<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
-------------
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934 (FEE REQUIRED)
For the Fiscal Year Ended
December 31, 1997
OR
[_] Transition Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934 (NO FEE REQUIRED)
For the transition period from ______________ to ______________
Commission File No. 33-82624
Moran Transportation Company
(Exact name of registrant as specified in its charter)
Delaware 06-1399280
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Greenwich Plaza, Greenwich, CT 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 625-7800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicated by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
As of March 27, 1998, all of the registrant's 44,600 issued and
outstanding shares of Common Stock, par value $.01 per share, were held by
directors, officers and affiliates of the registrant.
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MORAN TRANSPORTATION COMPANY
Index to Report on Form 10-K
For the Year Ended December 31, 1997
Item Page
PART I...................................................................... 1
1. Business..................................................... 1
2. Properties................................................... 7
3. Legal Proceedings............................................ 10
4. Submission of Matters to a Vote of Security Holders.......... 11
PART II..................................................................... 11
5. Market For Registrant's Common Equity and Related
Stockholder Matters.......................................... 11
6. Selected Consolidated Financial Data......................... 12
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 13
8. Financial Statements ........................................ 19
9. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure.......................... 19
PART III.................................................................... 20
10. Executive Officers and Directors of the Registrant........... 20
11. Executive Compensation....................................... 22
12. Security Ownership of Certain Beneficial Owners
and Management............................................... 26
13. Certain Relationships and Related Transactions............... 27
PART IV..................................................................... 28
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.................................................. 28
<PAGE>
PART I
PART I
Item 1. Business
General
Moran Transportation Company was incorporated on June 2, 1994. Moran
Transportation Company was formed by Lakes Shipping Company, Inc. ("Lakes
Shipping") and its principals, Paul R. Tregurtha and James R. Barker (who
serve as Chairman and Vice Chairman, respectively), together with members of
Mr. Barker's immediate family, certain officers of Lakes Shipping
(collectively, the "Lakes Group"), and certain members of senior management
of Moran Towing Corporation (the "Predecessor"). Moran Transportation Company
acquired the Predecessor on July 11, 1994 (the "Acquisition"). Except as
otherwise indicated, or where the context otherwise requires, the "Company"
shall refer to Moran Transportation Company, the Predecessor and/or each of
its subsidiaries.
The Company is a leading provider of tug and marine transportation services
on the East and Gulf Coasts and in the U.S. coastwise trade (the "Jones Act"
trade). Operating a fleet of 53 tugs and 15 barges, the Company serves a
diverse customer base out of the ports of Portsmouth, New Hampshire; New
York, New York; Philadelphia, Pennsylvania; Baltimore, Maryland; Norfolk,
Virginia; Jacksonville, Florida; Miami, Florida; and Beaumont/Port Arthur,
Texas. The Company has relationships that span 30 or more years with many of
its major customers in the tug services and marine transportation businesses.
Tug Services. The Company is a widely recognized leader in the tug services
industry and believes it has the greatest number of tugboats performing
ship docking and barge towing services along the East and Gulf Coasts of
the United States. The Company provides ship docking and undocking services
as well as harbor and coastwise towing for major domestic and international
bulk and container cargo shipping companies, cruise lines, car carriers,
barge transportation companies, oil companies, several municipalities, the
U.S. Navy, and the Company's own barge fleet. The Company believes that it
has a leading position in the ship docking business in each of its ports of
operations, other than in Miami, Florida, where the Company began
operations in February, 1993.
Marine Transportation. The Company's barge fleet transports fuel oil and
refined petroleum products, coal, grain and other bulk cargoes in the Jones
Act and foreign trades. The Company's barges operate under term contracts
with utilities and on both a contract and spot market basis with oil
companies, refineries, commodity trading companies and other commercial
shippers.
Sales and Marketing
Tug Services. The general manager of each operating port has ongoing
marketing responsibilities for his port. The general managers are assisted
by sales personnel based in Greenwich, Connecticut and Baltimore, Maryland.
The Company also has long-standing relationships with a network of
independent foreign agents in many of the major shipping centers of the
world.
Marine Transportation. The Company has maintained long-term relationships
with key participants in the utility, energy and agricultural sectors, and
uses those contacts to develop business. New business opportunities for the
marine transportation business are also generated by the general managers
of the Company's operating subsidiaries or divisions. The Company has the
ability to quickly assemble a multi-disciplinary team to analyze new
business opportunities and prepare and submit proposals tailored to meet
customers' needs.
1
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Competition
Tug Services. The tug services industry is highly competitive. The Company
competes with numerous competitors in the ports which its serves. The
Company competes with McAllister Brothers, Inc. in five of its ports and
with Turecamo Maritime, Inc. in New York and Philadelphia. In addition, the
Company also competes with other providers of tug services in most of the
ports it serves. Because entry into most ports is unrestricted, additional
competitors may enter the Company's current markets in the future.
Management believes that participants in the tug services market compete on
the basis of price, service (including vessel availability), relationships,
reputation, quality of operations, the ability to meet stringent safety
requirements and operational flexibility.
Marine Transportation. The marine transportation industry is highly
competitive. The industry has become increasingly concentrated in recent
years as smaller and/or economically weaker companies have gone out of
business or have been acquired by larger competitors. The Company has a
number of competitors in each of its marine transportation markets which
operate U.S. flag barges, tankers and bulkers. Certain of these competitors
have substantially greater resources than the Company. However, the number
of vessels eligible to engage in Jones Act trade has declined over the past
several years.
Management believes that participants in the tank and dry bulk barge
business compete on the basis of price, service (including vessel
availability), relationships, reputation, quality of operations, the
ability to pass stringent safety audits and operational flexibility.
Further, in light of the potential liability of oil companies and other
shippers of petroleum products under the Oil Pollution Act of 1990 ("OPA
90") and analogous state laws, management believes that some shippers
select transporters in larger measure than in the past, on the basis of a
demonstrated record of safe operations. Therefore, the Company has
implemented a number of measures in order to maintain high quality
operations and has continued to stress its long-standing commitment to safe
transportation of petroleum products in its marketing efforts.
Customers and Contracts
Tug Services. The Company offers tug services to vessel owners, operators
and their agents. The Company prides itself on its long-standing customer
relationships, which in some cases date back to before World War II. The
majority of the Company's ship docking business is performed under
one-year, renewable contracts, with the remainder being on a spot basis.
The Company also has long and established relationships with many of its
harbor and coastwise towing customers. The Company's harbor and coastwise
towing business is performed both on a contract and on a spot market basis.
No single tug services customer accounted for more than 7% of the Company's
total consolidated revenues in 1997. Although many of the Company's tug
services customers have been customers of the Company for periods in excess
of 30 years and although most of the Company's tug services customers have
had at least a five-year relationship with the Company, there can be no
assurance that any individual contract or relationship will be renewed or
continued.
Marine Transportation. The Company's marine transportation business
operates both on a term contract basis and on a spot market basis. The
Company strives to maintain an appropriate mix of contract and spot
business, based on current market conditions. No single marine
transportation customer accounted for more than 8% of the Company's total
revenues in 1997.
2
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Insurance
The Company's operations are subject to the hazards associated with operating
vessels and carrying large volumes of cargo in a marine environment. These
hazards include the risk of loss of, or damage to, the Company's vessels,
damage to property of third parties (including customers), loss or
contamination of cargo, personal injury to employees or third parties, and
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 to amounts which the Company believes represents the fair
market values of such vessels, subject to certain deductibles. Vessel
operating liabilities, resulting from such things as collision, cargo and
environmental damage and personal injury, are insured at levels believed to
be adequate primarily through the Company's participation in a protection and
indemnity mutual insurance association. However, because of the mutual nature
of such insurance, the Company is exposed to funding requirements and
coverage shortfalls in the event claims by the Company or other members
exceed available funds and reinsurance. See "Regulatory Matters-Environmental
Matters - Oil Pollution Legislation."
The Company has entered into a Marine Insurance Additional Retention
Agreement (the "Insurance Agreement") with The Interlake Steamship Company,
Lakes Shipping and Mormac Marine Transport Inc. (collectively, the "Mormac
Group"). Messrs. Tregurtha, Barker and Langlois are officers, directors
and/or direct or indirect shareholders of some or all of the entities in the
Mormac Group. The Company and the Mormac Group entered into the Insurance
Agreement in an effort to reduce insurance expense by obtaining lower
premiums through group purchases of insurance and through higher deductibles.
The Insurance Agreement also provides for allocation among the parties of any
risk arising out of the increases in insurance deductibles. Pursuant to the
Insurance Agreement, the Company and Mormac Group agreed to share any
increased insurance claims expense required to be borne by a party as a
result of insurance claims which exceed historical deductibles but are less
than the new, increased deductibles. Allocations of any increased insurance
claims expense is based upon the historical claims experience (in excess of
historical deductibles) for each party to the agreement. In the current
policy year, 65% of any additional insurance claims expense attributable to
the higher deductibles will be borne by the Company and 35% of any such
additional insurance claims expense will be borne by the Mormac Group.
Amounts payable to the Company from members of the Mormac Group totaled
$222,000 at December 31, 1997. The Company believes that the terms of the
Insurance Agreement, which was prepared in consultation with an independent
insurance broker, are similar to those that would be obtained in an
arms'-length transaction.
Regulatory Matters
General. The Company's rates for transportation of bulk cargoes, which are
not published and are negotiated with its customers, are not subject to
government regulation. The operation of tugboats and barges is subject to
regulation under various federal laws and international conventions, as
interpreted and implemented by the United States Coast Guard, as well as
under certain state and local laws. Tugboats and barges are required to meet
operational and safety standards currently established by the United States
Coast Guard. In addition, most of the Company's tugboats and all of its
barges meet construction and repair standards established by the American
Bureau of Shipping, a private vessel inspection organization. The Company's
seagoing supervisory personnel are licensed by the United States Coast Guard.
Seamen and tankermen are certificated by the United States Coast Guard. See
also "Regulatory Matters-Occupational Health Regulations".
3
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Jones Act and Related Regulations. The Jones Act restricts marine
transportation between United States ports to vessels built and registered
in the United States and owned by United States citizens. The Jones Act
also requires that all United States flag vessels be manned by United
States citizens, which significantly increases the labor and certain other
operating costs of United States flag vessel operations compared to
foreign-flag vessel operations. In addition, the United States Coast Guard
and American Bureau of Shipping maintain the most stringent regime of
vessel inspection in the world, which tends to result in higher regulatory
compliance costs for United States flag operators than for owners of
vessels registered under foreign flags. Because the Company transports
cargo between United States ports and engages in harbor work within United
States ports, most of its business depends upon the Jones Act remaining in
effect. Compliance with the requirements of the Jones Act is therefore very
important to the operations of the Company and the loss of Jones Act status
could have a significant adverse effect on the Company. In this regard,
stockholder agreements prohibit the transfer of shares of the Company's
capital stock to non-U.S. citizens. See "Certain Relationships and Related
Transactions." The Company also monitors the citizenship of its employees
and will take any remedial action necessary to insure compliance with Jones
Act requirements. There have been various on-going unsuccessful attempts in
the past by foreign governments and companies to gain access to the Jones
Act trade. These efforts have been consistently defeated by large margins
in the United States Congress. Management believes that continued efforts
will be made to gain access to such trade and if such efforts are
successful, there could be an adverse effect on the Company.
Environmental Matters. The Company is subject to various legislation and
regulations enacted to protect the environment. Under applicable law, an
owner or operator of real property may be liable for the costs of removal
or remediation of certain hazardous or toxic substances on or under such
property, regardless whether the owner or operator knew of, or was
responsible for, the presence of such materials. Moreover, persons who
arrange for the disposal or treatment of wastes containing such substances
at an off-site facility may also be liable for the costs of removal or
remediation of such substances at the off-site facility, regardless whether
the facility is owned or operated by such person. In this regard, the
Company and its predecessors have conducted vessel repair and maintenance
activities at certain owned or leased sites, and have disposed of wastes
that may contain such substances at off-site waste management facilities.
As discussed below under "Legal Proceedings", Jakobson Shipyard, Inc. a
subsidiary of the Company ("Jakobson") has been named as a potentially
responsible party for the cleanup of an off-site waste management facility
in Syosset, New York. It is possible that the Company will in the future be
subject to additional claims for, and incur costs in connection with,
remediation of other real property. However, the extent of any such
liability and the timing of any payments to be made by the Company, if any,
are not determinable.
The Company may also incur future costs and expenses in order to ensure
compliance with existing or new requirements under applicable environmental
laws. In many instances, the ultimate costs under such environmental laws
and the time period during which such costs are likely to be incurred are
not determinable: See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Other Matters."
Oil Pollution Legislation. As a transporter of petroleum products, the
Company is subject to oil pollution legislation. OPA 90 substantially
affects the liability exposure of owners and operators of vessels, oil
terminals and pipelines. Under OPA 90, each responsible party for a vessel
or facility from which oil is discharged will be jointly and severally
liable for all oil spill containment and clean-up costs and certain other
damages arising from the discharge. These other damages are defined broadly
to include (i) natural resource damage (recoverable only by government
entities), (ii) real and personal property damage, (iii) net loss of taxes,
royalties, rents, fees and other lost revenues (recoverable only by
government entities), (iv) lost profits or impairment of earning capacity
due to property or natural resource damage, and (v) net cost of public
services necessitated by a spill response, such as protection from fire,
safety or health hazards.
The owner or operator of a vessel from which oil is discharged will be
liable under OPA 90 unless it can be demonstrated that the spill was caused
solely by an act of God, an act of war, or the act or omission of a third
party unrelated by contract to the responsible party. Even if the spill is
caused solely by a third party, the owner or operator must pay all removal
costs and damage claims and then seek reimbursement from the third party or
the trust fund established under OPA 90.
OPA 90 establishes a federal limit of liability of the greater of $1,200
per gross ton or $10 million per tank vessel. A vessel owner's liability is
not limited, however, if the spill results from a violation of federal
safety, construction or operating regulations.
4
<PAGE>
OPA 90 requires all vessels to maintain a certificate of financial
responsibility ("COFR") for oil pollution in an amount equal to the greater
of $1,200 per gross ton per vessel, or $10 million per vessel, in
compliance with regulations promulgated by the U.S. Coast Guard. Additional
financial responsibility in the amount of $300 per gross ton is required
under regulations promulgated by the U.S. Coast Guard under the
Comprehensive Environmental Response Compensation and Liability Act
("CERCLA"), the federal Superfund law. Owners of more than one tank vessel,
such as the Company, are only required to demonstrate financial
responsibility in an amount sufficient to cover the vessel having the
greatest maximum liability (approximately $17 million in the Company's
case). The Company currently maintains COFRs in compliance with applicable
Coast Guard rules.
OPA 90 requires all newly constructed petroleum tank vessels engaged in
marine transportation of oil and petroleum products in the U.S. to be
double-hulled and all existing single-hulled vessels to be retrofitted with
double hulls or phased out of the industry between January 1, 1995 and
2015. Because of the age and size of the Company's individual barges, the
first three of its barges will be required to be retired or retrofitted by
2005. However, many of the vessels competing with the Company's barges are
required to be retired or retrofitted between now and 2005.
Since the double-hull requirements of OPA 90 do not begin to impact
materially the seven single-hulled barges in the Company's current tank
barge fleet until 2005, the Company has not yet determined how it will
finance the conversion or replacement of these single-hulled barges.
However, the Company expects that, where economically feasible, it will
take steps to construct new, double-hulled barges when its single-hulled
barges are phased out. At current construction costs, the Company estimates
that it would cost approximately (a) $5 million to build a new 40,000
barrel tank barge similar to the Connecticut and (b) $25 million to build a
new barge to replace a 250,000 barrel tank barge such as the New York. The
timing of the construction or conversion of such barges will depend in
large measure on market conditions, particularly demand for double-hulled
barges and the rates that petroleum shippers are willing to pay to use such
barges. The Company expects to finance such construction or conversion from
both internally generated funds and from outside sources, including the
equity market, banks and insurance companies and U.S. Government-guaranteed
ship financing programs, if available. There is no assurance that such
financing will be available in the amounts and at interest rates that will
allow the Company to replace its current single-hulled barge fleet. See
"Properties-Vessels: Barge Fleet."
OPA 90 directs the Coast Guard to develop interim measures for single
hull-tank vessels of over 5,000 gross tons "that provide as substantial
protection to the environment as is economically and technologically
feasible". The Coast Guard has adopted, and is still adopting a series
of operational measures that, while increasing current standards, has
not, and is not expected to have an appreciable effect on the Company.
OPA 90 further requires all tank vessel operators to submit for federal
approval detailed vessel oil spill contingency plans setting forth their
capacity to respond to a worst case spill situation. Several states have
similar contingency or response plan requirements. Although the Company is
currently in compliance, there can be no assurance that the Company will be
able to remain in compliance with all the federal requirements or those of
one or more states.
OPA 90 is expected to have a continuing adverse effect on that segment of
the marine transportation industry that transports petroleum products,
including the Company. The effects on the industry could include, among
others, (i) increased requirements for capital expenditures to fund the
cost of double-hulled vessels, (ii) increased maintenance, training,
insurance and other operating costs, (iii) civil penalties and liability,
(iv) decreased operating revenues as a result of a further reduction of
volume transported by vessels and (v) increased difficulty in obtaining
sufficient insurance, particularly oil pollution coverage. These effects
could adversely affect the profitability and liquidity of the Company's
marine transportation line of business.
Finally, OPA 90 does not preclude states from adopting their own
liability laws. Many of the states in which the Company does business
have enacted laws providing for strict, unlimited liability for vessel
owners in the event of an oil spill. In addition, numerous states have
enacted or are considering legislation or regulations involving at least
some of the following provisions: tank-vessel-free zones, contingency
planning, inspection of vessels, additional operating, maintenance and
safety requirements, and financial responsibility requirements.
Management believes that the liability provisions of OPA 90 and similar
state laws have greatly expanded the Company's potential liability in
the event of an oil spill, even where the Company is not at fault.
5
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Other Regulations. The Company is also subject to regulations under the
Federal Water Pollution Control Act of 1972, as amended by the Clean Water
Act of 1977, and the Clean Air Act, as well as similar state statutory and
regulatory programs. To date, compliance with the applicable provisions of
these acts and regulations has not exposed the Company to material expense,
although the Company has found it increasingly expensive to manage the wastes
generated in its operations.
User Fees and Taxes. Federal legislation imposes user fees on vessel
operators such as the Company to help fund the United States Coast Guard's
regulatory activities. Other federal, state and local agencies or authorities
could also seek to impose additional user fees or taxes on vessel operators
or their vessels. Currently, the Coast Guard collects fees for vessel
inspection and documentation, licensing and tank vessel examinations. The
Company does not expect that these fees will be material to it. There can be
no assurance that additional user fees will not be imposed in the future.
Occupational Health Regulations. Certain of the Company's vessel operations
are subject to United States Occupational Safety and Health Administration
regulations. Similarly, the Coast Guard has promulgated regulations that
address the exposure to benzene vapors, which require the Company, as well as
other operators, to perform extensive monitoring, medical testing and record
keeping of seamen engaged in the handling of benzene transported aboard
vessels. It is expected that these regulations may serve as a prototype for
similar health regulations relating to the carriage of other cargoes.
Management believes that the Company is in compliance with the provisions of
the regulations that have been adopted.
Employees
The Company and its subsidiaries employed 586 persons as of December 31,
1997, of which 450 are crew members or other seagoing personnel. As of
December 31, 1997, 318 of such employees are represented by various unions.
