SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number 0-28732
HVIDE MARINE INCORPORATED
(Exact name of registrant as specified in its charter)
Florida 65-0524593
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2200 Eller Drive, P.O. Box 13038
Ft. Lauderdale, Florida 33316
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 523-2200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Class A
Common Stock, $.001 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X . NO .
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant as of March 27, 1997 (computed by reference to
the closing price of such stock on the Nasdaq National Market) was $266,032,348.
As of March 24, 1997, there were 11,647,791 shares of the registrant's
Class A Common Stock outstanding and 3,419,577 shares of its Class B Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT WHERE INCORPORATED
Portions of the Registrant's definitive Proxy Statement
regarding the 1997 Annual Meeting of Stockholders Part III
- --------------------------------------------------------------------------------
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HVIDE MARINE INCORPORATED
FORM 10-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
PART I
<S> <C> <C>
1 Business........................................................................................... 1
2 Properties......................................................................................... 14
3 Legal Proceedings.................................................................................. 15
4 Submission of Matters to a Vote of Security Holders................................................ 16
4a Executive Officers of the Registrant............................................................... 16
PART II
5 Market for Registrant's Common Equity and Related Stockholder Matters.............................. 19
6 Selected Financial Data............................................................................ 19
7 Management's Discussion and Analysis of Financial Condition and Results of
Operations......................................................................................... 22
8 Financial Statements............................................................................... 33
9 Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure......................................................................................... 33
PART III
10 Directors and Executive Officers of the Registrant................................................. 34
11 Executive Compensation............................................................................. 34
12 Security Ownership of Certain Beneficial Owners and Management..................................... 34
13 Certain Relationships and Related Transactions..................................................... 35
PART IV
14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.................................... 35
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
Hvide Marine Incorporated (the "Company") provides marine support and
transportation services primarily in the U.S. domestic trade and principally to
the energy and chemical industries. The Company is the third largest operator of
supply and crew boats in the U.S. Gulf of Mexico. In addition, the Company is
the sole provider of commercial tug services in Port Everglades and Port
Canaveral, Florida, and a leading provider of such services in Mobile, Alabama.
The Company also transports petroleum products and specialty chemicals in the
U.S. domestic trade, a market insulated from international competition under the
Jones Act. Four of the Company's five chemical carriers are among the last
independently owned chemical carriers scheduled to be retired under the Oil
Pollution Act of 1990 ("OPA 90").
The Company began operations in 1958 as a harbor tug operator and in
1975 acquired its first petroleum product carrier. It began transporting
specialty chemicals in 1977 and expanded into the operation of offshore energy
support vessels with the acquisition of eight supply boats in 1989. In 1994, the
Company substantially expanded its fleet, adding 20 crew boats, six supply
boats, and two utility boats to its offshore energy support fleet and an
18-vessel tug and barge fleet to its petroleum product transportation
operations.
In January 1996, the Company acquired eight crew boats, and in August
1996, utilizing the proceeds of its initial public offering, it acquired three
chemical carriers, 10 offshore supply boats, and one crew boat. In January 1997,
the Company completed a second public offering, a portion of the proceeds of
which are being utilized to fund further fleet expansions. From December 1996
through February 1997, the Company acquired three offshore supply boats, three
crew boats, one offshore anchor handling tug, and two harbor tugs. As of
February 28, 1997, the Company had entered into agreements or letters of intent
relating to the acquisition or construction of an additional five offshore
supply boats, eight crew boats, and three ship-docking modules.
The Company's principal office is located at 2200 Eller Drive, Fort
Lauderdale, Florida 33316, and its telephone number is (954) 523-2200.
OPERATIONS
All marine transportation between points in the United States,
including drilling rigs affixed to the U.S. outer continental shelf, is
restricted by law to vessels built and registered in the United States and owned
and manned by U.S. citizens. The U.S. domestic trade includes a number of market
segments, including the servicing of domestic offshore oil and gas drilling and
production platforms, the providing of offshore and harbor towing services to
the offshore energy industry, tankers and other vessels, and the transportation
of fuels, petroleum products, and chemicals along and between U.S. coasts. All
of the Company's vessels are eligible to participate in the U.S. domestic trade
except for two Panamanian-flag offshore supply boats operating in Southeast Asia
pursuant to contracts expiring in 1998.
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MARINE SUPPORT SERVICES
Offshore Energy Support. Marine support vessels serving offshore energy
exploration and production operations are used primarily to transport materials,
supplies, equipment, and personnel to drilling rigs and to support the
construction, positioning, and ongoing operation of oil and gas production
platforms. Offshore energy support vessels are hired by oil companies and others
engaged in offshore exploration activities, generally on a short-term (less than
six months) basis at varying day rates. See "Customers and Charter Terms."
Demand for such vessels, and the level of day rates paid for their utilization,
depend upon the level of drilling activity, which, in turn, is dependent upon
oil and gas prices, which are highly cyclical. The types of vessels primarily
utilized in these activities are supply boats, crew boats, and anchor handling
vessels.
Supply Boats. Supply boats (also called workboats) are generally at
least 150 feet in length and serve exploration and production facilities and
support offshore construction and maintenance activities. Supply boats are
differentiated from other vessel types by cargo flexibility and capacity. In
addition to transporting deck cargo, such as drill pipe and heavy equipment,
supply boats transport liquid mud, potable and drilling water, diesel fuel, dry
bulk cement, and dry bulk mud. With their relatively large liquid mud and dry
bulk cement capacity and large areas of open deck space, they are generally in
greater demand than other types of support vessels for exploration and workover
drilling activities.
The following table sets forth certain information concerning the 27
supply boats currently owned and operated by the Company and the four supply
boats that the Company has agreed to acquire. The Company has also entered into
a contract for the construction of one new supply boat.
<TABLE>
<CAPTION>
LENGTH YEAR BUILT/ AREA OF
SUPPLY BOAT NAME(1) (FEET) REBUILT HORSEPOWER OPERATION
<S> <C> <C> <C> <C>
Seabulk New York(2)......................................... 225 1975/1997 4,300 U.S. Gulf
Seabulk New Jersey(2)....................................... 225 1975/1997 4,300 U.S. Gulf
Seabulk Minnesota........................................... 205 1976/1994 2,250 U.S. Gulf
Seabulk Montana(4).......................................... 205 1974/1994 5,350 U.S. Gulf
Matagorda Island(3)(4)...................................... 191 1980 3,900 U.S. Gulf
Seabulk North Carolina(4)(5)................................ 190 1979/1993 4,000 U.S. Gulf
Seabulk Colorado............................................ 185 1982/1994 2,250 U.S. Gulf
Seabulk Missouri............................................ 185 1982 2,250 U.S. Gulf
Seabulk Arkansas............................................ 185 1982 2,250 U.S. Gulf
Jefferson(3)(4)............................................. 185 1981 3,900 U.S. Gulf
Seabulk Wyoming............................................. 185 1979 2,250 Cameron
Sabine(3)(4)................................................ 185 1979 3,900 U.S. Gulf
Seabulk Hawaii.............................................. 180 1979/1995 3,000 U.S. Gulf
Seabulk Georgia............................................. 180 1984 3,000 U.S. Gulf
Seamark South Carolina(4)(6)................................ 180 1983 3,000 SE Asia
Seabulk California.......................................... 180 1982 2,250 U.S. Gulf
Seabulk Florida............................................. 180 1982 2,250 U.S. Gulf
Seabulk Alabama............................................. 180 1982 2,250 U.S. Gulf
Seamark Mississippi(6)...................................... 180 1982 2,250 SE Asia
Seabulk Texas............................................... 180 1982 2,250 U.S. Gulf
Seabulk Louisiana........................................... 180 1982 2,250 U.S. Gulf
Seabulk Rhode Island........................................ 180 1980 2,700 U.S. Gulf
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Aransas(3).................................................. 180 1980 1,950 U.S. Gulf
Ross Seal................................................... 176 1977/1987 1,700 SE Asia
Seabulk Vermont............................................. 176 1977 1,700 Egypt
Seabulk Kentucky............................................ 175 1983 2,400 U.S. Gulf
Seabulk Tennessee........................................... 175 1983 2,400 U.S. Gulf
Seabulk Oregon.............................................. 175 1979 2,250 U.S. Gulf
Seabulk Washington.......................................... 175 1978 2,250 U.S. Gulf
Seabulk Maryland(5)......................................... 165 1980 1,860 U.S. Gulf
Seabulk Virginia(5)......................................... 165 1979 1,860 U.S. Gulf
</TABLE>
(1)Certain names reflect name changes currently in process.
(2)Vessel expected to be put into service during second quarter of 1997.
Vessel data reflect upgrading, refurbishment, and lengthening.
(3)Vessel to be acquired.
(4)Anchor handling tug/supply vessel.
(5)The Company is bareboat charterer and operator with an option to purchase the
vessel at the end of the bareboat charter for a nominal amount.
(6)These offshore supply boats are currently chartered to a joint venture in
which the Company has a 49% interest and are operated by the joint venture in
Southeast Asia. The Company receives bareboat charter hire, which is at a
rate that is approximately equivalent to the capital costs of the vessels,
and has the right to receive a 49% share of net income from the venture. The
joint venture has the right to purchase each vessel for $300,000 upon
expiration of the charters in August 1998.
Six of the vessels included in the foregoing table are anchor handling
tug/supply vessels. Anchor handling vessels are more powerful than supply boats
and are capable of towing and positioning drilling rigs, production facilities,
and construction barges. Some are specially equipped to assist tankers while
they are loading from single-point buoy mooring systems.
Crew Boats. Crew boats (also called crew/supply boats) are faster and
smaller than supply boats and are utilized primarily to transport light cargo,
including food and supplies, and personnel to and among production platforms,
rigs, and other offshore installations. They can be chartered together with
supply boats to support drilling or construction operations or separately to
serve the various requirements of offshore production platforms. Crew boats are
typically constructed of aluminum and generally have longer useful lives than
steel-hull supply boats. Crew boats also provide a cost-effective alternative to
helicopter transportation services and can operate reliably in all but the most
severe weather conditions.
The following table sets forth certain information concerning the 40
crew and two utility boats currently owned or operated by the Company and the
two crew boats the Company has agreed to acquire.
<TABLE>
<CAPTION>
LENGTH YEAR BUILT/
CREW BOAT NAME(1) (FEET) REBUILT HORSEPOWER
<S> <C> <C> <C>
Seabulk St. Frances........................................................ 152 1996 4,400
Seabulk St. Charles(2)..................................................... 152 1993 3,820
Seabulk Winn............................................................... 135 1991 3,056
Seabulk Galveston.......................................................... 135 1990 3,056
Seabulk Bossier............................................................ 135 1990 3,056
Sea Robin III.............................................................. 135 1978 2,250
Seabulk Acadia............................................................. 135 1995 3,300
Seabulk Monroe............................................................. 135 1993 3,056
Capt. Evan(3).............................................................. 135 1991 3,056
Capt. Rami(3).............................................................. 135 1991 3,056
Seabulk Lexington.......................................................... 135 1991 3,056
Seabulk LaFourche.......................................................... 130 1991 2,040
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C> <C>
Seabulk Houston............................................................ 125 1985 2,600
Seabulk Lafayette.......................................................... 125 1985 2,040
Seabulk Starr.............................................................. 120 1984 2,040
ThunderU.S.A............................................................... 120 1984 2,040
Seabulk Lamar.............................................................. 120 1980 2,040
Seabulk Liberty............................................................ 110 1985 2,040
Thunderplanet.............................................................. 110 1982 2,040
Seabulk Mobile............................................................. 110 1982 2,040
Seabulk Evangeline......................................................... 110 1981 2,040
Thunderwar................................................................. 110 1981 2,040
Seabulk Madison............................................................ 110 1980 2,040
Seabulk Bay................................................................ 110 1980 2,040
Seabulk Beauregard......................................................... 110 1980 2,040
Seabulk Jackson............................................................ 110 1980 2,100
David Jr.(4)............................................................... 110 1980 2,820
Seabulk Jasper(4).......................................................... 110 1980 2,820
Seabulk Nassau............................................................. 110 1979 2,040
Seabulk Aransas............................................................ 110 1978 2,100
Ralph Thompson(4).......................................................... 110 1978 2,820
Seabulk Albany(4).......................................................... 110 1978 2,820
Seabulk Austin(5).......................................................... 110 1978 1,080
Seabulk Baldwin(4)......................................................... 110 1976 2,400
Seabulk Claiborne(4)....................................................... 110 1975 2,400
Seabulk Baton Rouge(4)(5).................................................. 100 1981 910
Thundereagle............................................................... 100 1977/1995 1,530
Seabulk Cameron............................................................ 100 1976/1995 1,530
Thundercat................................................................. 100 1976/1995 1,530
Seabulk Sabine............................................................. 100 1976/1995 1,530
Seabulk Orleans............................................................ 100 1981 1,530
Seabulk Iberia............................................................. 100 1981 1,530
Rig Runner(4).............................................................. 90 1974 1,650
Seabulk Maverick........................................................... 85 1976 1,200
</TABLE>
(1) Certain names reflect name changes currently in process.
(2) The Company is bareboat charterer and operator with an option to purchase
the Seabulk St. Charles, at the end of the bareboat charter in 2002 for
$400,000.
(3) Vessel to be acquired.
(4) The Company is bareboat charterer and operator with an option to purchase
the vessel at the end of the bareboat charter for a nominal amount.
(5) Utility vessel.
Offshore and Harbor Towing. Offshore and harbor towing services are
provided by tugs to vessels utilizing the ports in which the tugs operate and to
vessels at sea to the extent required by environmental regulations, casualty, or
other emergency. The Company's anchor handling tug/supply boats and offshore
towing-equipped tugs have been engaged in towing a wide variety of barges
carrying heavy equipment, refinery modules, and petroleum products for the
energy industry in the U.S. Gulf of Mexico, the Atlantic Ocean, and the
Mediterranean Sea.
Charges for docking services are based on a fixed rate per job, and
those for towing services are based on hourly or daily rates. In most ports,
competition is unregulated, although a few port authorities -- including Port
Canaveral and Port Everglades, Florida where a majority of the Company's tugs
operate -- grant non-exclusive franchises to harbor tug operators. Rates are
unregulated in franchised ports
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served by the Company. See "Customers and Charter Terms." Each port is generally
a distinct market for harbor tugs, even though harbor tugs can be moved from
port to port. Demand for towing services depends on vessel traffic, which is in
turn generally dependent on local and national economic conditions. OPA 90 and
current state legislation require oil tankers to be escorted in and around
certain ports located in Alaska and the U.S. Pacific coast. The Company
anticipates that such regulatory requirements will be expanded, increasing the
demand for specially designed tractor tugs, such as the Broward, to perform
escort services.
The tugs currently owned or operated by the Company serve Port
Everglades and Port Canaveral, Florida and Mobile, Alabama, where they primarily
assist product carriers, barges, other cargo vessels, and cruise ships in
docking and undocking and in proceeding in confined waters. In 1995, the Company
took delivery of the Broward, a tractor tug that it operates pursuant to a
long-term operating lease. Tractor tugs have forward-mounted, omni-directional
propulsion units, giving them a high degree of maneuverability and control over
the operation of an escorted vessel, and are generally considered superior for
tanker escort service. In December 1996, the Company entered into one-year
bareboat charters of two newly constructed 4,000-hp tugs equipped with
omni-directional propulsion units and having some of the capabilities of tractor
tugs. These tugs are serving as harbor tugs in Mobile, enabling two of the
Company's harbor tugs to be utilized in offshore towing activities. In December
1996 and January 1997, the Company acquired one offshore towing-equipped tug and
two harbor tugs, respectively. The offshore towing-equipped tug is being
operated in the U.S. Gulf and the harbor tugs are being operated in Port
Everglades and Port Canaveral. The Company now operates five tugs with offshore
towing capabilities that conduct a variety of offshore towing services in the
U.S. Gulf and the Atlantic Ocean.
The following table sets forth certain information with respect to the
14 tugs owned or operated by the Company and the two tugs chartered by the
Company.
<TABLE>
<CAPTION>
LENGTH YEAR BUILT/
VESSEL NAME HORSEPOWER (FEET) REBUILT PORT
<S> <C> <C> <C> <C>
Broward(1)......................................... 5,100 100 1995 Port Everglades
Vigilant(1)........................................ 4,600 120 1981/1994 Offshore
Ft. Lauderdale..................................... 4,200 90 1971/1996 Port Everglades
Hollywood(1)....................................... 4,200 106 1985 Offshore
Mobile Power....................................... 4,100 98 1957/1986 Mobile
Z-One(2)........................................... 4,100 94 1996 Mobile
Z-Two(2)........................................... 4,000 94 1996 Mobile
Delaware........................................... 4,000 107 1952/1990 Mobile
Mary Dee Sanders................................... 3,600 105 1941/1984 Port Canaveral
Mobile Pride(1).................................... 3,300 107 1969/1989 Offshore
Paragon(1)......................................... 3,300 105 1978/1989/1996 Offshore
Mobile Persistence(3).............................. 3,000 98 1940/1975 Port Canaveral
Brevard............................................ 2,400 88 1945/1986/1996 Port Canaveral
Captain Brinn...................................... 2,145 88 1960/1986 Port Canaveral
Everglades......................................... 2,145 88 1956/1984 Port Everglades
Manatee............................................ 2,145 88 1959/1982 Port Everglades
</TABLE>
(1)Equipped for offshore towing.
(2)Vessel operated under a one-year bareboat charter.
(3)Expected to be retired in the second quarter of 1997.
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The Company has contracted for the construction of three ship-docking
modules, or SDM(TM)s, for delivery in late 1997 or early 1998. SDM(TM)s are
innovative ship-docking vessels that are designed to be more maneuverable,
efficient, and flexible than harbor tugs. In addition, they are expected to have
lower operating costs than harbor tugs because they require fewer crew members.
Company personnel, working in conjunction with consulting marine engineers and
architects, prepared the conceptual design and detailed specifications for the
SDM(TM)s. The Company has filed a patent application on the design. It is
currently anticipated that one SDM(TM) will operate in Port Everglades and two
in Mobile and that their deployment will make one or two of the bareboat
chartered tugs available for alternative service or redelivery to their owner.
MARINE TRANSPORTATION SERVICES
Chemical Transportation. In the domestic chemical transportation trade,
vessels carry chemicals primarily from chemical manufacturing plants and storage
tank facilities along the U.S. Gulf of Mexico coast to industrial users in and
around the Atlantic and Pacific coast ports and along inland rivers and
waterways. The chemicals primarily transported are caustic soda, alcohols,
chlorinated solvents, paraxyzlene, alkylates, toluene, methyl tertiary butyl
ether (MTBE), phosphoric acid, and lubricating oils. Certain of the chemicals
transported must be carried in vessels with specially coated or stainless steel
cargo tanks. Many are very sensitive to contamination and require special
cargo-handling equipment.
The Company estimates that approximately 11% (in terms of tonnage) of
bulk domestic chemical transportation is waterborne, with the remainder
transported by rail. The Company also estimates that approximately 60% of that
waterborne trade is in specialty chemicals, such as caustic soda, which can be
transported only by specially designed vessels. Although chemical carriers and
petroleum product carriers are similar in design, vessels engaged in the
transportation of petroleum products generally lack the large number of small
tanks, special tank coatings, and sophisticated cargo-handling capability
necessary to operate in the parcel or specialty chemical trade. Parcel shipments
are usually carried pursuant to contracts of affreightment by which a shipper
contracts for the use of a portion of a vessel's cargo capacity. See "Customers
and Charter Terms." Management believes that there are 13 specialty chemical
carriers active in the domestic trade, of which nine are independently operated
and four are owned by chemical or other companies that use the vessels to
transport cargoes for their own accounts. In addition to the specialty chemical
tankers, there are 44 tankers and 90 barges in the U.S.-flag domestic fleet over
10,000 gross tons that are capable of carrying some so-called "easy chemicals,"
such as gasoline additives (e.g. MTBE), and that compete with specialty chemical
carriers for the transportation of those chemicals.
The Company's chemical carriers are the 298,000-barrel, 39,300 dwt
Seabulk Magnachem, the 297,000-barrel, 46,300 dwt Seabulk America, the
360,000-barrel, 50,900 dwt HMI Dynachem, the 360,000-barrel, 50,900 dwt HMI
Petrochem, and the 260,000-barrel, 37,100 dwt HMI Astrachem, which are primarily
engaged in the U.S. domestic chemical parcel trade. The Company operates the
Seabulk Magnachem pursuant to a long-term bareboat charter. The Company owns a
67% economic interest, and Stolt Tankers (U.S.A.), Inc. owns the remaining 33%
economic interest, in the Seabulk America.
The Seabulk Magnachem, the Seabulk America, the HMI Dynachem, and the
HMI Petrochem have full double bottoms (as distinct from double hulls) and the
HMI Astrachem has a partial double bottom. Double bottoms provide increased
protection over single hull vessels from a spill in the event of a
6
<PAGE>
mishap. The Company's chemical carriers have from 13 to 24 cargo segregations
which are configured, strengthened, and coated to handle various sized parcels
of a wide variety of industrial chemical and petroleum products giving them the
ability to handle a broader range of chemicals than chemical-capable product
carriers. Many of the chemicals transported by the Company are hazardous
substances. Voyages are currently generally conducted from the Houston and
Corpus Christi, Texas, and Lake Charles, Louisiana areas to such ports as New
York, Philadelphia, Baltimore, Norfolk, Wilmington, North Carolina, and
Charleston, South Carolina.
Pursuant to the requirements of OPA 90, the Seabulk America, the HMI
Dynachem, the HMI Petrochem, and the Seabulk Magnachem, which were built with
full double bottoms but not double sides, cannot be utilized to transport
petroleum and petroleum products in U.S. commerce after 2015, 2011, 2011, and
2007, respectively. The HMI Astrachem, which has a partial double bottom, cannot
be so utilized after 2000. See "Environmental and Other Regulation -- Clean
Water Regulations." They may, however, be permitted to continue to carry certain
chemicals in U.S. commerce and may be redocumented in another country and
transport chemicals in non-U.S. trades. Although it has no current plans to do
so, the ITB design of the Seabulk Magnachem would allow the Company to replace
only the cargo-carrying portion of the vessel with a double-hull barge, which
the Company anticipates would be substantially less expensive than constructing
an entirely new double-hull conventional tank vessel.
The Company markets the five chemical carriers through its wholly owned
subsidiary OSTC. OSTC books cargoes either on a spot (movement-by-movement) or
time basis. Approximately 75% of contracts for cargo are committed on a 12- to
18-month basis, with minimum and maximum cargo tonnages specified over the
period at fixed rates per ton. The HMI Dynachem and HMI Astrachem are currently
chartered to major oil companies under charters that expire in August 1997 and
November 1997, respectively. Upon the expiration of these charters, the Company
intends to enter into new contracts of affreightment or time charters to market
those vessels. OSTC is often able to generate additional revenues by chartering
cargo space on competitors' vessels and by expanding the carriers' backhaul
(return voyage) opportunities.
Petroleum Product Transportation. In the domestic energy transportation
trade, oceangoing and inland-waterway vessels transport fuel and other petroleum
products, primarily from the U.S. Gulf of Mexico coast refineries and storage
facilities, to utilities, waterfront industrial facilities, and distribution
facilities along the U.S. Gulf of Mexico, the Atlantic and Pacific coasts, and
inland rivers. The inventory of U.S.-flag oceangoing vessels eligible to
participate in the U.S. domestic trade and capable of transporting fuel or
petroleum products has steadily decreased since 1980 as vessels have reached the
end of their useful lives and the cost of constructing a vessel in the United
States (a requirement for U.S. domestic trade participation) has exceeded the
level at which it was economically feasible to order a new vessel.
Seabulk Challenger. The Company's 320,000-barrel, 39,300 dwt CATUG(R)
ITB Seabulk Challenger is engaged in the transportation of fuel and other
petroleum products from refineries in Texas and Louisiana to tank farms and
industrial sites primarily in Port Everglades, Tampa, and Jacksonville, Florida.
Delivered in 1975, the Seabulk Challenger has six cargo segregations and was the
first CATUG(R) ITB constructed in the world. Like the Seabulk Magnachem, it
enjoys certain manning and other advantages over conventional tank vessels. In
1989 and 1991, the vessel had extensive steel renewals and tank recoatings. In
addition, in 1991 the vessel was outfitted with an inert-gas system at the
expense of the charterer.
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<PAGE>
The Seabulk Challenger has been under continuous contract to Shell Oil
Company ("Shell") since its delivery in 1975 and to date has performed over 600
voyages for Shell. In January 1990, Shell renewed the charter for a ten-year
period ending in January 2000. Under the charter, the Company is responsible for
operating costs such as crew, maintenance, and insurance, and Shell pays for
voyage costs such as fuel and port charges. The charter hire rate is adjusted
annually for inflation. The charter may be canceled by Shell in January 1998 and
January 1999 upon payment of a percentage of the charter hire due over the
remaining term of the charter. Shell has in the past repeatedly renewed its
charter of the Seabulk Challenger, and continues to fully utilize the vessel.
Because the termination penalties are substantial, and Shell has provided
significant capital enhancement to the vessel, the Company believes that Shell
will continue to charter the vessel until January 2000, although there can be no
assurance that it will do so. In the fourth quarter of 1996, the charter rate
was renegotiated and reduced by approximately 6% to reflect the lower current
market rate.
The Seabulk Challenger cannot be operated in U.S. waters after its
January 2003 phase-out date under OPA 90. As with the Seabulk Magnachem, the
Company could, but has no current plans to, replace the barge portion of the
Seabulk Challenger with a double-hull barge, which the Company anticipates would
be substantially less expensive than constructing an entirely new double-hull
conventional tank vessel.
Sun State. In September 1994, the Company acquired the marine assets of
Sun State Marine, Inc. ("Sun State"), which then owned and operated an energy
transportation fleet of ten towboats and eight fuel barges (one small barge was
acquired in April 1995 and four small barges were acquired in December 1995),
all of which are engaged in fuel transportation along the Atlantic intracoastal
waterway and in the St. Johns River in Florida. Sun State has been in operation
for over 50 years, and the Company continues to operate it as a wholly-owned
subsidiary, Sun State Marine Services, Inc.
(collectively with the predecessor company, "Sun State").
A majority of Sun State's revenue for the year ended December 31, 1995
and 1996 was derived from a fuel transportation contract with Florida Power or
Light Company ("FPL"). The remainder of its revenue was derived from a fuel
transportation contract with another customer and its marine maintenance,
repair, and drydocking facility. See "Other Services." Under its contract with
FPL, which has a term extending to September 1998, Sun State has agreed to
transport fuel oil from Port Canaveral and Jacksonville to certain FPL electric
power generating facilities at specified rates (a combination of per diem and
variable rates based upon barrels transported) with an escalation provision. The
FPL contract has a specified guaranteed minimum utilization provision.
The Sun State towboats are as follows:
<TABLE>
<CAPTION>
LENGTH YEAR BUILT/
VESSEL NAME HORSEPOWER (FEET) REBUILT
<S> <C> <C> <C>
Sun River City......................................................... 1,000 72 1994
Sun Commander.......................................................... 1,000 70 1968/1990
Sun Chief.............................................................. 1,000 72 1971/1990
Sun Merchant........................................................... 1,000 65 1966/1994
Sun Trader............................................................. 850 56 1972/1980
Sun St. Johns.......................................................... 850 58 1961/1990
Sun Explorer .......................................................... 800 57 1980
Sun Gypsy.............................................................. 800 53 1976/1992
Sun Rebel.............................................................. 800 60 1957/1991
Sun Venture............................................................ 800 66 1956/1986
</TABLE>
8
<PAGE>
The Sun State barges are as follows:
<TABLE>
<CAPTION>
BARGE LENGTH YEAR BUILT/
VESSEL NAME CAPACITY (FEET) REBUILT
<S> <C> <C> <C>
Sun State No. ......................................................... 25,684 bbls 290 1953/1994
Sun State No. 2........................................................ 25,684 bbls 290 1952/1979
Sun State No. 3........................................................ 25,974 bbls 290 1962/1986
Sun State No. 4........................................................ 25,974 bbls 290 1962/1984
Sun State No. 6........................................................ 21,408 bbls 264 1950/1982
Sun State No. 7........................................................ 20,700 bbls 264 1967/1990
Sun State No. 8........................................................ 23,000 bbls 272 1970
Sun State No. 9........................................................ 23,000 bbls 272 1970
Sun State 501.......................................................... 4,880 bbls 126 1966
Sun State 701.......................................................... 7,000 bbls 175 1942
Sun State 901.......................................................... 9,000 bbls 177 1948
Sun State 902.......................................................... 9,500 bbls 195 1947
Sun State 1101......................................................... 11,000 bbls 200 1963
</TABLE>
OPA 90 requires all single-hull barges, including the Sun State barges,
to discontinue transporting fuel and other petroleum products in 2015. The
Company is considering the construction of five double- hull barges at an
estimated aggregate cost of approximately $9.0 million. The decision to proceed
with the construction of these barges will be based upon successful completion
of negotiations of long-term contracts with a customer concerning use of these
vessels.
New Product Carriers. The Company has a 2.4% equity interest in five
45,300 dwt double-hull petroleum product carriers currently under construction
by Newport News Shipbuilding and Drydock Co. for delivery during 1998. The
aggregate cost of the five carriers is estimated to be $255.0 million, of which
approximately $40.0 million will constitute equity investment and $215.0 million
will be financed with the proceeds of government-guaranteed Title XI ship
financing bonds issued in March 1996. In addition to the Company's interest, 25%
of the equity interest in the vessels is held by Van Ommeren International BV
and 49.3% and 23.4%, respectively, by two other investors. Subject to the
condition that the current owner of the 49.3% interest has not previously sold
such interest to a third party, the Company has an option, exercisable through
2002, to purchase the 49.3% interest at a price equal to (i) the investor's
equity investment plus a stated annual return, or (ii) if exercised after
December 31, 1997, the greater of the fair market value of the interest or the
amount set forth in (I). The Company also has an option, exercisable on January
15, 1998, to purchase the additional 23.4% interest at a price equal to the
investor's equity investment plus a stated return. Should the Company fail to
exercise the latter option, the investor has the option to acquire 1.6% of the
ownership interest from the Company for nominal consideration. The total
estimated cost of exercising the Company's options is up to $32.0 million
(assuming the options are exercised prior to January 1, 1998). The Company
currently has no understandings or agreements with respect to the financing that
it would require if it were to exercise either or both of these options, and
there can be no assurance that such financing will be available.
The five double-hull product carriers, the operations of which will be
managed by the Company, are intended to serve the market currently served by
single-hull product carriers whose retirement is
9
<PAGE>
mandated by OPA 90. The vessels will operate in the U.S. domestic trade and may
be operated pursuant to long- or short-term charters, depending upon market
conditions during the period prior to their delivery and thereafter. The Company
is serving as the construction supervisor during the construction period.
OTHER SERVICES
As part of the Sun State acquisition, the Company also acquired a small
marine maintenance, repair, and drydocking facility in Green Cove Springs,
Florida, which is engaged principally in the maintenance of tugs and barges,
offshore support vessels, and other small vessels. The lease for the facility,
including options, expires in 2000. The towboat Sun River City was constructed
in the Green Cove Springs facility. This facility is capable of drydocking
vessels up to 300 feet in length for repair and can make dockside repairs on
vessels up to 320 feet in length. Since October 1994, the Green Cove Springs
facility has been utilized to overhaul or rebuild a number of the Company's
harbor tugs and offshore energy support vessels. The facility (originally a U.S.
government naval repair and operations station) has covered steel fabrication
facilities, workshops, and office spaces adjacent to a 1,840-foot finger pier
and mooring basins, where the facility's three floating drydocks are located.
The drydocks are 60, 80, and 108 feet in length, and are capable of lifting 350,
200, and 500 tons, respectively. The 60 and 108 foot drydocks are capable of
being joined together for lifting a vessel or barge with a nominal capacity of
1,175 long tons.
CUSTOMERS AND CHARTER TERMS
The Company offers its offshore energy support services primarily to
oil companies and large drilling companies. Consistent with industry practice,
the Company's U.S. Gulf of Mexico operations are conducted primarily in the
"term" market pursuant to short-term (less than six months) charters at varying
day rates. Generally, such short-term charters can be terminated by either the
Company or its customer upon notice of five days or less.
The Company offers its offshore and harbor towing services to vessel
owners and operators and their agents. The Company's rates for harbor towing
services are set forth in the Company's published tariffs and are subject to
modification by the Company at any time, limited by competitive factors. The
Company also grants volume discounts to major users of harbor services. Offshore
towing services are priced based upon the service required on an ad hoc basis.
The primary purchasers of chemical transportation services are chemical
and oil companies. The primary purchasers of petroleum product transportation
services are utilities, oil companies, and large industrial consumers of fuel
with waterfront facilities. Both services are generally contracted for on the
basis of short- or long-term time charters, voyage charters, contracts of
affreightment, or other transportation agreements tailored to the shipper's
requirements. Shell is the Company's largest single customer and the long-term
charterer of the Seabulk Challenger. In addition, Chevron Corporation
("Chevron") is a purchaser of the Company's offshore energy support and chemical
transportation services, FPL is a purchaser of the Company's petroleum product
transportation services and each of Phillips Petroleum Company ("Phillips") and
Amoco Corporation ("Amoco") currently charters one of the Company's chemical
carriers. Shell, Chevron, and FPL each accounted for between 5% and 10% of the
Company's revenue for the year ended December 31, 1996, and Shell accounted for
14% of the Company's revenue for the year ended December 31, 1995. The loss of
any of these customers could have a material adverse effect on the Company.
10
<PAGE>
COMPETITION
The Company operates in a highly competitive environment in all its
operations. The principal competitive factors in each of the markets in which
the Company operates are suitability of equipment, personnel, price, service,
and reputation. The Company's vessels that provide chemical and petroleum
products transportation services compete with both other vessel operators and,
in some areas and markets, with alternative modes of transportation, such as
pipelines, rail tank cars, and tank trucks. Moreover, the users of such services
are placing increased emphasis on safety, the environment, and quality, partly
due to heightened liability for the cargo owner in addition to the vessel
owner/operator under OPA 90. See "Environmental and Other Regulation -- Clean
Water Regulations." With respect to towing services, the Company's vessels
compete not only with other providers of tug services, but with the providers of
tug services in nearby ports. Many of the companies with which the Company
competes have substantially greater financial and other resources than the
Company. Additional competitors may enter the Company's markets in the future.
Moreover, should U.S. coastwise laws be repealed, foreign-built, foreign-manned,
and foreign-owned vessels could be eligible to compete with the Company's
vessels.
See "Environmental and Other Regulation -- Coastwise Laws."
ENVIRONMENTAL AND OTHER REGULATION
The Company's operations are subject to significant federal, state, and
local regulation, the principal provisions of which are described below.
Clean Water Regulations. OPA 90 established an extensive regulatory and
liability regime for the protection of the environment from oil spills. OPA 90
affects all owners and operators of vessels in United States waters, which
include the United States territorial sea and the 200-mile exclusive economic
zone of the United States. Although it applies in general to all vessels, for
purposes of its liability limits and financial-responsibility and
response-planning requirements, OPA 90 differentiates between tank vessels
(which include the Company's chemical carriers, product carrier, and fuel
barges) and "other vessels" (which include the Company's tugs and offshore
energy service vessels).
Under OPA 90, owners, operators, and certain charterers of vessels are
"responsible parties" and are jointly, severally, and strictly liable for
containment and cleanup costs and other damages arising from oil spills relating
to their vessels, unless the spill results solely from the act or omission of a
third party, an act of God, or an act of war. Such "other damages" are defined
broadly to include (i) natural resources damages and the costs of assessment
thereof; (ii) damages for injury to, or economic losses resulting from the
destruction of, real and personal property; (iii) net loss of taxes, royalties,
rents, fees, and other lost revenues by the U.S. government, a state, or
political subdivision thereof; (iv) lost profits or impairment of earning
capacity due to property or natural resources damage; (v) net cost of public
services necessitated by a spill response, such as protection from fire or other
hazards; and (vi) loss of subsistence use of natural resources.
For tank vessels, the statutory liability of responsible parties is
limited to the greater of $1,200 per gross ton or $10 million ($2 million for a
vessel of 3,000 gross tons or less) per vessel; for "other vessels," such
liability is limited to the greater of $600 per gross ton or $500,000 per
vessel. Such liability limits do not apply, however, to an incident proximately
caused by violation of federal safety, construction, or operating regulations or
by the responsible party's gross negligence or willful misconduct, or if the
responsible party fails to report the incident or to cooperate and assist in
connection with oil removal activities. Although the Company currently maintains
pollution liability insurance with
11
<PAGE>
coverage of $700 million per incident for its tank vessels ($500 million per
incident for its fuel barges), a catastrophic spill could result in liability in
excess of available insurance coverage, resulting in a material adverse effect
on the Company.
Under OPA 90, with certain limited exceptions, all newly built or
converted tankers operating in United States waters must be built with double
hulls, and existing single-hull vessels must be phased out at some point,
depending upon their size, age and place of discharge, between 1995 and 2015
unless retrofitted with double hulls. As a result of this phase-out requirement,
as interpreted by the U.S. Coast Guard, the Company's chemical carriers and its
petroleum product carrier will be required to cease transporting petroleum
products over the next 19 years, and its fuel barges will cease transporting
fuel in 2015. The retirement dates of certain tankers may be extended by
reducing their gross registered tonnage and cargo capacity. There can be no
assurance that the useful life of any of the Company's vessels will be so
extended.
OPA 90 expanded pre-existing financial responsibility requirements and
requires vessel owners and operators to establish and maintain with the United
States Coast Guard evidence of insurance or qualification as a self-insurer or
other evidence of financial responsibility sufficient to meet their potential
liabilities under OPA 90. U.S. Coast Guard regulations require evidence of
financial responsibility demonstrated by insurance, surety bond, self-insurance,
or guaranty. The regulations also implement the financial responsibility
requirements of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), which imposes liability for discharges of
hazardous substances such as chemicals, by increasing the amount of financial
responsibility from $1,200 to $1,500 per gross ton. The Company has obtained
COFRs pursuant to the Coast Guard regulations for its product carrier and for
its chemical carriers through self-insurance and commercial insurance and as
guarantor for the fuel barges.
OPA 90 also amended the Federal Water Pollution Control Act to require
the owner or operator of a tank vessel to prepare vessel response plans and to
contract with oil spill response organizations to remove to the maximum extent
practicable a worst-case discharge (loss of all cargo). The Company has complied
with both requirements. As is customary, the Company's oil spill response
contracts are executory in nature and are not activated unless required. Once
activated, the Company's pollution liability insurance covers the cost of spill
removal subject to overall coverage limitations and deductibles.
OPA 90 expressly permits individual states to impose their own
liability regimes with respect to oil pollution incidents occurring within their
boundaries, and many states have enacted legislation providing for unlimited
liability for oil spills. Some states that have enacted such legislation have
not yet issued implementing regulations defining tanker owners' responsibilities
under the legislation. The Company does not anticipate that such legislation or
regulations will have any material impact on its operations.
The Company manages its exposure to losses from potential discharges of
pollutants through the use of well-maintained and well-equipped vessels, safety
and environmental programs, and its insurance program, and believes that it will
be able to accommodate reasonably foreseeable environmental regulatory changes.
There can be no assurance, however, that any new regulations or
requirements or any discharge of pollutants by the Company will not have an
adverse effect on the Company.
12
<PAGE>
Clean Air Regulations. The federal Clean Air Act of 1970, as amended by
the Clean Air Act Amendments of 1990, requires the Environmental Protection
Agency to promulgate standards applicable to the emission of volatile organic
compounds and other air pollutants. These standards are designed to reduce
hydrocarbon emissions released in the atmosphere and are implemented by the
states through State Implementation Plans for areas that are not in compliance
with those standards. The Company's vessels are subject to vapor control and
recovery requirements when loading petroleum cargoes in Louisiana and when
loading, unloading, ballasting, cleaning, and conducting other operations in
certain ports in Texas. The Company's chemical and petroleum product carriers
are equipped with vapor control systems that satisfy the state requirements. The
fuel barges are not equipped with, and are not operated in areas that require,
such systems.
Coastwise Laws. Most of the Company's operations are conducted in the
U.S. domestic trade, which is governed by the coastwise laws of the United
States (principally, the Jones Act). The coastwise laws reserve marine
transportation (including harbor tug services) between points in the United
States (including drilling rigs fixed to the ocean floor in U.S. territorial
waters) to vessels built in and documented under the laws of the United States
(U.S. flag) and owned and manned by U.S. citizens. Generally, a corporation is
deemed a citizen for these purposes so long as (i) it is organized under the
laws of the U.S. or a state thereof, (ii) each of its president or other chief
executive officer and the chairman of its board of directors is a citizen, (iii)
no more than a minority of the number of its directors necessary to constitute a
quorum for the transaction of business are non-citizens, and (iv) 75% of the
interest and voting power in the corporation are held by citizens. Because the
Company would lose its privilege of operating its vessels in the U.S. domestic
trade if non-citizens were to own or control in excess of 25% of the Company's
outstanding capital stock, the Company's Articles of Incorporation contain
restrictions concerning foreign ownership of its stock. There have been repeated
efforts aimed at repeal or significant change of the Jones Act. Although the
Company believes that it is unlikely that the Jones Act will be substantially
modified or repealed, there can be no assurance that Congress will not
substantially modify the Jones Act or repeal it. Such changes could have a
material adverse effect on the Company's operations and financial condition.
Occupational Health Regulations. The Company's vessel operations are
subject to occupational safety and health regulations issued by the Coast Guard.
Such regulations currently require the Company to perform extensive monitoring,
medical testing, and record keeping with respect to seamen engaged in the
handling of the various cargoes transported by the Company's chemical and
petroleum products carriers.
Vessel Condition. The Company's chemical and petroleum products
carriers, offshore energy support vessels, seven of its tugs, and the fuel
barges are subject to periodic inspection and survey by, and drydocking and
maintenance requirements of, the Coast Guard and/or the American Bureau of
Shipping, a marine classification society whose periodic certification as to the
construction and maintenance of certain vessels is required in order to maintain
insurance coverage. All of the Company's vessels requiring certification to
maintain insurance coverage are certified.
Oil Tanker Escort Requirements. Implementation of oil tanker escort
requirements of OPA 90 and pending state legislation are expected to introduce
certain performance or engineering standards on tugs to be employed as tanker
escorts. The Company believes its tractor tug will be able to comply with any
existing or currently anticipated requirements for escort tugs. Adoption of such
new standards could require modification or refitting of the tugs currently
operated by the Company to the extent such tugs
13
<PAGE>
are employed as tanker escorts. The Company does not anticipate OPA 90 or state
requirements to require modification of tugs, such as the Company's, involved in
harbor tug operations.
The Company believes that it is currently in compliance in all material
respects with the environmental and other laws and regulations, including OSHA
shipyard requirements, to which its operations are subject and is unaware of any
pending or threatened litigation or other judicial, administrative, or arbitral
proceedings against it occasioned by any alleged non-compliance with such laws
or regulations. The risks of substantial costs, liabilities, and penalties are,
however, inherent in marine operations, and there can be no assurance that
significant costs, liabilities, or penalties will not be incurred by or imposed
on the Company in the future.
INSURANCE
The Company's marine transportation services operations are subject to
the normal hazards associated with operating vessels carrying large volumes of
cargo or rendering services in a marine environment These hazards include the
risk of loss of or damage to the Company's vessels, damage to third parties as a
result of collision, loss, or contamination of cargo, personal injury of
employees, pollution, and other environmental damages. The Company maintains
insurance coverage against these hazards. Risk of loss of or damage to the
Company's vessels is insured through hull insurance policies in amounts that
approximate fair market value. Vessel operating liabilities, such as collision,
cargo, environmental, and personal injury, are insured primarily through the
Company's participation in the Steamship Mutual Underwriting Association
(Bermuda Limited), a mutual insurance association under which the coverage
against such hazards is currently unlimited for each incident except in the case
of pollution, which is limited to $700 million (the maximum amount available)
for each incident involving the Company's chemical and petroleum products
carriers and $500 million with respect to its other vessels. Because it
maintains mutual insurance, the Company is subject to funding requirements and
coverage shortfalls in the event claims exceed available funds and reinsurance
and to premium increases based on prior loss experience.
EMPLOYEES
As of March 25, 1997, the Company had approximately 1,035 employees.
Management considers relations with employees to be satisfactory. The Seabulk
America, Seabulk Challenger, and Seabulk Magnachem are manned by approximately
108 officers and crew who are subject to collective bargaining arrangements. In
addition, the HMI Dynachem, HMI Petrochem, and HMI Astrachem are manned by
approximately 90 members of national maritime labor unions pursuant to an
agreement between the Company and a third party employer.
ITEM 2. PROPERTIES
The Company's principal offices are located in Fort Lauderdale,
Florida, where the Company leases approximately 36,000 square feet of office and
shop space under a lease that expires in 2009. In addition, the Company leases
facilities in Houston and Galveston, Texas, Lafayette and Amelia, Louisiana,
Mobile, Alabama, and Port Canaveral and Green Cove Springs, Florida, to support
its operations.
14
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Seabulk America was completed in 1990 by combining the stern
portion of the wrecked oil tanker Fuji with the forebody of the chemical barge
portion of the former integrated tug/barge Oxy Producer/Oxy 4102. In Norfolk
Shipbuilding and Dry Dock Corporation v. Seabulk Transmarine Partnership, Ltd.,
pending in the U.S. District Court for the Eastern District of Louisiana (Civil
Action No. 93-1312), one of the shipyards that contracted to complete the
Seabulk America for the Company is seeking to recover from the Company
approximately $6.1 million for alleged additions and changes to the contract
work and costs of alleged delay and disruption, in addition to $2.4 million of
the $5.9 million contract price that the Company has withheld. In addition, the
shipyard is seeking legal fees and expenses and $10.0 million of punitive
damages. The Company has asserted counterclaims aggregating $5.6 million for
contract deletions, unfinished and defective work, and liquidated damages for
late delivery. In 1993, when this suit was filed, the Company was required to
obtain a $5.6 million letter of credit in order to furnish a bond to obtain the
release of the Seabulk America, which had been arrested pursuant to customary
procedures in litigation involving vessels. The suit, which involves numerous
complex factual issues, is currently in the pre-trial discovery stage. While the
Company believes that the plaintiff's claims are without merit and that its
counterclaims are meritorious, there can be no assurance that the ultimate
resolution of the suit will not require some payment by the Company in addition
to the $3.6 million previously paid.
The Company is also a defendant in a suit relating to certain of its
offshore supply boats pending in the Circuit Court of the 17th Judicial Circuit
of Florida, U.S. Offshore, Inc. v. Seabulk Offshore, Ltd. (No. 93- 32963(09)).
The suit involves a claim by a former limited partner in the partnership that
owns eight of the supply boats seeking an unspecified amount of damages for
alleged breach of a contract by which the Company agreed to pay the plaintiff 5%
of the revenues (not to exceed $1.3 million) earned from the operation of the
boats during the 40 months ended March 31, 1994. The Company has paid the
plaintiff approximately $769,000 pursuant to the contract and believes that the
claim for any additional amount is without merit.
Affiliates of the Company have intervened in two parallel legal actions
brought by Kirby Corporation ("Kirby"), an operator of vessels with which the
five new product carriers in which the Company has an interest will compete,
seeking to have the construction project stopped. Kirby's actions allege that
the U.S. Maritime Administration acted unlawfully in guaranteeing, pursuant to
Title XI of the Merchant Marine Act, 1936, as amended ("Title XI"), the $215
million of ship financing bonds issued to finance the project, specifically
asserting that the Maritime Administration erroneously determined that the
project is economically sound and that the entities that will own the vessels
are U.S. citizens qualified to operate the vessels in the coastwise trade. The
Company believes the actions are without merit, has supported the U.S.
Department of Justice in obtaining dismissal of one of the actions, is
continuing to support the Department in defending against Kirby's appeal from
that dismissal and in seeking dismissal of the remaining action. Both actions
are currently pending in the United States Court of Appeals for the Fifth
Circuit, as Kirby Corporation v. United States (No. 96-60154) and Kirby
Corporation v. Pena (No. 96-20582).
From time to time the Company is also party to litigation arising in
the ordinary course of its business, most of which is covered by insurance.
15
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS
The executive officers of the Company(1) are:
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITIONS
<S> <C> <C>
J. Erik Hvide....................... 48 President and Chief Executive Officer
John H. Blankey..................... 49 Executive Vice President and Chief Financial Officer
Eugene F. Sweeney................... 54 Executive Vice President--Operations
Andrew W. Brauninger................ 50 Vice President--Offshore Division and President--Seabulk
Offshore, Ltd.
Leo T. Carey........................ 44 Vice President--Ship Management
Gene Douglas........................ 49 Vice President--Legal & General Counsel and Secretary
William R. Ludt..................... 49 Vice President--Inland Services Division and President--Sun
State Marine Services, Inc.
John J. O'Connell, Jr............... 53 Vice President--Corporate Communications
Robert A. Santos.................... 64 Vice President--Offshore and Harbor Towing Operations
Christopher D. Strong............... 38 Treasurer
</TABLE>
(1)Donald L. Caldera, Executive Vice President -- Development of the Company
since September 1993, will cease to serve in his position as an executive
officer effective April 30, 1997.
MR. HVIDE has been the Company's President and Chief Executive Officer
since January 1991. From 1981 until 1991, Mr. Hvide was President and Chief
Operating Officer of the Company. He has been employed by the Company in various
capacities since 1970 and became Vice President in 1973. He is also a director
of the American Waterways Operators, a participant on the Transportation
Committee of the American Petroleum Institute, a member of the American Bureau
of Shipping, a past Chairman of the Board of the American Institute of Merchant
Shipping and a past appointee to the U.S. Coast Guard's Towing Safety Advisory
Committee. Mr. Hvide is the son of Hans J. Hvide, the founder of the Company.
MR. BLANKLEY has been Executive Vice President -- Chief Financial Officer
since September 1995. He previously served as a director and Chief Financial
Officer of Harris Chemical Group Inc., a chemical manufacturing company, from
April 1993 to August 1994. Mr. Blankley is the owner of Seafirst Capital, a ship
finance consulting business he founded in 1994. He served as Executive Vice
President -- Finance and Chief Financial Officer of Stolt-Nielsen, Inc., a
publicly traded international operator of specialty chemical tankers, from 1985
to 1991. From 1983 until 1985, Mr. Blankley was a director, Senior Vice
President, and Chief Financial Officer of BP North America Inc. Mr. Blankley is
also a director of MC Shipping, a publicly traded operator of container feeder
vessels.
MR. SWEENEY has been Executive Vice President -- Operations of the Company
since September 1994. He was Senior Vice President -- Operations of the Company
from 1991 to September 1994. He joined the Company in 1981 as Vice President --
Ship Management. Prior to joining the Company, Mr. Sweeney was employed for 17
years by Texaco, Inc., where he served in sea-going and shore
16
<PAGE>
management positions, including operations manager of Texaco's U.S. tanker
fleet. Mr. Sweeney is past President of the Chemical Carriers Association, a
member of the Society of Naval Architects and Marine Engineers and served as a
member of a National Academy of Sciences Committee to study marine navigation
and pilotage.
MR. BRAUNINGER has been Vice President -- Offshore Division since March 1990
and the President of Seabulk Offshore, Ltd., the Company's offshore energy
support services subsidiary, since September 1994. He was Vice President of
Offshore Operations from May 1990 to September 1994 and Vice President --
Development from 1989 to 1990. From 1987 to 1989, Mr. Brauninger was President
of OMI Offshore Services, Inc., an operator of offshore service vessels.
Previously, he was employed by Sabine Towing and Transportation Company, where
he held a variety of posts including Vice President -- Harbor Division.
MR. CAREY has been Vice President -- Ship Management since November 1996.
He previously served as Director of Operations for the Company's fleet of
chemical and petroleum product carriers. He joined the Company in 1981 as
Superintendent Engineer. Prior to that, he served with El Paso Marine Co. as a
deck officer and maintenance manager.
MR. DOUGLAS has been Vice President -- Legal & General Counsel and Secretary
of the Company since 1975. He was an attorney with the Fort Lauderdale, Florida
law firm of Spear and Deuschle, P.A. prior to joining the Company. He has been
admitted to the Florida Bar since 1972 and is admitted to practice before
various federal courts. He is also a member of the American Bar Association, the
Maritime Law Association of the United States, and other professional
organizations.
MR. LUDT has been Vice President -- Inland Services Division since January
1995 and the President of Sun State Marine Services, Inc., the Company's energy
tug and barge subsidiary, since September 1994. He was Director -- Fleet
Operations of the Company from 1982 to September 1994. Since joining the Company
in 1979, he has also served as Fleet Manager and Port Engineer. He served as
President of the Chemical Carriers Association from 1989 to 1990 and as Vice
President of that association from 1990 to 1992. Mr. Ludt has also served on
various working groups within the U.S. Coast Guard's Chemical Transportation
Advisory Committee concerning issues such as vapor control and marine
occupational safety and health. Mr. Ludt holds a dual license as a Third Mate
and Third Assistant Engineer, Steam and Motor Vessels.
MR. O'CONNELL has been Vice President -- Corporate Communications since
August 1996, when he joined the Company. From September 1995 to August 1996 he
was an independent consultant. Previously, he served in a variety of management
positions with W.R. Grace & Co. for 20 years, most recently as Director of
Public Affairs. Mr. O'Connell was a member of the President's Private Sector on
Cost Control in the Federal Government from 1982 to 1984.
MR. SANTOS has been Vice President -- Towing Operations of the Company
since 1983. Mr. Santos joined the Company as its Towing Operations Manager in
1962. He has served as a Commissioner of Florida's Board of Pilot Commissioners,
Chairman of the Escort Vessel Subcommittee of the American Waterways Operators
and as a member of various marine-related trade associations and boards.
17
<PAGE>
MR. STRONG has been Treasurer of the Company since November 1996 and
Director of Finance since joining the Company in December 1994. From January
1990 to December 1994, he was Treasurer of the Port Everglades Authority. From
1986 to 1989, he served in several management positions with Kislak Mortgage
Corporation and Kislak National Bank including Vice President -- Finance and
Investment Officer. Mr. Strong previously served as an officer in the U.S. Navy.
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<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Since August 9, 1996, the Class A Common Stock has been traded on the
Nasdaq National Market under the symbol "HMAR." The following table sets forth
the high and low sale prices per share of the Class A Common Stock as reported
by the Nasdaq National Market for each calendar quarter since the commencement
of trading.
HIGH LOW
1996
Third Quarter (commencing August 9)........... $ 13 7/8 $ 11
Fourth Quarter................................ 24 1/4 12 7/8
1997
First Quarter (through March 24).............. 28 5/8 18 1/4
The Company has not paid any cash dividends on its Common Stock since
its formation. It presently intends to retain its earnings for use in its
business and therefore does not anticipate paying any cash dividends in the
foreseeable future. The payment of any future dividends will be determined by
the Board of Directors in light of conditions then existing, including the
Company's earnings, financial condition and requirements, restrictions in
financing agreements, business conditions, and other factors. In addition, the
Company's ability to pay dividends or make distributions to its stockholders is
also restricted by the terms of the Credit Facility. As of March 24, 1997, there
were 65 holders of record of Class A Common Stock and 9 holders of record of
Class B Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
The selected consolidated financial data presented below should be
read in conjunction with the consolidated financial statements and notes thereto
of the Company and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this report.
19
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
YEAR ENDED DECEMBER 31
1992 1993 1994 1995 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenue............................................. $ 39,639 $ 41,527 $ 49,792 $ 70,562 $ 109,356
-------- -------- -------- --------- ----------
Operating expenses.................................. 24,602 24,032 29,873 40,664 63,777
Overhead expenses................................... 6,778 6,176 9,581 12,518 14,979
Depreciation and amortization....................... 4,106 4,735 4,500 6,308 9,830
-------- -------- -------- --------- ----------
Income from operations.............................. 4,153 6,584 5,838 11,072 20,770
Interest expense, net............................... 3,993 3,412 5,302 11,460 11,631
Other income........................................ 8 519 11 26 437
-------- -------- -------- --------- ----------
Income (loss) before provision for (benefit
from) income taxes, extraordinary item
and cumulative effect of a change in
accounting principle.............................. 168 3,691 547 (362) 9,576
Provision for (benefit from) income
taxes............................................. 158 1,873 189 (2) 3,543
-------- -------- -------- --------- ----------
Income (loss) before extraordinary item
and cumulative effect of a change in
accounting principle.............................. 10 1,818 358 (360) 6,033
Loss on extinguishment of debt, net(1).............. -- -- -- -- (8,108)
Cumulative effect of a change in
accounting principle.............................. -- 1,491 -- -- --
-------- -------- -------- --------- ----------
Net income (loss)................................... $ 10 $ 3,309 $ 358 $ (360) $ (2,075)
======== ======== ======== ========= ==========
EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) before extraordinary
item and cumulative effect of a
change in accounting principle.................. $ (0.01) $ 0.26 $ 0.03 $ (0.14) $ 1.04
Net income (loss)(2).............................. $ (0.01) $ 0.50 $ 0.03 $ (0.14) $ (0.36)
======== ======== ======== ========= ==========
Weighted average number of common
shares and common share equivalents
outstanding(3).................................. 6,268 6,268 5,302 2,535 5,818
======== ======== ======== ========= ==========
EARNINGS (LOSS) PER COMMON SHARE ASSUMING
FULL DILUTION:
Income (loss) before extraordinary item
and cumulative effect of change in
accounting principle(2)......................... $ (0.01) $ 0.26 $ 0.06 $ 0.12 $ 0.99
Net income (loss)(2).............................. $ (0.01) $ 0.50 $ 0.06 $ 0.12 $ (0.23)
======== ======== ======== ========= ==========
Weighted average number of shares
and common share equivalents
outstanding(3).................................. 6,268 6,268 5,616 3,779 6,645
======== ======== ======== ========= ==========
OTHER FINANCIAL DATA:
EBITDA(4)......................................... $ 8,259 $ 11,319 $ 10,338 $ 17,380 $ 30,600
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
1992 1993 1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
NET CASH PROVIDED BY (USED IN):
Operating activities................................... $ (930) $ 6,956 $ 2,858 $ 3,948 $ 22,584
Investing activities................................... (1,592) (2,247) (39,815) (8,066) (84,354)
Financing activities................................... (2,473) (6,158) 41,249 805 68,337
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31
---------------------------------
1992 1993 1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)............................. $ 847 $ 2,640 $ 7,793 $ 4,315 $ (8,704)
Total assets.......................................... 83,718 82,373 135,471 143,683 273,473
Total debt............................................ 57,011 51,273 104,281 109,051 141,642
Stockholders' and minority partners'
equity.............................................. 15,858 19,926 14,903 13,999 101,989
</TABLE>
(1)Reflects the loss on the extinguishment of debt, net of applicable income
taxes of $1,474,000.
(2)For the purposes of calculating earnings per share for the years 1992, 1993,
and 1994, historical income available to common stockholders has been reduced
for dividends on Class A Preferred Stock of $50,000, $203,000, and $222,000,
respectively. The Class A Preferred Stock was redeemed on September 30, 1994.
(3)For the years 1992, 1993, and 1994, the weighted average number of common
shares and common share equivalents assumes the conversion of the Class B
Preferred Stock into shares of Common Stock. The Class B Preferred Stock was
redeemed on September 30, 1994. For the years ended 1994, 1995, and 1996,
shares outstanding assuming full dilution reflects the assumed conversion of
a portion of the Junior Notes into shares of Common Stock. The Junior Notes
were issued in September 1994 and converted into shares of Common Stock in
September 1996.
(4)EBITDA (net income from continuing operations before interest expense, income
tax expense, depreciation expense, amortization expense, minority interests,
and other non-operating income) is frequently used by securities analysts and
is presented here to provide additional information about the Company's
operations. EBITDA is not required by generally accepted accounting
principles and 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 from operations as a measure of liquidity.
21
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion and analysis of the Company's financial condition and
historical results of operations should be read in conjunction with the
Company's consolidated historical financial statements, and the related notes
thereto included elsewhere in this report.
HISTORICAL GROWTH
Since September 1994, the Company's operations have expanded through a
series of consolidating acquisitions which aggregate 93 vessels. The following
table sets forth certain information with respect to these acquisitions.
<TABLE>
<CAPTION>
NUMBER OF VESSELS AGGREGATE
PERIOD TRANSACTIONS ACQUIRED INVESTMENT
<S> <C> <C> <C> <C>
Offshore Energy Support.................... 1994 5 6 supply boats $ 19.6 million
20 crew boats
2 utility boats
1995 1 7 crew boats 5.9 million
1996 7 12 supply boats 46.6 million(1)
11 crew boats(2)
1997 3 1 supply boat 10.3 million
3 crew boats
Offshore and Harbor Towing................. 1994 1 1 tug 1.8 million
1995 1 1 tractor tug 6.4 million(3)
1996 1 1 offshore tug 3.4 million
1997 2 harbor tugs 0.6 million
Chemical Transportation.................... 1996 1 3 chemical carriers 64.7 million
Petroleum Product Transportation........... 1994 1 10 tugs 13.9 million
8 barges
1995 1 5 barges 0.1 million
</TABLE>
(1)Includes two vessels that are currently being upgraded, lengthened, and
refurbished and are expected to enter service during the second quarter of
1997. Aggregate investment includes the estimated cost of such upgrading,
lengthening, and refurbishment.
(2)Includes nine vessels acquired under capital lease obligations.
(3) The Company operates the tractor tug pursuant to a long-term operating
lease.
22
<PAGE>
PENDING ACQUISITIONS
As of February 28, 1997, the Company had entered into agreements or
letters of intent for the acquisition or construction of 16 additional marine
support vessels. The following table sets forth certain information with respect
to these acquisitions.
<TABLE>
<CAPTION>
AREA OF
EXPECTED INTENDED AGGREGATE
VESSELS DELIVERY DEPLOYMENT INVESTMENT
<S> <C> <C> <C>
Offshore Energy Support
2 crew boats........................................ 2nd Qtr. 1997 U.S. Gulf $ 3.6 million
4 supply boats...................................... 2nd Qtr. 1997 U.S. Gulf 21.8 million
1 crew boat(1)...................................... 2nd Qtr. 1997 U.S. Gulf 2.3 million(2)
1 supply boat(1).................................... 4th Qtr. 1997 U.S. Gulf 7.5 million(2)
5 crew boats(1)..................................... 1998 and 1999 U.S. Gulf 13.0 million(2)
Offshore and Harbor Towing
3 SDM(TM)s(1)....................................... 1997 and 1998 Port Everglades 14.5 million
Port Canaveral
</TABLE>
(1) Vessels to be constructed.
(2) Estimated cost of construction.
AREA OF OPERATIONS OVERVIEW
The financial information presented below represents historical results
by major areas of operations. The historical financial data presented below
should be read in conjunction with the Company's consolidated financial
statements and notes thereto included elsewhere in this report.
23
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1995 1996
-------- -------- ---------
<S> <C> <C> <C>
Revenues:
Marine support services:
Offshore energy support................................................. $ 11,317 $ 23,217 $ 43,715
Offshore and harbor towing.............................................. 11,140 12,582 13,950
--------- --------- ---------
22,457 35,799 57,665
Marine transportation services:
Chemical transportation................................................. 16,886 18,632 32,759
Petroleum product transportation........................................ 10,449 16,131 18,932
--------- --------- ---------
27,335 34,763 51,691
--------- --------- ---------
Total revenues..................................................... 49,792 70,562 109,356
--------- --------- ---------
Operating expenses:
Marine support services:
Offshore energy support.............................................. 7,017 13,335 22,525
Offshore and harbor towing........................................... 5,568 6,001 7,480
--------- --------- ---------
12,585 19,336 30,005
Marine transportation services:
Chemical transportation................................................. 10,698 11,105 20,976
Petroleum product transportation........................................ 6,590 10,223 12,796
--------- --------- ---------
17,288 21,328 33,772
--------- --------- ---------
Total operating expenses........................................... 29,873 40,664 63,777
Direct overhead expenses:
Marine support services:
Offshore energy support................................................. 1,090 2,182 2,558
Offshore and harbor towing.............................................. 958 1,111 1,364
--------- --------- ---------
2,048 3,293 3,922
Marine transportation services:
Chemical transportation................................................. 881 1,433 2,574
Petroleum product transportation........................................ 264 738 920
--------- --------- ---------
1,145 2,171 3,494
--------- --------- ---------
Total direct overhead................................................. 3,193 5,464 7,416
--------- --------- ---------
Fleet EBITDA(1):
Marine support services:
Offshore energy support................................................. 3,210 7,700 18,632
Offshore and harbor towing.............................................. 4,614 5,470 5,106
--------- --------- ---------
7,824 13,170 23,738
Marine transportation services:
Chemical transportation................................................. 5,307 6,094 9,209
Petroleum product transportation........................................ 3,595 5,170 5,216
--------- --------- ---------
8,902 11,264 14,425
--------- --------- ---------
Total fleet EBITDA(1)................................................ 16,726 24,434 38,163
Corporate overhead expenses.................................................. 6,388 7,054 7,563
--------- --------- ---------
EBITDA(1)................................................................. 10,338 17,380 30,600
Depreciation and amortization expenses....................................... 4,500 6,308 9,830
--------- --------- ---------
Income from Operations....................................................... $ 5,838 $ 11,072 $ 20,770
========= ========= =========
</TABLE>
(1) EBITDA (net income from continuing operations before interest expense,
income tax expense, depreciation expense, amortization expense, minority
interest and other non-operating income) is frequently used by securities
analysts and is presented here to provide additional information about the
Company's operations Fleet EBITDA is EBITDA before corporate overhead
expenses EBITDA and fleet EBITDA are not required by generally accepted
accounting principles and should not be considered as alternatives to net
income as indicators of the Company's operating performance, or as
alternatives to cash flows from operations as a measure of liquidity.
24
<PAGE>
REVENUE OVERVIEW
MARINE SUPPORT SERVICES
Revenue derived from vessels providing marine support services is
attributable to the Company's offshore energy support fleet and its offshore and
harbor towing operations.
Offshore Energy Support. Revenue derived from the Company's offshore
energy support services is primarily a function of the size of the Company's
fleet, vessel day rates or charter rates, and fleet utilization. Rates and
utilization are primarily a function of offshore drilling, production, and
construction activities. Levels of offshore drilling, production, and
construction have increased over the past several years as a result of
fundamental changes in the U.S. Gulf of Mexico energy industry, including: (i)
improvements in exploration technologies, such as computer-aided exploration and
3-D seismic, that have increased drilling success rates in the region; (ii)
improvements in subsea completion and production technologies that have led to
increased deepwater drilling and development; and (iii) expansion of the
region's production infrastructure that has improved the economics of developing
smaller oil and gas fields. In addition, the short reserve life characteristics
of U.S. Gulf of Mexico gas production require continuous drilling to replace
reserves and maintain production. These higher overall activity levels have led
to increased demand for the Company's offshore energy support services and
higher overall vessel day rates and utilization in the U.S. Gulf of Mexico.
Contracts for the utilization of offshore service vessels commonly include
termination provisions with three- to five-day notice requirements and no
termination penalty. As a result, the operations of companies engaged in the
offshore energy service market are particularly sensitive to changes in market
demand.
The following table sets forth average day rates achieved by the
offshore supply boats and crew boats owned or operated by the Company in the
U.S. Gulf of Mexico and their average utilization for the periods indicated.
<TABLE>
<CAPTION>
1994 1995
--------------------------------- ---------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Number of supply boats at
end of period......................... 5 7 7 8 10 10 10 10
Average supply boat day
rates(1).............................. $ 3,433 $ 3,035 $ 3,200 $ 3,060 $ 2,886 $ 2,843 $ 3,113 $ 3,244
Average supply boat
utilization(2)........................ 94% 73% 80% 90% 71% 76% 84% 93%
Number of crew boats at end
of period(3)(4)....................... __ __ 20 19 26 26 26 26
Average crew boat day
rates(1)(3)........................... __ __ $ 1,405 $ 1,435 $ 1,444 $ 1,412 $ 1,422 $ 1,458
Average crew boat
utilization(2)(3)..................... __ __ 87% 88% 79% 81% 90% 91%
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
1996
Q1 Q2 Q3 Q4
<S> <C> <C> <C> <C>
Number of supply boats at
end of period.......................... 10 11 16 18
Average supply boat day
rates(1)............................... $ 3,468 $ 4,095 $ 5,034 $ 5,776
Average supply boat
utilization(2)......................... 92% 100% 97% 90%
Number of crew boats at end
of period(3)(4)........................ 35 35 36 36
Average crew boat day
rates(1)(3)............................ $ 1,460 $ 1,466 $ 1,528 $ 1,531
Average crew boat
utilization(2)(3)...................... 89% 93% 96% 96%
</TABLE>
(1)Average day rates are calculated based on vessels operating domestically by
dividing total vessel revenue by the total number of days of vessel
utilization.
(2)Utilization is based on vessels operating domestically and determined on the
basis of a 365-day year. Vessels are considered utilized when they are
generating charter revenue.
(3)Excludes utility boats.
(4) The Company first began operating crew boats in July 1994.
Management believes that the increased activity in the U.S. Gulf of
Mexico since the second quarter of 1995 has been primarily attributable to
improved technology in the seismic industry and an approximate balance in the
supply of and demand for offshore service vessels.
Offshore and Harbor Towing. Revenue derived from the Company's tug
operations is primarily a function of the number of tugs available to provide
services, the rates charged for their services, and the volume of vessel traffic
requiring docking and other ship-assist services. Vessel traffic, in turn, is
largely a function of the general trade activity in the region served by the
port. The Company generally has maintained four to five tugs in Port Everglades,
and three each in Port Canaveral and Mobile, although it has shifted tugs among
ports depending upon demand. Since the August 1995 delivery of the tractor tug
Broward, the Company has operated up to five tugs in Port Everglades with one of
the tugs available to provide offshore towing services.
The following table summarizes certain operating information for the
Company's tugs.
YEAR ENDED DECEMBER 31,
1994 1995 1996
--------- --------- ------
Number of tugs at end of period(1)......... 10 11 16(3)
Total ship docking tug jobs(2)............. 8,740 9,233 9,034
Total offshore and harbor towing revenue
(in thousands).......................... $ 11,140 $ 12,582 $ 13,951
(1)The Company's eleventh tug was delivered in August 1995.
(2)Excludes offshore towing operations.
(3)Includes four harbor tugs under bareboat charter agreements.
