these vessels (approximately
$200,000) to the remaining vessels' cost and did not recognize a gain on the
sale of those vessels.
F-14
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued in March 1995 and is effective
for fiscal years beginning after December 15, 1995. SFAS No. 121 establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used and for long-lived assets and certain identifiable intangibles to be
disposed of. SFAS No. 123, "Accounting for Stock-Based Compensation" was
issued in October 1995 and is effective for fiscal years beginning after
December 15, 1995. SFAS No. 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans. The Statement requires
transactions to be accounted for based on the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more
reliably measurable. The Statement does allow pro forma amounts to be
disclosed by companies which continue to apply the prior accounting provisions
for stock-based compensation. Management is currently evaluating the
alternatives available upon implementing this Statement, but expects to adopt
only the pro forma disclosure provisions. The Company does not believe that
implementation of these accounting standards, which have been issued but are
not yet effective, will have a material effect on the Company's financial
position, results of operations or cash flows.
12. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures About Fair Value of Financial Instruments." The estimated fair
value amounts have been determined by the Company using available market
information and valuation methodologies described below. However, considerable
judgment is required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein may not be indicative
of the amounts that the Company could realize in a current market exchange.
The use of different market assumptions or valuation methodologies may have a
material effect on the estimated fair value amounts.
The carrying amounts of cash and cash equivalents approximate fair value due
to the short-term nature of these instruments. The carrying amount of the
revolving credit and term loans approximate fair value because they bear
interest rates currently available to the Company for debt with similar terms
and remaining maturities. It is not practicable to estimate the fair value of
the subordinated debt and accrued interest thereon since quoted prices are not
readily available and valuation techniques would not be practicable due to the
subordination and uncertainty regarding timing of repayment.
13. BRAZILIAN ACQUISITION:
Effective March 15, 1996, the Company purchased seven utility vessels and a
40% interest in a marine operating company located in Brazil for a combined
price of $4.2 million. The Brazilian operating company owns another utility
vessel and operates it and the seven other purchased utility vessels under
long-term contracts with a customer located in Brazil. The acquisition has
been accounted for by the purchase method of accounting and substantially all
of the purchase price has been allocated to the vessels purchased based upon
their relative fair value. In addition to the purchase price above, $300,000
of contingent purchase price is payable based upon the operating results of
the purchased utility vessels or the attainment by the Company of a certain
contract to provide offshore marine services in Brazil.
F-15
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
ACQUIRED VESSELS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
14. SUBSEQUENT EVENTS:
On April 26, 1996, the Company's Board of Directors approved a 3.0253-for-1
split of the Company's common stock in the form of a stock dividend. A total
of 2,123,372 shares of common stock, including shares subject to repurchase by
the Company, were issued in connection with the split. The par value of each
share was not changed. Approximately $21,000 was reclassified from the
Company's additional paid-in capital account to the Company's common stock
account. All effects of this stock split, including all share amounts, were
retroactively applied to October 29, 1993. In addition, the Company authorized
5,000,000 shares of $.01 par value per share preferred stock.
In April 1996, the Company signed a purchase agreement to acquire, for $11
million, all of the outstanding capital stock of a special purpose company
whose sole assets consist of four supply vessels that historically have been
bareboat chartered to an affiliated operating company. Pursuant to the terms
of the agreement, on April 29, 1996, the Company made a $400,000 advance
payment with the balance due on or before July 31, 1996, and, on May 1, 1996,
the Company will assume operation of the four boats under bareboat charter
agreements.
In April 1996, the Company modified its Option Plan to include a provision
for the 140,459 options not already containing a provision to become
exercisable at the consummation of an "initial public offering" to become
exercisable upon such a transaction.
F-16
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
1996 1995
------- -------
<S> <C> <C>
Current assets:
Cash and cash
equivalents................................................. $ 1,288 $1,117
Accounts receivable, net.................................. 9,516 7,417
Prepaid expenses and other current assets................. 722 156
------- -------
Total current assets..................................... 11,526 8,690
------- -------
Property and equipment, at cost:
Marine vessels............................................. 63,836 44,603
Transportation and other................................... 621 856
------- -------
64,457 45,459
Less accumulated depreciation and amortization............... 8,034 6,195
------- -------
Net property and equipment................................. 56,423 39,264
------- -------
Other assets, net............................................ 4,727 4,159
------- -------
$72,676 $52,113
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable........................................... $ 2,944 $ 3,656
Accrued expenses........................................... 2,566 2,878
Current portion of long-term debt.......................... -- 3,000
------- -------
Total current liabilities................................ 5,510 9,534
------- -------
Long-term debt............................................... -- 23,695
Subordinated debt and accrued interest thereon............... -- 13,085
Deferred income taxes, net................................... 4,498 87
------- -------
Total liabilities........................................ 10,008 46,401
------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 15,000,000 shares authorized,
issued 6,883,471 and 3,123,371 shares, outstanding 6,811,439
and 3,051,339 shares at June 30, 1996 and December 31, 1995,
respectively................................................ 69 31
Additional paid-in capital................................ 61,502 5,649
Retained earnings.......................................... 1,098 33
Treasury stock, at par value, 72,032 shares................ (1) (1)
------- -------
Total stockholders' equity............................... 62,668 5,712
------- -------
$72,676 $52,113
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-17
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
____________________ ___________________
1996 1995 1996 1995
________ ________ ________ _______
<S> <C> <C> <C> <C>
Revenues:
Charter hire $11,099 $ 5,783 $19,475 $12,131
Other vessel income 12 9 20 21
_________ _________ ________ ________
Total revenues 11,111 5,792 19,495 12,152
_________ _________ ________ ________
Operating expenses:
Direct vessel operating expenses 5,761 4,173 10,552 8,693
General and administrative 724 625 1,385 1,280
Amortization of marine inspection costs 467 290 897 523
_________ _________ ________ ________
Total operating expenses 6,952 5,088 12,834 10,496
_________ _________ ________ ________
Depreciation expense 994 938 1,818 1,928
_________ _________ ________ ________
Operating income (loss) 3,165 (234) 4,843 (272)
Interest expense 624 930 1,660 1,902
Amortization of deferred financing costs and g 85 94 187 187
Gain on sale of vessels - (167) - (223)
Other income, net (29) (26) (41) (56)
_________ _________ ________ ________
Income (loss) before income taxes and extraord 2,485 (1,065) 3,037 (2,082)
Income tax expense (benefit) 867 (362) 1,055 (708)
_________ _________ ________ ________
Income (loss) before extraordinary item 1,618 (703) 1,982 (1,374)
Extraordinary item, net of taxes (917) - (917) -
_________ _________ ________ ________
Net income (loss) $ 701 $ (703) $ 1,065 $(1,374)
========= ========= ======== ========
Weighted average common shares and
equivalents outstanding 5,583,748 3,051,339 4,545,268 3,049,689
========= ========== ========= =========
Earnings per common share and equivalent
outstanding:
Income (loss) before extraordinary $ 0.29 $ (0.23) $ 0.44 $ (0.45)
Extraordinary item (0.16) 0.00 (0.21) 0.00
_________ _________ ________ ________
Net income (loss) $ 0.13 $ (0.23) $ 0.23 $ (0.45)
========= ========= ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
F-18
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
_____ _____
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,065 $ (1,374)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,932 2,666
Extraordinary charge 1,411 -
Deferred income taxes 561 (708)
Interest on subordinated debt 461 541
Gain on sale of vessels - (223)
Provision for doubtful accounts 70 120
Changes in operating assets and liabilities:
Accounts receivable (2,169) 1,947
Prepaid expenses and other current assets (597) (67)
Accounts payable and accrued expenses (1,025) 393
Other, net (410) (2)
_____________ ______________
Net cash provided by operating activities 2,299 3,293
_____________ ______________
Cash flows from investing activities:
Purchases of property and equipment (15,724) (2,921)
Deferred marine inspection costs (595) (397)
Proceeds from sales of vessels - 1,052
Investment in unconsolidated company (947) -
_____________ ______________
Net cash used in investing activities (17,266) (2,266)
_____________ ______________
Cash flows from financing activities:
Proceeds from issuance of common stock, net of registrati 48,410 9
Proceeds from issuance of long-term and subordinated debt 6,169 2,302
Repayment of long-term and subordinated debt (38,929) (4,194)
Deferred financing costs and other (512) (225)
_____________ ______________
Net cash provided by (used in) financing activi 15,138 (2,108)
_____________ ______________
Net increase (decrease) in cash 171 (1,081)
Cash and cash equivalents at beginning of period 1,117 1,770
_____________ ______________
Cash and cash equivalents at end of period $ 1,288 $ 689
============= ==============
Supplemental information:
Income taxes paid $ 2 $ -
============= ==============
Income taxes refunded $ - $ 11
============= ==============
Interest paid $ 4,442 $ 2,047
============= ==============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statement Presentation:
The consolidated financial statements for Trico Marine Services,
Inc. (the "Company") included herein are unaudited but reflect,
in management's opinion, all adjustments, consisting only of
normal recurring adjustments, that are necessary for a fair
presentation of the nature of the Company's business. The
results of operations for the three and six months ended June
30, 1996 are not necessarily indicative of the results that may
be expected for the full fiscal year or any future periods. The
financial statements included herein should be read in
conjunction with the financial statements and notes thereto
included in the Company's consolidated financial statements for
the year ended December 31, 1995.
Certain prior period amounts have been reclassified to conform
with the presentation shown in the interim consolidated financial
statements. These reclassifications had no effect on net income
(loss), total stockholders' equity or cash flows.
2. Initial Public Offering:
In May 1996, the Company completed an initial public offering of
3,292,500 shares of common stock, $.01 par value. The
proceeds received from the sale were $48,416,000, net of
underwriting discount and other costs of $4,264,000. Of the
proceeds, the Company used $31,150,000 to prepay senior
debt, $6,000,000 to pay subordinated debt and $11,000,000 to
acquire four supply vessels. The balance of the proceeds was
used by the Company for additional working capital.
3. Amendment of Credit Agreement:
Effective March 6, 1996, the Company amended its agreement with
its bank lenders (the "Credit Agreement") to provide for an
increased total credit facility, extend principal payments and
restructure other portions of the Credit Agreement. The
outstanding principal balance of the Credit Agreement of
$31,150,000 was prepaid on May 21, 1996 together with a
prepayment fee of $75,000. As a result of the prepayment of the
Credit Agreement and the prepayment of all of the Company's
subordinated debt, the Company recorded an extraordinary charge
of $917,000, net of taxes of $494,000, for the write-off of the
unamortized balance of related debt issuance costs.
4. Foreign Acquisition:
On March 15, 1996, the Company acquired seven line handling
vessels and a 40% interest in a marine operating company located
in Brazil for a combined price of $4.2 million (the "Walker
Acquisition"). The Brazilian operating company owns an eighth
line handling vessel and operates it and the seven other acquired
vessels under long-term contracts with a customer located in
Brazil. The acquisition has been accounted for by the purchase
method of accounting. Of the purchase price, $3,565,000 has been
allocated to the acquired vessels purchased based upon their
relative fair value, $270,000 has been allocated to the Company's
investment in the stock of the Brazilian operating company with
the remaining $365,000 allocated to goodwill. In addition to the
purchase price above, $300,000 of contingent purchase price is
payable based upon the operating results of the acquired vessels
or the attainment by the Company of a certain contract to provide
offshore marine services in Brazil.
5. Stock Split:
On April 26, 1996, the Company's Board of Directors approved a
3.0253-for-1 split of the Company's common stock in the form of a
stock dividend. The financial statements have been restated to
reflect all effects of this stock split, including all share
amounts and per share data.
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
6. Stock Option and Incentive Plans:
In April 1996, the Company modified its 1993 Stock Option Plan to
include a provision for the 140,459 options not already
containing a provision to become exercisable at the consummation
of an "initial public offering" to become exercisable upon such a
transaction. Pursuant to the Company's 1996 Incentive
Compensation Plan, options to purchase 103,000 shares of the
Company's common stock were granted on April 26, 1996 to
officers, key members of management and certain long-term
employees at $16.00 per share, the initial public offering price,
and accordingly no expense was recognized.
7. Domestic Acquisition:
On May 22, 1996, the Company acquired for $11,000,000 all of the
outstanding capital stock of HOS Marine Partners, Inc. ("HOS"), a
special purpose company whose sole assets consist of four supply
vessels. In addition to the purchase price, the Company
recognized, in accordance with Statement of Financial Accounting
Standards No. 109, a deferred income tax liability of $3,850,000
for the deferred tax consequences of the differences between the
assigned values and the tax bases of the assets owned by HOS.
The acquisition was accounted for using the purchase method of
accounting and the results of operations from the date of
acquisition are included on the accompanying unaudited
consolidated financial statements. Of the $11,000,000 purchase
price and the recognized $3,850,000 deferred income tax liability,
$14,000,000 was allocated to the vessels based upon their relative
fair value, $279,000 was allocated to deferred tax assets based upon
the estimated realizable value of the net operating tax loss
carryforward of HOS and the remaining $571,000 was allocated to
goodwill.
8. Subsequent Events:
Effective July 26, 1996, the Company executed a $30,000,000
revolving credit agreement (the "New Credit Facility") with the
same group of lenders that provided the Company's previous Credit
Agreement which was prepaid on May 21, 1996 with proceeds from
the initial public offering. The New Credit Facility provides
for interest payments only until its maturity on June 30, 1999
and bears interest at LIBOR plus 1 1/2% per annum with a commitment
fee of 3/8 % per annum on the undrawn portion. The New Credit
Facility is collateralized by certain of the Company's vessels
and related assets and requires that the Company maintain certain
financial ratios. When the New Credit Facility was executed, the
Company had no outstanding borrowings.
<PAGE>
No dealer, salesman or other
individual has been authorized to give any
information or make any representations
not contained in this Prospectus in
connection with the Offering covered by
this Prospectus. If given or made, such
information or representations must not be
relied upon as having been authorized by
the Company, the Selling Stockholders or 2,000,000 Shares
the Underwriters. This Prospectus does
not constitute an offer to sell, or a
solicitation of an offer to buy, the
Common Stock in any jurisdiction where, or
to any person to whom, it is unlawful to [LOGO]
make such offer or solicitation. Neither
the delivery of this Prospectus nor any
circumstances, create any implication that
there has not been any change in the facts
set forth in this Prospectus or in the
affairs of the Company since the date Trico Marine Services, Inc.
hereof.
Common Stock
TABLE OF CONTENTS $0.01 par value per share)
Page
Prospectus Summary..................... 3
The Company............................ 3
The Offering........................... 5
Summary Financial and Operating Data... 6
Risk Factors........................... 8 Schroder Wertheim & Co.
Use of Proceeds.........................11
Price Range of Common Stock.............11 Raymond James
Dividend Policy.........................11 & Associates, Inc.
Capitalization..........................12
Selected Consolidated Financial and Simmons & Company
Operating Data..........................13 International
Management's Discussion and Analysis of
Financial Condition and Results of
Operations..............................15 November _____, 1996
Business................................22
Management..............................31
Principal and Selling Stockholders......36
Certain Relationships and Related
Transactions............................37
Description of Capital Stock............38
Underwriting............................43
Notice to Ontario Residents.............44
Legal Matters...........................44
Experts.................................44
Available Information...................45
Index to Consolidated Financial
Statements........................... F-1
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Estimated expenses payable in connection with the proposed sale of
Common Stock covered hereby are as follows:
SEC registration fee $ 28,031
NASD filing fee 9,250
Blue Sky fees and expenses 10,000
Accounting fees 150,000
Printing expenses 86,000
Legal fees and expenses 100,000
Miscellaneous expenses 16,719
_________
Total $ 400,000*
=========
_____________________
*All expenses except the SEC registration fee and the NASD filing fee
are estimated.
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify its directors and officers in a variety of
circumstances, which may include liabilities under the Securities Act of 1933,
as amended (the "Securities Act"). In addition, the Registrant's bylaws
provide for the indemnification of directors and officers against expenses and
liabilities incurred in connection with defending actions brought against them
for negligence or misconduct in their official capacities. The Registrant
also has indemnity agreements, a form of which is incorporated by reference
herein as Exhibit 10.1, with each of its directors, which provide for
indemnification of such directors. The Registrant has purchased insurance
permitted by the Delaware General Corporation Law on behalf of directors and
officers, which may cover liabilities under the Securities Act. The
Underwriting Agreement, a form of which is filed as Exhibit 1 and incorporated
herein by reference, also provides indemnification to directors and officers
of the Registrant under certain conditions.
Item 15. Recent Sales of Unregistered Securities.
On October 26, 1993, the Company issued 303 shares of its Common Stock
to Berkshire Fund III Investment Corp. (an affiliate of Berkshire) for an
aggregate purchase price of $550.
On October 29, 1993, the Company issued an aggregate of 2,953,268
(including the 303 shares referred to in the preceding paragraph) shares of
its Common Stock and $10,448,580 in principal amount of its 9% Subordinated
Notes (the "Notes") for an aggregate purchase price of $15,948,580 to
Berkshire Fund III Investment Corp., affiliates of Berkshire, members of
Company management and an intermediary.
Also on October 29, 1993, pursuant to its 1993 Stock Option Plan, the
Company granted options to buy an aggregate of 576,247 shares of its Common
Stock in equal amounts to Messrs. Fairley and Palmer at a current per share
exercise price (after giving effect to adjustments pursuant to the terms of
the option since that date) of $1.82. As of November 30, 1995, Messrs.
Fairley and Palmer surrendered 72,032 of such options (36,016 each) of the
Company, and the Company granted such options to five other members of Company
management (Messrs. Cain, Bourgeois, Edison, Bailey and Steele).
On December 27, 1993, the Company issued 56,815 shares of Common Stock
and $196,710 in principal amount of its Notes for an aggregate purchase price
of $300,000 to FSC Corp. ("FSC"), a wholly-owned subsidiary of the First
National Bank of Boston.
On December 30, 1994, the Company issued to Benjamin F. Bailar 18,336
shares of Common Stock and $66,664.50 in principal amount of its Notes for an
aggregate purchase price of $100,000. The Company also issued 18,336 shares
of Common Stock and $66,664.50 in principal amount of its Notes to Edward C.
Hutcheson, Jr. on the same day.
On February 22, 1995, the Company issued 4,583 shares of Common Stock
and $16,667.50 in principal amount of its Notes to Victor M. Perez for an
aggregate purchase price of $25,000. The Company also issued to Mr. Perez
options to buy 151,265 shares of Common Stock at a current exercise price
(after giving effect to adjustments pursuant to the terms of the options since
that date) of $1.82.