Union contracts for certain marine employees of operating division or
subsidiaries of the Company expire between May 31, 1998 (72 employees) and
April 30, 2001 (28 employees). Management believes that its relationship with
employees is satisfactory.
6
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Item 2. Properties
Vessels: Tug Fleet
The tugboat fleet operated by subsidiaries of the Company is comprised of 53
tugboats with the following specifications and capacities:
Average
Number Age in
Class in Class Years
----- -------- -----
Over 3,500 horsepower..................... 14 23.9
3,000 to 3,500 horsepower................. 18 25.1
Under 3,000 horsepower.................... 17 41.2
Mortrac(R)................................ 4 24.5
Tugboats typically have long useful lives, generally exceeding 50 years.
Through its maintenance practices and periodic overhauls, the Company is able
to maximize the operational life of its tug fleet and minimize vessel
downtime. Management believes that the Company's tug fleet has a lower
average age and is better maintained than the fleets of many of the Company's
competitors.
During the past three years, the Company converted four of its single screw
tugs to MORTRAC(R) class tugs. The conversion consists of installing a
forward mounted, fully retractable 360-degree azimuthing thruster, a state of
the art wheelhouse, and new fendering systems. In addition, during the time
that the vessels were undergoing conversion, a thorough maintenance and
repair process was undertaken to ensure that the remaining vessel systems
were in top condition. The resulting MORTRAC(R) tugs are highly maneuverable
and have significantly greater horsepower than prior to conversion. Customer
reaction to the capabilities of the converted vessels has been favorable and
the four tugs now play key roles in the ports where they are located. The
MORTRAC(R) conversion has greatly enhanced the value and expected life of the
tugs in question. MORTRAC(R) is a registered trademark of the Company.
7
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Vessels: Barge Fleet
The Company operates 15 barges in the U.S. coastwise trade. Thirteen
of the barges are owned by the Company and two are chartered to the
Company. The specifications and capacities of each of such barges are
set forth in the following table:
<TABLE>
<CAPTION>
OPA 90
Year Replacement Employment Principal
Name Type Built Date Capacity At 12/31/97 Cargo
- ---- ---- ----- ---- -------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
Somerset Ocean Dry Bulk 1990 N/A 13,211 dwt Term Contract Coal
Bridgeport Ocean Dry Bulk 1986 N/A 12,780 dwt Term Contract Coal
Portsmouth (1) Ocean Dry Bulk 1996 N/A 13,214 dwt Spot Market Coal
Virginia Ocean Dry Bulk 1982 N/A 24,109 dwt Time Charter Coal
Maryland (2) Inland Dry Bulk 1970 N/A 20,357 dwt Inactive Coal
Connecticut (3) Ocean Tank 1994 N/A 41,454 bbl Term Contract No. 6 Oil
Texas Ocean Tank 1981 2006 130,000 bbl Term Contract No. 6 Oil
Florida Ocean Tank 1980 2005 130,000 bbl Spot Market No. 6 Oil
Pennsylvania Ocean Tank 1971 2005 93,000 bbl Term Contract No. 6 Oil
New York (4) Ocean Tank 1970 2005 250,000 bbl Spot Market Gasoline
Massachusetts (6) Ocean Tank 1982 2007 145,000 bbl Spot Market No. 6 Oil
Maine Inland Tank 1976 2014 64,000 bbl Spot Market No. 6 Oil
Rhode Island Inland Tank 1972 2014 64,000 bbl Spot Market No. 6 Oil
Seahorse I (5) Inland Tank 1966 2014 41,770 bbl Spot Market No. 6 Oil
New Jersey Inland Tank 1969 2014 36,278 bbl Bareboat Charter Bunker Fuel
</TABLE>
(1) The Company leases this barge under a 10-year bareboat charter.
(2) The Maryland has in the past been employed in a number of alternative
uses, but is primarily a coal barge. The barge has not been utilized since
November 7, 1996 due to damage to the vessel. The Company is currently
evaluating whether to repair the vessel.
(3) This barge is the primary barge used in connection with a long-term
contract with Connecticut Light and Power ("CL&P"). This contract provides,
among other things that CL&P may exercise a purchase option on the
Connecticut in certain circumstances. First, commencing with the fourth
anniversary of the delivery of the Connecticut, CL&P may, on each
anniversary date, purchase the barge for a purchase price equal to certain
scheduled amounts. In addition, CL&P has the option to purchase the barge
if the Company willfully refuses to perform and in certain other limited
circumstances.
(4) Owned by a partnership in which a subsidiary of the Company has a 50%
interest.
(5) 100% owned by CL&P, and operated by a subsidiary of the Company pursuant to
an evergreen bareboat charter. The Seahorse I is the primary back up barge
for the Company's contract with CL&P, but is currently used in the spot
market. The Seahorse I is double-hulled, but does not meet the OPA 90
double hull requirements and therefore has an OPA 90 replacement date.
(6) The Company purchased this barge in February, 1997.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
8
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Other Properties
Set forth below is a list of all of the Company's offices and facilities
as of December 31, 1997.
<TABLE>
<CAPTION>
Approximate
Square Feet/ Lease
Location Description Linear Feet (1) Expiration Date
- -------- ----------- --------------- ---------------
<S> <C> <C> <C>
Greenwich, CT Executive Office 17,526 2004
Portsmouth, NH Office Space 322 Owned Property
Portsmouth, NH Pier Space 126 Owned Property
Staten Island, NY Office and Pier Space 113,756(2) Owned Property
Philadelphia, PA Pier and Office Space 52,500(2) 2007
Baltimore, MD Office Space 4,400 2002
Baltimore, MD Pier Space 415 2003
Norfolk, VA (2) Pier Space 115 Owned Property
Norfolk, VA Office Space 2,610 Month to Month
Jacksonville, FL Office and Pier Space 71,874(2) 2000
Miami, FL Office Space 630 1998
Nederland, TX Office Space 1,402 1998
Port Arthur, TX Pier Space 275 1998
</TABLE>
(1) Square footage is presented for office space; linear footage is presented
for pier space.
(2) Aggregate square footage for entire property.
Management believes that its existing properties are adequate for its current
needs and that additional facilities will be readily available if needed.
9
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Item 3. Legal Proceedings
The Company is a party to routine, marine-related lawsuits arising in the
ordinary course of its business. The claims made in connection with the
Company's marine operations are covered by marine insurance, subject to
applicable policy deductibles. Management believes, based on its current
knowledge, that such lawsuits and claims, even if the outcomes were to be
adverse, would not have a material adverse effect on the Company's financial
condition and results of operations.
On January 31, 1990, Jakobson was notified by letter from the EPA that the EPA
had reason to believe that the subsidiary is a Potentially Responsible Party (a
"PRP") under CERCLA with respect to a landfill site at Syosset, New York. In
February 1994, the Town of Oyster Bay, New York, operator of the Syosset
landfill, filed suit in the United States District Court for the Eastern
District of New York against Jakobson and several other PRPs to recover costs
associated with clean up of the landfill. In its complaint, the Town alleges
that Jakobson disposed of various wastes at the landfill, which the Town
operated from approximately 1933 to 1975. Prior to filing the complaint, the
Town entered into an administrative consent order with the EPA to remediate the
site. The Town seeks to recover from the PRPs past and future costs associated
with the cleanup. According to the Town's complaint, as of February 1994, the
Town had expended approximately $2.75 million and anticipated additional costs
of $500,000 to evaluate remedial alternatives for the site. Clean-up costs were
estimated at $25 million. Jakobson believes that it has both a factual and legal
defense to liability. Although in theory liability under CERCLA is joint and
several without regard to fault, as a practical matter, liability is typically
apportioned among PRPs, usually on a volumetric basis. Jakobson believes that in
relation to the other defendants its volumetric contribution, if any, to the
site is de minimus. Jakobson is investigating the allegations of the EPA and the
Town and the existence of insurance coverage should the subsidiary be found to
have liability with respect to the landfill site. At this stage, management
believes that it is premature to attempt to predict the outcome of the suit.
Jakobson's insurers are providing a defense.
Subsidiaries of the Company are defendants, along with others, in certain
lawsuits filed in the U.S. District Courts for the Northern District of Ohio and
the Eastern District of Pennsylvania and in Virginia state court by an aggregate
of 308 individuals or their estates or personal representatives who have alleged
damages for workplace exposure to asbestos. Based on employment records, a
number of these individuals appear to have worked for subsidiaries of the
Company, or their predecessors, for less than one year, if at all, out of their
working careers. The Company is in the process of identifying the scope of its
insurance coverage for these claims. At least 79 of these individuals served on
vessels operated by a subsidiary of the Company on behalf of the United States
government for which a government indemnity is applicable. The United States has
agreed to indemnify and defend the Company with respect to approximately 68
cases. Management believes that the United States indemnity will extend to
additional cases. Although the Company believes that these claims are without
merit, it is impossible at this juncture to express a definitive opinion on the
final outcome of any such suit. Management believes that any liability under any
such suits would not have a material adverse effect on the Company's financial
condition and results of operation, regardless of the scope of available
insurance coverage.
10
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
There is currently no public trading market for the Company's issued and
outstanding common stock. All of the Company's outstanding common stock is held
by officers, directors and affiliates of the Company.
11
<PAGE>
Item 6. Selected Consolidated Financial Data
The following table presents historical financial information concerning the
Predecessor and the Company. The historical financial information in the
five-year period ending December 31, 1997, is derived from the consolidated
financial statements of the Company. Such financial statements are included
elsewhere herein for the three-year period ended December 31, 1997. The
following financial information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
<TABLE>
<CAPTION>
Predecessor Company
----------------------- -------------------------------------------------
Period Period
Year Jan. 1, 1994 July 12, 1994 Year ended
(Dollars in thousands) ended thru thru December 31,
Dec. 31, July 11, Dec. 31, -----------------------------------
Income Statement Data: 1993 1994 1994 1995 1996 1997
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operating revenue----------------------------------- $ 78,740 $ 41,694 $ 37,482 $ 77,343 $ 91,458 $ 100,526
Operating expenses------------------------------- 48,134 27,341 22,355 45,672 57,451 66,090
Depreciation------------------------------------- 6,784 3,119 3,217 7,412 7,719 7,769
General and administrative expenses-------------- 13,197 7,559 5,962 14,221 14,283 13,755
Provision for shipyard sale---------------------- 705 589 -- -- -- --
--------- --------- --------- --------- --------- ---------
Operating income----------------------------- 9,920 3,086 5,948 10,038 12,005 12,912
Interest expense------------------------------------ (2,083) (975) (4,810) (10,192) (10,132) (10,026)
Interest income------------------------------------- -- 28 74 51 146 346
Equity in income/(loss) from affiliates------------- 1,149 (622) -- -- -- --
Equity in income/(loss) from joint venture---------- 614 220 106 (188) (66) (727)
Other income/(expense)------------------------------ 164 317 218 155 160 (273)
--------- --------- --------- --------- --------- ---------
Income/(loss) before provision for income taxes 9,764 2,054 1,536 (136) 2,113 2,232
Provision for income taxes-------------------------- 3,342 785 630 200 808 613
--------- --------- --------- --------- --------- ---------
Income/(loss) before cumulative effect of
accounting changes----------------------------- 6,422 1,269 906 (336) 1,305 1,619
Cumulative effect of accounting change (1)---------- 525 -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net income/(loss)---------------------------------- $ 6,947 $ 1,269 $ 906 $ (336) $ 1,305 $ 1,619
--------- ========= ========= ========= ========= =========
Other Data:
EBITDA(2)------------------------------------------- $ 19,775 $ 6,977 $ 9,987 $ 18,855 $ 23,337 $ 23,704
Net cash provided by operating activities----------- 8,334 3,939 6,527 5,491 11,427 8,929
Net cash (used for)/provided by investing activities (3,594) 817 (73,555) (5,832) (5,110) (8,063)
Net cash (used for)/provided by financing activities (6,323) (4,637) 68,842 (652) (3,496) 3,252
Ratio of earnings to fixed charges (3)-------------- 4.5x 2.7x 1.3x 1.0x 1.2x 1.2x
Balance Sheet Data (at end of period)
Total assets---------------------------------------- $ 69,139 $ 64,432 $ 170,108 $ 174,094 $ 172,717 $ 160,290
Total long-term debt-------------------------------- 19,235 16,450 83,414 82,848 80,000 83,252
Mandatorily redeemable capital stock---------------- -- -- 1,150 1,150 1,000 1,000
Total stockholders' equity-------------------------- 20,132 19,701 10,906 10,570 12,025 13,644
</TABLE>
- ---------------------
(1) The Company adopted FAS No. 109, effective January 1, 1993.
(2) EBITDA means income before provision for income taxes, interest expense
(including amortization of debt discount of $349 and $106 for the year
ended December 31, 1993 and the period ended July 11, 1994, respectively),
depreciation and amortization and provision for shipyard sale, and is
presented because the Company believes that it provides useful information
regarding its ability to service and/or incur debt. EBITDA should not be
considered in isolation or as a substitute for net income/(loss), cash
flows from operating activities and other combined income or cash flow
statement data prepared in accordance with generally accepted accounting
principles or as a measure of the Company's profitability or liquidity.
(3) For purposes of the computations, earnings before fixed charges consist of
income/(loss) before income taxes adjusted for equity earnings/(loss), as
appropriate, plus fixed charges. Fixed charges are defined as interest
expense plus interest capitalized and that portion of rental expense which
is deemed to be representative of the interest factor.
12
<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 and the
Predecessor's consolidated historical financial statements and the related notes
thereto included elsewhere in this report.
Overview Revenues
Tug Services. Tug services revenues depend primarily upon tug
utilization and the rates charged for tug services. Tug utilization is
primarily a function of the volume of vessel traffic requiring docking
or undocking or other ship assistance services, barge movements,
coastwise contract towing and offshore rescue work. Rates charged for
tug services are primarily set by reference to the Company's scheduled
rates, subject to discounts as competitive conditions warrant. When tug
services are not performed on a contract basis, rates are quoted at the
time that such services are requested.
Tug services revenues, in the aggregate, have remained relatively
stable over recent years. Although the number of ships entering and
exiting ports has gradually declined, the Company has offset the
resulting revenue decline by maintaining market share through
relationship management and increasing coastwise towing.
Marine Transportation. Marine transportation services are provided by
the Company's barge fleet on a term contract basis and on a spot market
basis. Rates for such services are pre-established by contract or are
quoted at the time that such services are requested, and are generally
set based on the quantity of product to be transported and the distance
to be traveled.
The Company's marine transportation revenues are primarily attributable
to the transport of petroleum products (particularly No. 6 oil), coal,
scrap iron, and grain. Demand for the Company's marine transportation
services is substantially dependent upon general demand for petroleum,
petroleum products and coal in the geographic areas served by its
vessels. In addition, weather, prevailing markets for fossil fuels and
other sources of energy and economic factors can affect utility
consumption of petroleum, petroleum products and coal and, as a result,
the demand for a substantial portion of the Company's marine
transportation services.
Operating Expenses. The Company's operating expenses are primarily a function of
fleet size and utilization levels and are comprised of wages and benefits, fuel,
repairs, insurance, insurance claims and charter hire of third party tugs to
satisfy vessel requirements. In addition, the Company incurs depreciation and
amortization expense. The crews of the Company's tugs and barges are primarily
paid on a daily wage basis. Wage and benefit levels vary among ports due to
labor market conditions. The Company capitalizes expenditures when a vessel is
improved or its useful life is extended. Drydocking and related costs are
capitalized when incurred and amortized over the period until the next
drydocking, usually 30 months. The timing of drydockings is generally governed
by American Bureau of Shipping requirements, which require two drydockings every
five years. All other repair expenditures are expensed as incurred. Insurance
costs consist primarily of premiums paid for (i) protection & indemnity
insurance ("P&I insurance") for the Company's marine liability risks, which are
insured by a mutual insurance association of which the Company is a member; (ii)
hull and machinery insurance and other marine-related insurance, which are
insured by commercial marine insurance markets; and (iii) general liability and
other traditional insurance, which are insured by commercial insurance carriers.
Insurance costs, particularly costs of marine insurance, are directly related to
amount of coverage, industry and individual loss records and overall insurance
market conditions, which vary from year-to-year. As discussed above under
"Business-Insurance," the Company and the Mormac Group have entered into the
Insurance Agreement, under which the Company's insurance expense will be
affected by both the Company's increased deductibles and the respective
insurance claims experience of the Company and the Mormac Group.
13
<PAGE>
Results of Operations
Year Ended December 31, 1997 compared to year ended December 31, 1996
Year Ended
December 31,
------------------------
1996 1997
--------- ---------
Operating revenue ................................ $ 91,458 $ 100,526
Cost of operations
Operating expenses ........................... 57,451 66,090
Depreciation ................................. 7,719 7,769
--------- ---------
Total cost of operations ......................... 65,170 73,859
--------- ---------
Gross profit ..................................... 26,288 26,667
General and administrative expenses .............. 14,283 13,755
--------- ---------
Operating income ................................. 12,005 12,912
Interest expense ................................. (10,132) (10,026)
Interest income .................................. 146 346
Equity in loss from joint venture ................ (66) (727)
Other income/(expense) ........................... 160 (273)
--------- ---------
Income before provision for income taxes ......... 2,113 2,232
Provision for income taxes ....................... 808 613
--------- ---------
Net income ....................................... $ 1,305 $ 1,619
========= =========
Operating Revenues. Operating revenues increased by $9.1 million, or 9.9%, to
$100.5 million in 1997. Tug Services revenue remained effectively flat,
decreasing by $0.3 million or 0.6% to $57.1 million as lower offshore towing
revenues were offset by The New York City Department of Sanitation contract
which expires on June 30, 1998.
Marine Transportation revenues increased by $9.4 million, or 27.6%, to $43.4
million primarily due to increased movements of coal and petroleum products. The
Company also increased its transportation of other products, such as scrap and
fertilizer. The Company also had a full year of operation for the barge
Portsmouth, which began operations in November 1996 and the barge Massachusetts,
purchased in February 1997.
Operating Expenses. Operating expenses increased by $8.6 million, or 15.0%, to
$66.1 million. The $8.6 million increase in operating expenses is primarily due
to increases in labor, fuel, outside towing expense, repairs and drydocking
amortization. The $2.5 million increase in labor expense and the $1.4 million
increase in outside towing expenses were primarily due to the increased level of
activity discussed above. The $1.0 million fuel expense increase was also due to
the increased activity. Repair expense also increased in 1997, as did drydocking
amortization.
Depreciation. Depreciation expense increased by $0.1 million, or 1.3%. This
increase was due to the acquisition of new equipment and to improvements to
existing floating equipment, including the MORTRAC(R) conversions discussed
previously.
General & Administrative Expenses. General and administrative expenses decreased
by $0.5 million or 3.7% to $13.8 million in 1997, primarily due to lower medical
costs.
Operating Income. Operating income increased by $0.9 million, or 7.6%, to $12.9
million. The increase was primarily due to the increased revenues and lower
general and administrative expenses discussed above, partially offset by higher
operating expenses and depreciation.
14
<PAGE>
Equity in Loss from Joint Venture. The Company equity loss in its 50% joint
venture was $0.7 million, compared the smaller loss of $0.1 million in 1996. The
$0.6 million variance is due to lower rates as well as a dry-docking of the
vessel, which began in the second quarter of 1997 and was completed mid-way
through the third quarter. In addition, market conditions in the clean petroleum
products market idled the barge New York for approximately half of the final six
months of 1997 and management believes that lower rates and lower utilization
could continue through 1998.