MARINE TRANSPORTATION SERVICES
Chemical Transportation. Generally, demand for industrial chemical
transportation services coincides with overall economic activity. Since 1989,
revenue derived from chemical transportation operations has been entirely
attributable to the operations of Ocean Specialty Tankers Corporation
26
<PAGE>
("OSTC"), a company owned equally by OMI Corp. ("OMI") and the Company until
August 1996, when the Company acquired OMI's interest in OSTC along with three
chemical carriers owned by OMI (the "OMI Chemical Carriers"). Prior to the
acquisition, the Company's chemical transportation revenue consisted of
distributions from OSTC attributable to the Company's two chemical carriers
marketed by OSTC based upon a formula that took into account individual vessel
performance characteristics applied to OSTC's revenue (net of fuel costs, port
charges, and overhead). Since the acquisition, the Company continues to have
OSTC market the five chemical carriers and receives the revenue attributable to
all five of the vessels.
Petroleum Product Transportation. Since entering service in 1975, the
product carrier Seabulk Challenger has derived all of its revenue from
successive voyage and time charters to Shell. Under the current charter, fuel
and port costs are for the account of the charterer, charter hire escalates
based upon changes in the consumer price index, and charter hire is suspended
while the vessel is unavailable to transport cargo, as when it is undergoing
repairs or regularly scheduled maintenance. The charter extends to January 2000,
with the charterer retaining the right to early termination upon the payment to
the Company of a significant penalty. In the fourth quarter of 1996, the charter
rate was renegotiated and reduced by approximately 6% to reflect the lower
current market rate. Revenue from the Company's towboats and fuel barges has
been derived primarily from contracts of affreightment with FPL and Steuart
Petroleum Co. that require the Company to transport fuel as needed by those two
customers, with the FPL contract having a guaranteed minimum utilization.
The following table sets forth the average time charter equivalents for
the Company's chemical and product carriers, including the OMI Chemical Carriers
as if such vessels were owned by the Company during the periods presented.
YEAR ENDED DECEMBER 31,
1994 1995 1996
-------- --------- ------
Number of vessels........................ 6 6 6
Time charter equivalents(1).............. $ 24,751 $ 25,629 $ 25,276
(1)Time charter equivalents are calculated by deducting total voyage expenses
from total voyage revenue and dividing the result by the total days per
voyage.
OVERVIEW OF OPERATING EXPENSES AND CAPITAL EXPENDITURES
The Company's operating expenses are primarily a function of fleet size
and utilization. The most significant expense categories are crew payroll and
benefits, depreciation and amortization, charter hire, maintenance and repairs,
fuel, and insurance.
The crews of Company-manned chemical and product carriers are paid on a
time-for-time basis by which they receive paid leave in proportion to time
served aboard a vessel. The crews of offshore energy support vessels and certain
tugs and towboats are paid only for days worked.
Charter hire consists primarily of payments made with respect to the
bareboat charters of the Seabulk Challenger and Seabulk Magnachem, which were
acquired pursuant to leveraged lease transactions and operating lease payments
on the tractor tug Broward. In addition, the Company recently entered into
one-year charters of two newly built tugs. The Company also pays charter hire
when it charters harbor tugs to meet requirements in excess of its own tugs'
availability.
27
<PAGE>
The Company capitalizes expenditures exceeding $5,000 for product and
chemical tankers and $3,000 for all other vessels, where the item acquired has a
useful life of three years or greater. Vessel improvements and vessel
maintenance and repair are capitalized only if they also extend the useful life
of the vessel or increase its value. The Company overhauls main engines and key
auxiliary equipment in accordance with a continuous planned maintenance program.
Under applicable regulations, the Company's chemical and product carriers,
offshore service vessels, and its four largest tugs are required to be drydocked
twice in a five-year period for inspection and routine maintenance and repairs.
These vessels are also required to undergo special surveys every five years
involving comprehensive inspection and corrective measures to insure their
structural integrity and proper functioning of their cargo and ballast piping
systems, critical machinery and equipment, and coatings. The Company's fuel
barges, because they are operated in fresh water, are required to be drydocked
only twice in each ten-year period. The Company's harbor tugs and towboats
generally are not required to be drydocked on a specific schedule. During the
years ended December 31, 1994, 1995, and 1996, the Company dry docked 13, 42,
and 25 vessels, respectively, at an aggregate cost (exclusive of lost revenue)
of $1.6 million, $2.0 million, and $1.6 million respectively. See "Liquidity and
Capital Resources" for information regarding anticipated maintenance and
improvement expense, including drydocking expense. The Company accounts for its
drydocking costs under the deferral method. Under the deferral method,
capitalized drydocking costs are expensed over the period preceding the next
scheduled drydocking. See Note 1 of the Company's consolidated financial
statements. In addition to variable expenses associated with vessel operations,
the Company incurs fixed charges to depreciate its marine assets. The Company
calculates depreciation based on a useful life ranging from 25 years for its
steel-hull offshore energy support vessels to 30 years for aluminum-hull
vessels, the lesser of any applicable lease term life or the OPA 90 life for its
product and chemical carriers, ten years for its fuel barges, and 40 years for
its towboats and tugs.
Insurance costs consist primarily of premiums paid for (i) protection
and indemnity insurance for the Company's marine liability risks, which are
insured by a mutual insurance association of which the Company is a member and
through the commercial insurance markets; (ii) hull and machinery insurance and
other maritime-related insurance, which are provided through the commercial
marine insurance markets; and (iii) general liability and other traditional
insurance, which is provided through the commercial insurance markets. Insurance
costs, particularly costs of marine insurance, are directly related to overall
insurance market conditions and industry and individual loss records, which vary
from year to year.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
Revenue. Revenue increased 55% to $109.4 million in 1996 from $70.6
million in 1995 primarily due to increased revenue in the Company's offshore
energy support and chemical transportation operations.
Revenue from offshore energy operations increased 88% to $43.7 million
in 1996 from $23.2 million in 1995 primarily due to acquisitions and greater
utilization of supply and crew boats and higher day rates resulting from
increased offshore exploration and production activity. During 1996, day rates
for supply boats owned, operated, or managed by the Company increased 57% from
1995, and day rates for crew boats owned, operated, or managed by the Company
increased 7% from 1995. Utilization of supply boats increased to 94% for 1996
from 81% for 1995, and utilization of crew boats increased to 94% for 1996 from
85% for 1995.
28
<PAGE>
Petroleum product transportation revenue increased 17% to $18.9 million
in 1996 from $16.1 million in 1995 primarily due to increased movements of
product by the Company's towboat and barge fleet.
Chemical transportation revenue increased 76% to $32.8 million in 1996
from $18.6 million in 1995 primarily due to the August 1996 acquisition of the
OMI Chemical Carriers and the remaining 50% interest in OSTC.
Revenue from offshore and harbor tug operations increased 11% to $14.0
million in 1996 from $12.6 million in 1995 primarily as a result of increased
tanker and freighter traffic in Port Everglades. Revenue also increased in the
port of Mobile due to a tariff increase and an increase in port traffic.
Operating Expenses. Operating expenses increased 57% to $63.8 million
in 1996 from $40.7 million in 1995 primarily due to increases in crew payroll
and benefits, maintenance and repair, and supplies and consumables resulting
from acquisitions and increased business activity. As a percentage of revenue,
operating expenses remained stable at 58% for both 1996 and 1995.
Overhead Expenses. Overhead expenses increased 20% to $15.0 million in
1996 from $12.5 million in 1995 primarily due to increased staffing requirements
due to acquisitions. As a percentage of revenue, overhead expenses decreased to
14% in 1996 from 18% in 1995.
Depreciation and Amortization Expense. Depreciation and amortization
expense increased 56% to $9.8 million in 1996 compared with $6.3 million in 1995
as a result of an increase in fleet size due to acquisitions.
Income from Operations. Income from operations increased 88% to $20.8
million, or 19% of revenue, in 1996 from $11.1 million, or 16% of revenue, in
1995 as a result of the factors noted above.
Net Interest Expense. Net interest expense increased 1% to $11.6
million in 1996 from $11.5 million in 1995. As a percentage of revenue, net
interest expense decreased to 11% in 1996 from 16% in 1995.
Net Income (Loss). The Company had a net loss of $2.1 million in 1996
after incurring a net loss of $0.4 million in 1995 primarily as a result of
non-recurring charges of $8.1 million, net of a $1.5 million income tax benefit,
related to an early extinguishment of debt in connection with the August 1996
initial public offering.
YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1994
Revenue. Revenue increased 42% to $70.6 million in 1995 compared with
$49.8 million in 1994 primarily due to the Company's purchase of new businesses
and additional vessels.
Offshore energy operations showed a 105% increase in revenue in 1995
primarily due to the acquisition of additional supply and crew boats. Although
revenue increased, the utilization of supply boats decreased to 81% in 1995 from
84% in 1994 and the utilization of crew boats decreased to 85% in 1995 from 88%
in 1994 due primarily to the relatively warm winter in early 1995, which caused
a decline in oil and gas prices thereby reducing exploration and production
activities. There was a 5% decrease in
29
<PAGE>
average day rates for the Company's supply boats in 1995 from 1994, while
average day rates for the Company's crew boats remained relatively stable.
Chemical transportation revenue increased 10% in 1995 primarily due to
fewer off-hire (out-of- service) days incurred by the Seabulk Magnachem in 1995
following its regularly scheduled drydocking in 1994.
Revenue from petroleum product transportation increased 54% in 1995
primarily due to a full year of operating results for the Sun State tug and
barge fleet, which was acquired in September 1994.
Revenue from offshore and harbor tug operations increased 13% to $12.6
million in 1995 from $11.1 million in 1994 primarily due to an increase in
overall traffic in the ports served by the Company.
Operating Expenses. Operating expenses increased 36% to $40.7 million
in 1995 from $29.9 million in 1994 primarily due to increased operating expenses
associated with acquisitions, although operating expenses decreased as a
percentage of revenues to 58% in 1995 from 60% in 1994.
Overhead Expenses. Overhead expenses increased 31% to $12.5 million in
1995 compared with $9.6 million in 1994 primarily due to increases in staffing,
certain benefits, and insurance expenses directly related to new business
acquisitions. Also, in addition to paying discretionary performance bonuses in
April 1995 which were, in part, related to prior periods, an accrual of $400,000
was made at year end for 1995 performance bonuses. As a percentage of revenues,
overhead expenses decreased to 18% in 1995 from 19% in 1994.
Depreciation and Amortization. Depreciation and amortization expense
increased 40% to $6.3 million in 1995 compared with $4.5 million in 1994
primarily due to an increase in fleet size as a result of acquisitions.
Income from Operations. Income from operations increased 90% to $11.1
million, or 16% of revenue, in 1995 compared with $5.8 million, or 12% of
revenue, in 1994. This increase was a result of a substantial increase in income
from operations from the Company's offshore energy segment and an increase in
the Company's fuel energy segment that were mainly the result of acquisitions.
Harbor towing achieved an increase in income from operations of 25% over 1994 as
a result of an overall increase in traffic in Mobile, Port Canaveral, and Port
Everglades.
Net Interest Expense. Net interest expense increased 116% to $11.5
million, or 16% of revenue, in 1995 compared with $5.3 million, or 11% of
revenue, in 1994 primarily due to interest on debt incurred in the last quarter
of 1994 to finance acquisitions.
Net Income (Loss). The Company had a net loss of $0.4 million in 1995
compared with net income of $0.4 million in 1994, primarily due to an increase
in financing costs incurred in connection with acquisitions completed in 1994
and the other factors noted above.
30
<PAGE>
SEASONALITY
The Company has experienced some slight seasonality in its overall
operations. The first half of the year is generally not as strong as the second
half due to lower activity in offshore energy support activity and petroleum
product transportation during the months of February, March, and April.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements historically have arisen primarily
from its working capital needs, acquisition of marine vessels, improvements to
vessels, and debt service requirements. The Company's principal sources of cash
have been borrowings, cash provided by operating activities, proceeds from the
August 1996 initial public offering (the "IPO"), and proceeds from the second
public offering (the "Second Offering") in January 1997.
In September 1994, the Company entered into a credit agreement (the
"Credit Facility") which, as amended, currently provides for a $60.5 million
term loan, a $10.0 million revolving line of credit, a $19.9 million vessel
acquisition credit line which decreases to $11.5 million over a four-year
period, and a $5.6 million letter of credit. Borrowings under the Credit
Facility bear interest at prime or LIBOR, at the Company's option, plus a margin
based on the Company's compliance with certain financial ratios. At December 31,
1996, borrowings outstanding under the Credit Facility aggregated $76.2 million,
consisting of $58.5 million under the term loan, $8.0 million under the
revolving line of credit, and $9.7 million under the vessel acquisition credit
line.
Also in September 1994, the Company received $50.0 million in proceeds
from the issuance of Senior Notes, Junior Notes, and certain equity securities
to members of a group of investors. These proceeds, together with borrowings
under the Credit Facility, were utilized primarily to repay other indebtedness
and to fund vessel acquisitions.
In August 1996, the Company completed the IPO, which resulted in net
proceeds to the Company of approximately $76.7 million. Of such net proceeds,
approximately $34.7 million was used to fund the $35.5 million cash portion of
the $97.5 million aggregate purchase price of three chemical carriers, 10 supply
boats and one crew boat (the "August 1996 Acquisitions") and approximately $42.0
million was used to repay certain indebtedness. The balance of the purchase
price of the August 1996 Acquisitions was paid by the assumption or incurrence
of $62.0 million of debt obligations. In addition, the Company agreed to
indemnify certain affiliates of one of the sellers for certain liabilities up to
a maximum of $7.0 million. Indebtedness repaid with proceeds from the IPO
included $7.0 million under the Credit Facility, $15.8 million of accrued
interest and principal under the Senior Notes, $15.1 million of accrued interest
and principal under the Junior Notes, and $4.1 million under certain notes
payable to affiliates of the Company. The $13.9 million balance of the
outstanding principal under the Junior Notes was converted into Class A Common
Stock and Class B Common Stock in September 1996. As of December 31, 1996, $10.1
million of accrued interest and principal under the Senior Notes was
outstanding.
In January 1997, the Company completed the Second Offering, which
resulted in net proceeds to the Company of approximately $94.3 million. Of such
amount, approximately $10.2 million was used to repay remaining principal of and
interest on the Senior Notes, approximately $23.4 million was used to repay
amounts outstanding under the Credit Facility, and $2.6 million was used to
repay other indebtedness. Of the balance of approximately $58.1 million, as of
March 15, 1997, $5.5 million had been used to fund vessel acquisitions, $22.7
million has been designated to fund the reminder of the purchase
31
<PAGE>
price of four supply boats and two crew boats to be acquired in the second
quarter of 1997, $6.9 million has been designated to fund the refurbishment and
lengthening of two supply boats expected to be put into service during the
second quarter of 1997 and the remaining $23.0 million is available for general
corporate purposes and to fund a portion of the costs of the vessels to be
constructed.
The Company's future capital needs are expected to relate primarily to
debt service obligations, maintenance and improvement of its fleet, and
acquisitions. The Company's outstanding indebtedness at December 31, 1996 was
approximately $141.6 million. After giving effect to repayments of an aggregate
of $36.2 million of indebtedness in January and February 1997 with a portion of
the proceeds of the Second Offering, the Company's principal and interest
payment obligations for 1997 are estimated to be approximately $17.8 and $7.9
million, respectively, and operating lease obligations for 1997 are estimated to
be approximately $3.9 million.
Capital requirements for vessel improvements were approximately $13.1
million during 1996 which had been recorded as either vessel improvements or
construction in progress as of December 31, 1996, and are estimated to be
approximately $17.3 million for 1997.
The Company has contracted for the construction of three SDM(TM)s at an
estimated aggregate cost of approximately $14.5 million with delivery expected
in late 1997 or early 1998. The Company is also considering the construction of
five double-hull barges at an estimated aggregate cost of approximately $9.0
million. The decision to proceed with the construction of these barges will be
based upon successful completion of negotiations of long-term contracts with a
customer concerning use of these vessels. These negotiations are in a
preliminary stage and there can be no assurance that the construction of these
barges will be undertaken. The Company has contracted for the construction of
one supply boat for delivery by the end of 1997 at a cost of $7.5 million. The
Company has also agreed to purchase for an estimated aggregate cost of $15.3
million six newly constructed 152-foot crew boats one of which is scheduled for
delivery in the second quarter of 1997 and the remainder in 1998 and 1999. The
Company currently intends to fund the aggregate cost of these SDM(TM)s, these
crew boats and supply boat, and, if built, these barges from available working
capital, borrowings under the Credit Facility, lease financing, or a combination
of such sources.
The Company has a 2.4% equity interest in five 45,300 dwt double-hull
petroleum product carriers currently under construction. The aggregate cost of
the five carriers is estimated to be $255.0 million, of which approximately
$40.0 million will constitute equity investment and $215.0 million will be
financed with the proceeds of government-guaranteed Title XI ship financing
bonds issued in March 1996. Subject to certain conditions, the Company has an
option, exercisable through 2002, to purchase a 49.2% interest at a price equal
to (i) the investor's equity investment plus a stated annual return, or (ii) if
exercised after December 31, 1997, the greater of the fair market value of the
interest or the amount set forth in (I). The Company also has an option,
exercisable on January 15, 1998, to purchase an additional 23.4% interest at a
price equal to the investor's equity investment plus a stated return. Should the
Company fail to exercise the latter option, the investor has the option to
acquire 1.6% of the ownership interest from the Company for nominal
consideration. The total estimated cost of exercising the Company's options is
up to $32.0 million (assuming the options are exercised prior to January 1,
1998). The Company currently has no understandings or agreements with respect to
the financing that it would require if it were to exercise either or both of
these options, and there can be no assurance that such financing will be
available.
The Company is the defendant in litigation in which one of the
shipyards that completed the Seabulk America is seeking additional payments
aggregating $8.5 million for its work and $10.0 million of punitive
32
<PAGE>
damages, plus legal fees and expenses. Although the Company believes the
shipyard's claims are without merit and has asserted counterclaims aggregating
$5.6 million, the Company has obtained a bank letter of credit to finance up to
$5.6 million of any additional payment that it might ultimately be required to
make pursuant to this litigation.
The Company believes that the remaining proceeds of the Second
Offering, cash generated from operations, and amounts available under the Credit
Facility will be sufficient to fund debt service requirements, planned capital
expenditures, and working capital requirements for the foreseeable future. The
Company also believes that such resources, together with the potential future
use of debt or equity financing, will allow the Company to pursue its strategy
of growth through acquisitions. However, since future cash flows are subject to
a number of uncertainties, including the condition of the markets served by the
Company, there can be no assurance that these resources will continue to be
sufficient to fund the Company's cash requirements.
EFFECT OF INFLATION
The Company does not consider inflation a significant business risk in
the current and foreseeable future although the Company has experienced some
cost increases. In some cases, these increases have been offset by charter hire
escalation clauses.
ITEM 8. FINANCIAL STATEMENTS
The Company's Consolidated Financial Statements are listed in Item
14(a)(1), included at the end of this report on Form 10-K beginning on page
F-1, and incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
33
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by Item 10 is contained in the Company's
Proxy Statement for the 1997 Annual Meeting of Stockholders under the captions
"Directors and Nominees" and "Compliance with Section 16(a) of the Securities
Exchange Act of 1934," and in Item 4a of this Report on Form 10-K, and is
incorporated herein by reference.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers, and persons who own more
than ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission and the NASD National Market initial reports of ownership
and reports of changes in ownership of Common Stock of the Company. Officers,
directors, and greater than ten percent shareholders are required by Securities
and Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Specific due dates for these reports have been established, and the Company
is required to disclose in this Form 10-K any failure to file by these dates
during 1996. To the Company's knowledge, based solely on a review of the copies
of such reports furnished to the Company, the Company believes that Form 3s were
not timely filed on August 8, 1996 by reporting persons to report their initial
ownership of common stock and derivative securities. Form 3s for the following
reporting persons were filed on August 23, 1996 and amended on November 12,
1996: J. Erik Hvide, Hvide Family Trust I, Arthur E. Bailey, John H. Blankley,
Andrew W. Brauninger, Donald L. Caldera, Robert B. Calhoun, Jr., Gene Douglas,
Gerald Farmer, Jean Fitzgerald, John J. Krumenacker, John Lee, William R. Ludt,
Walter Mink, Robert Rice, Robert A. Santos, Eugene F. Sweeney, and Raymond B.
Vickers. Form 3s for the following reporting persons were filed on August 23,
1996: Clipper/Merchant HMI, L.P., Clipper/Merban, L.P., Clipper/Park HMI, L.P.,
Clipper/Hercules, L.P., Clipper Capital Associates, L.P., Clipper Capital
Associates, Inc., Metropolitan Life Insurance Company, Olympus Growth Fund II,
L.P., OGF II, L.P., Robert S. Morris, Louis J. Mischianti and James A. Conroy.
Form 3s for the following reporting persons were filed on August 29, 1996:
Robert B. Calhoun, Jr. and John Lee. The Company believes that all other filing
requirements applicable to its Reporting Persons were complied with.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is contained in the Company's
Proxy Statement for the 1997 Annual Meeting of Stockholders under the caption
"Executive Compensation," and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is contained in the Company's
Proxy Statement for the 1997 Annual Meeting of Stockholders under the caption
"Common Stock Ownership of Certain Beneficial Owners and Management," and is
incorporated herein by reference.
34
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 is contained in the Company's
Proxy Statement for the 1997 Annual Meeting of Stockholders under the caption
"Compensation Committee Interlocks and Insider Participation and Certain
Transactions," and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A) (1) LIST OF FINANCIAL STATEMENTS. The following is a list of the
financial statements included at the end of this Report of Form 10-K beginning
on page F-1:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets as of December 31, 1995 and 1996
Consolidated Statements of Operations for the Years Ended December 31,
1994, 1995 and 1996
Consolidated Statements of Stockholders' Equity for
the Years Ended December 31, 1994, 1995
and 1996
Consolidated Statements of Cash Flows for the Years Ended December
31, 1994, 1995 and 1996
Notes to Consolidated Financial Statements
(2) LIST OF FINANCIAL STATEMENT SCHEDULES. All schedules have been
omitted because they are not applicable or not required, or the required
information is provided in the financial statements or notes thereto.
(B) REPORTS ON FORM 8-K.
No Reports on Form 8-K were filed during the last quarter of the fiscal
year covered by this Report on Form 10-K.
(C) LIST OF EXHIBITS. The following is a list of exhibits furnished.
Copies of exhibits will be furnished upon written request of any stockholder at
a charge of $.25 per page plus postage.
EXHIBIT
NUMBER EXHIBIT
3.1 Amended and Restated Articles of Incorporation.(5)
3.2 Bylaws of the Company, as amended.(5)
4.1 Form of Class A Common Stock Certificate (Domestic).(5)
4.2 Form of Class A Common Stock Certificate (Foreign).(5)
10.1 Non-Compete Agreement, between the Company and Hans J. Hvide, dated
September 28, 1994.(2)
10.2 Consulting Agreement between Sun State Marine Services, Inc. and
Frank V. Oliver, Jr., dated September 30, 1994.(2)
10.3 Equity Ownership Plan.(6)
10.4 Stock Option Plan for Directors.(6)
10.4.1 1996 Employee Stock Purchase Plan.(6)
10.4.2 Equity Ownership Plan.(5)
35
<PAGE>
10.4.3 Retirement Plan and Trust. (7)
10.5 Security Agreement, dated December 14, 1973, relating to United
States Government Ship Financing Bonds, between The Provident Bank
and The United States of America, with respect
to Seabulk Challenger/S.T.L. 3901.(1)
10.6* Bareboat Charter, dated as of December 14, 1973, by and between The
Provident Bank and Seabulk Tankers, Ltd., with respect to Seabulk
Challenger/S.T.L. 3901.(1)
10.7* Time Charter Party, dated as of December 20, 1989, between Seabulk
Tankers, Ltd., and Shell Oil Company with respect to Seabulk
Challenger/S.T.L. 3901, as amended.(1)
10.8 Security Agreement, dated August 20, 1975, by and among Port
Everglades Towing, Inc., Central National Bank of Cleveland and The
United States of America, with respect to the Seabulk Magnachem/
S.C.C. 3902, as amended.(1)
10.9* Bareboat Charter, dated February 24, 1977, by and between Central
National Bank of Cleveland and Seabulk Chemical Carriers, Inc., with
respect to Seabulk Magnachem/S.C.C. 3902, as amended.(1)
10.10 Sub-Bareboat Charter, dated January 16, 1988, between Seabulk
Chemical Carriers, Inc., and Hvide Shipping, Incorporated, with
respect to Seabulk Magnachem/S.C.C. 3902, as amended.(1)
10.12* Tanker Time Charter Party, dated December 15, 1989, between Seabulk
Ocean Systems Corporation and Ocean Specialty Tankers Corporation,
with respect with to Seabulk Magnachem/S.C.C. 3902, as amended.(1)
10.13* Tanker Time Charter Party, dated December 15, 1989, between Seabulk
Transmarine Partnership, Ltd., and Ocean Specialty Tankers
Corporation, with respect to Seabulk America.(1)
10.14 Franchise Agreement, dated as of January 8, 1975, by and between
Canaveral Port Authority and Port Everglades Towing, Inc.(1)
10.15 Non-Exclusive Franchise Agreement, dated as of March 7, 1991, by and
between Port Everglades Authority and Hvide Shipping,
Incorporated.(1)
10.16* Contract for Fuel Transportation, dated as of February 18, 1993, by
and between Florida Power & Light Company and Sun State Marine,
Incorporated.(1)
10.17 Sale and Purchase Agreement between the Company and certain officers,
directors and employees relating to the purchase of partnership
interests, dated September 30, 1994.(2)
10.18 Post-Retirement Benefits Agreement between the Company and Hans J.
Hvide, dated September 28, 1994.(2)
10.19 Junior Subordinated Note and Common Stock Purchase Agreement dated
September 30, 1994.(2)
10.20 Senior Subordinated Note and Common Stock Purchase Agreement dated
September 30, 1994.(2)
10.21 Letter of Credit Agreement, dated as of September 29, 1994, between
Hvide Shipping, Inc. and Bank of Boston.(2)
10.22 Credit Agreement, dated as of September 28, 1994, among Hvide Marine
Incorporated, Citibank, N.A., The First National Bank of Boston,
and Citibank, N.A.(2)
10.22(a) Amendment No. 1 dated as of May 15, 1995, to the Credit Agreement
dated as of September 28, 1994, by and among Hvide Marine
Incorporated, Citibank, N.A., The First National Bank of
Boston, and others.(2)
10.22(b) Amendment No. 2 dated as of March 26, 1996, to the Credit Agreement
dated as of September 28, 1994, by and among Hvide Marine
Incorporated, Citibank, N.A., The First National Bank
of Boston, and others.(2)
10.22(c) Amended and Restated Credit Agreement dated as of June 21, 1996, by
and among Hvide Marine Incorporated, Citibank, N.A., The First
National Bank of Boston, BNY Financial Corporation, Hibernia National
Bank, and Amsouth Bank of Florida.(5)
10.22(d) Amended and Restated Credit Agreement dated as of February 3, 1997.
10.26 Amendment No. 2 to Charter of Seabulk Magnachem.(2)
36
<PAGE>
10.27 Form of Recapitalization Agreement among Hvide Corp., Hvide Marine
Incorporated, the Junior Subordinated Noteholders, the Senior
Subordinated Noteholders, J. Erik Hvide, and certain
trusts.(5)
10.28 Form of Registration Rights Agreement by and between Hvide Marine
Incorporated and certain shareholders.(5)
10.29 Form of Agreement Among Shareholders among certain shareholders.(5)
10.30 Form of Amended and Restated Contingent Share Issuance Agreement
among Hvide Marine Incorporated and certain purchasers.(5)
11 Computation of Earnings (Loss) per Share
21 List of Subsidiaries.(4)
23.1 Consent of Ernst & Young LLP.
27 Financial Data Schedule.
* Confidential treatment requested. The materials omitted from these
documents have been marked with an asterisk (*). The materials omitted
have been separately filed with the Commission pursuant to the
confidential treatment request.
(1) Incorporated herein by reference to Registration Statement on Form S-1
(Registration No. 33-78166) filed with the Commission on April 26, 1994.
(2) Incorporated herein by reference to Amendment No. 1 to Registration
Statement on Form S-1 (Registration No. 33-78166) filed with the Commission
on May 3, 1996.
(3) Incorporated herein by reference to Amendment No. 2 to Registration
Statement on Form S-1 (Registration No. 33-78166) filed with the Commission
on May 13, 1996.
(4) Incorporated herein by reference to Amendment No. 3 to Registration
Statement on Form S-1 (Registration No. 33-78166) filed with the Commission
on July 11, 1996.
(5) Incorporated herein by reference to Amendment No. 4 to Registration
Statement on Form S-1 (Registration No. 33-78166) filed with the Commission
on August 5, 1996.
(6) Incorporated herein by reference to Form S-8 (Registration No. 333-17621)
filed with the Commission on December 11, 1996.
(7) Incorporated herein by reference to Form S-8 (Registration No. 333-19543)
filed with the Commission on January 10, 1997.
37
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HVIDE MARINE INCORPORATED
By: /s/ J. ERIK HVIDE
J. Erik Hvide
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ J. ERIK HVIDE Chairman of the Board, March 28, 1997
- --------------------------------------
J. Erik Hvide President, Chief Executive
Officer and Director
(principal executive officer)
/s/ JOHN H. BLANKLEY Executive Vice March 28, 1997
- --------------------------------------
John H. Blankley President -- Chief Financial
Officer and Director
(principal financial officer)
/s/ DONALD L. CALDERA Executive Vice President and March 28, 1997
- --------------------------------------
Donald L. Caldera Director
/s/ JOHN J. KRUMENACKER Controller (principal accounting March 28, 1997
John J. Krumenacker officer)
/s/ EUGENE F. SWEENEY Executive Vice President and March 28, 1997
- --------------------------------------
Eugene F. Sweeney Director
/s/ ROBERT B. CALHOUN, JR. Director March 28, 1997
Robert B. Calhoun, Jr.
Director March , 1997
Gerald Farmer
/s/ JEAN FITZGERALD Director March 28, 1997
Jean Fitzgerald
/s/ JOHN J. LEE Director March 31, 1997
John Lee
/s/ WALTER C. MINK Director March 28, 1997
- --------------------------------------
Walter C. Mink
/s/ ROBERT RICE Director March 28, 1997
Robert Rice
/s/ RAYMOND B. VICKERS Director March 28, 1997
- --------------------------------------
Raymond B. Vickers
</TABLE>
38
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Hvide Marine Incorporated
We have audited the accompanying consolidated balance sheets of Hvide
Marine Incorporated and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1996. 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Hvide
Marine Incorporated and subsidiaries at December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Miami, Florida
February 20, 1997, except the eighth paragraph of Note 3, as to which the date
is March 25, 1997
F-1
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
1995 1996
(IN THOUSANDS EXCEPT
SHARE AMOUNTS)
ASSETS
Current assets:
Cash and cash equivalents............................ $ 3,050 $ 9,617
Accounts receivable:
Trade, net......................................... 9,602 16,049
Insurance claims and other......................... 4,399 1,717
Due from affiliate................................... 101 --
Spare parts and supplies............................. 3,417 5,517
Prepaid expenses..................................... 960 1,253
Deferred costs (net)................................. 2,550 4,173
-------- --------
Total current assets............................... 24,079 38,326
Property:
Construction in progress............................. 1,387 8,041
Vessels and improvements............................. 122,198 229,776
Less accumulated depreciation...................... (20,585) (27,480)
Furniture and equipment.............................. 2,601 4,502
Less accumulated depreciation...................... (998) (1,409)
-------- --------
Net property....................................... 104,603 213,430
Other assets:
Deferred costs (net)................................. 4,112 4,645
Due from affiliates.................................. 131 49
Investment in affiliates............................. 423 1,291
Goodwill (net)....................................... 9,117 8,612
Long-term receivable (net)........................... 831 59
Deposits and other................................... 387 7,061
-------- --------
Total other assets................................. 15,001 21,717
-------- --------
Total.............................................. $143,683 $273,473
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt................ $ 7,708 $ 24,375
Current obligations under capital leases............ 577 1,443
Accounts payable.................................... 4,905 6,278
Charter hire and other liabilities.................. 6,574 14,934
--------- ---------
Total current liabilities......................... 19,764 47,030
Long-term liabilities:
Long-term debt...................................... 96,014 108,154
Notes payable to related parties.................... 1,302 178
Obligations under capital leases.................... 3,450 7,492
Due to charterer.................................... 547 831
Deferred income taxes............................... 4,317 6,385
Other............................................... 4,290 1,414
--------- ---------
Total long-term liabilities....................... 109,920 124,454
--------- ---------
Total liabilities................................. 129,684 171,484
Minority partners' equity in subsidiaries.............. 1,654 898
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $1.00 par value--authorized
10,000,000 shares,
issued and outstanding, none...................... -- --
Class A Common Stock--$.001 par value, authorized
100,000,000 shares, issued and outstanding,
0 and 7,647,791................................... -- 8
Class B Common Stock--$.001 par value, authorized
5,000,000 shares
issued and outstanding, 1,558,210 and 3,419,577... 1 3
Class C Common Stock--$.001 par value, authorized
2,500,000 shares, issued and outstanding,
976,630, and 0.................................... 1 --
Additional paid-in capital.......................... 6,341 97,153
Retained earnings................................... 6,002 3,927
--------- ---------
Total stockholders' equity...................... 12,345 101,091
--------- ---------
Total minority partners' equity in
subsidiaries and stockholders' equity......... 13,999 101,989
--------- ---------
Total........................................... $ 143,683 $ 273,473
========= =========
See notes to consolidated financial statements
F-2
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1995 1996
--------- ---------- -------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C> <C>
Revenues..................................................................... $ 49,792 $ 70,562 $ 109,356
Operating expenses:
Crew payroll and benefits................................................. 13,510 20,132 29,756
Charter hire and bond guarantee fee....................................... 5,013 4,063 4,667
Repairs and maintenance................................................... 3,847 5,347 8,984
Insurance................................................................. 2,991 4,547 7,633
Consumables............................................................... 2,237 3,395 6,643
Other..................................................................... 2,275 3,180 6,094
--------- -------- ---------
Total operating expenses................................................ 29,873 40,664 63,777
Selling, general and administrative expenses:
Salaries and benefits..................................................... 4,649 6,856 7,936
Office expenses........................................................... 819 1,068 1,394
Professional fees......................................................... 2,645 2,137 2,947
Other..................................................................... 1,468 2,457 2,702
--------- -------- ---------
Total overhead expenses................................................. 9,581 12,518 14,979
Depreciation and amortization................................................ 4,500 6,308 9,830
--------- -------- ---------
Income from operations....................................................... 5,838 11,072 20,770
Interest:
Interest expense.......................................................... 5,614 11,748 11,908
Interest income........................................................... (312) (288) (277)
--------- -------- ---------
Net interest............................................................ 5,302 11,460 11,631
Other income (expense):
Minority interest and equity in earnings of subsidiaries.................. (115) 137 894
Other..................................................................... 126 (111) (457)
--------- -------- ---------
Total other income (expense)............................................ 11 26 437
--------- -------- ---------
Income (loss) before provision for (benefit from) income
taxes and extraordinary item.............................................. 547 (362) 9,576
Provision for (benefit from) income taxes.................................... 189 (2) 3,543
--------- -------- ---------
Income (loss) before extraordinary item...................................... 358 (360) 6,033
--------- -------- ---------
Loss on early extinguishment of debt, net of applicable
income taxes of $1,474.................................................... -- -- 8,108
--------- -------- ---------
Net income (loss)....................................................... $ 358 $ (360) $ (2,075)
========= ======== =========
Earnings (loss) per common and common equivalent share:
Income (loss) applicable to common shares before
extraordinary item........................................................ $ 0.03 $ (0.14) $ 1.04
Loss on early extinguishment of debt......................................... -- -- (1.40)
--------- -------- ---------
Net income (loss) applicable to common shares........................... $ 0.03 $ (0.14) $ (0.36)
========= ======== =========
Earnings (loss) per common share--assuming full dilution:
Income applicable to common shares before
extraordinary item........................................................ $ 0.06 $ 0.12 $ 0.99
Loss on early extinguishment of debt......................................... -- -- (1.22)
--------- -------- ---------
Net income (loss) applicable to common shares........................... $ 0.06 $ 0.12 $ (0.23)
========= ======== =========
Weighted average common and common equivalent
shares outstanding........................................................ $ 5,302 $ 2,535 $ 5,818
========= ======== =========
Weighted average common shares outstanding
assuming full dilution.................................................... $ 5,616 $ 3,779 $ 6,645
========= ======== =========
</TABLE>
See notes to consolidated financial statements
F-3
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
11% 5% CLASS A CLASS B CLASS C
CLASS A CLASS B COMMON STOCK COMMON STOCK COMMON STOCK ADDITIONAL
PREFERRED PREFERRED PAID-IN RETAINED
STOCK STOCK SHARE AMOUNT SHARE AMOUNT SHARE AMOUNT CAPITAL EARNINGS TOTAL
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1994................. $ 2,669 $3,266 -- $ -- 1,105,692 $ 1 663,415 $ 1 $ 1,025 $ 6,389 $ 13,351
Net income............ -- -- -- -- -- -- -- -- -- 358 358
Common stock issued, net
of issuance costs.... -- -- -- -- 452,518 -- 313,215 -- 8,640 -- 8,640
Redemption of preferred
stock................ (2,669) (3,266) -- -- -- -- -- -- (1,350) -- (7,285)
Acquisition of limited
partnership interests -- -- -- -- -- -- -- -- (1,974) -- (1,974)
Preferred stock cash
dividends............ -- -- -- -- -- -- -- (385) (385)
------- ------ ----------- ------ ----------- ------ ------- ---- ------- ------- --------
Balance at December 31,
1994................. -- -- -- -- 1,558,210 1 976,630 1 6,341 6,362 12,705
Net loss.............. -- -- -- -- -- -- -- -- -- (360) (360)
------- ------ ----------- ------ ----------- ------ ------- ---- ------- ------- --------
Balance at December 31,
1995................. -- -- -- -- 1,558,210 1 976,630 1 6,341 6,002 12,345
Net loss.............. -- -- -- -- -- -- -- -- -- (2,075) (2,075)
Common Stock issued, net
of issuance costs.... -- -- 7,647,791 8 1,861,367 2 (976,630) (1) 90,812 -- 90,821
------- ------ ----------- ------ ----------- ------ -------- ---- ------- ------- --------
Balance at December 31,
1996................. $ -- $ -- 7,647,791 $ 8 3,419,577 $ 3 -- $ -- $97,153 $ 3,927 $101,091
======= ====== =========== ====== =========== ====== ======= ==== ======= ======= ========
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1995 1996
-------- -------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
OTHER ACTIVITIES:
Net Income (loss)......................................................... $ 358 $ (360) $ (2,075)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING
ACTIVITIES:
Loss on early extinguishment of debt, net............................... -- -- 8,108
Depreciation and amortization........................................... 4,500 6,308 9,830
Provision for bad debts................................................. -- 114 125
Gain on disposals of property........................................... -- (73) (13)
Amortization of discount on long-term debt.............................. 52 201 162
Provision for (benefit from) deferred taxes............................. 189 (2) 3,543
Minority partners' equity in earnings (losses) of subsidiaries, net..... 184 (625) (756)
Undistributed (earnings) losses of affiliates, net...................... (69) 488 (132)
Other non-cash items.................................................... -- -- 36
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable.................................................. (4,574) (5,056) (1,928)
Due from affiliates.................................................. (235) (394) 182
Other assets......................................................... (1,622) (1,317) 897
Accounts payable and other liabilities............................... 4,075 4,664 4,605
-------- --------- ----------
Net cash provided by operating activities.................................... 2,858 3,948 22,584
INVESTING ACTIVITIES:
Purchase of property...................................................... (5,672) (6,312) (8,759)
Deposits for the purchase of property..................................... -- -- (6,349)
Proceeds from disposals of property....................................... -- 690 8
Capital contribution to affiliates........................................ -- -- (736)
Deposits of funds in escrow............................................. (500) -- --
Acquisitions, net of cash acquired of $106 in 1994, net of $500
escrow deposit utilized in 1995 and net of cash acquired of
$1,722 in 1996.......................................................... (33,643) (2,444) (68,518)
-------- --------- ----------
Net cash used in investing activities........................................ (39,815) (8,066) (84,354)
FINANCING ACTIVITIES:
Proceeds of lines of credit, net.......................................... -- 7,500 1,994
Proceeds from long-term debt.............................................. 90,580 -- 36,964
Proceeds from issuance of common stock, net............................... 8,640 -- 76,595
Principal payments of long-term debt...................................... (51,700) (5,458) (44,819)
Payment of financing costs................................................ (3,478) (727) (838)
Payment of obligations under capital leases............................... (34) (510) (1,189)
Payment of notes payable to related parties............................... -- -- (370)
Payment of dividends...................................................... (385) -- --
Redemption of preferred stock............................................. (2,374) -- --
-------- --------- ----------
Net cash provided by financing activities.................................... 41,249 805 68,337
-------- --------- ----------
Increase (decrease) in cash and cash equivalents............................. 4,292 (3,313) 6,567
Cash and cash equivalents at beginning of period............................. 2,071 6,363 3,050
-------- --------- ----------
Cash and equivalents at end of period........................................ $ 6,363 $ 3,050 $ 9,617
======== ========= ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Net assets recorded in connection with dissolution to affiliate.............. $ -- $ 341 $ --
======== ========= ==========
Notes payable and notes payable to related parties issued for the
acquisition of vessels.................................................... $ 2,149 $ 3,000 $ 675
======== ========= ==========
Capital lease obligations for the acquisition of vessels and
equipment................................................................. $ 4,534 $ -- $ 6,098
======== ========= ==========
Note payable issued for the acquisition of minority interest................. $ 3,039 $ -- $ --
======== ========= ==========
Note payable issued and other liabilities incurred in conjunction with
the redemption of preferred stock......................................... $ 4,911 $ -- $ --
======== ========= ==========
Liabilities assumed for the acquisition of vessels (see Note 3).............. $ 279 $ -- $ 34,650
======== ========= ==========
Common stock issued for the redemption of notes payable to related
parties................................................................... $ -- $ -- $ 307
======== ========= ==========
Common stock issued for the repayment of debt............................... $ -- $ -- $ 13,883
======== ========= ==========
</TABLE>
See notes to consolidated financial statements
F-5
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Organization and Basis of Consolidation. Hvide Marine Incorporated
("HMI" and the "Company") was incorporated in the state of Florida on September
28, 1994 as the holding company for the former Hvide Marine Incorporated and its
majority-owned subsidiaries (the "Predecessor Company"). On September 30, 1994,
100% of the Common Stock of the Predecessor Company was exchanged for common
stock of HMI and accounted for in a manner similar to a pooling of interests.
Accordingly, the accompanying consolidated financial statements include the
combined successor/predecessor companies for all periods subsequent to September
30, 1994 and the Predecessor Company for all periods prior to September 30,
1994. All share and per share amounts have been adjusted to give retroactive
effect to the capital structure of HMI. All material intercompany transactions
and balances have been eliminated in the consolidated financial statements.
Investments in limited partnerships and less-than-majority-owned subsidiaries
are accounted for on the equity method.
On August 14, 1996, the Company completed the initial public offering
(the "IPO") of 7,000,000 shares of its Class A Common Stock at $12.00 per share.
The net proceeds to the Company were approximately $74,821,000, after deducting
underwriting commissions and other offering expenses. The net proceeds were used
primarily to repay certain indebtedness that was outstanding prior to the IPO
and for the cash portion of the purchase price of certain acquisitions
consummated simultaneously with and subsequent to the IPO. On September 12,
1996, the underwriters' over-allotment option was exercised in part, pursuant to
which an additional 159,000 shares were issued. The net proceeds of
approximately $1,774,000 were used by the Company to repay certain outstanding
indebtedness. In addition, on August 14, 1996, the Company issued 182,000 and
1,188,000 shares of Class A and Class B Common Stock, respectively, in payment
of certain outstanding indebtedness.
Operations. The principal operations of the Company consist of vessel
time charters, vessel operating agreements and harbor towing. Through its vessel
time charters and operating agreements, the Company serves the energy and
chemical industries primarily in the U.S. domestic trade. The Company's harbor
towing operations principally serve the passenger cruise ship, energy, and
chemical industries and are concentrated in ports located in the southeastern
United States.
Revenues. Revenues from time charters are earned and recognized on a
daily basis. Time charter rates are adjusted periodically based on changes in
specified price indices and market conditions. Revenues on voyage contracts are
recognized based upon the percentage of voyage completion.
Cash and Cash Equivalents. The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.
Insurance Claims Receivable. Insurance claims receivable represent costs
incurred in connection with insurable incidents for which the Company expects to
be reimbursed by the insurance carrier(s),
F-6
<PAGE>
subject to applicable deductibles. Deductible amounts related to covered
incidents are expensed in the period of occurrence of the incident.
Spare Parts and Supplies. Inventories of spare parts and supplies are
stated at the lower of cost, determined on a basis that approximates the
last-in, first-out method, or market.
Prepaid Expenses. Prepaid expenses primarily include prepaid vessel
insurance.
Long-Lived Assets. The Company accounts for long-lived assets pursuant
to Statement of Financial Accounting Standards No. 121 Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
("SFAS 121"), which requires impairment losses to be recorded on long-lived
assets used in operations when events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Management reviews
long-lived assets and the related intangible assets for impairment whenever
events or changes in circumstances indicate the assets may be impaired. The
Company, based on current circumstances, does not believe that any long-lived
assets are impaired at December 31, 1996.
Property. Vessels, improvements, furniture and equipment are stated at
cost less accumulated depreciation. Major renewals and improvements are
capitalized and replacements, maintenance and repairs which do not improve or
extend the lives of the assets are expensed. Depreciation is computed on the
straight-line method over the estimated useful lives of the assets. The
estimated useful lives of vessels and improvements other than tankers are 15 to
40 years and the estimated useful lives of furniture and equipment are 3 to 10
years. Tankers and related improvements are depreciated over estimated useful
lives, as determined by the Oil Pollution Act of 1990 and other factors, ranging
from 4 to 24 years.
Vessels under capital leases are amortized over the estimated useful
lives of the vessels. Included in vessels and improvements at December 31, 1995
and 1996 are vessels under capital leases of approximately $5,229,000 and
$11,594,000, net of accumulated amortization of approximately $149,000 and
$293,000, respectively.
For the years ended December 31, 1994, 1995 and 1996, depreciation and
amortization of vessels, improvements, furniture and equipment was approximately
$3,397,000, $4,770,000, and $8,291,000, respectively.
Deferred Costs. Deferred costs primarily represent drydocking and
financing costs. Deferred financing costs are amortized over the term of the
related borrowings. At December 31, 1995 and 1996, deferred costs include
unamortized drydocking of approximately $2,534,000 and $6,267,000, respectively.
Goodwill. Goodwill represents the excess of the purchase price over the
fair value of certain long-lived assets acquired and is amortized on the
straight-line basis over 20 to 40 years. The carrying value of goodwill is
reviewed if facts and circumstances suggest that it may be impaired. If this
review indicates that goodwill will not be recoverable, as determined based on
the estimated undiscounted cash flows of the assets acquired over the remaining
amortization periods, the carrying value will be adjusted accordingly. At
December 31, 1995 and 1996, accumulated amortization of goodwill was
approximately $1,689,000 and $2,194,000, respectively.
F-7
<PAGE>
Income Taxes. HMI files a consolidated tax return with all corporate
subsidiaries other than Seabulk Ocean Systems Holdings, Inc. and Seabulk Ocean
Systems Corporation, which file a separate consolidated income tax return. Each
partnership subsidiary files a separate partnership tax return.
The Company accounts for income taxes pursuant to Financial Accounting
Standards Board ("FASB") Statement No. 109 ("FASB 109"), "Accounting for Income
Taxes." Under FASB 109, deferred income tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities, and are measured using the enacted tax rates and laws in
effect when the differences are expected to reverse. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
Earnings (Loss) per Common Share. Earnings (loss) per common share is
calculated based on the weighted average number of common shares and dilutive
common stock equivalents outstanding during the period. Common stock equivalents
result from convertible preferred stock outstanding in 1994 and outstanding
stock options at December 31, 1996. Earnings (loss) per common share-assuming
full dilution includes the if-converted dilutive effect of a portion of the
convertible Junior Note through conversion in August 1996 (see Note 3) and the
incremental dilutive effect of outstanding common stock options at December 31,
1996.
Concentrations of Credit Risk. Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of cash
and cash equivalents in banks, trade accounts receivable and insurance claims
receivable. The credit risk associated with cash and cash equivalents in banks
is considered low due to the credit quality of the financial institutions. The
Company performs ongoing credit evaluations of its trade customers and generally
does not require collateral. The credit risk associated with insurance claims
receivable is considered low due to the credit quality and funded status of the
insurance pools that the Company participates in.
Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassifications. Certain amounts from prior periods' consolidated
financial statements have been reclassified to conform with the current
period's presentation.
2. CAPITAL CONSTRUCTION FUNDS
Pursuant to a Dual Use Agreement between Seabulk Tankers, Ltd. ("STL")
and the United States of America ("U.S."), the Capital Construction Funds
maintained by STL is collateral to the U.S., which amounts were $36,000 and
$37,000 at December 31, 1995 and 1996, respectively.
F-8
<PAGE>
3. DEBT
Long-term debt consisted of the following (in thousands):
DECEMBER 31,
1995 1996
Lines of Credit........................... $ 7,500 $ 10,647
Term Loan................................. 46,000 58,500
Acquisition Line.......................... -- 9,700
Senior Note............................... 23,200 9,153
Junior Note............................... 17,633 --
Title XI Debt............................. -- 32,243
Notes Payable............................. 9,389 12,286
---------- ----------
103,722 132,529
Less: Current maturities.................. (7,708) (24,375)
---------- ----------
$ 96,014 $ 108,154
========== ==========
On September 28, 1994, the Company entered into an agreement, as
amended on June 21, 1996, for a credit facility (the "Credit Facility") with its
principal banks.
The Credit Facility provides for a working capital credit line of
$10,000,000 through January 15, 2001 (the "Line") and a stand-by letter of
credit (the "Letter of Credit") of $5,600,000. Borrowings under the Line bear
interest at the prime rate or LIBOR, at the option of the Company, plus an
applicable margin based upon the Company's compliance with certain financial
covenants (8.1% at December 31, 1996), and are subject to an annual commitment
fee of 0.50% of the unused portion of the Line. Borrowings outstanding under the
Line totaled $8,000,000 at December 31, 1996, which is currently due. The Letter
of Credit is collateral for a surety bond to fund any final award relating to
the shipyard's claims discussed in Note 5. Additionally, the Credit Facility
provides for a letter of credit in an amount equal to the greater of amounts
available to be drawn under the Line or $4,000,000. Amounts drawn under either
letter of credit are due on demand or the ultimate maturity date of January 15,
2001. There were no amounts outstanding under the letters of credit at December
31, 1996.
The Credit Facility provides for a term loan (the "Term Loan") of
$60,500,000 and is payable in quarterly principal and interest payments.
Borrowings under the Term Loan bear interest at the prime rate or LIBOR, at the
option of the Company, plus an applicable margin based upon the Company's
compliance with certain financial covenants (8.1% at December 31, 1996).
The Credit Facility also provides for a $19,900,000 Acquisition Line of
Credit (the "Acquisition Line") to fund the cash portion of acquisitions.
Borrowings under the Acquisition Line are limited to the lesser of 70% of the
purchase price or a multiple of six times projected EBITDA from the acquisition,
as defined. The Acquisition Line bears interest at the prime rate or LIBOR, at
the option of the Company, plus an applicable margin based upon the Company's
compliance with certain financial covenants (8.1% at December 31, 1996).
Principal amounts outstanding under the Acquisition Line are due in quarterly
payments beginning in January, 1998. At December 31, 1996, $9,700,000 was
outstanding under the Acquisition Line.
F-9
<PAGE>
The collateral for the Company's indebtedness under the Credit Facility
includes all Company- owned vessels, its partnership interests in STL and
Seabulk Transmarine Partnership, Ltd., spare parts, fuel and supplies, and
eligible accounts receivable.
On September 30, 1994, and as amended on May 24, 1995, the Company
issued a $25,000,000 senior subordinated note (the "Senior Note"). The Senior
Note bears interest at 12%, payable semi-annually on March 31 and September 30.
The principal portion of the Senior Note is payable in equal annual installments
on September 30, 2003 and 2004. The Company received proceeds of approximately
$23,072,000, net of a discount of $1,928,000 ($1,904,000, $1,800,000 and
$657,000 at December 31, 1994, 1995, and 1996, respectively) which is being
amortized as interest expense over the term of the Senior Note. On August 14,
1996 and September 12, 1996, the Company repaid $13,490,000, and $1,700,000,
respectively, of the principal balance of the Senior Note with a portion of the
proceeds from the IPO and the exercise of the underwriters' related
over-allotment option. Repayment of the Senior Note is subordinated to the
claims of the Company's principal banks for amounts outstanding under the Credit
Facility.
The terms of the Credit Facility and Senior Note prohibit the Company
or any of its wholly owned subsidiaries from paying dividends on any class of
common stock and restrict, among other things, the Company's ability to enter
into new commitments or borrowings over specified amounts and dispose of assets
outside the ordinary course of business. In addition, the Company is required to
maintain a minimum level of tangible net worth, as defined.
On August 14, 1996, the Company assumed approximately $34,650,000 of
Title XI Debt in connection with the acquisitions of certain vessels (see note
12). The Title XI Debt is collateralized by first preferred mortgages on certain
vessels and bears interest at rates ranging from 5.4% to 10.1%. The debt is due
in semiannual principal and interest payments through December 1, 2006. Under
the terms of the Title XI debt, the Company is required to maintain a minimum
level of working capital, as defined, and comply with certain other financial
covenants. At December 31, 1996, the Company was not in compliance with the
working capital financial covenant. On March 25, 1997, the U.S. Department of
Transportation, which administers the Title XI debt, waived the Company's
non-compliance with this covenant through February 7, 1997, the date the company
became in compliance.
In connection with redemption of the outstanding preferred stock of the
Predecessor Company in 1994 (see Note 10), the Company issued notes payable
totaling approximately $3,561,000 to the former stockholder. Interest on the
notes is payable quarterly at the greater of 12% or Prime +3% (12% at December
31, 1996). The principal portion of the notes is due in the year 2000. Repayment
of these notes is subordinated to the claims of the Company's principal banks
for amounts outstanding under the Credit Facility. On August 14, 1996,
approximately $1,548,000 was repaid with a portion of the proceeds from the IPO.
In connection with the acquisition of the outstanding common stock of
its previously unconsolidated 50%-owned affiliate Ocean Specialty Tankers
Corporation ("OSTC"), on August 14, 1996, the Company assumed OSTC's obligations
under a $4,000,000 revolving line of credit secured by the outstanding accounts
receivables generated by three chemical tankers. The revolving line of credit
bears interest monthly at LIBOR + 1.5% (7.3% at December 31, 1996). At December
31, 1996, $2,647,000 was outstanding under the line of credit, which is
currently due.
F-10
<PAGE>
On August 14, 1996, the Company issued a $675,000 note payable for the
acquisition of a vessel (see note 12). The note is due in quarterly principal
and interest payments (10%) through August, 2001.
In connection with the acquisition of the outstanding limited
partnership interests in Hvide Chartering, Ltd. ("HCL") and Hvide Offshore
Services, Ltd. ("HOS") in 1994 (see Note 6), the Company issued notes payable of
approximately $2,149,000. Approximately $1,302,000 of these notes were issued to
certain officers and employees of the Company and the outstanding amounts are
recorded as notes payable to related parties in the accompanying consolidated
balance sheets. Interest on the notes is payable quarterly at 12% and the notes
are due in 2004. On August 14, 1996, approximately $678,000 of the notes payable
to related parties was repaid with $816,000 in cash and the issuance of 25,667
shares of Common Stock.
On September 30, 1994, HMI issued a $25,000,000 junior subordinated
note (the "Junior Note") bearing interest at 8%. In August 1996, the principal
sum and all accrued and unpaid interest was repaid with $15,115,000 of the
proceeds from the IPO and the issuance of 1,244,002 shares of Common Stock.
In connection with the acquisition of the minority interest in STL in
1994, the Company issued a note payable of approximately $3,039,000. On August
14, 1996, the outstanding balance of the note was repaid with proceeds from the
IPO.
In connection with the acquisition of seven crew vessels in 1995 (see
Note 12), the Company issued a $3,000,000 note payable. The outstanding balance
of the note was repaid in February 1996.
The aggregate annual future payments due on debt and notes payable as
of December 31, 1996 are as follows (in thousands):
YEAR ENDING DECEMBER 31,
1997............................................. $ 24,375
1998............................................. 17,052
1999............................................. 21,112
2000............................................. 22,801
2001............................................. 26,760
Thereafter....................................... 20,429
-----------
$ 132,529
In addition to the Letter of Credit available pursuant to the Credit
Facility, the Company has an available letter of credit of $7,000,000 for future
charter hire payments relating to the Seabulk Magnachem lease financing.
The Company made interest payments of approximately $3,062,000,
$8,952,000, and $19,213,000 in 1994, 1995 and 1996, respectively.
F-11
<PAGE>
4. CAPITAL LEASES
The Company owns certain vessels and other equipment under leases that
are classified as capital leases. The following is a schedule of future minimum
lease payments under capital leases together with the present value of the net
minimum lease payments as of December 31, 1996 (in thousands):
1997............................................... $ 2,108
1998............................................... 2,105
1999............................................... 2,004
2000............................................... 1,907
2001............................................... 1,629
Thereafter......................................... 1,357
--------
Total minimum lease payments....................... 11,110
Less amount representing interest.................. (2,175)
--------
Present value of minimum lease payment
(including current
portion of $1,443).............................. $ 8,935
========
5. COMMITMENTS AND CONTINGENCIES
The Company leases its office facilities under operating lease
agreements which expire at various dates through 2001. Rent expense was
$467,000, $591,000, and $699,000 for the years ending December 31, 1994, 1995,
and 1996. Future annual rentals due under non-cancelable operating leases are as
follows (in thousands):
YEAR ENDED DECEMBER 31,
1997............................................ $ 763
1998............................................ 705
1999............................................ 677
2000............................................ 654
2001............................................ 575
Thereafter...................................... 4,545
-------------
$ 7,919
=============
A portion of the Company's operations consists of charters of
ocean-going vessels. Two tankers are bareboat chartered for periods extending
through the years 1999 and 2002, respectively. Charter hire expense on these
tankers was approximately $3,100,000, $3,153,000, and $3,181,000 for the years
ended December 31, 1994, 1995 and 1996, respectively. Additionally one tug is
bareboat chartered through the year 2010. Charter hire expense on this tug was
approximately $217,000 and $614,000 for the years ended December 31, 1995 and
1996, respectively. The aggregate annual future payments due under these charter
agreements as follows (in thousands):
YEAR ENDED DECEMBER 31,
1997........................................... $ 3,842
1998........................................... 3,893
1999........................................... 3,949
2000........................................... 2,592
2001........................................... 2,608
------------
$ 16,884
============
F-12
<PAGE>
In 1990, the Company withheld approximately $2,400,000 from a shipyard
relating to delays and other problems encountered in the construction of a
vessel. In 1993, the shipyard filed a claim to recover approximately $8,500,000
for costs allegedly due the shipyard, and the Company asserted a counterclaim
for approximately $5,600,000 against the shipyard. In addition, the shipyard is
seeking $10,000,000 of punitive damages. Management believes the shipyard's
claim amounts are unsubstantiated and that recoveries upon the Company's
counterclaim, together with insurance coverage, will exceed amounts, if any,
which may be awarded to the shipyard. Management believes that the additional
costs incurred to complete the construction of the vessel exceeded the amounts
withheld (settlement of construction costs, if any, would generally be
capitalized and depreciated over future periods); however, the Company is unable
to predict the final outcome of this matter.
In November 1989, STL formed an 88%-owned subsidiary, Seabulk Offshore,
Ltd. ("SOL"), which acquired eight offshore supply vessels for approximately
$13,510,000. In December 1990, STL and Hvide Marine Transport, Incorporated (a
wholly-owned subsidiary of HMI) purchased the remaining 12% interest in SOL from
the limited partner ("U.S. Offshore") for $825,000. Additionally, SOL agreed to
pay U.S. Offshore an amount equal to 5% of gross revenues from the operation of
the vessels for a period not to exceed a maximum of 40 months (December 1, 1990
through March 31, 1994) and in a total amount not to exceed $1,300,000,
whichever occurred first. Approximately $769,000 has been paid to U.S. Offshore
under this agreement. U.S. Offshore has filed a claim against SOL related to the
amount due under the agreement. SOL is vigorously defending this claim and
believes that it will ultimately prevail; however, the Company is unable to
predict the final outcome of this matter.
On August 6, 1992, a wholly-owned subsidiary, Seabulk Transmarine II,
Inc. acquired a 49% interest in a joint venture which charters two offshore
supply vessels from SOL for a period of six years. At the end of the charter
period, the joint venture shall have the option to purchase each of the vessels
at an agreed-upon purchase price of $300,000.
On September 30, 1994, the Company acquired Sun State Marine Services,
Inc. ("SSMS"). The acquisition agreement provides the sellers contingent
payments for a period of five years from the date of the agreement. There were
no contingent amounts due related to SSMS for the year ended December 31, 1996.
At December 31, 1996, Hvide Partners, L.P. ("HPLP"), an affiliated
entity in which the Company participates as the sole general partner, was party,
through its five 75%-owned limited liability companies Hvide Van Ommeren Tankers
I-V LLC ("HVOT I-V"), to contracts for the construction of five double-hull
petroleum product carriers. Pursuant to its general and indirect limited
partnership interests in HPLP, the Company is required to make capital
contributions to HPLP in 1997 totaling approximately $150,000. The Company was
also party to an agreement at December 31, 1996 to provide technical services
and support related to the operations of HVOT I-V. Pursuant to this agreement
and commencing in 1997, the Company is to be paid an annual fee of $295,000,
subject to future escalation equal to increases, if any, in the CPI.
In November 1996, the Company entered into an agreement to bareboat
charter two tugs for a one year period.
In December 1996, the Company entered an agreement (the Agreement) to
purchase four crew boats for cash of approximately $7,400,000. Two of these
boats were delivered in February 1997 (see Note 16). The Agreement also consists
of the purchase of three additional crew boats to be constructed
F-13
<PAGE>
and delivered on various dates from March 1998 to February 1999 at an aggregate
cost of approximately $8,200,000.
In December 1996, the Company entered into an agreement to purchase
four supply boats for an aggregate cost of approximately $21,800,000.
6. RELATED PARTY TRANSACTIONS
In 1994, the Company acquired outstanding limited partnership interests
of HCL, a limited partnership in which the Company owned a 33 1/3% interest as
general partner, from certain officers and employees of the Company for cash and
notes payable of approximately $668,000 and $1,089,000, respectively.
In 1994, the Company acquired the outstanding limited partnership
interests of HOS from certain officers and employees of the Company for cash and
notes payable of approximately $607,000 and $1,060,000, respectively.
Additionally, the company assumed HOS's outstanding capital lease obligations
and certain other liabilities.
The purchase price of the vessels and other net assets acquired in the
acquisition of the limited partnership interests of HCL and HOS was
approximately $1,974,000 in excess of their historical net book value.
Accordingly, such amounts were deemed special distributions to the related
parties and recorded as a reduction of paid-in capital.
7. EMPLOYEE BENEFIT PLANS
The Company sponsors a Section 401(k) retirement plan covering
substantially all employees. Expense under this plan for the years ended
December 31, 1994, 1995 and 1996, was approximately $834,000, $1,047,000, and
$1,333,000, respectively. Contributions under the plan are determined on the
basis of employee compensation.
8. STOCK OPTIONS
The Company has authorized the grant of options for up to 1,000,000
shares of Class A common stock pursuant to a non-qualified stock option plan
(the "Plan") covering primarily employees and outside directors. Options under
the Plan are issuable at the discretion of committees appointed by the Board of
Directors and generally vest ratably over a four year period. Option terms range
from 5 to 10 years. At December 31, 1996, there were 806,000 options which were
all granted on August 12, 1996. The exercise price of all options ($12.00) is
equal to the fair market value of the underlying common stock at that date.
There were no options exercised or forfeited during 1996 and at December 31,
1996, 35,000 options are exercisable. The Class A Common Stock issuable pursuant
to the plan have been reserved.
The Company has elected to account for stock-based employee
compensation awards under Accounting Principles Board Option No. 25 "Accounting
for Stock-Based Compensation" (APB 25). Under APB 25, because the exercise price
of the Company's employee stock options was equal to the market price of the
underlying stock at the date of grant, no compensation expense was recognized.
F-14
<PAGE>
Pro forma information regarding net loss and loss per share is required
by FASB 123 as if the Company has accounted for its options under the fair value
method proscribed. However, the effect of applying the fair value method
proscribed by FASB 123 to the Company's stock options results in net loss and
loss per share that are not materially different from amounts reported.
9. INCOME TAXES
The components of the provision for (benefit from) income taxes are as
follows (in thousands):
YEAR ENDED DECEMBER 31,
1994 1995 1996
------ ------ -------
Current................................. $ -- $ -- $ --
Deferred................................ 189 (2) 3,543
------ ------ ---------
$ 189 $ (2) $ 3,543
====== ====== =========
Income taxes paid were approximately $400,000 in 1994. There were no income
taxes paid in 1995 and 1996.
A reconciliation of the Company's income tax rate to the federal rate of 34% is
as follows:
1994 1995 1996
------ ------ -----
Income tax expense (benefit) computed at the
statutory rate.......................... 34% ( 34%) 34%
State income taxes......................... 2 (2) 2
Capital Construction Funds................. 16 24 1
Other...................................... (17) 11 --
----- ---- ----
35% (1)% 37%
===== ==== ====
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred income tax assets and liabilities as of
December 31, 1995 and 1996 are as follows:
1995 1996
Deferred income tax assets:
Net operating loss carryforward.............. $ 8,388 $ 14,416
Charitable contributions carryforward....... 43 66
Alternative minimum tax credit carryforward. 1,226 1,226
Accrued compensation........................ 315 410
Other ........................................... 149 191
------ ------
Total deferred income tax assets...... 10,121 16,309
-------- --------
Deferred income tax liabilities:
Fixed asset differences...................... 13,770 21,772
Deferred drydocking costs.................... 668 922
-------- --------
Total deferred income tax liabilities.. 14,438 22,694
-------- --------
Net deferred income tax liability...... $ 4,317 $ 6,385
======== ========
F-15
<PAGE>
At December 31, 1996 the Company had approximately $40,500,000 in net
operating loss carryforwards for federal income tax purposes, expiring in
various amounts from 1998 to 2011. Due to a change in ownership, as defined in
Section 382 of the Internal Revenue Service Code, the utilization of
approximately $26,287,000 of net operating loss carryforwards, existing at the
date of the IPO, are limited to approximately $3,300,000 per year.
10. CAPITAL STOCK
On August 14, 1996 and September 12, 1996, the Company issued 7,000,000
and 159,000 shares of its Class A Common Stock, respectively, pursuant to the
IPO and underwriters' over-allotment option. Simultaneously with the IPO, shares
of the Company's Class C Common Stock were exchanged for 304,000 and 673,000
shares of the Company's Class A and Class B Common Stock, respectively.
Additionally, 182,000 and 1,188,000 shares of the Company's Class A and Class B
Common Stock, respectively, were issued in repayment of a portion of the Junior
Notes and other outstanding indebtedness.
On May 10, 1996, the Company's Board of Directors authorized a
1.5843-for-1 split of its common stock, and an increase of the number of
authorized shares of its Class A, Class B, and Class C Common Stock to
100,000,000, 5,000,000, and 2,500,000, respectively. All share and per share
data in the accompanying financial statements have been restated to reflect the
stock split. Contemporaneous with the IPO, the Company's Board of Directors
authorized the retirement of the Company's Class C Common Stock.
On September 28, 1994, all the stock of the Predecessor Company was
exchanged for shares of the Company's stock (see Note 1). The fair value of the
Predecessor Company's common stock and the Company's common stock were
equivalent.
On September 29, 1994, all of the outstanding shares of Class A and
Class B Preferred Stock of the Predecessor Company were repurchased from the
shareholder for cash of $2,374,000, notes of $3,561,000 and certain agreements
providing for future payments over a specified term. The present value of the
agreements providing for future payments has been recorded in other liabilities
in the accompanying consolidated balance sheets and total approximately
$1,282,000 and $1,261,000 at December 31, 1995 and 1996, respectively.
Each share of the Company's Class A Common Stock is entitled to one
vote per share and each share of Class B Common Stock is entitled to ten votes
per share. The holders of Class B Common Stock are entitled to convert, at the
holder's election and at any time, such shares into shares of Class A Common
Stock at the rate of one share of Class B Common Stock for one share of Class A
Common Stock.
In connection with the issuance of the Junior Note, the Company issued
to the note holders 765,733 shares of its Class B and Class C Common Stock and
Common Stock Contingent Share Issuances ("CSIs") to purchase a maximum of
554,495 additional shares of its common stock. The Junior Note, shares of Class
A and Class C Common Stock and the CSIs were recorded based upon their estimated
fair values at the date of issuance. The CSIs are exercisable at a price equal
to the par value of the underlying shares on June 10, 1997. The maximum amount
of CSIs that may be exercised is based upon the note holders return on their
investment in the Company.
F-16
<PAGE>
Simultaneously with the issuance of the CSIs, the Company entered into
an agreement with its Chairman and principal stockholder and certain trusts
whereby the principal stockholder and the trusts agreed to contribute pro rata a
like amount of shares of common stock to the Company concurrently with the
issuance of shares pursuant to the CSIs. Accordingly, issuance of shares
pursuant to the CSIs will not effect the Company's financial position or results
of operations.
11. SIGNIFICANT CUSTOMER
The Company derived revenues from a long-term contract with one company
representing 17%, 13%, and 10% of its revenues over the three years ended
December 31, 1994, 1995, and 1996, respectively.
12. ACQUISITIONS
On March 8, 1995, the Company acquired seven crew boats for $5,875,000,
including cash of $2,875,000 and a $3,000,000 promissory note.
In January and February 1996, the Company acquired nine crew boats
under capital lease obligations.