All of the securities described above were offered and sold without
registration under the Securities Act inasmuch as they were deemed not subject
to registration pursuant to the exemptions provided in Section 4(2) of the
Securities Act, Regulation D and the other rules and regulations promulgated
thereunder as securities sold in transactions not involving any public
offering.
Item 16. Exhibits and Financial Statement Schedules.
Exhibit
Number Description of Exhibits
1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Company.<F1>
3.2 Bylaws of the Company.<F2>
4 Specimen of Common Stock Certificate.<F2>
5 Opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. as to the legality of the Company's Common
Stock.
10.1 Form of Indemnity Agreement by and between the Company and each
of the Company's directors.<F2>
10.2 Note and Stock Purchase Agreement, dated as of October 29, 1993,
by and among the Company, Berkshire Fund III Investment Corp,
and other purchasers, as amended.<F2>
10.3 Revolving Credit Agreement among Trico Marine Operators, Inc.,
Trico Marine Assets, Inc., Trico Marine Services, Inc. and The
First National Bank of Boston, Hibernia National Bank, and First
National Bank of Commerce as Banks and The First National Bank
of Boston, as Agent dated as of July 26, 1996 ("Revolving Credit
Agreement").<F3>
10.4 Amendment No. 1 dated as of August 26, 1996 to the Revolving
Credit Agreement.<F5>
10.5 Amendment No. 2 dated as of September 25, 1996 to the Revolving
Credit Agreement.<F5>
10.6 Amendment No. 3 dated as of October 8, 1996 to the Revolving
Credit Agreement.<F5>
10.7 Sale and Purchase Agreement dated September 27, 1996, by and
between Trico Marine Assets, Inc. and Ogden Marine Indonesia,
Inc., a wholly-owned subsidiary of OMI, relating to the sale of
the M/V OMS Galveston.<F4>
10.8 Sale and Purchase Agreement dated September 27, 1996, by and
between Trico Marine Assets, Inc. And Ogden Marine Indonesia,
Inc., a wholly-owned subsidiary of OMI, relating to the sale of
the M/V OMS Kenedy.<F4>
10.9 Sale and Purchase Agreement dated September 27, 1996, by and
between Trico Marine Assets, Inc. And Ogden Marine Indonesia,
Inc., a wholly-owned subsidiary of OMI, relating to the sale of
the M/V Brazoria.<F4>
10.10 Sale and Purchase Agreement by and between Ensco Offshore
Company and Trico Marine Assets, Inc. dated October 11, 1996
relating to Houma, Louisiana docking and maintenance facility.
10.11 Vessel Purchase Agreement dated as of August 1, 1996 among Trico
Marine Assets, Inc. and Kim Susan, Inc., K&B Boat Rentals, Inc.,
Fagan Boat Services, Inc.<F5>
10.12 Stockholders Agreement by and among the Company, Berkshire Fund
III Investment Corp., various affiliates of Berkshire Partners,
Eldon L. Hinds, Ronald O. Palmer, Thomas E. Fairley, Kenneth W.
Bourgeois, Michael D. Cain, William O. Edison, Joseph O. Bailey
and Frank L. Steele dated of October 29, 1993.<F2>
10.13 Management Agreement dated as of October 29, 1993 by and among
Berkshire Partners and the Company.<F2>
10.14 Management and Operating Agreement dated as of October 28, 1993
by and among Power Offshore Services, Inc., Trico Marine
Operators, Inc. and Trico Marine Assets, Inc. As amended.<F2>
10.15 The Company's 1996 Incentive Compensation Plan.<F2>
10.16 The Company's 1993 Stock Option Plan.<F2>
10.17 Form of Stock Option Agreement under the 1993 Stock Option
Plan.<F2>
10.18 Form of Option Agreement under the 1996 Incentive Compensation
Plan.<F2>
10.19 Form of Noncompetition, Nondisclosure and Severance Agreements
between the Company and each of its Executive Officers.<F2>
10.20 Agreement by and among the Company and purchasers of its 9%
Subordinated Notes and Common Stock dated as of March 25, 1996
regarding the recapitalization of the Company.<F2>
21 Subsidiaries of the Company.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. (included in Exhibit 5).
24.1 Power of Attorney (included in Signature Page to the
Registration Statement).
<F1> Incorporated by reference to the Company's Registration Statement on
Form 8-A filed with the Commission on April 25, 1996.
<F2> Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration Statement No. 333-2990).
<F3> Incorporated by reference to the Company's Form 10-Q for the quarter
ended June 30, 1996.
<F4> Incorporated by reference to the Company's Form 8-K dated September 30,
1996.
<F5> Incorporated by reference to the Company's Form 8-K dated October 10,
1996.
Item 17. Undertakings.
The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant under Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of said securities
at that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned in the City of Houma, State of
Louisiana, on October 24, 1996.
TRICO MARINE SERVICES, INC.
By: /s/ Thomas E. Fairley
Thomas E. Fairley,
Chairman of the Board, President
and Chief Executive Officer
KNOWN ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Thomas E. Fairley, Ronald O. Palmer and Victor
M. Perez, and each of them acting individually, his true and lawful attorney-
in-fact and agent, with full power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intends and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact or agent or his substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
and on the dates indicated.
Signature Title Date
/s/ Thomas E. Fairley Director, Chairman of October 24, 1996
Thomas E. Fairley the Board, President and
Chief Executive Officer
/s/ Ronald O. Palmer Director, Executive Vice October 24, 1996
Ronald O. Palmer President
/s/ Victor M. Perez Vice President, Chief October 24, 1996
Victor M. Perez Financial Officer and
Treasurer (Principal
Financial Officer)
/s/ Kenneth W. Bourgeois Controller (Principal October 24, 1996
Kenneth W. Bourgeois Accounting Officer)
/s/ Benjamin F. Bailar Director October 24, 1996
Benjamin F. Bailar
/s/ Carl Ferenbach Director October 24, 1996
Carl Ferenbach
/s/ Garth H. Greimann Director October 24, 1996
Garth H. Greimann
/s/ Edward C. Hutcheson, October 24, 1996
Jr. Director
Edward C. Hutcheson, Jr.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Company.<F1>
3.2 Bylaws of the Company.<F2>
4 Specimen of Common Stock Certificate.<F2>
5 Opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. as to the legality of the Company's Common
Stock.
10.1 Form of Indemnity Agreement by and between the Company and each
of the Company's directors.<F2>
10.2 Note and Stock Purchase Agreement, dated as of October 29, 1993,
by and among the Company, Berkshire Fund III Investment Corp,
and other purchasers, as amended.<F2>
10.3 Revolving Credit Agreement among Trico Marine Operators, Inc.,
Trico Marine Assets, Inc., Trico Marine Services, Inc. and The
First National Bank of Boston, Hibernia National Bank, and First
National Bank of Commerce as Banks and The First National Bank
of Boston, as Agent dated as of July 26, 1996 ("Revolving Credit
Agreement").<F3>
10.4 Amendment No. 1 dated as of August 26, 1996 to the Revolving
Credit Agreement.<F5>
10.5 Amendment No. 2 dated as of September 25, 1996 to the Revolving
Credit Agreement.<F5>
10.6 Amendment No. 3 dated as of October 8, 1996 to the Revolving
Credit Agreement.<F5>
10.7 Sale and Purchase Agreement dated September 27, 1996, by and
between Trico Marine Assets, Inc. and Ogden Marine Indonesia,
Inc., a wholly-owned subsidiary of OMI, relating to the sale of
the M/V OMS Galveston.<F4>
10.8 Sale and Purchase Agreement dated September 27, 1996, by and
between Trico Marine Assets, Inc. And Ogden Marine Indonesia,
Inc., a wholly-owned subsidiary of OMI, relating to the sale of
the M/V OMS Kenedy.<F4>
10.9 Sale and Purchase Agreement dated September 27, 1996, by and
between Trico Marine Assets, Inc. And Ogden Marine Indonesia,
Inc., a wholly-owned subsidiary of OMI, relating to the sale of
the M/V Brazoria.<F4>
10.10 Sale and Purchase Agreement by and between Ensco Offshore
Company and Trico Marine Assets, Inc. dated October 11, 1996
relating to Houma, Louisiana docking and maintenance facility.
10.11 Vessel Purchase Agreement dated as of August 1, 1996 among Trico
Marine Assets, Inc. and Kim Susan, Inc., K&B Boat Rentals, Inc.,
Fagan Boat Services, Inc.<F5>
10.12 Stockholders Agreement by and among the Company, Berkshire Fund
III Investment Corp., various affiliates of Berkshire Partners,
Eldon L. Hinds, Ronald O. Palmer, Thomas E. Fairley, Kenneth W.
Bourgeois, Michael D. Cain, William O. Edison, Joseph O. Bailey
and Frank L. Steele dated of October 29, 1993.<F2>
10.13 Management Agreement dated as of October 29, 1993 by and among
Berkshire Partners and the Company.<F2>
10.14 Management and Operating Agreement dated as of October 28, 1993
by and among Power Offshore Services, Inc., Trico Marine
Operators, Inc. and Trico Marine Assets, Inc. As amended.<F2>
10.15 The Company's 1996 Incentive Compensation Plan.<F2>
10.16 The Company's 1993 Stock Option Plan.<F2>
10.17 Form of Stock Option Agreement under the 1993 Stock Option
Plan.<F2>
10.18 Form of Option Agreement under the 1996 Incentive Compensation
Plan.<F2>
10.19 Form of Noncompetition, Nondisclosure and Severance Agreements
between the Company and each of its Executive Officers.<F2>
10.20 Agreement by and among the Company and purchasers of its 9%
Subordinated Notes and Common Stock dated as of March 25, 1996
regarding the recapitalization of the Company.<F2>
21 Subsidiaries of the Company.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. (included in Exhibit 5).
24.1 Power of Attorney (included in Signature Page to the
Registration Statement).
TRICO MARINE SERVICES, INC.
2,000,000 Shares
Common Stock
(Par Value $.01 Per Share)
_______________
UNDERWRITING AGREEMENT
New York, New York
__________ ___, 1996
SCHRODER WERTHEIM & CO. INCORPORATED
RAYMOND JAMES & ASSOCIATES, INC.
SIMMONS & COMPANY INTERNATIONAL
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Schroder Wertheim & Co. Incorporated
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Dear Sirs:
Trico Marine Services, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell, and certain shareholders of the
Company (named in Schedule II attached hereto the "Firm Selling
Shareholders") propose to sell, to the Underwriters named in
Schedule I hereto (the "Underwriters"), an aggregate of
2,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"). The 2,000,000 shares of Common Stock to be sold
by the Company and the Firm Selling Shareholders are herein
referred to as the "Firm Securities." In addition, certain other
shareholders of the Company (named in Schedule III attached
hereto, the "Management Shareholders," together with the Firm
Selling Shareholders, the "Option Shareholders") and the Firm
Selling Shareholders propose to grant to the Underwriters an
option to purchase up to an additional 300,000 shares of Common
Stock (the "Option Securities"), on the terms and for the
purposes set forth in Section 2 hereof. The Firm Securities and
the Option Securities are herein collectively referred to as the
"Securities." Except as may be expressly set forth below, any
reference to you in this Agreement shall be solely in your
capacity as the Representatives.
1. The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File
No. 333-_____), and as a part thereof a preliminary
prospectus, in respect of the Securities, has been filed
with the Securities and Exchange Commission (the
"Commission") in the form heretofore delivered to you and,
with the exception of exhibits to the registration
statement, to you for each of the other Underwriters; if
such registration statement has not become effective, an
amendment (the "Final Amendment") to such registration
statement, including a form of final prospectus, necessary
to permit such registration statement to become effective,
will promptly be filed by the Company with the Commission;
if such registration statement has become effective and any
post-effective amendment to such registration statement has
been filed with the Commission prior to the execution and
delivery of this Agreement, which amendment or amendments
shall be in form acceptable to you, the most recent such
amendment has been declared effective by the Commission; if
such registration statement has become effective, a final
prospectus relating to the Securities containing information
permitted to be omitted at the time of effectiveness by
Rule 430A or Rule 434(d) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the
"Act"), will promptly be filed by the Company pursuant to
Rule 424(b) of the rules and regulations of the Commission
under the Act (any preliminary prospectus filed as part of
such registration statement being herein called a
"Preliminary Prospectus," such registration statement as
amended at the time that it becomes or became effective, or,
if applicable, as amended at the time the most recent post-
effective amendment to such registration statement filed
with the Commission prior to the execution and delivery of
this Agreement became effective (the "Effective Date"),
including all exhibits thereto and all information deemed to
be a part thereof at such time pursuant to Rule 430A of the
rules and regulations of the Commission under the Act, or if
the Company elects to rely upon Rule 434 of the rules and
regulations of the Commission, then all references to such
registration statement shall include the final or
preliminary prospectus and the applicable term sheet or
abbreviated term sheet (the "Term Sheet"), as the case may
be, in the form first furnished to the Underwriters by the
Company in reliance upon Rule 434 of the rules and
regulations of the Commission, being herein called the
"Registration Statement" and the final prospectus relating
to the Securities in the form first filed pursuant to
Rule 424(b)(1) or (4) of the rules and regulations of the
Commission under the Act or, if no such filing is required,
the form of final prospectus included in the Registration
Statement, being herein called the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission,
and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by an Underwriter through you expressly for use
therein;
(c) On the Effective Date and the date the Prospectus
is filed with the Commission, and when any further amendment
or supplements thereto become effective or are filed with
the Commission, as the case may be, the Registration
Statement, the Prospectus or such amendment or supplements,
as the case may be, did and will conform in all material
respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not and
will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter through you
expressly for use therein;
(d) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and to conduct its business
as described in the Prospectus, and has been duly qualified
as a foreign corporation for the transaction of business and
is in good standing under the laws of each other
jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification
(except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole); and each of
the Company's subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with corporate
power and authority to own its properties and to conduct its
business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each
other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification
(except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole);
(e) All the issued shares of capital stock of each
subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable
and, except as otherwise set forth in the Prospectus and the
Company's 40% equity interest in Walker Servicos Maritimos
Ltda., a Brazilian limitada, are owned by the Company free
and clear of all liens, encumbrances, equities, security
interests, or claims; and there are no outstanding options,
warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue,
any shares of capital stock of any subsidiary or any
security convertible or exchangeable or exercisable for
capital stock of any subsidiary; except for the shares of
stock of each subsidiary owned by the Company, neither the
Company nor any subsidiary owns, directly or indirectly, any
shares of capital stock of any corporation or have any
equity interest in any firm, partnership, joint venture or
other entity;
(f) The Company has all corporate power and authority
to execute, deliver and perform its obligations under this
Agreement; the execution, delivery and performance by the
Company of its obligations under this Agreement have been
duly and validly authorized by all requisite corporate
action of the Company; and this Agreement constitutes the
legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms
except as enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws relating to
or affecting the rights of creditors generally, by general
principles of equity and, with respect to Section 8 hereof,
by public policy underlying the federal or state securities
laws;
(g) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial
statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action,
order or decree, which loss or interference is material to
the Company and its subsidiaries, taken as a whole; and,
since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has
not been, and prior to the Time of Delivery (as defined in
Section 4 hereof) there will not be, any change in the
capital stock (other than shares issued pursuant to the
exercise of employee stock options that the Prospectus
indicates are outstanding (the "Employee Option Shares") or
short-term debt or long-term debt of the Company or any of
its subsidiaries (excluding changes in the amount of
indebtedness outstanding under the Company's Bank Credit
Facility (as defined in the Registration Statement) which
are incurred for the acquisition of vessels or working
capital purposes), or any material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the
Prospectus;
(h) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and
defects except such as are described or contemplated by the
Prospectus, or such as do not materially affect the value of
such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries, and any real property and buildings held under
lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such real property and
buildings by the Company and its subsidiaries;
(i) The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration
Statement, and all the issued shares of capital stock of the
Company have been duly and validly authorized and issued,
are fully paid and non-assessable, are free of any
preemptive rights, rights of first refusal or similar
rights, were issued and sold in compliance with the
applicable Federal and state securities laws and conform in
all material respects to the description in the Prospectus;
except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for
the issuance of, and there are no commitments, plans or
arrangements to issue, any shares of capital stock of the
Company or any security convertible or exchangeable or
exercisable for capital stock of the Company; there are no
holders of securities of the Company who, by reasons of the
filing of the Registration Statement have the right (and
have not waived such right) to request the Company to
include in the Registration Statement securities owned by
them;
(j) The Securities to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly
issued, fully paid and non-assessable, and will conform in
all material respects to the description thereof in the
Prospectus and will be quoted on the NASDAQ National Market
as of the Effective Date;
(k) The performance of this Agreement, the consummation
of the transactions herein contemplated and the issue and
sale of the Securities and the compliance by the Company
with all the provisions of this Agreement will not conflict
with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge, claim, or
encumbrance upon, any of the property or assets of the
Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of the
provisions of the Certificate of Incorporation or the By-
Laws, in each case as amended to the date hereof, of the
Company or any of its subsidiaries or any statute or any
order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body is required for the issue and sale of the Securities or
the consummation of the other transactions contemplated by
this Agreement, except the registration under the Act of the
Securities, and such consents, approvals, authorizations,
registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Underwriters;
(l) There are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries or
any of their respective officers or directors is a party or
of which any property of the Company or any of its
subsidiaries is the subject, other than litigation or
proceedings incident to the business conducted by the
Company and its subsidiaries which will not individually or
in the aggregate have a material adverse effect on the
current or future financial position, stockholders' equity
or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened or
contemplated by others;
(m) The Company and its subsidiaries have such
licenses, permits and other approvals or authorizations of
and from governmental or regulatory authorities ("Permits")
as are necessary under applicable law to own their
respective properties and to conduct their respective
businesses in the manner now being conducted and as
described in the Prospectus; and the Company and its
subsidiaries have fulfilled and performed all of their
respective obligations with respect to such Permits, and no
event has occurred which allows, or after notice or lapse of
time or both would allow, revocation or termination thereof
or result in any other impairment of the rights of the
holder of any such permits where such revocation,
termination or impairment would have a material adverse
effect on the current or future financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole;
(n) Coopers & Lybrand L.L.P. who have certified certain
financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the
audited consolidated financial statements and schedules
included in the Registration Statement and the Prospectus,
are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(o) The consolidated financial statements and schedules
of the Company and its subsidiaries included in the
Registration Statement and the Prospectus present fairly the
financial condition, the results of operations and the cash
flows of the Company and its subsidiaries as of the dates
and for the periods therein specified in conformity with
generally accepted accounting principles consistently
applied throughout the periods involved, except as otherwise
stated therein; and the other financial and statistical
information and data set forth in the Registration Statement
and the Prospectus is accurately presented and, to the
extent such information and data is derived from the
financial statements and books and records of the Company
and its subsidiaries, is prepared on a basis consistent with
such financial statements and the books and records of the
Company and its subsidiaries; no other financial statements
or schedules are required to be included in the Registration
Statement and the Prospectus;
(p) There are no statutes or governmental regulations,
or any contracts or other documents that are required to be
described in or filed as exhibits to the Registration
Statement which are not described therein or filed as
exhibits thereto; and all such contracts to which the
Company or any subsidiary is a party have been duly
authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the
Company or such subsidiary and are enforceable against the
Company or subsidiary in accordance with the terms thereof;
(q) Neither the Company nor any of and its subsidiaries
are in violation of any term or provision of its Certificate
of Incorporation or By-Laws (or similar corporate
constituent documents), in each case as amended to the date
hereof; nor are the Company or any of its subsidiaries in
violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or
any of its subsidiaries, or of any decree of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries where such violation
would have a material adverse effect on the current or
future financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as
a whole;
(r) No default exists, and no event has occurred which
with notice or lapse of time, or both, would constitute a
default in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of
trust, bank loan or credit agreement, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or their
respective properties is bound or may be affected where such
default would have a material adverse effect on the current
or future financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
taken as a whole;
(s) The Company and its subsidiaries have timely filed
all necessary tax returns and notices and have paid all
federal, state, county, local and foreign taxes of any
nature whatsoever for all tax years through December 31,
1995, to the extent such taxes have become due. The Company
has no knowledge, or any reasonable grounds to know, of any
tax deficiencies which would have a material adverse effect
on the Company or any of its subsidiaries; the Company and
its subsidiaries have paid all taxes which have become due,
whether pursuant to any assessments, or otherwise, and there
is no further liability (whether or not disclosed on such
returns) or assessments for any such taxes, and no interest
or penalties accrued or accruing with respect thereto,
except as may be set forth or adequately reserved for in the
financial statements included in the Registration Statement;
the amounts currently set up as provisions for taxes or
otherwise by the Company and its subsidiaries on their books
and records are sufficient for the payment of all their
unpaid federal, foreign, state, county and local taxes
accrued through the dates as of which they speak, and for
which the Company and its subsidiaries may be liable in
their own right, or as a transferee of the assets of, or as
successor to any other corporation, association,
partnership, joint venture or other entity;
(t) The Company will not, during the period of 120 days
after the date hereof except pursuant to this Agreement,
offer, sell, contract to sell or otherwise dispose of any
capital stock of the Company (or securities convertible
into, or exchangeable for, capital stock of the Company),
directly or indirectly, without the prior written consent of
the Representatives of the Underwriters except for grants
under the Company's 1993 Stock Option Plan and the
1996 Incentive Compensation Plan and the issuance of stock
upon the exercise of any options granted thereunder;
(u) The Company and its subsidiaries maintain a system
of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity
with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to
any differences;
(v) Neither the Company nor any of its subsidiaries is
in violation of any foreign, federal, state or local law or
regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants, nor any federal or state
law relating to discrimination in the hiring, promotion or
paying of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act of 1974, as amended, or the
rules and regulations promulgated thereunder, where such
violation would have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(w) None of the Company or its subsidiaries, or its
officers, directors, employees or agents has used any
corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to
political activity, or made any unlawful payment of funds of
the Company or any subsidiary or received or retained any
funds in violation of any law, rule or regulation;
(x) None of the Company or its subsidiaries, or its
officers, directors, employees or agents have taken or will
take, directly or indirectly, any action designed to or
which has constituted or that might be reasonably be
expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate
the sale or resale of the Securities;
(y) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended;
(z) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of
Section 517.075, Florida Statutes;
(27) The Company and its subsidiaries have in effect
with insurers of recognized financial responsibility
insurance against such losses and risks and in amounts that
the Company reasonably are adequate in light of the business
conducted by the Company and its subsidiaries;
(28) Neither the Company nor any of its subsidiaries is
party to any union or collective bargaining agreements, and
no labor disturbance, strike or slowdown exists, or, to the
Company's knowledge, is threatened, by or involving any
employees of the Company or its subsidiaries, in any such
case that is or would be reasonably likely to have a
material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole;
(29) The statements set forth in the Prospectus under
the caption "Description of Capital Stock," insofar as they
purport to constitute a summary of the terms of the Common
Stock, are, in all material respects, accurate and complete;
and
(30) The Company and any of its subsidiaries that owns
the marine vessels described in the Prospectus (the
"Vessels"), which operate in United States coastwise trade,
are and at all times have been citizens of the United States
within the meaning of Section 2 of the Shipping Act of 1916,
as amended, 46 U.S.C. 802 (the "Shipping Act"), and
qualified to engage in coastwise trade. At no time during
the Company or any subsidiary's ownership of the Vessels
have any of the Vessels been sold, chartered or otherwise
transferred to any person or entity in violation of any
applicable laws, rules or regulations. Except as set forth
of Schedule IV, each Vessel has clean certificate of
inspection from the United States Coast Guard and an
American Bureau of Shipping load line certificate where
applicable, in each case free of reported or reportable
exceptions or notations of record.