Taxes: Taxes were favorably impacted by the realization of a deferred tax asset.
The Company applied a capital loss carry forward to offset the tax gain
associated with the termination of the Jakobson Shipyard lease (see note 5 to
the financial statements). This tax asset previously had been valued at zero due
to the uncertainty associated with its utilization. The Company determined in
the third quarter that is was more likely than not that the asset could be
utilized.
Net Income. Net income increased by $0.3 million, or 24.1% to $1.6 million in
1997. The increase was primarily due to the factors discussed above.
15
<PAGE>
Results of Operations
Year Ended December 31, 1996 compared to year ended December 31, 1995
Year Ended
December 31,
----------------------
1995 1996
-------- --------
Operating revenue .................................. $ 77,343 $ 91,458
Cost of operations
Operating expenses ............................. 45,672 57,451
Depreciation ................................... 7,412 7,719
-------- --------
Total cost of operations ........................... 53,084 65,170
-------- --------
Gross profit ....................................... 24,259 26,288
General and administrative expenses ................ 14,221 14,283
-------- --------
Operating income ................................... 10,038 12,005
Interest expense ................................... (10,192) (10,132)
Interest income .................................... 51 146
Equity in loss from joint venture .................. (188) (66)
Other income ....................................... 155 160
-------- --------
(Loss)/income before provision for income taxes .... (136) 2,113
Provision for income taxes ......................... 200 808
-------- --------
Net (loss)/income .................................. $ (336) $ 1,305
======== ========
Operating Revenues. Operating revenues increased by $14.1 million, or 18.2%, to
$91.5 million in 1996. Tug Services increased by $9.4 million or 19.7%, to $57.5
million. All areas of the tug services business --- shipdocking, harbor towing
and coastwise towing -- showed increases in 1996 and included revenue related to
The New York City Department of Sanitation contract which began on July 1, 1996
and expires on June 30, 1998.
Marine Transportation revenues increased by $4.7 million, or 15.9%, to $34.0
million primarily due to increased movements of coal and petroleum products. The
Company also increased its transportation of other products, such as scrap and
fertilizer.
Operating Expenses. Operating expenses increased by $11.8 million, or 25.8%, to
$57.5 million. The $11.8 million increase in operating expenses is primarily due
to increases in labor, fuel, outside towing expense, claims and drydocking
amortization. The $2.6 million increase in labor expense and the $2.5 million
increase in outside towing expenses were primarily due to the increased level of
activity discussed above. The $2.6 million fuel expense increase was also due to
the increased activity but was also impacted by higher fuel prices, especially
in the second half of the year. Claims expense (claims under insurance
deductibles) also increased in 1996 as did drydocking amortization.
Depreciation. Depreciation expense increased by $0.3 million, or 4.1%. This
increase was due to additional improvements to floating equipment, including the
MORTRAC(R) conversions discussed previously.
General & Administrative Expenses. General and administrative expenses remained
essentially the same at $14.3 million, compared to $14.2 million in 1995.
Operating Income. Operating income increased by $2.0 million, or 19.6%, to $12.0
million. The increase was primarily due to the increased revenues discussed
above, partially offset by higher operating expenses and depreciation.
Equity in Loss from Joint Venture. Equity in loss from the Company's 50% joint
venture decreased by $0.1 million or 64.9% from a loss of $188,000 in 1995 to a
loss of $66,000 in 1996. The decrease is primarily due to increased revenues,
driven by higher rates and more operating days in 1996.
Net (Loss)/Income. Net income increased by $1.6 million, from a loss of $0.3
million in 1995 to a profit of $1.3 million in 1996. The increase was primarily
due to the higher operating profit discussed above.
16
<PAGE>
Liquidity and Capital Resources
The Company is highly leveraged as a result of the debt incurred in connection
with the Acquisition. The Company has outstanding $80.0 million of 11.75% Series
B First Preferred Ship Mortgage Notes due July 15, 2004 (the "Notes"), the
issuance of which was registered under the federal securities laws. Interest on
the Notes is payable semi-annually on January 15 and July 15. The Notes are
redeemable, in cash, at the option of the Company, on or after July 15, 1999 at
specified redemption prices plus accrued and unpaid interest. All of the
Company's subsidiaries have guaranteed the Notes. The Notes rank pari passu with
all existing and future senior indebtedness of the Company and senior to all
subordinated indebtedness of the Company and are secured by substantially all of
the Company's floating equipment. The indenture covering the Notes contains
certain restrictions on incurrence of debt, liens, sales of assets, investments,
and capital expenditures, dividends and upstream payments. The Company must also
comply with certain other financial covenants.
The Company has a revolving line of credit of up to $10.0 million, up to $5.0
million of which may be utilized for letters of credit. Both facilities are
subject to borrowing base limitations. This Senior Credit Facility is secured by
a first priority lien on the trade accounts receivable and inventory of the
Company and bears interest at rates linked to the prime rate and/or a Eurodollar
rate, at the Company's option. The Senior Credit Facility expires in July 2000.
The Senior Credit Facility contains certain financial covenants and other
covenants. At December 31, 1997, outstanding letters of credit approximated
$472,000; no other borrowings were outstanding under the Senior Credit Facility.
On December 1, 1997, the Company purchased a tug, the April Moran, from an
affiliated company. As part of that transaction, the Company entered into a $3.4
million term loan which is payable in 24 quarterly installments through June 1,
2005. Interest is based upon LIBOR plus 1.75% but is fixed through June 1, 1999
at 8.1%. The loan is secured by the April Moran.
On November 8, 1996, a subsidiary of the Company entered into a bareboat charter
for the barge Portsmouth. The ten year charter contains an option to buy at
enumerated times during the lease period. Subsequently, the subsidiary was
merged into Moran Towing Corporation, which assumed the charter obligations. The
Company has guaranteed performance by its subsidiary under the charter.
The Company believes that cash flow from current levels of operations and, to a
lesser extent, the availability under the Senior Credit Facility, will be
adequate to make required payments of interest on the Company's indebtedness, as
well as to fund capital expenditures. In the event that the Company draws upon
the commitments under the Senior Credit Facility due to adverse business
conditions or to finance acquisitions or for other corporate purposes, the
Company's aggregate interest expense would correspondingly be increased.
The Company's belief that it will generate sufficient cash to make required
payments of interest on its indebtedness and lease obligations is based, among
other things, on the assumptions that (i) the Company's revenues and operating
expenses, as adjusted for inflation, will remain relatively constant; (ii) the
Company will retain working capital in accordance with prior practices; (iii)
the Company will not incur any material capital expenditures (excluding routine
drydocking costs) other than the possible purchase or construction of new
vessels or the acquisition of businesses which in turn are expected to produce
additional cash flow; and (iv) neither OPA 90 nor any other federal or state
environmental statutes or regulations will impose significant additional capital
expenditure requirements on the Company other than the mandated phase-out or
retrofitting of vessels described in "Business-Regulatory Matters." Currently,
the Company has no specific plans for funding the repayment of principal on the
Notes. If cash generated from operations is insufficient to pay any portion of
the principal on the Notes, it would be necessary to refinance the Notes.
Cash and cash equivalents for the year ended December 31, 1997 increased by $4.1
million compared to a $2.8 million decrease in the year ended December 31, 1996,
and a $1.0 million increase in the year ended December 31, 1995. The changes for
these periods were attributable to the factors discussed below: For the year
ended December 31, 1997, net cash provided by operations of $8.9 million,
together with net proceeds from a constructive total loss of $2.8 million, net
proceeds from the sale of a leasehold interest of $2.9 million and increased
borrowings of $3.3 million was used to fund capital expenditures of $12.7
million (including the purchase of the tug April Moran, barge Massachusetts, and
two additional MORTRAC(R) conversions) and to fund a $1.0 million capital
contribution to a joint venture, primarily to fund a dry-docking for the barge
New York.
17
<PAGE>
For the year ended December 31, 1996, net cash provided by operations was $11.4
million. This cash, together with temporary borrowings of $2.3 million were used
to fund capital expenditures of $5.1 million (primarily the capitalization of
drydocking costs and the upgrading of the tug Harriet Moran to a MORTRAC(R) tug)
and to pay down debt of $5.7 million (including the indebtedness relating to the
acquisition of the tug Valentine Moran and the barge Pennsylvania.)
For the year ended December 31, 1995, net cash provided by operations was $5.5
million. This amount, together with $1.0 million is short-term borrowings, was
used to fund capital expenditures of $5.8 million (primarily the capitalization
of drydocking costs and including the upgrading of the tug Sewells Point to a
MORTRAC(R) tug), to pay debt of $1.5 million and to pay financing fees of $0.1
million.
Working capital was $17.6 million at December 31, 1997, $9.1 million at December
31, 1996 and $7.6 million at December 31, 1995.
A subsidiary of the Company has entered into a long-term contract to provide tug
and barge services to Florida Power & Light, a major Florida utility. The
five-year contract begins on October 1, 1998. Under the terms of the contract,
the subsidiary is building a number of tug and barge units over the next nine
months. The total capital associated with the project is expected to be $8 to
$10 million. The Company is exploring various financing alternatives.
Other Matters
In 1991, the Company discovered that the historical operations of its ship
repair subsidiary, Jakobson, had resulted in environmental contamination of its
leased shipyard property. During 1991, the Company decided to discontinue
Jakobson's ship repair business during 1992, and therefore reduced Jakobson's
assets to net realizable value. In 1992, Jakobson ceased operations and
commenced the clean up of the shipyard property. Environmental costs incurred to
ready the shipyard for sale were capitalized to the extent such costs are
reasonably expected to be recovered from the sale of the shipyard. At December
31, 1992, management established reserves for the expected future clean up of
the shipyard property. The clean up encompassed remediation of both the shipyard
property and sediments in the bay immediately adjacent to the shipyard.
Remediation of the shipyard property was substantially completed in 1993 and
remediation of bay sediments commenced and were substantially completed in 1994.
The remedial activities at the facility were concluded in 1995. The cost of this
project has been approximately $6.1 million. In late 1995, Jakobson received
written notification from the New York Department of Environmental Conservation
that the shipyard site had been deleted from the State Registry of Inactive
Hazardous Waste Disposal Sites. In 1995, the Company expended approximately $0.6
million in connection with the Jakobson property. Although such expenditures did
not affect the Company's results of operations because they were charged against
the provision for shipyard sale, such expenditures did reduce the Company's cash
flow. In the third quarter of 1997, the owner of the Jakobson Shipyard site sold
its property to the State of New York and the Town of Oyster Bay. At the same
time, Jakobson Shipyard, Inc., a subsidiary of the Company, terminated its
leasehold interest in the property and received $2.9 million. The loss related
to the lease termination was not material.
Recent Financial Accounting Pronouncements
FAS No. 128, "Earnings Per Share," issued in February 1997, changes the
calculation of earnings per share ("EPS") under generally accepted accounting
principles in the U.S. to be more consistent with international standards. Under
the new standard, companies replace the reporting of "primary" EPS with "basic"
EPS. Basic EPS is calculated by dividing the income or loss available to common
shareholders by the weighted average number of common shares outstanding for the
period, without consideration of common stock equivalents. "Fully diluted" EPS
is replaced by "diluted" EPS, which will be similar to fully diluted EPS as
previously computed. This statement was adopted by the Company in 1997.
FAS No. 130, "Reporting Comprehensive Income," issued in June 1997, will
require the Company to disclose in financial statement format, all non-owner
changes in equity. Such changes include, for example, cumulative foreign
currency translation adjustments, certain minimum pension liabilities and
unrealized gains and losses on securities available for sale. This statement is
effective for fiscal years beginning after December 15, 1997 and requires
presentation of prior period financial statements for comparability purposes.
FAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," issued in June 1997, establishes standards for reporting
information about operation segments in annual financial statements and interim
financial reports. It also establishes standards for related disclosures about
products and services, geographic areas and major customers.
18
<PAGE>
Generally, financial information is required to be reported on the basis that is
used internally for evaluating segment performance and deciding how to allocate
resources to segments.
FAS No. 132, "Employer's Disclosure about Pension and Other Postretirement
Benefits," is effective for the year ended December 31, 1998. This statement
revises the disclosure requirements for employers' pension and other retiree
benefits.
The Company expects to adopt the above statements beginning with its 1998
financial statements, with the exception of FAS 128 which was adopted in 1997.
Inflation
In general, the Company's business is affected by inflation and the effects of
inflation may be experienced by the Company in future periods. Management
believes, however, that such effect has not been significant to the Company
during the past three years. In the event that significant inflationary trends
were to arise, management believes that the Company would generally be able to
offset the effects thereof by increasing rates, to the extent permitted by
competitive factors, and through operation of certain escalation clauses
contained in certain of the Company's marine transportation contracts. There can
be no assurance, however, that all such cost increases could be passed through
to customers.
Year 2000
The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. This could result in
system failures or miscalculations causing disruptions of operations, including,
among other, a temporary inability to process transactions, send invoices or
engage in similar normal business activities.
The Company does not believe it has material exposure to the year 2000 issue
with respect to its own information systems.
Item 8. Financial Statements
See the financial statements which are listed in items 14(a)(1)-(2).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There were no changes in, or disagreements with, accountants.
19
<PAGE>
PART III
Item 10. Executive Officers and Directors of the Registrant
Set forth below is information concerning the directors and executive
officers of the Company.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Paul R. Tregurtha 62 Chairman of the Board and Director
James R. Barker 62 Vice Chairman of the Board and Director
Malcolm W. MacLeod 64 President, Chief Executive Office and Director
Jeffrey J. McAulay 44 Vice President of Finance and Administration and Director
William P. Muller 46 President of Moran Services Corporation
Edmond J. Moran, Jr. 53 President of Moran Mid-Atlantic Group and Director
Alan L. Marchisotto 48 Vice President, General Counsel and Secretary
Andrew P. Langlois 56 Director
Mort Lowenthal 67 Director
</TABLE>
Paul R. Tregurtha. Mr. Tregurtha has been a director and Chairman of the Board
of the Company since June 1994. In addition, he has been Chairman of each of
Mormac Marine Group, Inc. (the parent of Mormac) and Meridian Aggregates
Company, which owns and operates mines in the United States, since 1988 and
1991, respectively, and Vice Chairman of each of The Interlake Steamship Company
and Lakes Shipping Company, Inc. since 1988 and 1989, respectively. He served as
Chairman and Chief Executive Officer of Moore McCormack Resources during 1987
and 1988 and was President and Chief Operating Officer of Moore McCormack
Resources prior to that time. Mr. Tregurtha serves on the Board of Directors of
Brown & Sharpe Manufacturing Company, FPL Group, Inc. and Fleet Financial Group,
and is a trustee of TIAA/CREF.
James R. Barker. Mr. Barker has been a director and is Vice Chairman of the
Board of the Company since June 1994. In addition, he has been Chairman of
each of The Interlake Steamship Company and Lakes Shipping Company, Inc.
since 1987 and 1989, respectively, and Vice Chairman of Mormac Marine Group,
Inc. since 1988. From 1987 to 1988, he served as Chairman of Mormac Marine
Group, Inc. He served as Chairman and Chief Executive Officer of Moore
McCormack Resources from 1971 to 1987. Prior to joining Moore McCormack
Resources, Mr. Barker co-founded and was a principal of the management
consulting firm of Temple, Barker & Sloane, where he specialized in
consulting to the transportation industry. Mr. Barker is a member of the
Board of Directors of each of GTE Corporation and Pittston Corporation (where
he is non-executive chairman), is a trustee for Eastern Enterprises and is
the Chairman of the Committee of Managers of the Skuld Protection and
Indemnity Association.
Malcolm W. MacLeod. Mr. MacLeod has served as President, Chief Executive Officer
and director since the Acquisition. Mr. MacLeod served as President of the
Predecessor from June 1987 until the Acquisition and as Chief Executive Officer
from April 1991 until the Acquisition. In addition, Mr. MacLeod served as a
director of the Predecessor from 1984 until the Acquisition. Mr. MacLeod served
as President and Chief Executive Officer of Curtis Bay Towing Company, a Company
subsidiary, from 1979 until 1987 and as Vice President of Curtis Bay from 1978
to 1979. Prior to that, Mr. MacLeod started on Company tugs after his graduation
from the Massachusetts Maritime Academy in 1954 and has been with the Company
and its subsidiary companies in a variety of assignments since that time, with
the exception of two years' service in the United States Navy as a deck officer
on fleet tugs.
Jeffrey J. McAulay. Mr. McAulay has served as the Vice President of Finance and
Administration and a director of the Company since April 1996. Mr. McAulay
served as the Company's Controller from the Acquisition until April 1996 and
served as Controller of the Predecessor from February 1992 until the
Acquisition. From 1979 through 1992, Mr. McAulay was employed by W.R. Grace &
Co. He held various positions at Grace's Specialty Chemicals Group including
Manager of New Business Analysis (from 1988 to 1992), Assistant Controller and
briefly as Chief Financial Officer of Grace's Japan Chemicals Business. Mr.
McAulay began his career at the auditing firm of Arthur Andersen & Co.
William P. Muller. Mr. Muller was appointed President of Moran Services
Corporation and director of Moran Towing Corporation in July 1995. From 1989
until July, 1995, he was the Vice President, Operations of Moran Towing &
Transportation Co., Inc., the Company's New York operating subsidiary and Vice
President of Moran Services
20
<PAGE>
Corporation. From 1981 through 1989, he was Vice President and General Manager
of Moran Towing of Florida Inc., the Company's Jacksonville operating
subsidiary. Mr. Muller joined Moran in 1977 as part of the sales department and
held a variety of positions before accepting the Florida position. Prior to
joining Moran, Mr. Muller served as a manager for Prudential Grace Line's South
American operations. He began his career with Continental Insurance (MOAC) in
the hull & underwriting department.
Edmond J. Moran, Jr. From 1987 until the present, Mr. Moran has served as
President of Moran Mid-Atlantic Corporation (which was reorganized as the Moran
Mid-Atlantic Group as of January 1, 1997). Since January 1, 1997, Mr. Moran has
also served as Vice President, Business Development of Moran Towing Corporation.
Mr. Moran is currently a director of the Company and served as a director of the
Predecessor from 1984 until the Acquisition. From 1984 until 1987, Mr. Moran
served as Vice President of Moran Towing & Transportation Co., Inc. and directed
all the activities of the Company's barge division. From 1981 until 1983, Mr.
Moran served as President of Moran's Texas subsidiary. From 1976 until 1981, he
served as Vice President and General Manager of Jacksonville operations. From
1971, when he joined the Company, until 1976, Mr. Moran served as a Sales
Representative in the Harbor Operations Department. Prior to that, following
active duty in the United States Navy, Mr. Moran joined the planning department
of States Marine Lines, Inc.
Alan L. Marchisotto. Effective January 1, 1998, Mr. Marchisotto was elected a
Vice President of the Company. He continues to be General Counsel and Secretary,
a position he has held since he joined the Company in 1982. From 1978 until
1982, he served as corporate and international counsel to Norlin Corporation, a
NYSE-listed company, where he directed the legal affairs of manufacturing and
sales subsidiaries in eleven countries and worked closely with senior management
in the negotiation and structuring of complex financing and business agreements.
Prior to that, he was engaged in private practice in New York City.