On August 14, 1996, the Company purchased the remaining 50% of the
outstanding common stock of an entity and acquired three chemical tankers. The
aggregate purchase price of approximately $64,650,000 consisted of approximately
$30,000,000 in cash and the assumption of approximately $34,650,000 in mortgage
obligations related to two of the vessels acquired.
On August 14, 1996, the Company purchased eight supply boats for
$26,075,000. The Company has agreed to indemnify certain affiliates of the
sellers against certain of one seller's liabilities due to its creditors. The
Company's maximum liability pursuant to the guarantee and indemnification is
$7,000,000.
On August 14, 1996, the Company acquired two supply boat and one crew
boat for cash of $6,150,000 and the issuance of a $675,000 note payable.
In October 1996, the Company purchased two supply boats for cash of
approximately $4,600,000.
In November 1996, the Company purchased a crew boat for cash from the
Company's Chairman and the Investor Group for a purchase price of approximately
$2,200,000, which was equal to their cost of the vessel.
In December 1996, the Company purchased a tug for cash of approximately
$3,400,000.
The operations of acquired vessels and assets are included in the
accompanying consolidated statements of operations for the period subsequent to
their acquisition dates.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair
value of financial instruments included in the following categories:
F-17
<PAGE>
Cash and cash equivalents and accounts receivable. The carrying amounts
reported in the balance sheets approximates fair value due to the current
maturity of such instruments.
Credit Facility. Amounts outstanding under the Company's Credit
Facility, as amended, bear interest at variable rates that periodically adjust
to reflect changes in overall market rates and approximate fair value.
Senior Notes. Amounts outstanding under the Senior Notes bear interest
at 12%. The fair value of the Senior Notes at December 31, 1996 was estimated to
be $9.2 million, using a discounted cash flow analysis at estimated market
rates.
Notes Payable and Title XI Debt. The carrying amount reported in the
balance sheets approximates fair value using a discounted cash flow analysis at
estimated market rates.
14. SUPPLEMENTARY EARNINGS PER SHARE
Primary earnings per share for the year ended December 31, 1996 would
have been $0.03 assuming the retirement of certain indebtedness with proceeds
from both the IPO and the public offering completed in January 1997 (see note
16), had taken place on January 1, 1996. Supplementary earnings per share
reflect an increase in weighted average shares outstanding during the period of
approximately 4,157,000 shares and an increase in net income applicable to
common shares of approximately $2,389,000 net of applicable income taxes for the
period.
15. EXTRAORDINARY ITEM
On August 14, 1996, the Company paid cash of $26,307,000; issued 55,500
shares of Class A Common Stock and 1,188,502 shares of Class B Common Stock to
repay $25,000,000 and $15,190,000 of the Junior and Senior Notes, respectively.
Accordingly, the Company recorded a loss on extinguishment of $8,108,000 for the
write off of deferred financing costs and related debt discounts, net of a tax
benefit of $1,474,000.
16. SUBSEQUENT EVENTS
In January 1997, the Company purchased a supply boat and two tug boats
for cash of approximately $4,700,000 and $600,000, respectively.
On February 5, 1997, the Company completed a public offering of
4,000,000 shares of its Class A Common Stock at $24.875 per share. The net
proceeds to the Company were $94,300,000, after deducting underwriting
commissions. The net proceeds will be used primarily to repay certain
indebtedness, to fund the cash portion of certain potential acquisitions and for
general corporate purposes.
In February 1997, the Company purchased three crew boats for cash of
approximately $5,575,000 and entered into a contract to construct one supply
boat for an estimated aggregate cost of $7,520,000.
F-18
<PAGE>
In February 1997, the Company repaid $33,220,000 of its outstanding
debt and amended its Credit Facility. As a result, the Company recorded
extraordinary losses of $1,754,000 for the write off of deferred financing costs
associated with the early extinguishment of debt, net of income tax benefits of
$1,030,000.
In February 1997, the Company purchased the outstanding common stock of
an entity for cash of approximately $1,500,000. Pursuant to the purchase
agreement, the Company assumed the entity's commitments to fund the remaining
construction costs of three crew boats currently under contract with a shipyard.
The aggregate remaining construction cost of the vessels is approximately $5.7
million. The fair value of net assets acquired approximates the purchase price
paid by the company.
In February 1997, the Company contracted for the construction of three
ship-docking modules for an estimated aggregate cost of $14,500,000.
F-19
EXHIBIT 10.22(d)
U.S. $134,100,000
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF FEBRUARY 3, 1997
By and Among
HVIDE MARINE INCORPORATED
and the Persons listed in Schedule A
as Borrowers,
and
CITIBANK, N.A.,
as Administrative Agent and Co-Agent,
and
THE FIRST NATIONAL BANK OF BOSTON,
as Letter of Credit Agent and Co-Agent,
and
CITIBANK, N.A.
THE FIRST NATIONAL BANK OF BOSTON
BNY FINANCIAL CORPORATION
HIBERNIA NATIONAL BANK
AMSOUTH BANK OF FLORIDA
as Banks
#20170954.1
-1-
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
February 3, 1997 of a Credit Agreement dated as of September 28, 1994 as
subsequently amended by Amendment No. 1 dated as of May 15, 1995, Amendment No.
2 dated as of March 26, 1996, the Amended and Restated Credit Agreement dated as
of June 21, 1996 and Amendment No. 1 dated as of December 17, 1996 to the
Amended and Restated Credit Agreement is made and entered into by and among
HVIDE MARINE INCORPORATED, a corporation organized and existing under the laws
of the State of Florida ("Hvide" or a "Borrower"), and each of the other
Borrowers, listed in Schedule A (each a "Borrower" and together with each other
Borrower, the "Borrowers") and CITIBANK, N.A., a national banking association
organized and existing under the laws of the United States of America ("United
States" or "U.S."), THE FIRST NATIONAL BANK OF BOSTON, a national banking
association organized and existing under the laws of the United States and each
of the other banks or other institutions whose names may appear on the signature
pages of this Agreement or, if applicable, in the Register (each a "Bank" and,
collectively, the "Banks") for whom Citibank, N.A., subject to Article VII of
this Agreement, acts as Administrative Agent and Co-Agent and The First National
Bank of Boston, subject of Article VII of this Agreement acts as Letter of
Credit Agent and Co-Agent. Capitalized terms not otherwise herein defined shall
have the respective meanings set forth below in Section 1.01.
PRELIMINARY STATEMENTS
(1) As of the Effective Date, Hvide and the other
Borrowers will repay the Senior Subordinated Note.
(2) Hvide and the other Borrowers have requested the Banks to
amend certain covenants and to increase the amounts available under Facilities A
and F.
#20170954.1
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<PAGE>
(3) The Borrowers have requested that the Banks enter into
this Agreement to provide the following Facilities:
Facility Principal Amount Purpose
A Twenty Million Dollars to finance seasonal working capital
($20,000,000) needs of Borrowers
B up to Fifty Six Million to finance acquisition of offshore
Seven Hundred Fifty supply vessels and to refinance
Thousand Dollars Crewboats' Note and to pay for a
($56,750,000) portion of the acquisition of the
OMI Vessels
C up to Five Million Six to replace an existing standby
Hundred Thousand Dollars Letter of Credit
($5,600,000)
D up to Six Million Dollars to provide other letters of
($6,000,000) (sublimit of credit
Facility A)
F up to Fifty Million Dollars to provide for acquisitions of
($50,000,000) vessels: If the sum of the undrawn
Commitment (excluding Facility
F), all Advances and Letters
of Credit is less than sixty
five percent (65%) of the Pledged
Collateral, availability
of Advances for an Acquisition
may be the lesser of:(x)up to
one hundred percent (100%) of
the purchase price or appraised
value (whichever is less) of the
Acquisition; or (y) a multiple of
six times EBITDA of the Acquisition.
Otherwise, availability
of Advances for an Acquisition
is restricted to the lesser
of:(x) sixty five percent
(65%) of the purchase price or
appraised value (whichever
is less) of the Acquisition;
or (y) a multiple of six times
EBITDA of the Acquisition.
(4) The Borrowers have agreed to grant a first priority
security interest in the Mortgaged Vessels and the Receivables for all
Obligations of the Borrowers pursuant to Section 5.01(e).
(5) Each of the Banks has agreed severally, and not jointly,
for such Bank's Aggregate Amount and in the Percentage Interest in each Facility
and to provide the Loan upon the terms and conditions set forth herein.
(6) The Banks have requested each of the Administrative Agent
and the Letter of Credit Agent, and each of the Administrative Agent and the
Letter of Credit Agent has agreed, to act on behalf of the Banks in accordance
with the terms and conditions set forth herein.
(7) The Borrowers, the Administrative Agent, the
Letter of Credit Agent and each of the Banks party hereto desire
#20170954.1
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<PAGE>
to amend and restate this Credit Agreement in its entirety, following the
Effective Date, to reflect the changes occasioned by the Second Offering and by
the increase in the Facilities.
NOW, THEREFORE, the Borrowers, the Banks, the Administrative
Agent and the Letter of Credit Agent hereby agree among themselves as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.011 Definitions. As used in this Agreement, each of
the following terms shall have the respective meaning set forth below (such
meanings, unless otherwise indicated, to apply to both the singular and plural
forms of the terms defined) and all references to "Article", "Schedule",
"Section" and "Exhibit" shall mean an Article of, a Schedule to, a Section of,
or Exhibit to, this Agreement unless otherwise specified:
"Acquisition" means each of the Vessels or all of the equity
interest in a corporation or limited partnership or other entity acquired by
Hvide which may be funded with Advances under Facilities B or F subject to the
terms of Section 2.01(a).
"Acquisition Documents" means each bill of sale, memorandum of
agreement, each invoice, each asset purchase agreement or stock purchase
agreement and related documentation in connection with an Acquisition by a
Borrower.
"Acquisition Mortgage Supplement" means a mortgage supplement
substantially in the form of Exhibit N executed by the Mortgagee and a Borrower
which is the owner of a Vessel which is an Acquisition in order to mortgage the
Vessel pursuant to the terms of this Agreement.
"Administrative Agent" means Citibank, N.A., and any successor
administrative agent under this Agreement.
"Advance" means all amounts disbursed by the Banks and the
Administrative Agent to the Borrowers under this Agreement or owed to the Letter
of Credit Agent under Section 2.07(g).
"Affiliate" means, with respect to any Person, any other
person controlling, controlled by or under common control with, such Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to vote ten percent (10%) or more of the securities having voting power
for the election of directors of such Person, or otherwise to direct or cause
the direction of the management and
#20170954.1
<PAGE>
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Aggregate Amount" means, as to a Bank the Dollar amount
opposite such Bank's name in Exhibit M hereto or, if applicable, in the
Register, opposite each Facility, as such amount may be adjusted from time to
time pursuant to this Agreement.
"Agreement" means this Agreement, as it may be restated,
amended, supplemented or otherwise modified from time to time.
"Agreement Date" means February 3, 1997 on which the
respective parties hereto shall have executed and delivered the Agreement.
"Alternate Base Rate" means, for any Interest Period or any
other period, a fluctuating interest rate per annum as shall be in effect from
time to time, which rate per annum shall at all times be equal to the highest
of:
(a) the rate of interest announced publicly by Citibank, N.A.,
in New York, New York, from time to time, as its base rate;
(b) a rate equal to 1/2 of one percent per annum above the
latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average
determined weekly on each Monday (or if such day is not a Business Day,
on the next succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank, N.A., on the basis of such rates
reported by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank, N.A., from three New York certificate of deposit
dealers of recognized standing selected by Citibank, N.A., in each case
adjusted to the nearest 1/4 of one percent, or, if there is not nearest
1/4 of one percent, to the next higher 1/4 of one percent; or
(c) a rate equal to 1/2 of one percent per annum above the
then current Federal Funds Rate.
"Amendment and Restatement Fee" shall have the meaning set
forth in Section 2.10 (d).
"Applicable Law" means anything in Section 8.09(d) to the
contrary notwithstanding, (a) all applicable common law and principles of equity
and (b) all applicable provisions of all (i) constitutions, statutes, rules,
regulations and orders of
#20170954.1
<PAGE>
governmental bodies, including without limitation all provisions relating to the
environment, hazardous substances, health or safety, (ii) governmental approvals
and (iii) orders, decisions, judgments and decrees of all courts (whether at
law, in equity or admiralty) and arbitrators.
"Applicable Margin" means as to the Advances and any Letter of
Credit, (a) for the calendar year 1997, 1.25% as to the LIBOR Rate and 0.25% as
to the Alternate Base Rate; and (b) thereafter as to the LIBOR Rate or the
Alternate Base Rate, as the case may be, the Applicable Margin determined by the
Administrative Agent pursuant to Section 2.04(b)(iii)(A).
"Applicable Rate" means the Alternate Base Rate or the
LIBOR Rate.
"Application" means an application for a letter of credit
executed by the Borrowers and delivered to the Letter of Credit Agent.
"Assignment and Acceptance" means any Assignment and
Acceptance Agreement, substantially in the form of Exhibit I and executed and
delivered pursuant to Section 7.10.
"Available Collateral" means, at any time (i) all Mortgaged
Vessels; (ii) Eligible Receivables; and (iii) all products and proceeds thereof.
"Available Commitment" shall have the meaning set forth
in Exhibit K hereto.
"Bank Taxes" means (i) net income, capital, doing business and
franchise taxes imposed on the Administrative Agent, the Letter of Credit Agent
or a Bank by the jurisdiction (a) under the laws of which the Administrative
Agent, the Letter of Credit Agent or such Bank is organized or any political
subdivision or taxing authority thereof or therein, (b) in which such Bank's
lending office is located or any political subdivision or taxing authority
thereof or therein or (c) in which such Bank is doing business or any political
subdivision or taxing authority thereof or therein and (ii) any tax, charge,
fee, levy, impost, duty, deduction or withholding that would not have been
imposed but for the existence of any present or former connection between the
Administrative Agent, the Letter of Credit Agent or Bank, as relevant (or
between shareholders of such Administrative Agent, the Letter of Credit Agent or
Bank), and the United States or any political subdivision thereof imposing such
tax, charge, fee, levy, impost, duty, deduction or withholding including,
without limitation, the Administrative Agent, the Letter of Credit Agent or Bank
(or shareholders thereof) being or having been a resident thereof, being or
having been present therein, being or having been engaged in a trade or business
therein, or having had a permanent establishment or fixed place of business
therein (but excluding a connection
#20170954.1
<PAGE>
arising from the Administrative Agent's, Letter of Credit Agent's or a Bank's
execution or enforcement of or performance of its obligations under or receipt
of payment under the Loan Documents).
"Breakage Costs" has the meaning defined in Section
8.04(b).
"Business Day" means any day other than a Saturday, Sunday or
any other day on which commercial banks are required or authorized by law to
close in New York, New York, Boston, Massachusetts, London, England or in the
city where the Lending Office is located.
"Capital Expenditures" means the aggregate of all expenditures
(including that portion of leases which is capitalized on the consolidated
balance sheet of the Borrowers and their Subsidiaries and capitalized interest
thereon) by the Borrowers and their Subsidiaries that, in conformity with GAAP,
should be, has been or should have been included in the property, plant or
equipment reflected in a consolidated balance sheet of the Borrowers and their
Subsidiaries.
"Capital Lease" means, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, either would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person or otherwise be
disclosed as such in a note to such balance sheet, other than, in the case of
the Borrowers or a Subsidiary of the Borrowers, any such lease under which any
of the Borrowers or such Subsidiary is the lessor.
"Cash Collateral Account" has the meaning defined in
Section 5.03.
"Change of Control" means any change in the share ownership of
Class B Common Stock of Hvide except as may be disclosed by the filings made
with the SEC or which is not in accordance with Hvide's Articles of
Incorporation.
"Closing Date" means September 29, 1994 on which the original
Credit Agreement was executed and delivered.
"Co-Agent" means each of Citibank, N.A. and The First
National Bank of Boston, as Co-Agent under this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"Collateral" means, collectively, the collateral listed in
Schedule D and all proceeds of the same and any property which becomes subject
to the Security Agreement after the date of this Agreement.
#20170954.1
<PAGE>
"Commitment" means the obligation of each Bank to lend the
amounts set forth in Section 2.01 hereof, as such amounts may be reduced from
time to time pursuant to this Agreement.
"Commitment Fee" shall have the meaning set forth in
Section 2.10(a).
"Commitment Termination Date" means January 14, 2002 with
respect to Facilities A and F; August 14, 1996 with respect to Facility B.
"Consolidated Assets" means, at any time, the consolidated
assets of the Borrowers and their consolidated subsidiaries as of such time.
"Consolidated Cash Flow" means for any period, EBITDA less
cash taxes paid plus Rental Expense less Capital Expenditures (excluding
Acquisitions).
"Consolidated Financial Obligations" means for any period, all
scheduled principal payments in respect of Indebtedness plus Interest Expense
and Rental Expense which are to be paid by the Borrowers and their Consolidated
Subsidiaries.
"Consolidated Indebtedness" means Indebtedness of Hvide
and its Subsidiaries on a consolidated basis.
"Country of Registry" means each country under which a Vessel
is documented in the name of a Borrower as the owner and where the Mortgage in
respect of said Vessel is recorded.
"Credit Agreement" shall mean this Agreement, as from time to
time restated, amended, supplemented or modified.
"Crewboats Note" means the promissory note dated March
8, 1995 in the original aggregate principal amount of Three
Million United States Dollars (U.S. $3,000,000) granted by Hvide
in favor of Crewboats, Inc. and secured by First Preferred
mortgages over the U.S. flag vessels GULF RUNNER II, STORM
RUNNER, RAPID RUNNER and BIG BLUE.
"Default" means any event or condition that, with the giving
of notice, the lapse of time or both, would become an Event of Default.
"Dollars" and "$" means the lawful and freely transferable
currency of the United States of America.
"Drawdown Date" has the meaning set forth in Section
2.02(a).
"Earnings Assignment" means any assignment of earnings of a
Mortgaged Vessel by a Borrower to the Administrative Agent on behalf of the
Banks, substantially in the form of Exhibit G,
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and as the same may be amended, supplemented or otherwise
modified from time to time.
"EBITDA" means for any period and Person, the net income
without giving effect to adjustments, accruals, deductions or entries resulting
from any gains or losses from sales or other dispositions of assets of such
Person for such period plus, to the extent deducted in the calculation of net
income, Interest Expense, income taxes paid, depreciation, amortization and
other non-cash adjustments to income for such period excluding amortized
drydocking expenses.
"EBITDAR" means EBITDA plus Rental Expenses.
"Effective Date" means the Business Day on which Hvide has
received gross proceeds of at least Sixty Five Million Dollars ($65,000,000)
from its Second Offering.
"Eligible Assignee" means (i) a commercial bank, savings and
loan institution, insurance company or financial institution organized under the
laws of the United States, or any State thereof, which bank has both assets in
excess of One Billion Dollars ($1,000,000,000) and combined capital and surplus
in excess of One Hundred Million Dollars ($100,000,000), or which insurance
company or financial institution has total assets in excess of One Billion
Dollars ($1,000,000,000), and (ii) a finance company, insurance company or other
financial institution or a fund which is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business,
has total assets in excess of Five Hundred Million Dollars ($500,000,000), is
doing business in the United States and is organized under the laws of the
United States, or any State thereof, or under the laws of any member country of
the OECD.
"Eligible Receivable" has the meaning stated in the
Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Event of Default" means any of the events specified as
such in Section 6.01.
"Facility" means each of Facility A, B, C, D and F.
"Facility A" means, upon the Effective Date, the credit
facility available to the Borrowers pursuant to Section 2.01(a)(i).
"Facility B" means the credit facility available to the
Borrowers pursuant to Section 2.01(a)(ii).
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"Facility C" means the credit facility available to the
Borrowers pursuant to Sections 2.07(a)(i) and 2.07(b)(i).
"Facility D" means the credit facility available to the
Borrowers pursuant to Section 2.07(b)(ii).
"Facility F" means upon the Effective Date, the credit
facility available to the Borrowers pursuant to Section 2.01(a)(iii).
"Fair Market Value" has the meaning specified in
Section 1.03.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations of such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession for use in the United States; provided, however, that
if, as a result of any change in GAAP after the Closing Date, such change in the
opinion of the Banks adversely affects the basis or efficacy of the covenants
used in this Agreement to ascertain the financial condition of the Borrowers,
then the calculation of covenant compliance under this Agreement shall be
determined in accordance with GAAP, as applied as if such change had not
occurred.
"HMI Vessels" means each of HMI PETROCHEM, HMI DYNACHEM
and HMI ASTRACHEM acquired by Hvide from OMI Corp. as described
in Exhibit L hereto.
"Home Port" means, as to each Vessel, the port of each Country
of Registry where documents of title and mortgages may be recorded in respect of
such Vessel.
"Hvide" means Hvide Marine Incorporated, formerly named
Hvide Corp. as the surviving corporation of the merger between
Hvide Marine Incorporated and Hvide Corp.
"Incorporation Jurisdiction" means the jurisdiction of
incorporation or legal organization of a Person.
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"Indebtedness" means (a) any liability of any Person (i) for
borrowed money, or under any reimbursement obligation related to a letter of
credit or bid or performance bond facility, or (ii) evidenced by a bond, note,
debenture or other evidence of indebtedness (including a purchase money
obligation) representing extensions of credit or given in connection with the
acquisition of any business, property, service or asset of any kind (other than
a trade payable or other current liability arising in the ordinary course of
business) or (iii) for obligations with respect to (A) an operating lease
calculated on the basis of the present value discounted at ten percent (10%) on
the future payments from such Person under such operating lease, or (B) a lease
of real or personal property that is or would be classified and accounted for as
a Capital Lease; (b) any liability of others either for any lease, dividend or
letter of credit, or for any obligation described in the preceding clause (a)
that (i) the Person has guaranteed or that is otherwise its legal liability
(whether contingent or otherwise or direct or indirect, but excluding
endorsements of negotiable instruments for deposit or collection in the ordinary
course of business) or (ii) is secured by any Lien on any property or asset
owned or held by that Person, regardless whether the obligation secured thereby
shall have been assumed by or is a personal liability of that Person; and (c)
any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (a) and (b),
above.
"Insurance Assignment" means any assignment of insurance in
respect of a Mortgaged Vessel by any of the Borrowers to the Administrative
Agent on behalf of the Banks, substantially in the form of Exhibit H, and as the
same may be amended, supplemented or otherwise modified from time to time.
"Interest Expense" means interest expense net of interest
income as determined in accordance with GAAP.
"Interest Payment Date" means with respect to any Advance (1)
the last day of each Interest Period for such Advance, (2) the last day of each
three-month portion of each Interest Period which is longer than three months,
and (3) the day any principal amount of such Advance matures and becomes due and
payable.
"Interest Period" means with respect to each Advance (or any
tranche comprising a part thereof), each respective and successive (i) one-,
two-, three- or six-month calendar period for any portion of the Loan bearing
interest at a rate based on the LIBOR Rate and (ii) period for any portion of
the Loan bearing interest at a rate based on the Alternate Base Rate. Each such
period shall be designated by the Borrowers or the Administrative Agent, as the
case may be, pursuant to Section 2.04(b), and shall commence on the Drawdown
Date or the last day of the immediately preceding Interest Period, as the case
may be, of such Advance (or tranche comprising a part thereof) and
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continue until such date as the Advance (or such tranche) shall be paid in full,
provided, however, that (i) if any Interest Period (other than in respect of any
portion of the Loan bearing interest at a rate based on the Alternate Base Rate)
includes a Principal Payment Date but does not end on such date, then (x) the
principal amount of the Loan required to be paid on such date shall have an
Interest Period ending on such date and (y) the remainder (if any) of the Loan
shall have an Interest Period determined pursuant to Section 2.04, (ii) in all
cases each Interest Period shall commence on the expiry of the immediately
preceding Interest Period, and (iii) no Interest Period with respect to any
Facility shall commence on or extend past the Maturity Date of such Facility.
"IPO" means the initial public offering of Hvide stock
described in that certain Form S-1, Registration No. 33-78166, filed with the
SEC on May 13, 1996 as amended by Amendments No.
1, No. 2 and No. 3.
"IPO Date" means August 14, 1996.
"Lending Office" means the office of the Administrative Agent
at One Court Square, 7th Floor, Long Island City, New York, New York 11120-0001,
or any other office or affiliate of the Administrative Agent hereafter selected
and notified to the Borrowers from time to time by the Administrative Agent.
"Letter of Credit" means each Letter of Credit issued in
respect of Facilities C and D, substantially in the form of Exhibit A or in such
form as may be approved by the Letter of Credit Agent and as the same may be
from time to time amended, supplemented or otherwise modified.
"Letter of Credit Agent" means The First National Bank of
Boston, and any successor letter of credit agent under this Agreement.
"Letter of Credit Closing Date" means any date on which the
Letter of Credit Agent has issued one or more Letters of Credit pursuant to
Facility C and/or Facility D.
"Letter of Credit Renewal Date" means any date on which a
Letter of Credit by its terms, may be renewed.
"Leverage Ratio" means the ratio of Consolidated Indebtedness
to Tangible Net Worth as described in Section 5.01(d)(ii).
"LIBOR Rate" means, for an Interest Period for any portion of
the Loan bearing interest at a rate based on the LIBOR Rate, the rate determined
by the Administrative Agent to be the rate of interest per annum equal to the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum,
if such average is not such a multiple) of the rate per annum at which
#20170954.1
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deposits in United States Dollars are offered by the principal office of each of
the Reference Banks in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) as published by Reuters or Telerate two
Business Days before the first day of such Interest Period for a term equal to
such Interest Period and in an amount substantially equal to such portion of the
Loan. The LIBOR Rate for an Interest Period shall be determined by the
Administrative Agent on the basis of applicable rate furnished to and received
by the Administrative Agent from the Reference Banks two Business Days before
the first day of such Interest Period. If at any time the Administrative Agent
shall determine that by reason of circumstances affecting the London interbank
market (i) adequate and reasonable means do not exist for ascertaining the LIBOR
Rate for the succeeding Interest Period or (ii) the making or continuance of any
Loan at a rate based on the LIBOR Rate has become impracticable as a result of a
contingency occurring after the date of this Agreement which materially and
adversely affects the London interbank market, the Administrative Agent shall so
notify the Banks and the Borrowers. Failing the availability of the LIBOR Rate,
the LIBOR Rate shall mean the Alternate Base Rate thereafter in effect from time
to time until such time as a LIBOR Rate may be determined by reference to the
London interbank market.
"Lien" means any lien, charge, easement, claim, mortgage,
option, pledge, right of first refusal, right of usufruct, security interest,
servitude, transfer restriction or other encumbrance or any restriction or
limitation of any kind (including, without limitation, any adverse claim to
title, conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest).
"Liquidity" means as to any Borrower unrestricted cash
and Permitted Investments of such Borrower.
"Loan" means the aggregate amount of the Advances to the
Borrowers by each Bank and all amounts owed by the Borrowers in respect of
drawings under the Letter of Credit provided for in Section 2.01.
"Loan Documents" means this Agreement, the Notes, the
Letter of Credit, the Applications and the Security Documents.
"Majority Banks" means any Bank or Banks having an aggregate
of not less than a (65%) Sixty Five Percentage Interest and holding at least
Sixty Five percent (65%) of the then aggregate unpaid principal amount of the
Advances.
"Master Vessel Trust Agreement" means the amended and restated
Master Vessel Trust Agreement between the Mortgagee and the Administrative Agent
on behalf of the Banks, substantially in
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the form of Exhibit J, and as the same may be from time to time amended,
restated, supplemented or otherwise modified.
"Maturity Date" means in respect of Advances made under
Facilities A, B, D and F, January 15, 2002, and in respect of Advances made
under Facility C, January 15, 2000.
"Mortgage" means a mortgage by a Borrower of any Vessel
delivered to the Mortgagee for the benefit of the Banks, substantially in the
form of Exhibit F, and as the same may be from time to time amended,
supplemented or otherwise modified.
"Mortgaged Vessel" means a Vessel as described in each
granting clause of a Mortgage.
"Mortgagee" means First Union National Bank (as successor by
merger with First Fidelity Bank, National Association), a national banking
association organized and existing under the laws of the United States, or such
other Person as the Administrative Agent on behalf of the Banks shall designate
as trustee under the Master Vessel Trust Agreement to act as Mortgagee under the
Mortgage.
"New Money Commitment" means the obligation of each Bank to
lend the amounts set forth in Exhibit B hereto, as such amounts may be reduced
from time to time pursuant to this Agreement.
"New Money Fee" has the meaning stated in Section
2.10(d).
"Note" means any of, and "Notes" means all, the promissory
notes executed and delivered by the Borrowers in connection with this Agreement,
substantially in the form of Exhibits A-1, A-2 and A-3, respectively, and as any
such note may be replaced, amended, supplemented or otherwise modified from time
to time.
"Notice of Borrowing" has the meaning stated in
Section 2.02(a).
"Notice of Margin Adjustment" has the meaning stated in
Section 2.04(b)(iii)(B).
"OECD" means the Organization for Economic Cooperation
and Development.
"Obligations" means all obligations, including but not limited
to, all principal, interest, fees, expenses and other obligations, of every
nature of the Borrowers, or any of their Subsidiaries or Affiliates from time to
time owed to the Administrative Agent, any of the Banks, the Letter of Credit
Agent, or all of them, under this Agreement or any of the Loan Documents.
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"Percentage Interest" means, as to a Bank, the percentage set
forth opposite such Bank's name on Exhibit M of this Agreement and any amendment
hereto, or if applicable, in the Register.
"Permitted Investments" means (i) direct obligations of, or
obligations guaranteed by, the Government of the United States or any agency
thereof, in each case backed by the full faith and credit of the United States
and having maturities of not later than the Principal Payment Date next
succeeding the date of acquisition, (ii) commercial paper, maturing not later
than the Principal Payment Date next succeeding the date of acquisition, rated
at least P-1 by Moody's Investors Service, Inc. ("Moody's") or at least A-1 by
Standard & Poor's Corporation ("S&P"), (iii) Dollar denominated certificates of
deposit, time deposits and banker's acceptances maturing not later than the
Principal Payment Date next succeeding the date of acquisition, issued by (A)
the Administrative Agent, the Co-Agents or any one of the Banks hereunder, (B) a
domestic commercial bank that has a combined capital and surplus and undivided
profits of not less than $500,000,000, or (C) any bank whose short-term
commercial paper rating from Moody's is at least P-1 or from S&P is at least
A-1, and (iv) repurchase agreements having maturities of not later than the
Principal Payment Date next succeeding the date of acquisition (A) which are
entered into with major money center banks included in the commercial banking
institutions described in clause (iii), and (B) which are secured by readily
marketable direct obligations of the Government of the United States of America
or any agency thereof having maturities of not later than the Principal Payment
Date next succeeding the date of acquisition.
"Person" means any individual, corporation, limited
partnership, partnership, business trust, joint venture, association, joint
stock company, trust or other unincorporated organization, whether or not a
legal entity, or any government or agency or political subdivision thereof.
"Pledged Collateral" shall have the meaning set forth
in Section 5.01(e)(i).
"Principal Payment Date" means (a) as to each Advance in
respect of Facility A, the Maturity Date, (b) as to each Advance in respect of
Facility B and Facility F, the Maturity Date for such advance and the 15th day
of each of January, April, July and October of each year commencing on the dates
provided in Section 2.03, (c) as to any Advance in respect of Facility C, the
date on which demand for repayment is made, or January 15, 2000, whichever is
earlier, and (d) as to any Advance in respect of Facility D, the date on which
demand for repayment is made, or January 15, 2002, whichever is earlier.
"Receivables" has the meaning stated in the Security
Agreement.
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<PAGE>
"Reference Bank" means Citibank, N.A.
"Register" has the meaning stated in Section 7.10(d).
"Related Party Contract" means those contracts listed
in Schedule B.
"Relevant Amount" has the meaning stated in Section
2.04(b)(iii).
"Rental Expense" means operating lease payments and other
rental payments as determined in accordance with GAAP.
"Reserve Percentage" has the meaning stated in Section
2.06(b).
"S-1" means the Form S-1, Registration No. 33-18525
filed with the SEC on December 23, 1996 as amended by Amendment
No. 1 thereto and such other future amendments as may be required
by the SEC.
"SEABULK AMERICA" means that U.S. flag vessel owned by
Seabulk Tankers Partnership, Ltd., and bearing Official Number
961357.
"Seal Fleet Vessels" means each of the eight vessels acquired
by Hvide from Seal Fleet Inc., Ross Seal Partners, Ltd., Bengal Seal Partners,
Ltd., Indian Seal Partners, Ltd., Baffin Seal Partners, Ltd., and Baltor Seal
Partners, Ltd., as described in Exhibit L hereto.
"SEC" means the Securities and Exchange Commission of
the United States and its successors.
"Security Agreement" means the Security Agreement dated as of
the date hereof for the benefit of the Banks substantially in the form of
Exhibit E, and as the same may be from time to time amended, restated,
supplemented or otherwise modified.
"Security Documents" means the Master Vessel Trust
Agreement, each Mortgage, each Earnings Assignment, each Insurance Assignment,
and the Security Agreement.
"Senior Subordinated Note" means Hvide's 12% Senior
Subordinated Notes due 2004 in the original principal amount of $25,000,000
purchased on or before the Closing Date under the Senior Subordinated Note and
Common Stock Purchase Agreement
dated as of September 29, 1994.
"Second Offering" means the public offering of Six Million
shares of Class A Common Stock of Hvide described in the S-1.
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"Solvent" means with respect to any Person on a particular
date, that on such date (i) the fair market value of the assets of such Person
is greater than the total amount of liabilities (including contingent
liabilities) of such Person, (ii) the present fair salable value of the assets
of such Person is greater than the amount that will be required to pay the
probable liabilities of such Person for its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, including contingent obligations, as they mature, and
(iv) such Person does not have unreasonably small capital for the business in
which it is engaged.
"Subsidiary" means, with respect to any Person, any
corporation, association, limited partnership, partnership or other business
entity of which a majority of the voting power entitled to vote in the election
of directors, managers or trustees thereof (or in the case of a limited
partnership, in the control of the general partner) is at the time owned,
directly or indirectly, by such Person or by one or more other Subsidiaries, or
by such Person and one or more other Subsidiaries, or a combination thereof.
"Tangible Net Worth" means the excess of the total assets of
the Borrowers on a consolidated basis over Total Liabilities, excluding,
however, from the determination of total assets (i) goodwill, organizational
expenses, research and development expenses, trademarks, trade names,
copyrights, patents, patent applications, licenses and rights in any thereof and
other similar intangibles, (ii) unamortized debt discount and expense, (iii) all
reserves carried and not deducted from assets, (iv) treasury stock and capital
stock, obligations or other securities of or capital contributions to or
investments in any Subsidiary, (v) sinking or other analogous funds established
for the purpose of redemption, retirement or prepayment of capital stock, (vi)
any write up in the book value of any assets resulting from a revaluation
thereof subsequent to December 31, 1993, (vii) capitalized expenses in
connection with the issuance of debt or equity and (viii) any items not included
in clauses (i) through (vii) above which are treated as intangibles in
conformity with GAAP.
"Taxes" means all income, excise, stamp or franchise taxes and
any other tax, charge, fee, levy, impost, duty, withholding, deduction or other
assessment of any kind whatsoever, including any interest, penalties or
additions attributable thereto, imposed by any federal, commonwealth, state,
local or foreign taxing authority.
"Title XI Debt" means the United States Government Guaranteed
Ship Financing Bonds ("Title XI Bonds") issued pursuant to Title XI of the
Merchant Marine Act of 1936, as amended, which consist of approximately Four
Million Three Hundred Thousand Dollars ($4,300,000) in eight and one half
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percent (8.5%) Title XI Bonds due 1999 relating to M/V SEABULK CHALLENGER and
approximately Ten Million Six Hundred Thousand Dollars ($10,600,000) in five and
one quarter percent (5.25%) Title XI Bonds due 2000 relating to M/V SEABULK
MAGNACHEM and five series of Title XI Bonds due 2006 totalling approximately
Thirty Four Million Seven Hundred Thousand Dollars ($34,700,000) and bearing
interest at an average rate of seven point sixty five percent (7.65%) relating
to HMI PETROCHEM and HMI DYNACHEM.
"Total Liabilities" means all the obligations in accordance
with GAAP which are included in determining the total liabilities as shown on
the liabilities side of the balance sheet of the Borrowers on a consolidated
basis.
"Total Loss" means, in respect of any Vessel, any of the
following events; (x) the actual or constructive total loss of such Vessel or
the agreed or compromised total loss of such Vessel; or (y) the capture,
condemnation, confiscation, requisition, purchase, seizure or forfeiture of, or
any taking of title to, such Vessel. A Total Loss shall be deemed to have
occurred (i) in the event of an actual loss of such Vessel, on the date of such
loss; (ii) in the event of damage which results in a constructive or compromised
or arranged total loss of such Vessel, on the date of the event giving rise to
such damage; or (iii) in the case of any event referred to in clause (y) above,
on the date of the occurrence of such event. Notwithstanding the foregoing, if
such Vessel is subject to a Mortgage and such Vessel shall have been returned to
the Borrowers following any capture, requisition or seizure referred to in
clause (y) above prior to the date upon which payment is required to be made
under Section 2.05(d), no Total Loss of such Vessel shall be deemed to have
occurred by reason of such capture, requisition or seizure.
"Total Outstandings" has the meaning stated in Section
5.01(e)(i).
"Transaction" means the financing contemplated by the
Loan Documents.
"Uniform Customs" means Uniform Customs and Practice for
Commercial Documentary Credits of the International Chamber of Commerce,
revision 500 of 1993 and as the same may be amended,
modified or supplemented.
"Unreimbursed Letter of Credit Obligations" means any amounts
which the Borrowers are obligated to reimburse the Letter of Credit Agent for
drawings on a Letter of Credit.
"Vessel" means any of, and "Vessels" mean all of, the vessels
described in Schedule D and any vessel which in the future may be owned by a
Borrower and covered by a Mortgage.
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SECTION 1.012 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP,
consistently applied.
SECTION 1.013 Valuations. (a) "Fair Market Value" shall mean
as to any Vessel and any determination of "Fair Market Value" of a Vessel as the
Administrative Agent may require from time to time in accordance with this
Agreement, the fair market value of such Vessel determined as set forth in this
Section 1.03. All appraisers shall be selected from firms of independent
shipbrokers or marine surveyors of recognized standing and listed in Schedule C
to this Agreement, and as such schedule may be amended, modified or supplemented
from time to time.
(b) The Administrative Agent may at any time direct, and the
Borrowers may, and shall, if requested by the Administrative Agent, cause an
appraiser designated by the Administrative Agent to perform a valuation and such
determination will be binding; provided, however, if such appraisal is
challenged pursuant to (c) below, such determination shall be binding until the
resolution of the matter pursuant to (c) below. Except as otherwise provided in
paragraph (c) below, the cost of obtaining at the request of the Administrative
Agent up to two appraisals per calendar year for each Vessel shall be paid by
the Borrowers and the cost of appraisals obtained at the Borrowers' request
shall be paid by the Borrowers.
(c) In the event that the Borrowers or the Administrative
Agent shall dispute or challenge the fair market value determined by such
appraiser, then the Borrowers and the Administrative Agent shall each appoint a
separate appraiser (which need not be listed in Schedule C) and the two
appraisers (which need not be listed in Schedule C) appointed by the
Administrative Agent and the Borrowers shall appoint a third appraiser (which
need not be listed in Schedule C). Each appraiser so appointed shall make a
separate determination of fair market value on the same basis. The three
determinations of fair market value shall be averaged by the Administrative
Agent and the determination which is furthest from such average (whether higher
or lower) shall be disregarded. The remaining two determinations shall then be
averaged by the Administrative Agent with such average to be controlling for
purposes of this Agreement with respect to the then current fair market value of
a Vessel. The cost of obtaining all such opinions in the event of a dispute or
challenge shall be payable by the party disputing or challenging the original
fair market value determination.
(d) In the event the appraisers nominated by the parties fail
to appoint a third appraiser or any such appraiser, however appointed, fails to
deliver a valuation, unless otherwise agreed, the parties may petition the
American Arbitration Association in New York, New York to appoint a third
appraiser. Upon receipt of such appointed appraiser's appraisal, the
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Administrative Agent shall determine the fair market value as provided in
paragraph (c) above.
(e) All appraisals shall be made without, unless otherwise
reasonably required by the Administrative Agent, physical inspection and on the
basis of an arm's length purchase by a willing and able commercial buyer from a
willing and able commercial seller and without taking into account any charter
party.
ARTICLE II.
AMOUNTS AND TERMS OF THE ADVANCES
AND LETTER OF CREDIT
SECTION 1.021 The Advances. (a) Upon the terms and subject to
the conditions set forth in this Agreement, the Banks agree, severally on the
basis of their respective Percentage Interests but not jointly, to make Advances
as follows:
(i) in respect of Facility A, subject to the terms of
Section 2.07(b)(ii), in a maximum amount not to exceed at any time
outstanding such Bank's Aggregate Amount in respect of Facility A, and
provided further that any request for an advance under Facility A shall
be in an aggregate amount not less than $500,000 and an integral
multiple of $100,000 if in excess thereof;
(ii) in respect of Facility B, in an aggregate amount not
to exceed at any time outstanding such Bank's Aggregate Amount in
respect of Facility B; and
(iii) in respect of Facility F, in an aggregate amount not
to exceed at any time outstanding such Bank's Aggregate Amount in
respect of Facility F; PROVIDED HOWEVER, that amounts advanced under
this Facility F are restricted to Acquisitions which do not exceed: (A)
the lesser of either (x) one hundred percent (100%) of the purchase
price or appraised value (whichever is less) of the Acquisition being
acquired or (y) a multiple of six times the EBITDA of the Acquisition
if the sum of the undrawn Commitment (excluding Facility F) all
Advances and Letters of Credit is less than 65% of the Pledged
Collateral; or (B)the lesser of either (x) sixty five percent (65%) of
the purchase price or appraised value (whichever is less) of the
Acquisition being acquired, or (y) a multiple of six times EBITDA of
the Acquisition if the sum of the undrawn Commitment (excluding
Facility F) all Advances and Letters of Credit is equal to or greater
than 65% of the Pledged Collateral .
(b) The total amount to be made available by each Bank
as part of an Advance for a Facility shall never exceed the
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Commitment of such Bank for such Facility, and shall be proportionate always to
such Bank's Percentage Interest. The Banks are obligated to make Advances
pursuant to this Agreement until the relevant Commitment Termination Date. The
obligation of the Borrowers to repay each Advance shall be evidenced by this
Agreement and in the case of Facility A, Facility B, and Facility F, the Notes.
In respect of each Advance to the Borrowers under Facility A, Facility B, and
Facility F, the Borrowers shall issue in favor of each Bank a Note in respect of
each of such Facilities.
(c) The failure of any Bank to advance its Commitment in
respect of any Advance shall not relieve it or any other Bank of the obligation
to advance its Commitment, but no Bank or the Administrative Agent shall be
responsible for the failure of any other Bank to advance its Commitment to the
Borrowers.
SECTION 1.022 Disbursement of the Advances. (a) The Advance for each
Facility shall be made simultaneously, on at least three Business Days prior
written notice from the Borrowers to the Banks and the Administrative Agent
specifying the disbursement date therefor (a "Drawdown Date") which shall not be
later than the Business Day prior to the earlier of the Commitment Termination
Date or the Maturity Date. There shall be no more than three Drawdown Dates for
Facility B (except as to Advances made in respect of Facility C pursuant to
Section 2.03 (iii)). There shall be one Drawdown Date with respect to Facility
C. Each Drawdown Date shall be a Business Day. Not later than 10:00 A.M. (New
York City time) on such Drawdown Date, and upon fulfillment of the conditions in
Article III hereof, the Banks will make the Advances available to the
Administrative Agent for disbursement to the Borrowers in same day funds at the
Lending Office. Such notice of borrowing (the "Notice of Borrowing") shall be by
telex, telefacsimile or cable, confirmed immediately in writing signed by an
authorized officer of each of the Borrowers, in substantially the form of
Exhibit C, specifying therein (i) the requested date of such borrowing, (ii) the
aggregate Dollar amount to be borrowed and, but only to the extent the same may
be permitted or required in Section 2.04(b)(ii), the number of tranches and the
Dollar amount of each tranche and (iii) the Interest Period for such borrowing
(and each tranche thereof). The Commitment of each Bank shall terminate in an
amount equal to, and the Aggregate Amount of each Bank shall be reduced by, the
amount made available by such Bank in respect of each Advance.
(b) Each Notice of Borrowing sent shall be irrevocable and
binding on the Borrowers. If for any reason on a Drawdown Date specified in a
Notice of Borrowing, any Advance is not made as a result of any failure to
fulfill on or before such Drawdown Date the applicable conditions precedent, the
Borrowers shall indemnify each Bank against any loss, cost or expense incurred
by such Bank as a result of such failure, including, without limitation, any
loss, cost or expense incurred by reason of the
#20170954.1
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liquidation or reemployment of deposits or other funds acquired by such Bank to
fund the Advances to be made by such Bank as part of such borrowing.
SECTION 1.023 Repayment. The Borrowers shall repay the
aggregate principal amount of each Advance in respect of each Facility as
follows:
(i) Advances with respect to Facility A shall be paid
on the Maturity Date with respect to such Facility; PROVIDED HOWEVER,
that, beginning in the calendar year 1997, the Borrowers shall repay
any and all Advances in respect of Facility A (including amounts drawn
under Facility D) in excess of Ten Million Dollars (US$10,000,000)
annually and shall not reborrow such amounts for a period of no less
than 30 consecutive calendar days in each calendar year.
(ii) Advances with respect to Facility B shall be repaid
in 21 consecutive quarterly payments commencing on January 21, 1997 and
on each subsequent, January 15th, April 15th, July 15th and October
15th, until the Maturity Date according to the amortization schedule
set forth in Exhibit K hereto.
(iii) Advances with respect to Facility C shall be
repayable on demand; PROVIDED HOWEVER, that, subject to the terms of
this Agreement, the Borrowers may request, and if there is no existing
Event of Default each Bank shall make, an additional Advance under
Facility B to reimburse any amounts drawn under Facility C (and in such
case, the Advances will be repaid according to the Schedule provided in
Section 2.03(ii) pro rated over the then remaining Principal Payment
Dates).
(iv) Advances with respect to Facility F shall be repaid
in consecutive quarterly installments according to the Schedule set
forth in Exhibit K hereto.
(v) The final payment of all outstanding
principal amounts of a Facility shall be made on the
Maturity Date for such Facility.
SECTION 1.024 Interest. (a) The Borrowers shall pay interest
on the unpaid principal amount of each Advance from the Drawdown Date for such
Advance until the principal amount of such Advance is paid in full, payable on
each Interest Payment Date with respect to each such Advance. Notwithstanding
the preceding sentence of this Section 2.04(a), all interest accrued on any
Advance outstanding on the Maturity Date of such Advance shall be paid on the
Maturity Date for such Advance.
(b) As long as any Advance shall be outstanding, and
payment of the principal thereof and interest thereon shall not
be in default, interest on the Advance shall be payable at an
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interest rate which shall be adjusted as provided in this Section, and in the
case of the Alternate Base Rate and to reflect any change in the Applicable
Margin, as set forth herein during such Interest Period, and which shall be
determined as follows:
(i) with respect to each day of the period commencing on
and following a Drawdown Date and for each day of each successive
Interest Period thereafter, the Borrowers shall pay interest on each
Advance in its entirety or in one or more tranches permitted under
Section 2.04(b)(ii) at an interest rate equal to the sum of (y) the
Applicable Margin plus (z) the Alternate Base Rate or the LIBOR Rate,
as the case may be, subject to periodic adjustment as provided in
Section 2.04(b)(iii);
(ii) with respect to each Interest Period, the Borrowers
shall, by telex notice to be received by the Administrative Agent by 10
A.M. New York time at least four Business Days (one Business Day, in
the case of an Advance bearing interest at Alternate Base Rate) prior
to the commencement of each such successive period, elect the
Applicable Rate and elect an Interest Period of one, two, three or six
months duration in the case of LIBOR Rate, and such other period in the
case of the Alternate Base Rate, and one or more but no more than four
tranches in total for all outstanding Advances, provided each tranche
shall be in an amount not less than the scheduled principal amount due
on the Maturity Date; provided the Borrowers shall select Interest
Periods, and if necessary shall select as the final Interest Period for
each Advance an Interest Period less than one month in duration, so
that the maturity date of each Advance shall be the last day of the
Interest Period for such Advance; provided that if the Borrowers shall
fail to elect the Applicable Rate or an Interest Period as herein
provided, and so long as any Event of Default has not occurred and is
continuing, the Administrative Agent shall elect the relevant
Applicable Rate and the Interest Period, which may be one day;
(iii) (A) the interest payable on each Advance during each
successive Interest Period shall be adjusted as set forth herein by the
Administrative Agent for any change in the Applicable Margin in
addition to adjustments in respect of the Alternate Base Rate, if such
rate is then used. As to the Letter of Credit and as to all other
Advances beginning from January 1, 1998, the Applicable Margin for each
Interest Period (and each day thereof) shall be determined by the
Administrative Agent (or the Letter of Credit Agent, as the case may
be) subject to further adjustment from time to time pursuant to
paragraph (B) of this sub-section (iii). In respect of the Advances the
highest Applicable Margin shall be in effect unless the following test
is met on a rolling four quarter basis:
#20170954.1
<PAGE>
Consolidated LIBOR and Alternate
Indebtedness/ Letter of Credit Base Rate
EBITDAR Applicable Margin Applicable Margin
- ------------ ----------------- -----------------
3.00 to 3.49 1.50% .50%
2.50 to 2.99 1.25% .25%
2.00 to 2.49 1.00% 0%
1.99 or Below 0.75% 0%
For the first three quarters following the IPO, the Administrative
Agent shall use Hvide's Pro Forma Consolidated Historical Financial
Statements as presented in the S-1 for purposes of determining whether
the foregoing tests have been met. From the fourth quarter following
the IPO Date until the Maturity Date, the Administrative Agent shall
use the Borrowers' most recent quarterly financial statements for
purposes of determining whether the foregoing tests have been met.
(B) To the extent of any change in the
Applicable Margin during any Interest Period, the Administrative Agent
shall give prompt written notice to the Borrowers and the Banks (a
"Notice of Margin Adjustment") specifying the amount, if any, of
additional interest payable by the Borrowers, or excess interest paid
by the Borrowers, as the case may be, as a result of such change in the
Applicable Margin (such amount, the "Relevant Amount"). The Borrowers
shall immediately pay to the Administrative Agent any such Relevant
Amount specified as payable in the Notice of Margin Adjustment,
together with interest to the date of payment calculated as for an
Advance; any Relevant Amount specified in the Notice of Margin
Adjustment as an excess payment by the Borrowers shall be credited to
interest payable by the Borrowers on the next Interest Payment Date;
(iv) the Administrative Agent shall give prompt notice to
the Borrowers and the Banks of the applicable interest rate determined
by the Administrative Agent for purposes of Section 2.04(b) and the
rates published by each Reference Bank and used for the purpose of
determining the applicable LIBOR Rate hereunder; and
(v) if, with respect to any Advance bearing interest at a
rate based on the LIBOR Rate, any Bank shall notify the Administrative
Agent that the LIBOR Rate for any Interest Period for such Advance will
not adequately reflect the cost to such Bank of making, funding or
maintaining its portion of such Advance for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrowers and the
Banks, whereupon
#20170954.1
<PAGE>
(A) each such Bank's portion of each such
Advance bearing interest at a rate based on the LIBOR Rate will
automatically, on the last day of the then existing Interest Period
therefor, convert into an Advance bearing interest at a rate based on
the Alternate Base Rate, and
(B) the obligation of each such Bank to make
Advances, or to convert Advances into Advances, bearing interest at a
rate based on the LIBOR Rate shall be suspended until such Bank shall
notify the Borrowers and the Administrative Agent that the
circumstances causing such suspension no longer exist.
(c) In the event that the Administrative Agent or any Bank
does not receive on the due date any sum due under this Agreement or any of the
other Loan Documents in accordance with the terms hereof or thereof, or so long
as any Event of Default has occurred and is continuing, the Borrowers shall pay
to the Administrative Agent and such Banks, as the case may be, on demand in
accordance with Section 2.07 hereof, interest on all unpaid sums, from and
including the due date thereof or the date such Event of Default occurred,
whichever is earlier to but not including the date of actual payment (or date
such Event of Default is cured), at a rate per annum determined by the
Administrative Agent from time to time to be the sum of (a) two per cent (2%)
and the Applicable Margin plus (b) the Applicable Rate. Except as otherwise
provided in the following subsection (d), any such interest which is not paid
when due shall be compounded at the end of each Interest Period (both before and
after any notice of demand) by the Administrative Agent on behalf of the Banks
under this Agreement.
(d) Notwithstanding any provision contained in any of the Loan
Documents, none of the Banks, the Letter of Credit Agent nor the Administrative
Agent shall ever be entitled to receive, collect, or apply, as interest on the
Obligations, any amount in excess of the maximum rate of interest permitted to
be charged by Applicable Law. In the event any Bank, the Letter of Credit Agent
or the Administrative Agent ever receives, collects, or applies as interest, any
such excess, such amount which would be excessive interest shall be applied to
the reduction of the Obligations then outstanding. If the Obligations then
outstanding are paid in full, any remaining excess shall forthwith be paid to
the Borrowers. In determining whether or not the interest paid or payable, under
any specific contingency, exceeds the highest lawful rate, the Borrowers and any
Bank, the Letter of Credit Agent or the Administrative Agent, as the case may
be, shall, to the maximum extent permitted under Applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as interest, (ii) exclude any voluntary prepayments and the effects thereof, and
(iii) spread the total amount of interest throughout the entire contemplated
term of the Obligations so that the interest rate is uniform throughout the
entire term of the Obligations.
#20170954.1
<PAGE>
SECTION 1.025 Prepayments. (a) Upon at least four Business
Days' notice to the Administrative Agent received by 10:00 A.M. New York time,
the Borrowers may prepay, subject to payment of Breakage Costs, if any, incurred
by the Banks, the outstanding amount of each Advance for a Facility, in whole or
in part, on the last day of any Interest Period for each such Advance or part
thereof, with accrued interest to the date of such prepayment on the amount
prepaid, provided that no such partial prepayment shall be in a principal amount
of less than Two Hundred Fifty Thousand Dollars ($250,000) and be in integral
multiples of One Hundred Thousand Dollars ($100,000) in addition to such minimum
amount. The Administrative Agent promptly shall give the Banks a copy of each
such notice received from the Borrowers. Optional repayments shall be applied to
completely repay the Facilities in the following order: Facility A, then
Facility B, then Facility F, and then, to the extent that the Borrowers have
terminated the Commitment under Facility A, to be deposited in the Cash
Collateral Account as security for Facility C and Facility D. Optional
prepayments in respect of each Facility shall be applied to such Facility (i)
first to the next scheduled payment of principal, (ii) then to the final payment
due on the Maturity Date and (iii) finally pro rata over the remaining scheduled
principal payments. Prepayments shall be applied pro rata to all Banks' Advances
under the respective Facility. If Facility B is prepaid, no part thereof may be
reborrowed. If Facility F is prepaid, amounts may be reborrowed to the extent of
the Available Commitment described in Exhibit K hereto.
(b) The Borrowers shall prepay the Advances as
follows:
(i) an amount equal to one hundred percent (100%) of
all proceeds (net of Taxes and reasonable expenses in connection with
the sale) from the sale of any assets by the Borrowers in excess of One
Hundred Thousand Dollars ($100,000) in any one transaction or Five
Hundred Thousand Dollars ($500,000) in any calendar year; such
prepayment to be made not later than the date of such sale; any such
prepayments shall be applied ratably among all Advances of the Banks as
follows (v) first, to repay to the last installment due in respect of
Advances for Facility B on the Maturity Date and then pro rata over the
remaining Principal Payment Dates for Facility B, (w) second, to reduce
Advances under Facility A to the last installment due in respect of
Advances (x) third, for Facility F on the Maturity Date and then pro
rata over the remaining Principal Payment Dates for Facility F, fourth,
and (y) to the extent that the Borrowers have terminated the Commitment
under Facility A, to be deposited to the Cash Collateral Account as
security for Facility C and Facility D; and
(ii) an amount as shall be necessary to comply
with the provisions of Section 5.01(e); such prepayment to
#20170954.1
<PAGE>
be applied first to Advances outstanding in respect of Facility B, and
then to Advances outstanding in respect of Facility A and Facility F in
inverse order of maturity and ratably among the Banks.
(c) If it shall become unlawful for any Bank to continue to
fund or maintain any Advance or to perform its obligations hereunder, such Bank
shall notify and consult with the Borrowers and the Administrative Agent before
making any demand under this Section 2.05(c), and such Bank and the
Administrative Agent shall use all reasonable efforts to change its lending
office or take other measures so that it can perform its obligations hereunder;
provided that neither such Bank nor the Administrative Agent shall be obligated
to change its lending office or take any other measures if in its sole
reasonable judgment it would be disadvantageous to do so. If such Bank does not
change its lending office because it determines in its sole reasonable judgment
that it is disadvantageous to do so or because such change would not render such
Advance lawful, then such Bank shall notify the Administrative Agent and the
Borrowers, as the case may be, and shall make an Advance, and the Borrowers
shall borrow such Advance, at a rate based on the Alternate Base Rate in an
amount equal to the amount of the Advance currently outstanding and made by such
Bank to the Borrowers, if in the sole reasonable judgment of such Bank such
Advance can lawfully be extended at a rate based on the Alternate Base Rate.
Simultaneously with making such Advance at a rate based on the Alternate Base
Rate, the Advance then outstanding made available by such Bank to the Borrowers
shall be repaid with accrued interest thereon to the date of payment. If any
Bank makes an Advance at a rate based on the Alternate Base Rate to the
Borrowers pursuant to this Section, the Borrowers may prepay such Advance made
by such Bank, without penalty, at any time upon five Business Days notice. If
despite such Bank's compliance with the preceding provisions of this Section
2.05(c), or if the Borrowers shall refuse to borrow an Advance at a rate based
on the Alternate Base Rate as herein provided, and if it shall become unlawful
for any Bank to fund or maintain any Advance or perform its obligations
hereunder, upon demand by such Bank, the Borrowers shall prepay in full the
outstanding Advance made by such Bank, with accrued interest thereon and all
other amounts payable by the Borrowers hereunder, and upon such demand or any
notice of prepayment the obligation of such Bank to make any Advance to the
Borrowers shall terminate.
(d) (1) If a Total Loss occurs, the Borrowers shall give
prompt written notice to the Administrative Agent of such Total Loss. Unless the
Borrowers provide a Substitute Vessel under Section 2.05 (d)(3) and to the
extent necessary to comply with Section 5.01(e), not more than 120 days (the
"Loss Termination Date") after the date such Total Loss occurred, the Borrowers
shall pay to or to the order of the Administrative Agent, the sum of (a) the
product of the then outstanding principal amount of the Notes multiplied by a
fraction, in which
#20170954.1
<PAGE>
the numerator is the Fair Market Value of the Vessel subject to the Total Loss
as determined by the last appraisal obtained pursuant to Section 1.03 prior to
such Total Loss and the denominator is the aggregate Fair Market Value similarly
determined for all Mortgaged Vessels immediately prior to such Total Loss, (b)
accrued and unpaid interest on the Notes being prepaid through the Loss
Termination Date, (c) an amount equal to all out-of-pocket third party expenses
(including legal and investigatory fees) incurred by and not otherwise
reimbursed to, the Administrative Agent or the Banks in connection with the
occurrence of the Total Loss, as set forth in a certificate of the
Administrative Agent to be delivered to the Borrowers not less than five
Business Days prior to the Loss Termination Date, and (d) any other amounts
which have become due and payable under the Loan Documents but shall not have
been paid prior to the Loss Termination Date minus the sum of all insurance
proceeds actually received by the Administrative Agent in connection with such
Total Loss. All prepayments received after such Total Loss shall be applied as
provided in Section 6.02 hereunder.
(2) If a Total Loss occurs, the Borrowers, not less than 30
days before the Loss Termination Date, may notify the Administrative Agent of
their intention to replace the Vessel constituting the Total Loss with a
substitute vessel (the "Substitute Vessel"). Prior to or at the time of any
substitution under this Section, the Borrowers will at their own expense and
cost furnish the Administrative Agent with a satisfactory appraisal of the
proposed Substitute Vessel. If the Administrative Agent and the Banks in their
reasonable discretion, have agreed to permit the substitution, the Borrowers at
their own cost and expense shall cause a Mortgage covering the Substitute Vessel
to be duly executed and recorded at the Home Port of the Substitute Vessel and
shall make such amendments to the Loan Documents and Security Documents as the
Administrative Agent shall deem necessary or desirable to reflect such
substitution.
(3) If the Fair Market Value of the Substitute Vessel is less
than the Fair Market Value of the Vessel which constituted such Total Loss, the
Borrowers may grant the Administrative Agent on behalf of the Banks a perfected
first priority security interest in additional collateral satisfactory to the
Administrative Agent and the Banks, in their sole discretion, the Fair Market
Value of which (as determined by an appraisal of the type described in Section
1.03) shall be added to the Fair Market Value of the Substitute Vessel for the
purposes of complying with Section 5.01(e)(ii).
(4) If the Banks, in their sole discretion, permit the sale or
other such disposition of any Mortgaged Vessel and if as a result of such sale
or disposition the Borrowers no longer comply with Section 5.01(e)(ii), then all
proceeds of such sale or disposition shall be paid to the Administrative Agent
and the Administrative Agent shall apply all such proceeds to the payment
#20170954.1
<PAGE>
of all such amounts payable as if in respect of a Total Loss of such Vessel
pursuant to subsection (d)(1) above.
(e) If at any time the Borrowers shall, or may reasonably be
expected to, be required to deduct and withhold, or indemnify any Bank with
respect to, any Taxes (as defined in Section 2.09) (in each case, as evidenced
by an opinion reasonably satisfactory in form and substance to the Borrowers,
the Administrative Agent, the Letter of Credit Agent and the Banks from
independent tax counsel reasonably satisfactory to the Borrowers, the
Administrative Agent, the Letter of Credit Agent and the Banks) the Borrowers,
upon at least four Business Days' notice to the Administrative Agent and the
Banks, may prepay at any time, pro rata, the outstanding principal amount of
each Advance, in whole or in part, together with accrued interest to the date of
prepayment on the amount prepaid and all other amounts, including without
limitation Breakage Costs, then payable to the Banks by the Borrowers; provided
that, if such Taxes relate to payments to fewer than all the Banks (the
"Affected Banks"), the Borrowers, upon at least four Business Days' notice to
the Administrative Agent and the Affected Banks, may prepay, in whole or in
part, pro rata (except as set forth in the following provision), the outstanding
principal amount of Advances made by the Affected Banks, with accrued interest
thereon and all other amounts payable to the Affected Banks by the Borrowers
(without prepayment any portion of any Advance made by any Bank that is not any
Affected Bank); provided further, that if the rate of Taxes with respect to any
Affected Bank is higher than with respect to another Affected Bank, the
Borrowers may prepay any portion of the Advance made by the former Affected Bank
without prepaying any portion of the Advance made by the latter Affected Bank.
The Administrative Agent shall give prompt written notice to the Banks of any
prepayments made under this paragraph (e). No amount of principal paid or
prepaid, as the case may be, may be reborrowed except as otherwise explicitly
provided in this Agreement. Prepayments shall be applied first to outstanding
interest and Breakage Costs, if any, and then to installments of outstanding
principal in inverse order of maturity, except as otherwise expressly provided
herein.
SECTION 1.026 Increased Costs; Additional Interest. (a) If on
or after the Closing Date due to (i) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve or capital adequacy requirements) in, or in the interpretation of, any
law or regulation, or (ii) the compliance by any Bank with any guideline or
request (including, with respect to reserve and capital adequacy requirements,
those Applicable Laws, policies, guidelines and directives and interpretations
in effect on the Closing Date) from any central bank or other governmental
authority, whether or not having the force of law, there shall be any increase
in the cost to, or reduction in the return on capital of any Bank in consequence
of, any Bank agreeing to make or making, funding or maintaining an Advance, then
the Borrowers
#20170954.1
<PAGE>
shall from time to time, upon demand by such Bank, pay to such Bank additional
amounts sufficient to indemnify such Bank against such increased cost (without
duplication of any amounts pursuant to Section 2.06(b) herein).
(b) If any Bank shall determine that reserves under Regulation
D of the Board of Governors of the Federal Reserve System, as in effect from
time to time, are required to be maintained by it in respect of, or a portion of
its costs of maintaining reserves under Regulation D is properly attributable
to, one or more of its Advances, such Bank shall, subject to the provisions of
Section 2.06(d) below, give notice to the Borrowers, together with a certificate
as described below in Section 2.06(c) and the Borrowers, as the case may be,
shall pay to such Bank additional interest on the unpaid principal amount of
each such Advance, payable on the same day or days on which interest is payable
on such Advance, at an interest rate per annum equal at all times during each
Interest Period for such Advance to the excess of (i) the Applicable Margin plus
the rate obtained by dividing the LIBOR Rate for such Interest Period by a
percentage equal to 100% minus the Reserve Percentage (defined in the next
sentence), if any, applicable during such Interest Period over (ii) the LIBOR
Rate for such Interest Period. The "Reserve Percentage" for any such period,
with respect to any Advance, means the reserve percentage applicable thereto
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to (i) liabilities or assets consisting of or
including eurocurrency liabilities, as defined in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time, and
having a term equal to any such period, or (ii) any other category of
liabilities which includes deposits by reference to which the interest rate on
such Advance is determined and which have a term equal to any such period.
(c) If any Bank determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by the Bank or any corporation
controlling the Bank and that the amount of such capital is increased by or
based upon the existence of the Bank's commitment to lend hereunder and other
commitments of this type, then, upon demand by the Bank made in accordance with
the provisions of Section 2.06(d) hereof, the Borrowers shall immediately pay to
the Bank, from time to time as specified by the Bank in a certificate delivered
to the Borrowers, additional amounts sufficient to compensate the Bank or such
corporation in the light of such circumstance, to the extent that the Bank
reasonably determines such increase in capital to be allocable to the existence
of the Bank's commitment to lend hereunder. A
#20170954.1
<PAGE>
certificate as to the amount of any such increased cost, increased interest or
reduced return under this Section 2.06, submitted to the Borrowers and the
Administrative Agent by such Bank, setting forth calculations in reasonable
detail shall be conclusive and binding for all purposes, absent manifest error.
(d) Before making any demand under this Section 2.06, the Bank
shall consult with the Borrowers and the Administrative Agent and such Bank and
the Administrative Agent shall designate as to itself a different lending office
or take such other measures if such designation or measures would avoid the need
for, or reduce the amount of such increased cost or interest, provided that
neither such Bank nor the Administrative Agent shall be obliged to change its
lending office or take any other measures if in its sole reasonable judgment it
would be disadvantageous to do so.
(e) The Borrowers may, upon at least four Business Days'
notice to the Administrative Agent and any such Bank requesting payment of any
amounts pursuant to this Section 2.06, prepay the outstanding principal amount
of each Advance together with accrued interest to the date of prepayment on the
amount prepaid and all other amounts, including without limitation Breakage
Costs, if any, then payable to such Bank by the Borrowers.
SECTION 1.027 Letter of Credit. (a) Subject to the terms and
conditions of this Agreement, the Letter of Credit Agent, in reliance on the
Agreements of the Banks set forth in Section 2.07(f), agrees to issue:
(i) a Letter of Credit in respect of Facility C for
the account of the Borrowers on the Closing Date and on each Letter of
Credit Renewal Date in such form as may be approved from time to time
by the Letter of Credit Agent; and
(ii) one or more Letters of Credit in respect of Facility
D for the account of the Borrowers on a Letter of Credit Closing Date
and on each Letter of Credit Renewal Date in such form as may be
approved from time to time by the Letter of Credit Agent.
(b) (i) The stated amount of a Letter of Credit in respect of
Facility C shall not exceed the following except to the extent cash collateral
has been provided pursuant to Section 5.01(o):
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<PAGE>
Facility C Letter of Credit
Date Maximum Face Amount
September 30, 1994 $5,600,000 January 15, 1999 60% of Original
Stated Amount January 15, 2000 Zero (0).
(ii) The aggregate stated amount of all issued and
outstanding Letters of Credit (including Unreimbursed Letter of Credit
Obligations) in respect of Facility D shall not exceed Six Million United States
Dollars (US $6,000,000) at any one time. Subject to the Six Million United
States Dollar limit imposed in the preceding sentence, Letters of Credit in
respect of Facility D may be issued only to the extent that the aggregate stated
amount (including unreimbursed Letter of Credit Obligations, if any) of such
Letters of Credit shall be equal or less than (x) the sum of the aggregate
amounts available to be drawn in respect of Facility A minus (y) the sum of the
outstanding Advances in respect of Facility A. The amounts that may be drawn and
are permitted to be outstanding in respect of Facility A are reduced by the
aggregate stated amounts of all Letters of Credit issued and outstanding
pursuant to Facility D. The aggregate stated amounts of all Letters of Credit
issued and outstanding under Facility D shall not include any expired or
canceled Letters of Credit which have been issued under Facility D unless the
expired or canceled Letters of Credit constitute Unreimbursed Letter of Credit
Obligations.
(c) Any Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent, with the laws of the state in which
the principal office of the Letter of Credit Agent is located.
(d) The Letter of Credit Agent shall not be obligated to issue
any Letter of Credit hereunder if (x) such issuance would conflict with, or
cause the Letter of Credit Agent to exceed any limits imposed by Applicable Law;
or (y) if the Letter of Credit by its terms, expires after the applicable
Maturity Date.
(e) The Borrowers may request that the Letter of Credit Agent
issue a Letter of Credit by delivering to the Letter of Credit Agent and the
Administrative Agent an Application completed to the satisfaction of the Letter
of Credit Agent, the certificate referred to in Section 3.02 dated the date of
such Application and such other certificates, documents and other papers and
information as may be customary for a letter of credit of the kind being
requested and as the Letter of Credit Agent may reasonably request. Upon receipt
of the Application, and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures, the Letter of Credit Agent shall promptly
#20170954.1
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issue any Letter of Credit requested thereby issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the Letter
of Credit Agent and the Borrowers.