1.A. Each of the Option Shareholders severally and not
jointly represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Such Option Shareholder has all requisite power,
authority, authorizations, approvals, orders and consents to
enter into this Agreement and to carry out the provisions
and conditions hereof and in the event that such Option
Shareholder is a corporation, such Option Shareholder has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation; in the event that such
Option Shareholder is a limited partnership, such Option
Shareholder has been duly formed and is validly existing as
a limited partnership in good standing under the laws of the
jurisdiction of its formation.
(b) Each of this Agreement, the Custody Agreement (a
form of which is attached hereto as Exhibit A) and the Power
of Attorney (a form of which is attached hereto as
Exhibit B) has been duly authorized, executed and delivered
by or on behalf of such Option Shareholder and constitutes a
legal, valid and binding agreement of such Option
Shareholder and is enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws relating to
or affecting the rights of creditors generally and by
general principles of equity and, with respect to Section 8
hereof, by public policy under federal and state securities
laws.
(c) On the closing date for the Securities, all stock
transfer or other taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer
of the Securities to be sold by such Option Shareholder to
the Underwriters will have been fully paid or provided for
by such Option Shareholder and all laws imposing such taxes
will have been fully complied with.
(d) The performance of this Agreement and the
consummation of the transactions contemplated hereby will
not result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of such Option
Shareholder pursuant to the terms or provisions of, or
result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the acceleration of
any obligation under the articles of association or charter
or bylaws of such Option Shareholder, if applicable, or any
contract or other agreement to which such Option Shareholder
is a party or bound, or under any law, order, statute,
regulation, consent or memorandum of understanding
applicable to such Option Shareholder of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Option Shareholder
or the property of such Option Shareholder.
(e) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation by the Option Shareholder of the transactions
on its part contemplated hereby, except such as have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution by the Underwriters of the Shares
to be sold by the Option Shareholder or such as may be
required by the National Association of Securities Dealers,
Inc. (the "NASD").
(f) As of the date hereof, and as of each of the Time
of Delivery (defined below) and the Option Securities
Delivery Date (defined below), all information with respect
to the Option Shareholder contained in the Registration
Statement and the Prospectus complied and will comply with
all applicable provisions of the Act and the rules and
regulations of the Commission, contained and will contain
all statements required to be stated therein in accordance
with the Act and the rules and regulations of the
Commission, and did not and will not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(g) The Option Shareholder has not distributed and,
prior to the later to occur of (i) the Time of Delivery,
(ii) the Option Securities Delivery Date or (iii) completion
of the distribution of the Securities, will not distribute
without your prior written consent any offering material in
connection with the offering and sale of the Securities
other than as permitted by the Act.
(h) The Option Shareholder now has, and at each of the
Time of Delivery and the Option Securities Delivery Date
will have, good and valid title to the Securities to be sold
by such Option Shareholder hereto, free and clear of all
security interests, liens, encumbrances, equities or other
claims, and, upon delivery of and payment for such
Securities, the Option Shareholder will deliver to the
Underwriter, good and valid title to such Securities, free
and clear of all security interests, liens, encumbrances,
equities or other claims.
2. Subject to the terms and conditions herein set forth,
the Company agrees to issue and sell, and the Firm Selling
Shareholders agree to sell, to the several Underwriters an
aggregate of 2,000,000 Firm Securities (650,000 shares of such
Firm Securities will be sold by the Company and 1,350,000 shares
of such Firm Securities will be sold by the Firm Selling
Shareholders), and each of the Underwriters agrees to purchase
from the Company and the Firm Selling Shareholders, at a purchase
price of $_____ per share, the respective aggregate number of
Firm Securities determined in the manner set forth below. The
obligation of each Underwriter to the Company and the Firm
Selling Shareholders shall be to purchase that portion of the
number of shares of Common Stock to be sold by the Company and
the Firm Selling Shareholders pursuant to this Agreement as the
number of Firm Securities set forth opposite the name of such
Underwriter on Schedule I bears to the total number of Firm
Securities to be purchased by the Underwriters pursuant to this
Agreement, in each case adjusted by you such that no Underwriter
shall be obligated to purchase Firm Securities other than in
100 share amounts. In making this Agreement, each Underwriter is
contracting severally and not jointly.
In addition, subject to the terms and conditions herein set
forth, the Option Shareholders agree to sell, to the
Underwriters, as required (for the sole purpose of covering over-
allotments in the sale of the Firm Securities), up to
300,000 Option Securities at the purchase price per share of the
Firm Securities being sold by the Company and the Firm Selling
Shareholders as stated in the preceding paragraph (with any
Option Securities sold to the Underwriters pursuant to this
paragraph being sold in accordance with the procedures listed on
Schedule V attached hereto). The right to purchase the Option
Securities may be exercised by your giving 48 hours' prior
written or telephonic notice (subsequently confirmed in writing)
to the Company and the Option Shareholders of your determination
to purchase all or a portion of the Option Securities. Such
notice may be given at any time within a period of 30 days
following the date of this Agreement. Option Securities shall be
purchased severally for the account of each Underwriter in
proportion to the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule I hereto. No Option
Securities shall be delivered to or for the accounts of the
Underwriters unless the Firm Securities shall be simultaneously
delivered or shall theretofore have been delivered as herein
provided. The respective purchase obligations of each
Underwriter shall be adjusted by you so that no Underwriter shall
be obligated to purchase Option Securities other than in 100
share amounts. The Underwriters may cancel any purchase of
Option Securities at any time prior to the Option Securities
Delivery Date (as defined in Section 4 hereof) by giving written
notice of such cancellation to the Company.
3. The Underwriters propose to offer the Securities for
sale upon the terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Firm Securities
to be purchased by each Underwriter hereunder shall be delivered
by or on behalf of the Company and the Firm Selling Shareholders
to you for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor
by certified or official bank check or checks, payable in New
York Clearing House funds, (or, if the Underwriters and the
Company agree, by means of a wire transfer of same-day funds in
accordance with written instructions from the Company pursuant to
which the Company will reimburse the Underwriters for their costs
of obtaining such same-day funds) to the order of the Company and
the Firm Selling Shareholders, as appropriate, for the purchase
price of the Firm Securities being sold by the Company and the
Firm Selling Shareholders at the office of Schroder Wertheim &
Co. Incorporated, Equitable Center, 787 Seventh Avenue, New York,
New York, at 9:30 a.m., New York City time, on __________ ___,
1996, or at such other time, date and place as you and the
Company may agree upon in writing, such time and date being
herein called the "Time of Delivery."
Certificates in definitive form for the Option Securities to
be purchased by each Underwriter hereunder shall be delivered by
or on behalf of the Option Shareholders to you for the account of
such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price thereof by certified or official
bank check or checks, payable in New York Clearing House funds,
to the order of the respective Option Shareholders, for the
purchase price of the Option Securities, in New York, New York,
at such time and on such date (not earlier than the Time of
Delivery nor later than ten business days after giving of the
notice delivered by you to the Company with reference thereto)
and in such denominations and registered in such names as shall
be specified in the notice delivered by you to the Company and
the Option Shareholders with respect to the purchase of such
Option Securities. The date and time of such delivery and
payment are herein sometimes referred to as the "Option
Securities Delivery Date." The obligations of the Underwriters
shall be subject, in their discretion, to the condition that
there shall be delivered to the Underwriters on the Option
Securities Delivery Date opinions and certificates, dated such
Option Securities Delivery Date, referring to the Option
Securities, instead of the Firm Securities, but otherwise to the
same effect as those required to be delivered at the Time of
Delivery pursuant to Sections 7(d), 7(e), 7(f) and 7(i).
Certificates for the Firm Securities and the Option
Securities so to be delivered will be in good delivery form, and
in such denominations and registered in such names as you may
request not less than 48 hours prior to the Time of Delivery and
the Option Securities Delivery Date, respectively. Such
certificates will be made available for checking and packaging in
New York, New York, at least 24 hours prior to the Time of
Delivery and Option Securities Delivery Date.
5. The Company covenants and agrees with each of the
Underwriters:
(a) If the Registration Statement has not become
effective, to file promptly the Final Amendment with the
Commission and use its best efforts to cause the
Registration Statement to become effective; if the
Registration Statement has become effective, to comply with
the requirements of Rule 430A and/or Rule 434 of the rules
and regulations of the Commission; to make no further
amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you after
reasonable notice thereof; to advise you, promptly after it
receives notice thereof of the time when the Registration
Statement, or any amendment thereto, or any amended
Registration Statement has become effective or any
supplement to the Prospectus or any amended Prospectus has
been filed, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or
for additional information; and in the event of the issuance
of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best
efforts to obtain withdrawal of such order;
(b) Promptly from time to time to take such action as
you may request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions as you
may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete
the distribution, provided that in connection therewith the
Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish each of the Representatives and counsel
for the Underwriters, without charge, signed copies of the
registration statement originally filed with respect to the
Securities and each amendment thereto (in each case
including all exhibits thereto) and to each other
Underwriter, without charge, a conformed copy of such
registration statement and each amendment thereto (in each
case without exhibits thereto) and, prior to 9:00 a.m., New
York City time, on the business day next succeeding the date
of this Agreement and from time to time so long as a
prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary
Prospectus, the Prospectus and all amendments or supplements
thereto as you may from time to time reasonably request. If
at any time when a prospectus is required to be delivered
under the Act an event shall have occurred as a result of
which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to
state any material fact necessary in order to make
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply
with the Act, the Company will forthwith prepare and,
subject to the provisions of Section 5(a) hereof, file with
the Commission an appropriate supplement or amendment
thereto, and will furnish to each Underwriter and to any
dealer in securities, without charge, as many copies as you
may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance
in accordance with the requirements of Section 10 of the
Act;
(d) To make generally available to its stockholders as
soon as practicable, but in any event not later than 45 days
after the close of the period covered thereby, an earnings
statement in form complying with the provisions of
Section 11(a) of the Act covering a period of 12 consecutive
months beginning not later than the first day of the
Company's fiscal quarter next following the Effective Date;
(e) To file promptly all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to the Effective Date;
(f) For a period of five years from the Effective Date,
to furnish to its stockholders after the end of each fiscal
year an annual report meeting the requirements of the
Exchange Act (including a consolidated balance sheet and
statements of income, cash flow and stockholders' equity of
the Company and its subsidiaries certified by independent
public accountants);
(g) During a period of five years from the Effective
Date, to furnish to you copies of all reports or other
communications (financial or other) furnished to its
stockholders, and deliver to you (i) as soon as they are
available, copies of any reports and financial statements
furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information
concerning the business and financial condition of the
Company as you may from time to time reasonably request in
connection with your obligations hereunder;
(h) To apply the net proceeds from the sale of the
Securities in the manner set forth in the Prospectus under
the caption "Use of Proceeds;"
(i) That it will not, and will cause its subsidiaries,
officers, directors, employees, agents and affiliates not
to, take, directly or indirectly, any action designed to
cause or result in, or that might reasonably be expected to
cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale
or resale of the Securities;
(j) That prior to the Time of Delivery there will not
be any change in the capital stock (other than the issuance
of Employee Option Shares) or material change in the short-
term debt or long-term debt of the Company or any of its
subsidiaries (except for changes in the amount of
indebtedness outstanding under the Company's Bank Credit
Facility (as defined in the Registration Statement) incurred
for the acquisition of vessels or working capital purposes),
or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the
general affairs, management, financial position,
stockholders' equity or results of operations of the Company
or any of its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;
(k) That it will not, and will cause each of its
executive officers, directors and Berkshire Fund III, A
Limited Partnership to enter into agreements with the
Representatives in the form set forth in Exhibit A to the
effect that they will not, during the period of 120 days
after the date hereof (other than pursuant to this
Agreement), sell, offer or agree to sell or otherwise
dispose of any capital stock of the Company (or securities
convertible into, or exchangeable for, capital stock of the
Company), directly or indirectly, without the prior written
consent of the Representative, provided that the foregoing
restrictions shall not apply to grants under the Company's
1993 Stock Option Plan and 1996 Incentive Compensation Plan
and the exercise of options granted thereunder or pursuant
to the terms of convertible securities of the Company
outstanding on the date hereof or to any gift of Common
Stock or any private sale of Common Stock not made on the
open market to a donee or purchaser, respectively, that
agrees in writing for the benefit of the Representative to
be bound by the same restrictions with respect to such
shares;
(l) That it has caused the Securities to be included
for quotation on the NASDAQ National Market as of the
Effective Date; and
(m) That, if it commences engaging in business with the
government of Cuba or with any person or affiliate located
in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business
with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the
Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
5.A. Each of the Option Shareholders covenants with each of
the Underwriters as follows:
(a) Such Option Shareholder will not at any time,
directly or indirectly, take any action intended, or which
might reasonably be expected, to cause or result in, or
which will cause, stabilization of the price of the shares
of Common Stock to facilitate the sale or resale of any of
the Securities in connection with the Offering.
(b) As soon as such Option Shareholder is advised
thereof, such Option Shareholder will advise the
Underwriters and confirm such advice in writing, (1) of
receipt by such Option Shareholder, or by any
representative of the Option Shareholder, of any
communication from the Commission relating to the
Registration Statement, the Prospectus or any
Preliminary Prospectus, or any notice or order of the
Commission relating to the Company or such Option
Shareholder in connection with the transactions
contemplated by this Agreement and (2) of the happening
of any event during the period from and after the
Effective Date that in the judgment of such Option
Shareholder makes any statement made in the
Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration
Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in
which they were made, not misleading.
(c) Such Option Shareholder will not, for a period
of 120 days following the date of the Prospectus,
without prior written consent of the Underwriters,
offer, sell or contract to sell, or otherwise dispose
of, directly or indirectly, any other shares of Common
Stock or any securities convertible into, or
exchangeable for, shares of Common Stock (other than
the exercise of employee stock options owned by such
Option Shareholder).