Andrew P. Langlois. Mr. Langlois has served as a director since the Acquisition.
Mr. Langlois has served as Vice President of Mormac Marine Group and Lakes
Shipping Company, Inc., since 1988 and 1989, respectively, and as Vice President
and Director of Meridian Aggregates Company since 1991. From 1980 to 1988, Mr.
Langlois was employed by Moore McCormack Resources and was an officer from 1983
to 1988. Prior to joining Moore McCormack in 1980, he was employed by the
Electric Boat Division of General Dynamics.
Mort Lowenthal. Mr. Lowenthal joined the Board of Directors in November,
1994. Mr. Lowenthal is a Senior Advisor - Schroder & Co. Inc., an
international investment bank. From 1980 to February 1995, Mr. Lowenthal was
a Managing Director at Schroder & Co. Inc.
Each director holds office until the next annual meeting of stockholders and
until his successor has been elected and has qualified. Officers are elected by
the Board of Directors and serve at its discretion.
Directors of the Company who are not employees of the Company or the Lakes Group
are reimbursed for their travel and other expenses incurred in connection with
their responsibilities, and are also paid $1,100 for every meeting attended.
21
<PAGE>
Item 11. Executive Compensation
The following table sets forth the annual and long-term compensation for the
five highest paid officers (named executive officers), as well as the total
compensation paid to, or earned by, each individual for the Company's fiscal
years ended December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Annual
Compensation
Fiscal All Other
Name & Position Year Salary Bonus Compensation (1)
--------------- ---- ------ ----- ----------------
<S> <C> <C> <C> <C>
Paul R. Tregurtha 1997 $315,952 $ -- $ --
Chairman of the Board 1996 300,000 -- --
1995 300,000 -- --
James R. Barker 1997 315,952 -- --
Vice Chairman of the Board 1996 300,000 -- --
1995 300,000 -- --
Malcolm W. MacLeod 1997 332,149 35,000 21,317
President and Chief Executive Officer 1996 319,374 32,000 20,067
1995 298,340 29,000 16,317
Edmond J. Moran, Jr 1997 174,535 10,000 21,317
President of Moran Mid-Atlantic Group 1996 168,635 10,000 20,067
1995 163,723 7,500 16,317
William P. Muller 1997 150,000 10,000 20,027
President of Moran Services Corporation 1996 137,980 10,000 18,550
1995 121,462 10,000 13,463
</TABLE>
(1) Amounts for 1997 includes contribution of $20,000, $20,000 and $18,709
made by the Company to the Company's Profit Sharing Plan on behalf of
Messrs. MacLeod, Moran and Muller, respectively, in 1997. See "Company
Plans-Profit Sharing Plan." Also includes premiums of $1,317 paid by the
Company in respect of term life insurance policies insuring the lives of
Messrs. MacLeod, Moran and Muller, respectively, in 1997.
Company Plans
In connection with the Acquisition, the Company provided benefits to the
Company's non-union employees on terms which are substantially similar to the
benefit plans of the Predecessor existing prior to the Acquisition. In addition,
as described below under "-1994 Stock Option Plan," the Company adopted a stock
option plan which became effective upon the consummation of the Acquisition.
22
<PAGE>
Defined Benefit Plans
The following table shows the estimated annual benefits on a combined basis for
employees who retire at age 65, without regard to statutory maximums, for
various combinations of final average compensation and lengths of service under
the Moran Towing Corporation Restated Pension Plan and the Moran Towing
Corporation Supplemental Employee Retirement Plan (collectively, the "Plans").
The Restated Pension Plan is intended to be a qualified plan under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
Supplemental Employee Retirement Plan is not intended to be so qualified.
<TABLE>
<CAPTION>
Projected Annual Benefits at Age 65
Average Five Year of Service
Year Base -----------------------------------
Salary 15 20 25 30 35
------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$125,000 $27,450 $36,600 $45,750 $54,900 $64,050
150,000 33,075 44,100 55,125 66,150 77,175
175,000 38,700 51,600 64,500 77,400 90,300
200,000 44,325 59,100 73,875 88,650 103,425
225,000 49,950 66,600 83,250 99,900 116,550
250,000 55,575 74,100 96,625 111,150 129,675
275,000 61,200 81,600 102,000 122,400 142,800
300,000 66,825 89,100 111,375 133,650 155,925
</TABLE>
Generally, the monthly pension benefit under the Plans for named executive
officers is equal to 1% of the first $750 of average monthly compensation plus
1.5% of the remainder of the executive officer's average monthly compensation,
multiplied by the executive's number of years of credited service. In the case
of service years prior to 1975, the executive's benefit for such years is equal
to 25% of the executive's average monthly compensation multiplied by a fraction
equal to the executive's number of years of credited service divided by 35 and
adjusted for the normal form of payment under the Plans as in effect at that
time. The benefit in respect of years prior to 1975 is not reflected in the
table. For purposes of the preceding computations, an executive's average
monthly compensation is equal to the highest average of the executive's base
compensation (on a monthly basis) for any five consecutive calendar years during
the final 10 calendar years before retirement. For 1995, the base compensation
for each of the named executive officers is the same as the salary shown in the
summary compensation table under "Management-Executive Compensation." After
three years of service, a participant becomes 20% vested and vesting continues
in 20% increments for each year of service. At seven years the participant is
100% vested. The estimated number of credited years of service for named
executive officers is as follows: Malcolm MacLeod, 43 years; Edmond Moran, Jr.,
27 years and William P. Muller, 20 years.
Profit Sharing Plan. As a retirement plan for substantially all shoreside
non-union employees, the Company established a tax-qualified defined
contribution plan (the "Profit Sharing Plan"). Contributions are made on an
annual basis in an amount determined at the sole discretion of the Board of
Directors of the Company, subject to certain maximum limitations set forth under
the Code. Contributions are based upon a percentage, generally 10% to 15%, of
each participant's compensation as defined in the Profit Sharing Plan.
Contributions are invested in various investment alternatives pursuant to
instructions received from each plan participant. After three years of service,
a participant becomes 20% vested and vesting continues in 20% increments for
each year of service. At seven years, the participant is 100% vested. Profit
Sharing Plan contributions are made on a fiscal year basis.
1994 Stock Option Plan. The Company's 1994 Stock Option Plan (the "1994 Plan")
was adopted by the Company's Board of Directors and stockholders on June 11,
1994, effective as of the consummation of the Acquisition, to provide an
incentive to select employees of the Company to remain in the employ of the
Company and to increase their personal interest in the success of the Company.
The 1994 Plan provides for the grant of options ("1994 Stock Options") to
purchase shares of the Company's Common Stock. The maximum number of shares of
the Company's Common Stock issueable under the 1994 Plan is 2,000. Participation
in the 1994 Plan is limited to employees of the Company designated by the Plan
Committee comprised of Messrs. Tregurtha and Barker, each of whom is ineligible
to receive awards under the 1994 plan. Non-employee directors of the Company are
not eligible to participate.
23
<PAGE>
The table sets forth certain information concerning the number of shares covered
by stock options as of December 31, 1997. At December 31, 1997 the fair market
value is assumed to be equal to the exercise price. None of the named executive
officers exercised an option to purchase the Company's Common Stock in 1997.
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised in-the-Money Options
Acquired Options at Fiscal at Fiscal year End ($)
on Value Year-end (Exercisable/
Name Exercise Realized (Exercisable/Unexercisable) Unexercisable)
---- -------- -------- --------------------------- --------------
<S> <C> <C> <C> <C>
Paul R. Tregurtha 0 0 0 0
James R. Barker 0 0 0 0
Malcolm W. MacLeod 0 0 800/0 $0/$0
Edmond J. Moran, Jr. 0 0 0 0
William P. Muller 0 0 168/0 0/0
</TABLE>
24
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Company's Board of Directors is comprised of
Messrs. Tregurtha, Barker and MacLeod. Messrs. Tregurtha, Barker and MacLeod
have served in the positions described under "Executive Officers and Directors
of the Registrant". Generally such relationships can create an opportunity for
conflicts of interest in compensation decisions. Other than as set forth below,
none of the members of the Committee has any other relationship with other
entities that would require additional disclosure. Messrs. Tregurtha and Barker
serve in various capacities, including serving as directors, of Mormac Marine
Group, Inc., Meridian Aggregates Company and Lakes Shipping. Mr. Langlois, a
director of the Company, is an executive officer of Mormac Marine Group, Inc.,
Meridian Aggregates Company and Lakes Shipping. The boards of directors of such
entities perform the functions of compensation committees. In addition, the
Company provides ship docking and undocking services to Mormac, a company which
is owned by Messrs. Barker and Tregurtha and certain members of their families
and as to which Messrs. Barker and Tregurtha are principal executive officers.
Mormac operates three Coronado class oil tankers in the foreign trade and
manages tankers for others in the Jones Act. During 1997, Mormac paid $275,000
for ship docking services performed by the Company. All such services were
provided on arms'-length terms at customary rates. Management has been informed
that Mormac expects to continue to use the Company's tug services in each
instance where Mormac's tankers call on a harbor which the Company services. All
such services will be performed on arms'-length terms and conditions. All of the
members of the Compensation Committee are also parties to stockholder agreements
with the Company.
The Company has entered into the Insurance Agreement with the Mormac Group.
Messrs. Tregurtha, Barker and Langlois are officers, directors and/or direct or
indirect shareholders of some or all of the entities in the Mormac Group. The
Company and the Mormac Group entered into the Insurance Agreement in an effort
to reduce insurance expenses by obtaining lower premiums through group purchases
of insurance and through higher deductibles. The Insurance Agreement also
provides for allocation among the parties of any risk arising out of the
increases in insurance deductibles. Pursuant to the Insurance Agreement, the
Company and the Mormac Group agreed to share any increased insurance claims
expense required to be borne by a party as a result of insurance claims which
exceed historical deductibles but are less than the new, increased deductibles.
Allocations of any increased insurance claims expense is based upon the
historical claims experience (in excess of historical deductibles) for each
party to the agreement. In the current policy year, 65% of any additional
insurance claims expense attributable to the higher deductibles will be borne by
the Company and 35% of any such additional insurance claims expense will be
borne by the Mormac Group. Amounts payable to the Company from members of the
Mormac Group totaled $222,000 at December 31, 1997. The Company believes that
the terms of the Insurance Agreement which was prepared in consultation with an
independent insurance broker, are similar to those that would be obtained in an
arms'-length transaction.
In February 1997, the Company entered into a bareboat charter with Interlake
Transportation, Inc., a corporation which is indirectly owned by Messrs.
Tregurtha and Barker, and as to which Messrs. Tregurtha, Barker and Langlois
serve as executive officers and/or directors. Pursuant to the bareboat
charter, the Company bareboat chartered a tug until December, 1997, at an
aggregate cost of approximately $573,000. As part of a related transaction on
February 21, 1997, in which the Company purchased the barge Massachusetts
from a third party, the Company assigned its right to purchase such tug from
the same third party to Interlake Transportation, Inc., which purchased the
tug. The Company received no consideration for such assignment to Interlake
Transportation, Inc. In December 1997, the Company purchased the tug from
Interlake Transportation, Inc. at a price equal to the price paid to the
third party in February, 1997. Interlake Transportation, Inc. realized no
gain or loss on the sale.
25
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain beneficial ownership information as of
March 27, 1998, concerning the Company's Common Stock with respect to (1) each
person known by the Company to be a beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock, (2) each director of the
Company, (3) each named executive officer of the Company, and (4) all directors
and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Number
Directors, Named Officers and of
5% Beneficial Owners (1) Shares (2) Percentage
------------------------ ---------- ----------
<S> <C> <C>
Lakes Shipping Company, Inc.--------------------------- 28,000 61.5%
Paul R. Tregurtha (3)---------------------------------- 34,375 75.4
James R. Barker (4)------------------------------------ 30,310 66.5
Malcolm W. MacLeod (5)--------------------------------- 2,800 6.1
Edmond J. Moran, Jr.----------------------------------- 1,200 2.6
Andrew P. Langlois (6)--------------------------------- 450 1.0
Alan Marchisotto--------------------------------------- 800 1.8
Jeffrey J. McAulay (7)--------------------------------- 100 0.2
William P. Muller (7)---------------------------------- 168 0.4
Mort Lowenthal----------------------------------------- - -
Directors and executive officers as a group (9 persons) 42,097 92.4
</TABLE>
(1) Unless otherwise indicated, the business address of each beneficial owner
of more than 5% of the Company's Common Stock is Three Landmark Square,
Stamford, Connecticut 06901.
(2) For purposes of computing the percentage of outstanding shares of the
Company's Common Stock held by each person or entity, a person or entity
is deemed to have "beneficial ownership" of any shares of the Company's
Common Stock which such person or entity has the right to acquire within
60 days after the date of the report. Any such shares are deemed to be
outstanding for purposes of computing percentages of beneficial ownership.
Unless otherwise indicated, shares of the Company's Common Stock are
considered beneficially owned by a person or entity if such person or
entity has or shares voting or investment power with respect to such
shares. As a result, the same security may be beneficially owned by more
than one child and entity and, accordingly, in some cases, the same shares
are listed opposite more than one name in this table.
(3) Mr. Tregurtha owns directly 6,375 shares of the Company's Common Stock. In
addition, Mr. Tregurtha beneficially owns 44.6% of the capital stock of,
and serves as Vice Chairman of, Lakes Shipping. Therefore, Mr. Tregurtha
may be deemed to beneficially own the 28,000 shares beneficially owned by
Lakes Shipping.
(4) Mr. Barker owns directly 2,310 shares of the Company's Common Stock. In
addition, Mr. Barker and certain members of his family beneficially own in
the aggregate 44.6% of the capital stock of Lakes Shipping. Mr. Barker
also serves as Chairman of Lakes Shipping. Therefore, Mr. Barker may be
deemed to beneficially own the 28,000 shares beneficially owned by Lakes
Shipping. Three of Mr. Barker's adult children own, in the aggregate,
3,465 shares of Company's Common Stock, which shares are excluded from the
number of shares of the Company's Common Stock shown as being owned by Mr.
Barker. Mr. Barker disclaims beneficial ownership of all 3,465 shares
which are owned by his children.
(5) Mr. MacLeod's business address is Two Greenwich Plaza Greenwich,
Connecticut 06830. Includes options to purchase 800 shares of the
Company's Common Stock which were granted to Mr. MacLeod upon the
consummation of the Acquisition.
(6) Shares shown are held by an individual retirement account for the benefit
of Mr. Langlois.
(7) Includes presently exercisable options to purchase shares of the Company's
Common Stock.
26
<PAGE>
Item 13. Certain Relationships and Related Transactions
As discussed under "Business," the Company was formed in June 1994 in order to
acquire all of the outstanding capital stock of the Predecessor from, among
others, Messrs. MacLeod and Moran. Messrs. MacLeod, Moran and Marchisotto
acquired shares of the common stock of the Company concurrently with the closing
of the Acquisition. In addition, as discussed in note 1 to the consolidated
financial statements attached to this report, the Predecessor transferred its
20% equity interest in four partnerships to entities formed by the stockholders
of the Predecessor. Finally, the agreement governing the Acquisition provides
for the payment of a contingent purchase price to the former stockholders of the
Predecessor upon the occurrence of certain events. Contingent purchase price of
$12.0 million was paid to the former stockholders on February 10, 1997. The
remaining $1.6 million of the contingent purchase price was released from escrow
during the third quarter of 1997 when a subsidiary of the Company terminated its
leasehold interest in Jakobson Shipyard. Part of the Jakobson escrow was paid to
the Company ($0.4 million), with the remainder ($1.2 million) paid to the
Stockholders of the Predecessor.
Certain members of management (the "Management Group") entered into stockholder
agreements (the "Stockholder Agreements") concurrently with the consummation of
the Acquisition. With the exception of Alan L. Marchisotto, who purchased shares
of the Company's Common Stock for cash, all members of the Management Group were
issued shares of the Company's Common Stock in exchange for a portion of their
shares of the capital stock of the Predecessor. The Stockholder Agreements place
the following restrictions upon the transfer of the Company's Common Stock by
each member of the Management Group: (i) the members of the Management Group may
not transfer the Company's Common Stock to any non-U.S. citizen, for purposes of
the Jones Act (a "Foreigner"), and (ii) the members of the Management Group may
not transfer shares of the Company's Common Stock to any other individuals or
entities except in certain limited situations, such as through obtaining the
consent of the Company to the transfer, the exercise of a "Put" (as defined
below) with respect to these shares or the transfer of these shares to
ancestors, descendants or a spouse. The Stockholder Agreements also provide that
each member of the Management Group has the right to require the Company to
purchase (a "Put") all of such member's shares of the Company's Common Stock
following such time as the member ceases to be an employee of any of the
Company, its Subsidiaries or its affiliates, with certain limitations. The
Company has the right to purchase (a "Call") the shares of the Company's Common
Stock of each member of the Management Group upon the occurrence of certain
events, including the death of such member, the making by such member of a
general assignment for the benefit of creditors, the filing of a voluntary or
involuntary petition for bankruptcy or the cessation of such member's employment
with the Company, its subsidiaries or affiliates. The Stockholder Agreements for
all members of the Management Group, provide that the purchase price of the
shares being either purchased or sold through such a Put or Call will be the
fair market value of such shares as determined by an investment banking firm of
national standing. The Stockholder Agreements also provide that if the Company
grants registration rights to any executive officer, it will at such time grant
proportionate registration rights to the members of the Management Group.
The members of the Lakes Group entered into stockholder agreements with the
Company prohibiting the transfer of the Company's Common Stock to any foreigner.
27
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents Filed as Part of the Report
(1) Financial Statements - The Company
The following Consolidated Financial Statements of the Company and its
subsidiaries are included in this Report:
Report of Independent Accountants . . . . . . . . . . . . F-1
Consolidated Balance Sheets at December 31, 1996
and December 31, 1997 . . . . . . . . . . . . . . . . F-2 to F-3
Consolidated Statements of Income for the Years Ended
December 31, 1995, December 31, 1996 and December 31, 1997. . F-4
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, December 31, 1996 and December 31, 1997. . F-5
Consolidated Statement of Stockholders' Equity for the
Years Ended December 31, 1995, December 31, 1996 and
December 31, 1997. . . . . . .. . . . . . . . . . . . . . . F-6
Notes to Consolidated Financial Statements . . . . . . F-7 to F-20
28
<PAGE>
(3) Exhibits
The following is a list of Exhibits to this Report. Exhibits 10.18 - 10.20
are management contracts or compensatory plans or arrangements
required to be filed as Exhibits to this report pursuant to Item 14(c) of this
report.
Exhibit No. Description of Document
3.1* Certificate of Incorporation of the Registrant
3.2* By-Laws of the Registrant.
4.1* Indenture, dated as of July 11, 1994, among the Registrant, the
Guarantors named therein and Fleet National Bank (formerly Shawmut
Bank Connecticut, National Association), as Trustee, relating to the
Notes (including forms of Notes and Guarantees).
4.1(a)** Supplemental Indenture No. 1, dated December 29, 1994.
4.1(b)***Supplemental Indenture No. 2, dated January 2, 1996.
4.1(c) Supplemental Indenture No. 3, dated December 31, 1996 (filed as
exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 and incorporated herein by
reference).
4.1(d) Supplemental Indenture No. 4, dated December 31, 1997.
4.2* Form of Preferred Ship Mortgage, dated July 11, 1994, in favor of
Fleet National Bank (formerly Shawmut Bank Connecticut, National
Association), as Trustee.