(f) (i) Effective on the date of issuance of a Letter of
Credit, the Letter of Credit Agent irrevocably agrees to grant and hereby grants
to each Bank, and each Bank irrevocably agrees to accept and purchase and
thereby accepts and purchases from the Letter of Credit Agent, on the terms and
conditions hereinafter stated, for such Bank's own account and risk an undivided
participation equal to such Bank's Percentage Interest in the Facility relating
to such Letter of Credit and in the Letter of Credit Agent's obligations and
rights under such Letter of Credit issued by the Letter of Credit Agent and the
amount of each draft paid by the Letter of Credit Agent thereunder. Each Bank
unconditionally and irrevocably agrees with the Letter of Credit Agent that, if
a draft is paid whether prior to the Maturity Date or after the Maturity Date,
under any Letter of Credit for which the Letter of Credit Agent is not
reimbursed in full by the Borrowers in accordance with the terms of this
Agreement, each Bank shall pay to the Letter of Credit Agent upon demand at the
Lending Office an amount equal to such Bank's Percentage Interest of the
unreimbursed amount of such draft or any part thereof. The Banks' obligations
hereunder shall be absolute without regard to the occurrence of any Default or
Event of Default, the lapsing of Maturity Date or the occurrence of any other
condition precedent whatsoever.
(ii) If the Letter of Credit Agent does not receive any payment
from a Bank required under this section on the date such payment is due, such
Bank shall pay to the Letter of Credit Agent, on demand, an amount equal to the
product of (x) such amount, and (y) the daily average Federal Funds Rate during
the period from and including the date such payment is required to the date on
which such payment is immediately available to the Letter of Credit Agent
multiplied by (z) a fraction the numerator of which is the number of days that
have elapsed during such period and the denominator of which is 360. If any
unreimbursed amount required to be paid by any Bank pursuant to this Section is
not made available to the Letter of Credit Agent by such Bank within three
Business Days after the date such payment is due, the Letter of Credit Agent
shall be entitled to recover from such Bank, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to Base Rate Advances hereunder. A certificate of the Letter of Credit Agent
submitted to any Bank with respect to any amounts owing under this Section shall
be conclusive in the absence of manifest error.
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(iii) If, at any time after the Letter of Credit Agent has paid a
draft under a Letter of Credit and has received from any Bank its pro rata share
of such payment in accordance with this Section, the Letter of Credit Agent
receives any payment (excluding any fees and other amounts paid pursuant to
Section 2.07(g)) related to such Letter of Credit (whether directly from the
Borrowers or otherwise, including proceeds of collateral applied thereto by the
Administrative Agent), or any payment of interest on account thereof, then the
Letter of Credit Agent shall pay to the Administrative Agent, for the account of
such Bank, its pro rata share thereof; provided, however, that if any such
payment received by the Letter of Credit Agent is required to be returned by the
Letter of Credit Agent, such Bank shall return to the Administrative Agent for
the account of the Letter of Credit Agent, the portion thereof previously
distributed to such Bank.
(g) The Letter of Credit Agent shall notify the Borrowers of
the date and amount of any draft presented under a Letter of Credit. The
Borrowers agree to reimburse the Letter of Credit Agent on each such date for
all amounts paid by the Letter of Credit Agent for the account of (i) such
drafts so paid and (ii) any Taxes, fees, charges or other costs or expenses
incurred by the Letter of Credit Agent in connection with such payment. Each
payment shall be made to the Letter of Credit Agent at its address for notices
specified herein and in lawful money of the United States and immediately
available funds. Interest shall be payable on any or all amounts remaining
unpaid by the Borrowers under this subsection from the date such amounts become
payable until payment in full at the rate which will be payable on Base Rate
Advances at such time.
(h) Each of the Borrowers' obligations under this Section
shall be absolute and unconditional under any and all circumstances and without
setoff, counterclaim or defense to payment which any Borrower may have or have
had against the Letter of Credit Agent or any beneficiary of a Letter of Credit.
Each of the Borrowers also agrees with the Letter of Credit Agent that the
Letter of Credit Agent shall not be responsible for, and that the Borrowers'
obligations under this Section shall not be affected by, among other things, the
validity or genuineness of documents or any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged or any
dispute between or among the Borrowers and any beneficiary of a Letter of Credit
or any other party to which such Letter of Credit may be transferred or any
claims whatsoever of the Borrowers against any beneficiary of a Letter of Credit
or any such transferee. The Letter of Credit Agent shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with a Letter of
Credit, except for errors or omissions caused by the Letter of Credit Agent's
gross negligence or willful misconduct. The Borrowers agree that any action
taken or omitted by the Letter of Credit Agent in
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connection with a Letter of Credit or the related drafts or documents, if done
in the absence of gross negligence or willful misconduct and in accordance with
the standards of care specified in the Uniform Commercial Code of the state in
which the principal office of the Letter of Credit Agent is located, shall be
binding on the Borrowers and shall not result in any liability of the Letter of
Credit Agent to the Borrowers.
(i) If any draft shall be presented for payment of a Letter of
Credit, the Letter of Credit Agent shall promptly notify the Borrowers, the
Banks and the Administrative Agent of the date and amount thereof. The
responsibility of the Letter of Credit Agent to the Borrowers in connection with
any draft presented for payment under a Letter of Credit shall, in addition to
any payment obligation expressly provided in a Letter of Credit, be limited to
determining that the documents (including each draft delivered under a Letter of
Credit in connection with such presentment) are in conformity on their face with
such Letter of Credit.
(j) To the extent that any provision of the Application,
including any reimbursement provisions contained therein, related to a Letter of
Credit is inconsistent with the provisions of this Section, the provisions of
this Section shall prevail.
SECTION 1.028 Payments and Computations. (a) The Borrowers
shall make each payment hereunder and under any instrument and other Loan
Document delivered hereunder (except as otherwise provided in any such
instrument) due to any Bank or the Administrative Agent not later than 12:00
noon New York City time on the date when due, without set off or counterclaim,
in lawful and freely transferable United States Dollars to the Administrative
Agent at the Lending Office for the account of the Administrative Agent in same
day funds. The Administrative Agent shall promptly disburse to the Banks funds
of such type as it shall have received in the manner provided by this Agreement.
(b) The Borrowers hereby authorize the Administrative Agent
and each Bank, if and to the extent payment is not made when due hereunder or
under any instrument delivered hereunder and the Borrowers have been given, or
otherwise have, notice thereof, to charge from time to time against any or all
of the Borrowers' accounts with the Administrative Agent or the Banks, as the
case may be, any amounts so due, provided that, so long as a Default or Event of
Default has occurred and is continuing, no such notice to the Borrowers shall be
required. The Borrowers further agree that not later than 12:00 noon (New York
City time) on each day on which a payment is due hereunder with respect to the
Advance or under any Note, it will have in its account maintained with the
Administrative Agent in New York City a credit balance at least equal to the
total amount so due on such day.
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(c) All computations of interest and fees shall be made by the
Administrative Agent, the Letter of Credit Agent and the Banks on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fee
is payable except that interest in respect of the Base Rate shall be calculated
on the basis of actual days elapsed over a 365/366 day year.
(d) Whenever any payment to be made hereunder or under the
Loan Documents shall be stated to be due, or the Interest Payment Date would
otherwise occur on a day other than a Business Day, such payment shall be made,
and the Interest Payment Date shall occur, on the next succeeding Business Day,
and any such extension of time shall in all cases be taken into account in the
computation of payment of interest due hereunder or otherwise; provided,
however, if such extension would extend the Maturity Date or would cause such
payment to be made, or, in respect of an Interest Payment Date for any Advance
bearing interest at a rate based on the LIBOR Rate, to occur in a new calendar
month, such payment shall be made, and the Interest Payment Date shall occur on
the preceding Business Day.
(e) All parties to this Agreement acknowledge and agree that
the Obligations shall be automatically decreased (without any further action of
any Person being required) to the extent of any amounts received pursuant to
Section 2.08(a) hereof by the Administrative Agent, the Mortgagee or any of the
Banks under the Security Documents, as the case may be, which amounts the
Administrative Agent or the Banks, as the case may be, may freely apply or cause
to be applied to the repayment of the Obligations as provided in the Loan
Documents. Except as otherwise expressly provided in the preceding sentence, the
Security Documents shall not in any way negate or adversely affect the
liabilities and Obligations which the Borrowers and any other party have under
this Agreement and the other Loan Documents to the Banks, the Letter of Credit
Agent or the Administrative Agent.
SECTION 1.029 Taxes. (a) Any and all payments made by the
Borrowers under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future Taxes,
except as required by Applicable Law. If any Taxes are required by Applicable
Law to be deducted or withheld from any payment hereunder to the Administrative
Agent, the Letter of Credit Agent or any Bank, the Borrowers shall (i) promptly
notify the Administrative Agent, the Letter of Credit Agent or such Bank, as
applicable, of such requirement, (ii) deduct or withhold the full amount of such
Taxes in a timely manner and pay such Taxes in a timely manner to the
appropriate authorities, (iii) promptly forward to the Administrative Agent for
its own account, the Letter of Credit Agent for its own account or the account
of such Bank, as applicable, an official receipt or certified copy thereof or
other documentary evidence
#20170954.1
<PAGE>
satisfactory to the Administrative Agent, Letter of Credit Agent or such Bank
evidencing such payment and (iv) except in the case of Bank Taxes, pay such
additional amounts so that the amount received by the Administrative Agent, the
Letter of Credit Agent or such Bank with respect to such payment, after the
payment of such Taxes (including any Taxes on such additional amounts), equals
the full amount such Administrative Agent, the Letter of Credit Agent or such
Bank would have otherwise received with respect to such payment had no deduction
or withholding been required. Further, if any Taxes (other than Bank Taxes) are
asserted directly against the Administrative Agent, Letter of Credit Agent or
any Bank with respect to any payment hereunder to the Administrative Agent, the
Letter of Credit Agent or such Bank, the Administrative Agent, the Letter of
Credit Agent or such Bank may pay such Taxes and the Borrower shall promptly pay
such additional amounts (including any penalties, interest or expenses) so that
the amount received by the Administrative Agent, Letter of Credit Agent or such
Bank, after the payment of such Taxes (including any Taxes on such additional
amounts), equals the full amount the Administrative Agent, the Letter of Credit
Agent or such Bank would have otherwise received had no such Taxes been
asserted. If the Borrower fails to pay to the appropriate authority any Taxes
when due or fails to remit to the Administrative Agent, the Letter of Credit
Agent or such Bank, as applicable, the required receipts evidencing payment of
such Taxes, the Borrowers shall indemnify the Administrative Agent, the Letter
of Credit Agent or such Bank for any Taxes that may become payable as a result
of such failure.
(b) The Borrowers shall not be required to pay any additional
amounts to the Administrative Agent, Letter of Credit Agent or any Bank in
respect of United States federal withholding taxes pursuant to Section 2.09(a)
above if the obligation to pay such additional amounts would not have arisen but
for a failure by such Bank to comply with the provisions of Section 2.09(c). In
the event the Borrowers have actual knowledge that they are required to, or
there arises, in the Borrowers' reasonable opinion, a substantial likelihood
that the Borrowers will be required to, pay an increased amount or otherwise
indemnify the Administrative Agent, the Letter of Credit Agent or any Bank for
or on account of any Taxes pursuant to Section 2.09(a), the Borrowers shall
promptly notify the Administrative Agent, the Letter of Credit Agent and such
Bank of the nature of such Taxes and shall furnish such information to the
Administrative Agent, the Letter of Credit Agent and such Bank as the
Administrative Agent, the Letter of Credit Agent or such Bank may reasonably
request. In the event the Borrowers provide the notice described in the
preceding sentence, the Borrowers, the Administrative Agent, the Letter of
Credit Agent and each relevant Bank shall consult in good faith to determine
what may be required to avoid or reduce such Taxes and shall each use reasonable
efforts to avoid or reduce such Taxes (so long as such efforts result in no
incremental costs to the Administrative Agent, the Letter of Credit Agent or
such Bank, do not modify the terms of repayment
#20170954.1
<PAGE>
of the Loans or materially disadvantage the Administrative Agent, the Letter of
Credit Agent or such Bank).
(c) Prior to the first payment to the Administrative Agent,
the Letter of Credit Agent or any Bank under this Agreement, each Bank that is
not incorporated under the laws of the United States, any State thereof or the
District of Columbia shall deliver to the Borrowers and the Administrative Agent
(i) two duly completed copies of United States Internal Revenue Service Form
1001 or Form 4224 (or applicable successor form and any related forms as may
from time to time be adopted to document a claim to which such form relates) and
(ii) a duly completed copy of United States Internal Revenue Service Form W-8 or
W-9 (or applicable successor form and any related forms as may from time to time
be adopted to document a claim to which such form relates). Such Bank shall
certify that (x) in the case of any form provided pursuant to clause (i) of the
preceding sentence it is entitled to receive payments hereunder without
deduction or withholding of any United States federal income taxes and (y) in
the case of any form provided pursuant to clause (ii) of the preceding sentence
it is entitled to receive payments hereunder without deduction or withholding of
any United States federal backup withholding taxes. Each such Bank also agrees
to deliver further copies of said Form 1001, 4224, W-8 or W-9 (or applicable
successor form and any related forms as may from time to time be adopted to
document a claim to which such form relates), and any related certification as
described in the preceding sentence, as the case may be, (i) on or before the
date that any such form previously provided expires or becomes obsolete, (ii)
after the occurrence of any event requiring a change in the most recent form
previously provided unless, in any case, an event (including, without
limitation, any change in a treaty, law or regulation) has occurred prior to the
date on which delivery would otherwise be required that renders all such forms
inapplicable or that would prevent such Bank from duly completing and delivering
any such form with respect to it and such Bank so advises the Borrowers and the
Administrative Agent and the Letter of Credit Agent and (iii) upon reasonable
request of the Borrower.
(d) The Borrowers will indemnify the Administrative Agent and
each Bank for the full amount of Taxes (other than Bank Taxes) payable by the
Administrative Agent or such Bank, as the case may be, on any and all payments
made hereunder or on any instrument delivered hereunder and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Administrative
Agent or the Bank, as the case may be, makes written demand therefor with
appropriate supporting documentation. The Administrative Agent or the Bank, as
the case may be, to the extent practicable, shall notify the Borrowers before
paying, or requiring the Borrowers to pay, any such Tax.
#20170954.1
<PAGE>
(e) Within 30 days after the date of any payment of Taxes, the
Borrowers will deliver to the Administrative Agent and each Bank satisfactory
evidence of payment thereof. If no Taxes are payable in respect of any payment,
the Borrowers will, at the reasonable request of the Administrative Agent on
behalf of any Bank, as the case may be, deliver to the Administrative Agent a
certificate from each appropriate taxing authority or any political subdivision
thereof, or an opinion of counsel acceptable to the Administrative Agent, in a
form reasonably acceptable to the Administrative Agent, stating, or other
satisfactory evidence, that such payment is exempt from or not subject to Taxes.
(f) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in subsections (a) through (f) of this Section 2.09 shall survive the
payment in full of the Obligations and the expiry of the Loan Documents.
SECTION 2.10 Fees. (a) On the Effective Date, the Borrowers
shall pay solely for the account of each Bank on the Effective Date Fifteen
Thousand Five Hundred Ninety Four Dollars and 44/100 ($15,594.44) representing
the aggregate amount of any Commitment Fees and other fees owed the Banks
accruing prior to the Effective Date. The Borrowers shall pay the Administrative
Agent, solely for the account of each Bank, on the date which is three months
from the Effective Date and quarterly thereafter, a non-refundable commitment
fee (as to each Bank, its "Commitment Fee") of one-half of one percent (1/2%)
per annum of each such Bank's respective Commitment daily in respect of the
unused portion of the Bank's Commitment. The Commitment Fee shall be calculated
quarterly in arrears from the Effective Date. Notwithstanding anything to the
contrary contained in this Agreement or in any other agreement, each Bank's
Commitment Fee and the fees described in the first sentence of this subsection
shall be solely for the account of such Bank.
(b) The Borrowers shall pay the Co-Agents for their own
accounts on the Closing Date, and not later than the anniversary of such date of
each year thereafter so long as any amount payable by the Borrowers hereunder
remains outstanding, an annual agency fee in an amount mutually agreed between
them.
(c) (i) The Borrower shall pay a letter of credit fee to the
Administrative Agent for the account of the Letter of Credit Agent. Upon receipt
of the letter of credit fee, the Letter of Credit Agent shall distribute such
fee to the Banks pro rata and without deduction. The letter of credit fee shall
be at the per annum rate equal to the Applicable Margin for the LIBOR Rate (as
determined in Section 2.04(b)(iii) on the average daily aggregate amount
available to be drawn under the Letter of Credit for the period for which the
fee is calculated. Such fee shall accrue from the date on which the Letter of
Credit is issued and shall be payable quarterly in arrears commencing on
December 31
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<PAGE>
and quarterly thereafter until the termination of the Letter of
Credit.
(ii) In addition to the foregoing fees and
commissions, the Borrowers shall pay or reimburse the Letter of Credit Agent for
such normal and customary costs and expenses as are incurred or charged by the
Letter of Credit Agent in issuing, effecting payment under or amending any
Letter of Credit.
(d) On the Agreement Date, the Borrowers shall pay to the
Administrative Agent the Amendment and Restatement Fees of Two Hundred Ninety
Seven Thousand Dollars (US$297,000) and New Money Fees of Two Hundred Thousand
Five Hundred Dollars (US$200,500) which Amendment and Restatement Fees and New
Money Fees shall be shared by the Banks according to their respective Percentage
Interests.
SECTION 2.11 Optional Reduction. Upon at least four Business
Days' notice, the Borrowers shall have the right to terminate, in whole or in
part, the undrawn portion of Facility A. Any such partial terminations shall be
in a minimum amount of Two Hundred Fifty Thousand Dollars (US$250,000) and
integral multiples thereof. Reductions shall be applied ratably among the Banks'
Commitments. Once terminated, the Borrowers shall have no right to reinstate
such terminated Commitment.
ARTICLE III.
CONDITIONS PRECEDENT
SECTION 1.031 Conditions Precedent to an Advance on the
Agreement Date. (a) The obligations of the Banks to make an Advance on the
Agreement Date is subject to the conditions precedent that the Administrative
Agent, the Letter of Credit Agent and the Banks shall have received on or before
such Date, the following in form and substance satisfactory to the
Administrative Agent, the Letter of Credit Agent and the Banks:
(i) The Agreement, and the Notes each duly
executed by the Borrowers.
(ii) Each of the Security Documents, duly
executed by the parties thereto.
(iii) A certificate of each of the Secretary or an
Assistant Secretary of each of the Borrowers, dated such Date, as
follows: (A) certifying the Board of Directors has authorized, and
approved the Transaction, the Second Offering, the Loan Documents and
all the other transactions contemplated in and by this Agreement; (B)
attaching a copy of the organizational documents of such Borrowers
certified by an official of the relevant Incorporation Jurisdiction;
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(C) and attaching evidence of the good standing of such Borrowers in
its Incorporation Jurisdiction.
(iv) Copies of the Acquisition Documents.
(v) A certificate of each of the Secretary or an
Assistant Secretary of each Borrower dated such date, certifying the
names and true signatures of the officers of such Borrower who are
fully authorized to sign the Agreement and the other Loan Documents,
and any other document to be delivered by or in respect of such
Borrowers hereunder.
(vi) Proper financing statements or other filings,
duly executed by each of the Borrowers under the Uniform Commercial
Code or Applicable Law of all jurisdictions as the Administrative Agent
may deem necessary or desirable in order to perfect the security
interests created by the Security Documents in the Collateral covered
thereby.
(vii) Favorable opinions of Messrs. Dyer Ellis &
Joseph, and Panamanian counsel, special counsel for the Borrowers,
dated such Date, in form and as to such matters as the Administrative
Agent, the Letter of Credit Agent and the Banks may request.
(viii) A favorable opinion of Messrs. Winthrop,
Stimson, Putnam & Roberts, special counsel for the Administrative
Agent, the Letter of Credit Agent and the Banks, in form and substance
satisfactory to the Administrative Agent, the Letter of Credit Agent
and the Banks.
(ix) Evidence that all other actions have been taken
which are necessary or, in the opinion of the Administrative Agent,
desirable, to perfect or protect the first priority Liens in favor of
the Administrative Agent or the Mortgagee for the benefit of the Banks
in the Collateral.
(x) Each of the Banks shall be satisfied with the
final terms and conditions of the transactions contemplated by the
Second Offering, including without limitation all legal and tax aspects
thereof; all documentation relating to such transactions shall be in
form and substance satisfactory to the Banks; and a copy certified, as
true and complete by the Secretary or an Assistant Secretary of Hvide,
of each such document or filing as of such Date (together with all
documents and consents, if any, to be delivered under each thereof),
together with all exhibits, schedules and other documents furnished in
connection therewith, and the opinions of counsel, if any, delivered to
the Borrowers thereunder, together with a letter of such
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counsel addressed to the Banks to the effect that they each may rely
upon such opinions as though an addressee thereof.
(xi) A certificate of the chief financial officer of
the Borrowers, as of the Agreement Date and, to the extent necessary
supplemented as of the Effective Date attaching: (1) a list of all
agreements of the Borrowers and of their Subsidiaries relating to any
Indebtedness of the Borrowers or any Subsidiary, which Indebtedness,
singly or in the aggregate, equals or exceeds Five Hundred Thousand
Dollars ($500,000), specifying the amount of Indebtedness outstanding
and which may be outstanding under each such agreement; (2) a list of
all consensual Liens and known Liens for Taxes, assessments or other
governmental charges or levies, in each case on any vessel or other
properties or assets of any kind, real or personal, tangible or
intangible, of the Borrowers or any of its Subsidiaries; (3) a list of
any other Liens on any vessel or other properties or assets of any
kind, real or personal, tangible or intangible, of the Borrowers or any
of its Subsidiaries, having a value in each case equal to or greater
than Five Hundred Thousand Dollars ($500,000), specifying the amount of
such Liens in each case; (4) as to any Acquisition to be funded by
Facility F, the calculations and supporting documentation required
under Section 2.01(iii) to determine the amount which may be advanced;
(5) the calculations and the supporting documentation evidencing that
the Borrowers are, and upon giving effect to the making of the Loan
hereunder shall be in compliance with the financial covenants contained
in Section 5.01(d) and (6) confirming that the Borrowers are, and
immediately upon giving effect to the making of the Loan hereunder,
shall be in compliance with their obligations under Section 5.01(e).
(xii) As to each Vessel:
(A) evidence satisfactory to the
Administrative Agent, that each Borrower has good title to
such Vessel owned by such Borrower and that each such Vessel
is duly documented in the name and ownership of such Borrower
under the laws and flag of the United States for the trade in
which it is to engage or under the laws and flag of such other
Country of Registry as may be approved by the Administrative
Agent at the direction of the Majority Banks, free of recorded
Liens except the Mortgage;
(B) evidence satisfactory to the
Administrative Agent, that such Vessel and such other risks as
may be required to be covered by the terms of the relevant
Mortgage have been insured upon terms and with underwriters in
respect of such events as may be acceptable to the Banks in
their reasonable discretion and that the interest of the
Mortgagee in any such
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insurances as assignee has been effected and will be
noted by all underwriters, brokers and mutual clubs and
associations concerned;
(C) letters of undertaking and opinions as
to insurance coverage addressed to the Mortgagee and the Banks
by relevant brokers, underwriters and mutual clubs and
associations covering such Vessel's insurance policies and
mutual club entries, in each case reasonably satisfactory to
the Mortgagee and the Administrative Agent;
(D) as to acquired Vessels which are
classed, a certificate of class (dated not more than ten (10)
days prior to the date of the Acquisition) evidencing that
such Vessel is in class and classed in the highest
classification for vessels of the same age and type by a
classification society reasonably acceptable to the Banks,
free of any outstanding recommendations affecting class;
(E) an appraisal of any such acquired Vessel
completed in accordance with the provisions of Section 1.03
hereof not more than 30 days prior to the date of such
Acquisition;
(F) evidence satisfactory to the
Administrative Agent that each of the Mortgages has been duly
recorded at the Home Port of each of the Mortgaged Vessels and
constitute a first "Preferred Mortgage" within the meaning of
Chapter 313 of Title 46 of the United States Code.
(xiii) all governmental and third party consents and
approvals necessary in connection with the Transactions and the
transactions contemplated by the Second Offering shall have been
obtained (without the imposition of any conditions that are not
acceptable to the Banks) and shall be in full force and effect; all
applicable waiting periods shall have expired without any action being
taken by any competent authority; and no law or regulation shall be
applicable in the judgment of the Banks that restrains, prevents or
imposes materially adverse conditions upon the Transactions or
transactions contemplated by the Second Offering. The Banks shall have
completed a due diligence investigation of each Borrower and its
Subsidiaries in scope and with results satisfactory to the Banks; and
the Banks shall be satisfied with each Borrower's management and with
the arrangements between the Borrowers and their respective managements
including any management agreements, contracts, consulting agreements
or similar agreements.
(xiv) Each Borrower shall have satisfied the
Banks that such Borrower is in compliance with all material
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environmental statutes and regulations and maintains adequate reserves
in connection therewith, including without limitation if requested a
Phase I report in respect of any facilities to be acquired as part of
the transactions contemplated by the Acquisition Documents.
(xv) The Banks shall be satisfied that each Borrower
and each of their Affiliates shall be able to meet its obligations
under all employee and retiree welfare plans, that each Borrower's and
each Affiliates' employee benefit plans are funded in accordance with
the minimum statutory requirements, that no material "reportable event"
(as defined in ERISA) has occurred as to any such employee benefit plan
and that no termination of, or withdrawal from, any such employee
benefit plan has occurred or is contemplated that could result in a
material liability.
(xvi) The Banks (A) shall be satisfied with the terms
and conditions of the Second Offering (B) shall have received a copy
certified as true and complete by the Secretary or an Assistant
Secretary or other appropriate officer of the S-1, the prospectus and
all of the other documents and consents, if any, delivered in
connection therewith (C) shall have received evidence of gross receipt
by Hvide of at least Sixty Five Million Dollars ($65,000,000) in
connection with the Second Offering (D) shall have received evidence
that the Senior Subordinated Note and the Indebtedness related thereto
has been retired, and (E) shall have received evidence that the
Acquisitions as described in Exhibit L shall have been completed in
form and substance acceptable to the Banks.
(xvii) Audited, consolidated financial statements of
Hvide as of December 31, 1995, (as updated on September 30, 1996).
SECTION 1.032 Conditions Precedent to Each Advance and Letter
of Credit Following the Agreement Date. The obligation of the Banks to make each
Advance on a Drawdown Date and the Letter of Credit Agent to renew the Letter of
Credit shall be subject to the conditions precedent in Section 3.01 hereof and
the following additional conditions precedent that on each Drawdown Date or
Letter of Credit Renewal Date:
(a) the following statements shall be true and
correct, and the Administrative Agent on behalf of the Banks shall have
received a certificate signed by a duly authorized officer of the
Borrowers and dated the Drawdown Date of the Advance or Letter of
Credit Renewal Date, as the case may be, to attest that:
(i) The representations and warranties of
the Borrowers contained in this Agreement, the other
Loan Documents are true and correct on and as of the
#20170954.1
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Drawdown Date, as though made on and as of such date, and no
Default or Event of Default has occurred and is continuing, or
would result from such Advance, Letter of Credit or the
Transaction; and
(ii) The Borrowers are, and immediately upon
giving effect to the making of the Loan hereunder, shall be in
compliance with their obligations under Section 5.01(e) and
the financial covenants contained in Section 5.01(d) hereof;
(b) the Borrowers shall have paid or caused to be
paid all fees required to be paid under this Agreement on prior to such
Drawdown Date or Letter of Credit Renewal Date;
(c) no material adverse change shall have occurred
since December 31, 1995 (as updated on September 30, 1996), in the
business, operations, properties, prospects or condition (financial or
otherwise) of any of the Borrowers or their Subsidiaries taken as a
whole;
(d) the Advance when added to previous Advances and
such Letter of Credit when renewed are in an aggregate amount not
greater than the aggregate available on undisbursed or undrawn sum of
the then available Commitments of the Banks;
(e) all corporate, organizational or other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by the Loan Documents and
the Transaction shall be satisfactory in form and substance to the
Administrative Agent, the Banks and their counsel;
(f) the Banks shall have received copies of the
Acquisition Documents and the calculations required under
Section 2.01(iii) for each Acquisition;
(g) the Administrative Agent shall have received two
notarized Mortgage Supplements (in the form of Exhibit N hereto), duly
executed by the Borrower which is the owner of any Acquisition which is
funded in whole or in part by an Advance and which is not a Mortgage
Vessel but which is required to be mortgaged pursuant to Section
5.01(m) hereof;
(h) the Administrative shall receive an executed
amendment to the Credit Agreement and such other documentation in
connection therewith as it deems necessary or desirable in connection
with an Acquisition; and
(i) such other approvals, financial information,
vessel information, opinions, or documents as the Banks may
reasonably request.
#20170954.1
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 1.041 Representations and Warranties of the Borrowers.
Each of the Borrowers represents and warrants as follows:
(a) Due Existence; Compliance. Each of the Borrowers is a
corporation or limited partnership duly organized, validly existing and in good
standing, where applicable under the laws of its Incorporation Jurisdiction and
has all requisite power and authority under such laws to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and to execute, deliver and perform its obligations
under the Loan Documents to which it is, or will be, a party. Each of the
Borrowers and its Subsidiaries is duly qualified or licensed to do business as a
foreign corporation or entity and is in good standing, where applicable, in all
jurisdictions in which it owns or leases property (including vessels), or
proposes to own or lease property (including vessels), or in which the conduct
of its business, and the conduct of its business upon consummation of the
Transaction, requires it to so qualify or be licensed, except to the extent that
the failure to so qualify or be in good standing would have no material adverse
effect on the business, operations, properties, prospects or condition
(financial or otherwise) of any of the Borrowers and its Subsidiaries or the
ability of any such Person to perform its obligations under any of the Loan
Documents to which it is or may be a party. Each of the Borrowers and their
Subsidiaries is in compliance in all material respects with all Applicable Law,
rules, regulations and orders.
(b) Corporate Authorities; No Conflicts. The execution,
delivery and performance by each of the Borrowers of this Agreement, the other
Loan Documents and the Acquisition Documents to which it is or will be a party
are within its corporate or limited partnership powers and have been duly
authorized by all necessary corporate and stockholder approvals or partnership
approvals and (i) do not contravene its organizational documents or any law,
rule, regulation, judgment, order or decree applicable to or binding on any of
the Borrowers or their Subsidiaries and (ii) do not contravene, and will not
result in the creation of any lien under, any provision of any contract,
indenture, mortgage or agreement to which any of the Borrowers or their
Subsidiaries is a party, or by which it or any of its properties are bound.
(c) Government Approvals and Authorizations. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery and performance
by or enforcement against each of the Borrowers of the Loan Documents
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or the Acquisition Documents (except such governmental approvals or
authorizations as have been duly obtained or made and remain in full force and
effect).
(d) Legal, Valid and Binding. Each of the Loan Documents and
the Acquisition Documents to which any of the Borrowers is a party is, or upon
delivery will be, the legal, valid and binding obligation of such Borrowers,
enforceable against such Borrowers in accordance with its terms.
(e) Financial Information. The consolidated annual audited
balance sheet of the Borrowers as of December 31, 1995 (as updated on September
30, 1996) and the related statements of operations and changes in financial
position of the Borrowers for the fiscal year then ended, copies of which have
been furnished to the Administrative Agent, fairly present the consolidated
financial condition of the Borrowers as of such date and the results of the
operations of the Borrowers for the period ended on such date, all in accordance
with GAAP consistently applied. There has been no material adverse change in the
business, operations, properties or condition (financial or otherwise) of any of
the Borrowers or any of its Subsidiaries taken as a whole since December 31,
1995.
(f) Litigation. There is no pending or threatened action or
proceeding affecting any of the Borrowers or any of their Subsidiaries by or
before any court, governmental agency or arbitrator, which may materially
adversely affect the condition, operations, business, prospects, properties or
assets of the Borrowers or their Subsidiaries taken as a whole, or prohibit,
limit in any way or materially adversely affect the consummation of the
Transaction, including, without limitation, the ability of any of the Borrowers
or their Subsidiaries to perform its respective obligations under the Loan
Documents or Acquisition Documents to which it is or may be a party, except as
disclosed to the Banks in Schedule E.
(g) Immunities. None of the Borrowers or any of their
Subsidiaries, or the property of any of them, has any immunity from jurisdiction
of any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) under Applicable Law.
(h) No Taxes. There is no Tax or similar item imposed by the
United States, the States of New York or Florida or any other jurisdiction in
which the Borrowers conduct business, or by any political subdivision of any of
the foregoing, on or by virtue of the execution or delivery or enforcement of
this Agreement or the Loan Documents or any other document to be furnished
hereunder, including without limitation any document included in the Collateral
or any Acquisition Document.
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<PAGE>
(i) No Filing. To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement and the other Loan
Documents in each of the Incorporation Jurisdictions and the States of New York
or Florida or any other jurisdiction in which the Borrowers conduct business, it
is not necessary that any Loan Document, or any other document related to any
thereof except the Mortgages, be filed or recorded with any court or other
authority in such jurisdiction, or that any stamp or similar tax be paid on or
with respect to this Agreement or any of the other Loan Documents.
(j) Loan Document Representations and Warranties. The
representations and warranties of the Borrowers in the Loan Documents were true
and correct in all material respects when made, and are true and correct in all
material respects on the date hereof as if made as of the date hereof.
(k) No Defaults. There does not exist (i) any event of
default, or any event that with notice or lapse of time or both would constitute
an event of default, under any agreement to which any of the Borrowers or any of
their Subsidiaries is a party or by which any of them may be bound, or to which
any of their properties or assets may be subject which default would have a
material adverse effect on the Borrowers and their Subsidiaries taken as a
whole, or would materially adversely affect any of the Borrowers' ability to
perform its obligations under the Loan Documents to which it is or may be a
party, or (ii) any event which is a Default or Event of Default.
(l) Margin Regulations. No part of the proceeds of the Loan
will be used for any purpose that violates the provisions of any of Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System of the
United States or any other regulation of such Board of Governors. Neither the
Borrowers nor any of their Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock, within the
meaning of Regulations G, T, U and X issued by the Board of Governors of the
Federal Reserve System of the United States.
(m) Investment Company Act. None of the Borrowers is an "investment
company" or a company "controlled" by an "investment company" (as each of such
terms is defined or used in the Investment Company Act of 1940, as amended) of
the United States.
(n) Taxes Paid. (i) Each of the Borrowers and their
Subsidiaries (A) has filed or caused to be filed, or has timely requested an
extension to file or has received from the relevant governmental authorities an
extension to file, all material tax returns which are required to have been
filed, and (B) has paid all Taxes shown to be due and payable on said returns or
extension requests or on any assessments made against it or any of its
properties, and all other Taxes, fees or other charges
#20170954.1
<PAGE>
imposed on it or any of its properties by any governmental authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which appropriate reserves in
conformity with GAAP have been provided on its books); and (ii) no tax liens
have been filed and no claims are being asserted with respect to any such Taxes,
fees or other charges other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which appropriate reserves in accordance with GAAP have been provided
on its books.
(o) Disclosure. No representation, warranty or statements made
or document or financial statement provided by any of the Borrowers or any
Affiliate or Subsidiary thereof, in or pursuant to this Agreement, any other
Loan Document, or in any other document furnished in connection with this
Agreement, any other Loan Document or the Transaction, is untrue or incomplete
in any material respect or contains any misrepresentation of a material fact or
omits to state any material fact necessary to make any such statement herein or
therein not misleading.
(p) The Security Documents. The provisions of each of the
Security Documents create in favor of the Administrative Agent or the Mortgagee
under the Master Vessel Trust Agreement for the Banks a valid, binding and
enforceable security interest and Lien in all right, title and interest in the
Collateral therein described, and shall, upon execution by the parties thereto
constitute a fully perfected first priority security interest in favor of the
Banks and the Mortgagee on behalf of the Banks in all right, title and interest
in such Collateral, subject in the case of (x) each Mortgage, to the recordation
of the Mortgage as described in the following sentence, (y) each Earnings
Assignment, to notice being given to charterers and account parties and (z) each
Insurance Assignment to notice being given to underwriters and protection and
indemnity clubs, and their consent being obtained where policy provisions or
club rules so require. Upon execution and delivery of a Mortgage by each of the
Borrowers who are owners of a Mortgaged Vessel and the recordation of a Mortgage
in the Home Port of such Vessel, the Mortgage for each such Vessel will be a
first "preferred mortgage" within the meaning of Chapter 313 of Title 46 of the
United States Code and will qualify for the benefits accorded a "preferred
mortgage" under Chapter 313 of Title 46 of the United States Code and no other
filing or recording or refiling or rerecording or any other act is necessary or
advisable to create or perfect such security interests under such Mortgage or in
the mortgaged property therein described. No consent, approval or authorization
of any Person is necessary or desirable for the realization of the benefits
afforded by the Security Documents or for enforcement of the rights and remedies
therein contained by the Administrative Agent, the Mortgagee or the Banks.
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<PAGE>
(q) Good Title. Each of the Borrowers has good title to its
properties and assets, except for (i) as created hereby and permitted hereunder,
existing or future Liens, security interests, mortgages, conditional sales
arrangements and other encumbrances either securing Indebtedness or other
liabilities of any of the Borrowers or any of their Subsidiaries; (ii) other
than in respect of Collateral, Liens which the Borrowers in their reasonable
business judgment has determined would not be reasonably expected to materially
interfere with the business or operations of the Borrowers or their Subsidiaries
as conducted from time to time, (iii) minor irregularities therein which do not
materially adversely affect their value or utility; and (iv) Liens disclosed in
Schedule F.
(r) ERISA. None of the Borrowers nor any of their
Subsidiaries, is or has been subject to, or has any liability, or has incurred
any liability of any sort whatsoever to any Person in respect of any plan within
the meaning of, ERISA or the Code.
(s) Solvency. Each of the Borrowers is on the date
hereof, and at all times will be, Solvent.
(t) Chief Executive Offices. The chief executive
offices of the Borrowers are located at Fort Lauderdale, Florida.
(u) Burdensome Provisions. None of the Borrowers or any of
their Subsidiaries is a party to or bound by any contract or applicable law,
compliance with which will have a materially adverse effect on (a) the Borrowers
and their consolidated Subsidiaries taken as a whole, or (b) any Loan Document
to which any of the Borrowers is a party or (c) the Collateral.
(v) Pari Passu Status. The Obligations of the Borrowers to the Banks under
the Loan Documents will at all times rank at least pari passu in priority of
payment with all of the Borrowers' other Indebtedness.
(w) Citizenship. Each of Hvide and each Borrower owning a
Vessel engaged in the coastwise trade of the United States is a "citizen of the
United States" within the meaning of Section 2 of the Shipping Act, 1916, as
amended, for purposes of engaging in the coastwise trade of the United States.
ARTICLE V.
COVENANTS OF THE BORROWERS
SECTION 1.051 Affirmative Covenants. So long as an Advance or
any other Obligation shall remain unpaid or any Bank shall have any Commitment
under this Agreement, each of the Borrowers shall, unless the Administrative
Agent on behalf of the Banks shall otherwise consent in writing in accordance
with
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<PAGE>
Section 7.04, comply with each of the following affirmative covenants:
(a) Compliance With Laws. Each of the Borrowers shall comply,
and cause each of their Subsidiaries to comply, in all material respects with
Applicable Law, and to pay when due all Taxes, assessments and governmental
charges imposed upon it or upon its properties, and all lawful claims and
liabilities which, if unpaid, might by law become a Lien upon its properties,
provided, however, that the Borrowers shall not be required to pay or discharge
any such Tax, assessment, charge or claim that is being contested in good faith
by appropriate proceedings properly instituted, diligently conducted and for
which adequate reserves in conformity with GAAP have been provided. Each of the
Borrowers will take such action and make such payments which may be required by
any change in applicable laws affecting any of the Loan Documents, in whole or
in part, so that it may continue to perform this Agreement, the Loan Documents
and the other related documents in compliance with such laws.
(b) Use of Proceeds. The Borrowers shall use all proceeds of
the Advances under this Agreement for the purposes set out in Recital 1 of this
Agreement.
(c) Financial Information; Defaults.
(i) Each of the Borrowers shall promptly inform the
Administrative Agent of any event which is a Default or Event of
Default, or any event which materially adversely affects its ability
fully to perform any of its obligations under any Loan Document, or any
Event of Default which has occurred and is continuing under any
material agreement to which such Borrower or any of its Subsidiaries is
a party;
(ii) As soon as the same become available, but in any
event within 90 days after the end of each fiscal year, the Borrowers
shall deliver to the Administrative Agent on behalf of the Banks (x)
audited consolidated financial statements of the Borrowers and their
Subsidiaries in accordance with GAAP (y) unaudited consolidating
financial statements reconciled to the audited financial statements and
certified by Hvide's Chief Financial Officer and (z) a certificate of
the chief financial officer of Hvide setting forth an audited
calculation of the financial tests specified in Sections 5.01(d),(e)
and Section 5.02 (i) in accordance with GAAP showing compliance
therewith and stating that no Event of Default or Default has occurred
and is continuing, or setting forth in detail any such Event of Default
or Default and any steps being taken by the Borrowers to cure the same;
all such audited consolidated financial statements shall be accompanied
by an opinion thereon of independent certified public accountants of
recognized national standing acceptable to the Administrative Agent,
which opinion shall state that said
#20170954.1
<PAGE>
financial statements fairly present the consolidated financial
condition and results of operations of the Borrowers and their
Subsidiaries as at the end of, and for, such fiscal year;
(iii) As soon as the same become available and in any event
within 45 days after the end of each of the first three fiscal quarters
of each fiscal year, the Borrowers shall deliver to the Administrative
Agent on behalf of the Banks unaudited consolidated and consolidating
financial statements of the Borrowers and their Subsidiaries including
statements of income, retained earnings and cash flow and consolidated
balance sheets for such quarter in accordance with GAAP and (z) a
certificate of the chief financial officer of Hvide, which certificate
shall state that such financial statements fairly present the
consolidated financial condition and results of the operations of the
Borrowers and their Subsidiaries, as at the end of, and for, such
period (subject to normal year end audit adjustments) in accordance
with GAAP, consistently applied and set forth in reasonable detail a
calculation of the financial tests specified in Sections 5.01(d) and
(e) and Section 5.02 (i) in accordance with GAAP, showing compliance
therewith and stating that no Event of Default or Default has occurred
and is continuing, or setting forth in detail any such Event of Default
or Default and any steps being taken by the Borrowers to cure the same;
(iv) Not later than 30 days after the close of each month,
beginning with the month ended December 31, 1994, monthly financial
statements on a consolidating and consolidated basis of the Borrowers
showing income statements, balance sheets, cash flows and actual cash
position, together with a certificate of the Chief Financial Officer of
Hvide stating that no Event of Default or Default has occurred and is
continuing, or setting forth in detail any such Event of Default or
Default and any steps being taken by the Borrowers to cure the same;
(v) As soon as the same become available and in any
event not later than January 15 of each year, the Borrowers shall
deliver to the Administrative Agent on behalf of the Banks an annual
business plan of the Borrowers on a consolidated basis for such fiscal
year, financial projections for the Borrowers on a consolidated basis
for three years including statements of income and cash flow, and
balance sheets and the assumptions underlying such plan in reasonable
detail, certified by the chief financial officer of the Borrowers as a
reasonable forecast of the anticipated financial condition of the
Borrowers and their Subsidiaries on a consolidated basis and business
segment basis in respect of such fiscal years;
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<PAGE>
(vi) Promptly upon their becoming available, the Borrowers
shall deliver to the Administrative Agent copies of any registration
statements and periodic reports which the Borrowers shall have filed
with the SEC or any national securities exchange or market and, to the
extent any of the Borrowers has notice of the same, any ratings (and
changes thereto) of its debt by any rating agency or service in the
United States;
(vii) Promptly upon obtaining knowledge of the same give
notice to the Administrative Agent, the Letter of Credit Agent and the
Banks of any material litigation against, any of the Borrowers or their
Affiliates or Subsidiaries;
(viii) As soon as reasonably possible, in the event any of
the Borrowers or any of their Subsidiaries incurs any liability under
ERISA the Borrowers shall deliver to the Administrative Agent copies of
all reports and notices which it or any of its Subsidiaries files under
ERISA; and
(ix) From time to time on request, the Borrowers shall
furnish the Administrative Agent, the Letter of Credit Agent and the
Banks with such information and documents respecting the condition of
operations, financial or otherwise, of each of the Borrowers and its
Subsidiaries, and provide access to the properties, accounts, books,
records and agreements of such Borrowers or any Subsidiary or
Affiliate, as the Administrative Agent or any of the Banks may
reasonably require.
(d) Financial Covenants. The Borrowers shall ensure
that on a consolidated basis:
(i) From the Effective Date, at all times Hvide's
minimum Liquidity shall be not less than Six Million United States
Dollars ($6,000,000).
(ii) At all times Hvide's maximum Leverage Ratio
shall be no greater than the ratios listed below:
Period Ratio
12/31/95 to 6/29/96 5.25
6/30/96 to 12/31/96 3.00
1/1/97 and thereafter 1.75
(iii) At the end of each of Hvide's fiscal quarters, for
such quarter taken together with the immediately preceding three fiscal
quarters; the ratio of Hvide's Consolidated Indebtedness to EBITDAR
shall not be greater than the amount shown below for the respective
periods:
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<PAGE>
Test Period
(Fiscal Quarters Ending) Ratio
12/31/95 to 2/28/96 7.00
2/29/96 to 6/29/96 6.50
6/30/96 to 12/31/96 5.50
1/1/97 to thereafter 3.50
(iv) At the end of each of Hvide's fiscal quarters,
for such quarter taken together with the three immediately preceding
fiscal quarters, the ratio of Hvide's Consolidated Cash Flow to
Consolidated Financial Obligations shall not be less than the amount
shown below for the
respective period:
Test Period
(Quarters Ending) Ratio
12/31/95 to 6/29/96 1.00
6/30/96 to 12/30/97 1.10
12/31/97 and thereafter 1.20
(v) Notwithstanding the foregoing, for the period
from the IPO Date until the first day of the last quarter following the
IPO Date, all calculations made under this Section 5.01(d) shall be
made using Hvide's Pro Forma Consolidated Historical Financial
Statements as presented in the S-1 giving effect to the proposed Second
Offering and Acquisitions. Thereafter, the Administrative Agent shall
use the Borrowers' most recent quarterly financial statements for
purposes of determining whether the foregoing tests have been met.
(e) Collateral Maintenance and Valuation. (i) The Borrowers shall ensure
that at all times on and after the first Drawdown Date the aggregate amount of
unpaid principal in respect of Facilities A, B, and F and the undrawn amounts of
any Letters of Credit, issued in respect of Facilities C and D and Unreimbursed
Letter of Credit Obligations ("Total Outstandings") will be less than the sum of
(1) 70% of the Aggregate Fair Market Value of all Mortgaged Vessels (provided
that as to the SEABULK AMERICA, the value for such Vessel shall not be greater
than the maximum amount of the Mortgage on such Vessel), (2) 70% of all Eligible
Receivables and (3) other such unencumbered material assets reasonably
acceptable to the Banks and pledged to the Banks on a first priority basis as
security at such advance rates as shall be determined reasonably by the Banks
(collectively the "Pledged Collateral"). At any time the Borrowers fail to
satisfy the test prescribed in the preceding sentence, the Borrowers will
promptly either (a) provide additional collateral reasonably acceptable to the
Banks or (b) make a mandatory prepayment in
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<PAGE>
respect of Facilities A, B, or F or cause any Letter of Credit to be reduced or
terminated in the case of Facilities C and D sufficient to comply with the test
in the preceding sentence.
(ii) For purposes of covenant testing the Fair Market Value
of each such Mortgaged Vessel shall be the most recent value determined pursuant
to Section 1.03 hereof provided that the value of a Mortgaged Vessel which is a
Total Loss shall be zero unless (a) such Total Loss is covered by valid and
effective uncontested insurance complying with the requirements of the Mortgage
for such Mortgaged Vessel and the Loss Termination Date has not passed; or (b)
such Total Loss has been replaced by a Substitute Vessel pursuant to Section
2.05(d)(2) and such additional collateral as may be required by Section
2.05(d)(3) hereof and all of the requirements of the Administrative Agent in
connection therewith have been fulfilled and complied with to the satisfaction
of the Administrative Agent.
(iii) At any time that the Borrowers demonstrate to the
reasonable satisfaction of the Banks for each fiscal quarter after the Effective
Date that the ratio of Total Outstandings to the Pledged Collateral is less than
fifty percent (50%), the Banks agree that in respect of the then next following
quarter (A) the requirement for a pledge or mortgage on all Vessels acquired
after the Closing Date (except for the Vessels listed in Exhibit L hereto which
are required to be mortgaged) is waived (provided, however, that there shall be
no release of existing Mortgaged Vessels) and (B) the restriction on
contributing Mortgaged Vessels to joint ventures and partnerships will be
relaxed for such next following quarter from two percent (2%) to five percent
(5%). However, if the ratio of Total Outstandings to the Pledged Collateral is
equal to or greater than fifty percent (50%) in successive quarters, the
requirement for a pledge or mortgage on all Vessels acquired after the Closing
Date will be re-imposed and the restriction on future contributions of Mortgaged
Vessels to joint ventures and partnerships will be reduced to two percent (2%).
(f) Insurance. Each of the Borrowers shall, and shall cause
each of its Subsidiaries to, insure and keep insured, with financially sound and
reputable insurers, so much of its properties, in such amounts and against such
risks, as to all the foregoing, in each case, reasonably satisfactory to the
Administrative Agent on behalf of the Banks and as are usually and customarily
insured by companies engaged in a similar business with respect to properties of
a similar character (other than with respect to Vessels which shall be insured
as provided in the Mortgages).
(g) Access to Books and Records. Each of the Borrowers shall
permit the Administrative Agent or its authorized representatives, promptly upon
request, to make such inspection, examination, copy and audit of its properties,
books, records and accounts and those of its Subsidiaries as the Administrative
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<PAGE>
Agent or its authorized representative may reasonably deem necessary or
appropriate in connection with this Agreement or any of the Loan Documents or
the Acquisition Documents.
(h) Good Standing. Each of the Borrowers shall remain
a corporation or limited partnership duly organized and in good
standing under the laws of its Incorporation Jurisdiction.
(i) Keeping of Books and Records. The Borrowers shall keep
proper books of record and accounts, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrowers
and its Subsidiaries, respectively, in accordance with GAAP consistently
applied, or as otherwise required by applicable rules and regulations of any
governmental agency or regulatory authority having jurisdiction over the
Borrowers and its Subsidiaries, respectively, and as required.
(j) Solvency. The Borrowers shall procure that each
of them is, and shall be, at all times Solvent.
(k) Notice of Litigation. The Borrowers shall promptly give
notice in writing to the Administrative Agent of all litigation and of all
proceedings before any governmental or regulatory agency affecting itself which,
if adversely determined, would materially adversely affect the condition,
financial or otherwise, of the Borrowers.
(l) Further Assurances. The Borrowers shall, from time to time
upon the request of the Administrative Agent on behalf of any Bank, accept for
cancellation any Note or Notes held by and payable to such Bank, and thereupon
the Borrowers shall execute and deliver to the Administrative Agent on behalf of
such Bank, payable to it and its registered assigns, a substitute Note or Notes,
prepared and delivered to the Borrowers by the Administrative Agent, in like
form and total aggregate amount as the canceled Note or Notes, but in any
denomination not smaller than One Million Dollars ($1,000,000) or such lesser
amount as such Bank may request as shall constitute the outstanding principal of
all outstanding Notes held by such Bank. The Borrowers shall do all things
necessary to grant to, and maintain in favor of, the Administrative Agent or the
Mortgagee on behalf of the Banks a valid, first priority security interest in
the Collateral, and to maintain each of the Loan Documents as legal, valid and
binding obligations, enforceable in accordance with their respective terms by
the Administrative Agent, the Mortgagee, the Banks, as the case may be. The
Borrowers shall take such other actions and deliver such instruments as may be
necessary or advisable, in the opinion of the Administrative Agent on behalf of
the Banks, to protect the security interest created in the Collateral, and the
rights and remedies of the Banks and the Mortgagee as the case may be, under the
Loan Documents.
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<PAGE>
(m) Acquired Vessels. All vessels acquired by any of the
Borrowers after the Closing Date will be pledged or mortgaged to the Banks as
Mortgaged Vessels except as otherwise provided in Section 5.01(e) hereof. The
Borrowers shall deliver to the Administrative Agent within five days of any
Acquisition, two original executed and acknowledged Mortgage Supplements (in the
form of Exhibit N hereto) in order to mortgage any Vessels acquired pursuant to
the Acquisition.
(n) Cash Management. The Borrowers shall maintain cash
management systems acceptable to the Administrative Agent, and the collection
accounts for payment of earnings of Mortgaged Vessels shall be subject to a
first perfected priority lien in favor of the Administrative Agent on behalf of
the Banks.
(o) Cash Collateral. In the event the face amount of the
Letter of Credit exceeds the amount to which the Letter of Credit should have
been reduced as set forth in Section 2.07(b), the Borrowers shall deposit
additional funds in the Cash Collateral Account equal to such excess amount.
(p) Contracts. The Borrowers shall comply with the terms of
all contracts to which any of them is a party or by which any of them or any of
their properties may be bound, except that this Section 5.01(p) shall not apply
to any non-compliance that (a) has been excused or waived under the relevant
contract or (b) either alone or when aggregated with all other such non-
compliances, would not have a materially adverse effect on the Borrowers and
their consolidated Subsidiaries taken as a whole.
(q) Corporate Structure. The Borrowers shall (i) maintain
Hvide as a publicly traded company as contemplated by the S-1; and (ii) ensure
that the Hvide stock is always entitled to be traded on public markets of the
United States and is not censored by any exchange, the SEC or comparable
organization.
SECTION 1.052 Negative Covenants. So long as any Advance or
any other Obligation shall remain unpaid or any Bank shall have any Commitment,
the Borrowers shall not, unless the Administrative Agent on behalf of the Banks
shall otherwise consent in writing in accordance with Section 7.04:
(a) Mergers, Acquisitions, etc. Acquire the capital stock of
any Person, or merge or consolidate with or into, or permit any of its
Subsidiaries to do so, except that (x) any Subsidiary of the Borrowers may merge
or consolidate with or into, or transfer assets to the Borrowers, or (y) any
Subsidiary of the Borrowers may merge or consolidate with or into, or transfer
assets to, or acquire assets of, any other Subsidiary of the Borrowers, and any
Borrower may cause the change of its Incorporation Jurisdiction by way of merger
or otherwise, upon consent of the Majority Banks;
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(b) Liens. Permit Liens on the Consolidated Assets of the
Borrowers other than (i) those existing on the Closing Date which are approved
by the Banks, (ii) those permitted under the Mortgages, and (iii) anticipated
Indebtedness described in Exhibit D hereto;
(c) Restricted Payments. Make any payment of cash, property or
other assets in respect of any shares of any class of capital stock; including
but not limited to, dividends or other distribution or payment of assets
property, rights, obligations or securities on account of any of its shares of
capital stock except that Hvide may pay dividends to its Class A and Class B
Common Stock shareholders, the total of which may not exceed half of Hvide's net
income for the fiscal year in which the dividend is to be paid;
(d) Business Change. Make or permit any material
change to occur in the nature, or conduct of business of the
Borrowers and their Subsidiaries, taken as a whole, as conducted
on the date hereof;
(e) Guarantees. Assume, guarantee, endorse, agree to purchase
or repurchase or provide funds in respect of, or otherwise become or be, or
remain directly or contingently liable upon any Indebtedness, obligation or
dividend of, any other Person, firm, corporation or enterprise, except (i) those
which when aggregated with the additional indebtedness permitted under Section
5.02(j), do not exceed the requirements set forth in 5.02(j) in principal amount
or on a present value discounted basis; (ii) endorsements of negotiable
instruments for deposit or collection in the ordinary course of business; (iii)
the Hvide indemnity of up to the principal amount of Six Million Eight Hundred
Thousand Dollars ($6,800,000) in favor of the 3R Trusts as sellers of the Seal
Fleet Vessels; and (iv) guarantees of the obligations of Subsidiaries which are
not otherwise prohibited by this Agreement;
(f) Transactions with Officers, Directors and Shareholders.
Enter or permit any of its Subsidiaries to enter into any transaction or
agreement, including but not limited to any lease, Capital Lease, purchase or
sale of real property, purchase of goods or services, with any Subsidiary,
Affiliate or any officer, or director of the Borrowers or of any such Subsidiary
or Affiliate, or any record or known beneficial owner of equity securities of
any such Subsidiary, any known record or beneficial owner of equity securities
of any such Affiliate or the Borrowers, or any record or beneficial owner of at
least five percent (5%) of the equity securities of the Borrowers, except (i) on
terms that are no less favorable to the Borrowers or the relevant Subsidiary
than those that could have been obtained in a comparable transaction by the
Borrowers or such Subsidiary with an unrelated Person; (ii) between Subsidiaries
or between the Borrowers and Subsidiaries which are consolidated for financial
reporting purposes with the Borrowers;
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(g) Compliance with ERISA. Become party to any prohibited
transaction, reportable event, accumulated funding deficiency or plan
termination with respect to any plan as to which there is an insufficiency, all
within the meaning of ERISA and the Code, nor permit any Subsidiary to do so;
(h) Investment Company. Be or become an investment
company subject to the registration requirements of the Investment Company Act
of 1940, as amended, or permit any Subsidiary to do so;
(i) Additional Indebtedness. Incur additional Indebtedness
except for (i) existing Indebtedness listed in Schedule F; (ii) trade debt and
similar obligations incurred in the ordinary course of business; (iii)
anticipated Indebtedness listed in Exhibit D hereto; (iv) Indebtedness not to
exceed Thirty Million Dollars ($30,000,000) in principal amount which is
permitted in connection with Permitted Capital Expenditures.
(j) Place of Business, Etc. Change its principal place of
business or chief executive offices without first (i) giving the Administrative
Agent at least 30 days advance written notice thereof and (ii) executing and
filing Uniform Commercial Code financing statements, in form and substance
satisfactory to the Administrative Agent, in such jurisdiction or jurisdictions
as the Administrative Agent shall request;
(k) Organizational Documents. Amend its articles of
incorporation (or similar organizational documents) or by-laws, or permit any
Subsidiary to do any of the foregoing (except for such amendments as shall not
adversely affect the rights and remedies of the Administrative Agent or any
Bank);
(l) Management Contracts. Enter into any material
changes to the management or management contracts in connection
with any Vessels without the consent of the Administrative Agent,
which consent shall not unreasonably be withheld;
(m) Contribution to Joint Ventures. Contribute Mortgaged
Vessels to joint ventures or partnerships except for those Vessels in joint
ventures at the Closing Date and (over the life of the Transaction) vessels
valued at no more than a two percent (2%) in the aggregate of the total value of
Mortgaged Vessels at the time of their contribution to such joint venture or
partnership.
SECTION 1.053 Cash Collateral Account. (a) When required by
the terms of this Agreement, the Borrowers will establish and maintain at
Citibank, N.A. at 399 Park Avenue, New York, New York, 10043 under the
Administrative Agent's sole dominion and control, a special cash account (the
"Cash Collateral Account").
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(b) For so long as no Default or Event of Default has occurred
or is continuing hereunder, the Administrative Agent agrees to make Permitted
Investments with the funds in such account upon the instruction of the
Borrowers. Absent instruction from the Borrowers, the Administrative Agent shall
have no obligation to make such Permitted Investments. Any losses which result
in a shortfall of the amount necessary to pay the next maturing installment of
principal and interest shall be for the account of the Borrowers.
(c) The Administrative Agent on behalf of the Banks and the
Letter of Credit Agent shall have rights of setoff and a security interest and
charge in the Cash Collateral Account. If any Default or Event of Default shall
have occurred and be continuing, all amounts then on deposit or at any time
thereafter deposited in the Cash Collateral Account in lieu of being released
shall, in the sole discretion of the Administrative Agent, be retained by the
Administrative Agent, and/or from time to time applied by the Administrative
Agent against, any or all of the Obligations as such Obligations become due and
payable, whether by acceleration or otherwise.
(d) Any funds remaining in the Cash Collateral Account or
after the Loan and all Obligations have been repaid shall be released to the
Borrowers.
ARTICLE VI.
DEFAULT
SECTION 1.061 Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) Any of the Borrowers shall fail to pay any installment of
principal of the Loan when due, or interest with respect to the Loan within
three Business Days after an Interest Payment Date, or fees with respect to the
Loan within three Business Days after the date on which such fee is due or any
other amounts with respect to the Loan within three Business Days of the notice
demanding payment thereof; or
(b) Any representation or warranty made by or on behalf of any
of the Borrowers under or in connection with this Agreement or any of the other
Loan Documents shall prove to have been incorrect in any material respect when
made; or
(c) Any of the Borrowers shall fail to perform or observe any
covenant contained in Section 5.01(d), (e), (f), (j), (k), (l), (n) or (q),
Section 5.02, or Section 5.03 of this Agreement on its part to be performed or
observed; or
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(d) Any of the Borrowers shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or any of the
other Loan Documents (other than any Mortgage) on its part to be performed or
observed and, in each case, any such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to the Borrowers by the
Administrative Agent or any Bank; or
(e) Any of the Borrowers shall fail to pay any amount or
amounts due in respect of material Indebtedness of such Borrower when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Indebtedness;
or any other default under one or more agreements or instruments relating to
Indebtedness of such Borrower or such Subsidiary, or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease shall
be required to be made, in each case prior to the stated maturity thereof; or
(f) (1) Any of the Borrowers shall (A) generally not pay its
debts as such debts become due, (B) threaten to stop making payments generally,
(C) admit in writing its inability to pay its debts generally, (D) make a
general assignment for the benefit of creditors, (E) not be Solvent or (F) be
unable to pay its debts;
(2) Any proceeding shall be instituted in any jurisdiction by
or against any of the Borrowers or any of its material Subsidiaries (A) seeking
to adjudicate it a bankrupt or insolvent, (B) seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or (C) seeking the entry of an administration order, an order
for relief, or the appointment of a receiver, trustee, or other similar
official, for it or for any substantial part of its property; or
(3) Any of the Borrowers or any of their Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
subparagraph (f)(2) of this Section 6.01; or
(g) One or more judgments or orders shall be rendered against
any of the Borrowers or any of their Subsidiaries for the payment of money,
singly or in the aggregate, in excess of Five Hundred Thousand Dollars
($500,000) which amounts are not covered by valid insurance policies and either
(i) enforcement
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proceedings to sell assets have been commenced by any creditor upon such
judgment or order or (ii) there shall have elapsed any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not have been in effect; or
(h) Any governmental authority or any Person or entity acting
or purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or
substantially all of the property of any of the Borrowers or of any of their
Subsidiaries which are material to the assets or business of the Borrowers on a
consolidated basis, or shall have taken any action to displace the management of
the Borrowers or of any of their Subsidiaries which are material to the assets
or business of the Borrowers on a consolidated basis, or to curtail its
authority in the conduct of the business of any of the Borrowers or of any of
their Subsidiaries which are material to the assets or business of the Borrowers
on a consolidated basis; or
(i) After delivery thereof to the Administrative Agent, the
Banks, or the Mortgagee, the Administrative Agent, the Banks or the Mortgagee
shall for any reason (except to the extent permitted by the terms thereof) not
have a valid and perfected first priority security interest in any of the
Pledged Collateral purported to be covered by any of the Security Documents
which results in a default in the performance of the Borrowers' obligations
under Section 5.01(e); or
(j) An "event of default" shall have occurred and be
continuing under any Mortgage; or
(k) The Borrowers shall take any action in connection with any
charter or other operation of any Mortgaged Vessel which shall impair the
security interests of the Administrative Agent or the Mortgagee created or
purported to be created by any related Earnings Assignment or Insurance
Assignment; or
(l) Any material provision of the Loan Documents after
delivery thereof shall for any reason cease to be in full force and effect, or
any party thereto shall so state in writing; or
(m) There shall have occurred a Change of Control.
SECTION 1.062 Application of Proceeds. All payments received
and amounts held or realized by the Administrative Agent, or delivered to the
Administrative Agent by the Mortgagee, in respect of any of the Loan Documents
and the Collateral (or any proceeds thereof) after an Event of Default shall
have occurred and so long as an Event of Default shall be continuing shall
promptly be distributed by the Administrative Agent in the following order of
priority:
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First, so much of such payments or amounts as shall be
required to pay the Administrative Agent, the Letter of Credit Agent
and the Mortgagee for any Tax, expense, charge or other loss incurred
by the Administrative Agent, the Letter of Credit Agent or the
Mortgagee to the extent not previously reimbursed (including, without
limitation, the expenses of any sale, taking or other possession,
attorneys' fees and expenses, court costs and any other expenditures
incurred or expenditures or advances made by the Administrative Agent,
the Letter of Credit Agent or the Mortgagee in the protection, exercise
or enforcement of any right, power, or remedy or any damages sustained
by the Administrative Agent or the Mortgagee, liquidated or otherwise
upon such Event of Default) and to pay any other Obligations arising
hereunder or under any of the other Loan Documents to the
Administrative Agent, the Letter of Credit Agent and the Mortgagee
shall be applied by the Administrative Agent in payment of such
expenses;
Second, so much of such payments or amounts as shall be
required to reimburse the Banks ratably in accordance with their
respective Percentage Interests for all outstanding amounts in respect
of (i) accrued and unpaid interest, Breakage Costs, and then (ii)
outstanding principal of each Advance until paid in full, with any
amounts remaining to be applied in accordance with clause Third below;
Third, so much of such payments or amounts as shall be
required to reimburse the Banks ratably in accordance with their
respective Percentage Interests for all other amounts owing in respect
of any Obligations other than those specified in paragraph Second
above; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Borrowers.
ARTICLE VII.
RELATION OF BANKS, ASSIGNMENT
AND PARTICIPATIONS
SECTION 1.071 Banks and Administrative Agent. The general administration of
this Agreement and the Loan Documents shall be by the Administrative Agent, and
each Bank hereby authorizes and directs the Administrative Agent to take such
action (including without limitation retaining lawyers, accountants, surveyors
or other experts) or forbear from taking such action as in the Administrative
Agent's reasonable opinion may be necessary or desirable for the administration
hereof (subject to any direction of the Majority Banks and to the other
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requirements of Section 7.04 hereof). The Administrative Agent shall inform each
Bank, and each Bank shall inform the Administrative Agent, of the occurrence of
any Event of Default promptly after obtaining knowledge thereof; however, unless
it has actual knowledge of an Event of Default, each of the Administrative
Agent, the Letter of Credit Agent and the Banks may assume that no Event of
Default has occurred.
SECTION 1.072 Pro Rata Sharing. All commissions, fees,
interest and payments received by the Administrative Agent or any Bank under the
terms of this Agreement and the other Loan Documents and all expenses arising
from the administration hereof or the enforcement of any security and any sum
realized therefrom or from any setoff (other than sums applied to the payment of
expenses or for reimbursement of expenses paid) for which provision for
allocation and payment is not otherwise provided for herein or therein shall be
divided pro rata among the Banks in accordance with their Percentage Interests
set forth in Exhibit M hereto or, if applicable, in the Register.
Notwithstanding the foregoing, nothing herein shall be construed to prevent
Citibank, N.A. or The First National Bank of Boston from receiving solely for
its own account as neither Bank, Administrative Agent, Co-Agent nor Letter of
Credit Agent hereunder, such other fees and payments in respect of the
Transaction as it may mutually agree with the Borrowers. Each Bank shall pay to
the Administrative Agent promptly on demand any sums payable by such Bank
hereunder. Under no circumstances shall the Administrative Agent be obligated to
expend its own funds for the protection of the interests of the Banks, but the
Administrative Agent shall be entitled to be indemnified hereunder by the Banks
in accordance with their Percentage Interest prior to taking any action or
expending any funds.
SECTION 1.073 Setoff. Any Bank which shall receive payment of
or on account of all or part of its claim against the Borrowers hereunder
through the exercise of any right of setoff, counterclaim, banker's lien, or
secured claim under any bankruptcy statute in a greater proportion than its
Percentage Interest shall promptly notify the Administrative Agent thereof as
set forth in Section 8.05 hereof and shall be deemed to have purchased
immediately prior to such payment a ratable proportion of the claims of the
other Banks so that all recoveries of principal and interest shall be shared by
the Banks in accordance with their respective Percentage Interests. If all or
any portion of such excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored of such recovery,
but without interest.
SECTION 1.074 Approvals. Upon any occasion requiring or
permitting an approval of any amendment or modification or any consent, waiver,
declaring an Event of Default or taking any action thereafter, or any other
action on the part of the Administrative Agent or the Banks under any of the
Loan Documents, (1) action may (but shall not be required to) be taken
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by the Administrative Agent for and on the behalf or for the benefit of all
Banks, provided (A) that no contrary direction of the Majority Banks shall have
been previously received by the Administrative Agent, and (B) that the
Administrative Agent shall have received consent of the Majority Banks to enter
into any written amendment, waiver or modification of the provisions of any of
the Loan Documents, or to consent in writing to any material departure from the
terms of any Loan Documents by the Borrowers or any other party thereto or (2)
action shall be taken by the Administrative Agent upon the direction of the
Majority Banks, and any such action shall be binding on all Banks; provided
further, however, that unless all of the Banks agree in writing thereto, no
amendment, modification, waiver, consent or other action with respect to any of
the Loan Documents shall be effective which (a) increases the Commitment,
increases the Percentage Interest of any of the Banks or increases the Aggregate
Amount, (b) reduces any commission, fee, principal or interest owing to any Bank
hereunder or the method of calculation of any thereof, (c) extends Maturity
Date, the expiry date of any Letter of Credit or any other date on which any sum
is due hereunder, including, without limitation, the date or amount of any
prepayment required hereunder, (d) releases any Collateral, guaranty or other
security, (e) amends, waives or modifies the provisions of Section 5.01(e)
hereof, or (f) amends the provisions of this Section 7.04 or the definition of
Majority Banks.
SECTION 1.075 Exculpation. The Administrative Agent shall not
be liable or answerable for anything whatsoever in connection with any of the
Loan Documents or other instrument or agreement required hereunder or
thereunder, including responsibility in respect of the execution, delivery,
construction or enforcement of any of the Loan Documents or any such other
instrument or agreement, or for any action taken or not taken by the
Administrative Agent in any case involving exercise of any power or authority
conferred upon the Administrative Agent under any thereof, except for its wilful
misconduct or gross negligence, and the Administrative Agent shall have no
duties or obligations other than as provided herein and therein. The
Administrative Agent shall be entitled to rely on any opinion of counsel
(including counsel for any of the Borrowers or any of their Subsidiaries) in
relation to any of the Loan Documents or any other instrument or agreement
required hereunder or thereunder and upon writings, statements and
communications received from the Borrowers or any of its Subsidiaries (including
any representation made in or in connection with any Loan Document), or from any
other party to any of the Loan Documents or any documents referred to therein or
any other Person, firm or corporation reasonably believed by it to be authentic,
and the Administrative Agent shall not be required to investigate the truth or
accuracy of any writing or representation, nor shall the Administrative Agent be
liable for any action it has taken or omitted in good faith on such reliance.