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid: the
fees, disbursements and expenses of counsel and accountants for
the Company, and all other expenses, in connection with the
preparation, printing and filing of the Registration Statement
and the Prospectus and amendments and supplements thereto and the
furnishing of copies thereof, including charges for mailing, air
freight and delivery and counting and packaging thereof and of
any Preliminary Prospectus and related offering documents to the
Underwriters and dealers; the cost of copying and distributing
this Agreement, the Agreement Among Underwriters, the Selling
Agreement, communications with the Underwriters and selling group
and the Preliminary and Supplemental Blue Sky Memoranda and any
other documents in connection with the offering, purchase, sale
and delivery of the Securities; all expenses in connection with
the qualification of the Securities for offering and sale under
securities laws as provided in Section 5(b) hereof, including
filing and registration fees and the fees, reasonable
disbursements and expenses for counsel for the Underwriters in
connection with such qualification and in connection with Blue
Sky surveys or similar advice with respect to sales; the filing
fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; all fees and expenses in connection with
quotation of the Securities on the NASDAQ National Market; and
all other costs and expenses incident to the performance of their
obligations hereunder which are not otherwise specifically
provided for in this Section 6, including the fees of the
Company's Transfer Agent and Registrar, the cost of any stock
issue or transfer taxes on sale of the Securities to the
Underwriters, the cost of the Company's personnel and other
internal costs, the cost of printing and engraving the
certificates representing the Securities and all expenses and
taxes incident to the sale and delivery of the Securities to be
sold by the Company to the Underwriters hereunder. It is
understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all
their own costs and expenses, including the fees of their
counsel, stock transfer taxes on resale of any of the Securities
by them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all
representations and warranties and other statements of the
Company and the Firm Selling Shareholders herein are, at and as
of the Time of Delivery, true and correct, the condition that the
Company and the Firm Selling Shareholders shall have performed
all its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Registration Statement shall have become
effective, and you shall have received notice thereof not
later than 10:00 p.m., New York City time, on the date of
execution of this Agreement, or at such other time as you
and the Company may agree; if required, the Prospectus shall
have been filed with the Commission in the manner and within
the time period required by Rule 424(b); no stop order
suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission;
and all requests for additional information on the part of
the Commission shall have been complied with to your
reasonable satisfaction;
(b) All corporate proceedings and related legal and
other matters in connection with the organization of the
Company and the registration, authorization, issue, sale and
delivery of the Securities shall have been reasonably
satisfactory to Vinson & Elkins L.L.P., counsel to the
Underwriters, and Vinson & Elkins L.L.P. shall have been
timely furnished with such papers and information as they
may reasonably have requested to enable them to pass upon
the matters referred to in this subsection;
(c) You shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact or
omits to state a fact which in your judgment is in either
case material and in the case of an omission is required to
be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(d) Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. ("Jones, Walker"), counsel to the Company,
shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly and validly
incorporated and is validly existing as a corporation
in good standing under the laws of the State of
Delaware, and is qualified to do business and is in
good standing in each jurisdiction in which its
ownership or leasing of properties requires such
qualification or the conduct of its business requires
such qualification (except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or the business
affairs or prospects of the Company and its
subsidiaries, taken as a whole); and the Company has
all necessary corporate power and all material
governmental authorizations, permits and approvals
required to own, lease and operate its properties and
conduct its business as described in the Prospectus;
(ii) Each of the Company's subsidiaries has been
duly and validly incorporated and is validly existing
as a corporation in good standing under the laws of the
jurisdiction of its incorporation, and is qualified to
do business and is in good standing in each
jurisdiction in which its ownership or leasing of
properties requires such qualification or the conduct
of its business requires such qualification (except
where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole); and
each such subsidiary has all necessary corporate power
and all material governmental authorizations, permits
and approvals required to own, lease and operate its
properties and to conduct its business as described in
the Prospectus;
(iii) All the outstanding shares of capital stock
of each of the Company's subsidiaries have been duly
authorized and are validly issued and outstanding, are
fully paid and non-assessable, except as otherwise set
forth in the Prospectus and the Company's 40% equity
interest in Walker Servicos Maritimos Ltda., a
Brazilian limitada, are owned by the Company of record
and to the best knowledge of such counsel,
(A) beneficially and (B) free and clear of all liens,
encumbrances, equities, security interests or claims of
any nature whatsoever; and neither the Company nor any
of its subsidiaries has granted any outstanding
options, warrants or commitments with respect to any
shares of its capital stock, whether issued or
unissued, except as otherwise described in the
Prospectus;
(iv) The Company has an authorized capitalization
as set forth in the Registration Statement and all the
issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully
paid and non-assessable; are free of any preemptive
rights, and were issued and sold in compliance with all
applicable Federal and state securities laws; except as
described in the Prospectus, to the knowledge of such
counsel, there are no outstanding options, warrants or
other rights calling for the issuance of, and there are
no commitments, plans or arrangements to issue, any
shares of capital stock of the Company; the Securities
being sold by the Company have been duly and validly
authorized and, when duly countersigned by the
Company's Transfer Agent and Registrar and issued,
delivered and paid for in accordance with the
provisions of the Registration Statement and this
Agreement, will be duly and validly issued, fully paid
and non-assessable; the Securities conform to the
description thereof in the Prospectus; the Securities
have been duly authorized for quotation on the NASDAQ
National Market, as of the Effective Date; and the
certificates for the Securities are in valid and
sufficient form;
(v) To the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or
threatened to which the Company or any of its
subsidiaries or any of their respective officers or
directors is a party or of which any property of the
Company or any of its subsidiaries is the subject
which, if resolved against the Company or any of its
subsidiaries or any of their respective officers or
directors, individually, or to the extent involving
related claims or issues, in the aggregate, is of a
character required to be disclosed in the Prospectus;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company and is a legal,
valid and binding agreement of the Company enforceable
in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws relating to or
affecting the rights of creditors generally and by
general principles of equity and, with respect to
Section 8 of this Agreement, by public policy under
federal and state securities laws;
(vii) The Company has full corporate power and
authority to execute, deliver and perform this
Agreement, and the execution, delivery and performance
of this Agreement, the consummation of the transactions
herein contemplated and the issue and sale of the
Securities and the compliance by the Company with all
the provisions of this Agreement will not conflict
with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge,
claim or encumbrance upon, any of the property or
assets of the Company or any of its subsidiaries
pursuant to, the terms of any indenture, mortgage, deed
of trust, loan agreement or other material agreement or
instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action
result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws, in each
case as amended, of the Company or any of its
subsidiaries, or any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their
properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or
any regulatory authority or other governmental body is
required for the issue and sale of the Securities or
the consummation of the other transactions contemplated
by this Agreement, except such as have been obtained
under the Act and such consents, approvals, authoriza-
tions, registrations or qualifications as may be
required under state or foreign securities or Blue Sky
laws in connection with the purchase and distribution
of the Securities by the Underwriters;
(ix) To the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries is
currently in violation of its Certificate of
Incorporation or By-Laws or in default under, any
indenture, mortgage, deed of trust, lease, bank loan or
credit agreement or any other agreement or instrument
of which such counsel has knowledge to which the
Company or any of its subsidiaries is a party or by
which any of them or any of their property may be bound
or affected (in any respect that is material in light
of the financial condition of the Company and its
subsidiaries, taken as a whole);
(x) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any Securities pursuant to
the Company's Certificate of Incorporation or By-Laws
(except as provided in the Company's Certificate of
Incorporation with respect to ownership of Common Stock
by non-U.S. citizens), in each case as amended to the
date hereof, or any agreement or other instrument known
to such counsel; and no holders of securities of the
Company have rights to the registration thereof under
the Registration Statement or, if any such holders have
such rights, such holders have waived such rights;
(xi) To the extent summarized therein, all
contracts and agreements summarized in the Registration
Statement and the Prospectus are fairly summarized
therein, conform in all material respects to the
descriptions thereof contained therein, and, to the
extent such contracts or agreements or any other
material agreements are required under the Act or the
rules and regulations thereunder to be filed, as
exhibits to the Registration Statement, they are so
filed; and such counsel does not know of any contracts
or other documents required to be summarized or
disclosed in the Prospectus or to be so filed as an
exhibit to the Registration Statement, which have not
been so summarized or disclosed, or so filed;
(xii) All descriptions in the Prospectus of
statutes, regulations or legal or governmental
proceedings are fair summaries thereof and fairly
present the information required to be shown with
respect to such matters;
(xiii) The Registration Statement has become
effective under the Act, the Prospectus has been filed
in accordance with Rule 424(b) of the rules and
regulations of the Commission under the Act, including
the applicable time periods set forth therein, or such
filing is not required and, to the best knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act,
and the Registration Statement, the Prospectus and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all
material respects with the requirements of the Act and
the rules and regulations thereunder; it being
understood that such counsel need express no opinion as
to the financial statements and schedules or other
financial data contained in the Registration Statement
or the Prospectus.
Such counsel shall also state that nothing has
come to such counsel's attention that would lead such
counsel to believe that either the Registration
Statement or any amendment or supplement thereto, at
the time such Registration Statement or amendment or
supplement became effective, or the Prospectus or any
amendment or supplement thereto, as of its date and as
of the Time of Delivery, contains or contained any
untrue statement of material fact or omitted or omits
to state a material fact required to be stated therein
or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading.
In rendering their opinions set forth in
Section 7(d) above, such counsel may rely, to the
extent deemed advisable by such counsel, (a) as to
factual matters, upon certificates of public officials
and officers of the Company, and (b) as to the laws of
any jurisdiction other than the United States and
jurisdictions in which they are admitted, on opinions
of counsel (provided, however, that you shall have
received a copy of each of such opinions which shall be
dated the Time of Delivery, addressed to you or
otherwise authorizing you to rely thereon, and Jones,
Walker in its opinion to you delivered pursuant to this
subsection, shall state that such counsel are
satisfactory to them and Jones, Walker has no reason to
believe that the Underwriters and they are not
justified to so rely);
(e) Jones, Walker (or other law firm acceptable to the
Underwriters), shall have furnished to you their written
opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Each of this Agreement, the Power of Attorney
and the Custody Agreement has been duly authorized,
executed and delivered by or on behalf of each of the
Option Shareholders and constitutes a legal, valid and
binding agreement of each Option Shareholder.
(ii) No consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation by any Option Shareholder of the
transactions on its part contemplated by this Agreement
in connection with the Securities to be sold by any
Option Shareholder hereunder, except such as have been
obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of such
Securities by the Underwriters; and
(iii) Upon purchase of the Securities to be sold
by the Option Shareholders as provided in this
Agreement, each of the Underwriters (assuming that it
is a bona fide purchaser within the meaning of the
Uniform Commercial Code) will acquire good and valid
title to such Securities, free and clear of all
security interests, liens, encumbrances, equities or
other claims.
Such counsel may rely upon certificates of the Option
Shareholders. The opinions of such counsel relate solely
to, are based solely upon and are limited exclusively to the
laws of the State of Texas and the State of New York and the
laws of the United States of America, to the extent
applicable.
(f) Vinson & Elkins L.L.P., counsel to the
Underwriters, shall have furnished to you their written
opinion or opinions, dated the Time of Delivery, in form and
substance satisfactory to you, with respect to the
incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and
other related matters as you may reasonably request, and
such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon
such matters;
(g) At the time this Agreement is executed and also at
the Time of Delivery, Coopers & Lybrand L.L.P. shall have
furnished to you a letter or letters, dated the date of this
Agreement and the Time of Delivery, in form and substance
satisfactory to you, to the effect, that:
(i) They are independent accountants with respect
to the Company and its subsidiaries within the meaning
of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion the consolidated financial
statements of the Company and its subsidiaries
(including the related schedules and notes) included in
the Registration Statement and Prospectus and covered
by their reports included therein comply as to form in
all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder;
(iii) On the basis of specified procedures as of a
specified date not more than five days prior to the
date of their letter (which procedures do not
constitute an examination made in accordance with
generally accepted auditing standards), consisting of a
reading of the latest available unaudited interim
consolidated financial statements of the Company and
its subsidiaries, a reading of the latest available
minutes of any meeting of the Board of Directors and
stockholders of the Company and its subsidiaries since
the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of
the Company and its subsidiaries who have
responsibility for financial and accounting matters,
and such other procedures or inquiries as are specified
in such letter, nothing came to their attention that
caused them to believe that:
(A) The unaudited consolidated condensed
financial statements of the Company and its
subsidiaries included in the Prospectus do not
comply in form in all material respects with the
applicable accounting requirements of the Act and
the rules and regulations promulgated thereunder
or are not presented in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) as of a specified date not more than five
days prior to the date of their letter, there was
any change in the capital stock, or the long-term
debt of the Company and its subsidiaries on a
consolidated basis, or any decrease in total
assets, total current assets or stockholders'
equity or other items specified by the
Representatives, of the Company and its
subsidiaries on a consolidated basis, each as
compared with the amounts shown on the
September 30, 1996 balance sheet included in the
Registration Statement and the Prospectus, except
in each case for changes, increases or decreases
which the Prospectus discloses have occurred or
may occur or such other changes, decreases or
increases which are described in their letter and
which do not, in the sole judgment of the
Representatives, make it impractical or
inadvisable to proceed with the purchase and
delivery of the Securities as contemplated by the
Registration Statement; and
(C) for the period from October 1, 1996 to a
specified date not more than five days prior to
the date of such letter, there was any decrease,
as compared with the corresponding period of the
preceding fiscal year, in the following
consolidated amounts: total revenues, income
(loss) before income taxes, net income (loss) or
net income (loss) per average common share
outstanding, except in all instances for decreases
which the Registration Statement discloses have
occurred or may occur; or such other decreases
which are described in their letter and which do
not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with
the purchase and delivery of the Securities as
contemplated by the Registration Statement; and
(iv) in addition to the examination referred to in
their reports included in the Registration Statement
and the Prospectus and the limited procedures referred
to in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with
respect to certain amounts, percentages and financial
information specified by the Representatives, which are
derived from the general accounting records of the
Company and its subsidiaries which appear in the
Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement, and have
compared such amounts and financial information with
the accounting records of the Company and its
subsidiaries, and have found them to be in agreement
and have proved the mathematical accuracy of certain
specified percentages.
(h) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited
financial statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action,
order or decree; and since the respective dates as of which
information is given in the Prospectus, there shall not have
been any change in the capital stock (other issuance of
Employee Option Shares) or short-term debt or long-term
debt (excluding changes in the amount of indebtedness
outstanding under the Company's Bank Credit Facility
(as defined in the Registration Statement) incurred
for the acquisition of vessels or working capital
purposes) of the Company or any of its subsidiaries
nor any change or any development involving a prospective
change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus,
the effect of which, in any such case is in your judgment so
material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in
the Prospectus;
(i) Between the date hereof and the Time of Delivery
there shall have been no declaration of war by the
Government of the United States; at the Time of Delivery
there shall not have occurred any material adverse change in
the financial or securities markets in the United States or
in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities
or other calamity or crisis, the effect of which is such as
to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce
contracts for the resale of Securities and no event shall
have occurred resulting in (i) trading in securities
generally on the New York Stock Exchange or in the Common
Stock on the principal securities exchange or market in
which the Common Stock is listed or quoted being suspended
or limited or minimum or maximum prices being generally
established on such exchanges or market, or (ii) additional
material governmental restrictions, not in force on the date
of this Agreement, being imposed upon trading in securities
generally by the New York Stock Exchange or in the Common
Stock on the principal securities exchange or market in
which the Common Stock is listed or quoted or by order of
the Commission or any court or other governmental authority,
or (iii) a general banking moratorium being declared by
either Federal or New York authorities;
(j) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates signed
by the chief executive officer and the chief financial
officer, on behalf of the Company, satisfactory to you as to
such matters as you may reasonably request and as to (i) the
accuracy of the Company's representations and warranties
herein at and as of the Time of Delivery and (ii) the
performance by the Company of all its obligations hereunder
to be performed at or prior to the Time of Delivery;
(iii) the fact that they have carefully examined the
Registration Statement and Prospectus and, (a) as of the
Effective Date, the statements contained in the Registration
Statement and the Prospectus were true and correct and
neither the Registration Statement nor the Prospectus
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading and (b) since the Effective Date, no event has
occurred that is required by the Act or the rules and
regulations of the Commission thereunder to be set forth in
an amendment of, or a supplement to, the Prospectus that has
not been set forth in such an amendment or supplement; and
(iv) the matters set forth in subsection (a) of this
Section 7;
(k) Each director, executive officer and Berkshire Fund
III, A Limited Partnership shall have delivered to you an
agreement not to sell, offer or agree to sell or otherwise
dispose of any capital stock of the Company (or securities
convertible into, or exchangeable for, capital stock of the
Company), directly or indirectly, for a period of 120 days
after the date hereof (other than pursuant to this Agreement
and upon exercise of an employee stock option), without the
prior written consent of the Representative, provided that
the foregoing restrictions shall not apply to grants under
the Company's 1993 Stock Option Plan and 1996 Incentive
Compensation Plan and the exercise of options granted
thereunder or pursuant to the terms of convertible
securities of the Company outstanding on the date hereof or
to any gift of Common Stock or any private sale of Common
Stock not made on the open market to a donee or purchaser,
respectively, that agrees in writing for the benefit of the
Representative to be bound by the same restrictions with
respect to such shares; and
(l) The Company shall have delivered to you evidence
that the Securities have been authorized for quotation on
the NASDAQ National Market as of the Effective Date.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky application
or other document executed by the Company specifically for that
purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to
qualify any or all the Securities under the security laws thereof
or filed with the Commission or any securities association or
securities exchange (each, an "Application"), or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein
not misleading, or (ii) any untrue statement or alleged untrue
statement made by the Company in Section 1 of this Agreement, or
(iii) the employment by the Company of any device, scheme or
artifice to defraud, or the engaging by the Company in any act,
practice or course of business which operates or would operate as
a fraud or deceit, or any conspiracy with respect thereto, in
which the Company shall participate, in connection with the
issuance and sale of any of the Securities, and will reimburse
each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating,
preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; provided,
however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission relating to an
Underwriter made in any Preliminary Prospectus, the Registration
Statement, the Prospectus or such amendment or supplement or any
Application in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
you expressly for use therein.
(b) In addition to any obligations of the Company under
Section 8(a), the Company agrees that it shall perform its
indemnification obligations under Section 8(a) (as modified
by the last paragraph of this Section 8(b)) with respect to
counsel fees and expenses and other expenses reasonably
incurred by making payments within 45 days to the
Underwriter in the amount of the statements of the
Underwriter's counsel or other statements which shall be
forwarded by the Underwriter, and that they shall make such
payments notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
obligation to reimburse the Underwriters for such expenses
and the possibility that such payments might later be held
to have been improper by a court and a court orders return
of such payments.