4.3* Form of Preferred Fleet Mortgage, dated July 11, 1994, in favor of
Fleet National Bank (formerly Shawmut Bank Connecticut, National
Association), as Trustee.
10.1***** Second Amendment of the Revolving Credit Agreement, dated as of
July 11, 1994, among the Company, the Restricted Subsidiaries
named therein and BankBoston, N.A. (formerly known as The First
National Bank of Boston), individually and as agent.
10.2* Revolving Credit Agreement, dated as of July 11, 1994, among the
Registrant and the Restricted Subsidiaries named therein and The
First National Bank of Boston, the other lenders that may become
parties thereto, and The First National Bank of Boston, as agent.
10.2(a)** Instrument of Adherence dated December 29, 1994 by Barge Pennsylvania
Corporation.
10.2(b)***Instrument of Adherence dated January 2, 1996, by Moran Bulk
Corporation.
10.2(c) Instrument of Adherence dated December 31, 1996 by Seaboard Barge
Corporation, Petroleum Transport Corporation, and Moran Towing
of Delaware, Inc. (filed as exhibit to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996
and incorporated herein by reference).
10.3* Security Agreement, dated as of July 11, 1994 among the Registrant,
its subsidiaries named therein and The First National Bank of
Boston, individually and as agent (filed as exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 and incorporated herein by reference).
10.3(a) Security Agreement, dated December 31, 1996 among Seaboard barge
Corporation, Petroleum Transport Corporation and Moran Towing of
Delaware, Inc., and The First National Bank of Boston, individually
and as agent (filed as exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 and
incorporated herein by reference).
29
<PAGE>
10.4* Note, dated July 11, 1994, of the Registrant and its subsidiaries
named therein, payable to the order of The First National Bank of
Boston in the principal amount of up to $10,000,000.
10.5(a) Amended and Restated Term Loan Agreement, dated as of December 12,
1997, among Moran Towing Corporation, the guarantors named therein,
and BankBoston Leasing Inc., as lender and as agent.
10.5(b) Amended and Restated Term Loan Agreement, dated as of December 12,
1997, payable by Moran Towing Corporation, to BankBoston Leasing
Inc.
10.5(c) Guaranty in favor of BankBoston Leasing Inc., dated as of December 12,
1997.
10.5(d) First Preferred Fleet Mortgage, dated December 12, 1997, in favor
of BankBoston Leasing Inc.
10.6 Agreement dated December 10, 1997, between Interlake
Transportation, Inc. and Moran Towing Corporation.
10.7***** Licensed Agreement, effective June 10, 1995, between Seafarers
International Union of North America, Atlantic, Gulf, Lakes and
Inland Waters District, AFL - CIO, and Moran Towing of Texas
Inc.
10.8***** Unlicensed Agreement, effective June 10, 1995, between Seafarers
International Union of North America, Atlantic, Gulf, Lakes and
Inland Waters District, AFL - CIO, and Moran Towing of Texas Inc.
10.9 Agreement, effective May 1, 1996, between Seafarers International
Union of North America, Atlantic, Gulf, Lakes and Inland Waters
District, AFL - CIO, and Moran Towing of Pennsylvania and Moran Towing
of Maryland, divisions of Moran Towing Corporation.
10.10 Licensed Agreement, effective November 24, 1996, between American
Maritime Officers and Moran Mid-Atlantic Corporation, Moran Towing
of Pennsylvania Division.
10.11 Memorandum of Agreement between Local 333, United Marine Division,
International Longshoremans Association, AFL-CIO, and Moran Towing
& Transportation Co., Inc.
10.12 Agreement, effective May 1, 1997, between International
Organization of Masters, Mates & Pilots and Moran Towing of
Florida, Inc.
10.14* Stockholder Agreement, dated as of July 11, 1994, between the
Registrant and Malcolm W. MacLeod.
10.15* Stockholder Agreement, dated as of July 11, 1994, between the
Registrant and Edmond J. Moran, Jr.
10.16* Stockholder Agreement, dated as of July 11, 1994, between the
Registrant and Alan L. Marchisotto.
10.17* Form of Stockholder Agreement, dated as of July 11, 1994, between
the Registrant and each of Lakes Shipping Company, Inc., Paul R.
Tregurtha, James R. Barker, Andrew P. Langlois, James A. Barker,
Mark W. Barker and Karen E. Barker.
10.18* 1994 Stock Option Plan of the Registrant.
10.19* Form of 1994 Stock Option Agreement.
10.20* Moran Towing Corporation and Subsidiaries Supplemental Employee
Retirement Plan.
10.21**** Marine Insurance Additional Retention Agreement between Global
Marine Enterprises Ltd., Interlake Steamship Company, Lakes
Shipping Company, Inc., Moran Towing Corporation and Mormac Marine
Transport, Inc..
12.1 Statement regarding computation of ratio of earnings to fixed
charges.
21.1 List of Subsidiaries.
30
<PAGE>
27.1 Financial Data Schedule - Fiscal year end 1997
27.2 Financial Data Schedule - Fiscal year ends 1995, 1996 and
Quarters 1, 2, 3 of 1996
27.3 Financial Data Schedule - Quarter 1, 2, and 3 of 1997
* Filed as an Exhibit to the Registrant's Registration Statement on
Form S-1 (No. 33 - 82624) and incorporated herein by reference.
** Filed as an Exhibit to the Registrant's Form 10-K for the year
ended December 31, 1994 and incorporated herein by reference.
*** Filed as an Exhibit to the Registrant's Form 10-Q for the quarterly
period ended March 31, 1996 and incorporated herein by reference.
**** Filed as an Exhibit to the Registrant's Form 10-Q for the quarterly
period ended September 30, 1995 and incorporated herein by reference.
***** Filed as an Exhibit to the Registrant's Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference.
****** Filed as an Exhibit to the Registrant's Form 10-Q for the quarterly
period ended June 30, 1997, and incorporated herein by reference.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the last quarter of the year covered by this report.
31
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholders of
Moran Transportation Company
In our opinion, the accompanying consolidated balance sheets and related
consolidated statements of income, of cash flows and of changes in stockholders'
equity present fairly, in all material respects, the financial position of Moran
Transportation Company and its subsidiaries (the "Company") at December 31, 1997
and 1996, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Stamford, Connecticut
February 20, 1998
F-1
<PAGE>
MORAN TRANSPORTATION COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents ....................................... $ 5,827 $ 9,945
Accounts receivable, less allowance for doubtful accounts of $323
and $288 at December 31, 1996 and 1997, respectively ............ 12,744 14,319
Inventory (note 4) .............................................. 4,395 4,161
Unexpired insurance and other prepaid expenses .................. 2,065 2,487
Restricted funds held for contingent consideration (note 1) ..... 12,000 --
-------- --------
Total current assets ......................................... 37,031 30,912
Investment in joint venture (note 6) .............................. 2,892 3,164
Insurance claims receivable ....................................... 2,346 2,563
Fixed assets, net (note 3) ........................................ 121,325 119,920
Shipyard assets held for sale (note 13) ........................... 3,036 --
Restricted funds held for contingent consideration (note 1) ....... 1,600 --
Other assets ...................................................... 4,487 3,731
-------- --------
Total assets ...................................................... $172,717 $160,290
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
F-2
<PAGE>
MORAN TRANSPORTATION COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade accounts payable ........................................... $ 4,486 $ 3,602
Current portion of long-term debt (note 8) ....................... -- 168
Accounts payable to joint venture ................................ 1,066 477
Accrued interest payable ......................................... 4,308 4,331
Other accrued liabilities ........................................ 4,227 3,936
Backpay liability ................................................ 885 837
Income taxes payable (note 9) .................................... 926 --
Liability for contingent consideration (note 1) .................. 12,000 --
-------- --------
Total current liabilities ..................................... 27,898 13,351
Long-term debt (note 8) ............................................ 80,000 83,252
Insurance claims reserves .......................................... 5,989 7,227
Deferred income taxes (note 9) ..................................... 34,150 32,450
Postretirement benefits other than pensions (note 10) .............. 3,995 4,321
Liability for contingent consideration (note 1) .................... 1,600 --
Other liabilities .................................................. 6,060 5,045
-------- --------
Total liabilities ............................................. 159,692 145,646
Commitments and contingencies (notes 11 and 12)
Mandatorily redeemable capital stock 4,000 shares outstanding ...... 1,000 1,000
Stockholders' Equity
Common stock, par value $0.01 per share authorized-100,000 shares
issued and outstanding 40,600 shares ............................ 1 1
Capital surplus ................................................. 10,149 10,149
Retained earnings ............................................... 1,875 3,494
-------- --------
Total stockholders' equity ...................................... 12,025 13,644
-------- --------
Total liabilities and stockholders' equity ...................... $172,717 $160,290
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
F-3
<PAGE>
MORAN TRANSPORTATION COMPANY
AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except per share amount)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Operating revenue .......................................... $ 77,343 $ 91,458 $ 100,526
Cost of operations
Operating expenses ...................................... 45,672 57,451 66,090
Depreciation ............................................ 7,412 7,719 7,769
--------- --------- ---------
Total cost of operations ............................... 53,084 65,170 73,859
--------- --------- ---------
Gross profit ............................................... 24,259 26,288 26,667
General and administrative expenses ........................ 14,221 14,283 13,755
--------- --------- ---------
Operating income ........................................... 10,038 12,005 12,912
Interest expense ........................................... (10,192) (10,132) (10,026)
Interest income ............................................ 51 146 346
Equity in loss from joint venture (note 6) ................. (188) (66) (727)
Other income/(expense), net ................................ 155 160 (273)
--------- --------- ---------
(Loss)/income before provision for income taxes ............ (136) 2,113 2,232
Provision for income taxes (note 9) ........................ 200 808 613
--------- --------- ---------
Net (loss)/income ....................................... $ (336) $ 1,305 $ 1,619
========= ========= =========
(Loss)/earnings per share
Basic ................................................... (7.53) 29.26 36.30
========= ========= =========
Diluted ................................................. (7.53) 28.56 35.20
========= ========= =========
Weighted average number of shares outstanding (in thousands)
Basic ................................................... 44.6 44.6 44.6
========= ========= =========
Diluted ................................................. 44.6 45.7 46.0
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE>
MORAN TRANSPORTATION COMPANY
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities
Net (loss)/income ............................. $ (336) $ 1,305 $ 1,619
Adjustments to reconcile net (loss)/income to net
cash provided by operating activities:
Depreciation and amortization ................. 9,472 11,092 11,666
Deferred income taxes ......................... 267 (1,898) (1,661)
Equity in loss from joint venture ............. 188 66 727
Loss on disposal of floating equipment ........ -- 128 90
Changes in operation assets and liabilities:
Accounts receivable ........................... (1,500) (697) (1,575)
Other current assets .......................... (425) (182) 219
Accounts payable and accrued expenses ......... (2,528) 2,811 (1,740)
Income taxes payable .......................... 151 (69) (926)
Insurance claims receivable ................... (823) (629) (217)
Insurance claims reserve ...................... 530 1,658 1,238
Other assets and liabilities .................. 495 (2,158) (679)
-------- -------- --------
Net cash provided by operating activities .......... 5,491 11,427 8,761
-------- -------- --------
Cash flows from investing activities
Capital expenditures .......................... (5,832) (5,110) (12,713)
Capital contribution to joint venture ......... -- -- (1,000)
Net proceeds from constructive total loss ..... -- -- 2,800
Proceeds from sale of leasehold interest ...... -- -- 2,850
-------- -------- --------
Net cash used for investing activities ............. (5,832) (5,110) (8,063)
-------- -------- --------
Cash flows from financing activities
Proceeds from borrowings ...................... 1,000 2,250 3,420
Repayment of debt ............................. (1,512) (5,664) --
Debt issuance costs ........................... (140) (82) --
-------- -------- --------
Net cash (used for)/provided by financing activities (652) (3,496) 3,420
-------- -------- --------
Net (decrease)/increase in cash and cash equivalents (993) 2,821 4,118
Cash and cash equivalents at beginning of period ... 3,999 3,006 5,827
-------- -------- --------
Cash and cash equivalents at end of period ......... $ 3,006 $ 5,827 $ 9,945
======== ======== ========
Cash paid during period for
Interest ...................................... $ 9,743 $ 9,816 $ 9,579
======== ======== ========
Income taxes .................................. $ 469 $ 2,742 $ 3,656
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements
F-5
<PAGE>
MORAN TRANSPORTATION COMPANY
AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Dollars in thousands)
<TABLE>
<CAPTION>
Common Capital Retained
Stock Surplus Earnings Total
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 ....................... $ 1 $ 9,999 $ 906 $ 10,906
Net loss ........................................... -- -- (336) (336)
-------- -------- -------- --------
Balance at December 31, 1995 ....................... $ 1 $ 9,999 $ 570 $ 10,570
Transfer of mandatorily redeemable capital stock.... -- 150 -- 150
Net income ......................................... -- -- 1,305 1,305
-------- -------- -------- --------
Balance at December 31, 1996 ....................... $ 1 $ 10,149 $ 1,875 $ 12,025
Net income ......................................... -- -- 1,619 1,619
-------- -------- -------- --------
Balance at December 31, 1997 ....................... $ 1 $ 10,149 $ 3,494 $ 13,644
======== ======== ======== ========
</TABLE>
F-6
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
(1) Moran Transportation Company
Moran Transportation Company ("Moran" or the "Company") is a Delaware
corporation, incorporated on June 2, 1994. Moran was organized to acquire
(the "Acquisition") all of the outstanding common stock of Moran Towing
Corporation (the "Predecessor"), a company which provided tug services and
marine transportation services, primarily on the East and Gulf coasts of the
United States. The Company is a majority owned subsidiary of Lakes Shipping
Company, Inc. On July 11, 1994, the Acquisition was consummated and was
accounted for as a purchase. In connection with the Acquisition, the
Predecessor transferred its 20% equity interest in four partnerships to
entities formed by the stockholders of the Predecessor. When the Company
acquired the Predecessor, certain contingent liabilities of the Predecessor,
primarily related to certain limited and defined guarantees given by the
Predecessor, were assumed. These liabilities were fully reserved and funded
by placing $13.6 million in escrow. In February 1997, $12.0 million of the
escrow amount was released to the former shareholders upon the release of the
Company from the partnership guarantees. There was no impact on the Company,
other than assets and liabilities being reduced. The Company released the
remaining $1.6 million escrow during the third quarter when a subsidiary of
the Company terminated its leasehold interest in Jakobson Shipyard. The loss
related to the lease termination was not material.
(2) Summary of Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Moran
Transportation Company and its subsidiaries. The financial statements also
include a 50% owned joint venture in a marine tank barge operation which is
accounted for under the equity method of accounting. All material intercompany
items and transactions are eliminated in consolidation.
Reclassifications
Certain reclassifications have been made to the prior periods' consolidated
financial statements to conform with the December 31, 1997 presentation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures, at the
date of the financial statements. Similarly, estimates and assumptions are
required for the reporting of revenues and expenses. Actual results could differ
from the estimates that were used.
F-7
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
Change in Accounting Principles
In October 1995, Financial Accounting Standard No. 123 (FAS 123) - "Accounting
for Stock-Based Compensation" was issued and is effective for the Company on
January 1, 1996. FAS 123 permits, but does not require, a fair value based
method of accounting for employee stock option plans which results in
compensation expense being recognized in the results of operations when stock
options are granted. The Company plans to continue to use the current intrinsic
value based method of accounting for its plan.
In 1997, Financial Accounting Standards No. 128 (FAS 128) - "Earnings Per Share"
was issued and is effective for the Company on January 1, 1997. FAS 128 changes
the calculation of earnings per share ("EPS") under generally accepted
accounting principles in the U.S. to be more consistent with international
standards. Under the new standards, companies replace the reporting of "primary"
EPS with "basic" EPS. Basic EPS is calculated by dividing the income or loss
available to common shareholders by the weighted average number of common shares
outstanding for the period, without consideration of common stock equivalents.
"Fully diluted" EPS is replaced by "diluted" EPS, which will be similar to fully
diluted EPS as previously computed.
Revenue Recognition
Tug and barge revenue is recognized as services are performed.
Drydocking Expenses
Drydocking and related costs are capitalized when incurred and amortized over
the period until the next drydocking, usually 30 months.
Fixed Assets/Depreciation
Fixed assets include the cost of land, building, floating equipment, capitalized
drydocking costs, construction work-in-progress, improvements to leaseholds and
equipment. Interest incurred during the construction of floating equipment is
capitalized. Depreciation is provided on the straight-line method over the
estimated useful lives of the assets which range from three to twenty-five
years. Major renewals and betterments are capitalized, while replacements,
maintenance and repairs which do not improve or extend the life of the assets
are expensed.
Income Taxes
The Company and its wholly owned domestic subsidiaries file a consolidated
Federal income tax return. The Company accounts for deferred income taxes using
the asset and liability method as prescribed under Financial Accounting Standard
No. 109, "Accounting for Income Taxes" (FAS 109). The Company provides a
valuation allowance if it is more likely than not that some portion or all of
the deferred tax asset will not be realized.
F-8
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
Cash and Cash Equivalents
The Company considers all highly liquid investments having original maturities
of three months or less to be cash equivalents.
Inventory
Inventories are valued at the lower of cost (first-in, first-out basis) or
market and include fuel, replacement parts, supplies and repair materials.
Deferred Financing Costs
Expenses incurred in connection with debt issuance have been deferred and are
being amortized using the interest method over the terms of the related debt
agreements.
Environmental Expenditures
Environmental expenditures are expensed or capitalized, as appropriate.
Expenditures that result from the remediation of an existing condition caused by
past operations, that are not attributable to current or future revenues, are
expensed. Liabilities are recognized for remedial activities when the cleanup is
probable and the cost can be reasonably estimated, generally coinciding with the
Company's commitment to a formal plan of action.
Earnings Per Share
Effective December 31, 1997, earnings per share were calculated in accordance
with FAS 128, accordingly prior years earning per share have been restated.
Basic earnings per share is determined by dividing net income/(loss) by the
weighted average number of common shares outstanding during the period, without
consideration of common stock equivalents. Diluted earnings per share is
determined by dividing net income/(loss) by the weighted average number of
shares of common stock and common stock equivalents outstanding during the
period.
(3) Fixed Assets
Fixed assets consist of the following:
Dec. 31, Dec. 31,
1996 1997
-------- --------
Floating equipment ................................... $133,828 $135,550
Capitalized drydocking costs ......................... 7,875 10,123
Construction in progress ............................. 125 2,425
Shipyard and pier improvements ....................... 70 171
Furniture, fixtures and leasehold improvements ....... 641 903
Equipment ............................................ 147 199
Land ................................................. 663 663
-------- --------
Less: Accumulated depreciation and amortization ...... 22,024 30,114
-------- --------
Total ................................................ $121,325 $119,920
======== ========
F-9
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
(4) Inventories of Fuel, Supplies and Repair Materials
The components of inventory are as follows:
Dec. 31, Dec. 31,
1996 1997
------ ------
Fuel ................................................. $1,103 $ 916
Diesel parts ......................................... 1,564 1,583
Propeller wheels and shafts .......................... 1,230 1,221
Rope, fenders, supplies and miscellaneous ............ 498 441
------ ------
Total ................................................ $4,395 $4,161
====== ======
(5) Investment in affiliated partnerships
Subsidiaries of the Predecessor had a 20% interest in each of four partnerships
with subsidiaries of Overseas Shipholding Group, Inc., each of which partnership
is the bareboat charterer of one U.S. flag tanker. These interests were
transferred to the stockholders of the Predecessor as part of the Acquisition.