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SECTION 1.076 Indemnification. Each Bank agrees to indemnify
the Administrative Agent, except to the extent reimbursed by the Borrowers and
except in the case of any suit by any Bank against the Administrative Agent
resulting in a final judgment against the Administrative Agent, ratably
according to its Percentage Interest against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursement of any kind or nature whatsoever (except to the extent the
foregoing result from the Administrative Agent's gross negligence or wilful
misconduct) which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of (y) any of the
Loan Documents or any other instrument or agreement contemplated hereunder or
thereunder or (z) any action taken or omitted by the Administrative Agent under
any of the Loan Documents or such other instrument or agreement.
SECTION 1.077 Administrative Agent, Co-Agents and Letter of
Credit Agent as Bank. Each of the Administrative Agent, the Co-Agents and the
Letter of Credit Agent shall, in its individual capacity, have the same rights
and powers hereunder as any other Bank and may exercise the same as though it
were not an agent; the term "Banks" shall include each of the Administrative
Agent, the Co-Agents and the Letter of Credit Agent in its individual capacity
to the extent of its Percentage Interest. Each of the Administrative Agent, the
Co-Agents and the Letter of Credit Agent and its respective Subsidiaries and
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with each of the Borrowers, and their
respective Subsidiaries and Affiliates, as if it were not the Administrative
Agent, Co-Agents or Letter of Credit Agent, as the case may be.
SECTION 1.078 Notice of Transfer; Resignation; Successor
Administrative Agent. (a) The Administrative Agent may deem and treat a Bank
party to this Agreement as the owner of such Bank's interest in any Loan and any
other instrument or agreement of the assignment or transfer thereof, executed by
such Bank and otherwise in compliance with the requirements of Section 7.10
hereof, shall have been received and accepted by the Administrative Agent. The
Administrative Agent shall resign if directed by the Majority Banks. The
Administrative Agent may resign at any time by notice to the Borrowers and the
Banks.
(b) Any successor Administrative Agent shall be appointed by
the Majority Banks and shall be a bank or trust company reasonably satisfactory
to the Majority Banks, and, so long as no Event of Default shall have occurred
and be continuing, appointment of any such successor Administrative Agent
(whether by the Majority Banks or by the retiring Administrative Agent) shall be
subject to the consent of the Borrowers, such consent not to be unreasonably
denied or withheld. If no successor Administrative Agent shall have been so
appointed by the Majority Banks, and shall have accepted such
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appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Bank's removal of the Administrative
Agent, then such retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 1.079 Credit Decision; Not Trustee. Each Bank
represents that it has made, and agrees that it shall continue to make its own
independent investigation of the financial condition of each of the Borrowers
and their Subsidiaries and its own appraisal of the creditworthiness of each of
the Borrowers and their Subsidiaries in connection with the making and
performance of the Loan Documents. The Administrative Agent has and shall have
no duty or responsibility whatsoever on the date hereof or, except as otherwise
expressly provided in this Agreement at any time hereafter, to provide any Bank
with any credit or other information. Nothing herein shall (nor shall it be
construed so as to) constitute the Administrative Agent or the Letter of Credit
Agent a trustee for each of the Borrowers or their Subsidiaries or impose on it
any duties or obligations other than those for which express provision is made
in this Agreement or under the other Loan Documents.
SECTION 7.10 Assignments and Participation; Termination. (a)
Each Bank may assign to one or more banks or other entities all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment, the Advances owing to it and the Note or
Notes held by it); provided, however, that (i) each such assignment shall be of
a constant, and not a varying, percentage of all rights and obligations under
this Agreement, (ii) unless the Borrowers shall otherwise agree with the
assigning Bank, the amount of the Commitment of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than Five Million Dollars ($5,000,000) or such lesser amount as shall
constitute all of such assigning Bank's Commitment and the outstanding principal
of Notes payable to it, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall
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execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing recordation fee of $3,000;
provided further, however, that so long as no Event of Default shall have
occurred and be continuing, each such assignment shall be subject to the consent
of the Borrowers, which consent shall not unreasonably be denied and which
consent shall be deemed given unless the Borrowers gives the assigning Bank and
the Administrative Agent written notice of and a reasonable basis for its denial
not later than ten (10) Business Days following telex, telefacsimile or cable
notice given to the Borrowers by the assigning Bank or the Administrative Agent
of the name of the proposed transferee, the amount of Commitment to be assigned
and such information as the Borrowers may reasonably request for purposes of
making an informed judgment. Prior to contacting a prospective assignee in
connection with a proposed assignment hereunder, the assignor Bank shall give
the Borrowers notice of the identity of any such prospective assignee. Any
consent to assignment untimely or unreasonably denied by the Borrowers shall be
void and of no effect, and shall not preclude or bar any assignment otherwise
permitted by this Section 7.10(a). Any assignment or purported assignment not in
compliance with this Section shall be void and of no effect. Without regard to
any of the other terms of this Agreement or of any other agreement, any Bank may
assign, as collateral or otherwise, any of its rights (including, without
limitation, rights to payments of principal and/or interest on the Notes) under
this Agreement to any Federal Reserve Bank of the United States without notice
to or consent of the Borrowers, the Agent or any other Person.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance and subject to the foregoing, have the rights and
obligations of a Bank hereunder and (y) the Bank assignor thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement, such Bank shall cease to be
party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in connection with this Agreement
or the execution, legality,
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validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; (ii) such assigning
Bank makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any of the Borrowers or its Subsidiaries
or the performance or observance by any of the Borrowers or its Subsidiaries of
any of its obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this agreement, together with copies of the Borrowers' financial
statements referred to herein, and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Bank or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee representing that it is an Eligible
Assignee, the Administrative Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit I hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register (including the transfer of Notes to such Eligible Assignee by the
assigning Bank) and (iii) give prompt notice and an execution counterpart
thereof to the Borrowers. Within five (5) Business Days after its receipt of
such notice, the Borrowers, at the expense of the assigning Bank, shall execute
and deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a new Note or new Notes, as the case may be, of the same series to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance. Such new Note or Notes shall be
in an aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit I
hereto.
(e) The Administrative Agent shall maintain at its address
referred to in Section 8.02 of this Agreement a register for the recordation of
the names and addresses of the Banks and the Commitment of, and principal amount
of the Advance owing and
#20170954.1
<PAGE>
each Note payable to, each Bank from time to time and a copy of each Assignment
and Acceptance delivered to and accepted by it (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Administrative Agent, the Letter of Credit Agent
and the Banks may treat each Person whose name is recorded in the Register as a
Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers or any Bank at any reasonable time and
from time to time upon reasonable prior notice and each shall be entitled to
make copies thereof at its expense.
(f) Each Bank may grant participations to one or more banks or
other entities in or to all or any part of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
the Advance owing to it); provided, however, that, notwithstanding the grant of
any such participation by any Bank, such participation, and the right to grant
such a participation, shall be expressly subject to the following conditions and
limitations: (i) such Bank's obligations under this Agreement (including without
limitation, its Commitment to the Borrowers hereunder) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Bank shall remain the holder of
any such Note and Advance for all purposes of this Agreement, (iv) the
Borrowers, the Administrative Agent and the other Banks shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under the Agreement, (v) such Bank shall continue to be able to
agree to any modification or amendment of this Agreement or any waiver hereunder
without the consent, approval or vote of any such participant or group of
participants, other than modifications, amendments, and waivers which (a)
postpone the Maturity Date or any date fixed for any payment of, or reduce any
payment of, principal of or interest on such Bank's Advance or any fees or other
amounts payable under this Agreement, or (b) increase the amount of such Bank's
Commitment, or (c) change the interest rate payable under this Agreement, or (d)
release all or any substantial part of the Collateral, provided that if a Bank
agrees to any modification or waiver relating to items (a) through (d), the
Borrowers, the Administrative Agent and each other Bank may conclusively assume
that such Bank duly received any necessary consent of each of its participants,
and (vi) except as contemplated by the immediately preceding clause (v), no
participant shall be deemed to be or to have any of the rights or obligations of
a "Bank" hereunder.
(g) Any Bank may, in connection with any assignment,
designation or participation or proposed assignment, designation or
participation pursuant to this Section 7.10, disclose to the assignee or
participant, or proposed assignee, or participant, any information relating to
any of the Borrowers or their Subsidiaries that is otherwise publicly available
and has been furnished to such Bank by or on behalf of the Borrowers, provided
#20170954.1
<PAGE>
that without the Borrowers' prior written or oral consent, no Bank shall
disclose to any proposed assignee or proposed participant, any such information
not otherwise publicly available relating to the Borrowers or its Subsidiaries
as has been furnished to such Bank by or on behalf of the Borrowers hereby;
provided, however, any Bank may disclose such information to a potential
assignee if prior to any disclosure, the potential assignee has signed a
confidentiality agreement in form and substance reasonably satisfactory to
Borrowers. Any Bank that sells or grants a participation pursuant to this
Section 7.10 shall (i) in a timely manner withhold or deduct from each payment
to the holder of such participation the amount of any Taxes required under
Applicable Law to be withheld or deducted from such payment that have not been
withheld or deducted by the Borrowers or the Administrative Agent or the Letter
of Credit Agent (ii) pay such Taxes in a timely manner to the appropriate
authorities and (iii) indemnify the Borrowers and the Administrative Agent or
the Letter of Credit Agent for any Taxes, losses, costs or expenses that they
may incur as a result of any failure to pay such Taxes to the appropriate
authority when due.
SECTION 7.11 Co-Agents. Each of the Co-Agents shall have no
duties, responsibilities, rights or liabilities as Co- Agent, as the case may
be, under this Agreement or any of the other Loan Documents and shall not be
liable or answerable for anything whatsoever in connection with any of the Loan
Documents or other instrument or agreement required hereunder or thereunder,
including responsibility in respect of the execution, delivery, construction or
enforcement of any of the Loan Documents or any such other instrument or
agreement, or for any action taken or not taken by any Person with respect
thereto. Each of the Co-Agents has and shall have no duty or responsibility
whatsoever on the date hereof or at any time hereafter, to provide any Bank with
any credit or other information. Nothing herein shall (nor shall it be construed
so as to) constitute the Co-Agents a trustee for the Borrowers or their
Subsidiaries or impose on it any duties or obligations whatsoever under this
Agreement, the other Loan Documents, or otherwise.
ARTICLE VIII.
MISCELLANEOUS
SECTION 1.081 Amendments. No amendment, restatement,
supplement or modification to this Agreement shall be enforceable against the
Borrowers unless the same shall be in writing and signed by the Borrowers. No
amendment or waiver of any provision of this Agreement or any instrument
delivered hereunder, nor consent to any departure by the Borrowers therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent and, to the extent required by Section 7.04 hereof,
the Majority Banks or each Bank, as the case
#20170954.1
<PAGE>
may be, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given, provided that in the
absence of actual notice to the contrary, the Borrowers may conclusively rely on
all writings purported to be delivered and actions taken by the Administrative
Agent on behalf of the Banks or the Majority Banks, as the case may be, without
inquiry as to the authority of the Administrative Agent with respect thereto.
SECTION 1.082 Notices. All notices, demands and other
communications provided for hereunder shall be in writing (including telegraphic
communication) telexed, telecopied or telegraphed or delivered, if to the
Borrowers, at its address set forth below its signature herein written; if to
the Administrative Agent, at its address set forth below its signature herein
written; and if to a Bank other than the Administrative Agent, the Letter of
Credit Agent at its address set forth below its signature herein written; or, as
to each party, at such other address as shall be designated by such party in a
notice to the other parties hereto. All such notices and communications shall,
when telexed, telecopied, or telegraphed, be effective upon the earliest of (i)
actual receipt or (ii) when (on a Business Day and during normal business hours
at the addressee's address) transmitted by telecopy or telex or delivered to the
telegraph company, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II hereof shall not be effective until
received by the Administrative Agent.
SECTION 1.083 No Waiver; Remedies. Regardless of any fact
known or investigation undertaken by the Administrative Agent or any Bank, no
failure on the part of the Administrative Agent or any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 1.084 Costs, Expenses, Fees and Indemnities;
Concerning the Mortgagee and the Trustee. (a) Each Borrower agrees to pay on
demand (i) in connection with the preparation, execution, and delivery of this
Agreement and the instruments and other documents to be delivered hereunder, (x)
the reasonable fees and out-of-pocket expenses of Messrs. Winthrop, Stimson,
Putnam & Roberts, as special counsel for the Administrative Agent, the Letter of
Credit Agent and the Banks and Messrs. Bingham, Dana & Gould as special counsel
to the Letter of Credit Agent (and any local counsel retained by such firm) with
respect to the closing of the Transaction and (y) all other reasonable and
customary third party costs and expenses of the Banks and the Administrative
Agent (other than any other legal fees and related expenses incurred by them)
and (z) the reasonable fees and out-of-pocket expenses of the Mortgagee and the
Trustee (including
#20170954.1
<PAGE>
reasonable attorney fees and out-of-pocket expenses) and (ii) after the Closing
Date, all reasonable and customary third party costs and expenses in connection
with the administration of this Agreement and the other instruments and
documents to be delivered hereunder, including, without limitation, (y) the
reasonable fees and out-of-pocket expenses of any counsel for the Administrative
Agent or the Banks in connection with advice given the Administrative Agent or
the Banks, from time to time, as to their rights and responsibilities under this
Agreement and in connection with the waiver, supplementation or amendment of
such instruments and documents and (z) the reasonable fees and out-of-pocket
expenses of the Mortgagee (including the reasonable fees and out-of-pocket
expenses of counsel to the Mortgagee) and the indemnities payable to the
Mortgagee as trustee under the Master Vessel and Collateral Trust Agreement,
respectively, pursuant to the terms hereof. The Borrowers further agree to pay
on demand all losses, costs and expenses, if any (including, without limitation,
counsel fees and expenses), in connection with the enforcement of this Agreement
and the instruments and other documents delivered hereunder, including, without
limitation, losses, costs and expenses sustained as a result of a Default by any
of the Borrowers in the performance of its obligations contained in this
Agreement or any instrument or document delivered hereunder.
(b) If, for any reason, including maturity or demand of the
Loan under Article VI, or prepayment of the Loan, in whole or in part, the
Administrative Agent or any of the Banks receives payment of principal of or
interest on an Advance on any day other than the Principal Payment Date or
Interest Payment Date for such Advance, the Borrowers shall pay to the
Administrative Agent on behalf of the Banks on demand any amounts required to
compensate the Banks for any breakage costs (including cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds in
respect of such payment) and any additional losses, costs or expenses which any
Bank may incur as a result of such payment, prepayment, purchase or acceleration
in connection with unwinding or liquidating of any deposits or funding or
financing arrangement with its funding sources (collectively, "Breakage Costs"),
provided that the Bank shall have delivered to the Administrative Agent and the
Borrowers a certificate as to the amount of such Breakage Costs, which
certificate shall be binding, absent manifest error, except that the failure of
the Bank to provide such certificate shall in no way relieve the Borrowers of
their obligations under this Section 8.04(b).
(c) Each Borrower agrees to indemnify and hold harmless each
of the Banks and the Administrative Agent, the Letter of Credit Agent and its
and their respective Affiliates, directors, officers, employees, agents,
representatives, counsel and advisors (each an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and disbursements
#20170954.1
<PAGE>
of counsel and the costs of investigation and defense thereof) which may be
incurred by or asserted or awarded against any Indemnified Party, in each case
based upon, arising out of or in connection with or by reason of, the
Transaction (including, without limitation, any act or failure to act by the
Administrative Agent, the Letter of Credit Agent or the Mortgagee where such act
or failure to act was taken pursuant to the Borrowers' request, any Transaction
contemplated by this Agreement, or any Loan Document), whether or not any
Advance hereunder is made, except to the extent that such claim, damage, loss,
liability or expense results from the gross negligence or willful misconduct of
such Indemnified Party. The indemnities of this Loan Agreement shall survive the
termination of this Loan Agreement and the other Loan Documents.
SECTION 1.085 Right of Setoff. Upon the occurrence and during
the continuance of an Event of Default, each of the Administrative Agent, the
Letter of Credit Agent, each Bank and their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) any time held, and other Indebtedness at any time
owing, by the Administrative Agent, the Letter of Credit Agent, a Bank or their
respective Affiliates to or for the credit or the account of the Borrowers
against any and all of the obligations of the Borrowers now or hereafter
existing under the Agreement and any instrument delivered hereunder,
irrespective of whether or not the Bank shall have made any demand under this
Agreement or such instrument and although such obligations may be unmatured. The
Administrative Agent, the Letter of Credit Agent and each Bank agrees promptly
to notify the Borrowers, as the case may be, and the Administrative Agent, the
Letter of Credit Agent, as the case may be, after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Administrative Agent,
the Letter of Credit Agent, each Bank and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Administrative Agent, the Letter
of Credit Agent or such Bank may have.
SECTION 1.086 Joint and Several Liability of Borrowers. Each
Borrower agrees with the Banks, the Letter of Credit Agent and the
Administrative Agent that such Borrower shall be jointly and severally liable
for the Obligations with the other Borrowers except that Seabulk Transmarine
Partnership, Ltd.'s liability hereunder shall be limited to such amounts as may
be recovered pursuant to the Mortgage and Assignments in respect of M/V SEABULK
AMERICA.
SECTION 1.087 Judgment. (a) If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due hereunder
or under any instrument delivered hereunder in
#20170954.1
<PAGE>
United States Dollars into another currency, the parties hereto agree, to the
fullest extent permitted by law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent, the
Letter of Credit Agent or the Banks, as the case may be, could purchase United
States Dollars with such other currency on the Business Day preceding that on
which final judgment is given.
(b) The obligation of a Borrower in respect of any sum due
from it to the Administrative Agent, the Letter of Credit Agent or any Bank
hereunder or under such instrument shall, notwithstanding any judgment in a
currency other than United States Dollars, be discharged only to the extent that
on the Business Day following receipt by the Administrative Agent, the Letter of
Credit Agent or such Bank of any sum adjudged to be so due in such other
currency the Administrative Agent, the Letter of Credit Agent or such Bank, as
the case may be, may in accordance with normal banking procedures purchase
United States Dollars with such other currency; if the United States Dollars so
purchased are less than the sum originally due to the Administrative Agent, the
Letter of Credit Agent or such Bank, as the case may be, in United States
Dollars, each Borrower agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Administrative Agent, the Letter of Credit Agent
or such Bank, as the case may be, against such loss, and if the United States
Dollars so purchased exceed the sum originally due to the Administrative Agent,
the Letter of Credit Agent or such Bank in United States Dollars, the
Administrative Agent, the Letter of Credit Agent or such Bank shall remit such
excess to such Borrower.
SECTION 1.088 Consent to Jurisdiction; Waiver of Immunities.
(a) Each Borrower hereby irrevocably submits to the jurisdiction of any New York
State court sitting in New York County and to the jurisdiction of the United
States District Court for the Southern District of New York in any action or
proceeding arising out of or relating to this Agreement or the Notes or the
other Loan Documents, and each Borrower hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such New York State or Federal court. Each Borrower irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding or the failure to join any other
Borrower as a necessary party to such action. The Borrowers hereby irrevocably
appoint CT Corporation (the "Process Agent"), with an office on the date hereof
at 1633 Broadway, New York, New York, 10019, United States, as their agent to
receive on behalf of each of them and their property service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding. Such service may be made by mailing or delivering a copy
of such process to the Borrowers in care of the Process Agent (or any successor
thereto, as the case may be) at such Process Agent's above address (or the
address of any successor thereto, as the
#20170954.1
<PAGE>
case may be), and the Borrowers hereby irrevocably authorize and direct the
Process Agent (and any successor thereto) to accept such service on their
behalf. The Borrowers shall appoint a successor agent for service of process
should the agency of CT Corporation terminate for any reason, and further shall
at all times maintain an agent for service of process in New York, New York, so
long as there shall be outstanding any Obligations under the Loan Documents. The
Borrowers shall give notice to the Administrative Agent of any appointment of
successor agents for service of process, and shall obtain for each successor
agent a letter of acceptance of appointment and promptly deliver the same to the
Administrative Agent. As an alternative method of service, each Borrower also
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to it at its address
specified in Section 8.02 hereof. Without waiver of its rights of appeal
permitted by relevant law, each Borrower agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 8.07 shall affect the right of the
Administrative Agent, the Letter of Credit Agent or any Bank to serve legal
process in any other manner permitted by law, or affect the right of the
Administrative Agent, the Letter of Credit Agent or any Bank to bring any action
or proceeding against any Borrower or its respective properties in the courts of
any other jurisdiction.
(c) To the extent that any Borrower has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, such Borrower hereby irrevocably waives such immunity in respect of
its obligations under this Agreement and the Notes and each of the other Loan
Documents.
SECTION 1.089 Binding Effect; Merger; Severability; GOVERNING
LAW. (a) This Agreement shall be binding upon, and shall inure to the benefit
of, the Borrowers, the Administrative Agent, the Letter of Credit Agent and each
Bank, and their respective successors and assigns, except that the Borrowers
shall not have the right to assign its rights hereunder or any interest herein.
Each Bank may, to the extent permitted under this Agreement, assign to any other
financial institution all or any part of, or any interest in, the Bank's rights
and benefits hereunder and under any instrument delivered hereunder, and to the
extent of such assignment such assignee shall have the same rights and benefits
against the Borrowers as it would have had if it were the Bank hereunder.
(b) The Loan Documents, together with all attachments
and exhibits to each of them and all other documents referenced
#20170954.1
<PAGE>
herein and therein, and delivered hereunder and thereunder and pursuant hereto
and thereto, constitute the entire agreement among the parties with respect to
the subject matter hereof and thereof, and supersede all prior and
contemporaneous written and oral understandings and agreements related thereto
among the parties.
(c) If any work, phrase, sentence, paragraph, provision or
section of the Loan Documents shall be held, declared, pronounced or rendered
invalid, void, unenforceable or inoperative for any reason by any court of
competent jurisdiction, governmental authority, statute, or otherwise, such
holding, declaration, pronouncement or rendering shall not adversely affect any
other word, phrase, sentence, paragraph, provision or section of the Loan
Documents, which shall otherwise remain in full force and effect and be enforced
in accordance with their respective terms.
(d) This Agreement has been delivered in New York, New
York. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND BE CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 8.10 Counterparts. This Agreement may be executed in
as many counterparts as may be deemed necessary or convenient and by each party
hereto on separate counterparts, each of which, when so executed, shall be
deemed as original, but all such counterparts shall constitute but one and the
same agreement.
SECTION 8.11 WAIVER OF JURY TRIAL. BY ITS SIGNATURE BELOW
WRITTEN EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE LOAN DOCUMENTS HEREIN DESCRIBED OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 8.12 Effectiveness. This Agreement shall not come into
effect until the Effective Date. Prior to the Effective Date, the Credit
Agreement dated as of September 28, 1994, as amended by Amendment No. 1 dated as
of May 15, 1995 and Amendment No. 2 dated as of March 26, 1996 and as
subsequently amended and restated by an Amended and Restated Credit Agreement
dated as of June 21, 1996 which was amended by Amendment No. 1 dated as of
December 17, 1996, shall be binding upon the parties hereto.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
HVIDE MARINE INCORPORATED
By:
----------------------------------
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
SEABULK TRANSMARINE PARTNERSHIP, LTD.
By its general partner Seabulk Tankers, Ltd.
By its general partner Hvide Marine
Transport, Incorporated
By: _________________________________
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
SEABULK OFFSHORE LTD.
By its general partner Seabulk Tankers Ltd.
By its general partner Hvide Marine
Transport, Incorporated
By:
-------------------------------------
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
HVIDE MARINE TRANSPORT, INCORPORATED
By:
----------------------------------
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
SEABULK TANKERS, LTD.
By its general partner Hvide Marine
Transport, Incorporated
By:
----------------------------------
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
HVIDE CHARTERING, LTD.
By its general partner Hvide Marine
Incorporated
By:
---------------------------------
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
SEABULK OCEAN SYSTEMS CORPORATION
By: ____________________________________
Name: Gene Douglas
Title: Vice President - Legal &
General Counsel
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
SUN STATE MARINE SERVICES, INC.
By: ____________________________________
Name: Gene Douglas
Title: Secretary
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
CITIBANK, N.A.
Administrative Agent, Co-Agent
By:
Name:
Title:
Address: Citibank, N.A.
NAGF Loan Processing
One Court Square, 7th Floor
Long Island City
New York, NY 11120-0001
Telephone: (718) 248-7180
Facsimile: (718) 248-4844
CITIBANK, N.A.
By:
Name:
Title:
Address: 399 Park Avenue
Global Shipping Division
8th Floor
New York, NY 10043
Telephone: (212) 559-3849
Facsimile: (212) 793-3588
Lending Office: The above address or such
other address
or addresses
as may be
notified to
the
Administrative
Agent and the
Borrowers from
time to time.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
BNY FINANCIAL CORPORATION
By:
Name:
Title:
Address: 1290 Ave. of the Americas
Third Floor-Legal Depart.
New York, NY 10104
Telephone: 212-408-7272
Facsimile: 212-408-7372
Lending Office: The above address or such
other address
or addresses
as may be
notified to
the
Administrative
Agent and the
Borrowers from
time to time.
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
THE FIRST NATIONAL BANK OF BOSTON
as Letter of Credit Agent, Co-Agent
By:
Name:
Title:
Address: The First National Bank of Boston
Transportation
Mail Stop: 01-08-01
100 Federal Street
Boston, MA 02106-2016
Telephone: 617-434-3066
Facsimile: 617-434-1955
THE FIRST NATIONAL BANK OF BOSTON
By:
Name:
Title:
Address: The First National Bank of Boston
Mail Stop: 01-08-01
100 Federal Street
Boston, MA 02106-2016
Telephone: 617-434-3066
Facsimile: 617-434-1955
Lending Office: The above address or such
other address
or addresses
as may be
notified to
the
Administrative
Agent and the
Borrowers from
time to time.
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
HIBERNIA NATIONAL BANK
By:
Name:
Title:
Address: 313 Carondelet Street,
Suite 1400
New Orleans, LA 70130
Telephone: 504-533-5395
Facsimile: 504-533-5434
Lending Office: The above address or such
other address
or addresses
as may be
notified to
the
Administrative
Agent and the
Borrowers from
time to time.
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Credit Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
AMSOUTH BANK OF FLORIDA
By:
Name:
Title:
Address: 469 West 23rd Street
P.O. Box 550
Panama City, FL 32405
Telephone: 904-747-4543
Facsimile: 904-747-4675
Lending Office: The above address or such
other address
or addresses
as may be
notified to
the
Administrative
Agent and the
Borrowers from
time to time.
#20170954.1
<PAGE>
EXHIBIT A
to the
Amended and Restated
Credit Agreement
BANK LETTERHEAD
Irrevocable Letter of Credit # ________________
To: American Home Assurance Company
National Union Fire Insurance Company of Pittsburgh, Pa.
We have established this irrevocable Letter of Credit in your
favor for drawings up to U.S. $____________ effective immediately and expiring
at (Bank Address) with our close of business on _______________________.
We hereby undertake to promptly honor your sight draft(s)
drawn on us, indicating our Credit #______________, for all or any part of this
Credit if presented at (Bank Address) on or before the expiry date or any
automatically extended date.
Except as stated herein, this undertaking is not subject to
any condition or qualification. The obligation of the bank under this Letter of
Credit shall be the individual obligation of the bank, in no way contingent on
reimbursement with respect thereto.
It is a condition of this Letter of Credit that it shall be
deemed automatically extended without amendment for one year from the expiry
date hereof, or any future expiry date, unless 60 days prior to any expiry date
we shall send written notice by registered mail to: American Home Assurance
Company/National Union Fire Insurance Company of Pittsburgh, Pa., Bond
Department, 70 Pine Street, New York, NY 10270, that we elect not to consider
this Letter of Credit renewed for any such additional period.
This Letter of Credit is subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision) of the International Chamber of
Commerce (Publication 500).
---------------------------
Authorized Signature
Exhibit A
#20170954.1
<PAGE>
EXHIBIT A-1
to the
Amended and Restated
Credit Agreement
SERIES A
HVIDE MARINE INCORPORATED
HVIDE MARINE TRANSPORT, INCORPORATED
SEABULK OFFSHORE, LTD.
SEABULK TANKERS, LTD.
SEABULK TRANSMARINE PARTNERSHIP, LTD.
SEABULK OCEAN SYSTEMS CORPORATION
SUN STATE MARINE SERVICES, INC.
SERIES A
SECURED PROMISSORY NOTE
U.S. $20,000,000.00 Dated: February [____], 1997
FOR VALUE RECEIVED, each of the undersigned, HVIDE MARINE
INCORPORATED (formerly named Hvide Corp., the surviving corporation of a merger
between Hvide Marine Incorporated and Hvide Corp.), HVIDE MARINE TRANSPORT,
INCORPORATED, SEABULK OFFSHORE, LTD., SEABULK TANKERS, LTD, SEABULK TRANSMARINE
PARTNERSHIP, LTD., SEABULK OCEAN SYSTEMS CORPORATION, and SUN STATE MARINE
SERVICES, INC., each a corporation or limited partnership organized and existing
under the laws of the State of Florida (collectively, the "Borrowers"), HEREBY
JOINTLY AND SEVERALLY PROMISE TO PAY to the order of [_______________] (the
"Holder") one of the Banks listed on Exhibit 1 hereto, the sum of the amounts
advanced up to the maximum principal amount at any one time of Twenty Million
United States Dollars (US$20,000,000) multiplied by such Holder's Percentage as
listed on Exhibit 1 hereto (the "Loan"). The Borrowers jointly and severally
promise to pay interest on the unpaid principal hereof from the date hereof
until such principal amount is paid in full, at such interest rates, and at such
times, as are specified in the Amended and Restated Credit Agreement dated as of
February 3, 1997 by and among the Borrowers, Citibank, N.A. as the
administrative agent (the "Administrative Agent"), and the Banks, as such Banks
may be changed from time to time as provided therein (the "Credit Agreement");
provided, however, that all amounts of principal and interest hereon shall be
paid no later than January 15, 2002.
Both principal and interest are payable in lawful money of the
United States of America in immediately available funds at
Exhibit A-1
#20170954.1
<PAGE>
the office of the Administrative Agent at One Court Square, 7th Floor, Long
Island City, New York, NY 11120-0001, United States of America, not later than
12:00 noon, New York City time, on the day when due for the account of the
Administrative Agent, free and clear of, and without any deduction for, any and
all present and future taxes, levies, imposts, deductions, charges,
withholdings, and other liabilities, all as provided in the Credit Agreement.
Payment of this Note may be demanded by the Administrative
Agent on behalf of the Holder hereof and the other Banks prior to the maturity
of this Note under certain circumstances and conditions, in the manner and with
the effect provided in the Mortgages and the Credit Agreement.
This Secured Promissory Note is one of the Notes referred to
in, and is subject to the terms and provisions and entitled to the benefits of,
the Credit Agreement. Terms not defined in this Secured Promissory Note but
defined in the Credit Agreement shall have the same meanings when used herein.
No course of dealing between the Borrowers and the
Administrative Agent or the Holder of this Note or the Banks or any delay on the
part of the Administrative Agent or the Holder of this Note or the Banks in
exercising any rights hereunder or under the Mortgages referred to herein shall
operate as a waiver of any right of the Administrative Agent or the Holder of
this Note or the Banks.
All parties hereto and guarantors hereof waive presentment for
payment, demand, protest and notice of protest and non-payment hereof, and
hereby consent that any and all securities, property or other collateral, if
any, held by the Holder hereof or the Banks or the Administrative Agent at any
time as security for this Note may be exchanged, released or surrendered and
that the time of payment of this Note may be extended, all in the sole
discretion of the Holder hereof and the other Banks and without affecting in any
manner the liability of such parties or such guarantors.
In the event the Holder hereof shall assign all or part of its
interest in this Note in accordance with the provisions of Section 7.10 of the
Credit Agreement, at the discretion of the Administrative Agent, this Note may
be reissued (and in such event such reissued Note shall represent the same
indebtedness as is represented by this Note) or endorsed to reflect such
assignment. The undersigned agree to execute and deliver such instruments as may
reasonably be requested by the Administrative Agent in connection therewith.
All Advances made by the Banks and repayments of principal
thereof shall be recorded by the Administrative Agent and prior to any transfer
hereof, appropriate notations to evidence the foregoing information with respect
to each such
Exhibit A-1
#20170954.1
<PAGE>
Advance then outstanding shall be endorsed by the Administrative Agent in its
records; provided that the failure of the Administrative Agent to make any such
recordation or endorsement shall not affect the obligations of the Borrowers
hereunder or under the Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit A-1
#20170954.1
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Series A Note the day and year first above written.
HVIDE MARINE INCORPORATED (formerly named
Hvide Corp., the surviving corporation of a
merger between Hvide Marine Incorporated and
Hvide Corp.)
By:_________________________________
Title: Executive Vice President -
Chief Financial Officer
Name: John Blankley
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title: Executive Vice President-
Chief Financial Officer
Name: John Blankley
SEABULK OFFSHORE, LTD.
By its General Partner
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title: Executive Vice President-
Chief Financial Officer
Name: John Blankley
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title: Executive Vice President-
Chief Financial Officer
Name: John Blankley
Exhibit A-1
#20170954.1
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Series A Note the day and year first above written.
SEABULK OCEAN SYSTEMS CORPORATION
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
SUN STATE MARINE SERVICES, INC.
By:_________________________________
TitleSecretary
Name: Gene Douglas
SEABULK TRANSMARINE PARTNERSHIP, LTD.
By its General Partner
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
Exhibit A-1
#20170954.1
<PAGE>
Exhibit 1
to Note
FACILITIES A & D
Percentage
Name of Holder Interest Amounts
Citibank, N.A. 24.49% US$ 4,897,159.64
The First National
Bank of Boston 22.16% US$ 4,432,865.18
BNY Financial Corporation 21.09% US$ 4,218,362.26
Hibernia National Bank 16.13% US$ 3,225,806.46
Amsouth Bank of Florida 16.13% US$ 3,225,806.46
------ ----------------
100% US$20,000,000.00
Exhibit A-1
#20170954.1
<PAGE>
EXHIBIT A-2
to the
Amended and Restated
Credit Agreement
SERIES B
HVIDE MARINE INCORPORATED
HVIDE MARINE TRANSPORT, INCORPORATED
SEABULK OFFSHORE, LTD.
SEABULK TANKERS, LTD.
SEABULK TRANSMARINE PARTNERSHIP, LTD.
SEABULK OCEAN SYSTEMS CORPORATION
SUN STATE MARINE SERVICES, INC.
SERIES B
SECURED PROMISSORY NOTE
U.S. $56,750,000.00 Dated: February [___], 1997
FOR VALUE RECEIVED, each of the undersigned, HVIDE MARINE
INCORPORATED (formerly named Hvide Corp., the surviving corporation of a merger
between Hvide Marine Incorporated and Hvide Corp.), HVIDE MARINE TRANSPORT,
INCORPORATED, SEABULK OFFSHORE, LTD., SEABULK TANKERS, LTD., SEABULK TRANSMARINE
PARTNERSHIP, LTD., SEABULK OCEAN SYSTEMS CORPORATION and SUN STATE MARINE
SERVICES, INC., each a corporation or limited partnership organized and existing
under the laws of the State of Florida (collectively, the "Borrowers"), HEREBY
JOINTLY AND SEVERALLY PROMISE TO PAY to the order of [ ] (the "Holder") one of
the Banks listed on Exhibit 1 hereto, the sum of the amounts advanced up to the
maximum principal amount at any one time of Fifty-Six Million Seven Hundred
Fifty Thousand United States Dollars (US$56,750,000) multiplied by such Holder's
Percentage Interest as listed on Exhibit 1 hereto (the "Loan"). The Borrowers
jointly and severally promise to pay interest on the unpaid principal hereof
from the date hereof until such principal amount is paid in full, at such
interest rates, and at such times, as are specified in the Amended and Restated
Credit Agreement dated as of February 3, 1997 by and among the Borrowers,
Citibank, N.A. as the administrative agent (the "Administrative Agent"), and the
Banks, as such Banks may be changed from time to time as provided therein (the
"Credit Agreement"); provided, however, that all amounts of principal and
interest hereon shall be paid no later than January 15, 2002.
Both principal and interest are payable in lawful money of the
United States of America in immediately available funds at
Exhibit A-2
#20170954.1
<PAGE>
the office of the Administrative Agent at One Court Square, 7th Floor, Long
Island City, New York, NY 11120-0001, United States of America, not later than
12:00 noon, New York City time, on the day when due for the account of the
Administrative Agent, free and clear of, and without any deduction for, any and
all present and future taxes, levies, imposts, deductions, charges,
withholdings, and other liabilities, all as provided in the Credit Agreement.
Payment of this Note may be demanded by the Administrative
Agent on behalf of the Holder hereof and the other Banks prior to the maturity
of this Note under certain circumstances and conditions, in the manner and with
the effect provided in the Mortgages and the Credit Agreement.
This Secured Promissory Note is one of the Notes referred to
in, and is subject to the terms and provisions and entitled to the benefits of,
the Credit Agreement. Terms not defined in this Secured Promissory Note but
defined in the Credit Agreement shall have the same meanings when used herein.
No course of dealing between the Borrowers and the
Administrative Agent or the Holder of this Note or the Banks or any delay on the
part of the Administrative Agent or the Holder of this Note or the Banks in
exercising any rights hereunder or under the Mortgages referred to herein shall
operate as a waiver of any right of the Administrative Agent or the Holder of
this Note or the Banks.
All parties hereto and guarantors hereof waive presentment for
payment, demand, protest and notice of protest and non-payment hereof, and
hereby consent that any and all securities, property or other collateral, if
any, held by the Holder hereof or the Banks or the Administrative Agent at any
time as security for this Note may be exchanged, released or surrendered and
that the time of payment of this Note may be extended, all in the sole
discretion of the Holder hereof and the other Banks and without affecting in any
manner the liability of such parties or such guarantors.
In the event the Holder hereof shall assign all or part of its
interest in this Note in accordance with the provisions of Section 7.10 of the
Credit Agreement, at the discretion of the Administrative Agent, this Note may
be reissued (and in such event such reissued Note shall represent the same
indebtedness as is represented by this Note) or endorsed to reflect such
assignment. The undersigned agree to execute and deliver such instruments as may
reasonably be requested by the Administrative Agent in connection therewith.
All Advances made by the Banks and repayments of principal
thereof shall be recorded by the Administrative Agent and prior to any transfer
hereof, appropriate notations to evidence the foregoing information with respect
to each such
Exhibit A-2
#20170954.1
<PAGE>
Advance then outstanding shall be endorsed by the Administrative Agent in its
records; provided that the failure of the Administrative Agent to make any such
recordation or endorsement shall not affect the obligations of the Borrowers
hereunder or under the Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit A-2
#20170954.1
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Series B Note the day and year first above written.
HVIDE MARINE INCORPORATED (formerly named
Hvide Corp., the surviving corporation of a
merger between Hvide Marine Incorporated and
Hvide Corp.)
By:_________________________________
Title:
Name:
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title:
Name:
SEABULK OFFSHORE, LTD.
By its General Partner
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title:
Name:
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title:
Name:
Exhibit A-2
#20170954.1
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Series B Note the day and year first above written.
SEABULK OCEAN SYSTEMS CORPORATION
By:_________________________________
Title:
Name:
SUN STATE MARINE SERVICES, INC.
By:_________________________________
Title:
Name:
SEABULK TRANSMARINE PARTNERSHIP, LTD.
By its General Partner
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
Title:
Name:
Exhibit A-2
#20170954.1
<PAGE>
Exhibit 1
to Note
FACILITY B
Percentage
Name of Holder Interest Amounts
Citibank, N.A. 24.49% US$ 13,898,075.00
The First National
Bank of Boston 22.16% US$ 12,575,800.00
BNY Financial Corporation 21.09% US$ 11,968,575.00
Hibernia National Bank 16.13% US$ 9,153,775.00
Amsouth Bank of Florida 16.13% US$ 9,153,775.00
100% US$56,750,000.00
Exhibit A-2
#20170954.1
<PAGE>
EXHIBIT A-3
to the
Amended and Restated
Credit Agreement
SERIES F
HVIDE MARINE INCORPORATED
HVIDE MARINE TRANSPORT, INCORPORATED
SEABULK OFFSHORE, LTD.
SEABULK TANKERS, LTD.
SEABULK TRANSMARINE PARTNERSHIP, LTD.
SEABULK OCEAN SYSTEMS CORPORATION
SUN STATE MARINE SERVICES, INC.
SERIES F
SECURED PROMISSORY NOTE
U.S. $50,000,000.00 Dated: February [___], 1997
FOR VALUE RECEIVED, each of the undersigned, HVIDE MARINE
INCORPORATED (formerly named Hvide Corp., the surviving corporation of a merger
between Hvide Marine Incorporated and Hvide Corp.), HVIDE MARINE TRANSPORT,
INCORPORATED, SEABULK OFFSHORE, LTD., SEABULK TANKERS, LTD., SEABULK TRANSMARINE
PARTNERSHIP, LTD., SEABULK OCEAN SYSTEMS CORPORATION and SUN STATE MARINE
SERVICES, INC., each a corporation or limited partnership organized and existing
under the laws of the State of Florida (collectively, the "Borrowers"), HEREBY
JOINTLY AND SEVERALLY PROMISE TO PAY to the order of [ ] (the "Holder") one of
the Banks listed on Exhibit 1 hereto, the sum of the amounts advanced up to the
maximum principal amount at any one time of Fifty Million United States Dollars
(US$50,000,000) multiplied by such Holder's Percentage Interest as listed on
Exhibit 1 hereto (the "Loan"). The Borrowers jointly and severally promise to
pay interest on the unpaid principal hereof from the date hereof until such
principal amount is paid in full, at such interest rates, and at such times, as
are specified in Schedule 1 hereto or the Amended and Restated Credit Agreement
dated as of February 3, 1997 by and among the Borrowers, Citibank, N.A. as the
administrative agent (the "Administrative Agent"), and the Banks, as such Banks
may be changed from time to time as provided therein (the "Credit Agreement");
provided, however, that all amounts of principal and interest hereon shall be
paid no later than January 15, 2002.
Both principal and interest are payable in lawful money of the
United States of America in immediately available funds at
Exhibit A-3
#20170954.1
<PAGE>
the office of the Administrative Agent at One Court Square, 7th Floor, Long
Island City, New York, NY 11120-0001, United States of America, not later than
12:00 noon, New York City time, on the day when due for the account of the
Administrative Agent, free and clear of, and without any deduction for, any and
all present and future taxes, levies, imposts, deductions, charges,
withholdings, and other liabilities, all as provided in the Credit Agreement.
Payment of this Note may be demanded by the Administrative
Agent on behalf of the Holder hereof and the other Banks prior to the maturity
of this Note under certain circumstances and conditions, in the manner and with
the effect provided in the Mortgages and the Credit Agreement.
This Secured Promissory Note is one of the Notes referred to
in, and is subject to the terms and provisions and entitled to the benefits of,
the Credit Agreement. Terms not defined in this Secured Promissory Note but
defined in the Credit Agreement shall have the same meanings when used herein.
No course of dealing between the Borrowers and the
Administrative Agent or the Holder of this Note or the Banks or any delay on the
part of the Administrative Agent or the Holder of this Note or the Banks in
exercising any rights hereunder or under the Mortgages referred to herein shall
operate as a waiver of any right of the Administrative Agent or the Holder of
this Note or the Banks.
All parties hereto and guarantors hereof waive presentment for
payment, demand, protest and notice of protest and non-payment hereof, and
hereby consent that any and all securities, property or other collateral, if
any, held by the Holder hereof or the Banks or the Administrative Agent at any
time as security for this Note may be exchanged, released or surrendered and
that the time of payment of this Note may be extended, all in the sole
discretion of the Holder hereof and the other Banks and without affecting in any
manner the liability of such parties or such guarantors.
In the event the Holder hereof shall assign all or part of its
interest in this Note in accordance with the provisions of Section 7.10 of the
Credit Agreement, at the discretion of the Administrative Agent, this Note may
be reissued (and in such event such reissued Note shall represent the same
indebtedness as is represented by this Note) or endorsed to reflect such
assignment. The undersigned agree to execute and deliver such instruments as may
reasonably be requested by the Administrative Agent in connection therewith.
All Advances made by the Banks and repayments of principal
thereof shall be recorded by the Administrative Agent and prior to any transfer
hereof, appropriate notations to evidence the foregoing information with respect
to each such
Exhibit A-3
#20170954.1
<PAGE>
Advance then outstanding shall be endorsed by the Administrative Agent in its
records; provided that the failure of the Administrative Agent to make any such
recordation or endorsement shall not affect the obligations of the Borrowers
hereunder or under the Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit A-3
#20170954.1
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Series F Note the day and year first above written.
HVIDE MARINE INCORPORATED (formerly named
Hvide Corp., the surviving corporation of a
merger between Hvide Marine Incorporated and
Hvide Corp.)
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
SEABULK OFFSHORE, LTD.
By its General Partner
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
Exhibit A-3
#20170954.1
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Series F Note the day and year first above written.
SEABULK OCEAN SYSTEMS CORPORATION
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
SUN STATE MARINE SERVICES, INC.
By:_________________________________
TitleSecretary
Name: Gene Douglas
SEABULK TRANSMARINE PARTNERSHIP, LTD.
By its General Partner
SEABULK TANKERS, LTD.
By its General Partner
HVIDE MARINE TRANSPORT, INCORPORATED
By:_________________________________
TitleExecutive Vice President-
Chief Financial Officer
Name: John Blankley
Exhibit A-3
#20170954.1
<PAGE>
Exhibit 1
to Note
FACILITY F
Percentage
Name of Holder Interest Amounts
Citibank, N.A. 24.49% US$12,245,000
The First National Bank of Boston 22.16% US$11,080,000
BNY Financial Corporation 21.09% US$10,545,000
Hibernia National Bank 16.13% US$ 8,065,000
Amsouth Bank of Florida 16.13% US$ 8,065,000
100% US$50,000,000
Exhibit A-3
#20170954.1
<PAGE>
Schedule 1
to Facility F Note
Facility F: Amortization Schedule
<TABLE>
<CAPTION>
Maximum
Principal Available
Date Amount ($) Installment ($) Percentage
---- ---------- --------------- ----------
<S> <C> <C> <C>
Until April 15, 1998 50,000,000 100%
July 15, 1998 48,000,000 2,000,000 96%
October 15, 1998 46,000,000 2,000,000 92%
January 15, 1999 44,000,000 2,000,000 88%
April 15, 1999 41,000,000 3,000,000 82%
July 15, 1999 38,000,000 3,000,000 76%
October 15, 1999 35,000,000 3,000,000 70%
January 15, 2000 32,000,000 3,000,000 64%
April 15, 2000 29,000,000 3,000,000 58%
July 15, 2000 26,000,000 3,000,000 52%
October 15, 2000 23,000,000 3,000,000 46%
January 15, 2001 20,000,000 3,000,000 40%
April 15, 2001 17,000,000 3,000,000 34%
July 15, 2001 14,000,000 3,000,000 28%
October 15, 2001 11,000,000 3,000,000 22%
January 15, 2002 0 11,000,000 0%
======================================== ============ =========== ====
</TABLE>
Exhibit A-3
#20170954.1
<PAGE>
EXHIBIT B
to the
Amended and Restated
Credit Agreement
NEW MONEY COMMITMENT
<TABLE>
<CAPTION>
Bank Facility A & D Facility F
<S> <C> <C>
Citibank, N.A 4,897,159.64 12,245,000.00
The First National Bank
of Boston 4,432,865.18 11,080,000.00
BNY Financial Corporation 4,218,362.26 10,545,000.00
Hibernia Bank 3,225,806.46 8,065,000.00
AmSouth Bank of Florida 3,225,806.46 8,065,000.00
$20,000,000.00 $50,000,000.00
=================================================== ============== ===============
</TABLE>
Exhibit B
#20170954.1
<PAGE>
EXHIBIT C
to the
Amended and Restated
Credit Agreement
[Letterhead of Hvide Marine Incorporated]
January ___, 1997
Mr. John Heuss
Vice President
Citibank, N.A.
399 Park Avenue
New York, NY 10043
Re: Citibank, N.A. and The First National Bank of
Boston Amended and Restated Credit Agreement dated as of
February 3, 1997 (the "Credit Agreement") for Hvide Marine
Incorporated
Dear Mr. Heuss:
The undersigned hereby requests an Advance of Facility A as
defined in the Credit Agreement in the principal amount of $[ ] be advanced on [
] pursuant to the terms of the Credit Agreement. We select an Interest Period of
[ ] months duration for this Advance.
The undersigned hereby requests an Advance of Facility F as
defined in the Credit Agreement in the principal amount of [ ] be advanced on [
] pursuant to the terms of the Credit Agreement. We select a LIBOR rate loan and
an Interest Period of [ ] months duration. The Acquisition(s) to be financed by
this Advance are described on the attached schedule. The calculations required
by Section [2.01] are also included.
Capitalized terms used herein without definition shall have
the respective meanings given to such terms in the Credit Agreement.
The undersigned hereby represents and warrants to you that as
of the date hereof; (i) all of the representatives and warranties of the
undersigned contained in the Credit Agreement are true and correct as if made on
Exhibit C
#20170954.1
<PAGE>
the date hereof; (ii) no Default or Event of Default has occurred and is
continuing and to the Borrowers' knowledge no Default or Event of Default will
result from the advances requested hereby; and (iii) all of the preconditions to
the Advances requested hereby set forth in the Credit Agreement have been or
will on the date of the Advances, be satisfied, met and complied with, subject
to review by the Banks and such documents being acceptable to the Banks.
You are hereby authorized and directed to disburse the
proceeds of the Advances hereby in accordance with the attached schedule.
HVIDE MARINE INCORPORATED
By: ______________________________
Exhibit C
#20170954.1
<PAGE>
EXHIBIT D
to the
Amended and Restated
Credit Agreement
ANTICIPATED INDEBTEDNESS
ANTICIPATED
INDEBTEDNESS
(IN THOUSANDS)
Term Loan $58,500
Revolver Facility (A) $20,000
Acquisition Facility (F) $50,000
Capital Leases
GBMS Lease $3,108
Royal Runner Lease $1,814
St. Frances Note $2,264
Baton Rouge $247
Maryland $974
Virginia $858
North Carolina $1,333
Fork Lift $25
Computer Leases $425
Telephone Lease $137
Title XI
Dynachem B $7,313
Dynachem C $7,650
Petrochem A $4,780
Petrochem C $3,180
Petrochem D $9,320
Star Note (Astrachem) $6,951
Carol Note $649
Operating Leases (Charter Hire)
Challenger $3,707
Magnachem $8,273
Tractor Tug $4,704
Other Indebtedness $30,000
Exhibit D
#20170954.1
<PAGE>
EXHIBIT E
to the
Amended and Restated
Credit Agreement
- --------------------------------------------------------------------------------
SECURITY AGREEMENT
dated as of February 3, 1997
Between
HVIDE MARINE INCORPORATED
SUN STATE MARINE SERVICES INC.
HVIDE MARINE TRANSPORT, INCORPORATED
SEABULK OFFSHORE, LTD.
SEABULK TANKERS, LTD.
SEABULK OCEAN SYSTEMS CORPORATION
as Pledgors
and
CITIBANK, N.A.,
as Administrative Agent on behalf of the Banks
as Secured Party
- --------------------------------------------------------------------------------
Exhibit E
#20170954.1
<PAGE>
AMENDED AND RESTATED
SECURITY AGREEMENT
Dated as of February 3, 1997
In consideration of the execution and delivery of the Amended
and Restated Credit Agreement dated as of February 3, 1997 by the Banks listed
on the signature pages thereof, Citibank, N.A., as Administrative Agent, the
Co-Agents and the Letter of Credit Agent, Hvide Marine Incorporated ("Hvide"),
and each of Hvide Chartering, Ltd., Hvide Marine Transport, Incorporated,
Seabulk Offshore, Ltd., Seabulk Tankers, Ltd., Seabulk Ocean Systems
Corporation, Sun State Marine Services, Inc. (collectively, with Hvide, the
"Pledgors"), each a limited partnership or corporation organized and existing
under the laws of the State of Florida, hereby agree with Citibank, N.A., as
Administrative Agent on behalf of the Banks, as Secured Party, to execute and
deliver an Amended and Restated Security Agreement to replace the Amended and
Restated Security Agreement dated as of August 14, 1996 and hereby agree as
follows (with certain terms used herein being defined in Article 7):
ARTICLE 1.
SECURITY INTEREST
Section 1.1. Grant of Security Interest. To secure the
payment, observance and performance of the Obligations, the Pledgors hereby
mortgage, pledge and assign the Collateral to the Secured Party, and grant to
the Secured Party a continuing security interest in, and a continuing lien upon,
the Collateral.
Section 1.2. Validity and Priority of Security Interest. The
Pledgors agree that the Security Interest shall at all times be valid, perfected
and enforceable against the Pledgors and all third parties, in accordance with
the terms hereof, as security for the Obligations, and that the Collateral shall
not at any time be subject to any Lien that is prior to, on a parity with or
junior to such Security Interest.
Section 1.3. Maintenance of Status of Security Interest,
Collateral and Rights. (a) Required Action. The Pledgors shall take all action
that may be necessary or desirable, or that the Secured Party may request, so as
at all times (i) to maintain the validity, perfection, enforceability and
priority of the Security Interest in the Collateral in conformity with the
requirements of Section 1.2, (ii) to protect and preserve the Collateral and
(iii) to protect and preserve, and to enable the exercise or enforcement of, the
rights of the
Exhibit E
#20170954.1
<PAGE>
Secured Party therein and hereunder and under the other Loan Documents.
(b) Authorized Action. The Secured Party is hereby authorized
to file one or more financing or continuation statements or amendments thereto
without the signature of or in the name of each of the Pledgors. A carbon,
photographic or other reproduction of this Agreement or of any financing
statement filed in connection with this Agreement shall be sufficient as a
financing statement.
Section 1.4. Evidence of Status of Security Interest. The
Pledgors shall from time to time, upon request of the Secured Party, deliver to
the Secured Party (i) such file search reports from such Uniform Commercial Code
and other filing and recording offices and (ii) such opinions of counsel
relating to the Collateral, the attachment and perfection of the Security
Interest and otherwise to this Agreement, as the Secured Party may designate.
Section 1.5. Pledgors Remain Obligated; Secured Party and
Other Principals Not Obligated. The grant by the Pledgors to the Secured Party
of the Security Interest shall not (i) relieve the Pledgors of any liability to
any Person under or in respect of any of the Collateral or (ii) impose on the
Secured Party or the other Principals any such liability or any liability for
any act or omission on the part of the Pledgors relative thereto.
ARTICLE 2.
DISPOSITION OF COLLATERAL PROCEEDS
Section 2.1. General. (a) Rights of Pledgors. Subject to
Section 2.2 (a) the Pledgors shall be entitled to (i) receive and retain all
payments in respect of the Collateral, and (ii) make withdrawals from the
Collateral Account, and (b) all instruments and documents constituting part of
the Collateral shall be made available to the Pledgors upon request for purposes
of presentation, collection or renewal (any such arrangement to be effected to
the extent deemed appropriate by the Secured Party against a trust receipt or
like document). Each withdrawal under clause (a)(ii) and request under clause
(b) of the preceding sentence shall constitute a representation and warranty by
the Pledgors that no Event of Default is continuing. No delivery of any
Collateral pursuant to clause (b) of the preceding sentence shall terminate the
Security Interest therein and the Pledgors shall, within 18 days of its receipt
of any such Collateral, either return such Collateral or its proceeds to the
Secured Party or such other Person as the Secured Party may designate or, should
the Security Interest in any such proceeds not be perfectible by possession,
take such other action as may be required by Section 1.3(a) to continue the
perfection of the Security Interest therein.
Exhibit E
#20170954.1
<PAGE>
(b) Rights of Secured Party. Subject to the Pledgors' rights
under Section 2.1(a) and except in the case of proceeds of Collateral as to
which a different disposition is expressly provided for herein, the Secured
Party shall be entitled to receive and retain all proceeds of Collateral.
Subject to its rights under Section 2.1(a), the Pledgors shall, should any of
them receive any such proceeds, hold all such proceeds in trust for the Secured
Party, not commingle the same with other property or funds of the Pledgors and,
unless the Secured Party shall have otherwise instructed the Pledgors, deliver
the same or cause the same to be delivered in the exact form received, together
with any necessary endorsements, to the Secured Party or to such Person or
Persons as the Secured Party may designate. The Secured Party is hereby
irrevocably authorized, either in the name and on behalf of the Pledgors or in
its own name, to endorse and deposit, or cause to be deposited, for collection,
present, draw upon or under, or otherwise take action to realize upon, all
instruments and documents constituting party of the Collateral for the purpose
of holding and disposing of the proceeds thereof in accordance with the terms
hereof.
Section 2.2. Event of Default. (a) Except during an Event of
Default, (A) the Pledgors shall be entitled to (i) have delivered to them upon
request all proceeds of the Collateral and (ii) make withdrawals from the
Collateral Account and (B) all instruments and documents otherwise constituting
part of the Collateral shall be made available to the Pledgors upon request for
purposes of presentation, collection or renewal (any such arrangement to be
effected to the extent deemed appropriate by the Secured Party against a trust
receipt or like document). Each request under clause (A)(i) or clause (B) and
each withdrawal under clause (A)(ii) of the preceding sentence shall constitute
a representation and warranty by the Pledgors that no Default is continuing. No
delivery of any Collateral pursuant to such clause (B) of the preceding sentence
shall terminate the Security Interest therein and the Pledgors shall, within 18
days of its receipt of any such Collateral, either return such Collateral or its
proceeds to the Secured Party or such other Person as the Secured Party may
designate or, should the Security Interest in any such proceeds not be
perfectible by possession, take such other action as may be required by Section
1.3(a) to continue the perfection of the Security Interest therein.
(b) During an Event of Default, the Secured Party shall have
with respect to all Collateral held by or for its account all of the rights
afforded it under Article 5.
Section 2.3. Interest on Collateral. No Collateral shall bear
interest except to the extent specifically agreed to in writing by the Secured
Party and, unless otherwise so agreed, any such interest shall constitute
Collateral.
Exhibit E
#20170954.1
<PAGE>
ARTICLE 3.
CERTAIN REPRESENTATIONS AND WARRANTIES
Each of the Pledgors confirms the representations and
warranties made by the Pledgors in the Credit Agreement.
ARTICLE 4.
CERTAIN COVENANTS
Subject, in the case of each Section referred to therein, to
the provisions of Section 4.2:
A. General.
Section 4.1. Certain Matters Relating to Preservation of
Status of Security Interest. (a) Chief Executive Office. Each Pledgor shall
maintain its chief executive office and, if different from its chief executive
office, each office where the books and records relating to any Receivables are
kept only at, and shall keep all of its books and records only at or in transit
to, (b) the location specified therefor below its signature or (c) any other
location provided that (i) the Secured Party has approved such location in
writing, (ii) such location is within one of the 50 States of the United States
or the District of Columbia and (iii)(a) the Security Interest, with respect to
any Collateral at such location, or affected by the situs of such location,
conforms to the requirements of Section 1.2 and (b) the Secured Party shall have
received such evidence satisfactory to it to that effect that it may request,
including acknowledgment copies of financing statements and opinions of counsel.
(b) Change of Name, Identity, Etc. Each Pledgor shall
not change its name, identity or corporate structure without
giving the Secured Party 60 days' prior notice thereof.
Section 4.2. Ownership and Defense of Collateral. The Pledgors shall at all
times (a) be the owners of the Collateral free from any right, title or interest
of any third Person and (b) defend the Collateral against the claims and demands
of all third Persons, except that this Section 4.2 shall not apply to the
interest in the Collateral and the claims and demands of a holder of a Permitted
Lien but for only so long as such Lien is a Permitted Lien.
Exhibit E
#20170954.1
<PAGE>
Section 4.3. Taxes; Compliance. The Pledgors shall (a) pay or
cause to be paid when due all taxes, assessments and governmental charges levied
or assessed or imposed upon or with respect to the Collateral or its use or sale
or other disposition and (b) comply with (i) all Applicable Law relating to the
Collateral, (ii) the terms and provisions of all deeds and contracts relating to
premises where Collateral is located and (iii) all license and franchise
agreements pertaining to the Collateral.
Section 4.4. Requested Information. In addition to such other
information as shall be specifically provided for herein, each Pledgor shall
furnish to the Secured Party and each Bank such other information with respect
to the Collateral as the Secured Party may request from time to time, in each
case in form and substance and certified in a manner satisfactory to the Person
requesting such information.
Section 4.5. Collection of Collateral Obligations. Subject to
the rights of the Secured Party hereunder, each Pledgor shall endeavor to
collect from the Collateral Debtor of each Collateral Obligation, when due, all
amounts owing thereunder, and shall apply all amounts so collected to the
outstanding balance of such Collateral Obligation, except that unless an Event
of Default shall exist, this Section 4.5 shall not require the Pledgors to take
any action not in accordance with sound business judgment and their respective
customary collection practices as in effect on the Agreement Date or as approved
in writing by the Secured Party. The Pledgors shall deposit all amounts so
collected in the Collateral Account.
B. Receivables.
Section 4.6. Status of Receivables. Each Pledgor agrees that
each Receivable (i) shall at all times represent the legal, valid and binding
obligation of its Collateral Debtor and, subject to clause (ii)(A), be
enforceable in accordance with its terms, (ii) shall at no time be subject to
(A) any discount, defense, set-off or counterclaim, other than, but only in each
case to the extent arising in the ordinary course of business, (1) discounts or
allowances for prompt payment, advertising and the like, but only to the extent
the amounts thereof and arrangements therefor are set forth on Schedule 4.6(a)
or have been disclosed to the Secured Party and the Banks or (2) defenses,
set-offs or counterclaims resulting from damaged or non-complying merchandise,
(B) any agreement prohibiting assignment or requiring notice of or consent to
assignment, or (C) any stamp or other Tax, (iii) shall be genuine and in all
respects what it purports to be and arise out of a bona fide transaction, (iv)
shall require no further act on the part of the Pledgors or any other Person to
make it payable by the Collateral Debtor, and (v) shall comply with all
Applicable Law.
Exhibit E
#20170954.1
<PAGE>
Section 4.7. Maintenance of Records. Each Pledgor shall, for
not less than five years from the date on which any Receivable arose, maintain
(a) complete records of such Receivable, including records of all payments
received, credits granted and merchandise returned and (b) all other
documentation relating thereto.
Section 4.8. Performance of Terms. Each Pledgor shall duly
fulfill all obligations on its part to be fulfilled under or in connection with
the Receivables and shall do nothing to impair the rights of the Secured Party
therein.
Section 4.9. Modification of Terms. (a) The Pledgors
shall not enter into any agreement providing for any deduction from any
Receivable except for agreements that are made in the ordinary course of
business.
(b) The Pledgors shall not rescind or cancel any obligation
evidenced by any Receivable or modify any term thereof or make any adjustment
with respect thereto, or extend or renew the same, or compromise or settle any
dispute, claim, suit or legal proceeding relating thereto, without the prior
written consent of the Secured Party, except that, unless an Event of Default
shall exist, each Pledgor may, with respect to any Receivable, but only in the
ordinary course of its business and in accordance with sound business judgment
and its customary collection practices as in effect on the Agreement Date or as
approved in writing by the Secured Party (i) extend the time of payment thereof
and (ii) settle the same for an amount less than the then unpaid balance
thereof.
Section 4.10. No Dispositions of Receivables. The
Pledgors shall not sell or otherwise dispose of any Receivable or
any interest therein.
Section 4.11. Verification. The Secured Party shall have the
right at any time and from time to time, in the name of the Secured Party, in
the name and on the stationery of the Pledgors or in such name as the Secured
Party may select, to verify the validity, amount or any other matter relating to
any Receivable by mail, facsimile, telephone or any other means.
Section 4.12. Information. (a) Schedule of Receivables. Each
Pledgor shall deliver to the Secured Party and each Bank, within fifteen
Business Days after the end of each quarterly accounting period of each fiscal
year of the Pledgors, a schedule of Receivables that (i) shall be as of the last
Business Day of such quarterly period, and (ii) shall set forth (A) a detailed
aged trial balance of all its then existing Receivables specifying the names and
balance due for each Collateral Debtor obligated on a Receivable so listed, and
(B) the respective, aggregate amounts of Receivables with respect to which,
since the date of the most recent schedule, (1) the times
Exhibit E
#20170954.1
<PAGE>
of payment have been extended and (2) settlements for less than the unpaid
balances thereof have been effected.
(b) Master Address List and Other Documents. Each Pledgor shall from time
to time upon request deliver to the Secured Party and each Bank (a) a master
address list and an open items statement of each Collateral Debtor with respect
to its Receivables and (b) copies of invoices, proofs of delivery, repayment
histories, present status reports, and such other information relating to the
Receivables and their status as the Secured Party or any Bank may request.
ARTICLE 5.
EVENT OF DEFAULT
During an Event of Default, and in each such case:
A. Proceeds.
Section 5.1. Application of Proceeds. All cash proceeds
received by the Secured Party upon any sale of, collection of, or other
realization upon, all or any part of the Collateral and all cash held by the
Secured Party as Collateral shall, subject to the Secured Party's right to
continue to hold the same as cash Collateral, be applied as follows:
First: To the payment of all out-of-pocket costs and
expenses incurred by the Secured Party in connection with
the sale of or other realization upon Collateral, including
attorneys' fees and disbursements;
Second: To the payment of the Obligations owing to the
Secured Party as provided in the Credit Agreement; and
Third: To the extent of the balance (if any) of such proceeds,
to the payment to the Pledgors, subject to Applicable Law and to any
duty to pay such balance to the holder of any subordinate Lien in the
Collateral.
B. Remedies.
Section 5.2. General. (a) Use of Premises. The
Secured Party may enter the Pledgors' premises and, until the
Secured Party completes the enforcement of its rights in the
Collateral thereof, remain on such premises and use the same to
the extent necessary for the purpose of collecting Collateral
Obligations.
(b) Directors, Officers and Employees. The Secured
Party may retain the Pledgors' directors, officers and employees,
in each case upon such terms as the Secured Party and any such
Person may agree, notwithstanding the provisions of any
Exhibit E
#20170954.1
<PAGE>
employment, confidentiality or non-disclosure agreement between any such Person
and the Pledgors and each Pledgor hereby waives its rights under any such
agreement and consents to each such retention.
(c) Power of Sale. The Secured Party (a) may sell the
Collateral in one or more parcels at public or private sale, at any of its
offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as it may deem commercially
reasonable, (b) shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given, and (c) may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.
(d) Foreclosure. The Secured Party, instead of exercising the
power of sale conferred upon it by Section 5.2(c) and Applicable Law, may
proceed by a suit or suits at law or in equity to foreclose the Security
Interest and sell the Collateral, or any portion thereof, under a judgment or a
decree of a court or courts of competent jurisdiction.
(e) Receiver. The Secured Party may obtain the
appointment of a receiver of the Collateral and each Pledgor
consents to and waives any right to notice of such appointment.
(f) Bank Accounts. The Secured Party, and each Principal with
which a Bank Account is maintained, may, with respect to the Collateral Account,
do either or both of the following: (1) exercise dominion and control over, and
refuse to permit further withdrawals and transfers (including withdrawals and
transfers of cash, securities, instruments and other property) from, such
accounts and continue to hold such accounts as part of the Collateral and (2)
exercise all other rights hereunder with respect thereto and with respect to the
property that is credited to such accounts that the Secured Party could exercise
with respect to other Collateral, including, in case of such Principal, rights,
including those under Section 5.3(c), that such Principal would have with
respect to the Collateral Account maintained with it if such Principal were the
Secured Party. In exercising such rights, each such Principal shall be entitled
to all of the rights of the Secured Party under the Loan Documents.
Section 5.3. Collateral Proceeds. (a) Collections by Pledgors.
The Secured Party may, by notice to each of the Pledgor, direct it to, and
thereupon each Pledgor shall, receive all proceeds of Collateral in trust for
the Secured Party, not commingle the same with any other property or funds of
such Pledgor and, unless the Secured Party shall have otherwise instructed such
Pledgor, deliver or cause to be delivered all such proceeds in the exact form
received, together with any
Exhibit E
#20170954.1
<PAGE>
necessary endorsements, to the Secured Party or to such Person or Persons as the
Secured Party may designate.
(b) Notification. Following an Event of Default the Secured
Party may notify, or request the Pledgors to notify, in writing or otherwise,
(i) each Collateral Debtor to make payment directly to the Secured Party and
(ii) each Collateral Account and each other Person maintaining any similar
arrangement to hold or otherwise dispose of all amounts then or thereafter
credited to, deposited in or made subject to the applicable Collateral Account
or other arrangement as the Secured Party may direct. If, notwithstanding the
giving of any notice, any such Person shall make payments to the Pledgors, the
Pledgors shall hold all such payments received in trust for the Secured Party,
without commingling the same with other funds or property of the Pledgors or any
other Person, and shall deliver the same to the Secured Party immediately upon
receipt by the Pledgors in the identical form received, together with any
necessary endorsements.
(c) Secured Party's Rights with Respect to Proceeds and Other
Collateral. All payments and other deliveries received by or for the account of
the Secured Party from time to time pursuant to Section 5.3(a) or (b), together
with the proceeds of all other Collateral from time to time held by or for the
account of the Secured Party (whether as a result of the exercise by the Secured
Party its rights under Section 4.6 or Section 5.2(c) or (d) or otherwise) and
the Collateral Account (including all amounts credited from time to time thereto
and all cash, securities, instruments and other property represented by such
credits) may, at the election of the Secured Party, (i) be or continue to be
held by the Secured Party, or any Person designated by the Secured Party to
receive or hold the same, as Collateral, (ii) be applied as provided in Section
5.1 or (iii) be disposed of as provided in Section 5.2(c) and (d).