The indemnity agreement in Section 8(a) shall be in
addition to any liability which the Company may otherwise
have and shall extend upon the same terms and conditions to
each person, if any, who controls any Underwriter within the
meaning of the Act or the Exchange Act.
(c) Each Option Shareholder will indemnify and hold
harmless each Underwriter or the Company, as the case may
be, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or the Company,
as the case may be, may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or in any Blue Sky
application or other document executed by the Company
specifically for that purpose or based upon written
information furnished to the Company by the Option
Shareholder filed in any state or other jurisdiction in
order to qualify any or all the Securities under the
security laws thereof or filed with the Commission or any
securities association or securities exchange (each, an
"Application"), or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements made therein in each
case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission was made
in reliance upon and in conformity with written information
furnished to the Company by such Option Shareholder
specifically for use therein and provided, however, that the
Option Shareholder shall not be liable in any such case to
the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission
relating to an Underwriter made in any Preliminary
Prospectus, the Registration Statement, the Prospectus or
such amendment or supplement or any Application in reliance
upon and in conformity with written information furnished to
the Company by such Underwriter through you expressly for
use therein. In addition, in no event shall the liability
of any Option Shareholder for indemnification in this
Section 8(c) exceed the proceeds received by such Option
Shareholder in the Offering.
(d) In addition to any obligations of each of the
Option Shareholders under Section 8(c), each of the Option
Shareholders agrees that it shall perform its
indemnification obligations under Section 8(c) (as modified
by the last paragraph of this Section 8(d)) with respect to
counsel fees and expenses and other expenses reasonably
incurred by making payments within 45 days to the
Underwriter in the amount of the statements of the
Underwriter's counsel or other statements which shall be
forwarded by the Underwriter, and that they shall make such
payments notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
obligation to reimburse the Underwriters for such expenses
and the possibility that such payments might later be held
to have been improper by a court and a court orders return
of such payments.
The indemnity agreement in Section 8(c) shall be in
addition to any liability which such Option Shareholder may
otherwise have and shall extend upon the same terms and
conditions to each person, if any, who controls any
Underwriter within the meaning of the Act or the Exchange
Act.
(e) Each Underwriter will indemnify and hold harmless
the Company or the Option Shareholders, as the case may be,
against any losses, claims, damages or liabilities to which
the Company or any of the Option Shareholders may become
subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or
any Application, or arise out of or are based upon the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration
Statement, the Prospectus or such amendment or supplement or
any Application in reliance upon and in conformity with
written information furnished to the Company or the Option
Shareholder by such Underwriter relating to such Underwriter
through you expressly for use therein, and will reimburse
the Company or the Option Shareholder for any legal or other
expenses reasonably incurred by the Company or the Option
Shareholder in connection with investigating or defending
any such action or claim.
The indemnity agreement in this Section 8(e) shall be
in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of
the Company or Option Shareholder, if appropriate, and to
each person, if any, who controls the Company or Option
Shareholder, if appropriate, within the meaning of the Act
or the Exchange Act.
(f) Promptly after receipt by an indemnified party
under Section 8(a), 8(c) or 8(e) of notice of the
commencement of any action (including any governmental
investigation), such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to
notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party under
Section 8(a), 8(c) or 8(e) except to the extent it was
unaware of such action and has been prejudiced in any
material respect by such failure or from any liability which
it may have to any indemnified party otherwise than under
such Section 8(a), 8(c) or 8(e). In case any such action
shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof
other than reasonable costs of investigation. If, however,
(i) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the
indemnifying party or (ii) an indemnified party shall have
reasonably concluded that representation of such indemnified
party and the indemnifying party by the same counsel would
be inappropriate under applicable standards of professional
conduct due to actual or potential differing interests
between them and the indemnified party so notifies the
indemnifying party, then the indemnified party shall be
entitled to employ counsel different from counsel for the
indemnifying party at the expense of the indemnifying party
and the indemnifying party shall not have the right to
assume the defense of such indemnified party. In no event
shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to local
counsel) for all indemnified parties in connection with any
one action or separate but similar or related actions in the
same jurisdiction arising out of the same set of allegations
or circumstances. The counsel with respect to which fees
and expenses shall be so reimbursed shall be designated in
writing by Schroder Wertheim & Co. Incorporated in the case
of parties indemnified pursuant to Section 8(a) and 8(c) and
by the Company and the Option Shareholders in the case of
parties indemnified pursuant to Section 8(e).
No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and
indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
proceeding.
(g) In order to provide for just and equitable
contribution under the Act in any case in which (i) any
Underwriter (or any person who controls any Underwriter
within the meaning of the Act or the Exchange Act) makes
claim for indemnification pursuant to Section 8(a) or 8(c)
hereof, but is judicially determined (by the entry of a
final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such
indemnification may not be enforced in such case
notwithstanding the fact that Section 8(a) or 8(c) provides
for indemnification in such case or (ii) contribution under
the Act may be required on the part of any Underwriter or
any such controlling person in circumstances for which
indemnification is provided under Section 8(e), then, and in
each such case, each indemnifying party shall contribute to
the aggregate losses, claims, damages or liabilities to
which they may be subject as an indemnifying party hereunder
(after contribution from others) in such proportion as is
appropriate to reflect the relative benefits received by the
Company or any of the Option Shareholders on the one hand
and the Underwriters on the other from the offering of the
Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give
the notice required under Section 8(d) above, then each
indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the
statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable
considerations. The relative benefits received by the
Company or any of the Option Shareholders on the one hand
and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement
(before deducting expenses) received by the Company or any
of the Option Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters with
respect to the Securities purchased under this Agreement, in
each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by the Company or any of the Option
Shareholders on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission. The Company, each of the Option
Shareholders and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this
Section 8(g) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to
above in this Section 8(g). The amount paid or payable by
an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof)
referred to above in this Section 8(g) shall be deemed to
include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 8(g), no Underwriter shall be
required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten
by it and distributed to the public were offered to the
public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or
alleged omission and no Option Shareholder shall be required
to contribute any amount in excess of the proceeds received
by such Option Shareholder in the Offering. No person
guilty of a fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations
in this Section 8(e) to contribute are several in proportion
to their respective underwriting obligations and not joint.
(h) Promptly after receipt by any party to this
Agreement of notice of the commencement of any action, suit
or proceeding, such party will, if a claim for contribution
in respect thereof is to be made against another party (the
"contributing party"), notify the contributing party of the
commencement thereof; but the omission so to notify the
contributing party will not relieve it from any liability
which it may have to any other party for contribution under
the Act except to the extent it was unaware of such action
and has been prejudiced in any material respect by such
failure or from any liability which it may have to any other
party other than for contribution under the Act. In case
any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party of the
commencement thereof, the contributing party will be
entitled to participate therein with the notifying party and
any other contributing party similarly notified.
9. (a) If any Underwriter shall default in its obligation
to purchase the Firm Securities which it has agreed to purchase
hereunder, you may in your discretion arrange for you or another
party or other parties to purchase such Firm Securities on the
terms contained herein. If the aggregate number of Firm
Securities as to which Underwriters default is more than one-
eleventh of the aggregate number of all the Firm Securities and
within 36 hours after such default by any Underwriter you do not
arrange for the purchase of such Firm Securities, then the
Company shall be entitled to a further period of 36 hours within
which to procure another party or other parties satisfactory to
you to purchase such Firm Securities on such terms. In the event
that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Firm
Securities, or the Company notifies you that it has so arranged
for the purchase of such Firm Securities, you or the Company
shall have the right to postpone the Time of Delivery for a
period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents or
arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to
such Firm Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Securities of such defaulting
Underwriter or Underwriters by you or the Company or both as
provided in subsection (a) above, the aggregate number of
such Firm Securities which remain unpurchased does not
exceed one-eleventh of the aggregate number of all the Firm
Securities, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of
the Firm Securities which such Underwriter agreed to
purchase hereunder and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based
on the number of Firm Securities which such Underwriter
agreed to purchase hereunder) of the Firm Securities of such
defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Securities of a defaulting Underwriter
or Underwriters by you or the Company as provided in
subsection (a) above, the aggregate number of such Firm
Securities which remain unpurchased exceeds one-eleventh of
the aggregate number of all the Firm Securities, or if the
Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters
to purchase Firm Securities of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate
without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity agreement in Section 8
hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, represen-
tations, warranties and other statements of the Company, the
Option Shareholders and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or the Company, or an
officer or director or controlling person of the Company, or an
Option Shareholder, or an officer or director or controlling
person of the Option Shareholder, and shall survive delivery of
and payment for the Securities.
11. This Agreement shall become effective (a) if the
Registration Statement has not heretofore become effective, at
the earlier of 12:00 Noon, New York City time, on the first full
business day after the Registration Statement becomes effective,
or at such time after the Registration Statement becomes
effective as you may authorize the sale of the Securities to the
public by Underwriters or other securities dealers, or (b) if the
Registration Statement has heretofore become effective, at the
earlier of 24 hours after the filing of the Prospectus with the
Commission or at such time as you may authorize the sale of the
Securities to the public by Underwriters or securities dealers,
unless, prior to any such time you shall have received notice
from the Company that it elects that this Agreement shall not
become effective, or you, or through you such of the Underwriters
as have agreed to purchase in the aggregate fifty percent or more
of the Firm Securities hereunder, shall have given notice to the
Company that you or such Underwriters elect that this Agreement
shall not become effective; provided, however, that the
provisions of this Section and Section 6 and Section 8 hereof
shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9
hereof, or if this Agreement, by election of you or the
Underwriters, shall not become effective pursuant to the
provisions of this Section, the Company shall not then be under
any liability to any Underwriter except as provided in Section 6
and Section 8 hereof, but if this Agreement becomes effective and
is not so terminated but the Securities are not delivered by or
on behalf of the Company as provided herein because the Company
has been unable for any reason beyond its control and not due to
any default by it to comply with the terms and conditions hereof,
the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and
delivery of the Securities, but the Company shall then be under
no further liability to any Underwriter except as provided in
Section 6 and Section 8 hereof.
12. The statements set forth in the last paragraph on the
front cover page of the Prospectus, the paragraphs on the inside
front cover of the Prospectus containing stabilization language
and the second paragraph under the caption "Underwriting" in the
Prospectus constitute the only information furnished by any
Underwriter through the Representatives to the Company for
purposes of Sections 1(b), 1(c) and 8 hereof.
13. In all dealings hereunder, you shall act on behalf of
each of the Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by you
jointly or by Schroder Wertheim & Co. Incorporated on behalf of
you as the Representatives.
All statements, requests, notices and agreements hereunder,
unless otherwise specified in this Agreement, shall be in writing
and, if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission (subsequently confirmed by
delivery or by letter sent by mail) to you as the Representatives
in care of Schroder Wertheim & Co. Incorporated, Equitable
Center, 787 Seventh Avenue, New York, New York 10019, Attention:
Syndicate Department; and if to the Company, shall be delivered
or sent by mail, telex or facsimile transmission (subsequently
confirmed by delivery or by letter sent by mail) to the address
of the Company set forth in the Registration Statement,
Attention: Victor M. Perez; provided, however, that any notice to
any Underwriter pursuant to Section 8(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission
(subsequently confirmed by delivery or by letter sent by mail) to
such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any
such statements, requests, notices or agreements shall take
effect at the time of receipt thereof.
14. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 8 and Section 10 hereof, the officers
and directors of the Company and each person who controls the
Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. Time shall be of the essence of this Agreement. As
used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
16. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof.
17. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the
authority set forth in a form of Agreement Among Underwriters,
manually or facsimile executed counterparts of which, to the
extent practicable and upon request, shall be submitted to the
Company for examination, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
TRICO MARINE SERVICES, INC.
By:
Name:
Title:
OPTION SHAREHOLDERS
By:
As Attorney-in-Fact for each of the several Option
Shareholders named in Schedules II and III
Accepted as of the date hereof:
SCHRODER WERTHEIM & CO.
INCORPORATED
RAYMOND JAMES & ASSOCIATES, INC.
SIMMONS & COMPANY INTERNATIONAL
as Representatives of the several Underwriters
By: SCHRODER WERTHEIM & CO.
INCORPORATED
By:
Managing Director
Trico Marine Services, Inc.
Underwriting Agreement
SCHEDULE I
Underwriter Number of Firm
Securities
Schroder Wertheim & Co. Incorporated
Raymond James & Associates, Inc.
Simmons & Company International
Total ___________
Trico Marine Services, Inc.
Underwriting Agreement
Schedule I
<PAGE>
SCHEDULE II
Firm Selling Shareholders Number of Firm
Securities
Berkshire Fund III, A Limited Partnership
Bradley M. Bloom
Caroline M. Clifford Present Interest Trust
Catherine K. Clifford Present Interest Trust
John C. Clifford Present Interest Trust
Russell L. Epker
Richard K. Lubin Daughters' Trusts
Kevin T. Callaghan
Jane Brock-Wilson
Robert J. Small
Ian K. Loring
Ross M. Jones
Trico Marine Services, Inc.
Underwriting Agreement
Schedule II
<PAGE>
Schedule III
Thomas E. Fairley
Ronald O. Palmer
Victor M. Perez
Michael D. Cain
Kenneth W. Bourgeois
Edward C. Hutcheson, Jr.
Benjamin F. Bailar
<PAGE>
Schedule VI
<PAGE>
Schedule V
Procedures for Option Securities
1. If the option granted to the Underwriters to cover over-
allotments (the "Option") is exercised with respect to _____
shares or less, ___% of such shares shall be sold by Edward C.
Hutcheson, Jr. and __% shall be sold by Benjamin F. Bailar
(collectively, the "Directors").
2. If the Option is exercised with respect to more than
_____ but no more than 206,500 shares, (i) ____ shares shall be
sold by the Directors in accordance with the provisions of
Paragraph 1 and (ii) all other shares shall be sold collectively,
by Thomas E. Fairley, Ronald O. Palmer, Victor M. Perez, Michael
D. Cain and Kenneth W. Bourgeois (the "Management"), on a pro
rata basis based on the total amount of shares of Common Stock
"beneficially owned" (as defined by Rule 13d-3 under the
Securities Exchange Act of 1934) by such person.
3. If the Option is exercised with respect to more than
206,500 shares, (i) ____ shares shall be sold by the Directors in
accordance with the provisions of Paragraph 1, (ii) _____ shares
shall be sold collectively by Management in accordance with the
provisions contained in Paragraph 2 and (iii) all other shares
shall be sold collectively by the Firm Selling Shareholders on a
pro rata basis based on the number of shares of common stock
owned by such Firm Selling Shareholder.
Capitalized terms used herein and not otherwise defined are
used herein as defined in the Underwriting Agreement to which
this Schedule V is attached and made a part.
Exhibit 5
Jones, Walker
Waechter, Poitevent
Carrere & Denegre, L.L.P.
October 25, 1996
Trico Marine Services, Inc.
610 Palm Avenue
Houma, Louisiana 70364
RE: Trico Marine Services, Inc.
Registration Statement on Form S-1
2,300,000 shares of Common Stock
Gentlemen:
We have acted as your counsel in connection
with the preparation of the registration
statement on Form S-1 (the "Registration
Statement") filed by Trico Marine Services, Inc.
(the "Company") with the Securities and
Exchange Commission (the "Commission"), on the
date hereof, with respect to the registration of
2,300,000 shares of Common Stock, $.01 par value
per share (the "Shares").
In so acting, we have examined originals,
or photostatic or certified copies, of such
records of the Company, certificates of officers
of the Company and of public officials, and such
other documents as we have deemed relevant. In
such examination, we have assumed the
genuineness of all signatures, the authenticity
of all documents submitted to us as originals,
the conformity to original documents of all
documents submitted to us as certified or
photostatic copies and the authenticity of the
originals of such documents.
Based upon the foregoing, we are of the
opinion that the Shares, when issued and sold
upon the terms described in the Registration
Statement, will be validly issued and
outstanding, fully paid and non-assessable.
We consent to the filing of this opinion as
an exhibit to the Registration Statement and to
the reference to us in the prospectus included
therein under the caption "Legal Matters." In
giving this consent, we do not admit that we are
within the category of persons whose consent is
required under Section 7 of the Securities Act
of 1933, as amended, or the general rules and
regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, L.L.P.
JONES, WALKER, WAECHTER, POITEVENT,
CARRERE & DENEGRE, L.L.P.
AGREEMENT TO PURCHASE AND SELL
This Agreement to Purchase and Sell is made as of the 11th
day of October, 1996, by and between:
ENSCO OFFSHORE COMPANY, a Delaware Corporation, whose
address is 2700 Fountain Place, 1445 Ross Avenue, Dallas,
Texas, 75202-2792; and
TRICO MARINE ASSETS, INC., a Delaware Corporation, doing
business in the State of Louisiana, whose address is 610
Palm Avenue, Houma, Louisiana 70364;
who made the following declarations:
Article 1
Definitions
1. Definitions.As used in this Agreement, the following terms
have the meaning herein set forth:
1.1 "Agreement" means this Agreement for Purchase and
Sale.
1.2 "Business Days" means Monday through Friday inclusive,
excluding national holidays.
1.3 "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980
(42 U.S.C. 9601 et seq.).
1.4 "Claim" means any claim, liability, demand, loss,
damage, deficiency, litigation, cause of action,
penalty, fine, judgment, defense, imposition, fee,
lien, bonding cost, settlement, disbursement, penalty,
cost or expenses of any and every kind and nature
(including without limitation reasonable attorneys
fees), whether known or unknown, incurred or potential,
accrued, absolute, direct, indirect, contingent or
otherwise and whether imposed by strict liability, and
consequential, punitive and exemplary damage claims.
1.5 "Closing" means the closing of the purchase and sale
of the Property pursuant to this Agreement.
1.6 "Closing Date" means the date on which the Closing
occurs.
1.7 "Closing Documents" means the documents to be executed
by the Parties at Closing.
1.8 "Closing Effective Date" shall be 12:01 a.m. central
standard time on the date immediately following the
Closing Date.
1.9 "Commitments" means an owner's title policy commitment
related to the Real Estate issued by the Title Company
dated no earlier than the Effective Date.
1.10 "Consideration" means the sum of One Million Five
Hundred Thousand ($1,500,000) Dollars.
1.11 "Corporate Documentation" means articles of
incorporation, bylaws and corporate resolutions.
1.12 "Days" refers to calendar days, except as used in
"Business Days".
1.13 "Default" means a breach of any provision of this
Agreement by a Party.
1.14 "Effective Date" is the date on which the last party
hereto affixes its signature.