The Predecessor had provided certain financial guarantees in connection with the
acquisition of the affiliated partnerships. These undertakings were limited to
$12,000 in the aggregate and among others, guaranteed (i) payment of the equity
portion of charter hire to the owner of the affiliated partnership's tankers,
(ii) certain indemnity obligations arising under the bareboat charters,
including tax obligations, and (iii) the obligation of the partnerships to
maintain and insure the tankers. These guarantees survived the Acquisition and
remained the obligation of the Company. To secure these guarantees, $12,000 of
the purchase price was put into escrow to be released when the guarantees
expired in 2003, to the extent not called upon. These funds were included in
restricted funds held for contingent consideration. In February 1997, the
Company was released from these obligations and the $12,000 escrow related to
these guarantees was distributed to the former shareholders.
(6) Investment in Joint Venture
The Company has invested in a 50% owned joint venture which owns and operates an
ocean going petroleum barge. The Company accounts for the joint venture under
the equity method.
Partner's capital in the Company's 50% investment in the joint venture was $794,
$968, and $1,480 at December 31, 1995, 1996 and 1997 respectively. The Company
received no cash dividends in the three years ended December 31, 1997 and made a
partnership contribution of $1,000 in 1997 to cover dry-docking related costs.
F-10
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
The Company's 50% interest in the assets, liabilities, revenues, expenses and
income of the joint venture is summarized as follows:
As of December 31,
------------------
1996 1997
---- ----
Total assets...................... $1,483 $1,858
====== ======
Total liabilities................. $516 $378
==== ====
For the years ended December 31,
--------------------------------
1995 1996 1997
---- ---- ----
Total revenues.................... $1,939 $2,528 $1,460
====== ====== ======
Total expenses.................... $1,887 $2,354 $1,947
====== ====== ======
Equity in income/(loss)........... $52 $174 $(487)
=== ==== =====
In connection with the Acquisition, the Company increased the carrying value of
its investment by $2,519 to fair market value. The Company is amortizing the
increase over ten years, representing the remaining useful life of the joint
venture's barge. Amortization was $240 per year for the three years ending
December 31, 1997.
(7) Insurance Subsidiary
The consolidated financial statements include the accounts of the Company's
wholly-owned insurance subsidiary whose fiscal year end is March 31. Summarized
unaudited financial information based on the Company's reporting periods is as
follows:
As of December 31,
------------------
1996 1997
---- ----
Total assets...................... $2,122 $2,188
====== ======
Total liabilities................. $387 $384
==== ====
For the years ended December 31,
--------------------------------
1995 1996 1997
---- ---- ----
Total income (a).................. $10 $118 $70
=== ==== ===
(a) Total income includes interest income of $23, $156 and $91 for the years
ended December 31, 1995, 1996 and 1997, respectively.
F-11
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
(8) Long-term Debt
Long-term debt at December 31 was as follows:
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
11.75% Series B First Preferred Ship Mortgage Notes due July 15, 2004 $80,000 $80,000
8.1% Term Loan due June 1, 2005 .................................... -- 3,420
------- -------
80,000 83,420
Less: Current maturities ....................................... -- 168
------- -------
Long-term portion .............................................. $80,000 $83,252
======= =======
</TABLE>
As part of the Acquisition, the Company issued $80,000 of 11.75% First Preferred
Ship Mortgage Notes due July 15, 2004. In November 1994, pursuant to an Exchange
and Registration Rights Agreement, the Company exchanged all of such Notes for
its 11.75% Series B First Preferred Ship Mortgage Notes, the issuance of which
had been registered under the federal securities laws. Interest on the notes is
payable semi-annually on January 15 and July 15. The Notes are redeemable, in
cash, at the option of the Company, in whole or in part in amounts of $1,000 or
an integral multiple of $1,000 on or after July 15, 1999 at the redemption
prices set forth below, plus accrued and unpaid interest if redeemed during the
12-month period commencing on July 15 of the year indicated below:
1999 108%
2000 106
2001 104
2002 102
2003 and thereafter 100
All of the Company's subsidiaries (the "Guarantors") have guaranteed the $80,000
of Series B First Preferred Ship Mortgage Notes. Accordingly, the financial
statements of the Guarantors have not been included, individually or on a
combined basis, because the guarantors have fully and unconditionally guaranteed
such Notes on a joint and several basis, and because the aggregate net assets,
earnings and equity of the Guarantors are substantially equivalent to the net
assets, earnings and equity of the Company on a consolidated basis and,
therefore, separate financial statements concerning the Guarantors are not
deemed material to investors.
The Notes rank pari passu with all existing and future senior indebtedness of
the Company and senior to all subordinated indebtedness of the Company and are
secured by substantially all of the Company's floating equipment. The indenture
contains certain restrictions on incurrence of debt, liens, sales of assets,
investments, capital expenditures, and dividend and upstream payments. The
Company must also comply with certain other financial covenants.
F-12
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
On December 1, 1997, the Company purchased a tug from an affiliated company. As
part of that transaction, the Company entered into a $3.4 million term loan
which is payable in 24 quarterly installments through June 1, 2005, with a
balloon payment equal to 50% of the original loan value. Interest is based upon
LIBOR plus 1.75% but is fixed through June 1, 1999 at 8.1%. The loan is secured
by the tug April Moran.
The Company has a Senior Credit Facility, which consists of a revolving line of
credit (the "Revolving Credit Facility") of up to $10,000, including a letter of
credit facility (the "Letter of Credit Facility") of up to $5,000. Any amounts
outstanding under the letter of Credit Facility reduce the available credit
under the Revolving Credit Facility. The accounts receivable and inventory of
the Company primarily secure the Revolving Credit Facility. At December 31, 1996
and 1997, letters of credit outstanding were $472 and $472, respectively. At
year-end, the Company had no borrowings outstanding under the Revolving Credit
Facility which expires on July 11, 2000.
The Company has deferred debt placement costs incurred in connection with the
$80,000 of First Preferred Ship Mortgage Notes. The unamortized balance of such
fees was $2,854 and $2,415 at December 31, 1996 and 1997, respectively.
(9) Income Taxes
In accordance with FAS 109, the deferred tax provision was determined under the
asset and liability approach. Deferred tax assets and liabilities were
recognized on differences between the book and tax basis of assets and
liabilities using current tax rates. The provision for income taxes is the sum
of the amount of income tax paid or payable for the year as determined by
applying current tax laws to the taxable income for the current year and the net
change in the Company's deferred tax assets and liabilities during the year.
The components of the provision for income taxes are as follows:
For the years ended December 31,
--------------------------------
1995 1996 1997
---- ---- ----
Current...................... $776 $2,680 $2,274
Deferred..................... (576) (1,872) (1,661)
---- ------ ------
$200 $808 $613
==== ====== ======
This provision includes state tax expense for the years ended December 31, 1995,
1996 and 1997 of $279, $34 and $182, respectively.
F-13
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
The reconciliation of the Company's effective income tax rate and the statutory
income tax rate are as follows:
For the years ended December 31,
--------------------------------
1995 1996 1997
---- ---- ----
Statutory income tax rate............. (34.0)% 35.0% 35.0%
Increases (decreases) due to:
State taxes...................... 135.8 6.4 5.3
Meals and entertainment.......... 40.7 2.0 1.9
Rate differential................ - (2.6) 1.8
Release of valuation allowance... - - (17.3)
Other-net........................ 4.8 (2.6) 0.8
----- ---- ----
Effective income tax rate............. 147.3% 38.2% 27.5%
===== ==== ====
Under FAS 109, temporary differences which give rise to a significant portion of
net deferred tax liabilities were as follows:
Dec. 31, Dec. 31,
1996 1997
-------- --------
Deferred tax assets
State and local taxes ............................. $ 816 $ 749
Insurance claims reserves ......................... 746 623
Post retirement benefits other than pensions ...... 1,358 1,469
Capital loss carry forward ........................ 386 --
Additional compensation ........................... 234 268
Hull insurance aggregate reserves ................. 759 1,179
P & I insurance aggregates reserve ................ 373 373
Backpay liability ................................. 1,782 1,403
Other items-net ................................... 445 (109)
-------- --------
Total deferred tax assets ......................... 6,899 5,955
-------- --------
Deferred tax liabilities
Depreciation and amortization ..................... (36,307) (34,411)
Pension benefits .................................. (466) (368)
Capitalized drydocking costs ...................... (1,606) (2,263)
Land valuation .................................... (197) (197)
Fuel inventory costs .............................. (374) (311)
Capitalized environmental remediation costs ....... (820) --
-------- --------
Total deferred tax liabilities .................... (39,770) (37,550)
Valuation allowance ............................... (721) (335)
-------- --------
Net deferred tax liabilities ...................... $(33,592) ($31,930)
======== ========
The current portion of net deferred income taxes of $558 and $520 at December
31, 1996 and 1997, respectively, is included in other prepaid expenses.
F-14
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
(10) Pension, Postretirement Benefit and Profit Sharing Plans
Pension
The net periodic pension expense for the Company's defined benefit pension plan
is comprised of the following:
For the years ended December 31,
--------------------------------
1995 1996 1997
------- ------- -------
Service cost-benefits earned during the period $ 286 $ 327 $ 305
Interest cost projected benefit obligation .... 557 559 532
Actual return on plan assets .................. (988) (757) (1,043)
Net amortization and deferral ................. 425 117 438
------- ------- -------
Net periodic pension expense .................. $ 280 $ 246 $ 232
======= ======= =======
The following table sets forth the defined benefit pension plan's funded status
and amounts recognized in the Company's financial statements at December 31,
1996 and December 31, 1997:
Dec. 31, Dec. 31,
1996 1997
------ ------
Actuarial present value of benefit obligation:
Vested benefits obligation ............................... $5,176 $5,847
====== ======
Accumulated benefit obligation ........................... $5,383 $6,044
====== ======
Projected benefit obligation ............................. $7,099 $7,878
Fair value of plan assets ................................ 7,775 8,338
------ ------
Plan assets in excess of projected benefit obligation .... 676 460
Unamortized loss ......................................... 691 675
------ ------
Prepaid pension costs .................................... $1,367 $1,135
Dec. 31, Dec. 31,
1996 1997
------ ------
The actuarial assumptions are:
Discount rate ............................................ 7.50% 7.25%
Rate of increase in compensation levels .................. 4.0% 4.0%
Expected long-term rate of return on assets .............. 8.0% 8.0%
The Company has a defined benefit pension plan covering substantially all
shoreside non-union employees. The plan generally provides benefit payments
using a formula that is based on an employee's compensation and length of
service. The Company's policy is to fund current service costs. The plan's
assets are primarily invested in a managed bond portfolio with a portion
invested in a managed equity portfolio. In 1996, a $69 contribution was made for
the 1995 plan year. Since the plan is fully funded, no contribution is required
for the 1997 plan year. In addition, the Company has an unfunded supplemental
F-15
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
Three-year period ended December 31, 1997
employee retirement plan ("SERP") for certain executives. The Company's
pension SERP liability was $575 and $651 at December 31, 1996 and 1997
respectively.
In accordance with contractual agreements, the Company makes contributions to
union-sponsored pension and welfare plans. Such contributions were $956, $1,965
and $2,287 for years December 31, 1995, 1996 and 1997, respectively. In
addition, the Company has a defined contribution pension plan for non-union
fleet employees. The Company made contributions of $182, $201 and $333 for the
years ended December 31, 1995, 1996 and 1997, respectively.
Profit Sharing Plan
The Company has a non-contributory profit-sharing plan covering substantially
all shoreside non-union employees. Company contributions are at the discretion
of the Board of Directors. The Company made contributions of $556, $674 and $681
for the years ended December 31, 1995, 1996 and 1997, respectively. In addition,
the Company has an unfunded profit sharing SERP for certain executives. The
Company's profit sharing SERP liability was $114 and $137 at December 31, 1996
and 1997, respectively.
Post Retirement Benefits
The Company provides certain health care and life insurance benefits to all
employees who retire from the Company and satisfy certain service and age
requirements.
Generally, the medical coverage pays a stated percentage of most medical
expenses reduced for any deductible and payments made by Medicare or other group
coverage. Benefits are administered through an insurance carrier paid by the
Company. The cost of providing these benefits is shared with retirees. The cost
sharing provisions vary depending on the retirement date. The plan is unfunded.
The premium cost of providing these benefits was $281, $265 and $271 for the
years ended December 31, 1995, 1996 and 1997, respectively.
The Company accounts for retiree health care costs in accordance with Financial
Accounting Standard No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions." This statement requires the accrual of the cost of
providing postretirement benefits, including medical and life insurance
coverage, during the active service period of the employee.
F-16
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
The following table sets forth the Company's accrued postretirement benefit
liability recognized in the Company's Consolidated Balance Sheets at December
31, 1996 and 1997 and related postretirement cost for the years ended December
31, 1996 and 1997.
December 31,
---------------
1996 1997
------ ------
Actuarial present value of postretirement benefit obligation:
Retirees ................................................... $2,955 $3,590
Fully eligible active participants ......................... 890 842
Other active participants .................................. 801 984
------ ------
Accumulated postretirement benefit obligation ................ 4,646 5,416
Unrecognized net loss ........................................ 663 1,107
------ ------
Accrued postretirement benefit liability ..................... $3,983 $4,309
====== ======
Net periodic postretirement benefit cost for periods ended December 31, 1996 and
December 31, 1997 included the following components:
1996 1997
---- ----
Service cost of benefits earned .................................. $161 $176
Interest cost on accumulated postretirement benefits obligation .. 318 366
Amortization of unrecognized loss ................................ 32 49
---- ----
Net periodic postretirement benefit cost ......................... $511 $591
==== ====
The discount rate used in determining the APBO was 7.5% in fiscal 1996 and 7.25%
in 1997. The assumed health care cost trend rate used for measuring the APBO was
divided into two categories:
1996 1997
---- ----
Under age 65 participants ....................................... 11.9% 10.8%
Over age 65 participants ........................................ 14.5% 12.8%
Over 17 years, rates were assumed to remain unchanged at 6.1% for the under age
65 participants and 6.3% for the over age 65 participants, for 1996 and for
1997.
If the health care cost trend rate was increased 1 percent, the APBO as of
December 31, 1996, would have increased 11.6%. The effect of this change on the
aggregate of service and interest cost for period ended December 31, 1996 would
be an increase of 15.2%. As of December 31, 1997, the effect on the APBO would
be an increase of 11.6% and for period service and interest an increase of
14.3%.
F-17
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
(11) Commitments
On November 8, 1996, a subsidiary of the Company entered into a 10 year bareboat
charter for the barge Portsmouth. The Company has an option to purchase the
barge at the end of the seventh year and at the end of the lease term. The
annual charterhire for this vessel is $1.0 million over the term of the lease.
Minimum annual rental commitments at December 31, 1997, under non-cancelable
operating leases, including the bareboat charter for the Portsmouth, are as
follows:
1998........................................ $1,888
1999........................................ 1,840
2000........................................ 1,842
2001........................................ 1,789
2002........................................ 1,713
2003 and beyond............................. 4,786
Total gross rent expense was $1,054, $1,160 and $1,896 for the years ended
December 31, 1995, 1996 and 1997, respectively.
(12) Contingent Liabilities
In February 1994, a lawsuit was filed in United States District Court for the
Eastern District of New York by the Town of Oyster Bay (the "Town"), New York,
against the Company and several other potentially responsible parties ("PRP").
The Town is seeking indemnification for remediation and investigation costs that
have been or will be incurred for a Federal Superfund site in Syosset, New York,
which served as a Town owned and operated landfill between 1933 and 1975. In a
Record of Decision issued on or about September 27, 1990, the EPA set forth a
remedial design plan, the cost of which was estimated at $25,000 and is
reflected in the Town's lawsuit. In an Administrative Consent Decree entered
into between the EPA and the Town on December 6, 1990, the Town agreed to
undertake remediation at the site.
While the current state of law imposes joint and several liability upon PRPs, as
a practical matter costs of these sites are typically shared with other PRPs.
The Company believes that its portion of the hazardous materials disposed of at
the site, if any, is insignificant when compared to that of the other PRPs.
While management is unable to estimate the Company's future liability, if any,
it does not believe such liability would have a material adverse effect on the
Company's financial position or results of operations.
(13) Shipyard Assets Held for Sale
In the third quarter of 1997, the owner of the Jakobson Shipyard site sold its
property to the State of New York and the Town of Oyster Bay. At the same time,
Jakobson Shipyard, Inc., a subsidiary of the Company, terminated its leasehold
interest in the property and received $2.9 million. The loss related to the
lease termination was not material.
F-18
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
(14) Financial Instruments
The following disclosure of the estimated fair value of financial instruments at
December 31, 1996 and 1997 is made in accordance with the requirements of FAS
No 107, "Disclosure about Fair Market of Financial Instruments". The estimated
fair value amounts have been determined by the Company using available market
information and appropriate valuation methodologies. However, considerable
judgment is necessarily required in interpreting market data to develop the
estimates of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.
The Company's financial instruments consist of cash, short-term trade
receivables and payables, and short and long-term debt. With the exception of
long-term debt, the carrying amounts of these financial instruments approximate
their fair value.
Based upon the average of the bid and asked price for the 11.75% Series B First
Preferred Ship Mortgage Notes at their respective year ends, the fair value of
the Company's Notes as of December 31, 1996 and 1997 is approximately $86,700
and $88,800 respectively. The Company's other long-term debt is considered to be
at fair value.
Financial instruments which potentially subject the Company to concentration of
credit risk consist solely of trade receivables. The Company grants credit terms
in the normal course of business to its customers. The Company has a diverse
customer base and as part of its on-going procedures the Company monitors the
credit worthiness of its customers. Bad debt write-offs have historically been
minimal.
The fair value information presented herein is based on pertinent information
available to management as of December 31, 1996 and 1997. Although management is
not aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these consolidated financial statements since that date, and current
estimates of fair value may differ significantly from the amounts presented
herein.
(15) Related Party Transactions
In 1995, the Company and certain related parties (the "Group") negotiated
insurance coverage with third party providers in order to obtain lower premiums.
In connection with the new coverage, the Group entered into a risk sharing
agreement whereby the Company would bear a portion of certain claims expense of
the Group in proportion to its past experience. This percentage is reset each
year. The Company believes its agreement is at arms length. The amount due from
related parties at December 31, 1997 was $222.
F-19
<PAGE>
MORAN TRANSPORTATION COMPANY
Notes to Consolidated Financial Statements
(Dollars in thousands)
Three-year period ended December 31, 1997
(16) Mandatorily Redeemable Capital Stock
Mandatorily Redeemable Capital Stock is the same as the Company's Common Stock
in terms of voting rights, dividends and other attributes except that under
certain circumstances it is redeemable at the option of stockholders or the
Company at fair market value. As of December 31, 1996 and 1997, the fair market
value of the shares was $250 per share. The Company's Common Stock contains no
redemption features. During 1996, 600 shares of mandatorily redeemable stock
were transferred into 600 shares of common stock and are no longer subject to
any put rights or mandatorily redeemable features.