(d) Enforcement by Secured Party. The Secured Party may,
without notice to the Pledgors and at such time or times as the Secured Party in
its sole discretion may determine, exercise any or all of the Pledgors' rights
in, to and under, or in any way connected with or related to, any or all of the
Collateral, including (i) demanding and enforcing payment and performance of,
and exercising any or all of the Pledgors' rights and remedies with respect to
the collection, enforcement or prosecution of, any or all of the Collateral
Obligations, in each case by legal proceedings or otherwise, (ii) settling,
adjusting, compromising, extending, renewing, discharging and releasing any or
all of, and any legal proceedings brought to collect or enforce any or all of,
the Collateral Obligations, (iii) preparing, filing and signing the name of the
Pledgors on (A) any proof of claim or similar document to be filed in any
bankruptcy or similar proceeding involving any Collateral Debtor and (B) any
notice of lien, assignment or satisfaction of lien, or similar document in
connection with any Collateral Obligation, and (iv) using the information
recorded on or contained in any data processing
Exhibit E
#20170954.1
<PAGE>
equipment and computer hardware and software relating to the Collateral
Obligations to which the Pledgors have access.
(e) Adjustments. The Secured Party may settle or adjust
disputes and claims directly with Collateral Debtors for amounts and on terms
that the Secured Party considers advisable and in all such cases only the net
amounts received by the Secured Party in payment of such amounts, after
deduction of out-of-pocket costs and expenses of collection, including
reasonable attorneys' fees, shall be subject to the other provisions of this
Agreement.
ARTICLE 6.
MISCELLANEOUS
Section 6.1. Expenses of Pledgors' Agreements and Duties. The
terms, conditions, covenants and agreements to be observed or performed by the
Pledgors under this Agreement and the other Loan Documents shall be observed or
performed by it at their joint and several cost and expense.
Section 6.2. Secured Party's Right to Perform on Pledgors'
Behalf. If the Pledgors shall fail to observe or perform any of the terms,
conditions, covenants and agreements to be observed or performed by the
respective Pledgors under this Agreement and the other Loan Documents, the
Secured Party may (but shall not be obligated to) do the same or cause it to be
done or performed or observed, either in its name or in the name and on behalf
of the Pledgors, and the Pledgors hereby authorize the Secured Party so to do.
Section 6.3. Secured Party's Right to Use Administrative
Agents and to Act in Name of Pledgors. The Secured Party may exercise its rights
and remedies under this Agreement and the other Loan Documents through an agent
or other designee and, in the exercise thereof, the Secured Party or any such
other Person may act in its own name or in the name and on behalf of the
Pledgors.
Section 6.4. No Interference, Compensation or Expense. The
Secured Party may exercise its rights and remedies under the Loan Documents (a)
without resistance or interference by the Pledgors, (b) without payment of any
rent, license fee or compensation of any kind to the Pledgors and (c) for the
account, and at the expense, of the Pledgors.
Section 6.5. Limitation of Obligations with Respect to
Collateral. (a) Neither the Secured Party nor any other Principal shall have
any obligation to protect or preserve any Collateral or to preserve rights
pertaining thereto other than the obligation to use reasonable care in the
custody and preservation of any Collateral in its actual possession. The
Exhibit E
#20170954.1
<PAGE>
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Secured Party accords
its own property. The Secured Party shall be relieved of all responsibility for
any Collateral in its possession upon surrendering it, or tendering surrender of
it, to the Pledgors.
(b) Nothing contained in the Loan Documents shall be construed
as requiring or obligating the Secured Party or any other Principal, and neither
the Secured Party nor any other Principal shall be required or obligated, to (i)
make any demand, or to make any inquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or notice or take any
action, with respect to any Collateral Obligation or any other Collateral or the
monies due or to become due thereunder or in connection therewith, (ii)
ascertain or take action with respect to calls, conversions, exchanges,
maturities, tenders, offers or other matters relating to any Collateral, whether
or not the Secured Party or any other Principal has or is deemed to have
knowledge or notice thereof, (iii) take any necessary steps to preserve rights
against any prior parties with respect to any Collateral or (iv) notify the
Pledgors of any decline in the value of any Collateral.
Section 6.6. Rights of Secured Party Under Uniform Commercial
Code and Applicable Law. The Secured Party shall have, with respect to the
Collateral, in addition to all of its rights and remedies under the Loan
Documents, (a) the rights and remedies of a secured party under the Uniform
Commercial Code, whether or not the Uniform Commercial Code would otherwise
apply to the Collateral in question, and (b) the rights and remedies of a
secured party under all other Applicable Law.
Section 6.7. Waivers of Rights Inhibiting Enforcement. Each
Pledgor waives (a) any claim that, as to any part of the Collateral, a public
sale, should the Secured Party elect so to proceed, is, in and of itself, not a
commercially reasonable method of sale for such Collateral, (b) the right to
assert in any action or proceeding between it and the Secured Party any offsets
or counterclaims that it may have, (c) except as otherwise provided in any of
the Loan Documents, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE OR
JUDICIAL HEARING IN CONNECTION WITH THE SECURED PARTY'S TAKING POSSESSION OR
DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND
HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT EACH
PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND
TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF THE
SECURED PARTY'S RIGHTS HEREUNDER, (d) all rights of redemption, appraisement,
valuation, stay and extension or moratorium and (e) all other rights the
exercise of which would, directly or indirectly, prevent, delay or inhibit the
enforcement of any of
Exhibit E
#20170954.1
<PAGE>
the rights or remedies under the Loan Documents or the absolute sale of the
Collateral, now or hereafter in force under any Applicable Law, and each
Pledgor, for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waive the benefit of all such laws and rights.
Section 6.8. Power of Attorney. (a) In addition to the other
powers granted the Secured Party by the Pledgors under the Loan Documents, each
Pledgor hereby appoints the Secured Party, and any other Person that the Secured
Party may designate, as such Pledgor's attorney-in-fact to act, in the name,
place and stead of such Pledgor in any way in which such Pledgor itself could
do, with respect to each of the following: (i) endorsing the Pledgors' name on
(A) any checks, notes, acceptances, money orders, drafts or other forms of
payment, (B) any proxies, documents, instruments, notices, freight bills, bills
of lading or other documents or agreements relating to the Collateral, (C)
schedules and assignments of Collateral Obligations and (D) notices of
assignment, financing statements and other public records; (ii) claiming for,
adjusting, and instituting legal proceedings to collect, any amounts payable
under insurance, and applicable loss payable endorsements, required to be
maintained under any of the Loan Documents; (iii) taking any actions or
exercising any rights, powers or privileges that each Pledgor is entitled to
take or exercise and that, under the terms of any of the Loan Documents, the
Secured Party is authorized to take or exercise; (iv) doing or causing to be
done any or all things necessary or, in the determination of the Secured Party,
desirable to observe or perform the terms, conditions, covenants and agreements
to be observed or performed by each Pledgor under the Loan Documents and
otherwise to carry out the provisions of the Loan Documents; and (v) during an
Event of Default, notifying the post office authorities to change the address
for delivery of the Pledgors' mail to an address designated by the Secured
Party, and receiving, opening and disposing of all mail addressed to the
Pledgors (with all mail not constituting, evidencing or relating to the
Collateral to be forwarded by the Secured Party to the Pledgors). Each Pledgor
hereby ratifies and approves all acts of the attorney.
(b) To induce any third Person to act under this Section 6.8,
each Pledgor hereby agrees that any third Person receiving a duly executed copy
or facsimile of this Agreement may act under this Section 6.8, and that the
termination of this Section 6.8 shall be ineffective as to such third Person
unless and until actual notice or knowledge of such termination shall have been
received by such third Person, and each Pledgor, on behalf of itself and its
successors and assigns, hereby agrees to indemnify and hold harmless any such
third Person from and against any and all claims that may arise against such
third Person by reason of such third Person having relied on the provisions of
this Section 6.8.
Exhibit E
#20170954.1
<PAGE>
Section 6.9. Release and Subordination of Rights Against the
Borrowers, Guarantors and Other Collateral. (a) Release of "Claims" Against the
Borrowers Resulting from the Loan Documents. Each Pledgor hereby releases the
other Borrowers from all "claims" (as defined in section 101(4) of the
Bankruptcy Code) that such Pledgor might otherwise have against the Borrower in
any way arising out of, related to, or connected with, (i) its obligations under
the Loan Documents, (ii) any obligation of contribution it may have, or (iii)
the payment or performance of any obligation referred to in clause (i) or (ii).
(b) Subordination of Other Rights. To the extent not released
by the Pledgors under Section 6.9(a), all rights that the Pledgors may at any
time have against the other Borrowers, any guarantor or any other collateral for
the Obligations (including rights of subrogation, exoneration, reimbursement and
contribution and whether arising under Applicable Law or otherwise) in any way
arising out of, related to, or connected with, (i) their respective obligations
under the Loan Documents, (ii) any obligation of contribution the respective
Pledgor may have, or (iii) the payment or performance of any obligation referred
to in clause (i) or (ii), are hereby expressly subordinated to the prior
payment, observance and performance in full of the Obligations. The Pledgors
shall not enforce any of the rights, or attempt to obtain payment or performance
of any of the obligations, subordinated pursuant to this Section 6.9(b) until
the Obligations have been paid, observed and performed in full, except that such
prohibition shall not apply to routine acts, such as the giving of notices and
the filing of continuation statements, necessary to preserve any such rights. If
any amount shall be paid to or recovered by the Pledgors (whether directly or by
way of setoff, recoupment or counterclaim) on account of any right or obligation
subordinated pursuant to this Section 6.9(b), such amount shall be held in trust
by the Pledgors for the benefit of the Principals, not commingled with any of
the Pledgors' other funds and forthwith paid over to the Secured Party, in the
exact form received, together with any necessary endorsements, to be applied and
credited against, or held as security for, the Obligations.
Section 6.10. Termination of Security Interest. The Security
Interest and all of the Pledgors' obligations under Articles 1, 4 and 5 shall
terminate upon the satisfaction of the Obligations without the filing of a
petition under the Bankruptcy Code by or against any Person whose assets were
used to pay any amounts payable by the Borrowers under the Loan Documents.
Section 6.11. Notices and Deliveries. (a) Notices
and Materials Other than Collateral. Except as provided in
Section 6.20:
(1) Manner of Delivery. All notices,
communications and materials (including all Information) to be
given or delivered pursuant to the Loan Documents shall, except
Exhibit E
#20170954.1
<PAGE>
in those cases where giving notice by telephone is expressly permitted, be given
or delivered in writing (which shall include telex and facsimile transmissions).
In the event of a discrepancy between any telephonic notice and any written
confirmation thereof, such written confirmation shall be deemed the effective
notice except to the extent the Secured Party has acted in reliance on such
telephonic notice.
(2) Addresses. All notices, communications and
materials to be given or delivered pursuant to the Loan Documents shall be given
or delivered at the following respective addresses and telex, telecopier and
telephone numbers and to the attention of the following individuals or
departments in Section [8.02] of the Credit Agreement; or at such other address
or telex, telecopier or telephone number or to the attention of such other
individual or department as the party to which such information pertains may
hereafter specify for the purpose in a notice specifically captioned "Notice of
Change of Address" given to (x) if the party to which such information pertains
is the Pledgors, the Secured Party and each Bank, (y) if the party to which such
information pertains is the Secured Party, the Pledgors and each Bank and (z) if
the party to which such information pertains is a Bank, the Pledgors and the
Secured Party.
Section 6.12. Authorization to Charge Bank Accounts. Each
Pledgor hereby authorizes each Principal, if and to the extent any amount
payable by the Pledgors under the Loan Documents (whether payable to such
Principal or to any other Principal) is not otherwise paid when due, to charge
such amount against any or all of the Bank Accounts of the Pledgors with such
Principal or any of its Affiliates, with the Pledgors remaining liable for any
deficiency.
Section 6.13. Remedies of the Essence. The various rights and
remedies of the Principals under the Loan Documents are of the essence of those
agreements, and the Principals shall be entitled to obtain a decree requiring
specific performance of each such right and remedy.
Section 6.14. Disclosures. The Secured Party and the other
Principals may disclose to, and exchange and discuss with, any other Person (the
Secured Party, the other Principals and each such other Person being hereby
authorized to do so) any information concerning the Collateral or the Pledgors
or any of their Subsidiaries (whether received by the Secured Party, the other
Principals or such other Person in connection with or pursuant to the Loan
Documents or otherwise) for the purpose of (a) complying with Applicable Law,
(b) protecting or preserving the Collateral, (c) protecting, preserving,
exercising or enforcing any of their rights in, under or related to the
Collateral or the Loan Documents, (d) performing any of their obligations under
or related to the Loan Documents or (e) consulting with respect to any of the
foregoing matters.
Exhibit E
#20170954.1
<PAGE>
Section 6.15. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the
State of New York.
Section 6.16. LIMITATION OF LIABILITY. NEITHER THE SECURED
PARTY NOR ANY OTHER PRINCIPAL SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND EACH
OF THE PLEDGORS HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY LOSS OR
DAMAGE SUSTAINED BY ANY OF THE PLEDGORS, OR ANY LOSS, DAMAGE, DEPRECIATION OR
OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT MAY OCCUR AS A RESULT OF,
IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO, (i) ANY ACT OR FAILURE TO
ACT OR (ii) ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THIS AGREEMENT OR THE LOAN
DOCUMENTS, EXCEPT, IN THE CASE OF CLAUSE (ii), FOR ANY SUCH LOSS, DAMAGE,
DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE SAME IS DETERMINED BY A
JUDGMENT OF A COURT THAT IS BINDING ON THE PLEDGORS AND SUCH PRINCIPALS, FINAL
AND NOT SUBJECT TO REVIEW ON APPEAL, TO BE THE RESULT OF ACTS OR OMISSIONS ON
THE PART OF SUCH PRINCIPALS CONSTITUTING (x) WILLFUL MISCONDUCT, (y) KNOWING
VIOLATIONS OF LAW OR (z) GROSS NEGLIGENCE.
Section 6.17. Counterparts. Each Collateral Document may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto were upon the same instrument.
Section 6.18. Entire Agreement. This Agreement embodies the
entire agreement among the Pledgors, the Secured Party and the Banks relating to
the subject matter hereof and supersedes all prior agreements, representations
and understandings, if any, relating to the subject matter hereof.
Section 6.19. Successors and Assigns. All of the provisions of
each Collateral Document shall be binding upon and inure to the benefit of the
Pledgors, the Secured Party and the other Principals and their respective
successors and assigns.
Section 6.20. Delivery of Opinions Authorized. The Pledgors
hereby acknowledge and agree that each Person that has rendered or may render an
opinion, report or similar communication, including legal opinions and
accountant's reports, to any Person in connection with the Loan Documents, has
been and is hereby authorized and directed to so deliver such opinion, report or
communication.
Section 6.21. Conflicts with Credit Agreement. In the event of
any conflict between the terms of this Agreement and the Credit Agreement the
terms of the Credit Agreement shall control.
Exhibit E
#20170954.1
<PAGE>
ARTICLE 7.
INTERPRETATION
Section 7.1. Definitional Provisions. (a) Certain
Terms Defined by Reference. Except in the case of "Agreement",
"Agreement Date", "Collateral" and "Security Interest" and as
otherwise specified herein, all terms defined in the Credit
Agreement are used herein with the meanings therein ascribed to
them.
(b) Other Defined Terms. For purposes of this
Agreement capitalized terms used in this Agreement shall have the
meaning stated below:
"Account" means a Receivable that represents the right to
payment for goods sold or leased or for services rendered, in each case in the
ordinary course of business.
"Account Debtor" means a Person obligated on an
Account.
"Account Proceeds" means proceeds of an Account.
"Agreement" means this Agreement, including all
schedules, annexes and exhibits hereto.
"Agreement Date" means the date set forth as such on the last
signature page hereof.
"Amended and Restated Credit Agreement" means the Credit
Agreement, dated as of September 28, 1994 as amended by Amendment No. 1 dated as
of May 15, 1995 and Amendment No. 2 dated as of March 26, 1996 and as
subsequently amended and restated by that certain Amended and Restated Credit
Agreement dated as of June 21, 1996 and Amendment No. 1 to the Amended and
Restated Credit Agreement dated as of December 17, 1996 among the Pledgors, the
Banks listed on the signature pages thereof, Citibank N.A., as Administrative
Agent and the First National Bank of Boston, as Letter of Credit Agent.
"Applicable Law" means anything in Section 6.15 to the
contrary notwithstanding, (a) all applicable common law and principles of equity
and (b) all applicable provisions of all (i) constitutions, statutes, rules,
regulations and orders of governmental bodies, (ii) Government Approvals and
(iii) orders, decisions, judgments and decrees of all courts (whether at law in
equity or admiralty) and arbitrators.
"Bank Account" means (i) a deposit, custody, or other account
(whether, in any case, time or demand or interest or non-interest bearing and
whether maintained at a branch or office located within or without the United
States) of the Pledgors with the Secured Party, any other Principal or any
Affiliate of the
Exhibit E
#20170954.1
<PAGE>
Secured Party or any other Principal, (ii) all amounts from time to time
credited to such account, (iii) all cash, securities, instruments, documents,
chattel paper, general intangibles, accounts and other property from time to
time credited to such account or representing investments and reinvestments of
amounts from time to time credited to such account and (iv) all interest,
principal payments, dividends and other distributions payable on or with respect
to, and all proceeds of, (A) all property so credited or representing such
investments and reinvestments and (B) such account.
"Collateral" means the Pledgors' interest (WHATEVER IT MAY BE)
in each of the following, IN EACH CASE WHETHER NOW OR HEREAFTER EXISTING OR NOW
OWNED OR HEREAFTER ACQUIRED BY THE Pledgors AND WHETHER OR NOT THE SAME IS NOW
CONTEMPLATED, ANTICIPATED OR FORESEEABLE, or constitutes Collateral by reason of
one or more than one of the following clauses, AND WHEREVER THE SAME MAY BE
LOCATED:
(i) all Receivables;
(ii) all Collateral Accounts;
(iii) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks and related data processing software
(owned by the Pledgors or in which a Pledgor has an interest) that at
any time evidence or contain information relating to any Collateral or
are otherwise necessary or helpful in the collection thereof or
realization thereupon;
(iv) all guaranties, Liens on real or personal property,
leases and other agreements and property that in any way secure or
relate to any Collateral, or are acquired for the purpose of securing
and enforcing any item thereof;
(v) all drydocks owned by Sun State Marine Services, Inc.,
including, without limitation, those located in Green Cove Springs,
Florida; and
(vi) all products and proceeds of Collateral in whatever form.
The inclusion of "proceeds" of Collateral in the definition of
"Collateral" shall not be deemed a consent by the Secured Party to any
sale or other disposition of any Collateral not otherwise specifically
permitted by the terms hereof.
"Collateral Account" means a deposit account maintained with a
Collateral Account Bank.
"Collateral Account Bank" means a bank in which a Collateral
Account is opened pursuant to Article 5.
Exhibit E
#20170954.1
<PAGE>
"Collateral Debtor" means a Person obligated on, bound
by, or subject to, a Collateral Obligation.
"Collateral Obligation" means a liability constituting part of
the Collateral and includes any such constituting or arising under any
Receivable.
"Defaulted Receivable" means a Receivable: (i) which is unpaid
for more than 90 days from its original due date; (ii) as to which the
Collateral Debtor or any other Person obligated thereon in respect thereof has
taken any action, or suffered any event to occur, or is the subject of, any
bankruptcy, insolvency, assignment for due benefit of creditors or similar
action or proceeding; or (iii) which in accordance with good business practice
would be transferred to inactive status or written off the books of the Pledgor
which originated such Receivable as uncollectible.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Collateral Debtors of which is not an
Affiliate of any of the parties hereto;
(ii) the Collateral Debtor of which, at the time of the
initial creation of an interest therein under the Agreement, is not the
Collateral Debtor of any Defaulted Receivables which in the aggregate
constitute 10% or more of the aggregate outstanding balance of all
Receivables of such Obligor;
(iii) which at the time of the initial creation of an
interest therein under the Agreement is not a Defaulted
Receivable;
(iv) which, according to the contract related thereto, is
required to be paid in full (A) within 30 days of the original billing
date therefor, or (B) more than 30 days but no later than 120 days
following the original billing date therefor;
(v) which is an "account" within the meaning of Section 9-106
of the UCC of the applicable jurisdictions governing the perfection of
the interest created by a Receivable Interest;
(vi) which is denominated and payable only in United
States dollars in the United States;
(vii) which arises under a contract which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the Collateral Debtor of such
Receivable and is not subject to any dispute, offset, counterclaim or
defense whatsoever
Exhibit E
#20170954.1
<PAGE>
(except the potential discharge in bankruptcy of such
Collateral Debtor);
(viii) which, together with the Collateral Debtor related
thereto, does not contravene any laws, rules or regulations applicable
thereto and with respect to which no party to the Collateral Debtor
related thereto is in violation of any such law, rule or regulation in
any material respect; and
(ix) the Collateral Debtor of which is a United States
resident or a non-resident to the extent the outstanding balance of
such Receivable (the Collateral Debtor of which is a non-resident) at
the time of the initial creation of an interest therein under this
Agreement, when aggregated with the outstanding balance of all other
receivables the Collateral Debtor of which is a non-resident, does not
exceed 10% of the then outstanding balance of all Receivables.
"Excluded Receivables" means those receivables listed in
Schedule 1 to this Agreement.
"Fair Saleable Value" means, with respect to any asset at any
time, the amount that a willing buyer would pay a willing seller for such asset
on the assumption that the sale must take place within a period of six months to
one year after such time.
"Pledgors" means the Persons listed in Schedule 1.3(a)
--------
hereto.
"Principals" means all Persons that are, or at any time were,
the Secured Party, the Administrative Agent, the Letter of Credit Agent, the
Co-Agent or a Bank.
"Receivables" means all rights and claims to the payment or
receipt of money or other forms of consideration or compensation of any kind at
any time now or hereafter owing or to be owing or claimed or that could be
claimed to be owing (whether, if subject to the Uniform Commercial Code,
classified thereunder as accounts, contract rights, chattel paper, general
intangibles, instruments, securities or otherwise) including all such rights and
claims in, to and under (i) (A) accounts, (B) contracts, guaranties and
contracts of insurance of all kinds, including credit and key-man life
insurance, (C) letters of credit, (D) chattel paper, (E) notes, (F) drafts, (G)
instruments, (H) documents, (I) acceptances, (J) tax refunds, (K) judgments and
(L) all other debts, obligations and liabilities in whatever form now or
hereafter owing, and (ii) all causes of action, whether sounding in tort,
contract or otherwise and whether or not currently in litigation other than
Excluded Receivables.
Exhibit E
#20170954.1
<PAGE>
"Secured Party" means the Administrative Agent and the
Banks.
"Secured Party's Office" means the address of the Secured
Party specified in or determined in accordance with the provisions of Section
8.02 of the Credit Agreement.
"Security Interest" means the mortgages, pledges and
assignments to the Secured Party of, the continuing security interest of the
Secured Party in, and the continuing lien of the Secured Party upon, the
Collateral intended to be effected by the terms of this Agreement or any of the
other Loan Documents.
Section 7.2. Captions. Captions to Articles, Sections and
subsections of, and Annexes, Schedules and Exhibits to, the Loan Documents are
included for convenience of reference only and shall not constitute a part of
the Loan Documents for any other purpose or in any way affect the meaning or
construction of any provision of the Loan Documents.
Exhibit E
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers all as of the
Agreement Date.
HVIDE MARINE INCORPORATED (formerly named
Hvide Corp., the surviving corporation of a
merger between Hvide Marine Incorporated and
Hvide Corp.)
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
HVIDE CHARTERING, LTD.
By its general partner Hvide Marine
Incorporated
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
Exhibit E
20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers all as of the
Agreement Date.
HVIDE MARINE TRANSPORT, INCORPORATED
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
Exhibit E
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers all as of the
Agreement Date.
SEABULK OFFSHORE, LTD.
By its general partner Seabulk Tankers, Ltd.
By its general partner Hvide Marine
Transport Incorporated
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
SEABULK TANKERS, LTD.
By its general partner Hvide Marine
Transport Incorporated
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
Exhibit E
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers all as of the
Agreement Date.
SEABULK OCEAN SYSTEMS CORPORATION
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
Exhibit E
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers all as of the
Agreement Date.
SUN STATE MARINE SERVICES, INC.
By:
Name:
Title:
Address: 2200 Eller Drive, Building 27
P.O. Box 13038
Port Everglades Station
Fort Lauderdale, FL 33316
Telephone: 954-524-4200
Facsimile: 954-527-1772
CITIBANK, N.A.,
as Administrative Agent
on behalf of the Banks,
as Secured Party
By:
Name:
Title:
Agreement Date: February 3, 1997
Exhibit E
#20170954.1
<PAGE>
Schedule 1
to Security Agreement
EXCLUDED RECEIVABLES
All Receivables relating to the U.S. Flag vessel SEABULK
MAGNACHEM.
All Receivables relating to the U.S. Flag vessel SEABULK
CHALLENGER.
All Receivables relating to the U.S. Flag vessel HMI DYNACHEM.
All Receivables relating to the U.S. Flag vessel HMI
PETROCHEM.
[All Receivables relating to the U.S. Flag vessel
ASTRACHEM.]
Exhibit E
#20170954.1
<PAGE>
Schedule 1.3(a)
to Security Agreement
STANDARD FORM UCC-1
FINANCING STATEMENT
(a) Debtor: [Insert Pledgors' names and addresses]
(b) Secured Party: Citibank, N.A., as Administrative Agent for
the Banks, 399 Park Avenue, Shipping Department, 8th Floor,
New York, NY 10043, as Secured Party (as defined in Annex A
hereto).
(c) "Collateral" as defined in Annex A hereto, whether now or hereafter
existing or now owned or hereafter acquired, including Receivables
(including all accounts, contract rights and other rights to payment)
Signature Lines:
Debtor: [Insert Pledgors' names]
Secured Party: Citibank, N.A., as Administrative Agent, as
Secured Party
Exhibit E
#20170954.1
<PAGE>
ANNEX A TO UCC-1 FINANCING STATEMENT
DEBTOR:
SECURED PARTY: Citibank, N.A., as Administrative Agent and as
Secured Party for the Banks under the Credit
Agreement
COLLATERAL DESCRIPTION
"Collateral" means the Debtor's interest (whatever it may be)
in each of the following, in each case whether now or hereafter existing or now
owned or hereafter acquired by the Debtor and whether or not the same is now
contemplated, anticipated or foreseeable, or constitutes Collateral by reason of
one or more than one of the following clauses, and wherever the same may be
located:
(a) all Receivables except Excluded Receivables;
(b) all Collateral Accounts;
(c) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks and related data processing software (owned by
the Debtor or in which it has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon;
(d) all guaranties, liens on real or personal property, leases
and other agreements and property that in any way secure or relate to any
Collateral, or are acquired for the purpose of securing and enforcing any item
thereof;
(e) all drydocks owned by Sun State Marine Services,
Inc., including, without limitation, those located in Green Cove
Springs, Florida; and
(f) all products and proceeds of Collateral in
whatever form.
Exhibit E
#20170954.1
<PAGE>
ADDITIONAL DEFINITIONS
For purposes of this Annex A:
"Administrative Agent" means Citibank, N.A., as agent for and
representative (within the meaning of Section 9-105(m) of the Uniform Commercial
Code) of the Banks, and any successor Administrative Agent appointed pursuant to
the provisions of the Credit Agreement.
"Agreement" means the Security Agreement, dated as of
September 30, 1994, between the Debtor and the other Pledgors named therein and
the Secured Party, as amended from time to time.
"Amended and Restated Credit Agreement" means the Credit
Agreement, dated as of September 28, 1994 as amended by Amendment No. 1 dated as
of May 15, 1995 and Amendment No. 2 dated as of March 26, 1996 and as
subsequently amended and restated by an Amended and Restated Credit Agreement
dated as of June 21, 1996 and amended by Amendment No. 1 dated December 17, 1996
and as subsequently amended and restated again by that certain Amended and
Restated Credit Agreement dated as of February 3, 1997 among the Pledgors, the
Banks listed on the signature pages thereof, Citibank N.A., as Administrative
Agent and the First National Bank of Boston, as Letter of Credit Agent.
"Banks" means the banks listed on the signature pages of the
Credit Agreement and their respective successors and assigns.
"Collateral Account" means a deposit account maintained with a
Collateral Account Bank.
"Receivables" means all rights and claims to the payment or
receipt of money or other forms of consideration or compensation of any kind at
any time now or hereafter owing or to be owing or claimed or that could be
claimed to be owing to the Debtor (whether classified under the Uniform
Commercial Code as accounts, contract rights, chattel paper, general
intangibles, instruments, securities or otherwise) including all such rights and
claims in, to and under (a) (i) accounts, (ii) contracts, including guaranties
and contracts of insurance of all kinds, including credit and key-man life
insurance, (iii) letters of credit, (iv) chattel paper, (v) notes, (vi) drafts,
(vii) instruments, (viii) documents, (ix) acceptances, (x) tax refunds, (xi)
judgments and (xii) all other debts, obligations and liabilities in whatever
form now or hereafter owing to the Debtor, and (b) all causes of action, whether
sounding in tort, contract or otherwise and whether or not currently in
litigation.
Exhibit E
#20170954.1
<PAGE>
"Secured Party" means the Administrative Agent, acting both on
its own behalf as Administrative Agent and as the agent for and representative
(within the meaning of Section 9-105(m) of the Uniform Commercial Code) of the
other Principals.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect from time to time in the State of New York.
Exhibit E
#20170954.1
<PAGE>
Schedule 1.3(f)
to Security Agreement
[Form of Collateral Account Pledge Agreement]
[Letterhead of the Pledgors]
COLLATERAL ACCOUNT PLEDGE AGREEMENT
, 19
[Name and address of Bank]
Attention:
CITIBANK, N.A.,
as Administrative Agent
Gentlemen:
Reference is made to Account No. (the "Account") maintained by
[name of Pledgors] (the "Pledgors") with [name of Collateral Account Bank] (the
"Bank").
The Pledgors hereby advise the Bank that Citibank, N.A., as
agent (the "Secured Party") pursuant to an Amended and Restated Security
Agreement dated as of February 3, 1997 (the "Security Agreement"), a copy of
which is attached hereto, has a security interest in any and all amounts
credited to and balances in the Account on and after such time. Terms not
otherwise defined herein shall have the meanings set forth in the Security
Agreement.
1. Funds on deposit in the Account shall be withdrawn only
upon the instructions of the Secured Party to the Bank and in the manner, at the
times and to the account specified by the Secured Party to the Bank from time to
time. Until the Secured Party notifies the Bank otherwise, the Secured Party's
instructions to the Bank are as set forth in Exhibit A hereto. The Bank agrees
not to exercise against the Account or the Collateral Account any security
interests or rights of setoff, recoupment or counterclaim that it may have
against the Pledgors.
2. The Pledgors hereby pledge, assign and transfer to
the Secured Party and grant the Secured Party a security interest
Exhibit E
#20170954.1
<PAGE>
in (a) the Account and (b) all present and future credit balances in the Account
as security for all Obligations and the Pledgors and the Bank acknowledge and
agree that the Bank is holding and will hold the Account and such credit
balances as agent for the Secured Party, for the sole and specific purpose of
perfecting the Secured Party's security interest therein. The Secured Party's
rights against the Pledgors under this paragraph are in addition to and not in
limitation of the Secured Party's rights under the other provisions of this
letter, under the Security Agreement and under the other Loan Documents (as such
term is defined in the Security Agreement) and otherwise.
3. This Agreement may not be revoked or amended, in whole or
in part, nor any requirement hereof waived, except with the prior written
consent of the Secured Party. The Secured Party shall have the right at any time
to direct the Pledgors to cause collections on proceeds of Collateral (as
defined in the Security Agreement). In addition, upon five days' prior written
notice to each of the other parties hereto, either the Bank or the Secured Party
may terminate this Agreement at any time, but in any such event, the Secured
Party's rights under paragraphs 1 and 3 shall continue until all balances in the
Account have been transferred to the Secured Party in accordance with the terms
hereof, and the Bank's rights under paragraph 2 hereof shall, with respect to
amounts transferred, survive such termination.
Very truly yours,
[NAMES OF PLEDGORS]
By
Name:
Title:
Exhibit E
#20170954.1
<PAGE>
Accepted and agreed to:
[NAME OF COLLATERAL ACCOUNT BANK]
By
Name:
Title:
Consented and agreed to:
CITIBANK, N.A.,
as Administrative Agent
By
Name:
Title:
Exhibit E
#20170954.1
<PAGE>
Exhibit A
to Collateral Account
Pledge Agreement
Instructions from the Secured Party
Until instructed otherwise by the Secured Party (either by
written notice or otherwise), the Bank shall promptly carry out any and all
transfer requests made by the Pledgors with respect to balances in the Account.
Exhibit E
#20170954.1
<PAGE>
EXHIBIT F
to the
Amended and Restated
Credit Agreement
- --------------------------------------------------------------------------------
FIRST PREFERRED MORTGAGE
ON THE [UNITED STATES OR PANAMA] FLAG VESSEL
[NAME OF VESSELS]
By
[NAME OF SHIPOWNER]
in favor of
[NAME OF MORTGAGEE],
as Mortgagee
- -------------------------------------------------------------------------------
Exhibit F
#20170954.1
<PAGE>
FIRST PREFERRED [FLEET] MORTGAGE
FIRST PREFERRED FLEET MORTGAGE, made the ___ day of ________,
______ by [NAME OF SHIPOWNER], a Florida [corporation or limited partnership of
which the general partner is __________], [SHIPOWNER ADDRESS] (herein referred
to as the "Shipowner"), in favor of [NAME OF TRUSTEE], a national banking
association organized and existing under the laws of the United States of
America, [TRUSTEE ADDRESS], not in its individual capacity, but solely as
trustee (herein referred to as the "Mortgagee") pursuant to the Master Vessel
and Collateral Trust and Security Agreement dated as of September 29, 1994 as
amended and restated by the Amended and Restated Master Vessel and Collateral
Trust and Security Agreement dated as of February 3, 1997 (as the same may be
restated, amended, supplemented or otherwise modified from time to time, the
"Master Vessel Trust Agreement") between Citibank N.A., as Administrative Agent
(the "Administrative Agent") on behalf of itself, The First National Bank of
Boston, a national banking association organized and existing under the laws of
the United States of America and the other banks (together with their successors
and assigns, the "Banks") described in the Credit Agreement as defined below and
[NAME OF TRUSTEE].
WHEREAS:
A. The Shipowner is the sole owner of the whole of the United
States [Panamanian] flag motor vessel [NAME OF VESSEL], Official No. ________,
of ______ gross and ________ net tons, or thereabouts, duly documented in the
name of the Shipowner, with her home port at the Port of ___________________,
having been built in [country] in [year].
[The Shipowner is the sole owner of the whole of
the [United States or Panamanian] flag vessels listed in Exhibit B which is
attached hereto and made a part hereof (the "Vessels").]
B. The Shipowner, [Insert Names of Other Borrowers], jointly
and severally, as borrowers (herein collectively referred to as the
"Borrowers"), the Administrative Agent, the Letter of Credit Agent, the
Co-Agents and the Banks have entered into a Credit Agreement dated as of
September 28, 1994, as amended by Amendment No. 1, dated as of May 15, 1995, as
subsequently amended by Amendment No. 2, dated as of March 26, 1996, as amended
and restated as of June 21, 1996 and amended by Amendment No. 1 dated December
17, 1996 and as subsequently amended and restated by the Amended and Restated
Credit Agreement dated as of February 3, 1997 (the "Credit Agreement"), a copy
of which is attached hereto as Exhibit A and made a part hereof. The Credit
Agreement provides, inter alia, for one or more advances to be made to the
Borrowers from time to time under (i) Facility A in a maximum principal amount
of up to Twenty Million United States
Exhibit F
#20170954.1
<PAGE>
Dollars (US$20,000,000) with a maturity date of January 15, 2002, (ii) Facility
B in an aggregate principal amount of up to Fifty Six Million Seven Hundred
Fifty Thousand United States Dollars (US$56,750,000) with a maturity date of
January 15, 2002, (iii) Facility C in a maximum principal amount of up to Five
Million Six Hundred Thousand United States Dollars (US$5,600,000) with a
maturity date of January 15, 2000, (iv) Facility D in a maximum principal amount
of up to Six Million United States Dollars (US$6,000,000) with a maturity date
of January 15, 2002, and (v) Facility F in a maximum principal amount of up to
Fifty Million United States Dollars (US$50,000,000) with a maturity date of
January 15, 2002, such that the maximum principal amount of all advances may be
One Hundred Thirty Four Million One Hundred Thousand United States Dollars
(US$134,100,000) (the "Loan"), which is evidenced, in part, by Secured
Promissory Notes issued jointly and severally by the Shipowner and the other
Borrowers in favor of each Bank substantially in the form of Exhibit A-1,
Exhibit A-2 and Exhibit A-3 to the Credit Agreement (collectively, the "Notes"),
and that the Shipowner will deliver this Mortgage in favor of the Mortgagee as
security for the Loan and the Shipowner's other Obligations as defined in the
Credit Agreement.
C. The Administrative Agent and [NAME OF TRUSTEE] have entered
into the Master Vessel Trust Agreement pursuant to which [NAME OF TRUSTEE] has
agreed to act as trustee for the Banks and hold to preferred mortgages on their
behalf as set forth in the Master Vessel Trust Agreement.
D. Pursuant to the Credit Agreement, the Banks have agreed
upon the terms and subject to the conditions set forth therein, severally, but
not jointly, to advance to the Borrowers up to the maximum principal amount of
One Hundred Thirty Four Million One Hundred Thousand United States Dollars
(US$134,100,000). A portion of the Loan was drawn-down on the date hereof and
the Shipowner acknowledges that it is justly indebted to the Mortgagee and may
hereafter from time to time be justly indebted to the Mortgagee up to the
maximum principal amount of One Hundred Thirty Four Million One Hundred Thousand
United States Dollars (US$134,100,000) evidenced, in part, by the Notes.
Consequently, the total amount of this Mortgage is One Hundred Thirty Four
Million One Hundred Thousand United States Dollars (US$134,100,000) and
interest, fees and performance of mortgage covenants.
E. In order to secure the payment of the Loan and its other
Obligations as defined in the Credit Agreement evidenced, in part, by the Notes
(including the principal of and interest thereon) according to the terms of the
Credit Agreement and the Notes, and the payment of all other such sums that may
hereinafter be secured by this Mortgage in accordance with the terms hereof, and
to secure the performance and observance of and compliance with all the
agreements, covenants and conditions contained herein or in the Credit Agreement
and the other Loan
Exhibit F
#20170954.1
<PAGE>
Documents as defined in the Credit Agreement, the Shipowner has duly authorized
the execution and delivery of this First Preferred [Fleet] Mortgage under the
pursuant to [Chapter 313 of Title 46 of the United States Code as at any time
amended (hereinafter the "United States Maritime Law") Article 1515 of the
Panama Code of Commerce as amended by Law 43 at any time amended hereinafter
"Panamanian Maritime Law".]
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, and in order to secure the payment of the Loan
and other Obligations as defined in the Credit Agreement evidenced, in part, by
the Notes (including the principal of and interest thereon) according to the
terms of the Credit Agreement, and the payment of all other sums that may
hereafter be secured by this Mortgage in accordance with the terms hereof (all
such principal, interest, fees, and all other sums being hereinafter called
"Indebtedness hereby secured") and to secure the performance and observance of
and compliance with all of the agreements, covenants and conditions contained
herein or in the Credit Agreement, the Shipowner has granted, conveyed,
mortgaged, pledged, confirmed, assigned, transferred and set over and by these
presents does grant, convey, mortgage, pledge, confirm, assign, transfer and set
over, unto the Mortgagee, its successors and assigns, the whole of the said
vessels [NAME OF VESSEL the Vessels listed in Exhibit B] including, without
being limited to, all of the boilers, engines, machinery, masts, spars, boats,
anchors, cables, chains, rigging, tackle, capstans, outfit, tools, pumps and
pumping equipment, drills, apparel, furniture, fittings, equipment, drilling
equipment, spare parts, and all other appurtenances thereunto appertaining or
belonging, whether now owned or hereafter acquired, and also any and all
additions, improvements, renewals and replacements hereafter made in or to such
vessel or any part thereof, including all items and appurtenances aforesaid
(such vessel, together with all of the foregoing, being herein called the
"Vessel").
TO HAVE AND TO HOLD all and singular the above mortgaged and
described property unto the Mortgagee, its successors and assigns, to its and to
its successors' and assigns' own use, benefit and behoof forever.
PROVIDED, and these presents are upon the condition, that, if
the Shipowner or its successors or assigns shall pay or cause to be paid the
Indebtedness hereby secured as and when the same shall become due and payable in
accordance with the terms of the Credit Agreement, the Notes and this Mortgage
and all other such sums as may hereafter become secured by this Mortgage in
accordance with the terms hereof, and the Shipowner shall duly perform, observe
and comply with or cause to be performed, observed, or complied with all the
covenants, terms and conditions of this Mortgage, the Notes and the Credit
Agreement, expressed or implied, to be performed, then this Mortgage and the
estate and rights hereunder shall cease determine and be void, otherwise to
remain in full force and effect.
Exhibit F
#20170954.1
<PAGE>
The Shipowner for itself, its successors and assigns, hereby
covenants, declares and agrees with the Mortgagee, its successors and assigns
that the Vessel is to be held subject to the further covenants, conditions,
terms and uses hereinafter set forth.
ARTICLE I
Covenants of the Shipowner.
SECTION 1. Acknowledgment of Debt. (a) The Shipowner hereby
acknowledges that it is justly indebted to the Mortgagee and agrees to pay or
cause to be paid the Indebtedness hereby secured and to observe, perform and
comply with the covenants, terms and conditions herein, express or implied, on
its part to be observed, performed or complied with.
(b) The obligation of the Indebtedness hereby secured is an
obligation in United States Dollars and the terms "USD" or "U.S.$" or "Dollars"
when used shall mean United States Dollars. Notwithstanding fluctuations in the
value or rate of Dollars in terms of gold or any other currency, all payments
hereunder or otherwise in respect of the Indebtedness hereby secured shall be
made in United States Dollars when due and in United States Dollars when paid,
whether such payment is made before or after the due date thereof.
SECTION 2. Organization of Shipowner. (a) The
Shipowner is a corporation or a limited partnership duly
organized and existing under the laws of the State of Florida.
(b) The Shipowner has full power and authority to own and
mortgage the Vessel; all action necessary and required by law for the execution
and delivery of this Mortgage, has been duly and effectively taken; and the
Indebtedness hereby secured is and will be the valid and enforceable obligation
of the Shipowner in accordance with its terms.
SECTION 3. No Existing Liens. The Shipowner lawfully owns and
is lawfully possessed of the Vessel free from any lien or encumbrance whatsoever
other than (a) liens for current crew's wages, (b) liens covered by valid
policies of insurance held by the Mortgagee and meeting the requirements of
Section 15 below, and (c) liens not covered by insurance incurred in the
ordinary course of business and not more than thirty days past due, and shall
defend the title and possession thereto and to every part thereof for the
benefit of the Mortgagee against the claims and demands of all persons
whomsoever.
SECTION 4. Preferred Mortgage. The Shipowner will
cause this Mortgage to be duly recorded in accordance with the
provisions of the [United States or Panamanian] Maritime Law, and
will otherwise comply with and satisfy all of the provisions of
Exhibit F
#20170954.1
<PAGE>
the [United States or Panamanian] Maritime Law in order to establish and
maintain this Mortgage as a first preferred mortgage lien upon the Vessel for
the amount of the Indebtedness hereby secured.
SECTION 5. No Unlawful Operation. The Shipowner will not cause
or permit the Vessel to be operated in any manner contrary to law, and the
Shipowner will not engage in any unlawful trade or violate any law or carry any
cargo that will expose the Vessel to penalty, forfeiture or capture, and will
not do, or suffer or permit to be done, anything which can or may injuriously
affect the registration or enrollment of the Vessel under the laws and
regulations of the [United States or Republic of Panama] and will at all times
keep the Vessel duly documented thereunder.
SECTION 6. Payment of Taxes, etc. The Shipowner will pay and
discharge when due and payable, from time to time, all taxes, assessments,
government charges, fines and penalties lawfully imposed on the Vessel or any
income therefrom; provided that the Shipowner shall not be required to pay any
such tax, assessment or charge if the validity or amount thereof is concurrently
contested in good faith by appropriate proceedings and if the Shipowner shall
have set aside on its books reserves in accordance with United States generally
accepted accounting principles consistently applied deemed by it adequate with
respect to such tax, assessment or charge; and provided further, however, that
the Shipowner will pay or cause to be paid all such taxes, assessments or
charges forthwith upon the commencement of proceedings to foreclose any lien
which is attached as security therefor.
SECTION 7. No Power to Create Liens. Neither the Shipowner,
any charterer, the Master of the Vessel nor any other person has or shall have
any right, power or authority to create, incur or permit to be placed or imposed
or continued upon the Vessel any lien whatsoever other than for crew's wages,
salvage and this Mortgage.
SECTION 8. Notice of Mortgage. The Shipowner will place, and
at all times and places will retain, a properly certified [English language]
copy of this Mortgage on board the Vessel with her papers and will cause each
such certified copy to be exhibited to any and all persons having business
therewith which might give rise to any lien thereon other than liens for crew's
wages and salvage, and to any representative of the Mortgagee; and will place
and keep prominently displayed in the chart room and in the Master's cabin of
the Vessel a framed printed notice in plain type reading as follows:
Exhibit F
#20170954.1
<PAGE>
"NOTICE OF MORTGAGE
The Vessel is covered by a First Preferred [Fleet] Mortgage in
favor of [NAME OF TRUSTEE], as trustee, under authority of [Chapter 313
of Title 46 of the United States Code Article 1515 of the Panama Code
of Commerce as amended by Law 43 of 1984 as amended]. Under the terms
of said Mortgage, neither the Owner, any charterer, the Master of this
Vessel nor any other person has any right, power or authority to
create, incur or permit to be imposed upon this Vessel any other lien
whatsoever except liens for crew's wages and salvage."
SECTION 9. Discharge of Liens, Encumbrances, etc. Except for
the lien of this Mortgage, the Shipowner will not suffer to be continued any
lien, encumbrance or charge on the Vessel, and in due course and in any event
within thirty (30) days after the same becomes due and payable or within
fourteen (14) days after being requested to do so by the Mortgagee will pay or
cause to be discharge or make adequate provision for the satisfaction or
discharge of all claims or demands, or will cause the Vessel to be released or
discharged from any such lien, encumbrance or charge.
SECTION 10. Libel. If a libel, complaint or similar process be
filed against the Vessel or the Vessel be otherwise attached, levied upon or
taken into custody by virtue of any legal proceeding in any court, the Shipowner
will promptly notify the Mortgagee thereof by cable or telex, confirmed by
letter, at its address, as specified in this Mortgage, and will cause the Vessel
to be released from such attachment within seven (7) days and all liens thereon
other than this Mortgage to be discharged and will promptly notify the Mortgagee
thereof in the manner aforesaid. The Shipowner will notify the Mortgagee within
forty-eight (48) hours after it has become known to the Shipowner of any average
or salvage incurred by the Vessel.
SECTION 11. Vessel Condition. (a) The Shipowner will at all
times and without cost or expense to the Mortgagee maintain and preserve, or
cause to be maintained and preserved, the Vessel and all its equipment, outfit
and appurtenances, tight, staunch, strong, in good condition, working order and
repair and in all respects seaworthy and fit for its intended service, and if
classed will keep the Vessel, or cause her to be kept, in such condition as will
entitle her to the highest classification and rating for vessels of the same age
and type in American Bureau of Shipping, or other classification society of like
standing approved by the Mortgagee.
(b) The Vessel shall, and the Shipowner covenants that it
will, at all times comply with all applicable laws, treaties and conventions of
the [United States or Republic of Panama], and rules and regulations issued
thereunder, and shall have on board
Exhibit F
#20170954.1
<PAGE>
as and when required thereby valid certificates showing compliance therewith.
The Shipowner covenants that the Vessel will at all times comply with all laws,
rules and regulations of the United States and of any State or nation of
territory having jurisdiction over the Vessel, including but not limited to the
Oil Pollution Act of 1990, the Toxic Substances Control Act, Comprehensive
Environmental Response Compensation and Liability Act and the Hazardous
Materials Transportation Act and in each case the rules and regulations
promulgated and guidance issued pursuant thereto and similar treaties,
conventions, and national, state and local statutes, as they may be amended from
time to time and shall have on board the Vessel(s) shall at all times comply
with all applicable laws, treaties and conventions to which the [United States
or Republic of Panama] is a party and the rules and regulations issued
thereunder valid certificates demonstrating compliance according to and wherever
required thereby.
(c) The Shipowner will not make, or permit to be made, any
substantial change in the structure, type or speed of the Vessel(s), without
first receiving the written approval thereof by the Mortgagee.
(d) The Shipowner agrees, following request by the Mortgagee,
to give the Mortgagee at least ten (10) days notice of actual date and place of
any drydocking or survey in order that the Mortgagee may have representatives
present if desired. The Shipowner agrees that at the Mortgagee's request it will
satisfy the Mortgagee that the expense of such drydocking or survey or work to
be done thereat is within Shipowner's financial ability and will not result in a
claim or lien against the Vessel in violation of the provisions of this
Mortgage.
(e) The Shipowner will submit to the Mortgagee, annually or
more often, a certificate issued by the Vessel's classification society
indicating the classification in which the Vessel is maintained.
SECTION 12. Provision of Information and Documents. (a) The
Shipowner will at all reasonable times afford the Mortgagee or its authorized
representatives full and complete access to the Vessel for the purpose of
inspecting the Vessel and her cargo and papers and, at the request of the
Mortgagee, the Shipowner will deliver for inspection copies of any and all
contracts and documents relating to the Vessel, whether on board or not.
(b) The Shipowner hereby agrees to furnish the Mortgagee
promptly the following: (i) on demand, copies of any and all contracts and
documents relating to the Vessel, whether on board or not, including without
limitation, all charter parties or contracts of affreightment; and (ii) full
information and details with respect to the Vessel and all such contracts and
documents, including without limitation, full details as to
Exhibit F
#20170954.1
<PAGE>
parties, times of delivery and the like related to any charter
parties or contracts of affreightment.
(c) The Shipowner agrees to assign to the Mortgagee any
charters or earnings of the Vessel, and said assignments shall be in all
respects subject to the terms of the Credit Agreement.
(d) The Shipowner hereby appoints the Mortgagee
attorney-in-fact of the Shipowner, whether or not an event of default shall have
occurred or is continuing, to appear before governmental bodies, classification
societies and insurers and to demand and receive to the same extent that the
Shipowner itself might, all information and certificates respecting (i) the
corporate status of the Shipowner under the laws of its jurisdiction of
organization or any other jurisdiction in which it may have qualified to do
business, (ii) the status of the Vessel(s) under the laws and regulations of its
country of registration, and its compliance with the requirements thereof, and
(iii) the state of the records of [any of] the Vessel(s) or of the Shipowner in
respect of the Vessel(s) in any classification society with which the Vessel(s)
may be classed or of any company, association or club by whom the Vessel(s) or
the Shipowner in respect of the Vessel(s) may be insured; and the Shipowner
hereby agrees that the Mortgagee may execute its powers as attorney-in-fact as
aforesaid through its agents, representatives and attorneys. This power of
attorney is coupled with an interest and shall be irrevocable as long as any
Indebtedness hereby secured from the Shipowner to the Mortgagee or the Banks
remains outstanding.
SECTION 13. No Transfer of Flag. The Shipowner will not
transfer or change the flag or port of documentation of the Vessel without the
written consent of the Mortgagee first had and obtained, and any such written
consent to any one transfer or change of flag or port of documentation shall not
be construed to be a waiver of this provision with respect to any subsequent
proposed transfer or change of flag or port of documentation.
SECTION 14. Negative Pledge. The Shipowner will not sell,
mortgage, demise charter or transfer the Vessel without written consent of the
Mortgagee first had and obtained, and any such written consent to any one sale,
mortgage, demise charter or transfer shall not be construed to be a waiver of
this provision with respect to any subsequent proposed sale, mortgage, demise
charter or transfer. Any such sale, mortgage, demise charter or transfer of [any
of] the Vessel shall be subject to the provisions of this Mortgage and the lien
hereof. The Shipowner will not charter the Vessel to, or permit the Vessel to
serve under any contract of affreightment with any person with whom such charter
or contract of affreightment would be prohibited under any applicable treaty,
convention or law governing the Vessel(s) or the Shipowner.
Exhibit F
#20170954.1
<PAGE>
SECTION 15. Insurances. (a) The Shipowner will cause to be
carried and maintained with respect to the Vessel without expense to the
Mortgagee and will obtain renewals thereof at least five (5) full business days
prior to the expiration date thereof insurance as follows:
(i) Insurance covering marine navigating risk, hull
and machinery or if appropriate, port risk, hull and machinery with
underwriters approved by the Mortgagee under forms of policies of the
American Institute of Marine Underwriters or the Institute of London
Underwriters or such other forms or policies as shall be approved by
the Mortgagee insuring the Vessel[s] against the usual risks covered by
current (at the time of issue of the policy in question) forms of the
American Institute of Marine Underwriters or the Institute of London
Underwriters which may include increased value and total loss only
insurance, each such insurance (including any increased value and total
loss only insurance) to be in amounts aggregating at all times not less
than the greater of (x) the [each] Vessel's fair market value
determined pursuant to Section 1.03 of the Credit Agreement or (y) one
hundred twenty percent (120%) of the aggregate unpaid principal amount
of the Loan and the then available Commitment due in respect of a Total
Loss of the [a] Vessel under Section 2.05(d)(i) of the Credit
Agreement. If, when and while the Vessel is laid up, in lieu of the
aforesaid insurance, port risk, hull and machinery and port risk war
hull and machinery insurance may be taken out thereon. Any of the
foregoing insurance may provide for a deductible in the amount of up to
Fifty Thousand United States Dollars (US$50,000) for any one loss or
such greater amount as may be reasonably approved by the Mortgagee;
provided, however, if the insurance in respect of the Vessel[s] is part
of a fleet cover, the deductible attributed to any one ship shall be
Fifty United States Dollars (US$50,000) or such greater amount as may
be reasonably approved by the Mortgagee and such insurances shall
include a cross-liability endorsement.
(ii) Marine protection and indemnity insurance and
worker's compensation, crew coverage, excess collision, salvage,
general average, care, custody and control coverage, and if generally
available and commercially reasonable and prudent to purchase such
coverage, liability for punitive damages in the highest amounts from
time to time generally obtained by first class prudent operators of
fleets of vessels of similar type, size, age, trade, purpose and flag
as the Vessel, and war risk protection and indemnity insurance in
amount equal to the then current amount of hull and machinery insurance
coverage, carried pursuant to subparagraph (i) above in each case,
under the forms of cover approved by the Mortgagee insuring the
Vessel[s] against usual risks covered by current (at the time of issue
of the policy in question) rules of a member
Exhibit F
#20170954.1
<PAGE>
of the international group of P&I clubs or equivalent insurances and
with a protection and indemnity association or club in good standing
and acceptable to the Mortgagee. The Shipowner will cause such club or
association to issue to the Mortgagee a Letter of Undertaking in form
satisfactory to the Mortgagee. Such insurance shall not include a
deductible or self-insured retention in excess of __________ United
States Dollars (US$__________) per occurrence of such greater amount as
may be reasonably approved by the Mortgagee; provided, however, if the
insurance in respect of the [a] Vessel is part of a fleet cover, the
deductible attributable to any one Vessel shall be __________ United
States Dollars (US$__________) or such greater amount as may be
reasonably approved by the Mortgagee and such insurances shall include
a cross-liability endorsement.
(iii) Liability insurance for pollution, leakage and
spillage (which may be included in the coverage procured pursuant to
subparagraph (ii) above) in such aggregate amount as may be approved by
the Mortgagee.
(iv) Mortgagee's interest insurance and additional
peril pollution or equivalent cover in favor of the Mortgagee in form
and amount and with underwriters acceptable to the Mortgagee. In the
case of additional peril pollution insurance, the Mortgagee shall
contract for such insurance and the Mortgagor shall reimburse the
Mortgagee for premiums paid in respect of the same.
(v) Such other insurances with respect to the
Vessel[s] as may be requested by the Mortgagee in such forms and
amounts as the Mortgagee may require or approve.
(b) All insurances required under this Section 15 shall
provide that there shall be no material amendments or modifications without the
prior written consent of the Mortgagee and that neither the Shipowner nor any
charterer may declare or agree with any underwriters that the Vessel is a
constructive or compromised or agreed or arranged constructive total loss
without the prior written consent of the Mortgagee (provided that no such
consent shall be required in the event that the underwriters of the hull
insurance on the Vessel shall have agreed to make payment in respect of the
Vessel on the basis of a total loss in a net amount not less than the principal
amount required to be paid pursuant to Section 2.05(d) of the Credit Agreement)
and all such policies or certificates shall contain the following named assured
and loss payable clauses:
(i) Insurance on the [any] Vessel involved in any damage to
the Vessel shall contain the following named assured and loss payable
clauses:
Exhibit F
#20170954.1
<PAGE>
"Named Assured:
[NAME OF SHIPOWNER], as Shipowner, and [NAME OF
TRUSTEE], as Trustee/Mortgagee (the "Mortgagee")
under a certain [United States/Panamanian] First
Preferred [Fleet] Mortgage dated _____________, as at
any time amended or supplemented, and as assignee
under the Insurance Assignment dated _____________,
as their respective interests may appear."
"Loss Payee:
A. Losses, if any, (excepting claims required to be
paid to others under the collision clause) payable
to [NAME OF TRUSTEE], as Trustee/Mortgagee (the
"Mortgagee") under that certain [United
States/Panamanian] First Preferred [Fleet]
Mortgage dated _____________, as at any time
amended or supplemented (the "Mortgage"), for
distribution by the Mortgagee first to itself and
thereafter to [NAME OF SHIPOWNER] as Shipowner, or
order. However, notwithstanding that the
insurance is payable in accordance with the
preceding sentence, all losses, except for total
loss, under policies of insurance carried on the
Vessel shall be payable (unless the underwriters
are otherwise notified by the Mortgagee) direct
for the repair, salvage or other charges involved,
or if the Shipowner shall have first paid for any
or all repairs or for any or all salvage or other
charges, and the underwriters have received
satisfactory proof thereof, to the Shipowner;
provided that in the case of (1) a loss in excess
of __________ United States Dollars (US$________)
or (2) receipt by the underwriters of a notice
from the Mortgagee that an Event of Default under
the Mortgage has occurred and is continuing, the
underwriters shall not make payment to the
Shipowner without first obtaining the written
consent thereto by the Mortgagee, and in either of
which cases all payments shall be payable to the
Mortgagee for distribution by the Mortgagee first
to itself and thereafter to the Shipowner, or
order;
B. The underwriters will notify the Mortgagee in
writing if any payment of the premium is not
received within fourteen days of the due date
therefor.
C. In the event of non-payment of premiums when due,
the underwriters undertake not to exercise any
right of cancellation which they may have without
Exhibit F
#20170954.1
<PAGE>
giving ten (10) days prior telefax notice confirmed
in writing of such cancellation to the Mortgagee and
giving the Mortgagee an opportunity of paying any
balance of such premiums in respect of the Vessel
which may be in default. If the Vessel is insured
under fleet cover, the underwriter agrees that in the
event of the nonpayment of the premium for the fleet,
the underwriter will nevertheless continue the
insurance in respect of the Vessel if the Mortgagee
pays or causes to be paid the pro rata portion of the
premium which is allocable to the Vessel.
D. Notwithstanding the fact that [NAME OF TRUSTEE],
as Trustee/Mortgagee, is named hereunder as an
assured, there shall be no recourse against the
Mortgagee for payment of premium."
(ii) Insurances on the Vessel respecting protection and
indemnity risks shall contain the following named assured loss payee
and notice of cancellation clauses in substantially the following forms
or such other forms as may be acceptable to the Mortgagee:
"Named Assured:
[NAME OF SHIPOWNER], as Owner, and [NAME OF TRUSTEE],
as Trustee/Mortgagee under a certain [United
States/Panamanian] First Preferred [Fleet] Mortgage
dated ________________, as at any time amended or
supplemented, and as Assignee under the Insurance
Assignment dated ____________, from the Shipowner to
the Mortgagee as their respective interests may
appear."
"Loss Payee:
A. Losses, if any payable to the person to whom any
liability covered by this insurance is incurred or
to the Shipowner provided that before making any
such payment, the underwriters or the clubs shall
receive satisfactory proof that the Shipowner has
discharged the liability, and paid the expense or
settled the claim on which the payments is based
or cause such discharge, payment or settlement to
be made, unless and until the receipt by the
underwriter or club of a notice from the Mortgagee
that an Event of Default under the [United
States/Panamanian] First Preferred [Fleet]
Mortgage dated ____________, given by the
Shipowner to [NAME OF TRUSTEE], as
Trustee/Mortgagee, has occurred and is continuing
under the Mortgage, in which case all payments
Exhibit F
#20170954.1
<PAGE>
shall be payable to Mortgagee for distribution by it
first to itself and thereafter to the Shipowner
provided always that the underwriters or the club are
free to make payments in discharge of any guarantees
theretofore issued by such underwriters or club in
favor of third parties;
B. The Underwriters or the club will notify the
Mortgagee in writing if any payment of calls
(including supplemental calls) or assessments have
not been received within 14 days of the due date
therefor.
C. In the event of non-payment of calls (including
supplemental calls) or assessments when due
relating to the Vessel(s) the underwriters or club
shall undertake not to exercise any right of
cancellation which they may have without giving
ten (10) days prior telex notice confirmed in
writing of such cancellation to the Shipowner and
the Mortgagee and an opportunity of paying any
balance of such calls (including supplemental
calls) or assessments relating to the Vessel which
may be in default.
D. Notwithstanding the fact that [NAME OF TRUSTEE],
as Trustee/Mortgagee, is named hereunder as
assured, there shall be no recourse against the
Mortgagee for payment of calls or assessments."
(c) The Shipowner will furnish the Mortgagee from time to time
on request, and in any event at least annually, a detailed report signed by a
firm of marine insurance brokers acceptable to the Mortgagee with respect to the
insurance carried and maintained on the Vessel(s), stating that the insurance
(i) comply with the provisions of this Mortgage or describing any terms which
differ from the provisions of this Mortgage and (ii) is comparable to insurances
carried by prudent shipowners of comparable vessels of the same age and type.
The Shipowner will cause such firm to agree to advise the Mortgagee of
non-payment of any premium within 10 days after the due date thereof and of any
other act or omission on the part of the Shipowner of which they have knowledge
and which might invalidate or render unenforceable, in whole or in part, any
insurance on the Vessel(s). At the Shipowner's expense, the Shipowner will cause
any insurance broker and P&I club or association providing P&I insurance to
agree to advise the Mortgagee by telex or telefax confirmed by air mail letter
of any expiration, termination, alteration or cancellation of any policy, any
default in payment of any premium and of any other act or omission on the part
of the Shipowner of which it has knowledge and which might invalidate or render
unenforceable in whole or in part any insurance on the Vessel(s). To the extent
obtainable from underwriters or brokers, all policies required hereby shall
Exhibit F
#20170954.1
<PAGE>
provide for not less than 10 days prior written notice to be received by the
Mortgagee prior to the termination and cancellation of the insurance evidenced
thereby. All policies of insurance maintained pursuant to this Section 15 shall
contain provisions waiving underwriters' rights of subrogation thereunder
against any assured named in such policy and any assignee of said assured. The
Shipowner agrees that, unless the insurances by their terms provide that they
cannot cease without the Mortgagee being informed and having the right to
continue the insurances by paying any premiums or demands not paid by the
Shipowner, receipts showing payment of premiums for required insurance and also
any demands from the Vessel's P&I underwriters have been paid shall be in the
hands of the Mortgagee at least two (2) days before the risk in question
commences.
(d) All amounts paid to the Mortgagee in respect of
any insurance on the Vessel shall be disposed of as follows:
(i) any amount which might have been paid at the
time, in accordance with the provisions of paragraph (b) above,
directly to the Shipowner or others shall be paid by the Mortgagee to,
or as directed by, the Shipowner;
(ii) all amounts paid the Mortgagee in respect of a
Total Loss as defined in the Credit Agreement shall be applied by the
Mortgagee in accordance with Section 6.02 of the Credit Agreement;
(iii) so long as no "event of default" referred to in
Section 1 of Article II shall have occurred and be continuing, at the
option of the Mortgagee, all other amounts paid to the Mortgagee in
respect of any insurance on the Vessel shall be applied to the making
of needed repairs or other work on the Vessel or to the payment of
other claims incurred by the Shipowner relating to the Vessel or may be
paid to the Shipowner or whosoever may be entitled thereto;
(iv) if an event of default shall have occurred and
be continuing, all amounts paid to the Mortgagee in respect of any
insurance on the Vessel shall be applied in accordance with the
provisions of Section 6.02 of the Credit Agreement;
(v) all other amounts paid to the Mortgagee in
respect of any insurance on the Vessel may, in the Mortgagee's sole
discretion, be held and applied to the prepayment of the indebtedness
hereby secured.
(e) In the event that any claim or lien is asserted against
the (a) Vessel for loss, damage or expense which is covered by insurance
required hereunder and it is necessary for the Shipowner to obtain a bond or
supply other security to prevent arrest of the Vessel or to release the
(such)Vessel from
Exhibit F
#20170954.1
<PAGE>
arrest on account of such claim or lien, the Mortgagee, on request of the
Shipowner, may, in the sole discretion of the Mortgagee, assign to any person,
firm or corporation executing a surety or guarantee bond or other agreement to
save or release the Vessel from such arrest, all right, title and interest of
the Mortgagee in and to said insurance covering said loss, damage or expense, as
collateral security to indemnify against liability under said bond or other
agreement.
(f) The Shipowner shall deliver to the Mortgagee certified
copies or originals whenever so requested by the Mortgagee, of all certificates
of entry, cover notes, binders, evidences of insurance and policies for the
purpose of inspection or safekeeping, or, alternatively, satisfactory letters of
undertaking from the broker holding the same. The Shipowner agrees to assign to
the Mortgagee its rights under all policies of insurance in respect of the
Vessel.
(g) The Shipowner agrees that it will not execute or permit or
willingly allow to be done any act by which any insurance may be suspended,
impaired or canceled, and that it will not permit or allow the Vessel to
undertake any voyage or run any risk or transport any cargo which may not be
permitted by the policies in force, without having previously insured the Vessel
by additional coverage to extend to such voyages, risks or cargoes.
(h) In case any underwriter proposes to pay less on any claim
than the amount thereof, the Shipowner shall forthwith inform the Mortgagee and,
so long as no Default or Event of Default has occurred and is continuing, the
Shipowner may with the prior approval of the Agent agree to any compromise, but
otherwise the Mortgagee shall have the right to negotiate and agree to any
compromise.
(i) The Shipowner will comply with and satisfy all of the
provisions of any applicable law, convention, regulation, proclamation or order
concerning financial responsibility for liabilities imposed on the Shipowner or
the Vessel with respect to pollution by any state or nation or political
subdivision thereof and will maintain all certificates or other evidences of
financial responsibility as may be required by any such law, convention,
regulation, proclamation or order with respect to the trade which the Vessel is
from time to time engaged in and the cargo carried by it.
SECTION 16. Reimbursement for Expenses. The Shipowner will
reimburse the Mortgagee promptly, with interest at the default rate described in
Section 2.04(c) of the Credit Agreement, for expenditures which the Mortgagee
may from time to time make, lay out or extend in providing such protection in
respect of insurance, discharge or purchase of liens, taxes, dues, assessments,
governmental charges, fines and penalties lawfully imposed, repairs, attorney's
fees, necessary translation
Exhibit F
#20170954.1
<PAGE>
fees for documents made in a language other than English, and other matters as
the Shipowner is obligated herein or in the Credit Agreement to provide, but
fails to provide. Such obligation of the Shipowner to reimburse the Mortgagee
shall be an additional indebtedness due from the Shipowner, secured by this
Mortgage, and shall be payable by the Shipowner on demand. The Mortgagee, though
privileged to do so, shall be under no obligation to the Shipowner to make any
such expenditures, nor shall the making thereof relieve the Shipowner of any
default in that respect.
SECTION 17. Performance of Charter. The Shipowner will fully
perform in all material respect any and all charter parties which are, or may
be, entered into with respect to the Vessel.
SECTION 18. No Change in Ownership Structure. The Shipowner
further covenants and agrees with the Mortgagee that, so long as any part of the
Indebtedness hereby secured remains unpaid, there shall be no change in the
ownership of the Vessel(s), change in the shareholders of the Shipowner or its
shares without the prior written consent of the Mortgagee.
[SECTION 19. Citizenship. The Shipowner is now, and
shall remain during the life of this Mortgage, a citizen of the
United States as defined in Section 2 of the Shipping Act, 1916,
as amended, qualified to engage in the coastwise trade.]
ARTICLE II
Events of Default and Remedies.