1.15 "Encumbrance" means any lien, charge, servitude,
easement, option, right of first refusal, conditional
sales contract, security interest or encumbrance,
including liens, charges, security interests, or
encumbrances securing payment of Claims or payment
of charges for labor, materials, supplies, equipment,
rent, or utilities.
1.16 "Environmental Information" means all records and
information concerning all Hazardous Substances,
including Medical Waste, used, stored, generated,
treated, or disposed of by the Seller, all
environmental or safety studies conducted by or on
behalf of Seller and all reports, correspondence,
or filings to governmental agencies with jurisdiction
over Environmental Requirements concerning the
compliance of the Property or the operation of the
Property with Environmental Requirements.
1.17 "Environmental Objections" means Purchaser's
objections to the condition of the Real Estate
identified as a result of Purchaser's Environmental
Inspection which affect the merchantability of Seller's
title or the use of the Real Estate as presently
utilized, or is otherwise unacceptable to the
Purchaser, in its sole discretion.
1.18 "Environmental Requirements" means all State,
federal, local, municipal, parish, and regional
laws, statutes, rules, regulations, ordinances, codes,
permits, approvals, plans, authorizations, concessions,
investigation results, guidance documents; all
legislative, judicial, and administrative judgments,
decrees, orders, rules, rulings, and regulations; and
all agreements and other restrictions and requirements
in effect on or prior to the Closing Date, of any
Governmental Authority, including, without limitation,
federal, state, and local authorities, relating to the
regulation or protection of human health and safety,
natural resources, conservation, the environment,
or the storage, treatment, disposal, processing,
release, discharge, emission, use, remediation,
transportation, handling, or other management of
industrial, gaseous, liquid or solid waste, hazardous
waste, Medical Waste, hazardous or toxic substances or
chemicals, or pollutants. The term shall specifically
include, without limitation, the regulations of the
federal Public Health Service and Department of
Transportation concerning the transport of etiologic
agents or similar agents, the regulations of the
Nuclear Regulatory Commission concerning radioactive
materials and waste, the regulations of the
Occupational Safety and Health Administration, and
including without limitation the following
environmental laws: The Clean Air Act (42 U.S.C.A.
1857); the Federal Water Pollution Control Act (33
U.S.C. 1251); the Resource Conservation and Recovery
Act of 1976, (42 U.S.C. 6901); CERCLA, as amended by
the Superfund Amendments and Reauthorization Act of
1986 (Pub.L. 99-499, 100 Stat. 1613); the Toxic
Substances Control Act (15 U.S.C. 2601, the Clean
Water Act (33 U.S.C. 1251); the Safe Drinking Water
Act (42 U.S.C. 30); the Occupational Safety and Health
Act (29 U.S.C. 651); the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. 135); the
Louisiana Environmental Quality Act (La. R.S. 30:2001);
and the Louisiana Air Quality Regulations (La. C.
33:III.2595) including any amendments or extensions
thereof and any rules, regulations, standards or
guidelines issued pursuant to or promulgated under any
of the foregoing.
1.19 "Escrow Agent" means Baronne Title Co., Inc., d/b/a
Title Insurance Services as agent for the Title
Company, or other such person as mutually agreed to by
the Parties as escrow agent.
1.20 "Existing Environmental Reports" means the "Report of
Phase I Environmental Assessment and Limited Site
Investigation Penrod Drilling Property Houma,
Louisiana" dated September 1991 and the "Report of
Phase II Environmental Assessment and Limited Site
Investigation Penrod Drilling Property Houma,
Louisiana" dated June 1992, each prepared for Penrod
Drilling Corporation by G& E Engineering, Inc.
(individually and collectively).
1.21 "Governmental Authority" means any federal, state,
parish, regional, or local government, political
subdivision, any governmental agency, department,
authority, instrumentality, bureau, commission, board,
official, or officer, any court, judge, examiner, or
hearing officer, any legislative, judicial, executive,
administrative, or regulatory body or committee or
official thereof or private accrediting body.
1.22 "Governmental Regulation" means laws, statutes,
codes, acts, ordinances, orders, judgments, decrees,
writs, injunctions, rules, regulations, restrictions,
permits, plans, authorizations, concessions,
investigation reports, guidelines, and requirements or
accreditation standards of any Governmental Authority
including without limitation, Environmental
Requirements.
1.23 "Hazardous Substance" means (a) any "hazardous
substance" as defined in 101(14) of CERCLA or any
regulations promulgated thereunder; (b) petroleum
and petroleum by-products; (c) asbestos or asbestos-
containing material ("ACM"); (d) polychlorinated
biphenyls; (e) urea formaldehyde foam insulation;
(f) Medical Waste; or (g) any additional substances or
materials which at any time are classified, defined or
considered to be explosives, corrosive, flammable,
infectious, radioactive, mutagenic, carcinogenic,
pollutants, hazardous or toxic under any of the
Environmental Requirements.
1.24 "Incorporated Equipment" means the Seller's
equipment, apparatus, engines, motors, machinery,
and appliances which have been permanently attached to
and become component parts of the Real Estate.
1.25 "Indemnified Party" means the Party entitled to
indemnification pursuant to this Agreement.
1.26 "Indemnifying Party" means the Party obligated to
provide indemnification pursuant to this Agreement.
1.27 "IRC" means the Internal Revenue Code of 1986, as
amended, and any and all regulations and rulings
promulgated thereunder.
1.28 "Keys" means all keys, computerized entry cards, and
electronic or computerized access codes and passwords
which provide entry to the Real Estate or any part
thereof or which are used in connection with the Real
Estate and the Incorporated Equipment, each such key,
card, code, and password to be properly identified by
Seller.
1.29 "Other Parties" means any Person other than a Party.
1.30 "Party" or "Parties" means Seller and Purchaser,
individually and collectively.
1.31 "Permits" means all of Seller's right, title and
interest in and to permits, licenses, certificates of
need, certificates of exemptions, authority and/or
grants affecting the Real Estate, including, without
limitation, all consents, approvals and authorizations
issued by any Governmental Authority to conduct and
maintain the Real Estate as it is currently operated by
Seller.
1.32 "Person" means all juridical persons, whether
corporate or natural, including individuals, firms,
trusts, corporations, associations, joint ventures and
partnerships.
1.33 "Property" means the Real Estate, the Incorporated
Equipment, the Real Estate Documents, and such other
rights, interest, and properties as may be specified in
this Agreement to be sold, transferred, assigned, or
conveyed by Seller to Purchaser.
1.34 "Purchaser" means Trico Marine Assets, Inc. and/or
its successors and assigns.
1.35 "Purchaser Group" means the Purchaser and its
representatives, agents, servants, licensees, servants,
officers, consultants, attorneys and employees,
individually and collectively.
1.36 "Purchaser's Inspections" means the inspections,
review, observations, studies, examinations, probes and
research conducted by Purchaser in connection with the
Title Commitment, Survey, Environmental Inspection
and/or Soil Tests, individually and collectively, all
of the foregoing as provided for in Article 8.
1.37 "Purchaser's Objections" means the Environmental
Objections, Survey Objections, and Title Objections,
individually and collectively.
1.38 "Purchaser's Obligations" means the agreements,
covenants, conditions, terms, and provisions to be
performed by Purchaser under this Agreement, and the
representations made by Purchaser in this Agreement,
all of which terminate as of and do not survive the
Closing.
1.39 "Purchaser Violations" means any failure to comply
with or violation of, any Purchaser Obligation.
1.40 "Real Estate" means all of Seller's right, title and
interest in and to:
a. The 62.545 acre tract situated in the NW quarter
of Section 12, Township 17 South, Range 17 East,
Terrebonne Parish, Louisiana, more fully described
on Exhibit "A" attached hereto;
together with all of the improvements thereon;
b. All fixtures, equipment and appurtenances
pertaining thereto, particularly, without
limitation, the Incorporated Equipment;
c. Any rights, title and interest of Seller, if any,
in and to adjacent streets, roads, alleys and
rights of way;
d. All the rights, ways, privileges, servitudes, and
advantages belonging or in anywise appertaining to
such land, buildings, improvements, other real
property and the Incorporated Equipment; and
1.41 "Real Estate Documents" means all contracts, agreements
and documents existing as of the Effective Date and as
of the Closing Date and relating to the construction of
any improvements comprising a part of the Real Estate
(including any and all environmental audits, soil
tests, termite reports, appraisals, construction
specifications, drawings, architectural, mechanical,
electrical and other engineering plans and
specifications and related data, surveys, tests,
reports, bonds and governmental approvals), or to the
maintenance of the Real Estate.
1.42 "Real Estate Taxes" means real property taxes,
impositions, and currently due installments of
assessments, general, special or otherwise,
specifically imposed upon the Real Estate. Real Estate
Taxes exclude federal, state or local income taxes;
franchise, gift, transfer, excise, capital stock,
estate, succession or inheritance taxes; penalties or
interest for late payment of Real Estate Taxes; and
taxes assessed against trade fixtures or personal
property placed by the Seller on the Real Estate.
1.43 "Remediation" means any and all costs incurred due to
any investigation of the Property or any remediation,
response, cleanup, removal, or restoration required by
any Governmental Regulation, Governmental Authority or
by Environmental Requirements.
1.44 "Seller" means ENSCO Offshore Company.
1.45 "Seller Group" means Seller, its contractors,
representatives, licensees, agents, servants,
employees, customers and any other Person for whom
Seller is responsible, individually and collectively.
1.46 "State" means the State of Louisiana.
1.47 "Survey" means the survey map more fully described on
Exhibit "B" attached hereto.
1.48 "Survey Objections" means Purchaser's objections to the
Survey which affect the merchantability of Seller's
title or the use of the Real Estate as presently
utilized.
1.49 "Tank Systems" means aboveground or underground storage
tank systems.
1.50 "Title Agent" means Baronne Title Insurance Co., Inc.,
d/b/a Title Insurance Services.
1.51 "Title Company" means First American Title Insurance
Company.
1.52 "Title Objections" means Purchaser's objections to the
condition of title as set forth in the Commitments
which affect the merchantability of Seller's title or
the use of the Real Estate as presently utilized.
1.53 "Transaction Escrow Agreement" means the Escrow
Agreement to be entered into among Seller, Purchaser
and Escrow Agent pursuant to Article 10, the form of
which is attached hereto as Schedule 2.
1.54 "Transaction Escrow Deposit" means the sum of Fifty
Thousand ($50,000) Dollars to be deposited with Escrow
Agent on the Effective Date by Purchaser and held in
accordance with the provisions of the Transaction
Escrow Agreement.
Article 2
Purchase and Sale
2.1 Sale of Property. At the Closing, Seller agrees to
sell, convey, transfer, assign, and deliver to Purchaser, and
Purchaser agrees to purchase from Seller, the Property for the
Consideration paid in accordance with the terms of this
Agreement.
2.2 Payment of Consideration. The Consideration shall be
due and payable at Closing by wire transfer of immediately
available federal funds or as Seller shall otherwise designate in
writing.
2.3 Apportionment. The actual amount to be paid to Seller
at the Closing will be subject to adjustment, based on
the apportionments of Real Estate Taxes, and the costs and
expenses which the Parties are required to pay at the Closing
pursuant to this Agreement, if any.
Article 3
Liabilities
3.1 Purchaser Liabilities. Notwithstanding anything in
this Agreement to the contrary, or in any other agreement or
document executed by Purchaser in connection with this Agreement
or the transaction contemplated herein, Purchaser Group shall not
incur any pecuniary, financial or personal liability or
obligation whatsoever, whether known or unknown, accrued,
absolute, direct, indirect, contingent or otherwise, for Claims
accruing prior to the Closing Date, or which arises after the
Closing Date but are based on facts, circumstances, events, or
actions of Seller prior to the Closing Date. Purchaser shall
have no further obligation to Seller under this Agreement as of
the Closing Date, and under no circumstances will Purchaser Group
incur any pecuniary charge or financial liability to Seller or
any Person claiming by or through Seller with respect to
Purchaser's performance under this Agreement, and recovery by any
Person for a Purchaser Violation is and shall be limited solely
to the Transaction Escrow Deposit.
3.2 Seller's Liabilities. Notwithstanding anything in this
Agreement to the contrary, or in any other agreement or document
executed by Seller in connection with this Agreement or the
transaction contemplated herein, Seller Group shall not incur any
pecuniary, financial or personal liability or obligation
whatsoever, whether known or unknown, accrued, absolute, direct,
indirect, contingent or otherwise, for Claims accruing after the
Closing Date due to Purchaser's actions. Seller shall have no
further obligation to Purchaser under this Agreement as of the
Closing Date, and under no circumstances will Seller Group incur
any pecuniary charge or financial liability to Purchaser or any
Person claiming by or through Purchaser with respect to Seller's
performance under this Agreement, except for fraud or intentional
misconduct.
3.3 Environmental Liabilities.Notwithstanding anything to
the contrary contained herein, Purchaser shall have no liability
to Seller in the event a Claim is filed by any third Person
against Seller arising out of, or as a result of the
environmental condition of, or any environmental hazard or
violation on the Real Estate which existed as of the Closing
Date.
Article 4
Representations of Seller
Seller represents and warrants to the Purchaser as follows:
4.1 Absence of Undisclosed Claims. Except for Claims which
are not material and which are incurred in the ordinary course of
business, Seller, as of the date hereof, has no actual knowledge
of any Claim related to the Real Estate or Seller's right, power
and authority to sell the Real Estate to Purchaser, which is not
disclosed in this Agreement or in the Schedules attached thereto,
except Claims that are not material individually or in the
aggregate to completion of the transactions under this Agreement
or the Property to be transferred.
4.2 Adverse Information. Seller has no actual knowledge of
any action by adjacent landowners with respect to the Property.
4.3 Binding Obligation. This Agreement to the extent
permitted by Governmental Authority and Governmental Regulation
constitutes the valid and binding agreement of Seller,
enforceable in accordance with its terms (except as
enforceability may be restricted or delayed by bankruptcy,
insolvency, moratorium or similar laws affecting or relating to
the enforcement of creditors' rights in general and by general
principles of equity).
4.4 Broker's Fee. Seller has not engaged any real estate
agent, broker or consultant other than Patterson Real Estate.
Seller is only obligated for the payment of any real estate
broker fees or commissions due in connection with this
Transaction to Patterson Real Estate in the amount of $90,000.00.
Purchaser has not engaged any real estate agent, broker or
consultant in connection with this Transaction, and is not
obligated for the payment of any real estate broker fees or
commissions in connection with this Transaction.
4.5 Condemnation. Seller has no actual knowledge of any
pending, contemplated, or threatened condemnation or similar
proceeding or of any litigation affecting the Real Estate or any
part thereof.
4.6 Corporate Authorization. Seller is the sole owner
of the Property, and has full right, power, and corporate
authority to execute this Agreement, carry out the transactions
contemplated by this Agreement, and perform its obligations under
this Agreement. Seller has taken, caused to be taken or shall
cause to be taken all necessary, proper and required corporate
action to authorize the execution and delivery of this Agreement,
and the performance of its obligations under this Agreement. The
individuals who have executed this Agreement have the full and
legal right, power, and authority to do so on behalf of Seller,
and to otherwise act on behalf of Seller in connection with the
consummation of the transactions contemplated by this Agreement.
Seller's authorization (and the authorization of the individuals
executing this Agreement on behalf of Seller) to enter into this
Agreement has not been repealed, modified, or amended.
4.7 Corporate Organization And Good Standing. Seller is a
Delaware Corporation duly organized, validly existing, and in
good standing under the laws of the State, authorized and
licensed to conduct business under the laws of the State.
4.8 Environmental Matters. To the best of Seller's actual
knowledge, and except as disclosed in the Existing Environmental
Reports, the Real Estate is free of Hazardous Substances
(including without limitation asbestos-containing material within
the Real Estate, whether friable or non-friable) as of the date
of this Agreement. Seller has not received notice of any pending
or threatened litigation or administrative investigation or
proceeding concerning the Real Estate involving Hazardous
Substances or Environmental Requirements.
4.9 Removal of Drums. Seller shall remove the drums
presently situated near the rear shed located on the Real Estate
prior to the Closing.
4.10 Parties in Possession. To the best of Seller's actual
knowledge, there are no parties in possession of any portion of
the Real Estate as tenants, possessors or trespassers.
4.11 Regulatory Approvals. To the best of Seller's actual
knowledge, all notices, consents, approvals, authorizations and
other requirements prescribed by Governmental Regulation that are
necessary for the execution and delivery by Seller of this
Agreement and the documents to be executed and delivered by
Seller in connection herewith, or are necessary for the
consummation of the transactions contemplated hereby, have been
obtained or satisfied except for such notices, consents,
approvals, authorizations, or other requirements that this
Agreement expressly contemplates are to be obtained or satisfied
between the date of this Agreement and Closing or thereafter
(which Seller shall obtain or satisfy by Closing).
4.12 Regulatory Violation or Litigation. To the best of
Seller's actual knowledge, (a) Seller is not in violation of any
Governmental Regulation that has had or will have a material
adverse effect on Seller's use of the Property, (b) Seller has
not received any notice of noncompliance with any Governmental
Regulations that has had or will have a material adverse effect
on Seller's use of the Property; (c) no notice from any authority
in respect to the suspension, revocation, withdrawal, or
termination of any Permit has been issued or given to Seller;
and/or (d) Seller has not received notice of any lawsuits,
proceedings, Claims or governmental investigations against Seller
or against the Property, and Seller has not received notice of
any action, suit or proceeding by any Governmental Authority
pending which questions the legality or validity of the
transactions contemplated by this Agreement.
4.13 Seller's Actual Knowledge. The Parties hereby
acknowledge and agree that references in this Agreement to
"Seller's actual knowledge" or "to the best of Seller's actual
knowledge" shall be deemed to mean the actual knowledge of
Seller, its respective agents, officers, directors, employees and
attorneys.
4.14 Tax Parcel. The Real Estate is taxed as separate and
distinct tax parcels, and described on Schedule 3 are real estate
tax bills for the Real Estate for the years 1994 and 1995.
4.15 Tax Status. Seller and all persons holding beneficial
interests in the Property are "United States Persons", as defined
by Section 1445(f)(3) and Section 7701 (g) of the IRC, and the
purchase of the Property by Purchaser pursuant to this Agreement
is not subject to the withholding requirements of Section 1445(a)
of the IRC.
4.16 Title to Real Estate. Seller has good and
merchantable title to the Real Estate subject to no Encumbrances
other than those exceptions to title accepted by Purchaser
following its due diligence of the Real Estate. Between the date
hereof and the Closing Date, Seller will not create or, using its
best efforts, permit to be created any Encumbrances on the Real
Estate.