(17) Stock Option Plan
On July 11, 1994 the Company adopted a Stock Option Plan (the "1994 Plan") which
became effective on the date of the Acquisition to provide an incentive to
certain employees of the Company to remain in the employ of the Company and to
increase their personal interest in the success of the Company. The maximum
number of shares of the Company's Common Stock issuable under the 1994 Plan is
2,000, of which 1,640 were granted in the period ended December 31, 1994 at a
price equal to the fair market value of the Company's Common Stock at the date
of the grant. None of the options granted were exercised in the period ended
December 31, 1996. Participation in the 1994 Plan is limited to employees of the
Company designated by the Plan Committee. Non-employee directors of the Company
are not eligible to participate. A total of 350 options were granted in 1996. No
options were granted in 1997.
The Company applies APB Opinion 25 and related Interpretations in accounting for
the 1994 Plan. Accordingly, no compensation cost has been recognized for its
fixed stock options plan. Had the compensation cost for the stock based
compensation plan been determined in accordance with FAS 123, the Company's net
income and earnings per share would not have been materially different.
F-20
<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.
MORAN TRANSPORTATION COMPANY
(Registrant)
March 30, 1998 /s/ Jeffrey J. McAulay
----------------------
Jeffrey J. McAulay
Vice President of
Finance and Administration
(Principal Financial Officer)
and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
March 30, 1998 /s/ Paul R. Tregurtha
----------------------
Paul R. Tregurtha
Chairman of the Board
and Director
March 30, 1998 /s/ James R. Barker
--------------------
James R. Barker
Vice-Chairman of the Board
and Director
March 30, 1998 /s/ Malcolm W. MacLeod
-----------------------
Malcolm W. MacLeod
President, Chief Executive
Officer and Director
<PAGE>
SIGNATURES
March 30, 1998 /s/ Edmond J. Moran, Jr.
-------------------------
Edmond J. Moran, Jr.
Director
March 30, 1998 /s/ Robert J. Patten
---------------------
Robert J. Patten
Controller (Principal
Accounting Officer)
March 30, 1998 /s/ Andrew P. Langlois
-----------------------
Andrew P. Langlois
Director
March 30, 1998 /s/ Mort Lowenthal
-------------------
Mort Lowenthal
Director
SUPPLEMENTAL INFORMATION TO BE FURNISHED
WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF
THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT
The registrant has not sent, and does not at present intend to send, to its
security holders either: (1) An annual report to security-holders covering the
registrant's last fiscal year; or (2) A proxy statement, form of proxy or other
proxy soliciting material with respect to any annual or other meeting of
security-holders.
<PAGE>
SUPPLEMENTAL INDENTURE NO. 4
This SUPPLEMENTAL INDENTURE NO. 4, dated as of December 31, 1997, is by and
among MORAN TRANSPORTATION COMPANY, a Delaware corporation (the "Company"),
MORAN TOWING CORPORATION, a New York corporation ("Moran Towing"), the
Guarantors listed on Annex I hereto (collectively, the "Guarantors"), MORAN BULK
CORPORATION ("Moran Bulk"), a Delaware corporation, and FLEET NATIONAL BANK
(formerly known as Shawmut Bank Connecticut, National Association), as trustee
(the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company, the Trustee, the Guarantors and Moran Bulk are
parties to that certain Indenture dated July 11, 1994, as amended by
Supplemental Indentures No. 1, 2 and 3 (as so supplemented, the "Indenture"),
pertaining to the Company's 11-3/4% Series B First Preferred Ship Mortgage Notes
due 2004 issued under the Indenture (the "Notes");
WHEREAS, after giving effect to the merger of Moran Bulk with and into
Moran Towing described below, the Guarantors listed on Annex I hereto will
constitute all of the Subsidiaries of the Company.
1. Moran Bulk Corporation Merger.
WHEREAS, pursuant to a certain agreement and plan of merger, effective
December 31, 1997, Moran Bulk shall merge with and into Moran Towing with Moran
Towing being the survivor of such merger.
2. General
WHEREAS, Section 6.03 of the Indenture provides that (a) a Qualified
Restricted Subsidiary shall have the right to merge with any other Qualified
Restricted Subsidiary provided that the Qualified Restricted Subsidiary which is
the surviving corporation shall execute a supplemental indenture (in a form
reasonably satisfactory to the Trustee) pursuant to which such surviving
corporation shall (i) expressly assume the obligations under the applicable
Guarantee of the merged Qualified Restricted Subsidiary which is not the
surviving corporation in such merger and (ii) confirm the due and punctual
performance of the Guarantee of such surviving corporation and every covenant in
the Indenture on the part of such surviving corporation to be performed or
observed; and that (b) a Restricted Subsidiary that is not a Qualified
Restricted Subsidiary shall have the right to merge with any other Restricted
Subsidiary which is not a Qualified Restricted Subsidiary provided that the
Restricted Subsidiary which is the surviving corporation shall (i) execute a
supplemental indenture (in a form reasonably satisfactory to the Trustee)
pursuant to which such surviving corporation shall (1) expressly assume the
obligations under the applicable Guarantee of the merged Restricted Subsidiary
which is not the surviving corporation in such merger and (2) confirm the due
and punctual performance of the Guarantee of such surviving corporation and
every covenant in the Indenture and the Collateral Documents on the part of such
surviving corporation to be performed or observed and (ii) execute any
instrument required by the Trustee pursuant to Section 3.4 of the applicable
Ship Mortgage(s);
WHEREAS, Moran Bulk is a Qualified Restricted Subsidiary, and Moran Towing
is a
<PAGE>
Restricted Subsidiary which is not a Qualified Restricted Subsidiary;
WHEREAS, notwithstanding Section 6.03 of the Indenture, which relates to
mergers of (i) Qualified Restricted Subsidiaries with other Qualified Restricted
Subsidiaries and (ii) Restricted Subsidiaries which are not Qualified Restricted
Subsidiaries with other Restricted Subsidiaries which are not Qualified
Restricted Subsidiaries, the Company and Moran Towing intend that the merger of
Moran Bulk with and into Moran Towing fulfill the requirements of the proviso to
Section 5.14 of the Indenture;
WHEREAS, Section 5.14 of the Indenture provides that subject to Article 6
of the Indenture, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect (i) its corporate existence and
the corporate existence of each of its Restricted Subsidiaries, in accordance
with their respective organizational documents (as the same may be amended from
time to time) and (ii) its (and its Restricted Subsidiaries') rights (charter
and statutory), licenses and franchises; provided, however, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any Restricted Subsidiary, if the Board of Directors of
the Company shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material
respect to the Holders;
WHEREAS, Sections 10.01(g) and (h) of the Indenture provide that the
Trustee, the Company, the Guarantors and a Subsidiary, as applicable, may amend
or supplement the Indenture without the consent of any Holder to make any
changes that do not adversely affect the legal rights of any Holder or to
supplement the Indenture to provide for mergers of Restricted Subsidiaries
pursuant to Section 6.03, and
WHEREAS, the Company, Moran Towing and the Guarantors intend that this
Supplemental Indenture No. 4 fulfill the requirements of Section 5.14, and that
Moran Towing assume the obligations of Moran Bulk under the Guarantee and the
Indenture.
NOW THEREFORE, the parties agree as follows, for the benefit of each other
and for the equal and ratable benefit of the Holders of the Notes:
Section 1.01 Defined Terms. Capitalized terms used in this Supplemental
Indenture but not defined herein shall have the meanings given such terms in the
Indenture.
Section 2.01 Acceptance by Trustee. The Trustee accepts the modifications
of the Indenture hereby effected only upon the terms and conditions set forth in
the Indenture as supplemented by this Supplemental Indenture No. 4. Without
limiting the generality of the foregoing, the Trustee shall not be responsible
for the correctness of the recitals contained herein, which shall be taken as
statements of the Company, and the Trustee makes no representations and shall
have no responsibility for, or in respect of, the validity or sufficiency of
this Supplemental Indenture No. 4.
-2-
<PAGE>
Section 2.02 Construction. This Supplemental Indenture No. 4 is executed
as and shall constitute an instrument supplemental to the Indenture and shall be
construed in connection with and as part of the Indenture.
Section 2.03 Ratification. Except as modified and expressly amended by
this Supplemental Indenture No. 4, the Indenture is, in all respects, ratified
and confirmed and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
Section 2.04 Moran Towing. Moran Towing hereby agrees as follows:
(a) to assume the obligations of Moran Bulk under the Guarantee of
Moran Bulk; and
(b) that Moran Towing confirms the due and punctual performance by
Moran Towing of the Guarantee and the Collateral Documents, to the extent
applicable, of Moran Towing and/or Moran Bulk and every covenant in the
Indenture and the Collateral Documents, to the extent applicable, to be
performed or observed by Moran Towing and/or Moran Bulk; and
Section 2.05 Exhibit F. Effective as of the date of this Supplemental
Indenture No. 4, Exhibits F-1, F-2 and F-3 to the Indenture shall be replaced
with Annex I attached hereto.
Section 2.10 Counterparts. This Supplemental Indenture No. 4 may be
executed in any number of counterparts; each signed copy shall be an original,
but all of them together represent the same agreement.
Section 2.11 Governing law. This Supplemental Indenture No. 4 shall be
subject to the governing law and choice of forum provisions of Section 13.09 of
the Indenture.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 4 to be duly executed as of the day and year first above written.
MORAN TRANSPORTATION COMPANY
By: /s/ Jeffrey J. McAulay
--------------------------
Name: Jeffrey J. McAulay
Title: Vice President
MORAN TOWING CORPORATION
By: /s/ Jeffrey J. McAulay
--------------------------
Name: Jeffrey J. McAulay
Title: Vice President
THE GUARANTORS LISTED ON ANNEX I HERETO
By: /s/ Alan Marchisotto
--------------------------
Name: Alan Marchisotto
Title: Secretary As to each of the Guarantors
listed in Annex I.
MORAN INSURANCE COMPANY LIMITED
By: /s/ Jeffrey J. McAulay
--------------------------
Name: Jeffrey J. McAulay
Title: Vice President
MORAN BULK CORPORATION (to be merged as described above)
By: /s/ Alan Marchisotto
--------------------------
Name: Alan Marchisotto
Title: Secretary
S-1
<PAGE>
FLEET NATIONAL BANK,
as Trustee
By: /s/ Mark A. Forgetta
--------------------------
Name: Mark A. Forgetta
Title: Authorized Signatory
S-2
<PAGE>
ANNEX I
GUARANTORS
Guarantors after Giving Effect to the Merger Described Herein
A. Restricted Subsidiaries
1. Restricted Subsidiaries which are Not Qualified Restricted Subsidiaries
Moran Towing Corporation
Petroleum Transport Corporation
2. Qualified Restricted Subsidiaries
Florida Towing Company
Curtis Bay Towing Company of Pennsylvania
Curtis Bay Towing Company of Virginia
Moran Insurance Company Limited
Moran Towing of Texas, Inc.
Moran Shipyard Corporation
Jakobson Shipyard, Inc.
Moran Barge Corporation
Portsmouth Navigation Corporation
Hampton Roads Land Co., Inc.
Moran Services Corporation
Moran Towing of Delaware, Inc.
Seaboard Barge Corporation
B. Unrestricted Subsidiaries
None
S-3
<PAGE>
EXHIBIT 10.5(a)
AMENDED AND RESTATED TERM LOAN AGREEMENT
amended and restated as of December 12, 1997
among
MORAN TOWING CORPORATION
(THE "BORROWER")
MORAN TRANSPORTATION COMPANY
AND THE OTHER GUARANTORS NAMED HEREIN
(THE "GUARANTORS")
AND
BANCBOSTON LEASING INC.
(THE "LENDER")
AND
BANCBOSTON LEASING INC.
(THE "AGENT")
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION . . . . . . . . . . . . . .-2-
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .-2-
1.2 Rules of Interpretation . . . . . . . . . . . . . . . . . . -12-
2. TERM LOAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
2.1 Amendment and Restatement of Existing Loan Agreement;
Assumption of Obligations. . . . . . . . . . . . . . . . . . . . -12-
2.2 The Term Note . . . . . . . . . . . . . . . . . . . . . . . -13-
2.3 Repayment of the Principal of the Term Loan . . . . . . . . -13-
2.4 Optional Prepayment of Term Loan. . . . . . . . . . . . . . -14-
2.5 Interest on The Term Loan . . . . . . . . . . . . . . . . . -15-
3. CERTAIN GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . -16-
3.1 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . -16-
3.2 Funds for Payments. . . . . . . . . . . . . . . . . . . . . -16-
3.2.1 Payments to Lender . . . . . . . . . . . . . . . . . -17-
3.2.2 No Offset, etc . . . . . . . . . . . . . . . . . . . -17-
3.3 Computations. . . . . . . . . . . . . . . . . . . . . . . . -17-
3.4 Inability to Determine Eurodollar Rate. . . . . . . . . . . -17-
3.5 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . -17-
3.6 Additional Costs, etc . . . . . . . . . . . . . . . . . . . -17-
3.7 Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . -18-
3.8 Certificate . . . . . . . . . . . . . . . . . . . . . . . . -19-
3.9 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . -19-
3.10 Interest After Default . . . . . . . . . . . . . . . . . . -19-
3.10.1 Overdue Amounts . . . . . . . . . . . . . . . . . . -19-
3.10.2 Amounts Not Overdue . . . . . . . . . . . . . . . . -19-
4. SECURITY AND GUARANTIES. . . . . . . . . . . . . . . . . . . . . -19-
4.1 Security of Borrower. . . . . . . . . . . . . . . . . . . . -19-
4.2 Guaranties of the Guarantors. . . . . . . . . . . . . . . . -19-
5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . -19-
5.1 Corporate Authority . . . . . . . . . . . . . . . . . . . . -19-
5.1.1 Incorporation; Good Standing . . . . . . . . . . . . -20-
5.1.2 Authorization. . . . . . . . . . . . . . . . . . . . -20-
5.1.3 Enforceability . . . . . . . . . . . . . . . . . . . -20-
5.2 Governmental Approvals. . . . . . . . . . . . . . . . . . . -20-
5.3 Title to Properties . . . . . . . . . . . . . . . . . . . . -20-
5.4 Financial Statements and Projections. . . . . . . . . . . . -20-
5.4.1 Financial Statements . . . . . . . . . . . . . . . . -20-
5.4.2 Budget . . . . . . . . . . . . . . . . . . . . . . . -20-
<PAGE>
- ii -
5.5 No Material Changes, etc. . . . . . . . . . . . . . . . . . -21-
5.6 Franchises, Patents, Copyrights, etc. . . . . . . . . . . . -21-
5.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . -21-
5.8 No Materially Adverse Contracts, etc. . . . . . . . . . . . -21-
5.9 Compliance With Other Instruments, Laws, etc. . . . . . . . -21-
5.10 Tax Status. . . . . . . . . . . . . . . . . . . . . . . . . -21-
5.11 No Event of Default . . . . . . . . . . . . . . . . . . . . -22-
5.12 Holding Company and Investment Company Acts . . . . . . . . -22-
5.13 Absence of Financing Statements, etc. . . . . . . . . . . . -22-
5.14 Perfection of Security Interest . . . . . . . . . . . . . . -22-
5.15 Certain Transactions. . . . . . . . . . . . . . . . . . . . -22-
5.16 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . -22-
5.17 Purpose; Regulations U and X. . . . . . . . . . . . . . . . -22-
5.18 Subsidiaries, etc . . . . . . . . . . . . . . . . . . . . . -22-
5.19 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . -22-
5.20 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . -23-
5.21 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . -23-
5.22 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . -23-
5.23 Concerning the Vessel . . . . . . . . . . . . . . . . . . . -23-
6. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS . . . . -23-
6.1 Punctual Payment. . . . . . . . . . . . . . . . . . . . . . -23-
6.2 Maintenance of Office . . . . . . . . . . . . . . . . . . . -23-
6.3 Records and Accounts. . . . . . . . . . . . . . . . . . . . -23-
6.4 Financial Statements, Certificates and Information. . . . . -23-
6.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
6.5.1. Defaults. . . . . . . . . . . . . . . . . . . . . . -24-
6.5.2. Environmental Events. . . . . . . . . . . . . . . . -24-
6.5.3. Notification of Claims Against Collateral . . . . . -25-
6.5.4. Notice of Litigation and Judgments. . . . . . . . . -25-
6.6. Corporate Existence; Maintenance of Properties. . . . . . . -25-
6.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . -25-
6.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
6.9 Inspection of Properties and Books, etc . . . . . . . . . . -25-
6.9.1. General . . . . . . . . . . . . . . . . . . . . . . -25-
6.9.2. Communication with Accountants. . . . . . . . . . . -26-
6.10 Compliance with Laws, Contracts, Licenses, and Permits. . . -26-
6.11 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . -26-
6.12 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . -26-
6.13 Concerning the Vessel . . . . . . . . . . . . . . . . . . . -26-
6.14 Further Assurances. . . . . . . . . . . . . . . . . . . . . -26-
<PAGE>
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7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS. . -26-
7.1 Restrictions on Indebtedness. . . . . . . . . . . . . . . . -27-
7.2 Restrictions on Liens . . . . . . . . . . . . . . . . . . . -27-
7.3 Restrictions on Investments . . . . . . . . . . . . . . . . -27-
7.4 Restricted Prepayments. . . . . . . . . . . . . . . . . . . -28-
7.5 Merger; Consolidation; Subsidiaries . . . . . . . . . . . . -28-
7.5.1. Mergers and Acquisitions. . . . . . . . . . . . . . -28-
7.5.2. Disposition of Assets . . . . . . . . . . . . . . . -28-
7.6 Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . -28-
7.7 Compliance with Environmental Laws. . . . . . . . . . . . . -28-
7.8 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . -28-
7.9 Change of Principal Place of Business or Corporate Name . . -29-
7.10 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . -29-
7.11 Transactions with Affiliates. . . . . . . . . . . . . . . . -29-
7.12 Business Activities . . . . . . . . . . . . . . . . . . . . -29-
7.13 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . -29-
7.14 Additional Guarantors . . . . . . . . . . . . . . . . . . . -29-
7.15 Other Debt Agreements . . . . . . . . . . . . . . . . . . . -29-
8. FINANCIAL COVENANTS OF THE BORROWER AND THE GUARANTORS . . . . . -29-
8.1 Debt Service. . . . . . . . . . . . . . . . . . . . . . . . -29-
8.2 Leverage. . . . . . . . . . . . . . . . . . . . . . . . . . -30-
9. CONDITIONS TO EFFECTIVE DATE . . . . . . . . . . . . . . . . . . -30-
9.1 Loan Documents. . . . . . . . . . . . . . . . . . . . . . . -30-
9.2 Certified Copies of Charter Documents . . . . . . . . . . . -30-
9.3 Corporate Action. . . . . . . . . . . . . . . . . . . . . . -30-
9.4 Incumbency Certificate. . . . . . . . . . . . . . . . . . . -30-
9.5 Validity of Liens . . . . . . . . . . . . . . . . . . . . . -30-
9.6 Perfection Certificate and UCC Search Results . . . . . . . -30-
9.7 Certificates of Insurance . . . . . . . . . . . . . . . . . -30-
9.8 Solvency Certificate. . . . . . . . . . . . . . . . . . . . -30-
9.9 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . -31-
10. EVENTS OF DEFAULT; ACCELERATION; ETC . . . . . . . . . . . . . . -31-
10.1 Events of Default and Acceleration. . . . . . . . . . . . . -31-
10.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . -34-
10.3 Distribution of Collateral Proceeds . . . . . . . . . . . . -34-
11. SETOFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
<PAGE>
- iv -
12. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
13. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . -36-
14. SURVIVAL OF COVENANTS, ETC . . . . . . . . . . . . . . . . . . . -36-
15. ASSIGNMENT AND PARTICIPATION . . . . . . . . . . . . . . . . . . -37-
15.1 Assignment by the Lender. . . . . . . . . . . . . . . . . . -37-
15.2 Participations. . . . . . . . . . . . . . . . . . . . . . . -37-
15.3 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . -37-
15.4 Miscellaneous Assignment Provisions . . . . . . . . . . . . -37-
15.5 Assignment by Borrower; Guarantors. . . . . . . . . . . . . -37-
16. NOTICES, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
17. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . -38-
18. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
19. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
20. ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . . . . . -39-
21. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . -39-
22. CONSENTS, AMENDMENTS, WAIVERS, ETC . . . . . . . . . . . . . . . -39-
23. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
24. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. . . . . . . . . . -40-
24.1 Sharing of Information with Section 20 Subsidiary . . . . . -40-
24.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . -40-
24.3 Prior Notification. . . . . . . . . . . . . . . . . . . . . -40-
24.4 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
<PAGE>
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SCHEDULES
Schedule 1.1(u) Unrestricted Subsidiaries
Schedule 5.3 Title to Properties; Leases
Schedule 5.16 Employee Benefit Plans
Schedule 5.18 Subsidiaries; Joint Ventures
Schedule 5.19 Real Property
Schedule 5.22 Insurance
Schedule 6.2 Chief Executive Offices
Schedule 7.1 Existing Indebtedness
Schedule 7.2 Existing Liens
Schedule 7.3 Existing Investments
Schedule 7.4.1 Individuals Holding Redeemable Stock
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Guaranty
Exhibit C Form of Compliance Certificate
<PAGE>
AMENDED AND RESTATED TERM LOAN AGREEMENT
This AMENDED AND RESTATED TERM LOAN AGREEMENT (together with the exhibits
and schedules hereto, this "Loan Agreement") is dated as of December 12, 1997,
by and among MORAN TOWING CORPORATION (the "Borrower") a Delaware corporation
having its principal place of business at Two Greenwich Plaza, Greenwich,
Connecticut 06830, MORAN TRANSPORTATION COMPANY ("Moran"), each of the Persons
executing the signature pages hereto as a guarantor (together with Moran, each a
"Guarantor" and collectively, the "Guarantors"), BANCBOSTON LEASING INC. (the
"Lender") and BANCBOSTON LEASING INC., as collateral agent (the "Agent").