SECTION 1. Events of Default. In case any one or more
of the following events, herein termed "events of default", shall
have occurred and be continuing:
(a) any payment in respect of the Indebtedness hereby
secured has not been received by the Mortgagee when due; or
(b) the statements in Sections 2 and 3 of Article I
shall prove to be untrue in a material way; or
(c) a default shall have occurred in the due and punctual
observance and performance of any of the provisions of Sections 3, 4, 5, 9, 10,
11(a), (b), (c), 13, 14, 15(a), (b), (c), (g), (i), 16, 18 [and 19] of Article I
hereof; or
(d) a default by the Shipowner in the observance or
performance of any other agreement under this Mortgage shall have occurred and
shall remain unremedied for seven (7) days after written notice thereof shall
have been given to the Shipowner by the Mortgagee; or
Exhibit F
#20170954.1
<PAGE>
(e) (i) the Shipowner shall be in default under any other
mortgage covering the Vessel(s) and the period of grace, if any, for such
default shall have expired or (ii) any other mortgage covering the Vessel(s)
shall be amended, supplemented or assigned without the prior written consent of
the Mortgagee; or
(f) an Event of Default as defined in the Credit
Agreement shall have occurred and be continuing;
then, and in each and every such case, the Mortgagee shall have
the right to:
(1) Declare all the then unpaid Indebtedness hereby secured to
be due and payable immediately, and upon such declaration the same,
including interest to the date of declaration, shall become and be
immediately due and payable (provided no declaration shall be required
if an Event of Default shall have occurred and be continuing as
described in Section 6.01(e) of the Credit Agreement);
(2) Exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of the [United States
Maritime Law/Republic of Panama] or the law of any other jurisdiction
where the Vessel may be found;
(3) Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for the Indebtedness hereby secured, and
collect the same out of the property of the Shipowner covered by this
Mortgage or otherwise;
(4) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process and without being
responsible for loss or damage, and the Shipowner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to
the Mortgagee possession of the Vessel and the Mortgagee may, without
being responsible for loss or damage, hold, lay up, lease, charter,
operate or otherwise use such Vessel for such time and upon such terms
as it may deem to be for its best advantage, and demand, collect and
retain all hire, freights, earnings, issues, revenues, income, profits,
return premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect of such
Vessel or in respect of any insurance thereon from any person
whomsoever, accounting only for the net profits, if any, arising from
such use of Vessel and charging upon all receipts from the use of the
Vessel or from the sale thereof by court proceedings or pursuant to
subsection (5) next following, all costs, expenses, charges, damages or
losses by reason of such use; and if at any time the Mortgagee shall
avail itself of the right herein given it to take the Vessel, the
Mortgagee shall have the right to dock the Vessel, for a reasonable
time at any dock, pier or
Exhibit F
#20170954.1
<PAGE>
other premises of the Shipowner without charge, or to dock
her at any other place at the cost and expense of the
Shipowner;
(5) Take and enter into possession of the Vessel at any time,
wherever the same may be, without legal process, and if it seems
desirable to the Mortgagee and without being responsible for loss or
damage, sell such Vessel, at any place and at such time as the
Mortgagee may specify and in such manner as the Mortgagee may deem
advisable, free from any claim by the Shipowner in admiralty, in
equity, at law or by statute, at public or private sale, by sealed bids
or otherwise, by mailing, by air or otherwise, notice of such public
sale, addressed to the Shipowner at its last known address, fourteen
days prior to the date fixed for entering into the contract of sale and
by first publishing notice of any such public sale for ten consecutive
days, in some newspaper published in the City of New York, State of New
York or if the place of sale should not be in New York City then by
publication of a similar notice at or near the place of sale; in the
event that the Vessel shall be offered for sale by private sale,
reasonable notice must be given to the Shipowner but not more than
three days' notice and no newspaper publication of notice shall be
required, nor notice of adjournment of sale; sale may be held at such
place and at such time as the Mortgagee by notice may have specified,
or may be adjourned by the Mortgagee from time to time by announcement
at the time and place appointed for such sale or for such adjourned
sale, and without further notice or publication the Mortgagee may make
any such sale at the time and place to which the same shall be so
adjourned; and any sale may be conducted without bringing the Vessel to
the place designated for such sale and in such manner as the Mortgagee
may deem to be for its best advantage, and the Mortgagee may become the
purchaser at any sale. Any sale made in accordance with the terms of
this subsection (5) shall be deemed made in a commercially reasonable
manner insofar as the Shipowner is concerned.
SECTION 2. Sale Divests Title. Any sale of [any of] the
Vessel(s) made in pursuance of this Mortgage, whether under the power of sale
hereby granted or any judicial proceedings, shall operate to divest all right,
title and interest of any nature whatsoever of the Shipowner therein and
thereto, and shall bar the Shipowner, its successors and assigns, and all
persons claiming by, through or under them. No purchaser shall be bound to
inquire whether notice has been given, or whether any default has occurred, or
as to the propriety of the sale, or as to the application of the proceeds
thereof. In case of any such sale, the Mortgagee, if it is the purchaser, shall
be entitled for the purpose of making settlement or payment for the property
purchased to use and apply the Indebtedness hereby secured in order that there
may be credited against the amount remaining due and unpaid thereon the sums
payable out of the net proceeds of
Exhibit F
#20170954.1
<PAGE>
such sale to the Mortgagee after allowing for the costs and expense of sale and
other charges; and thereupon such purchase shall be credited, on account of such
purchase price, with the net proceeds that shall have been so credited upon the
Indebtedness hereby secured. At any such sale, the Mortgagee may bid for and
purchase such property and upon compliance with the terms of sale may hold,
retain and dispose of such property without further accountability therefor.
SECTION 3. Mortgagee's Power of Attorney - Sales. The Mortgagee is hereby
appointed attorney-in-fact of the Shipowner, upon the happening of an event of
default specified in Section 1 of this Article II, to execute and deliver to any
purchaser aforesaid, and is hereby vested, irrevocably, with full power and
authority to make, in the name and in behalf of the Shipowner, a good conveyance
of the title to [any of] the Vessel[s] so sold. In the event of any sale of the
[a] Vessel, under any power herein contained, the Shipowner will, if and when
required by the Mortgagee, execute such form of conveyance of the Vessel as the
Mortgagee may direct or approve.
SECTION 4. Mortgagee's Power of Attorney - Collection. The
Mortgagee is hereby appointed attorney-in-fact of the Shipowner upon the
happening of any event of default specified in Section 1 of this Article II, in
the name of the Shipowner, irrevocably, to demand, collect, receive, compromise
and sue for, so far as may be permitted by law, all freights, hire, earnings,
issues, revenues, income and profits of the Vessel(s) and all amounts due from
underwriters under any insurance thereon as payment of losses or as return
premiums or otherwise, salvage awards and recoveries, recoveries in general
average or otherwise, and all other sums due or to become due at the time of the
happening of any event of default in respect of the Vessel(s), or in respect of
any insurance thereon, from any person whomsoever, and to make, give and execute
in the name of the Shipowner acquittance, receipts, releases or other discharges
for the same, whether under seal or otherwise, and to endorse and accept in the
name of the Shipowner all checks, notes, drafts, warrants, agreements and other
instruments in writing with respect to the foregoing.
SECTION 5. Delivery of Vessel. Whenever any right to enter and
take possession of the Vessel(s) accrues to the Mortgagee, it may required the
Shipowner to deliver, and the Shipowner shall, on demand, at its own cost and
expense, deliver to the Mortgagee the Vessel[s] as demanded. If the Mortgagee
shall be entitled to make any legal proceedings to enforce any right under this
Mortgage, the Mortgagee shall be entitled as a matter of right to the
appointments of a receiver of the Vessel[s] and of the freights, hire, earnings,
issues, revenues, income and profits due or to become due and arising from the
operation thereof.
Exhibit F
#20170954.1
<PAGE>
SECTION 6. Mortgagee Power of Attorney - Discharge of Liens.
The Shipowner authorizes and empowers the Mortgagee or its appointees or any of
them to appear in the name of the Shipowner, its successors and assigns, in any
court of any country or nation of the world where a suit is pending against [any
of] [such] the Vessel[s] because of or on account of any alleged lien against
[such] the Vessel[s] from which the Vessel has not been released and to take
such proceedings as to them or any of them may seem proper towards the defense
of such suit and the purchase or discharge of such lien, and all reasonable
expenditures made or incurred by them or any of them for the purpose of such
defense or purchase or discharge shall be a debt due from the Shipowner, its
successors and assigns, to the Mortgagee, and shall be secured by the lien of
this Mortgage in like manner and extent as if the amount and description thereof
were written herein.
SECTION 7. Indemnification. The Shipowner covenants that upon
the happening of any one or more of the events of default, then, upon written
demand of the Mortgagee, the Shipowner will pay to the Mortgagee the whole
amount due and payable in respect of the Indebtedness hereby secured; and in
case the Shipowner shall fail to pay the same forthwith upon such demand, the
Mortgagee shall be entitled to recover judgment for the whole amount so due and
unpaid, together with such further amounts as shall be sufficient to cover the
reasonable compensation to the Mortgagee's agents, attorneys and counsel and any
necessary advances, expenses and liabilities made or incurred by it hereunder.
All moneys collected by the Mortgagee under this Section 7 shall be applied by
the Mortgagee in accordance with the provisions of Section 6.02 of the Credit
Agreement.
SECTION 8. Every Power Cumulative. Each and every power and
remedy herein given to the Mortgagee shall be cumulative and shall be in
addition to every other power and remedy herein given or now or hereafter
existing at law, in equity, in admiralty or by statute, and each and every power
and remedy whether herein given or otherwise existing may be exercised from time
to time and as often and in such order as may be deemed expedient by the
Mortgagee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other power or remedy. No delay or omission by the
Mortgagee in the exercise of any right or power in the pursuance of any remedy
accruing upon any default as above defined shall impair any such right, power or
remedy or be construed to be a waiver of any such event of default or to be an
acquiescence therein; nor shall the acceptance by the Mortgagee of any security
or of any payment of or on account of the Indebtedness hereby secured maturing
after any event of default or of any payment on account of any past default be
construed to be a waiver of any right to take advantage of any future event of
default or of any past event of default not completely cured thereby. No
consent, waiver or approval of the Mortgagee shall
Exhibit F
#20170954.1
<PAGE>
be deemed to be effective unless in writing and duly signed by
authorized signatories of the Mortgagee.
SECTION 9. Cure of Defaults. If, at any time after an event of
default and prior to the actual sale of [any of] the Vessel[s] by the Mortgagee
or prior to any enforcement or foreclosure proceedings, the Shipowner offers
completely to cure all events of default and to pay all expenses, advances and
damages to the Mortgagee consequent on such events of default, with interest,
then the Mortgagee may (but shall not be obligated to) accept such offer and
payment and restore the Shipowner to its former position, but such action, if
taken, shall not affect any subsequent event of default or impair any rights
consequent thereon.
SECTION 10. Restoration. In the case the Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Mortgagee, then and in every such case the Shipowner and the Mortgagee
shall be restored to their former positions and rights hereunder with respect to
the property subject to or intended to be subject to this Mortgage, and all
rights, remedies and powers of the Mortgagee shall continue as if no such
proceedings had been taken.
SECTION 11. Application of Proceeds. After an event of default
shall have occurred and be continuing, the proceeds of any sale of the Vessel
and the net earnings of any charter operation or other use of the Vessel and any
and all other moneys received by the Mortgagee pursuant to or under the terms of
this Mortgage or in any proceedings hereunder, the application of which has not
elsewhere herein been specifically provided for, shall be applied as set forth
in Section 6.02 of the Credit Agreement.
SECTION 12. Quiet Enjoyment. Until one or more of the events
of default hereinabove described shall happen, the Shipowner (a) shall be
suffered and permitted to retain actual possession and use of the Vessel[s] and
(b) shall have the right, from time to time, in its discretion, and without
application to the Mortgagee, and without obtaining a release thereof by the
Mortgagee, to dispose of, free from the lien hereof, any boilers, engines,
machinery, masts, spars, sails, rigging, boats, anchors, chains, tackle,
apparel, furniture, fittings or equipment or any other appurtenances of the
Vessel[s] that are no longer useful, necessary, profitable or advantageous in
the operation of the Vessel, first or simultaneously replacing the same by new
boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors,
chains, tackle, apparel, drills, furniture, fittings, equipment, or other
appurtenances of substantially equal value to the Shipowner, which shall
forthwith become subject to the lien of this Mortgage as a preferred mortgage
thereon.
Exhibit F
#20170954.1
<PAGE>
SECTION 13. No Waiver of Preferred Status. (a) If any
provision of this Mortgage should be deemed invalid or shall be deemed to affect
adversely the preferred status of this Mortgage under any applicable law, such
provision shall cease to be a part of this Mortgage without affecting the
remaining provisions, which shall remain in full force and effect.
(b) In the event any of the Credit Agreement, the Notes or
this Mortgage or any of the documents or instruments which may from time to time
be delivered hereunder or thereunder or any provision hereof or thereof shall be
deemed invalidated by present or future law of any nation or by decision of any
court, this shall not affect the validity and/or enforceability of all or any
other parts of the Credit Agreement, the Notes or the Mortgage or such documents
or instruments and, in any such case, the Shipowner covenants and agrees that,
on demand, it will execute and deliver such other and further agreements and/or
documents and/or instruments and do such things as the Mortgagee in its sole
discretion may deem to be necessary to carry out the true intent of this
Mortgage and to secure the Indebtedness secured hereby.
(c) No provision of this Mortgage is intended or shall be
construed to be a waiver of the preferred status of this Mortgage under the
[United States or Panamanian] Maritime Law, or in derogation of any of the
benefits, privileges, rights or remedies provided for by the [United States or
Panamanian] Maritime Law. If any provision of this Mortgage should be held by a
court of competent jurisdiction to be inconsistent, at variance or in conflict
with the provisions of this subsection 13(c), then such provision shall be
deemed to be of no force or effect without affecting the remaining provisions,
and the provisions of this subsection 13(c) shall prevail over and supersede
such provision.
ARTICLE III
Sundry Provisions.
SECTION 1. Binding on Successors. All of the covenants,
promises, stipulations and agreements of the Shipowner in this Mortgage
contained shall bind the Shipowner and its successor and assigns and shall inure
to the benefit of the Mortgagee and its successors and assigns. In the event of
any assignment or transfer of this Mortgage, the term "Mortgagee", as used in
this Mortgage, shall be deemed to mean any such assignee or transferee.
SECTION 2. Exercise by Agents. Wherever and whenever
herein any right, power or authority is granted or given to the
Mortgagee, such right, power or authority may be exercised in all
cases by the Mortgagee or such agent or agents as it may appoint,
Exhibit F
#20170954.1
<PAGE>
and the act or acts of such agent or agents when taken, shall constitute the act
of the Mortgagee hereunder.
SECTION 3. Counterparts. This Mortgage may be
executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 4. Notices. Any notice or other communication to be
given pursuant hereto shall be made as set forth in Section 8.02 of the Credit
Agreement, with all such notices or other communications to be given to the
Mortgagee addressed to the Mortgagee, with a copy to the Administrative Agent,
at:
[NAME OF TRUSTEE]
[ADDRESS OF TRUSTEE]
[FACSIMILE NO.]
SECTION 5. Titles and Section Headings. The titles
and section headings in this Mortgage are for convenience only
and shall not affect the construction hereof.
SECTION 6. Recording Clause. The maximum principal amount
including Facilities A, B, C, D and F that may be outstanding under this
Mortgage at any time is One Hundred Thirty Four Million One Hundred Thousand
United States Dollars (US$134,100,000), and for the purpose of recording this
Mortgage as required by the [United States or Panamanian] Maritime Law the total
amount of this Mortgage is One Hundred Thirty Four Million One Hundred Thousand
United States Dollars (US$134,100,000), and interest, fees and performance of
mortgage covenants. The maturity date as to Facility C is January 15, 2000 and
the maturity date for Facilities A, B, D and F is January 15, 2002. There is no
separate discharge amount for the Vessel.
Exhibit F
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the Shipowner has duly executed [and the
Mortgagee has accepted in its entirety] this First Preferred [Fleet] Mortgage
the day and year first above written.
[IF LIMITED PARTNERSHIP, GENERAL
PARTNER ON BEHALF OF]
[NAME OF SHIPOWNER]
By:____________________________
Name:
Title:
[IF PANAMANIAN MORTGAGE, NAME OF
MORTGAGEE]
By:____________________________
Name:
Title:
Exhibit F
#20170954.1
<PAGE>
STATE OF ____________)
: ss.:
COUNTY OF ___________)
On this ____ day of __________, 199[ ], before me personally
appeared _____________________, to me known, who, being by me duly sworn, did
depose and say that [s]he resides at
and that [s]he is the
of [NAME OF SHIPOWNER], a _____________ [corporation limited
partnership], the [corporation] described in and which executed the foregoing
instrument; and that [s]he signed [his/her] name to said mortgage by order of
the Board of Directors of said [corporation limited partnership] and that the
same is the free and voluntary act and deed of said [corporation limited
partnership] for the uses and purposes therein expressed.
-----------------------
Notary Public
NOTARIAL CERTIFICATION FOR PANAMA
I __________, Notary Public, duly authorized, admitted and
sworn, licensed in __________, do hereby certify by:
1. __________ and __________ are personally known to
me and that their respective signatures are authentic;
2. Sufficient evidence has been presented to me that
__________ and __________ were duly authorized by their
respective principals to execute and accept the same.
IN WITNESS WHEREOF, I have subscribed my name and affixed my
seal of office this _____ day of ___________, 199[ ].
-----------------------
Notary Public
Must be authenticated by Panamanian Consul.
Exhibit F
#20170954.1
<PAGE>
EXHIBIT G
to the
Amended and Restated
Credit Agreement
AMENDED AND RESTATED
EARNINGS ASSIGNMENT
[ ]
THIS ASSIGNMENT, dated as of _________, 19___ (the "Amended
and Restated Earnings Assignment"), amends and restates, in its entirety, the
Amended and Restated Earnings Assignment dated as of [August 14, 1996], given by
[ ], a [corporation/limited partnership] organized and existing under the laws
of the State of Florida (the "Assignor") in favor of CITIBANK, N.A., a national
banking association organized and existing under the laws of the United States
of America, as Administrative Agent on behalf of the banks (the "Banks") named
in the Credit Agreement referred to below (the "Assignee").
W I T N E S S E T H:
WHEREAS,
A. The Assignor is the sole owner of the [United
States or Panamanian] flag vessel [ ]), Official No.
[ ] (the "Vessel").
B. The Assignor has entered into a Credit Agreement dated as
of September 28, 1994 among (i) the Assignor, (ii) the other Borrowers named
therein, (iii) the Assignee, (iv) the Letter of Credit Agent and (v) the Banks,
as amended by Amendment No. 1, dated as of May 15, 1995, as subsequently amended
by Amendment No. 2, dated as of March 26, 1996 and as amended and restated by an
Amended and Restated Credit Agreement dated as of June 21, 1996 as subsequently
amended by Amendment No. 1 dated December 17, 1996 and as subsequently amended
and restated by the Amended and Restated Credit Agreement dated as of February
3, 1997 (the "Credit Agreement").
C. It is a condition to the obligation of the Banks
to advance funds to the Assignor under the Credit Agreement that
the Assignor execute an earnings assignment in favor of the
Assignee for each of the vessels owned by it.
D. The Assignor now desires to execute this Amended
and Restated Earnings Assignment with respect to the Vessel in
order to satisfy the conditions to lending under the Credit
Agreement.
Exhibit G
#0170954.1
<PAGE>
E. Capitalized terms used herein and not otherwise
defined herein shall have the same meanings ascribed to them as
set forth in the Credit Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. As security for all amounts due and to become due
to the Assignee under the Credit Agreement and the other Loan Documents, and in
consideration of One Dollar ($1) lawful money of the United States of America,
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Assignor hereby grants, sells, conveys, assigns, transfers,
mortgages and pledges to the Assignee, and unto the Assignee's successors and
assigns, all its right, title, interest, claim and demand in and to, and hereby
also grants unto the Assignee a security interest in and to, (i) the earnings of
the Vessel, including, but not limited to, all freights, hire and passage
moneys, proceeds of off-hire insurance, any other moneys earned and to be
earned, due or to become due, or paid or payable to, or for the account of, the
Assignor, of whatsoever nature, arising out of or as a result of the ownership,
use, operation or management by the Assignor or its agents of the Vessel, (ii)
all moneys and claims for moneys due and to become due to the Assignor under and
all claims for damages arising out of the breach (or payments for variation or
termination) of any charter, or contract relating to or under which is employed
the Vessel, any and all other present and future charter parties, contracts of
affreightment, and operations of every kind whatsoever of the Vessel, and in and
to any and all claims and causes of action for money, loss or damages that may
now and hereafter accrue or belong to the Assignor, its successors or assigns,
arising out of or in any way connected with the present or future ownership,
use, operation or management of the Vessel or arising out of or in any way
connected with the Vessel, (iii) all moneys and claims for moneys due and to
become due to the Assignor, and all claims for damages, in respect of the actual
or constructive total loss of or requisition of use of or title to the Vessel,
(iv) all moneys and claims for moneys due in respect of demurrage or detention,
and (v) any proceeds of any of the foregoing.
SECTION 2. Anything herein contained to the contrary
notwithstanding, the Assignee, or its respective successors and assigns, shall
have no obligation or liability under any agreement, including without
limitation under any charter, time charter or contract of affreightment, by
reason of or arising out of this Amended and Restated Earnings Assignment, and
the Assignee, or its respective successors and assigns, shall not be required or
obligated in any manner to perform or fulfill any obligations of the Assignor
under or pursuant to any agreement, including without limitation under any
Charter, any charter or contract of affreightment or to make any payment or to
make any inquiry as to the nature or sufficiency of any payment received by it
or to present or file any claim, or to take any other action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled hereunder at any time or times.
Exhibit G
#20170954.1
<PAGE>
SECTION 3. The Assignor hereby constitutes the Assignee, its
successors and assigns, its true and lawful attorney-in-fact, irrevocably, with
full power, in the name of the Assignor or otherwise, to ask, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due and to become due, arising out of property and rights hereby
assigned, to endorse any checks or other instruments or orders in connection
therewith and to file any document or to take any action or institute any
proceedings which the Assignee and its successors and assigns may reasonably
deem necessary or advisable in the premises.
SECTION 4. The Assignor hereby further covenants and agrees
that upon the occurrence of a Default or an Event of Default (a) it will have
all the freights and other monies hereby assigned paid over directly to the
Assignee; and (b) will procure that notice of this Amended and Restated Earnings
Assignment in substantially the form of Annex A attached hereto and a letter of
instructions shall be duly given to each person who becomes party to any charter
or contract of affreightment entered into with Assignor in respect of the Vessel
or to any Person who may receive any earnings and monies hereby assigned; and
(c) it will instruct each such person to provide consent where the consent of
any such person is required pursuant to any charter or contract of affreightment
assigned hereby; and (d) it will instruct such person to acknowledge directly to
the Assignee receipt of the Assignor's notification and instructions.
SECTION 5. The powers and authorities granted to the Assignee
and its successors or assigns herein have been given for valuable consideration
and are hereby declared to be irrevocable.
SECTION 6. The Assignor agrees that at any time and from time
to time, upon the written request of the Assignee, the Assignor will promptly
and duly execute and deliver any and all such further instruments and documents
as the Assignee may deem desirable in obtaining the full benefits of this
Amended and Restated Earnings Assignment and of the rights and powers herein
granted.
SECTION 7. The Assignor warrants and represents that it has
not assigned or pledged the rights, title and interest assigned hereunder to
anyone other than the Assignee. The Assignor hereby covenants that, without the
prior written consent thereto of the Assignee, so long as this Amended and
Restated Earnings Assignment shall remain in effect, it will not assign or
pledge the whole or any part of the rights, title and interest hereby assigned
to anyone other than the Assignee, and it will not take or omit to take any
action, the taking or omission of which might result in an alteration or
impairment of this Amended and Restated Earnings Assignment, or of any of the
rights created by this Amended and Restated Earnings Assignment.
SECTION 8. The Assignor hereby appoints the Assignee as its
attorney-in-fact to execute and file, on the Assignor's behalf, any financing
statements or continuation statements under the Uniform Commercial Code or
papers of similar purpose or
Exhibit G
#20170954.1
<PAGE>
effect in respect of this Amended and Restated Earnings
Assignment.
SECTION 9. Any notice, demand or other communication to be
given under or for the purposes of this Amended and Restated Earnings Assignment
shall be made as provided in Section 8.02 of the Credit Agreement.
SECTION 10. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This Amended
and Restated Earnings Assignment shall not be amended and/or varied except by
agreement in writing signed by the parties hereto.
SECTION 11. BY ITS SIGNATURE BELOW WRITTEN THE ASSIGNOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS ASSIGNMENT, THE CREDIT
AGREEMENT, THE LOAN DOCUMENTS THEREIN DESCRIBED, ANY AMENDMENTS THERETO, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Exhibit G
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the Assignor has duly executed this
Amended and Restated Earnings Assignment in respect of the [United States or
Panamanian] flag vessel [ ] as of the day and year first above written.
[ ],
as Assignor
By:
Name:
Title:
Exhibit G
#20170954.1
<PAGE>
ANNEX A
to Amended and Restated
Earnings Assignment
NOTICE OF ASSIGNMENT
To: [ ]
PLEASE TAKE NOTICE that, pursuant to the annexed Amended and
Restated Earnings Assignment by [Name of Shipowner] (the "Assignor"), the
Assignor has assigned to CITIBANK, N.A., as Administrative Agent (the
"Assignee") on behalf of the banks party to the Credit Agreement referred to
below (the "Banks"), all of the Assignor's right, title, interest, claim and
demand in and to, but not limited to, the earnings, including, but not limited
to, all freight, hire and other moneys earned and to be earned, due or to become
due, or paid or payable to, or for the account of, the Assignor, of whatsoever
nature, arising out of or as a result of the ownership and operation by the
Assignor or its agents of the [United States or Panamanian] flag vessel [ ] (the
"Vessel") as security for the Loan and the Assignor's other Obligations as
defined in the Amended and Restated Credit Agreement, dated as of February 3,
1997, among (i) the Assignor, (ii) the other Borrowers named therein, (iii) the
Assignee, (iv) the Letter of Credit Agent and (v) the Banks named therein. The
undersigned hereby directs that, all moneys otherwise payable to the Assignor as
a result of the ownership and operation of the Vessel by the Assignor referred
to in the above-mentioned Amended and Restated Earnings Assignment shall be paid
to the Assignee at its office at 399 Park Avenue, New York, NY 10043; ABA No.
021000089; CHIPs ID# 008; Account No. [40548046]; Ref.: WCG Loan Payment Account
Attn: [Mercedes Baize] Re: Hvide; until further notice from the Assignee.
Dated: ,
[ ]
as Assignor
By:____________________________
Name:
Title:
Exhibit G
#20170954.1
<PAGE>
EXHIBIT H
to the
Amended and Restated
Credit Agreement
AMENDED AND RESTATED
INSURANCE ASSIGNMENT
[NAME OF VESSEL(S)]
[NAME OF SHIPOWNER], a [corporation] [limited partnership]
organized and existing under the laws of the State of Florida (the "Assignor"),
in consideration of One Dollar ($1) lawful money of the United States of
America, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, as sole owner of the [United States]
[Panamanian] flag vessel(s) [NAME OF VESSEL(S)] [listed in Annex B attached
hereto], Official No.________ (the "Vessel(s)"), has agreed to amend and restate
the Amended and Restated Insurance Assignment dated August 14, 1996 and has
sold, assigned, transferred, set over and granted a security interest and by
this instrument does sell, assign, transfer, set over and grant a security
interest, unto CITIBANK, N.A., a national banking association organized and
existing under the laws of the United States of America, as administrative agent
(the "Assignee") on behalf of the banks named in that certain Credit Agreement
dated as of September 28, 1994 as amended by Amendment No. 1 dated May 15, 1995
and by Amendment No. 2 dated as of March 26, 1996 and as amended and restated by
an Amended and Restated Credit Agreement dated as of June 21, 1996 which was
amended by Amendment No. 1 dated December 17, 1996 and as subsequently amended
and restated by an Amended and Restated Credit Agreement dated as of February 3,
1997 (as the same may be from time to time amended, supplemented or otherwise
modified, the "Credit Agreement") among (i) the Assignor, (ii) the other
Borrowers named therein, (iii) the Assignee, (iv) the Letter of Credit Agent and
(v) the Banks, and unto the Assignee's successors and assigns, and its
successors' and assigns' own proper use and benefit, and, as collateral security
for Assignor's indebtedness under the Credit Agreement all right, title and
interest of the Assignor under, in and to (i) all insurances in respect of the
Vessel whether now or hereafter to be effected, and all renewals of or
replacements for the same, (ii) all claims, returns of premium and other moneys
and claims for moneys due and to become due under said insurance or in respect
of said insurance, (iii) all other rights of the Assignor under or in respect of
said insurance and (iv) any proceeds of any of the foregoing.
Except where otherwise expressly provided, words and
expressions defined in the Credit Agreement shall bear the same meanings when
used in this Assignment.
Exhibit H
#20170954.1
<PAGE>
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Assignor shall remain liable under said insurances
to perform all of the obligations assumed by it thereunder, and the Assignee
shall have no obligation or liability under said insurances by reason of or
arising out of this instrument of assignment nor shall the Assignee be required
or obligated in any manner to perform or fulfill any obligations of the Assignor
under or pursuant to said insurances or to make any payment or to make any
inquiry as to the nature or sufficiency of any payment received by it or to
present or file any claim, or to take any other action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it may be
entitled hereunder at any time or times.
The Assignor hereby constitutes the Assignee, its successors
and assigns, the Assignor's true and lawful attorney-in-fact, irrevocably, with
full power (in the name of the Assignor or otherwise), to ask, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due and to become due under or arising out of said insurances, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or to take any action or institute any proceedings which the Assignee
may deem to be necessary or advisable in the premises. The powers and
authorities granted to the Assignee and its successors or assigns herein have
been given for valuable consideration and are hereby declared to be irrevocable.
The Assignor covenants and agrees that:
(a) the insurances assigned hereby are now valid and
in full force and effect and that the Assignor
will not do or omit or knowingly suffer to be done
or omitted anything whereby any of the insurances
assigned hereby may become void or voidable in
whole or in part or the Assignee or any other
person claiming title through it may be prevented
from receiving the proceeds thereof.
(b) if by reason of anything done or omitted or
knowingly suffered to be done or omitted the
insurances assigned hereby shall at any time
become voidable in whole or in part the Assignor
will forthwith at its own cost take all such
action as shall be necessary for keeping such
insurances in force and in particular will pay all
premiums as they become due.
(c) if by reason of anything done or omitted or
knowingly suffered to be done or omitted the
insurances assigned hereby or any of them shall at
any time become void in whole or in part the
Assignor at its own cost will forthwith effect new
insurances with insurers approved by the Assignee
on terms approved by the Assignee and will
forthwith (if so required by the Assignee) execute
an assignment of such new insurances to the
Exhibit H
#20170954.1
<PAGE>
Assignee and will pay any sums payable by way of
premium under the new insurances.
The Assignor hereby further covenants and agrees to procure
that notice of this Assignment in substantially the form of Annex A shall be
duly given to all underwriters and that where the consent of any underwriter is
required pursuant to any of the insurances assigned hereby that it shall be
obtained and evidence thereof shall be given to the Assignee, or, in the
alternative, that in the case of protection and indemnity coverage the Assignee
shall obtain a letter of undertaking by the underwriters, and that there shall
be duly endorsed upon all slips, cover notes, policies, certificates of entry or
other instruments issued or to be issued in connection with the insurances
assigned hereby such clauses as to loss payees as the Assignee may require or
approve. In all cases, unless otherwise agreed in writing by the Assignee, such
slips, cover notes, notices, certificates of entry or other instruments shall
show the Assignee as named assured and loss payee and shall provide that there
will be no recourse against the Assignee for payment of premiums, calls or
assessments.
The Assignor agrees that at any time and from time to time,
upon the written request of the Assignee, the Assignor will promptly and duly
execute and deliver or cause to be executed and delivered any and all such
further instruments and documents as the Assignee may deem desirable in
obtaining the full benefits of this Assignment and of the rights and powers
herein granted.
The Assignor does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants that, without the prior written
consent thereto of the Assignee, so long as this instrument of assignment shall
remain in effect, it will not assign or pledge the whole or any part of the
right, title and interest hereby assigned to anyone other than the Assignee, its
successors or assigns, and it will not take or omit to take any action, the
taking or omission of which might result in an alteration or impairment of said
insurances, of this Assignment or of any of the rights created by said
insurances or this Assignment.
All notices or other communications which are required to be
made to the Assignee hereunder shall be made pursuant to Section 8.02 of the
Credit Agreement.
The Assignor hereby appoints the Assignee its attorney-in-fact
for the sole purpose of executing and filing any financing statements or papers
of similar purpose or effect in connection with any filing or recording of this
Assignment.
THIS ASSIGNMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This Assignment shall not be
amended and/or varied except by agreement in writing signed by the parties
hereto.
Exhibit H
#20170954.1
<PAGE>
BY ITS SIGNATURE BELOW WRITTEN THE ASSIGNOR HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS ASSIGNMENT, THE CREDIT AGREEMENT, THE LOAN
DOCUMENTS THEREIN DESCRIBED OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Exhibit H
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the Assignor has duly executed this
Amended and Restated Insurance Assignment in respect of the [United States]
[Panamanian] flag vessel(s) [NAME OF VESSELS] [listed in Annex B attached
hereto] this ___ day of ________,
- -----.
[IF LIMITED PARTNERSHIP, NAME OF
GENERAL PARTNER],
on behalf of
[NAME OF SHIPOWNER]
as Assignor
By
Name:
Title:
Exhibit H
#20170954.1
<PAGE>
ANNEX A
to the Insurance Assignment
NOTICE OF ASSIGNMENT
To: [NAME OF BROKER]
PLEASE TAKE NOTICE that, pursuant to the annexed Insurance
Assignment of [NAME OF SHIPOWNER] (the "Assignor"), the Assignor has assigned to
CITIBANK, N.A., as Administrative Agent (the "Assignee"), all of the Assignor's
right, title and interest in, to and under (i) all insurances in respect of the
Vessel[s] whether now or hereafter to be effected, and all renewals of or
replacements for the same, (ii) all claims, returns of premium and other moneys
and claims for moneys due and to become due under said insurance or in respect
of said insurance, (iii) all other rights of the Assignor under or in respect of
said insurance and (iv) any proceeds of any of the foregoing as security for the
Loan and the Assignor's other Obligations as defined in the Amended and Restated
Credit Agreement, dated as of February 3, 1997, among (i) the Assignor, (ii) the
other Borrowers named therein, (iii) the Assignee, (iv) the Letter of Credit
Agent and (v) the Banks. The undersigned hereby directs that, on and after the
date on which the Assignee shall have notified you that an Event of Default (as
defined in such Credit Agreement) has occurred and is continuing, all moneys
otherwise payable to the Assignor under the insurances referred to in the
above-mentioned Assignment of Insurances shall be paid to the Assignee at
Citibank N.A., at its office at 399 Park Avenue, New York, NY 10043; ABA No.
021000089; CHIPs ID# 008; Account No. 40548046; Ref.: WCG Loan Payment Account
Attn: Mercedes Baize Re: Hvide; until further notice from the Assignee.
Dated: _________ __, ____
[NAME OF SHIPOWNER]
By:________________________________
Name:
Title:
Acknowledged and Agreed on this ___ day of ________, ____:
[NAME OF BROKER]
By: ___________________________
Name:
Title:
Exhibit H
#20170954.1
<PAGE>
ANNEX B
to the Insurance Assignment
LIST OF VESSELS
Name Official No.
Exhibit H
#20170954.1
<PAGE>
EXHIBIT I
to the
Amended and Restated
Credit Agreement
ASSIGNMENT AND ACCEPTANCE
Dated _______ __, 199_
Reference is made to the Amended and Restated Credit Agreement
dated as of February 3, 1997 (as the same may be from time to time amended,
supplemented or otherwise modified, the "Credit Agreement") by and among HVIDE
MARINE INCORPORATED, each a Florida corporation, the other borrowers named
therein (the "Borrowers"), the Banks named therein (the "Banks"), CITIBANK,
N.A., as Administrative Agent for the Banks (the "Administrative Agent") and THE
FIRST NATIONAL BANK OF BOSTON (the "Letter of Credit Agent"). Terms defined in
the Credit Agreement are used herein with the same meanings.
________________________ (the "Assignor") and __________________
___________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, as of the Effective
Date (defined in Paragraph 4 below) that interest in and to the Assignor's
rights and obligations under the Credit Agreement as of the date hereof which
represents the Percentage Interest specified on Schedule 1 of all outstanding
rights and obligations under the Credit Agreement, including, without
limitation, such interest in the Assignor's Commitment, and the Advances owing
to the Assignor, and the *Note[s] held by the Assignor. After giving effect to
such sale and assignment, the Assignee's Commitment and the amount of the
Advances owing to the Assignee will be as set forth in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to (x) any
statements, warranties or representations made in or in connection with the
Credit Agreement, or (y) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no
- --------
* Section 7.10(a)(i) of the Loan Agreement requires assignment
to the Assignee of a constant percentage of all outstanding
Notes payable to the Assignor.
Exhibit I
#20170954.1
<PAGE>
responsibility with respect to the financial condition of any of the Borrowers,
their Subsidiaries or the performance or observance by the Borrowers or their
Subsidiaries of any of their obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Notes
referred to in paragraph l above and requests that the Administrative Agent
exchange such Notes for new Notes payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto or new
Notes payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and the Assignor in an amount equal to
the Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in the Credit Agreement, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Letter of Credit Agent, the Assignor or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and address for notices) the offices set forth beneath its name
on the signature page hereof; and (vii) attaches hereto an executed counterpart
signature page to the Credit Agreement (reflecting the Assignee's aggregate
commitment after giving effect hereto).
4. The effective date for this Assignment and Acceptance shall
be the date of acceptance hereof by the Administrative Agent, unless a later
date is specified in Schedule 1 hereto (the Effective Date). Following the
execution of this Assignment and Acceptance, two counterparts will be promptly
delivered by the Assignee to the Administrative Agent for acceptance and
recording by the Administrative Agent, and the Administrative Agent shall
promptly forward a counterpart to the Borrowers.
5. Upon such acceptance and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
Exhibit I
#20170954.1
<PAGE>
6. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments under the
Credit Agreement in respect of the assignment effected hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and shall be construed in accordance with, the laws of the
State of New York.
[NAME OF ASSIGNOR]
By:_________________________
Title:
[NAME OF ASSIGNEE]
By:_________________________
Title:
Exhibit I
#2170954.1
<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated _____________, 19__
Section 1.
Percentage Interest: ______________
Facility A ______________
Facility B ______________
Facility C ______________
Facility D ______________
Facility F ______________
Section 2.
Assignee's Commitment: $______________
Aggregate Outstanding Principal
Amount of Advances owing to
the Assignee: $______________
Notes payable to the Assignee
Principal Amount: $______________
Dated: ________, 19__
Notes payable to the Assignor
Principal Amount: $______________
Dated: ________, 19__
Section 3.
Effective Date**$______________
[NAME OF ASSIGNOR]
By:___________________________
Title:
- --------
** See Section 7.10(a) of the Loan Agreement. Such date shall be not
earlier than the date of the Administrative Agent's acceptance of
this Assignment and Acceptance.
Exhibit I
#20170954.1
<PAGE>
EXHIBIT J
to the
Amended and Restated
Credit Agreement
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
MASTER VESSEL TRUST AGREEMENT
DATED AS OF February 3, 1997
Between
CITIBANK, N.A.,
as Administrative Agent,
and
FIRST UNION NATIONAL BANK,
as Trustee
- --------------------------------------------------------------------------------
Exhibit J
#20170954.1
<PAGE>
AMENDED AND RESTATED
MASTER VESSEL TRUST AGREEMENT
THIS AMENDED AND RESTATED MASTER VESSEL TRUST AGREEMENT, dated
as of February 3, 1997, is made and entered into by and among (A) CITIBANK,
N.A., a national banking association organized and existing under the laws of
the United States of America, as Administrative Agent (the "Administrative
Agent") on behalf of itself, The First National Bank of Boston, a national
banking association organized and existing under the laws of the United States
of America and the other banks (together with their successors and assigns, the
"Banks") described in that certain Credit Agreement dated as of September 28,
1994, as amended by Amendment No. 1, dated as of May 15, 1995, as subsequently
amended by Amendment No. 2, dated as of March 26, 1996, as amended and restated
as of June 21, 1996 and amended by Amendment No. 1 dated December 17, 1996 and
as subsequently amended and restated by the Amended and Restated Credit
Agreement dated as of February 3, 1997 (the "Credit Agreement"), among the
Banks, the Administrative Agent, the Letter of Credit Agent, the Co-Agents and
Hvide Marine Incorporated ("Hvide") together with the other borrowers named
therein (the "Borrowers") and (B) FIRST UNION NATIONAL BANK (as successor by
merger with First Fidelity Bank, National Association), a national banking
association organized and existing under the laws of the United States of
America (the "Trustee").
W I T N E S S E T H:
WHEREAS,
A. Hvide and the other Borrowers have requested the
Banks to amend certain covenants and increase the amounts
available under the Credit Agreement; and
B. Under the terms of the Credit Agreement, each Bank
has made additional Advances to the Borrowers; and
C. As a condition of the obligation of each Bank to make its
Advance, the Borrowers have entered or may enter into certain Loan Documents to
secure the Obligations of the Borrowers under the Credit Agreement which
Obligations are to be secured by inter alia first priority mortgages covering
the Vessels; and
D. From time to time the Banks, the Administrative agent
and/or the Letter of Credit Agent may not qualify as mortgagees of a United
States vessel under applicable law and understand that the Trustee is an
"approved trustee" within the meaning of Section 2 of the Shipping Act, 1916 (46
App. U.S.C. 802) as amended, qualified to hold preferred mortgages covering
United States vessels for the benefit of persons such as the Administrative
Agent, the Letter of Credit Agent and the Banks; and
E. Pursuant to the Credit Agreement, the Borrowers
shall grant on or before a Drawdown Date and may grant in the
Exhibit J
#20170954.1
<PAGE>
future to the Trustee, solely for the benefit of the Banks, a Mortgage on each
Mortgaged Vessel described in the Credit Agreement and Vessels to be designated
from time to time; and
F. The Administrative Agent, the Letter of Credit Agent, the
Co-Agents and the Banks desire the Trustee to hold such mortgages pursuant to
the provisions of this Trust Agreement, and the Trustee is willing to hold such
mortgages in accordance with the provisions hereof, all as hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual premises, and
subject to the terms and conditions provided herein, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.011 As used in this Trust Agreement, each of the
following terms shall have the respective meaning set forth below (such
meanings, unless otherwise indicated, to apply to both the singular and plural
forms of the terms defined) and all references to "Section" and "Exhibit" shall
mean a Section of, or Exhibit to, this Trust Agreement unless otherwise
specified:
(a) "Actual Knowledge" means actual knowledge of an officer in
the Corporate Trust Department of the Trustee who, in the normal performance of
his or her operational duties, would have knowledge of such matters and the
requirements with respect thereto.
(b) "Administrative Agent" shall have the meaning given that
term in the Preamble and shall include any successors and assignees under the
Credit Agreement.
(c) "Banks" shall have the meaning given that term in the
Preamble and shall include any successors and assignees under the Credit
Agreement.
(d) "Enforcement" means the exercise of any remedy provided
for under the Mortgages or otherwise available by applicable law upon the
occurrence of an Event of Default under any of the Mortgages.
(e) "MARAD" means the United States Maritime Administration
and any predecessor or successor agency or the Secretary of Transportation of
the United States of America, acting by and through the Maritime Administration
as the context of the United States Maritime Laws may require.
(f) "Mortgage" means a mortgage by a Borrower of any Vessel
delivered to the Trustee for the benefit of the Banks pursuant to the Credit
Agreement, and as the same may be from time to time amended, supplemented or
otherwise modified.
Exhibit J
#20170954.1
<PAGE>
(g) "Trust Agreement" means this Agreement, together with all
Exhibits hereto, and as it may be from time to time amended, supplemented or
otherwise modified.
(h) "Trust Estate" means, and consist of, (i) the Mortgages,
(ii) the Vessels, funds and other property which the Trustee acquires in its
capacity as Trustee or Mortgagee in connection with any of the Mortgages or any
of the Vessels.
(i) "Trust Receipt" means a receipt, substantially in the form
of Exhibit A, given by the Trustee to the Administrative Agent upon receipt of
the Mortgages.
(j) "Trustee" has the meaning given that term in the
preamble, and any successor Trustee.
(k) "United States Maritime Laws" mean all provisions of
United States law restricting or pertaining to the operation of a vessel or to
the transfer of any interests in United States flag vessels to persons who are
not citizens of the United States including but not limited to Section 2 of the
Shipping Act, 1916 as amended (46 U.S.C. ss. 801 et seq, the Ship Mortgage Act
of 1920 as amended (46 U.S.C. ss. 31328) and pertinent regulations of the United
States Coast Guard and MARAD.
(l) "Vessel" means any of, and "Vessels" means all of, the
vessels on which a mortgage may be granted from time to time in favor of the
Trustee pursuant to the Credit Agreement; and as of the date hereof are more
particularly described in Exhibit B.
Capitalized terms used herein and not otherwise defined herein shall have the
same meanings ascribed to them as set forth in the Credit Agreement.
ARTICLE II.
DECLARATION OF TRUST
SECTION 1.021 The Trustee hereby declares that it will hold
each item of the Trust Estate when received upon the trusts hereinafter set
forth, subject to, and upon the terms and conditions of this Trust Agreement,
for the sole use and benefit of the Administrative Agent on behalf of the Banks.
ARTICLE III.
TRANSFER OF PROPERTY TO TRUST
SECTION 1.031 The Administrative Agent hereby authorizes the
Trustee and the Trustee hereby agrees to accept each of the Mortgages as a part
of the Trust Estate. At any time hereafter and from time to time, the Trustee
shall execute or enter into, as the case may be, as Trustee, any Mortgage upon
written direction of the Administrative Agent. The Trustee shall
Exhibit J
#20170954.1
<PAGE>
issue to the Administrative Agent a Trust Receipt for each Mortgage upon the
execution of such Mortgage.
SECTION 1.032 Upon satisfaction or discharge of the
indebtedness secured by the lien or security interest provided for in any of the
Mortgages, the Administrative Agent shall so notify the Trustee. The
Administrative Agent shall then instruct the Trustee as to satisfaction or
discharge of such indebtedness and, if so instructed, will execute and deliver
to the Administrative Agent, such satisfaction or discharge of such Mortgage as
the Administrative Agent may request. Upon satisfaction or discharge of the lien
provided for in any of the Mortgages, the Administrative Agent shall return the
respective Trust Receipt to the Trustee for cancellation and thereafter the
Trustee shall return the respective Mortgage to the Administrative Agent, at
which time such Mortgage shall be deemed withdrawn from the Trust Estate.
SECTION 1.033 The Administrative Agent shall deliver to the
Trustee each year a certificate setting forth the principal amount then
outstanding under the Mortgages.
ARTICLE IV.
DUTIES OF THE TRUSTEE
SECTION 1.041 The Trustee shall take such action with respect
to any event of default under any of the Mortgages as shall be specified in any
notice of such default and written instructions of the Administrative Agent, but
the Trustee shall not be required to take any action not expressly set forth in
such written instructions. If the approval of any governmental agency or body
(including approval from MARAD) is required in order to carry out the
instructions of the Administrative Agent, the Trustee shall not be required to
carry out such instructions unless such approval shall have been obtained. The
Trustee may rely on instructions of the Administrative Agent and shall not be
responsible for any loss, cost or expense in following such instructions except
for its own gross negligence or willful misconduct.
SECTION 1.042 (a) The Trustee shall not have any duty or
obligation to manage, operate, control, use, sell, make investments in respect
of, dispose of or otherwise deal with the Vessels or any other part of the Trust
Estate or to otherwise take or refrain from taking any action under, or in
connection with, the Mortgages, except as expressly provided by the terms of
this Trust Agreement or as expressly provided in written instructions received
from the Administrative Agent pursuant to the terms of Section 4.01 of this
Agreement.
(b) The Trustee shall not be obligated or required, and this
Trust Agreement shall not be construed so as to obligate or require the Trustee,
to expend or risk its own funds or incur any financial responsibility in the
performance of any of its duties under this Trust Agreement, to file any reports
or other
Exhibit J
#20170954.1
<PAGE>
matters with any governmental authority relating to the matters hereof other
than those required to be filed by the Trustee as a depository institution, or
to follow any written instructions received from the Letter of Credit Agent, the
Co-Agents, any Bank or any Person other than the Administrative Agent.
SECTION 1.043 (a) The Trustee shall use its best efforts to
maintain its status as an approved trustee by MARAD and shall properly comply
with United States Maritime Laws in connection therewith including, without
limitation, making such reports, annual filings and accountings as may be
required. If the Trustee learns of the occurrence of events which will or could,
in its opinion, result in its disqualification, the Trustee shall so advise the
Administrative Agent.
(b) In the event the Trustee shall be unable to act as trustee
under any applicable governmental rule or regulation, the sole obligation of the
Trustee hereunder shall be to advise the Administrative Agent promptly of any
such fact of which it has Actual Knowledge and to resign under this Trust
Agreement, if requested by the Administrative Agent. The Trustee shall have no
liability to the Administrative Agent, the Letter of Credit Agent, the
Co-Agents, the Banks, the Borrowers, any of the Borrowers' Subsidiaries, or any
other Person by reason of its failure to be or remain qualified to act under
applicable law as trustee, except that the Trustee agrees to pay its own costs
and expenses, including, without limitation, legal counsel fees and expenses, in
connection with any resignation under this Section 4.03.
SECTION 1.044 The Trustee shall furnish promptly to the
Administrative Agent each communication received by it or a copy thereof
relating to the Mortgages, but shall have no duty to act upon or reply to any
such communication in the absence of written instructions from the
Administrative Agent.
SECTION 1.045 The Trustee shall keep custody of any cover
notes, insurance policies, brokers' opinion letters, or other documents
delivered to it from time to time as may be required by the Mortgages and shall
promptly give copies thereof to the Administrative Agent. The Trustee shall have
no duty to advise the Administrative Agent, the Letter of Credit Agent, the
Co-Agents or the Banks of its failure to receive in timely fashion any such
insurance document and the responsibility of determining if any insurance
document does not comply with the requirements of the Mortgages shall be solely
that of the Administrative Agent.
Exhibit J
#20170954.1
<PAGE>
ARTICLE V.
CONCERNING THE TRUSTEE
SECTION 1.051 The Trustee accepts the trust hereby created and
agrees to perform such trust but only upon the terms of this Trust Agreement.
The Trustee agrees that it shall not authorize operation of any United States
flag vessel under a Mortgage without the prior consent of MARAD in any case
where such consent is required by law. The Trustee agrees that it will not sell
any United States flag vessel pursuant to its Mortgage to a person who is not a
citizen of the United States within the meaning of Section 2 of the Shipping
Act, 1916, as amended, without the prior written consent of MARAD in any case
where such consent is required by law. The Trustee shall not be answerable or
accountable to the Administrative Agent, the Letter of Credit Agent, the
Co-Agents, the Banks or any other Person under any circumstances, except for its
own willful misconduct or gross negligence.
SECTION 1.052 Except in accordance with written instructions
furnished pursuant to Section 4.01, and without limiting the generality of
Section 4.02, the Trustee shall have no duty (a) to record, file or deposit any
of the Mortgages or any amendments thereto, (b) to effect or maintain any
insurance on any Vessel, (c) to pay or discharge any tax, assessment, or other
governmental charge or any lien or encumbrance of any kind owing with respect
to, assessed or levied against, any part of the Trust Estate, (d) to confirm or
verify any notices or reports of the Borrowers or any of the Borrowers'
Subsidiaries other than to furnish the Administrative Agent with a copy of each
notice or report furnished the Trustee by the Borrowers or any of the Borrowers'
Subsidiaries pursuant to the Mortgages or (e) to inspect any Vessel at any time
or ascertain or inquire as to the performance or observance of any Borrower's or
any of the Borrowers' Subsidiaries' covenants under any of the Mortgages or
whether any default shall have occurred thereunder.
SECTION 1.053 THE TRUSTEE MAKES NO REPRESENTATION OR
WARRANTY AS TO: (a) THE VALIDITY, LEGALITY, ENFORCEABILITY OR
PRIORITY OF THE MORTGAGES, OR AS TO THE CORRECTNESS OF ANY
STATEMENT CONTAINED IN ANY THEREOF, OR AS TO ITS TITLE THERETO;
(b) THE TITLE, DOCUMENTATION, SEAWORTHINESS, VALUE, CONDITION OR
FITNESS FOR USE OF ANY OF THE VESSELS, OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT THERETO; OR (c) THE
VALIDITY, LEGALITY OR ENFORCEABILITY OF THIS TRUST AGREEMENT OR
ANY DOCUMENT HEREBY CONTEMPLATED, except that the Trustee
represents and warrants that (x) this Trust Agreement and any
other instrument executed by the Trustee have been or will be
executed by an officer duly authorized to execute them on its
behalf; and (y) on the date hereof the Trustee is an "approved
trustee" within the meaning of Section 2 of the Shipping Act,
1916 (46 App. U.S.C. 802) as amended and 46 U.S.C. ss. 31328 and
the related regulations.
SECTION 1.054 No monies received by the Trustee hereunder need
be segregated in any manner except to the extent
Exhibit J
#20170954.1
<PAGE>
required hereunder or by law and the Trustee shall not be liable
for any interest thereon.
SECTION 1.055 The Trustee shall incur no liability to anyone
in acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it in good faith to be genuine and believed by it in good faith to be signed by
the proper party or parties. The Trustee may accept a copy of a resolution of
the board of directors of any corporate party, certified by the secretary, an
assistant secretary or any other officer of said party, as duly adopted and in
full force and effect, as conclusive evidence that such resolution has been
adopted by said board and is in full force and effect. As to any fact or matter,
the manner of ascertainment of which is not specifically described herein, the
Trustee may for all purposes hereof rely in good faith on a certificate, signed
by or on behalf of the party executing such certificate, as to such fact or
matter, and such certificate shall constitute full protection to the Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereof.
In the administration of the Trust Estate, the Trustee may perform its powers
and duties hereunder directly or through other agents or attorneys and may, at
the cost and expense of the Administrative Agent, seek advice of counsel
(including counsel for the Administrative Agent, the Borrowers or the Borrowers'
Subsidiaries), accountants and other skilled Persons to be selected and employed
by it, and the Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the actions, advice or opinion of
any such counsel, agents, accountants or other skilled Persons.
SECTION 1.056 In accepting the trust hereby created, the
Trustee acts solely as trustee hereunder and not in its individual capacity, and
the Trustee shall have no liability hereunder or under the Mortgages except as
expressly set forth herein or in the Mortgages.
ARTICLE VI.
INDEMNIFICATION OF THE TRUSTEE BY THE ADMINISTRATIVE AGENT
SECTION 1.061 The Administrative Agent shall, whether or not
any of the transactions contemplated hereby shall be consummated, assume
liability for, and indemnify, protect, save and keep harmless the Trustee and
its respective successors, assigns, agents and servants, from and against any
and all liabilities, obligations, losses, damages, penalties, taxes (such term
"taxes" or the term "tax" as used in this Section 6.01 shall include, without
limitation, all taxes specifically related to this Trust Agreement and the Trust
Estate created hereby excluding, however, any income, franchise or similar taxes
on fees or other compensation received by the Trustee in its capacity as
Trustee), claims, actions, suits, costs, expenses or disbursements (including,
without limitation, legal fees and expenses) of any kind and nature whatsoever
which may be imposed
Exhibit J
#20170954.1
<PAGE>
on or incurred by or asserted against the Trustee, its respective successors,
assigns, agents or servants, by whomsoever asserted, in any way specifically
relating to or arising out of this Trust Agreement or the Mortgages, or the
performance or enforcement of any of the terms thereof, or in any way relating
to or arising out of the financing, refinancing, mortgaging, manufacture,
purchase, acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return, or other disposition of any of the Vessels
(including, without limitation, latent and other defects, whether or not
discoverable, and any claim for patent, trademark or copyright infringement), or
in any way relating to or arising out of the administration of the Trust Estate,
or to the action or inaction of the Trustee hereunder, except only in the case
of willful misconduct or gross negligence by the Trustee. The indemnities
contained in this Section 6.01 shall survive the termination of this Trust
Agreement. If the Trustee shall be entitled to indemnification, the Trustee
shall have a lien on the Trust Estate prior to any interest therein of the
Administrative Agent, the Letter of Credit Agent, the Co- Agents or the Banks.
SECTION 1.062 The indemnity provided in Section 6.01 shall not
apply to any costs, expenses or other liabilities incurred by the Trustee in the
preservation of its current status as an approved trustee by MARAD or any other
status with respect to trust powers generally which it holds at the date of
entering into this Trust Agreement which are necessary for the performance of
its obligations under this Trust Agreement.
ARTICLE VII.
TRANSFER OF THE ADMINISTRATIVE AGENT'S INTEREST
SECTION 1.071 The Administrative Agent and/or the Banks shall
not assign, convey or otherwise transfer any of its right, title or interest in
and to this Trust Agreement, the Trust Estate or any part thereof except (i)
with respect to the Administrative Agent and the Banks in compliance with
Article VII of the Credit Agreement or (ii) with the prior written consent of
the Trustee. In connection with any conveyance or transfer described above, the
Trustee shall execute and deliver such instrument or do such acts as the
Administrative Agent may require, at the cost and expense of the Administrative
Agent, in order to consummate such assignment, conveyance or transfer.
ARTICLE VIII.
PROCEDURE FOR ENFORCEMENT
SECTION 1.081 Upon receipt of a notice and instructions
provided for in Section 4.01, the Trustee shall proceed to exercise such rights
and remedies available to it under the Mortgages as the Administrative Agent
shall, from time to time, instruct it to exercise. The Administrative Agent
acknowledges that it cannot require the Trustee to operate any of
Exhibit J
#20170954.1
<PAGE>
the Vessels or to sell any of the Vessels to a person who is not a citizen of
the United States under the United States Maritime Laws without the prior
written consent of MARAD in any case where such consent is required by law.
SECTION 1.082 If so instructed by the Administrative Agent,
the Trustee shall, in connection with any Enforcement, employ attorneys,
experts, consultants, managers, security guards, surveyors, insurance brokers,
inspectors or any other persons or entities deemed desirable by the
Administrative Agent.
SECTION 1.083 If so instructed by the Administrative Agent and
subject to receipt of an indemnity satisfactory to the Trustee, the Trustee
shall file such suits or actions or bring such proceedings before any court or
agency in connection with the enforcement of the Mortgages, in its own name in
its capacity as Trustee, or shall join in any such suits, actions or proceedings
as co-plaintiff with the Administrative Agent, the Banks, as the case may be, as
the Administrative Agent deems necessary or desirable. The conduct of such
suits, actions or proceedings shall be in accordance with instructions from the
Administrative Agent.
SECTION 1.084 If so instructed by the Administrative Agent,
the Trustee shall, in connection with any Enforcement, provided the same be
lawful, take such actions to authorize on behalf of the Trustee as provided in
Section 5.05 any or all of the following:
(a) operate any or all of the Vessels under their
respective Mortgages;
(b) conduct a private sale of the Vessel or Vessels or other
collateral covered by the Mortgages and execute and deliver an
appropriate bill of sale transferring title to the Vessel or Vessels to
a purchaser thereof at such a private sale;
(c) bid upon or purchase the Vessel or Vessels at any judicial
sale or other auction, provided that the Administrative Agent shall
have made funds available in advance to the Trustee for this purpose;
and
(d) operate any or all of the Vessels acquired by it
as a result of an Enforcement.
SECTION 1.085 the acquisition of title to the Vessel or
Vessels, as contemplated by Section 8.04 above, the Trustee shall have no
obligation to protect, conserve or deal with any Vessel, except as specifically
instructed by the Administrative Agent in writing.
SECTION 1.086 The Administrative Agent shall pay all costs and
expenses incurred in connection with any Enforcement, and the Trustee may, in
its discretion, require that the Administrative Agent make funds available to
the Trustee to
Exhibit J
#20170954.1
<PAGE>
satisfy any such cost or expense prior to the time of incurring such cost or
expense.
ARTICLE IX.
PAYMENTS TO THE ADMINISTRATIVE AGENT AND DISTRIBUTIONS
SECTION 1.091 Provided that the Administrative Agent is not in
default under this Trust Agreement with respect to the payment of fees,
compensation or other sums owed to the Trustee pursuant hereto, the Trustee
shall pay, pursuant to Section 9.02, to the Administrative Agent promptly upon
receipt thereof, all sums collected under the Mortgages. Such payments shall be
made in immediately available funds to such place as the Administrative Agent
from time to time may direct the Trustee.
SECTION 1.092 Save as expressly stated to the contrary in the
Mortgages or in any written instructions to the Trustee from the Administrative
Agent, to the extent that the Trust receives or recovers monies pursuant to the
Loan Documents to be applied in discharge of the Obligations, such monies (after
deduction of the costs, expenses and fees of the Trustee or any receiver,
attorney, agent, delegate or other Person appointed by the Trustee) shall be
paid by the Trustee to the Administrative Agent for application by the
Administrative Agent in accordance with the provisions of Section 6.02 of the
Credit Agreement.
SECTION 1.093 The Trustee shall not be required to segregate
its collections or sums received in payment from its other funds, except as
otherwise by law required or required hereunder, but shall, upon request of the
Administrative Agent, furnish to the Administrative Agent a statement and
accounting of any monies, or funds or other things of value (other than the
Mortgages) held by it as Trustee for the benefit of the Administrative Agent.
The form of such report shall be as mutually agreed by the Trustee and the
Administrative Agent.
SECTION 1.094 In the event the Administrative Agent is in
default in respect of any payment of the Trust of fees or any other sums owed by
the Administrative Agent, the Trustee shall be allowed to deduct any such fees
or amounts from the Trust Estate before being required to make any payment
thereof to the Administrative Agent. In the event any such deduction is made,
the Trustee shall promptly furnish the Administrative Agent a statement giving
complete details of any such deduction and the basis upon which such deduction
is made.
ARTICLE X.
COMPENSATION OF THE TRUSTEE
SECTION 1.101 The Trustee shall receive as compensation for
its services hereunder such fees as may from time to time be agreed upon between
the Borrowers and the Trustee. Pursuant to Section 8.04 of the Credit Agreement,
the
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#20170954.1
<PAGE>
Borrowers have agreed to pay such fees of the Trustee together with expenses as
therein provided.
SECTION 1.102 The compensation provided for in Section 10.01
above shall be in addition to those costs, expenses and liabilities for which
the Trustee is entitled to be reimbursed or indemnified by the Administrative
Agent as set forth in this Trust Agreement.
ARTICLE XI.
REMOVAL, DISQUALIFICATION OR RESIGNATION OF
THE TRUSTEE; SUCCESSOR TRUSTEES
SECTION 1.111 (a) In its discretion, the Administrative Agent
may remove the Trustee at any time, without cause, by directing a written notice
to the Trustee of such removal. No removal shall be effective unless a qualified
successor trustee, described in Section 11.02(e) below, shall have been
appointed on or prior to the effective date of such removal in accordance with
the provisions of this Trust Agreement. Any expenses incurred in connection with
such removal shall be paid by the Administrative Agent except where the Trustee
has been removed for cause.
(b) If the Trustee becomes disqualified as an approved
trustee by MARAD, the Administrative Agent shall: (i) remove the
Trustee and appoint a qualified successor trustee or (ii) take
the action provided for in Section 11.03.
(c) The Trustee may resign at any time without cause by giving
at least thirty (30) days' prior written notice to the Administrative Agent,
such resignation to be effective, subject to the provision of the last sentence
of this paragraph, on the date specified in such notice. If the Administrative
Agent shall not have appointed a successor trustee within thirty (30) days after
such notice of resignation, the Trustee may apply to any court of competent
jurisdiction to appoint a qualified successor trustee to act until such time, if
any, as a successor trustee shall have been appointed by the Administrative
Agent. Any successor trustee so appointed by such court shall immediately and
without further act be superseded by any successor trustee appointed by the
Administrative Agent. In any event, however, no resignation shall be effective
until a qualified trustee shall have been appointed by the Administrative Agent
or a court.
SECTION 1.112 (a) A successor trustee shall be appointed by an
instrument in writing which shall state the effective date said successor
trustee shall become the Trustee hereunder, which document shall contain the
executed acknowledgement of acceptance by the successor trustee of the trust,
the Trust Estate and the duties of the Trustee as herein provided. The Trustee,
the successor trustee and the Administrative Agent shall execute, acknowledge
and deliver such assignments as may be required, in recordable form, and a
sufficient number of counterparts, whereby the successor trustee
Exhibit J
#20170954.1
<PAGE>
becomes vested with all of the estates, properties, rights, remedies and trusts
of its predecessor to the trust hereunder and such instruments shall be duly
recorded forthwith in accordance with United States Maritime Laws or the laws or
statutes governing the Mortgages. The Trustee shall duly assign, transfer,
deliver and pay over to any successor trustee any monies and other property or
things of value subject to the trust hereunder and held by the Trustee. Should
any act or further instrument from the Trustee, the Banks or the Administrative
Agent be required by any successor trustee for more fully and certainly vesting
in and confirming to such successor trustee such estates, properties, rights,
remedies and trusts, then on request any and all such acts and instruments shall
be done, made, executed, acknowledged and delivered by the Administrative Agent,
the Letter of Credit Agent, the Co-Agents, the Banks and the Trustee.
(b) The Administrative Agent shall pay or cause to be paid all
recording fees, transfer taxes, court costs, if applicable, and all other costs
arising out of the transfer of the Trust Estate from the Trustee to a successor
trustee.
(c) Upon the removal or resignation of the Trustee, the
Trustee's compensation shall cease as of the effective date thereof, but its
rights of indemnification shall survive such removal or resignation. Within
thirty (30) days following the effective date of such removal or resignation,
the Trustee shall furnish to the Administrative Agent a complete accounting of
the Trust Estate and its compensation, costs and expenses as of the date of
removal or resignation.
(d) Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation to which substantially all the business of the Trustee
may be transferred, shall be the Trustee under this Trust Agreement without any
further act, provided the successor corporation remains qualified as an approved
trustee under the United States Maritime Laws or such other applicable law.
(e) Any successor to the Trustee, however appointed, shall be
a bank or trust company organized under the laws of the United States or any
jurisdiction thereof having a combined capital and surplus of at least
$50,000,000, and which is able and legally qualified to perform the duties of
the Trustee hereunder upon reasonable or customary terms. Any successor, however
appointed, shall be an "approved trustee" under the provisions of the United
States Maritime Laws.
SECTION 1.113 If at any time: (a) events occur which will or
could, in the opinion of the Administrative Agent or the Trustee, result in the
disqualification of the Trustee, or (b) the Trustee becomes disqualified, the
Trustee or the Administrative Agent, or both of them, may petition the United
States District Court for the Southern District of New York for instructions to
the Trustee in order that the trust may be
Exhibit J
#20170954.1
<PAGE>
preserved to prevent the Administrative Agent, the Letter of Credit Agent, the
Co-Agents, the Banks or the Trustee from falling into violation of law. To the
extent that such may be required or necessary, the parties hereto agree that
said court has jurisdiction for this purpose; however, if in the interest of
justice, the said court determines to transfer the matter to any other United
States Court, the parties hereby agree to the jurisdiction of such transferee
court. Any such petition shall be served upon the other party hereto. The
Trustee, the Administrative Agent and any successor trustee hereby agree to
abide by the instructions of the court and to do all acts, execute such
agreements and instruments as may be required in connection therewith and all
other instruments and/or documents necessary to preserve the Trust Estate for
the benefit of the Administrative Agent on behalf of the Banks under the terms
hereunder.
ARTICLE XII.
TERMINATION AND DISCHARGE OF TRUST
SECTION 1.121 This trust is hereby declared to be irrevocable
except that this trust may be terminated by notice given by the Administrative
Agent to the Trustee at any time that there is no Mortgage held or to be held as
a part of the Trust Estate and termination of the trust would not create an
interest in any of the Vessels on the part of the Administrative Agent, the
Letter of Credit Agent, the Co-Agents and the Banks that would be contrary to
applicable law, or otherwise cause the Administrative Agent, the Letter of
Credit Agent, the Co-Agents or the Banks to be in violation of any applicable
law and no Obligations to the Administrative Agent, the Letter of Credit Agent,
the Co-Agents and the Banks under the Loan Documents remain and no Bank
Commitment is still outstanding. Within thirty (30) days following the date of
such notice, the Trustee shall furnish to the Administrative Agent a complete
accounting of the Trust Estate and its compensation, costs and expenses. This
trust shall terminate, cease and determine upon: (i) the assignment, conveyance
and transfer by the Trustee to the Administrative Agent of any property then
comprising the Trust Estate and (ii) the acceptance of such accounting of the
Trustee by the Administrative Agent.
ARTICLE XIII.
AMENDMENT OF TRUST AGREEMENT
SECTION 1.131 No term or provision of this Trust Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the Administrative Agent and the Trustee; and any waiver of
the terms hereof shall be effective only in the specific instance and for the
specific purpose given; provided, however, because of the irrevocable nature of
this trust and the reasons for which it is created the trust may not be amended
in any way that may vest or
Exhibit J
#20170954.1
<PAGE>
revest in the Administrative Agent, the Letter of Credit Agent, the Co-Agents or
the Banks any interest in any of the Vessels contrary to the United States
Maritime Laws or other applicable law.
ARTICLE XIV.
MISCELLANEOUS
SECTION 1.141 The headings of the various articles are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 1.142 Any assignment, sale, transfer or other
conveyance by the Trustee of the interest of the Trustee in the Mortgages or any
of the Vessels made pursuant to this Trust Agreement or the Mortgages shall bind
the Administrative Agent, the Letter of Credit Agent, the Co-Agents and the
Banks and shall be effective to transfer or convey all right, title and interest
of the Trustee, the Administrative Agent, the Letter of Credit Agent, the
Co-Agents and the Banks therein. No purchaser or other grantee shall be required
to inquire as to the authorization, necessity, expediency or regularity of such
assignment, sale, transfer or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Trustee.
SECTION 1.143 All notices, demands and other communications
provided for hereunder shall be in writing (including telegraphic communication)
telexed, telecopied, telegraphed or delivered, if to the Trustee, at its offices
at First Fidelity Bank, National Association, Corporate Trust Department, 765
Broad Street, Newark, New Jersey 07102, telecopy no. 201-430-4963; if to the
Administrative Agent, as set forth in Section 8.02 of the Credit Agreement; or,
as to each party, at such other address as shall be designated by such party in
a notice to the other parties hereto. All such notices and communications shall,
when telexed, telecopied, or telegraphed, be effective upon the earliest of (i)
actual receipt or (ii) when (on a Business Day and during normal business hours
at the addressee's address) transmitted by telecopy or telex or delivered to the
telegraph company, respectively. All notices required to be delivered by the
Trustee under this Trust Agreement shall be delivered promptly by the Trustee.
SECTION 1.144 Any provision of this Trust Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 1.145 This Trust Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such
Exhibit J
#20170954.1
<PAGE>
counterparts shall together constitute but one and the same
instrument.
SECTION 1.146 All covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, the Trustee and its
successors and assigns, the Administrative Agent, and its successors and
assigns, the Letter of Credit Agent, the Co-Agents and the Banks, and their
respective successors and assigns. Any request, notice, direction, consent,
waiver or other instrument or action by the Administrative Agent shall bind its
successors and assigns, the Letter of Credit Agent, the Co- Agents and the
Banks, and their respective successors and assigns.