4.17 Work Performed. Except as set forth on Schedule 4 and
other than ordinary maintenance and repair, there is no material
construction, renovation, remodeling, or other work that has been
commenced within the last twelve (12) months with respect to the
Real Estate but has not been completed. No labor has been
performed or material furnished for the Real Estate for which the
Seller has not heretofore fully paid or for which an Encumbrance
can be claimed by any Person.
4.18 Survival of Representations and Warranties. The
representations and warranties set forth in this Article 4 shall
be true and correct on and as of the Closing Date with the same
force and effect as if made at that time, provided, however, no
such representations and warranties shall survive the Closing.
Article 5
Representations of Purchaser
Purchaser represents to Seller as follows:
5.1 Binding Obligation of Purchaser. This Agreement, to
the extent permitted by Governmental Authority and Governmental
Regulation, constitutes a legal, valid, and binding obligation
of Purchaser, enforceable against Purchaser in accordance with
its terms.
5.2 Execution and Delivery by Purchaser. On the Closing
Date Purchaser shall have taken or caused to be taken all actions
necessary to authorize the execution and delivery of this
Agreement by Purchaser and the performance by Purchaser of its
obligations under this Agreement, all approvals, consents, and
authorizations required by the applicable laws of the State for
the Purchaser to enter into and perform its obligations under
this Agreement shall have been obtained and/or complied with, and
no further authorization shall be necessary or required for due
execution, delivery, or performance by Purchaser of this
Agreement, and Purchaser's authorization to enter into this
Agreement shall not have been repealed, or materially altered,
modified, or amended.
5.3 Necessary Action. Subject to Governmental Authorities
and Governmental Regulations, Purchaser shall in timely fashion
take all actions necessary to enter into this Agreement and to
carry out the terms hereof.
5.4 Status and Authority of Purchaser. Purchaser has the
legal right, power and authority to enter into this Agreement,
and to perform the obligations imposed upon it under this
Agreement.
5.5 Limitation on Purchaser Representations. All
representations of Purchaser under this Agreement are made in
good faith to the best of Purchaser's knowledge, information, and
belief, and terminates as of and do not survive the Closing Date.
Article 6
Covenants of Seller
Seller covenants and agrees with the Purchaser as follows:
6.1 Access and Information. At all times prior to the
Closing Effective Date, Seller shall afford to the Purchaser and
its agents, employees and authorized representatives, access,
during normal business hours, to the Property, as may be
reasonably requested. If this Agreement is terminated prior to
Closing for any reason, all such information shall be returned to
Seller within five (5) Business Days.
6.2 Acts Affecting the Real Estate. Seller will refrain
from (a) performing any grading or excavation, construction, or
removal of improvements to the Real Estate, or making any change
or improvements on or about the Real Estate; (b) creating any
Encumbrance affecting the Real Estate; and (c) committing any
waste or nuisance upon the Real Estate. Seller will maintain the
Real Estate in its present condition.
6.3 Conduct of Business. During the period between the
execution of this Agreement and the Closing Effective Date,
Seller shall conduct the business on the Real Estate in the
ordinary course thereof consistent with prior practice.
6.4 Engineering Plans and Studies. Within five (5) days of
the Effective Date, Seller shall make available to Purchaser all
engineering plans, blueprints, drawings, surveys and artist's
renderings, which Seller has relating to the Real Estate.
6.5 Notification. Seller promptly will notify the
Purchaser of any lawsuits, Claims, administrative actions or
other proceedings asserted or commenced against Seller, its
officers, trustees of employees involving the Property.
Article 7
Waiver of Warranty as to Condition of Real Estate
7.1 Waiver of Warranty as to Condition of Real Estate
Purchaser acknowledges for Purchaser and Purchaser's successors,
and assignees, (i) that Purchaser will be given a reasonable
opportunity to inspect and investigate the Property, all
improvements thereon and all aspects relating thereto, including
all Real Estate, the Incorporated Equipment and the Real Estate
Documents, either independently or through agents and experts of
Purchaser's choosing and (ii) that Purchaser is acquiring the
Property based upon Purchaser's own investigation and inspection
thereof. SELLER AND PURCHASER AGREE THAT THE PROPERTY SHALL BE
SOLD AND THAT PURCHASER SHALL ACCEPT POSSESSION OF THE PROPERTY
ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS" WITH NO
RIGHT OF SET-OFF OR REDUCTION IN THE PURCHASE PRICE, AND THAT
SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTY
OF INCOME POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE (BUT SPECIFICALLY EXCLUDING THE
WARRANTIES REGARDING TITLE MADE BY IN THIS ACT OF CASH SALE), AND
SELLER DOES HEREBY DISCLAIM AND RENOUNCE ANY SUCH REPRESENTATION
OR WARRANTY (BUT SPECIFICALLY EXCLUDING THE WARRANTIES REGARDING
TITLE MADE BY IN THIS ACT OF CASH SALE). PURCHASER SPECIFICALLY
ACKNOWLEDGES THAT PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS
OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM
SELLER, OR SELLER'S OFFICERS, DIRECTORS OR EMPLOYEES AS TO ANY
MATTERS CONCERNING THE PROPERTY (EXCEPT FOR THE WARRANTIES
REGARDING TITLE MADE IN THE ACT OF CASH SALE), INCLUDING WITHOUT
LIMITATION: (1) THE CONDITION OR SAFETY OF THE PROPERTY OR ANY
IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO, PLUMBING,
SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING,
IF ANY, FOUNDATIONS, SOILS AND GEOLOGY INCLUDING HAZARDOUS
MATERIALS, LOT SIZE, OR SUITABILITY OF THE PROPERTY OR ITS
IMPROVEMENTS FOR A PARTICULAR PURPOSE; (2) WHETHER THE
APPLIANCES, IF ANY, PLUMBING OR UTILITIES ARE IN WORKING ORDER;
(3) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY
STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (4) THE FITNESS OF
ANY PERSONAL PROPERTY; OR (5) WHETHER THE IMPROVEMENTS ARE
STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH
APPLICABLE CITY, PARISH, STATE OR FEDERAL STATUTES, REGULATIONS,
CODES OR ORDINANCES. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT SELLER SHALL BE UNDER NO DUTY TO MAKE ANY AFFIRMATIVE
DISCLOSURE REGARDING ANY MATTER WHICH MAY BE KNOWN TO SELLER, ITS
OFFICERS, DIRECTORS, OR EMPLOYEES, EXCEPT AS SPECIFICALLY SET
FORTH IN THE PURCHASE AGREEMENT, AND THAT IT IS RELYING SOLELY
UPON ITS OWN INSPECTION OF THE PROPERTY AND NOT UPON ANY
REPRESENTATIONS MADE TO IT BY ANY PERSON WHOMSOEVER. ANY REPORTS,
REPAIRS OR WORK REQUIRED BY PURCHASER ARE TO BE THE SOLE
RESPONSIBILITY OF PURCHASER AND PURCHASER AGREES THAT THERE IS NO
OBLIGATION ON THE PART OF THE SELLER TO MAKE ANY CHANGES,
ALTERATIONS, OR REPAIR TO THE PROPERTY, AND PURCHASER
ACKNOWLEDGES THAT PURCHASER HAS COMPLETED ITS DUE DILIGENCE WITH
RESPECT TO THE PROPERTY TO ITS SATISFACTION. PURCHASER IS SOLELY
RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF
THE PROPERTY, IF ANY, AND FOR ANY REPAIRS OR ALTERATIONS
NECESSARY TO OBTAIN SAME ALL AT PURCHASER'S SOLE COST AND
EXPENSE.
7.2 Exception The waiver contained in Section 7.1 is
subject to Purchaser's disclaimer of liability pursuant to
Articles 3 of this Agreement.
Article 8
Purchaser's Due Diligence
8.1 Documentation to be Furnished by Seller. Within
ten (10) days after the Effective Date, Seller's Group shall
furnish Purchasers Group with access to the information in its
possession with respect to the Property, including the following
documentation to the extent such documentation is in the
possession of Seller's Group, provided, however, Seller makes no
warranty or representation that such information is in Seller's
possession, or that if such information is in Seller's
possession, that it can be located:
a. Plats of survey in Seller's possession reflecting
the legal descriptions of the Real Estate and/or
showing the location of all improvements located
thereon;
b. Real Estate Documents;
c. All Permits;
d. Zoning evidence;
e. Documents evidencing the authority of Seller to
enter into this transaction; and,
f. All other documents reasonably requested
by Purchaser which may affect Purchaser's
acquisition of the Real Estate.
Purchaser shall have fifteen (15) days from receipt of the
above instruments or information to notify Seller in writing of
Purchaser's Objections to any of the instruments or information
set forth above in this Section. Seller shall have the right,
but not the obligation to satisfy Purchaser's objections to
Purchaser's satisfaction within ten (10) days after Purchaser
gives written notice thereof. If Seller has not cured such
Objections within the 10-day period, or elects not to cure
Purchaser's obligations, Purchaser may, at its option, terminate
this Agreement by giving written notice of termination within
seven (7) days after the expiration of Seller's aforementioned
ten-day response period. or prior to Closing, whichever is the
first to occur. If either of the aforesaid written notices from
Purchaser to Seller are not given within the required time, the
instruments and information shall be deemed to be acceptable, any
objection thereto shall be deemed to have been waived for all
purposes, and this Agreement will continue in full force and
effect.
8.2 Title Commitment. Purchaser shall have until thirty
(30) days from the Effective Date to examine title to the Real
Estate, obtain the Title Commitment and notify Seller in writing
of the Title Objections. The Title Commitment and Title Policy
obtained by Purchaser shall be at Purchaser's sole cost and
expense.
8.3 Survey. Purchaser shall have until thirty (30) days
from the Effective Date to update the Survey and notify Seller in
writing of Survey Objections to the Survey and/or any matters
revealed by the Survey. The updated Survey obtained by Purchaser
shall be at Purchaser's sole cost and expense.
8.4 Environmental Inspection. Seller has or will within
five (5) days of the Effective Date provided Purchaser with
access to the Environmental Information. Seller agrees that the
Purchaser shall have the right until forty-five (45) days from
the Effective Date to inspect the Environmental Information and
the Real Estate and, at the discretion and sole cost of the
Purchaser, perform such environmental inspections as Purchaser
deems necessary in conducting its due diligence, including
subsurface or other invasive investigations, and air monitoring,
at or near the Real Estate. Purchaser shall have until forty-five
(45) days from the Effective Date to notify Seller in writing of
any Environmental Objections
Seller understands and agrees that Purchaser and its
employees, agents, and representatives may find it appropriate to
contact governmental agencies to obtain information from such
agency in connection with their analysis of the Environmental
Information and as part of their due diligence of the Real
Estate, but for no other purpose.
The reference to the Existing Environmental Reports herein
shall not be deemed an acceptance by Purchaser of any
information, matter and/or condition referenced therein.
Purchaser reserves the right to make any Environmental
Objections, including Environmental Objections to information,
matters and/or conditions referenced in the Existing
Environmental Reports.
8.5 Inspection Procedure. Purchaser shall make the
Purchaser's Inspections in good faith and with due diligence.
All title costs, survey fees, inspection fees, appraisal fees,
engineering fees and other expenses of any kind incurred by
Purchaser relating to the Purchaser's Inspections will be solely
Purchaser's expense. Seller shall cooperate with Purchaser in
all reasonable respects in making the Purchaser's Inspections
without cost to Seller. Purchaser shall have the right to remove
vegetation situated on the Real Estate in connection with
Purchaser's Inspection. Seller hereby reserves the right to have
a representative present at the time of making each of
Purchaser's Inspections. Purchaser shall notify Seller not less
than one (1) Business Day in advance of making any of Purchaser's
Inspections. Purchaser agrees to indemnify and hold Seller and
its directors, officers and employees harmless, to the extent
permitted by Governmental Authority and Governmental Regulation,
from any and all Claims of Seller which arise out of or are
related to the Purchaser's Inspections and to pay the cost
of repair for any damage to the Property (except for the removal
of vegetation) in connection with any of Purchaser's Inspection
by or on behalf of Purchaser.
8.6 Curative Work. Seller shall, at its sole cost and
expense promptly undertake and use its best efforts to eliminate
all of Purchaser's Title Objections which arise out of Seller's
acquisition of the Real Estate from Penrod Drilling Company.
If Seller does not satisfy any one or more of Purchaser's
Objection prior to the Closing Date, Purchaser shall, in its sole
discretion, elect to:
a. Accept the Property subject to Purchaser's
Objection; or
b. In the case of Title Objections, obtain from Title
Company an acceptable endorsement providing
affirmative coverage expressly insuring against
loss or damage resulting from the Title Objection;
or
c. If Seller elects not to cure any Purchaser's
Objection then Purchaser may declare this
Agreement terminated, in which event $100.00 shall
be paid to Seller by Purchaser as an option
fee for the Inspection Period, whereupon the
Parties shall have no further rights or
obligations hereunder and the Escrow Deposit shall
be returned by Escrow Agent immediately to
Purchaser.
8.7 Right to Terminate. Notwithstanding anything in this
Agreement to the contrary, on or before November 20, 1996, in the
event Purchaser determines as a result of the Purchaser's
Inspections that any condition of the Real Estate is deficient in
any respect in Purchaser's sole and absolute discretion,
Purchaser may elect to terminate this Agreement by delivering
written notice thereof to Seller prior to the expiration of the
period of time granted Purchaser to conduct Purchaser's
Inspections, in which event $100.00 shall be paid to Seller by
Purchaser as an option fee for the Inspection Period, whereupon,
the Parties shall have no further rights or obligations hereunder
and the Transaction Escrow Deposit shall be returned immediately
to Purchaser.
Article 9
Conditions Precedent to Obligations of Purchaser
The obligations of the Purchaser under this Agreement are,
at the option of the Purchaser (which may be waived specifically
in writing by the Purchaser, in whole or in part), subject to the
satisfaction, on or prior to the Closing Date, of the following
conditions:
9.1 Approval by Counsel. Jones, Walker, Waechter,
Poitevent, Carrere & Denegre. L. L. P., as counsel for Purchaser,
and counsel for Seller must have approved all matters as to
legal form, proceedings, instruments, and documents relating to
the transaction contemplated by this Agreement.
9.2 Execution and Delivery of Closing Documents. Seller
shall have executed and delivered each of the Closing Documents
to which it is a party.
9.3 No Changes or Destruction of Property. There shall
have been, between the Effective Date and the Closing Effective
Date, no material adverse change in the condition of the Property
or any casualty loss that cannot be repaired within one hundred
twenty (120) days of the date of such loss and the Property shall
not have been materially damaged, by fire, flood, casualty, act
of God or public enemy regardless of insurance coverage for such
damage, which cannot be repaired within one hundred twenty (120)
days.
9.4 No Litigation. No litigation, administrative
proceeding, civil sanction, hearing, review, or investigation
which restricts Seller's ability to own, operate, or transfer the
Property or which seeks an equitable remedy relating to the
Property or the operations thereof before the Closing Date shall
have been instituted or threatened by any Person or Governmental
Authority, which shall not have been resolved prior to Closing by
Seller.
9.5 No Misrepresentation or Breach of Covenants,
Representations and Warranties. There shall have been no
material breach by Seller in the performance of any of its
covenants herein, each of the representations and warranties of
Seller contained or referred to in this Agreement shall be true
and correct in all material respects on the Closing Date as
though made on the Closing Date, and there shall have been
delivered to the Purchaser a certificate or certificates to that
effect, dated the Closing Date and signed on behalf of Seller by
the appropriate officer of Seller.
9.6 Obstructive Proceedings. No suit, pleading, action, or
Claim shall have been alleged, filed or instituted by any Person
(excluding Purchaser) seeking injunctive relief or damages in a
material amount, and no order, decree or judgment shall have been
rendered by any Governmental Authority, which seeks to void or
would prevent the consummation of, or render it unlawful for,
Purchaser to enter into this Agreement; or acquire and/or operate
the Property, which shall not have been resolved prior to Closing
by Seller after receiving notice thereof.
9.7 Order Prohibiting Transaction. No order shall have
been entered in any action or proceeding before any court or
Governmental Authority, and no temporary, preliminary or
permanent injunction by any court shall have been issued which
would have the effect of (a) making the transactions contemplated
by this Agreement unenforceable or illegal; and/or (b) otherwise
preventing consummation of such transactions, which shall not
have been resolved prior to Closing by Seller after receiving
notice thereof.
9.8 Results of Inspections. The results of the Purchaser's
Inspections shall be satisfactory to Purchaser or the applicable
periods of time to conduct the Purchaser's Inspections shall have
expired without written notice of Purchaser's Objections or
termination being received by Seller from Purchaser.
Article 10
Transaction Escrow Deposit
In consideration of Seller entering into this Agreement,
Purchaser has delivered to Escrow Agent, and Seller acknowledges
receipt thereof, the Transaction Escrow Deposit. The Transaction
Escrow Deposit shall be held in a separate interest-bearing
account held by Escrow Agent. In the event the Closing occurs,
the Transaction Escrow Deposit shall be returned to the Purchaser
pursuant to the terms of the Transaction Escrow Agreement. In
the event of a Default by Seller or Purchaser, or in the event of
a termination of this Agreement, the Transaction Escrow Deposit
shall be treated in accordance with the terms of the Transaction
Escrow Agreement.
The Transaction Escrow Deposit shall not constitute earnest
money. Both Seller and Purchaser reserve the right to demand
specific performance.
Article 11
Closing and Closing Date
11.1 Closing. Unless the Parties hereto otherwise agree in
writing, and subject to the extension set forth in Article 9 of
this Agreement, the Closing shall occur on or before November 30,
1996. Anything herein to the contrary notwithstanding, this
Agreement may be terminated and abandoned at any time:
a. on or prior to the Closing Date by the mutual
consent of the Parties; or,
b. for a reason otherwise permitted in this Agreement
which does not constitute a Default by the
terminating Party.
Upon any termination as above provided, written notice shall be
given to the other Parties, and thereupon this Agreement shall
become void and of no effect and there shall be no liability on
the part of any Party to any other Party.
11.2 Place. The Closing shall be held at the offices
of Jones, Walker, Waechter, Poitevent, Carrere & Denegre. L. L.
P., Suite 500, 8555 United Plaza Boulevard, Baton Rouge,
Louisiana, or such other place as the Parties may mutually agree.
Article 12
Obligations of Parties at Closing
12.1 Seller's Obligations to Purchaser at Closing. At the
Closing, Seller shall execute, acknowledge, deliver or cause to
be delivered to Purchaser, each of which must be in a recordable
form satisfactory to Purchaser:
a. Act of Cash Sale. An Act of Cash Sale to the Real
Estate conveying to Purchaser all of Seller's
right, title and interest in and to the Real
Estate with full warranty as to title subject only
to those exceptions which have been accepted by
Purchaser in connection with its due diligence of
the Real Estate, and with full substitution and
subrogation in and to any claims and/or causes of
action which Seller has or may have against all
preceding owners.
b. Assignments of Property. Good and sufficient
bills of sale, blanket assignments and other
instruments of transfer to Purchaser of Seller's
right, title, and interest in and to the equipment
and other movable property located on the Real
Estate with full warranty as to title and with
full substitution and subrogation in and to any
claims and/or causes of action which Seller has or
may have against all preceding owners.
c. Consents. Any consents of third Persons which are
necessary to effectively transfer the Property to
Purchaser.
d. Possession. Possession of the Property.
e. Title Affidavit. An owner's affidavit or
affidavits, a copy of which is attached hereto as
Exhibit "C",and owner's policy of title insurance
together with such other evidence as may be
required by the Title Company insuring Purchaser's
full ownership title to the Real Estate, which
affidavits or other documentary evidence, if
required, shall be in form and substance
satisfactory to the Title Company and sufficient
to cause the Title Company to issue an owner's
policy on the Real Estate without standard
exceptions, including matters of survey and
mechanic's liens (all at Purchaser's cost and
expense).
f. Original Permits. The originals of all Permits to
the extent such are in the possession of Seller's
Group.
g. Non Resident Certificate. A certificate made
under penalty of perjury by Seller stating that
Seller is not a foreign Person as defined by the
IRC.
h. 1099 Information. Any information in connection
with the conveyance of the Real Estate by the
Seller required by the IRC in connection with the
preparation and filing of Treas. Form 1099.
i. Additional Documentation. All documents to be
provided by Seller to Purchaser as reasonably
required by any other provision of this Agreement.
j. Resolution. A certified copy of a resolution of
Seller's Board of Directors authorizing the
execution, delivery and performance of this
Agreement and any other documents required to be
executed by Seller at the Closing, as set forth
herein.
k. Certificate of Good Standing. A certificate
of good standing for Seller issued by the
Secretary of State of the State of Delaware and
dated within five (5) days prior to the Closing
Date.
l. Seller's Counsel's Opinion. An opinion of counsel
for Seller for the benefit of Purchaser and its
counsel in form and substance reasonably
satisfactory to Purchaser opining that:
(1) Seller is a Corporation duly organized and
existing and in good standing under the laws of
the State of Delaware and is duly qualified
to transact business in the State; and has all
requisite corporate power and authority to enter
into and perform the agreements executed by Seller
pursuant to the Agreement to Purchase and Sell
and to carry out the transaction contemplated
thereby;
(2) All requisite and necessary actions on the
part of Seller have been duly taken and had as to
fully authorize Seller to enter into the Closing
Documents and that the Closing Documents to the
extent permitted by Governmental Authority and
Governmental Regulation are binding upon and
enforceable against the Seller in accordance with
their respective terms (except to the extent that
enforcement may be limited by applicable
bankruptcy, insolvency, or other debtor relief
laws in effect at the time of the Closing); and,
12.2 Purchaser's Obligations to Seller at Closing. On the
Closing Date, Purchaser shall deliver to Seller:
a. Funds. A wire transfer of immediately available
funds payable to Seller or its order in the amount
of the Purchaser Consideration.
b. Additional Documentation. All documents to be
provided by Purchaser to Seller as reasonably
required by any other provision of this Agreement.
12.3 Adjustments, Apportionments and Closing Expenses:
a. Closing Expenses. Seller and Purchaser shall each
bear their respective costs and expenses incurred
or to be incurred in negotiating and preparing
this Agreement. Purchaser shall bear the cost of
preparing and recording the documents of transfer
of the Property.
b. Allocation of Expenses. Real Estate taxes for the
current year and personal property taxes, if any,
shall be apportioned between Seller and Purchaser
as of Closing Effective Date (except as otherwise
provided in this Agreement) provided, however,
that if the current year's assessment is not
available at the time of Closing, the
apportionment shall be based upon the most recent
assessment available and shall be corrected so as
to be accurate with monetary adjustment made
within thirty (30) days after actual taxes are
known.
c. Seller's Prior Obligations. Seller agrees to pay
or cause to be paid, in full, all expenses,
charges, bills or trade accounts maintained or
incurred in connection with the ownership of the
Real Estate, the period prior to the Closing Date,
and all sales taxes, excise taxes, payroll taxes,
withholding taxes or other taxes collected or
payable by Seller, or its agents, in connection
with the ownership of the Real Estate for or
during said period.
Article 13
Default
13.1 Breach by Seller.
a. Prior to Closing, if Seller Defaults in the due
and timely performance of any of the terms to be
performed by Seller hereunder, makes any
misrepresentation or is unable or unwilling to
consummate the sale of the Property, for any
reason except Purchaser's Default or the
termination of this Agreement pursuant to any of
the termination provisions hereof, Purchaser may
obtain a refund of the Transaction Escrow Deposit
from the Escrow Agent pursuant to the terms of the
Transaction Escrow Agreement and then, at its
option, may
(1) terminate this Agreement by written notice to
Seller; or
(2) may enforce specific performance of this
Agreement
If Purchaser successfully enforces specific performance of
this Agreement and acquires the Property, Purchaser shall be
entitled to all of its rights under this Agreement.
13.2 Breach by Purchaser. If Purchaser Defaults in the due
and timely performance of any of Purchaser's obligations
hereunder, the conditions to Purchaser's obligations set forth
in this Agreement having been satisfied and Purchaser's being in
Default and Seller not being in Default hereunder, Seller may:
a. terminate this Agreement by written notice to
Purchaser and obtain payment of the Transaction
Escrow Deposit in accordance with the terms of the
Transaction Escrow Agreement; or
b. may enforce specific performance of this
Agreement.
If Seller successfully enforces specific performance of this
Agreement and sells the Property, Seller shall be entitled to all
of its rights under this Agreement.
13.3 Waiver. No delay or omission in the exercise of any
right or remedy accruing to one Party upon any breach by another
Party under this Agreement shall impair such right or remedy or
be construed as a waiver of any such breach theretofore or
thereafter occurring. The waiver by a Party of any condition or
of any subsequent breach of the same or any other term, covenant,
or condition herein contained shall not be deemed to be a waiver
of any other condition or of any subsequent breach of the same or
any other term, covenant, or condition herein contained. Except
as specifically excepted in this Agreement, all rights, powers,
options, or remedies afforded to any Party either hereunder or by
law shall be cumulative and not alternative and the exercise of
one right, power, option or remedy shall not bar other rights,
powers, options, or remedies allowed herein or by law.
Article 14
Waiver of Liens and Resolutory Conditions
Notwithstanding anything in this Agreement to the contrary,
it is Seller's intention that no vendor's lien, and/or privilege,
mortgage, resolutory condition, right of recision nor stipulation
for the benefit of a third party (other than Purchaser's and
Purchaser's assignees and designees), shall be created by this
Agreement or the assumption of any obligation referred to in this
Agreement; and, should any be deemed to have been created, they
are hereby expressly released, renounced, waived and abandoned.
Article 15
Miscellaneous
15.1 Delay or Omission. No delay or omission in the
exercise of any right or remedy accruing to any Party upon any
breach by any other Party under this Agreement shall impair such
right or remedy or be construed as a waiver of any breach
theretofore or thereafter occurring. The waiver of any condition
or the breach of any term, covenant, or condition herein
contained shall not be deemed to be a waiver of any other
condition or of any subsequent breach of the same or any other
term, covenant or condition herein contained.
15.2 Approval of Documents. Any document required to be
prepared, executed and delivered in connection with the Closing
shall be in form reasonably satisfactory to Seller and Purchaser
and their respective counsel.
15.3 Risk of Loss. The risk of loss or damage to the
Property or any part thereof by fire or other casualty shall from
the date hereof until the Closing Date be borne by Seller.
15.4 Notices. All notices or other communications required
or permitted hereunder shall be in writing, shall be delivered
personally or sent by certified mail or by an overnight delivery
service that operates on a nationwide basis, and routinely issues
receipts, and shall be considered given upon the earlier of
actual receipt or forty-eight (48) hours after mailing postage
prepaid. All such notices shall be addressed as follows:
IF TO PURCHASER:
TRICO MARINE ASSETS, INC.
610 Palm Avenue Post Office Box 1620
Houma, LA 70364 and Houma, LA 70361
ATTN:
WITH A COPY TO:
William B. Master
Jones, Walker, Waechter, Poitevent, Carrere &
Denegre L.L.P.
Place St. Charles Avenue
New Orleans, Louisiana 70170-5100
and
Charles A. Landry
Jones, Walker, Waechter, Poitevent, Carrere &
Denegre L.L.P.
Suite 500
8555 United Plaza Boulevard
Baton Rouge, Louisiana 70809
IF TO SELLER:
ENSCO OFFSHORE COMPANY
2700 Fountain Place
1445 Ross Avenue
Dallas, TX 75202-2792
ATTN: William S. Chadwick, Jr.
WITH COPIES TO:
Albert G. McGrath, Jr.
2700 Fountain Place
1445 Ross Avenue
Dallas, TX 75202-2792
or to such other addresses as the parties may specify in writing.
15.5 Further Assurances. Following the Closing, each of the
Parties will take such further actions and execute and deliver
such additional documents and instruments as may be reasonably
requested by any other Party in order to perfect and complete the
purchase and sale of the Property as set forth herein, and the
other transactions specifically contemplated herein.
15.6 Waiver of Terms. Any of the terms or conditions of
this Agreement may be waived at any time by the Parties which are
entitled to the benefit thereof but only by a written notice
signed by the Parties waiving such terms or conditions. The
waiver of any term or condition shall not be construed as a
waiver of any other term or condition of this Agreement.
15.7 Amendment of Agreement. This Agreement may be amended,
supplemented or modified only by a written instrument duly
executed by Seller and by the Purchaser.
15.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana.
15.9 Partial Invalidity. If any one or more of the
provisions contained herein shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision
or provisions had never been contained herein.
15.10 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Parties, their
respective successors, assignees and designees.
15.11 Execution in Counterparts. This Agreement may be
executed simultaneously in one or more counterparts, each of
which shall be deemed an original agreement, but all of which
together shall constitute one and the same instrument.
15.12 Titles and Headings. Titles and headings to sections
herein are for purposes of reference only, and shall in no way
limit, define, or otherwise affect the provisions herein.
15.13 Schedules. The annexed Schedules shall be construed
as an integral part of this Agreement to the same extent as if
the same had been set forth verbatim herein. Any fact disclosed
on one Schedule hereto shall be deemed to be disclosed on each
other applicable Schedule. Seller shall have the right to update
each Schedule, except as hereinbelow described, not more than two
(2) Business Days prior to Closing, which updated Schedule shall
be subject to the Purchaser's approval.
15.14 Entire Agreement. This Agreement, including the
Schedules annexed hereto, constitutes the entire agreement and
supersedes all other prior agreements and understandings, both
written and oral, among the Parties or any of them, with respect
to the subject matter hereof.
15.15 Expiration. Notwithstanding anything else in this
Agreement to the contrary, if the Closing has not occurred by
December 30, 1996, Seller or Purchaser shall have the right at
any time thereafter and prior to the Closing by delivery of ten
(10) days written notice to the other Party to terminate the
Agreement, provided, however, that the noticing party is not then
in material breach of any terms or provisions of this Agreement,
or if the noticing party is in material breach of any terms and
conditions of this Agreement, then the other parties also must be
in material breach of the terms or conditions of this Agreement
in order to terminate the Agreement.
15.16 Litigation Expenses. If a Party litigates (a) any
provision of this Agreement; (b) the subject matter of this
Agreement; or (c) to enforce any warranty, representation or
covenant of this Agreement, the Parties hereto agree that the
unsuccessful litigant shall pay to the successful litigant all of
its reasonable attorneys fees; provided, however, A Party shall
be considered the successful litigant if such Party:
a. obtains substantially (which shall include any
damage judgment in its favor although in a lesser
amount than it sought) the relief it sought or
successfully defends its position, in either case,
solely through a judgment;
b. it did not initiate the litigation and the other
Party withdraws its action without substantially
obtaining the relief it sought; or
c. it did not initiate the litigation and judgment is
entered for either Party, but without
substantially granting the relief sought.
15.17 Rules of Interpretation. The following rules shall
apply to the construction of this Agreement unless the context
requires otherwise: (a) the singular includes the plural and the
plural, the singular; (b) words importing any gender include the
other genders; (c) references to statutes are to be construed as
including all statutory provisions consolidating, amending or
replacing the statute to which reference is made and all
regulations promulgated pursuant to such statutes; (d) references
to "writing" include printing, photocopy, typing, lithography and
other means of reproducing words in a tangible visible form; (e)
the words "including", "includes" and "include" shall be deemed
to be followed by words "without limitation"; (f) references to
the introductory paragraph, preliminary statements, articles,
sections (or subdivision of sections), exhibits, appendices,
annexes or schedules are to those of this Agreement unless
otherwise indicated; (g) references to agreements and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications to such instruments; (h)
references to Persons include their respective successors and
assigns to the extent successors or assigns are permitted or not
prohibited by the terms of this Agreement; (I) "or" is not
exclusive; (j) provisions apply to successive events and
transactions; (k) references to documents or agreements which
have been terminated or released or which have expired shall be
of no force and effect after such termination, release, or
expiration; (l) references to mail shall be deemed to refer to
first-class mail, postage prepaid, unless another type of mail is
specified; (m) all references to time shall be to Baton Rouge,
Louisiana time; (o) references to specific persons, positions, or
officers shall include those who or which succeed to or perform
their respective functions, duties, or responsibilities; (o) the
terms "herein", "hereunder", "hereby", "hereof," and any similar
terms refer to this Agreement as a whole and not to any
particular articles, section or subdivision hereof; and the term
"heretofore" means before the Effective Date, the term "now"
means at the Effective Date, and the term "hereafter" means after
the Effective Date; and (p) all Parties have been actively
involved in drafting this document and no provision hereof shall
be construed in favor of or against any Party on the basis of
such Party's role in drafting that particular provision.
15.18 Time is of Essence. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF the Parties hereto have executed this
Agreement as of the date first above written.
WITNESSES AS TO SELLER: SELLER
ENSCO Offshore Company
/s/ witness
______________________________ By: /s/ Willaim S. Chadwick, Jr.
_______________________________
/s/ witness William S. Chadwick, Jr.
_______________________________ Vice President
Signed by Purchaser in Houma, Louisiana, on October 11, 1996.
WITNESSES AS TO PURCHASER: PURCHASER:
TRICO MARINE ASSETS, INC.
/s/ witness
_______________________________ /s/ Thomas E. Fairley
By:_______________________________
/s/ witness Thomas E. Fairley
- ------------------------------- President and
Chief Executive Officer
Schedule 1 - Intentionally omitted
Schedule 2 - Transaction Escrow Agreement
Schedule 3 - Tax Parcel Information
Schedule 4 - Work Performed
Exhibit "A" - Legal Description
Exhibit "B" - Description of Survey
Exhibit "C" - Seller's/Owner's Affidavit
SCHEDULE 1
Intentionally Omitted
SCHEDULE 2
Transaction Escrow Agreement
SCHEDULE 3
Tax Parcel Information
SCHEDULE 4
Work Performed
Exhibit "A"
Legal Description of Property
Exhibit "B"
Survey prepared for Penrod Drilling Company
by T. Baker Smith & Son, Inc.
dated 5/8/91, revised as of 5/21/91
Exhibit "C"
FATIC-012
(12/1/88)
SELLER'S/OWNER'S AFFIDAVIT
State of _____________________________ County/Parish
of _______________________
I, we,
____________________________________________________
being first duly sworn, on oath depose and state that
I, we, own the following described property:
See Exhibit "A" attached hereto and made a
part hereof
I/We have owned the property now being sold by
me continuously for ________________ years, and my
enjoyment thereof has been peaceable and undisturbed
and the title to said property has never been
disrupted to the best of my actual knowledge, nor do I
have actual knowledge of any facts by reason of which
the title to, or possession of, said property might be
disputed or by reason of which any claim to any of
said property might be asserted adversely to me, and
more particularly, to the best of my knowledge and
except as disclosed:
1. No party other than the Seller(s)/Owner(s)
is in possession of all or any portion of the premises
above described under any unrecorded leases, tenancy
at will or otherwise.
2. The Seller(s)/Owner(s) during the time of
ownership of the premises above described has/have
conveyed no portion of the premises nor done any act
or allowed any act to be done which has changed the
boundaries of the premises.
3. The Seller(s)/Owner(s) has/have allowed no
encroachments on the premises above described by any
adjoining land owners nor has/have the undersigned
encroached upon the property of adjoining land owners.
4. The Seller(s)/Owner(s) has/have allowed no
easements, rights of way, continuous driveway usage,
drain, sewer, water, gas or oil pipeline or other
rights of passage to others over the premises above
described and has/have no knowledge of such adverse
rights.
5. The Seller(s)/Owner(s), at present, and for
a period of 70 days past, has/have caused no
construction, erection, alteration or repairs of any
structures or improvements on the premises above cited
to be done, nor has/have contracted for any material
to be delivered to the premises for which charges
therefor remain unpaid.
6. The Seller(s)/Owner(s) has/have no knowledge
of any highways, abandoned roads, lanes, cemetery or
family burial grounds, springs, streams, rivers,
ponds, or lakes bordering or running through said
premises.
7. The undersigned has no knowledge of any due
taxes or special assessments.
8. The undersigned has not allowed and knows of
no violation of any covenants, restrictions,
agreements, conditions or zoning ordinances affecting
the premises.
9. There are no pending suits, proceedings,
judgments, bankruptcies, liens or executions against
said owner relating to the property, either in the
aforesaid county/parish or any other county/parish in
the aforesaid state.
This affidavit is given to induce FIRST AMERICAN
TITLE INSURANCE COMPANY, a California corporation, to
issue its title insurance policy or policies without
exception to claims of materialmen's and laborers'
liens, survey matters, special assessments and rights
of parties in possession.
_______day of ___________________, 1996.
_______________________________________
Seller/Owner
of Property
_______________________________________
Notary Public
My commission expires: ____________________
Exhibit 21
SUBSIDIARIES
The following is a list of all subsidiaries of the Company.
Company State of Incorporation
Trico Marine Assets, Inc. Delaware
Trico Marine Operators, Inc. Louisiana
HOS Marine Partners, Inc. Delaware
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 of our
report dated March 27, 1996, except for Note 14 as to which the date is April
29, 1996 on our audits of the consolidated financial statements and financial
statement schedule of Trico Marine Services, Inc. and Subsidiaries and the
statement of revenues less direct operating expenses of the Acquired Vessels.
We also consent to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
New Orleans, Louisiana
October 24, 1996