SECTION 1.147 Nothing expressed or implied herein is intended
or shall be construed to confer upon or give to any Person, other than the
parties hereto, their successors or assigns, any right, remedy or claim under or
by reason of this Trust Agreement or of any term, covenant or condition hereof,
and all of the terms, covenants, conditions, promises and agreements contained
herein shall be for the sole and exclusive benefit of the parties hereto and
their successors and assigns.
SECTION 14.07 THIS TRUST AGREEMENT, AND ALL OF THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, AND THEIR SUCCESSORS AND ASSIGNS, SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
SECTION 1.148 No provision of this Trust Agreement or any
action taken pursuant hereto shall be considered to be a waiver of the preferred
status of any preferred ship mortgage transferred to the Trustee hereunder or in
derogation of any of the benefits, privileges, rights or remedies provided for
by the United States Maritime Laws or by other applicable law or the Mortgages.
SECTION 1.149 This Trust Agreement has been delivered in New
York, New York.
Exhibit J
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed and delivered in New York, New York by their
respective officers thereunto duly authorized, as of the date first above
written.
CITIBANK, N.A., as
Administrative Agent for the
Banks described in the Credit
Agreement as heretofore mentioned
By:
Name: John F. Heuss
Title: Vice President
FIRST UNION NATIONAL BANK (as
successor by merger with First
Fidelity Bank, National
Association)
By:
Name: Rick Barnes
Title: Vice President
Exhibit J
#20170954.1
<PAGE>
EXHIBIT A
to the Master Vessel
and Collateral Trust Agreement
TRUST RECEIPT
Date:______________________ Number:__________________
To: Citibank, N.A.,
as Administrative Agent for the Banks
From: First Union National Bank
not in its individual
capacity but solely as
Trustee
The Trustee hereby acknowledges the delivery to the Trustee,
as trustee under the Amended and Restated Master Vessel Trust Agreement dated as
of February 3, 1997 with you (the "Master Vessel Trust Agreement"), of the
[First Preferred Mortgage covering the [ ] flag vessel[s] ______________ or
First Preferred Fleet Mortgage covering the ______ flag vessel[s] listed in
Schedule A annexed hereto and made a part hereof] entered into by ______________
in favor of the Trustee for your benefit on behalf of the Banks (the
"Mortgage").
Terms used herein are used as defined in the Master Vessel
Trust Agreement.
FIRST UNION NATIONAL BANK
not in its individual
capacity but solely
as Trustee
By:
Title
Exhibit J
#20170954.1
<PAGE>
EXHIBIT B
to the Master Vessel
and Collateral Trust Agreement
MORTGAGED VESSELS
I. SEABULK OFFSHORE, LTD.
<TABLE>
<CAPTION>
Gross Net Place & Year of
VESSEL NAME Off. No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
ANNA P. 992165 Miami, FL 250 75 Breaux Brothers Ent.
1993
CAPT. EVAN 978590 Miami, FL 219 65 Breaux's Bay Craft
1991
CAPT. RAMI 978136 Miami, FL 219 65 Breaux's Bay Craft
1991
RIG RUNNER 973660 Miami, FL 219 65 Breaux's Bay Craft
1991
JOPEYE 1034084 Miami, FL 80 54 Breaux's Bay Craft
1995
SEABULK RHODE 621641 Miami, FL 258 176 Bourg, LA 1980
ISLAND (formerly
Bolivar)
SEABULK ARKANSAS 648553 Miami, FL 272.93 185 Rysco 1982
(formerly Hawke
Seal)
SEABULK AUSTIN 600720 Miami, FL 91 62 Blountstown, FL 1978
SEABULK CAMERON 577687 Miami, FL 86 59 Loreauville, LA 1976
SEABULK COLORADO 643471 Miami, FL 272.93 185 Rysco 1982
(formerly Baffin
Seal)
ROSS SEAL 582641 Miami, FL 299.17 203 Rysco 1977
(formerly Seabulk
Delaware; formerly
Ross Seal )
SEABULK GALVESTON 967695 Miami, FL 219 65 Loreauville, LA 1990
(formerly Big
Blue)
SEABULK KENTUCKY 662712 Miami, FL 627 188 Escatawpa, MS 1990
(formerly
Intersurf)
SEABULK LAMAR 629116 Miami, FL 95 64 Morgan City, LA 1981
(formerly Nautic
Runner)
SEABULK ALABAMA 644987 Port 287 195 Chicksaw, AL 1982
Everglades, FL
</TABLE>
Exhibit J
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
Gross Net Place & Year of
VESSEL NAME Off. No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
SEABULK ARANSAS 590229 Miami, FL 99 67 Patterson, LA 1978
(formerly
Thunderbolt;
formerly Seminole)
SEABULK BEAUREGARD 628334 Miami, FL 98 66 Houma, LA 1980
SEABULK CALIFORNIA 645964 Port 287 195 Chicksaw, AL 1982
Everglades, FL
SEABULK EVANGELINE 638112 Miami, FL 98 66 Loreauville, LA 1981
(formerly
Thunderroad)
SEABULK FLORIDA 645686 Port 299 203 Lockport, LA 1982
Everglades, FL
SEABULK GEORGIA 659900 Port 290 197 Houston, TX 1984
Everglades, FL Pass Christian,
Miss
SEABULK HAWAII 597511 Miami, FL 275 187 Houma, LA 1978
(formerly Aleutian
Command)
SEABULK NEW YORK 569386 Miami, FL 311 212 Moss Point, MS 1975
(formerly F/V
Pacific Endeavor)
SEABULK NEW JERSEY 566513 Miami, FL 1098 373 Moss Point, MS 1975
(formerly F/V
Northern Empire)
SEABULK IBERIA 643917 Miami, FL 96 65 Chalmette, LA 1981
(formerly Amanda
Lynn; traded for
Thundergoddess)
SEABULK JEFFERSON 645836 Miami, FL 98 67 Loreauville, LA 1982
(formerly
Thunderplanet)
SEABULK LAFAYETTE 684127 Miami, FL 97 66 Loreauville, LA 1985
(formerly
Thunderuniverse)
SEABULK LAFOURCHE 974293 Miami, FL 199 59 Loreauville, LA 1991
(formerly
Thunderpatriot)
SEABULK LIBERTY 680947 Miami, FL 98 67 Loreauville, LA 1985
(formerly
Thundercruise)
SEABULK LOUISIANA 645687 Port 299 203 New Orleans, LA 1982
Everglades, FL
SEABULK MADISON 617888 Miami, FL 98 66 Loreauville, LA 1980
(formerly
Thunderworld)
SEABULK MONTANA 557401 Miami, FL 271.59 184 Burton 1974
(formerly Indian
Seal)
</TABLE>
Exhibit J
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
Gross Net Place & Year of
VESSEL NAME Off. No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
SEABULK MINNESOTA 577547 Miami, FL 295.26 200 American Marine 1976
(formerly Baltic
Seal)
SEABULK MISSOURI 650958 Miami, FL 272.93 185 Rysco 1982
(formerly Pegaus
Seal)
SEABULK MOBILE 649804 Miami, FL 98 67 Loreauville, LA 1991
(formerly
Thunderventure)
SEABULK NASSAU 599775 Miami, FL 98 66 Loreauville, LA 1978
(formerly
Thunderation)
SEABULK OREGON 599312 Miami, FL 298 203 Blountstown, FL 1978
SEABULK ORLEANS 636895 Miami, FL 92 62 Loreauville, LA 1981
(formerly Gulf
Runner II)
SEABULK SABINE 570578 Miami, FL 86 59 Loreauville, LA 1976
(formerly
Thunderhawk)
SEABULK STARR 674994 Miami, FL 93 63 Loreauville, LA 1984
(formerly
Thundermaster)
SEABULK TENNESSEE 662711 Miami, FL 627 188 Escatawpa, MS 1982
(formerly Big
Orange XXII)
SEABULK TEXAS 645258 Port 294 200 Lockport, LA 1982
Everglades, FL
SEABULK WASHINGTON 611561 Miami, FL 298 203 Blountstown, FL 1979
SEABULK WINN 976173 Miami, FL 219 65 Loreauville, LA 1991
(formerly Rapid
Runner)
SEABULK WYOMING 608866 Miami, FL 288.41 196 Zigler 1979
(formerly Bengal
Seal)
SEABULK VERMONT 587272 Miami, FL 297.05 201 Rysco 1977
(formerly China
Seal)
SEA ROBIN III 593509 Port 99 66 Loreauville, LA 1978
Everglades, FL
SEABULK BOSSIER 968584 Miami, FL 219 65 Loreauville, LA 1990
(formerly Storm
Runner)
THUNDERBAY 621746 Port 98 66 Loreauville, LA 1980
Everglades, FL
THUNDERCAT 581849 New Orleans, 98 66 Crown Point, LA 1977
(formerly Apache) LA
THUNDERCLOUD 617291 Miami, FL 98 66 Houma, LA 1980
(formerly
Comanche)
</TABLE>
Exhibit J
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
Gross Net Place & Year of
VESSEL NAME Off. No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
THUNDEREAGLE 582671 New Orleans, 92 63 Loreauville, LA 1977
(formerly Warrior) LA
THUNDER U.S.A. 670567 Port 93 63 Loreauville, LA 1984
Everglades, FL
THUNDERWAR 632285 Port 98 66 Loreauville, LA 1981
Everglades, FL
</TABLE>
Exhibit J
#20170954.1
<PAGE>
SEAMARK SOUTH
VESSEL NAME: SEAMARK MISSISSIPPI CAROLINA
Patente of Navigation: 20643-93 20644-93
Date Patente: March 24, 1993 March 24, 1993
Hailing Port: Panama Panama
Radio Call Sign: HP-6959 HP-6960
Length of Vessel: 50.60 meters 51.27 meters
Width of Vessel: 12.19 meters 12.19 meters
Height of Vessel: 3.51 meters 3.46 meters
Gross Tons: 299.56 tons 299.31 tons
Net Tons: 203.00 tons 203.00 tons
Exhibit J
#20170954.1
<PAGE>
II. SUN STATE MARINE SERVICES, INC.
<TABLE>
<CAPTION>
Off. Gross Net Place & Yr of
NAME OF VESSEL No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
SUN CHIEF 536753 Jacksonville, FL 142 96 Fort George Island,
FL 1971
SUN COMMANDER 514230 Jacksonville, FL 141 96 Greenville, MS 1968
SUN GYPSY 572179 Jacksonville, FL 76 52 Palatka, FL 1976
SUN MERCHANT 504113 Jacksonville, FL 125 85 Greenville, FL 1966
SUN TRADER 544795 Jacksonville, FL 74 50 Guild, TN 1972
SUN ST. JOHNS 287286 Jacksonville, FL 61 41 Jacksonville, FL
1961
SUN REBEL 275040 Jacksonville, FL 55 25 Jacksonville, FL
1957
SUN VENTURE 273020 Jacksonville, FL 69 47 Patterson, LA 1956
SUN RIVER CITY 999702 Jacksonville, FL 114 91 Green Cove Springs,
FL 1994
SUN EXPLORER 619367 Jacksonville, FL 122 83 Morgan City, LA 1980
SUN STATE NO. 1 263152 Jacksonville, FL 1533 1533 St. Louis, MO 1952
SUN STATE NO. 2 263153 Jacksonville, FL 1563 1563 St. Louis, MO 1952
SUN STATE NO. 3 289446 Jacksonville, FL 1492 1492 St. Louis, MO 1962
SUN STATE NO. 4 287971 Jacksonville, FL 1512 1512 Paducah, KY 1962
SUN STATE NO. 6 260861 Jacksonville, FL 1279 1279 Nashville, TN 1950
SUN STATE NO. 7 507486 Jacksonville, FL 1172 1172 Nashville, TN 1967
SUN STATE NO. 8 524331 Jacksonville, FL 1216 1216 Harvey, LA 1970
SUN STATE NO. 9 524332 Jacksonville, FL 1216 1216 Harvey, LA 1970
SUN STATE NO. 501 503567 Jacksonville, FL 316 316 New Orleans, LA 1976
(formerly Eastpet
No. 5)
SUN STATE NO. 701 175533 Jacksonville, FL 404 404 Neville Island,
Pittsburgh, PA 1942
SUN STATE NO. 901 255167 Jacksonville, FL 624 624 Camden, NJ 1948
SUN STATE NO. 902 253754 Jacksonville, FL 538 538 St. Louis, MO 1947
SUN STATE NO. 1101 290481 Jacksonville, FL 708 708 New Orleans, LA 1963
</TABLE>
Exhibit J
#20170954.1
<PAGE>
III. HVIDE MARINE INCORPORATED
<TABLE>
<CAPTION>
Off. Gross Net Place & Yr of
NAME OF VESSEL No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
BREVARD 248591 Port Canaveral, 138 94 Cohoes, NY 1945
FL
CAPTAIN BRINN 283882 Port Canaveral, 166 113 Cohoes, NY 1960
FL
EVERGLADES 272008 Port Everglades, 141 96 Cohoes, NY 1956
FL
FORT LAUDERDALE 530647 Port Everglades, 147 100 Houston, TX 1971
FL
MANATEE (formerly 279577 Port Everglades, 166 113 Cohoes, NY 1959
Captain Nelson) FL
MOBILE PERSISTENCE 239779 Port Everglades, 187 127 Wilmington, DE
FL 1940
MOBILE POWER 273774 Mobile, AL 252 171 Mariners Harbor,
S.I., NY 1957
MOBILE PRIDE 521907 Mobile, AL 190 129 Slidell, LA 1969
PARAGON (formerly 596518 Port Everglades, 149 101 Amelia, LA 1978
Broward) FL
VIGILANT 634724 Port Everglades, 197 134 Rysco Shipyard
FL 1981
DELAWARE 965565 Port Everglades, 197 134 San Diego, CA
FL 1952
MARY DEE SANDERS 647228 Port Everglades, 148 100 Port Arthur, TX
FL 1941
</TABLE>
Exhibit J
#20170954.1
<PAGE>
IV. SEABULK TRANSMARINE PARTNERSHIP, LTD.
SEABULK AMERICA
Official No. 961357
Hailing Port: Ft. Lauderdale, Florida
Gross Tonnage: 22,138
Net Tonnage: 15,701
Place of Construction: Kochi, Japan 1975
Rebuilt in United States, 1990
V. HVIDE CHARTERING, LTD.
M/V HOLLYWOOD
Official No. 678702
Hailing Port: Ft. Lauderdale, Florida
Gross Tonnage: 185
Net Tonnage: 68
Place of Construction: Fall River, Massachusetts 1984
Exhibit J
#20170954.1
<PAGE>
EXHIBIT K
to the
Amended and Restated
Credit Agreement
AMORTIZATION SCHEDULE: FACILITY B
Principal Amortization
January 15, 1997 $ 1,750,000
April 15, 1997 $ 1,750,000
July 15, 1997 $ 1,750,000
October 15, 1997 $ 1,750,000
January 15, 1998 $ 2,250,000
April 15, 1998 $ 2,250,000
July 15, 1998 $ 2,250,000
October 15, 1998 $ 2,250,000
January 15, 1999 $ 2,750,000
April 15, 1999 $ 2,750,000
July 15, 1999 $ 2,750,000
October 15, 1999 $ 2,750,000
January 15, 2000 $ 3,250,000
April 15, 2000 $ 3,250,000
July 15, 2000 $ 3,250,000
October 15, 2000 $ 3,250,000
January 15, 2001 $ 3,250,000
April 15, 2001 $ 3,250,000
July 15, 2001 $ 3,250,000
October 15, 2001 $ 3,250,000
January 15, 2002 $ 5,500,000
Exhibit K-1
#20170954.1
<PAGE>
EXHIBIT K
to the
Amended and Restated
Credit Agreement
AVAILABLE COMMITMENT AND AMORTIZATION SCHEDULE:
FACILITY F
<TABLE>
<CAPTION>
Available Available
Date Commitment ($) Installment ($) Percentage
---- -------------- --------------- ----------
<S> <C> <C> <C>
Until April 15, 1998 50,000,000 100%
July 15, 1998 48,000,000 2,000,000 96%
October 15, 1998 46,000,000 2,000,000 92%
January 15, 1999 44,000,000 2,000,000 88%
April 15, 1999 41,000,000 3,000,000 82%
July 15, 1999 38,000,000 3,000,000 76%
October 15, 1999 35,000,000 3,000,000 70%
January 15, 2000 32,000,000 3,000,000 64%
April 15, 2000 29,000,000 3,000,000 58%
July 15, 2000 26,000,000 3,000,000 52%
October 15, 2000 23,000,000 3,000,000 46%
January 15, 2001 20,000,000 3,000,000 40%
April 15, 2001 17,000,000 3,000,000 34%
July 15, 2001 14,000,000 3,000,000 28%
October 15, 2001 11,000,000 3,000,000 22%
January 15, 2002 0 11,000,000 0%
</TABLE>
Exhibit K-2
#20170954.1
<PAGE>
EXHIBIT L
to the
Amended and Restated
Credit Agreement
VESSELS AND ACQUISITIONS
A. PREVIOUSLY ACQUIRED VESSELS
I. HMI VESSELS
<TABLE>
<CAPTION>
OFFICIAL GROSS NET PLACE AND YEAR
NAME OF VESSEL NUMBER TONS TONS OF CONSTRUCTION
-------------- -------- ------ ---- ---------------
<S> <C> <C> <C> <C>
HMI PETROCHEM 642151 29,763 16,905 Avondale, LA 1981
HMI DYNACHEM 638899 29,763 16,905 Avondale, LA 1981
HMI ASTRACHEM 528567 20,527 13,727 Baltimore, MD 1970
</TABLE>
II. SEAL FLEET VESSELS
<TABLE>
<CAPTION>
OFFICIAL GROSS NET PLACE AND YEAR
NAME OF VESSEL NUMBER TONS TONS OF CONSTRUCTION
- -------------- -------- ------ ---- ---------------
<S> <C> <C> <C> <C>
SEABULK MONTANA 557401 271.59 184 Burton 1974
(formerly Indian
Seal)
SEABULK MINNESOTA 577547 295.26 200 American Marine 1976
(formerly Baltic
Seal)
ROSS SEAL 582641 299.17 203 Rysco 1977
(formerly Seabulk
Delaware; formerly
Ross Seal)
SEABULK WYOMING 608866 288.41 196 Zigler 1979
(formerly Bengal
Seal)
SEABULK COLORADO 643471 272.93 185 Rysco 1982
(formerly Baffin
Seal)
SEABULK VERMONT 587272 297.05 201 Rysco 1977
(formerly China
Seal)
SEABULK ARKANSAS 648553 272.93 185 Rysco 1982
(formerly Hawke
Seal)
SEABULK NEW YORK 569386 311 212 Moss Point, MS 1975
(formerly F/V
Pacific Endeavor)
SEABULK NEW JERSEY 566513 1098 373 Moss Point, MS 1975
(formerly F/V
Northern Empire)
</TABLE>
Exhibit K-2
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
OFFICIAL GROSS NET PLACE AND YEAR
NAME OF VESSEL NUMBER TONS TONS OF CONSTRUCTION
<S> <C> <C> <C> <C>
SEABULK RHODE 621641 258 176 Bourg, LA 1980
ISLAND
(formerly Bolivar)
VIGILANT 634724 197 134 Rysco Shipward 1981
DELAWARE 965565 197 134 San Diego, CA 1952
MARY DEE SANDERS 647228 148 100 Port Arthur, TX 1941
</TABLE>
Exhibit L
#20170954.1
<PAGE>
B. ACQUISITIONS TO BE MORTGAGED AFTER THE EFFECTIVE DATE*
<TABLE>
<CAPTION>
PLACE & YEAR PROPOSED DATE
OFFICIAL GROSS NET OF OF
NAME OF VESSEL NUMBER TONS TONS CONSTRUCTION ACQUISITION
- -------------- -------- ------ ---- ------------ ------------
<S> <C> <C> <C> <C> <C>
SEABULK NEW YORK 569386 311 212 Moss Point, 10/25/96
(formerly F/V MS 1975
Pacific Endeavor)
SEABULK NEW JERSEY 566513 1098 373 Moss Point, 11/21/96
(formerly F/V MS 1975
Northern Empire)
MATAGORDA ISLAND 8124670 768 550 Halter on or before
Marine, Inc. 4/15/97
1981
JEFFERSON 8003452 900 550 Quality on or before
Shipyard 4/15/97
1981
SABINE 610461 926 450 Halter on or before
Marine, Inc. 6/30/97
1979
SEABULK RHODE ISLAND 621641 258 176 Bourg, LA 1/9/97
(formerly Bolivar) 1980
ARANSAS 620859 850 425 Halter on or before
Marine, Inc. 6/30/97
1980
JOPEYE 1034084 80 54 Breaux's Bay on or before
Craft 1995 4/15/97
ANNA P. 992165 250 75 Breaux on or before
Brothers 2/28/97
Ent. 1993
CAPT. EVAN 978590 219 65 Breaux's Bay on or before
Craft 1991 2/28/97
CAPT. RAMI 978136 219 65 Breaux's Bay on or before
Craft 1991 2/28/97
RIG RUNNER 973660 219 65 Breaux's Bay on or before
Craft 1991 2/28/97
VIGILANT 634724 197 134 Rysco 12/16/96
Shipyard
1981
DELAWARE 965565 197 134 San Diego, 1/6/97
CA 1952
MARY DEE SANDERS 647228 148 100 Port Arthur, 1/6/97
TX 1941
</TABLE>
* This list may be updated and amended from time to time by written
notification by the Borrowers to the Administrative Agent of any proposed
Acquisitions.
Exhibit L
#20170954.1
<PAGE>
C. MORTGAGED VESSELS
I. SEABULK OFFSHORE, LTD.
<TABLE>
<CAPTION>
Official Gross Net Place & Year of
VESSEL NAME Number Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
ANNA P. 992165 Miami, FL 250 75 Breaux Brothers Ent.
1993
SEABULK RHODE 621641 Miami, FL 258 176 Bourg, LA 1980
ISLAND (formerly
Bolivar)
CAPT. EVAN 978590 Miami, FL 219 65 Breaux's Bay Craft 1991
CAPT. RAMI 978136 Miami, FL 219 65 Breaux's Bay Craft 1991
JOPEYE 1034084 Miami, FL 80 54 Breaux's Bay Craft
1995
RIG RUNNER 973660 MIami, FL 219 65 Breaux's Bay Craft 1991
SEABULK ARKANSAS 648553 Miami, FL 272.93 185 Rysco 1982
(formerly Hawke
Seal)
SEABULK AUSTIN 600720 Port Everglades, 91 62 Blountstown, FL 1978
FL
SEABULK CAMERON 577687 Miami, FL 86 59 Loreauville, LA 1976
SEABULK COLORADO 643471 Miami, FL 272.93 185 Rysco 1982
(formerly Baffin
Seal)
ROSS SEAL 582641 Miami, FL 299.17 203 Rysco 1977
(formerly
Seabulk
Delaware;
formerly Ross
Seal)
SEABULK 967695 Miami, FL 219 65 Loreauville, LA 1990
GALVESTON
(formerly Big
Blue)
SEABULK KENTUCKY 662712 Miami, FL 627 188 Escatawpa, MS 1990
(formerly
Intersurf)
SEABULK LAMAR 629116 Miami, FL 95 64 Morgan City, LA 1981
(formerly Nautic
Runner)
SEABULK ALABAMA 644987 Port Everglades, 287 195 Chicksaw, AL 1982
FL
SEABULK ARANSAS 590229 Miami, FL 99 67 Patterson, LA 1978
(formerly
Thunderbolt;
formerly
Seminole)
</TABLE>
Exhibit L
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
Official Gross Net Place & Year of
VESSEL NAME Number Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
SEABULK 628334 Miami, FL 98 66 Houma, LA 1980
BEAUREGARD
SEABULK 645964 Port Everglades, 287 195 Chicksaw, AL 1982
CALIFORNIA FL
SEABULK 638112 Miami, FL 98 66 Loreauville, LA 1981
EVANGELINE
(formerly
Thunderroad)
SEABULK FLORIDA 645686 Port Everglades, 299 203 Lockport, LA 1982
FL
SEABULK GEORGIA 659900 Port Everglades, 290 197 Houston, TX 1984
FL Pass Christian,
Miss
SEABULK HAWAII 597511 Miami, FL 275 187 Houma, LA 1978
(formerly
Aleutian
Command)
SEABULK NEW YORK 569386 Miami, FL 311 212 Moss Point, MS 1975
(formerly F/V
Pacific
Endeavor)
SEABULK 645836 Miami, FL 98 67 Loreauville, LA 1982
JEFFERSON
(formerly
Thunderplanet)
SEABULK NEW 566513 Miami, FL 1098 373 Moss Point, MS 1975
JERSEY (formerly
F/V Northern
Empire)
SEABULK IBERIA 643917 Miami, FL 96 65 Chalmette, LA 1981
(formerly Amanda
Lynn; traded for
Thundergoddess)
SEABULK 684127 Miami, FL 97 66 Loreauville, LA 1985
LAFAYETTE
(formerly
Thunderuniverse)
SEABULK 974293 Miami, FL 199 59 Loreauville, LA 1991
LAFOURCHE
(formerly
Thunderpatriot)
SEABULK LIBERTY 680947 Miami, FL 98 67 Loreauville, LA 1985
(formerly
Thundercruise)
SEABULK 645687 Port Everglades, 299 203 New Orleans, LA 1982
LOUISIANA FL
SEABULK MADISON 617888 Miami, FL 98 66 Loreauville, LA 1980
(formerly
Thunderworld)
</TABLE>
Exhibit L
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
Official Gross Net Place & Year of
VESSEL NAME Number Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
SEABULK MONTANA 557401 Miami, FL 271.59 184 Burton 1974
(formerly Indian
Seal)
SEABULK 577547 Miami, FL 295.26 200 American Marine 1976
MINNESOTA
(formerly Baltic
Seal)
SEABULK MISSOURI 650958 Miami, FL 272.93 185 Rysco 1982
(formerly Pegaus
Seal)
SEABULK MOBILE 649804 Miami, FL 98 67 Loreauville, LA 1991
(formerly
Thunderventure)
SEABULK NASSAU 599775 Miami, FL 98 66 Loreauville, LA 1978
(formerly
Thunderation)
SEABULK OREGON 599312 Miami, FL 298 203 Blountstown, FL 1978
SEABULK ORLEANS 636895 Miami, FL 92 62 Loreauville, LA 1981
(formerly Gulf
Runner II)
SEABULK SABINE 570578 Miami, FL 86 59 Loreauville, LA 1976
(formerly
Thunderhawk)
SEABULK STARR 674994 Miami, FL 93 63 Loreauville, LA 1984
(formerly
Thundermaster)
SEABULK 662711 Miami, FL 627 188 Escatawpa, MS 1982
TENNESSEE
(formerly Big
Orange XXII)
SEABULK TEXAS 645258 Port Everglades, 294 200 Lockport, LA 1982
FL
SEABULK 611561 Miami, FL 298 203 Blountstown, FL 1979
WASHINGTON
SEABULK WINN 976173 Miami, FL 219 65 Loreauville, LA 1991
(formerly Rapid
Runner)
SEABULK WYOMING 608866 Miami, FL 288.41 196 Zigler 1979
(formerly Bengal
Seal)
SEABULK 587272 Miami, FL 297.05 201 Rysco 1977
VERMONT(formerly
ChinaSeal)
SEA ROBIN III 593509 Port Everglades, 99 66 Loreauville, LA 1978
FL
SEABULK BOSSIER 968584 Miami, FL 219 65 Loreauville, LA 1990
(formerly Storm
Runner)
</TABLE>
Exhibit L
#20170954.1
<PAGE>
<TABLE>
<CAPTION>
Official Gross Net Place & Year of
VESSEL NAME Number Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
THUNDERBAY 621746 Port Everglades, 98 66 Loreauville, LA 1980
FL
THUNDERCAT 581849 New Orleans, LA 98 66 Crown Point, LA 1977
(formerly
Apache)
THUNDERCLOUD 617291 Miami, FL 98 66 Houma, LA 1980
(formerly
Comanche)
THUNDEREAGLE 582671 New Orleans, LA 92 63 Loreauville, LA 1977
(formerly
Warrior)
THUNDER U.S.A. 670567 Port Everglades, 93 63 Loreauville, LA 1984
FL
THUNDERWAR 632285 Port Everglades, 98 66 Loreauville, LA 1981
FL
</TABLE>
Exhibit L
#20170954.1
<PAGE>
SEAMARK SOUTH
VESSEL NAME: SEAMARK MISSISSIPPI CAROLINA
Patente of Navigation: 20643-93 20644-93
Date Patente: March 24, 1993 March 24, 1993
Hailing Port: Panama Panama
Radio Call Sign: HP-6959 HP-6960
Length of Vessel: 50.60 meters 51.27 meters
Width of Vessel: 12.19 meters 12.19 meters
Height of Vessel: 3.51 meters 3.46 meters
Gross Tons: 299.56 tons 299.31 tons
Net Tons: 203.00 tons 203.00 tons
Exhibit L
#20170954.1
<PAGE>
II. SUN STATE MARINE SERVICES, INC.
<TABLE>
<CAPTION>
Off. Gross Net Place & Yr of
NAME OF VESSEL No. Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
SUN CHIEF 536753 Jacksonville, FL 142 96 Fort George Island,
FL 1971
SUN COMMANDER 514230 Jacksonville, FL 141 96 Greenville, MS 1968
SUN GYPSY 572179 Jacksonville, FL 76 52 Palatka, FL 1976
SUN MERCHANT 504113 Jacksonville, FL 125 85 Greenville, FL 1966
SUN TRADER 544795 Jacksonville, FL 74 50 Guild, TN 1972
SUN ST. JOHNS 287286 Jacksonville, FL 61 41 Jacksonville, FL
1961
SUN REBEL 275040 Jacksonville, FL 55 25 Jacksonville, FL
1957
SUN VENTURE 273020 Jacksonville, FL 69 47 Patterson, LA 1956
SUN RIVER CITY 999702 Jacksonville, FL 114 91 Green Cove Springs,
FL 1994
SUN EXPLORER 619367 Jacksonville, FL 122 83 Morgan City, LA 1980
SUN STATE NO. 1 263152 Jacksonville, FL 1533 1533 St. Louis, MO 1952
SUN STATE NO. 2 263153 Jacksonville, FL 1563 1563 St. Louis, MO 1952
SUN STATE NO. 3 289446 Jacksonville, FL 1492 1492 St. Louis, MO 1962
SUN STATE NO. 4 287971 Jacksonville, FL 1512 1512 Paducah, KY 1962
SUN STATE NO. 6 260861 Jacksonville, FL 1279 1279 Nashville, TN 1950
SUN STATE NO. 7 507486 Jacksonville, FL 1172 1172 Nashville, TN 1967
SUN STATE NO. 8 524331 Jacksonville, FL 1216 1216 Harvey, LA 1970
SUN STATE NO. 9 524332 Jacksonville, FL 1216 1216 Harvey, LA 1970
SUN STATE NO. 501 503567 Jacksonville, FL 316 316 New Orleans, LA 1976
(formerly Eastpet
No. 5)
SUN STATE NO. 701 175533 Jacksonville, FL 404 404 Neville Island,
Pittsburgh, PA 1942
SUN STATE NO. 901 255167 Jacksonville, FL 624 624 Camden, NJ 1948
SUN STATE NO. 902 253754 Jacksonville, FL 538 538 St. Louis, MO 1947
SUN STATE NO. 1101 290481 Jacksonville, FL 708 708 New Orleans, LA 1963
</TABLE>
Exhibit L
#20170954.1
<PAGE>
III. HVIDE MARINE INCORPORATED
<TABLE>
<CAPTION>
Off. No. Gross Net Place & Yr of
NAME OF VESSEL Hailing Port Tons Tons Construction
<S> <C> <C> <C> <C> <C>
BREVARD 248591 Port Canaveral, FL 138 94 Cohoes, NY 1945
CAPTAIN BRINN 283882 Port Canaveral, FL 166 113 Cohoes, NY 1960
EVERGLADES 272008 Port Everglades, FL 141 96 Cohoes, NY 1956
FORT LAUDERDALE 530647 Port Everglades, FL 147 100 Houston, TX 1971
MANATEE (formerly 279577 Port Everglades, FL 166 113 Cohoes, NY 1959
Captain Nelson)
MOBILE PERSISTENCE 239779 Port Everglades, FL 187 127 Wilmington, DE
1940
MOBILE POWER 273774 Mobile, AL 252 171 Mariners Harbor,
S.I., NY 1957
MOBILE PRIDE 521907 Mobile, AL 190 129 Slidell, LA 1969
PARAGON (formerly 596518 Port Everglades, FL 149 101 Amelia, LA 1978
Broward)
VIGILANT 634724 Port Everglades, FL 197 134 Rysco Shipyard
1981
DELAWARE 965565 Port Everglades, FL 197 134 San Diego, CA
1952
MARY DEE SANDERS 647228 Port Everglades, FL 148 100 Port Arthur, TX
1941
</TABLE>
Exhibit L
#20170954.1
<PAGE>
IV. SEABULK TRANSMARINE PARTNERSHIP, LTD.
SEABULK AMERICA
Official No. 961357
Hailing Port: Ft. Lauderdale, Florida
Gross Tonnage: 22,138
Net Tonnage: 15,701
Place of Construction: Kochi, Japan 1975
Rebuilt in United States, 1990
V. HVIDE CHARTERING, LTD.
M/V HOLLYWOOD
Official No. 678702
Hailing Port: Ft. Lauderdale, Florida
Gross Tonnage: 185
Net Tonnage: 68
Place of Construction: Fall River, Massachusetts 1984
Exhibit L
#20170954.1
<PAGE>
EXHIBIT M
to the
Amended and Restated
Credit Agreement
PERCENTAGE INTERESTS
<TABLE>
<CAPTION>
PERCENTAGE
INTEREST
IN EACH FACILITY A & D FACILITY B FACILITY C FACILITY F
FACILITY COMMITMENT COMMITMENT COMMITMENT COMMITMENT
BANK (%) (US$) (US$) (US$) (US$)
<S> <C> <C> <C> <C> <C>
Citibank, N.A 24.49 4,897,159.64 13,898,075.00 1,371,440.00 12,245,000.00
The First National
Bank of Boston 22.16 4,432,865.18 12,575,800.00 1,240,960.00 11,080,000.00
BNY Financial
Corporation 21.09 4,218,362.76 11,968,575.00 1,181,040.00 10,545,000.00
Hibernia Bank 16.13 3,225,806.46 9,153,775.00 903,280.00 8,065,000.00
AmSouth Bank of
Florida 16.13 3,225,806.46 9,153,775.00 903,280.00 8,065,000.00
100.00 20,000,000.00 56,750,000.00 5,600,000.00 50,000,000.00
</TABLE>
Exhibit M
#20170954.1
<PAGE>
EXHIBIT N-1
to the
Amended and Restated
Credit Agreement
FORM OF ACQUISITION SUPPLEMENT
FOR UNITED STATES FLEET MORTGAGE
SUPPLEMENT NO. [ ] TO FIRST PREFERRED FLEET MORTGAGE
BY [NAME OF SHIPOWNER]
Supplement No. [ ] dated as of [ , ] amending and
supplementing the First Preferred Fleet Mortgage dated as of September 30, 1994,
as amended by the Amendment No. 1 dated as of [ , ], [Supplement No. 2] dated as
of [ , ], [Supplement No. 3] dated as of [ , ], [Supplement No. 4] dated as of [
, ] and [Supplement No. 5] dated as of [ , ] [LIST OF EACH OTHER RECORDED
MORTGAGE SUPPLEMENT OR AMENDMENT AND DATE] (the First Mortgage as amended by the
Amendment No. 1, [Supplement No. 2], [Supplement No. 3], [Supplement No. 4] and
[Supplement No. 5] shall be referred to herein as the "First Mortgage") by [Name
of Shipowner], a Florida [LIMITED PARTNERSHIP OF WHICH THE GENERAL PARTNER IS
NAME OF GENERAL PARTNER OR CORPORATION], 2200 Eller Drive, Building 27, P.O. Box
13038, Port Everglades, Fort Lauderdale, Florida (the "Shipowner") to First
Union National Bank (as successor by merger with First Fidelity Bank, National
Association), a national banking association organized and existing under the
laws of the United States of America, 765 Broad Street, Newark, New Jersey,
U.S.A., not in its individual capacity, but solely as trustee (hereinafter
referred to as the "Mortgagee")under the Master Vessel Trust Agreement dated
September 29, 1994 as amended and restated by the Amended and Restated Master
Vessel Trust Agreement dated as of February 3, 1997 (the "Master Vessel Trust
Agreement") pursuant to that certain Credit Agreement dated as of September 28,
1994 as amended by Amendment No. 1 dated as of May 15, 1995, Amendment No. 2
dated as of March 26, 1996, as amended and restated by an Amended and Restated
Credit Agreement dated as of June 21, 1996, as amended by Amendment No. 1
thereto dated December 17, 1996 and as subsequently amended and restated by that
certain Amended and Restated Credit Agreement dated as of February 3, 1997 (the
"Credit Agreement") by and among the Shipowner, and the other Borrowers named
therein, Citibank, N.A., as administrative agent (the "Administrative Agent"),
The First National Bank of Boston as letter of credit agent (the "Letter of
Credit Agent") and the Banks named therein.
Exhibit N-1
#20170954.1
<PAGE>
WHEREAS:
A. The Shipowner is the sole owner of the whole of
the United States flag vessels listed in Exhibit B attached to
the Mortgage and made a part thereof;
B. The First Preferred Fleet Mortgage was recorded by
the Marine Documentation Officer at the Port of Miami, Florida in
Book [ ] at Page/Inst. [ ] on [date of recording] at [time
of recording];
C. The Amendment No. 1 to the First Mortgage was
recorded by the Marine Documentation Officer at the Port of
Miami, Florida in Book [ ] at Page/Inst. [ ] on [date of
recording] at [time of recording];
D. [The Supplement No. 2] to the First Mortgage was
recorded by the Marine Documentation Officer at the National
Vessel Documentation Center in Book [ ] at Page/Inst. [ ]
on [date of recording ] at [time of recording];
E. The [Supplement No. 3] to the First Mortgage was
recorded by the Marine Documentation officer at the National
Vessel Documentation Center in Book [ ] at page/Inst. [ ]
on [date of recording] at [time of recording];
F. The [Supplement No. 4] to the First Mortgage was
recorded by the Marine Documentation officer at the National
Vessel Documentation Center in Book at page/Inst. [ ] on [date
of recording] at [time of recording;
[INCLUDE RECORDING INFORMATION FOR EACH PRIOR MORTGAGE
SUPPLEMENT OR AMENDMENT -- SEE CLAUSES C-F ABOVE]
[ ] The Shipowner has acquired the vessels listed in Schedule
A hereto which, pursuant to the terms of the Credit Agreement, shall be subject
to the Mortgage.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Shipowner and Mortgagee hereby covenant and agree as follows:
1. Exhibit B to the Mortgage is hereby amended to
add in the vessels listed in Schedule A to this Supplement No. [ ]; such that
the vessels listed on Schedule A hereto are henceforth mortgaged to the
Mortgagee and the term "Vessels" in Exhibit B shall be deemed to include the
Vessels listed in Schedule A hereto.
2. Whenever the term "Mortgage" is used herein,
in the Credit Agreement or in the First Mortgage it shall be
deemed to mean and refer to the First Mortgage as amended and
supplemented by this Supplement No. [ ].
Exhibit N-1
#20170954.1
<PAGE>
3. For the purpose of recording this Mortgage
Supplement as required by United States Maritime Law, this Mortgage Supplement
Mortgages the Vessels listed on Schedule A hereto. All other Vessels listed on
Exhibit B to the Mortgage continue to be subject to the terms of the Mortgage.
The total amount of the Mortgage, the maturity dates of the Mortgage and the
discharge amount remain unchanged.
4. The Shipowner shall pay all costs and expenses
associated with the preparation, documentation and recording of this Supplement
No. [ ], including without limitation, Coast Guard fees and Mortgagee's
attorneys' fees and expenses.
5. All of the terms, provisions, conditions and
covenants herein contained shall be binding upon Shipowner and its permitted
successors and assigns and shall inure to the benefit of Mortgagee and its
successors and assigns.
6. Except as specifically amended and
supplemented hereby, all of the terms, covenants and conditions contained in the
Mortgage are in all respects ratified and confirmed and all of the terms,
provisions and conditions thereof shall remain in full force and effect. The
Mortgagee expressly does not hereby waive the preferred status of the Mortgage.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit N-1
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the Shipowner and the Mortgagee have
executed this Supplement No. [ ] to the First Preferred Fleet Mortgage as of the
day and year first above written.
[NAME OF SHIPOWNER]
By:______________________________
Name:
Title:
FIRST UNION NATIONAL BANK, not in its
individual capacity, but solely as
trustee
By:______________________________
Name:
Title:
Exhibit N-1
#20170954.1
<PAGE>
County of Essex )
: ss.:
State of New Jersey )
On this ____ day of [ ], [ ] before me personally came to me
known and known to me to be the person who executed the foregoing Supplement No.
, who being by me duly sworn did depose and say that he/she resides at [
]; that he/she is the Vice President for FIRST UNION NATIONAL
BANK, the corporation described in and which executed the foregoing Supplement
No. [ ] to First Preferred Fleet Mortgage; that he/she signed his/her name
thereto pursuant to authority granted to him/her by the Board of Directors of
said corporation and he/she further acknowledged that the instrument is the act
indeed of said corporation.
-----------------------------------
Notary Public
Exhibit N-1
#20170954.1
<PAGE>
)
: ss.:
)
On this ______ day of [ ], [ ], before me personally appeared
[ ], to me known, who, being by me duly sworn, did depose and say that her/his
address is c/o Hvide Marine Incorporated, 2200 Eller Drive, P.O. Box 13038 Port
Everglades Station, Fort Lauderdale, FL 33316 and that s/he is the [NAME OF
SHIPOWNER], a Florida described in and which executed the foregoing instrument;
and that s/he signed her/his name to said Mortgage Supplement under the
authority of the [Certificate of Limited Partnership of said limited
partnership][Board of Directors] and that the same is the free and voluntary act
and deed of said [limited partnership][corporation] for the uses and purposes
therein expressed.
-----------------------------------
Notary Public
Exhibit N-1
#20170954.1
<PAGE>
Schedule A to the Supplement No. [ ] to the First Preferred
Mortgage By [ ] (SHIPOWNER)
Dated as of [ ]
OFF. GROSS NET PLACE & YEAR OF
VESSEL NAME NO. HAILING PORT TONS TONS CONSTRUCTION
Exhibit N-1
#20170954.1
<PAGE>
EXHIBIT N-2
to the
Amended and Restated
Credit Agreement
Form of Acquisition Supplement for
Panamanian Fleet Naval Mortgage
SUPPLEMENT NO. [ ] TO FIRST PRIORITY FLEET NAVAL MORTGAGE
BY SEABULK OFFSHORE, LTD.
Supplement No. [ ] dated as of ________, 199__ amending and
supplementing the First Priority Fleet Naval Mortgage dated September 30, 1994,
as amended by the Amendment No. 1 dated May 15, 1995, and Amendment No. 2 dated
March 26, 1996, Supplement No. 3, dated August 6, 1996 and Supplement No. 4
dated February __, 1997 (the First Mortgage as amended by each of Amendment No.
1, Amendment No. 2, Supplement No. 3 and Supplement No. 4 shall be referred to
herein as the "First Mortgage") by SEABULK OFFSHORE, LTD., a Florida limited
partnership domiciled at 2200 Eller Drive, P.O. Box 13038, Port Everglades
Station, Fort Lauderdale, Florida, U.S.A. (herein referred to as the
"Shipowner") in favor of First Union National Bank (as successor by merger with
First Fidelity Bank, National Association), a national banking association
organized and existing under the laws of the United States of America, 765 Broad
Street, Newark, New Jersey, U.S.A., (hereinafter referred to as the "Mortgagee")
not in its individual capacity, but solely as trustee under the Amended and
Restated Master Vessel Trust Agreement dated as of February 3, 1997 (the "Trust
Agreement") pursuant to that certain Credit Agreement dated as of September 28,
1994 as amended by Amendment No. 1 dated as of May 15, 1995, Amendment No. 2
dated as of March 26, 1996, Amended and Restated Credit Agreement dated as of
June 21, 1996, Amendment No. 1 thereto dated December 17, 1996 and the Amended
and Restated Credit Agreement dated as of February 3, 1997 (the "Credit
Agreement") by and among the Shipowner and the other Borrowers named therein and
Citibank, N.A., as the administrative agent (the "Administrative Agent"), The
First National Bank of Boston as the letter of credit agent (the "Agent") and
the Banks as defined therein.
WHEREAS:
A. The Shipowner is the sole owner of the whole of the Panamanian
flag vessels listed in Exhibit B attached to the Mortgage and made
a part thereof (the "Vessels");
B. Pursuant to the Credit Agreement, and as security
for promissory notes and other obligations, the Shipowner has
heretofore executed and delivered the First Mortgage to the
Mortgagee;
Exhibit N-2
#20170954.1
<PAGE>
C. The Shipowner has agreed to mortgage to the
Mortgagee any Panamanian vessels acquired by one Shipowner;
D. The Shipowner has acquired the Panamanian flag
vessels listed on Schedule A hereto;
E. The First Mortgage was recorded at the Office of the Public
Registry of Panama, Microfilm (Mercantile) Section, at Microjacket N-16589, Roll
44151, Frame 0020 on November 9, 1994 with respect to M/V SEAMARK MISSISSIPPI,
and at Microjacket N- 16590, Roll 44151, Frame 0053 on November 9, 1994 with
respect to
M/V SEAMARK SOUTH CAROLINA;
F. The Amendment No. 1 to the First Mortgage was
recorded at the Office of the Public Registry of Panama, Microfilm
(Mercantile) Section, at Microjacket N-16589, Roll 49128, Frame
0065 on March 25, 1996 with respect to M/V SEAMARK MISSISSIPPI, and
at Microjacket N-16590, Roll 49128, Frame 116 on March 25, 1996
with respect to M/V SEAMARK SOUTH CAROLINA;
G. The Amendment No. 2 to the First Mortgage was
recorded at the Office of the Public Registry of Panama, Microfilm
(Mercantile) Section, at Microjacket _______, Roll _______, Frame
____ on _________ __, 199_ with respect to M/V SEAMARK MISSISSIPPI,
and at Microjacket _________, Roll _____, Frame ____ on _________
__, 199_ with respect to M/V SEAMARK SOUTH CAROLINA;
H. The Supplement No. 3 to the First Mortgage was
recorded at the Office of the Public Registry of Panama, Microfilm
(Mercantile) Section, at Microjacket _______, Roll _______, Frame
____ on _________ __, 199_ with respect to M/V SEAMARK MISSISSIPPI,
and at Microjacket _________, Roll _____, Frame ____ on _________
__, 199_ with respect to M/V SEAMARK SOUTH CAROLINA;
I. The Supplement No. 4 to the First Mortgage was
recorded at the Office of the Public Registry of Panama, Microfilm
(Mercantile) Section, at Microjacket _______, Roll _______, Frame
____ on _________ __, 199_ with respect to M/V SEAMARK MISSISSIPPI,
and at Microjacket _________, Roll _____, Frame ____ on _________
__, 199_ with respect to M/V SEAMARK SOUTH CAROLINA;
J. The Supplement No. [ ] to the First Mortgage was
recorded at the Office of the Public Registry of Panama, Microfilm
(Mercantile) Section, at Microjacket _______, Roll _______, Frame
____ on _________ __, 199_ with respect to M/V SEAMARK MISSISSIPPI,
and at Microjacket _________, Roll _____, Frame ____ on _________
__, 199_ with respect to M/V SEAMARK SOUTH CAROLINA;
[INCLUDE RECORDING INFORMATION FOR EACH PRIOR MORTGAGE
SUPPLEMENT]
Exhibit N-2
#20170954.1
<PAGE>
K. The Shipowner, the Banks, and the Mortgagee have agreed to
amend and supplement the First Mortgage pursuant to Section 8.01 of the Credit
Agreement so that the First Mortgage includes the vessels listed on Schedule A
hereto as "Vessels" listed on Exhibit B to the Mortgage;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Shipowner and the Mortgagee hereby covenant and agree as
follows:
1. The Shipowner hereby continues to be justly indebted
to the Mortgagee for the Loan in the principal amount of One
Hundred Thirty Four Million One Hundred Thousand United States
Dollars (US$134,100,000).
2. Exhibit B of the Mortgage is amended and supplemented to
include the vessels listed in Schedule A hereto and add to Exhibit B of the
Mortgage, such that the Vessels listed on Schedule A hereto are henceforth
mortgaged to the Mortgagee and the term "Vessels" in Exhibit B shall be deemed
to include the Vessels listed in Schedule A hereto. All other Vessels listed on
Exhibit B to the Mortgage continue to be subject to the Mortgage.
3. Wherever in the First Mortgage, or the Credit Agreement, or
herein, the term "this Mortgage" or the "Mortgage" is used, it shall be deemed
to mean and refer to the First Mortgage as amended and supplemented by this
Supplement No. [ ].
4. Except as specifically amended and supplemented hereby, all
of the terms, covenants and conditions contained in the Mortgage are in all
respects ratified and confirmed and all of the terms, provisions and conditions
thereof shall remain in full force and effect. The Mortgagee expressly does not
hereby waive the preferred status of the Mortgage.
5. In the event of any inconsistency or conflict
between this Supplement No. [ ] and the Mortgage, the terms,
provisions and conditions of this Supplement No. [ ] shall govern
and control.
6. The Shipowner shall pay all costs and expenses
associated with the preparation, documentation and recording of
this Supplement No. [ ], including without limitation, Coast Guard
fees and the Mortgagee's attorneys' fees and expenses.
7. All of the terms, provisions, conditions and covenants
herein contained shall be binding upon the Shipowner and its permitted
successors and assigns and shall inure to the benefit of the Mortgagee and its
successors and assigns.
Exhibit N-2
#20170954.1
<PAGE>
IN WITNESS WHEREOF, the Shipowner and the Mortgagee have
executed this Supplement No. [ ] to the First Priority Fleet Naval Mortgage to
be executed as of the day and year first above written.
SEABULK OFFSHORE, LTD.
By Seabulk Tankers, Ltd. its general partner
By Hvide Marine Transport, Incorporated
its general partner
By:
Name:
Title:
FIRST UNION NATIONAL BANK, not in its
individual capacity, but solely as trustee
By:
Name:
Title: Assistant Vice President
Exhibit N-2
#20170954.1
<PAGE>
I, ________________, Notary Public, duly authorized, admitted
and sworn, practicing at the County of New York, State of New York, United
States of America, do hereby certify that:
1. [ ], who has executed this Supplement
No. [ ] to First Priority Fleet Naval Mortgage on behalf of
SEABULK OFFSHORE, LTD., hereinafter the "MORTGAGOR," is
personally known to me and that his signature is authentic;
2. Sufficient evidence has been presented to me that [ ] on
behalf of the MORTGAGOR is duly authorized by his respective principal to
execute and accept the Supplement No.
[ ] to First Priority Fleet Naval Mortgage.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my seal of office this ______ day of ______, 199__.
-----------------------------
Notary Public
[To be authenticated by a Panamanian Consul.]
Exhibit N-2
#20170954.1
<PAGE>
I, ________________, Notary Public, duly authorized, admitted
and sworn, practicing at the County of New York, State of New York, U.S.A., do
hereby certify that:
1. [ ] accepted this Supplement No. [ ]
to First Priority Fleet Naval Mortgage on behalf of FIRST UNION
NATIONAL BANK, hereinafter the "MORTGAGEE," is personally known
to me and that his signature is authentic;
2. Sufficient evidence has been presented to me that
[ ] on behalf of the MORTGAGEE is duly authorized by
his principal to execute and accept the Supplement No. [ ] to
First Priority Fleet Naval Mortgage.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my seal of office this ______ day of ______, 199__.
-----------------------------
Notary Public
[To be authenticated by a Panamanian Consul.]
Exhibit N-2
#20170954.1
<PAGE>
SCHEDULE A TO
SUPPLEMENT NO. [ ]
TO FIRST PRIORITY FLEET NAVAL MORTGAGE
BY SEABULK OFFSHORE LTD.
VESSEL NAME:
Patente of Navigation:
Date Patente:
Hailing Port: Panama
Radio Call Sign:
Length of Vessel:
Width of Vessel:
Height of Vessel:
Gross Tons:
Net Tons:
============================================ ===================================
Exhibit N-2
#20170954.1
<PAGE>
SCHEDULE A
to the
Amended and Restated
Credit Agreement
LIST OF BORROWERS
Hvide Marine Incorporated
Hvide Chartering, Ltd.
Hvide Marine Transport, Incorporated
Seabulk Offshore, Ltd.
Seabulk Tankers, Ltd.
Seabulk Transmarine Partnership, Ltd.
Seabulk Ocean Systems Corporation
Sun State Marine Services, Inc.
Schedule A
#20170954.1
<PAGE>
SCHEDULE B
to the
Amended and Restated
Credit Agreement
RELATED PARTY CONTRACTS
Post-Retirement Benefits Agreement between Hvide Marine
Incorporated and Hans J. Hvide dated as of the 28th day of
September, 1994.
Redemption Agreement between Hvide Marine Incorporated and Hans
J. Hvide dated as of the 28th day of September, 1994.
Consulting Agreement between Sun State Marine Services, Inc. and
Frank V. Oliver, Jr. dated as of the 30th day of September,
1994.
Administrative Services and Facilities Agreement between certain of the
Borrowers and certain of their subsidiaries relating to administrative
overhead allocations.
Bareboat Charter for the tug "Cape Canaveral" between Hvide
Chartering, Ltd. and Hvide Marine Incorporated.
Documentsand promissory notes between or from Hvide Marine Incorporated with or
to each of the Related Parties relating to the acquisition of
partnership interests in Hvide Chartering, Ltd. and Hvide Offshore
Services, Ltd.
Schedule B
#20170954.1
<PAGE>
SCHEDULE C
to the
Amended and Restated
Credit Agreement
LIST OF APPRAISERS
A. Tugs
Charles A. Smith, Stuckney Dufour & Associate
B. Offshore Vessels
Bassoe Offshore (USA), Inc., Stickney Dufour & Associate, Rivers & Gulf
Marine Surveyors, Inc.
C. Vessels
A.L. Burbank, Francis A. Martin & Ottaway, Inc., Noble &
Denton, Jacques Pierot Jr. et Sons Inc.
Schedule C
#20170954.1
<PAGE>
SCHEDULE D
to the
Amended and Restated
Credit Agreement
HVIDE MARINE INCORPORATED
COLLATERAL VALUES
DATE OF APPRAISED
VESSEL APPRAISAL VALUE
I. TANKERS (1)
SEABULK AMERICA 05/17/96 38,250,000
38,250,000
II. HARBOR TUGS (10)
BREVARD 06/04/96 800,000
PARAGON (formerly BROWARD) 06/04/96 2,700,000
HOLLYWOOD
(CAPE CANAVERAL) 06/04/96 3,000,000
CAPTAIN BRINN 06/04/96 600,000
MANATEE
(formerly CAPTAIN NELSON) 06/04/96 600,000
EVERGLADES 06/04/96 600,000
FORT LAUDERDALE 06/04/96 3,000,000
MOBILE PERSISTENCE 06/04/96 175,000
MOBILE PRIDE 06/04/96 2,000,000
MOBILE POWER 06/04/96 800,000
-----------
14,275,000
III. TUGS & BARGES (23)
SUN CHIEF 05/13/96 200,000
SUN COMMANDER 05/13/96 200,000
SUN EXPLORER 05/13/96 300,000
SUN GYPSY 05/13/96 150,000
SUN MERCHANT 05/13/96 150,000
SUN REBEL 05/13/96 70,000
SUN RIVER CITY 05/13/96 500,000
SUN ST. JOHNS 05/13/96 90,000
SUN TRADER 05/13/96 100,000
SUN VENTURE 05/13/96 70,000
SUN STATE NO. 1 05/13/96 150,000
SUN STATE NO. 2 05/13/96 150,000
SUN STATE NO. 3 05/13/96 150,000
SUN STATE NO. 4 05/13/96 150,000
SUN STATE NO. 6 05/13/96 150,000
Schedule D
#20170954.1
<PAGE>
DATE OF APPRAISED
VESSEL APPRAISAL VALUE
SUN STATE NO. 7 05/13/96 150,000
SUN STATE NO. 8 05/13/96 225,000
SUN STATE NO. 9 05/13/96 250,000
SUN STATE NO. 501 05/13/96 5,600
SUN STATE NO. 901 05/13/96 105,000
SUN STATE NO. 902 05/13/96 105,000
SUN STATE NO. 701 05/13/96 30,000
SUN STATE NO. 1101 05/13/96 30,000
----------
3,500,600
IV. SUPPLY BOATS (11)
SEABULK ALABAMA 05/27/96 2,700,000
SEABULK CALIFORNIA 05/27/96 2,700,000
SEABULK FLORIDA 05/27/96 2,700,000
SEABULK GEORGIA 05/27/96 2,900,000
SEABULK LOUISIANA 05/27/96 2,700,000
SEABULK TEXAS 05/27/96 2,700,000
SEAMARK MISSISSIPPI 05/27/96 2,400,000
SEAMARK SO. CAROLINA 05/27/96 2,600,000
SEABULK OREGON 05/27/96 2,300,000
SEABULK WASHINGTON 05/27/96 2,300,000
SEABULK HAWAII (formerly ALEUTIAN) 05/27/96 2,400,000
-----------
28,400,000
V. CREWBOATS (26)
SEABULK NASSAU (formerly T-RATION) 05/27/96 650,000
THUNDERBAY 05/27/96 725,000
SEABULK LIBERTY (formerly T-CRUISE) 05/27/96 900,000
SEABULK IBERIA 05/27/96 480,000
SEABULK SABINE (formerly T-HAWK) 05/27/96 360,000
SEABULK CAMERON (formerly T-HORSE) 05/27/96 360,000
SEABULK STARR (formerly T-MASTER) 05/27/96 960,000
SEABULK LAFOURCHE (formerly T-PATRIOT) 05/27/96 1,600,000
SEABULK JEFFERSON (formerly 05/27/96 850,000
Thunderplanet)
THUNDERROAD 05/27/96 800,000
THUNDER U.S.A. 05/27/96 960,000
THUNDERUNIVERSE 05/27/96 960,000
SEABULK MOBILE (formerly T-VENTURE) 05/27/96 850,000
THUNDERWAR 05/27/96 800,000
Schedule D
#20170954.1
<PAGE>
DATE OF APPRAISED
VESSEL APPRAISAL VALUE
SEABULK MADISON (formerly Thunderworld) 05/27/96 725,000
SEABULK BEAUREGARD (formerly FTHM RUNR) 05/27/96 725,000
NAUTIC RUNNER 05/27/96 800,000
SEA ROBIN III 05/27/96 680,000
THUNDERCAT (formerly APACHE) 05/27/96 360,000
THUNDERCLOUD (formerly COMANCHE) 05/27/96 725,000
SEABULK ARANSAS (formerly T-BOLT) 05/27/96 650,000
THUNDEREAGLE (formerly WARRIOR) 05/27/96 360,000
SEABULK ORLEANS (formerly GULF RUNNER 05/27/96 480,000
II)
STORM RUNNER 05/27/96 1,600,000
SEABULK WINN (formerly RAPID RUNNER) 05/27/96 1,600,000
BIG BLUE 05/27/96 1,600,000
-----------
21,560,000
VI. UTILITY BOATS (1)
SEABULK AUSTIN 05/27/96 360,000
360,000
TOTAL VESSELS - 78
VII. DRYDOCKS (3)
DRYDOCK NO. 1 04/08/94 100,000
DRYDOCK NO. 2 04/08/94 175,000
DRYDOCK NO. 3 04/08/94 500,000
-------
775,000
TOTAL @ 6/3/96 107,120,600
VIII. SEAL FLEET SUPPLY BOATS (8)
CHINA SEAL 07/19/96 1,800,000
HAWKE SEAL 07/19/96 3,000,000
PEGASUS SEAL 07/19/96 3,200,000
BAFFIN SEAL 07/19/96 3,200,000
BALTIC SEAL 07/19/96 3,000,000
INDIAN SEAL 07/19/96 2,000,000
BENGAL SEAL 07/19/96 2,800,000
ROSS SEAL 07/19/96 1,800,000
----------
30,800,000
IX. ACQUISITIONS
SUPPLY BOATS
Schedule D
#20170954.1
<PAGE>
DATE OF APPRAISED
VESSEL APPRAISAL VALUE
S/B TENNESSEE
(formerly BIG ORANGE) 07/07/96 3,250,000
S/B KENTUCKY
(formerly INTERSURF) 07/10/96 3,150,000
S/B NEW YORK
(formerly PACIFIC ENDEAVOR) 10/22/96 5,500,000*
S/B NEW JERSEY
(formerly NORTHERN EMPIRE) 10/22/96 5,500,000*
SEABULK RHODE ISLAND (formerly 11/06/96 4,800,000
BOLIVAR)
TUGS
VIGILANT 11/26/96 3,400,000
DELAWARE 11/02/96 400,000
MARY DEE SANDERS 11/26/96 200,000
26,200,000
TOTAL POST-OFFERING $154,120,600
* As built.
Schedule D
#20170954.1
<PAGE>
SCHEDULE E
to the
Amended and Restated
Credit Agreement
Existing Litigation/Claims Involving
the Borrowers and/or Subsidiaries
1. SEABULK TRANSMARINE PARTNERSHIP LTD. VS. NORFOLK
------------------------------------------------
SHIPBUILDING AND DRYDOCK: Seabulk Transmarine Partnership,
------------------------
Ltd. ("Seabulk") and Norfolk Shipbuilding and Drydock
Corporation ("Norshipco") have filed suits against each
other concerning the contract (the "Contract") under which
Norshipco rebuilt the wrecked tanker FUJI into the SEABULK
AMERICA by joining the FUJI's stern with the forebody of
barge 4102. The Contract price was $5,947,797, of which the
Company has paid $3,568,678. Norshipco has asserted claims
for contract additions, constructive changes, acceleration,
delay, disruption, and attorneys' fees and expenses of
approximately $8.5 million (including the unpaid portion of
the contract price). Seabulk has asserted claim against
Norshipco for unfinished work, contract deficiencies, and
liquidated damages of approximately $5.6 million. Seabulk
has also asserted a claim against the builder's risk insurer
(Vesta) to recover losses caused by the vessel's defective
hull lines and defective propeller nozzle. The value of
that claim is presently uncertain.
The dispute is the subject of an action pending in the United States
District Court for the Eastern District of Louisiana. Both parties'
major claims involve complex factual and legal issues that require
extensive pretrial discovery and preparations that are now underway.
The process of substantiating and documenting each party's respective
claims is incomplete. Due to the highly technical nature of the issues,
the court has nominated a Special Master, who is a naval architect and
maritime attorney, to hear all claims asserted in the lawsuit. The
Special Master will make conclusions of law and findings of fact, which
will be subject to the court's review. It is presently not possible to
predict the outcome of the lawsuit.
Please note that in addition to the claims alleged by Norshipco in the
litigation herein described, Norshipco has also asserted a claim for
$10 million in punitive damages. It is the conclusion of counsel for
the Company that the claim is not material because any recovery upon
this claim is remote.
2. KEYSTONE SHIPPING COMPANY, ET AL. VS. UNITED STATES OF
AMERICA, ET. AL.: In this litigation, two tanker operators,
Keystone Shipping Co. and Marine Transport Lines, challenged
determinations of the U.S. Coast Guard and the Maritime
Administration that allow the NYV SEABULK AMERICA to operate
free of domestic-trading restrictions that were applicable
to its components, M/V FUJI and former barge 4102. On
Schedule F
#20170954.1
<PAGE>
September 2, 1992, the court affirmed some of the agencies'
determinations and remanded others to the two agencies for further
explanation of their actions.
The agencies issued their further explanations, affirming their
previous decisions, in the summer of 1994. Since that time, neither the
plaintiffs nor the court have taken any farther action. In the event
that this litigation is revived, the Company believes that the
agencies' determinations will be upheld upon judicial review.
3. U.S. OFFSHORE, INC. AND J. MICHAEL JONES VS. SEABULK
----------------------------------------------------
OFFSHORE, LTD., SEABULK TANKERS, LTD., SEABULK TRANSMARINE
----------------------------------------------------------
II, INC., HVIDE MARINE TRANSPORT, INCORPORATED, HVIDE MARINE
------------------------------------------------------------
INTERNATIONAL, INC. AND HVIDE SHIPPING, INCORPORATED, ET AL.
------------------------------------------------------------
BROWARD COUNTY CIRCUIT COURT CASE NO. 93-32963(09): On
--------------------------------------------------
December 22, 1993, U.S. Offshore, Inc. and J. Michael Jones
filed a lawsuit against Hvide Marine Incorporated and its
various entities for alleged breach of a settlement
agreement between the parties dated December, 1990
("Agreement"). It is alleged that the Hvide entities
breached the Agreement by failing to pay to U.S. Offshore
five percent (5%) of gross revenue, as defined in the
Agreement. This case is in the discovery phase.
The Company is vigorously defending this lawsuit and believes that it
has paid U.S. Offshore more money than U.S. offshore is entitled to
receive under the Agreement. The case will hinge on the interpretation
of the phase "gross revenue" as defined in the Agreement. It is
difficult to determine with any degree of certainty the probability of
a favorable or unfavorable outcome at this stage of the case, although
the Company appears to have meritorious defenses to this action. It is
too early in this litigation and in counsel's investigation to
determine that a particular range of loss is probable.
4. MICHAEL BROWN, ET AL. VS. HVIDE SHIPPING, INCORPORATED: On
------------------------------------------------------
February 5, 1987, Michael Brown, et al. filed suit in the
Circuit Court of the 17th Judicial Circuit in and for
Broward County, Florida (Case No. 87-03042 CA) against Hvide
Shipping, Incorporated. The complaint alleges breach of
employment contracts and also seeks a declaratory judgment
as to such plaintiff rights under alleged employment
contracts. The parties submitted this matter to binding
arbitration which has occurred and a decision has been
rendered in favor of the various plaintiffs. The decision
requires the Company to pay plaintiffs certain past overtime
wages, and the Company is in the process of calculating such
past overtime wages. Although insurance coverage does not
appear to apply to this potential liability, same not appear
to involve sums in excess of what the Company deems
"substantial".
5. INSURANCE - COVERED PERSONAL INJURY/JONES ACT-RELATED
LITIGATION: Borrowers is a Defendant in personal injury or
Jones Act-related litigations. Borrowers represent that
Schedule F
#20170954.1
<PAGE>
each of such litigations is fully covered by applicable insurance,
except the deductible amounts.
Schedule F
#20170954.1
<PAGE>
SCHEDULE F
to the
Amended and Restated
Credit Agreement
LIENS; EXISTING INDEBTEDNESS
EXISTING DOCUMENT
Maritime Lien on the "Seabulk America" relating to Facility C
Lien created by the Loan Documents
ADDITIONS
Dynachem and Petrochem (Hudson) mortgaged to the United States of
America
Astrachem (Star) mortgaged to NorLease, Inc.
Carol mortgaged to Leppaluto Offshore.
St. Frances mortgaged to AmSouth.
Bareboat Charters
Seabulk North Carolina
Seabulk Maryland
Seabulk Virginia
David Jr.
Seabulk Jasper
Ralph Thompson
Seabulk Albany
Seabulk Baldwin
Seabulk Claiborne
Seabulk Baton Rouge
Rig Runner
Seabulk St. Charles (Royal Runner)
Magnachem
Challenger
Broward
Z-One
Z-Two
Schedule F
#20170954.1
EXHIBIT 11
HVIDE MARINE INCORPORATED
COMPUTATION OF EARNINGS (LOSS) PER SHARE
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1995 1996
--------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Income (loss) before extraordinary item and
cumulative effect........................................................... $ 358 $ (360) $ 6,033
Less: Class A Preferred Stock cash dividends.................................. 222 -- --
--------- -------- --------
Adjusted income (loss) applicable to common
shares-- primary............................................................ 136 (360) 6,033
Plus: Interest on Junior Note net of income tax effect........................ 192 807 515
--------- -------- --------
Adjusted income applicable to common shares -- fully
diluted..................................................................... $ 328 $ 447 $ 6,548
========= ======== ========
Weighted average shares outstanding............................................ 1,962 2,535 5,672
If-converted dilutive effect of Convertible Class B
Preferred Stock........................................................... 3,340 -- --
Dilutive effect of outstanding stock options................................ -- -- 146
--------- -------- --------
Common shares used in earnings (loss) per share
calculation-- primary....................................................... 5,302 2,535 5,818
If-converted dilutive effect of Junior Note.................................... 314 1,244 681
Incremental dilutive effect of outstanding stock
options..................................................................... -- -- 146
--------- -------- --------
Common shares used in earnings per share
calculation-- fully diluted................................................. 5,616 3,779 6,645
========= ======== ========
</TABLE>
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 333- 19543) pertaining to the Retirement Plan and Trust
and (Form S-8 No. 333-17621) pertaining to The Stock Option Plan for Directors,
Equity Ownership Plan and the 1996 Employee Stock Purchase Plan of Hvide Marine
Incorporated of our report dated February 20, 1997 (except for the eighth
paragraph of Note 3, as to which the date is March 25, 1997) with respect to
the consolidated financial statements of Hvide Marine Incorporated included in
the Annual Report (Form 10-K) for the year ended December 31, 1996.
Ernst & Young LLP
Miami, Florida
March 26, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<CASH> 9,617
<SECURITIES> 0
<RECEIVABLES> 16,049
<ALLOWANCES> 0
<INVENTORY> 5,517
<CURRENT-ASSETS> 38,326
<PP&E> 242,319
<DEPRECIATION> 28,889
<TOTAL-ASSETS> 273,473
<CURRENT-LIABILITIES> 47,030
<BONDS> 0
0
0
<COMMON> 11
<OTHER-SE> 101,080
<TOTAL-LIABILITY-AND-EQUITY> 273,473
<SALES> 109,356
<TOTAL-REVENUES> 109,356
<CGS> 63,777
<TOTAL-COSTS> 88,586
<OTHER-EXPENSES> (437)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,631
<INCOME-PRETAX> 9,576
<INCOME-TAX> 3,543
<INCOME-CONTINUING> 6,033
<DISCONTINUED> 0
<EXTRAORDINARY> 8,108
<CHANGES> 0
<NET-INCOME> (2,075)
<EPS-PRIMARY> (0.36)
<EPS-DILUTED> (0.23)
</TABLE>