WHEREAS, pursuant to a Construction and Term Loan Agreement, dated as of
May 16, 1997 (the "Existing Loan Agreement") among Interlake Transportation,
Inc. ("Interlake"), Interlake Holding Company ("Holdings"), The Interlake
Steamship Company ("Steamship" and together with Holdings, the "Interlake
Guarantors"), BankBoston, N.A., as construction lender, the Lender and the
Agent, the Lender made a term loan in the principal amount of $3,500,000 to
Interlake (the "Term Loan"), the proceeds of which were used to refinance
Indebtedness incurred by Interlake in connection with the acquisition of the
Vessel (defined below);
WHEREAS, pursuant to an Agreement, dated as of the date hereof, between
Interlake and the Borrower, Interlake has transferred the Vessel to the Borrower
(the "April Transfer"), subject to the Vessel Mortgage;
WHEREAS, as a condition to the Lender's consent to the April Transfer,
pursuant to Section 2.1 hereof, (i) the Borrower has agreed to assume all of the
obligations of Interlake under the Existing Loan Agreement with respect to the
outstanding amount of the Term Loan pursuant to the terms of this Loan Agreement
and (ii) the Guarantors have agreed to assume all of the obligations of the
Interlake Guarantors under the Existing Loan Agreement with respect to the
outstanding amount of the Term Loan; and
WHEREAS, the parties hereto wish to amend and restate that portion of the
Existing Loan Agreement relating to the Term Loan to reflect the April Transfer,
the assumption by the Borrower of Interlake's obligations under the Existing
Loan Agreement with respect to the outstanding amount of the Term Loan, and the
assumption by the Guarantors of the obligations of the Interlake Guarantors
under the Existing Loan Agreement with respect to the outstanding amount of the
Term Loan.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
<PAGE>
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1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1 DEFINITIONS. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Loan Agreement referred to
below:
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower or a Guarantor under Rule 144(a) of the Rules and Regulations of
the Securities and Exchange Commission, as in effect on the date hereof, if the
Borrower or such Guarantor were issuing securities.
AGENT. As defined in the first paragraph hereof.
APRIL TRANSFER. As defined in the preamble hereto.
BALANCE SHEET DATE. December 31, 1996.
BASE RATE. The higher of (a) the annual rate of interest announced
from time to time by BKB at its head office in Boston, Massachusetts, as its
"base rate" or (b) one-half of one percent (1/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds Effective
Rate" shall mean, for any day, the rate per annum equal 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 that is a Business Day, the average of the quotations for such day on such
transactions received by BKB from three funds brokers of recognized standing
selected by BKB.
BASE RATE LOAN(S). All or any portion of the Term Loan bearing
interest calculated by reference to the Base Rate.
BKB. BankBoston, N.A.
BORROWER. As defined in the first paragraph hereof.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
CAPITALIZED LEASES. Leases under which the Borrower or a Guarantor is
the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.
CLOSING DATE. May 16, 1997.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of the Borrower
that are or are intended to be subject to the security interests created by the
Security Documents.
<PAGE>
- 3 -
COMMITMENT. The Lender's commitment to maintain the Term Loan, as the
same may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions hereof, zero.
COMPLIANCE CERTIFICATE. See Section 6.4(d) hereof.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of Moran and its
Restricted Subsidiaries, consolidated in accordance with GAAP.
CONSOLIDATED DEBT SERVICE. As of the end of each fiscal quarter of
Moran, the aggregate amount of Debt Service of Moran and its Restricted
Subsidiaries for the period of the four consecutive fiscal quarters then ending,
determined on a consolidated basis for such Persons in accordance with GAAP.
CONSOLIDATED EBITDA. As of the end of each fiscal quarter of Moran,
the aggregate amount of EBITDA of Moran and its Restricted Subsidiaries for the
period of the four consecutive fiscal quarters then ending, determined on a
consolidated basis for such Persons in accordance with GAAP.
CONSOLIDATED FUNDED DEBT. As at the end of each fiscal quarter of
Moran, the aggregate amount of Funded Debt of Moran and its Restricted
Subsidiaries as at such date, determined on a consolidated basis for such
Persons in accordance with GAAP.
CONSOLIDATED OPERATING CASH FLOW. As of the end of each fiscal
quarter of Moran, the aggregate amount of Operating Cash Flow of Moran and its
Restricted Subsidiaries for the period of the four consecutive fiscal quarters
then ending, determined on a consolidated basis for such Persons in accordance
with GAAP.
CONVERSION REQUEST. A notice given by the Borrower to the Lender of
the Borrower's election to convert or continue all or a portion of the Term Loan
in accordance with Section 2.5.
DEBT SERVICE. For any fiscal period of any Person, an amount equal to
the SUM of (a) the Total Interest Expense of such Person for such period PLUS
(b) the Total Financial Obligations of such Person for such period, as
determined in accordance with GAAP.
DEBT SERVICE COVERAGE RATIO. The ratio of (a) Consolidated Operating
Cash Flow to (b) Consolidated Debt Service.
DEFAULT. See Section 10 hereof.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower or the
Guarantors, other than dividends payable solely in shares of common stock of the
Borrower or the Guarantors; the purchase, redemption, or other retirement by the
issuer thereof of any shares of any class of capital stock of the Borrower or
the Guarantors, directly or indirectly; the return of capital by the Borrower or
the Guarantors to their shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock of the Borrower or the
Guarantors.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially the Lender's Head Office,
thereafter such other office as the Lender may, from time to time, designate by
written notice to the Borrower.
<PAGE>
- 4 -
DRAWDOWN DATE. The date on which the Term Loan was originally made
pursuant to the Existing Credit Agreement and the date on which all or any
portion of the Term Loan is converted or continued in accordance with Section
2.5.
EARNINGS BEFORE INTEREST AND TAXES. The earnings (or loss) from the
operations of any Person for any period, after all expenses and other proper
charges but before payment or provision of any income taxes or interest expense
for such period, determined in accordance with GAAP.
EBITDA. With respect to any Person, and for any period, the Net
Income of such Person for such period, after all expenses and other proper
charges but before payment or provision for any income taxes, tax distributions,
interest expense, depreciation or amortization for such period, determined in
accordance with GAAP, and after eliminating therefrom all extraordinary
nonrecurring items of income (or deficit).
EFFECTIVE DATE. The first date on which the conditions set forth in
Section 9 have been satisfied and the Existing Loan Agreement is amended and
restated pursuant the provisions hereof.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning
of Section 3(2) of ERISA maintained or contributed to by the Borrower, any
Guarantor or any ERISA Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. Any federal, state, county, regional or local
law, statute, or regulation pertaining to environmental matters, including
without limitation, the Resource Conservation and Recovery Act of 1976, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under or relating to such laws or relating to environmental matters and
which are applicable to the Borrower or the Guarantors.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer
with the Borrower or any Guarantor under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has not
been waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Lender in its
sole discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the Lender's Head Office;
thereafter, such other office of the Lender, if any, that shall be making or
maintaining Eurodollar Rate Loans.
<PAGE>
- 5 -
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate per annum (rounded upwards
to the nearest 1/16 of one percent) at which the Lender's Eurodollar Lending
Office is offered Dollar deposits two (2) Eurodollar Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations of such Eurodollar
Lending Office are customarily conducted at or about 10:00 a.m., Boston time,
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Rate Loan to which such Interest Period applies, DIVIDED BY (b) a number equal
to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
EURODOLLAR RATE LOAN(S). All or any portion of the Term Loan bearing
interest calculated by reference to the Eurodollar Rate.
EVENT OF DEFAULT. See Section 10 hereof.
EXISTING LOAN AGREEMENT. As defined in the preamble hereto.
FIXED RATE. For any Interest Period with respect to all or any
portion of the Term Loan, the rate determined by the Lender, at or about the
Drawdown Date of the applicable Fixed Rate Loan, in its sole discretion, acting
in good faith, to be its cost of funds for funding all or such portion of such
Loan for the Interest Period relating to such Loan. The Borrower may request
the Lender to quote the Borrower the Fixed Rate, by giving the Lender at least
three (3) Business Days notice before the requested Drawdown Date of any such
Loan. The Lender will, as promptly as practicable, notify the Borrower by
telephone of the Fixed Rate applicable to such Loan.
FIXED RATE LOAN. All or any portion of the Term Loan bearing interest
calculated by reference to the Fixed Rate.
FUNDED DEBT. With respect to any Person, the aggregate amount of all
Indebtedness of such Person for borrowed money (other than short-term trade
credit), the deferred purchase price of assets (other than short-term trade
credit) and Capitalized Leases.
GAAP. (a) When used in Section 8, whether directly or indirectly
through reference to a capitalized term used therein, means (i) principles that
are consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the fiscal year
ended on the Balance Sheet Date, and (ii) to the extent consistent with such
principles, the accounting practice of Moran and its Subsidiaries reflected in
its financial statements for the year ended on the Balance Sheet Date, and (b)
when used in general, other than as provided above, means principles that are
(i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (ii) consistently applied with past financial statements of Moran and its
Subsidiaries adopting the same principles, PROVIDED that in each case referred
to in this definition of "GAAP" a certified public accountant would, insofar as
the use of such accounting principles is pertinent, be in a position to deliver
an unqualified opinion (other than a qualification regarding changes in GAAP) as
to financial statements in which such principles have been properly applied.
GOVERNMENTAL AUTHORITY. The United States of America, any State
thereof, any political subdivision thereof, and any agency, authority,
department, commission, board, bureau, or instrumentality of any of them
(including without limitation the Federal Maritime Commission, MARAD, and the
United States Coast Guard).
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower,
any Guarantor or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
<PAGE>
- 6 -
GUARANTORS. As defined in the first paragraph hereof.
GUARANTY. The Guaranty, dated as of the date hereof, made by the
Guarantors in favor of the Lender, pursuant to which the Guarantors have
guaranteed to the Lender the payment and performance of the Obligations,
substantially in the form of EXHIBIT B attached hereto, and each additional
guaranty of the obligations delivered pursuant to Section 7.14 hereof.
HAZARDOUS SUBSTANCES. Any hazardous waste, as defined by 42 U.S.C.
Section 9601(5), any hazardous substances as defined by 42 U.S.C. Section
9601(14), any pollutant or contaminant as defined by 42 U.S.C. Section 9601(33)
and any toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws.
INDEBTEDNESS. With respect to any Person, (a) every obligation of
such Person for money borrowed, (b) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of
such Person, (d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding (i) trade
accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue by 60 days or more or are being contested in good
faith and (ii) obligations arising under construction contracts for the
construction of qualified vessels substituted pursuant to the terms of the
Senior Indenture), (e) interest accrued after the commencement of any
bankruptcy, insolvency, receivership or similar proceedings and other interest
that would have accrued but for the commencement of such proceedings, (f) every
Capitalized Lease of such Person, (g) the maximum fixed redemption or repurchase
price of preferred stock of such Person at the time of determination, (h) every
obligation of the type referred to in clauses (a) through (g) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise. Any reference in this definition to
indebtedness shall be deemed to include any renewals, extensions, refundings,
amendments and modifications to any such indebtedness or any indebtedness issued
in exchange for such indebtedness.
INELIGIBLE SECURITIES. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
INTEREST PAYMENT DATE. (a) As to any Fixed Rate Loan, the last day of
each successive quarterly period of three months following the Drawdown Date
thereof and in addition the last day of the Interest Period relating thereto;
(b) as to any Base Rate Loan, the last day of the calendar quarter which
includes the Drawdown Date thereof; and (c) as to any Eurodollar Rate Loan in
respect of which the Interest Period is (i) three (3) months or less, the last
day of such Interest Period and (ii) more than three (3) months, the date that
is three (3) months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.
INTEREST PERIOD. With respect to all or any portion of the Term Loan,
(a) initially, the period commencing on the Drawdown Date of such Loan and
ending on the last day of one of the periods set forth below: (i) for any Fixed
Rate Loan, four (4) years, (ii) for any Base Rate Loan, the last day of the
calendar quarter; and (iii) for any Eurodollar Rate Loan, 1, 2, 3 or 6 months;
and (b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
PROVIDED that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar Business Day
unless the result of such
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extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding
Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in Section
2.5 hereof, the Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan or Fixed Rate Loan to a Base Rate Loan on the last
day of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Eurodollar Business Day of a
calendar month; and
(e) any Interest Period with respect to all or any portion of the
Term Loan, that would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.
INTERLAKE. As defined in the preamble hereto.
INTERLAKE GUARANTORS. As defined in the preamble hereto.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LENDER. As defined in the first paragraph hereof.
LENDER'S HEAD OFFICE. The Lender's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Lender may
designate by written notice to the Borrower from time to time.
LENDER'S SPECIAL COUNSEL. Bingham Dana LLP, or such other counsel as
may be approved by the Lender.
LEVERAGE RATIO. The ratio of (a) Consolidated Funded Debt to (b)
Consolidated EBITDA.
LOAN. The Term Loan.
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LOAN AGREEMENT. As defined in the first paragraph hereof.
LOAN DOCUMENTS. This Loan Agreement, the Note and the Security
Documents.
MAKE-WHOLE AMOUNT. With respect to any prepayment of a Fixed Rate
Loan, an amount determined by the Lender pursuant to the following formula:
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Make Whole = (R-T) X P X D
Amount 360
As used in this definition of "Make-Whole Amount",
"R" means the effective rate of interest quoted to the Lender by the
Treasury Division of BKB, in accordance with its customary procedures, for
deposits of funds with BKB on the Drawdown Date of such Fixed Rate Loan, in the
principal amount of such Fixed Rate Loan and for a number of days equal to the
number of days contained in the Interest Period relating to such Fixed Rate
Loan.
"T" means the effective rate of interest at which United States
Treasury instruments maturing on the last day of the Interest Period relating to
such Fixed Rate Loan, and in the same amount as the amount of such Fixed Rate
Loan so prepaid, can be purchased by BKB on the date of such prepayment.
"P" means the amount of principal so prepaid.
"D" means the number of days remaining in the Interest Period relating
to such Fixed Rate Loan, as of the date of such prepayment.
MARAD. The United States Maritime Administration.
MATURITY DATE. May 16, 2005.
MORAN. As defined in the first paragraph hereof.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower, any
Guarantor or any ERISA Affiliate.
NOTE. See Section 2.2 hereof.
NOTE RECORD. The grid attached to the Note, or the continuation of
such grid, or any other similar record, including computer records, maintained
by the Lender with respect to the Term Loan.
NET INCOME. The consolidated net income (or deficit) of Moran and its
Restricted Subsidiaries, determined in accordance with GAAP, PROVIDED that (a)
the net income of any Person which is not a wholly-owned Subsidiary of Moran or
any of its Restricted Subsidiaries but which is consolidated with Moran or any
of its Restricted Subsidiaries or is accounted for by Moran or any of its
Restricted Subsidiaries by the equity method of accounting shall be included for
the purpose of determining net income only to the extent of the amount of cash
dividends or cash distributions paid to Moran or its Restricted Subsidiaries;
(b) the net income of any Person acquired by Moran or any of its Restricted
Subsidiaries or a Subsidiary of Moran or any of its Restricted Subsidiaries in a
pooling of interests transaction for any period prior
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to the date of such acquisition shall be excluded; (c) the net income of any
Restricted Subsidiary of Moran that is subject to restrictions at such time,
direct or indirect, on the payment of dividends or the making of distributions
to Moran or any of its Restricted Subsidiaries shall be excluded to the extent
of such restrictions (other than restrictions imposed by applicable law); (d)
the net income of (i) any Unrestricted Subsidiary and (ii) any Subsidiary of
which less than 80% of whose securities having the right (apart from the right
under special circumstances) to vote in the election of directors are owned by
Moran or its wholly-owned Restricted Subsidiaries shall be included only to the
extent of the amount of cash dividends or cash distributions actually paid by
such Subsidiary to Moran or a wholly-owned Restricted Subsidiary of Moran net of
any amounts invested in or otherwise transferred to any Unrestricted
Subsidiaries by Moran or its Restricted Subsidiaries in excess of $5,000,000;
(e) in the case of Moran, the net income attributable to any business,
properties or assets acquired (by way of merger, consolidation, purchase or
otherwise) by Moran or any Restricted Subsidiary of Moran for any period prior
to the date of such acquisition shall be excluded; and (f) all extraordinary
gains and losses, and any gain or loss realized upon the termination of any
employee pension benefit plan, in respect of dispositions of assets other than
in the ordinary course of business and any one-time increase or decrease to net
income which is required to be recorded because of the adoption of new
accounting policies, practices or standards required by GAAP, shall be excluded.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Borrower, the Guarantors and/or their affiliates to the Lender and the
Agent, individually or collectively, existing on the date of this Loan Agreement
or arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Loan Agreement or any of the other Loan Documents or in
respect of the Loan, the Note or any other instruments at any time evidencing
any thereof.
OPERATING CASH FLOW. With respect to any Person and any particular
fiscal period, an amount equal to (a) such Person's Earnings Before Interest and
Taxes for such period, PLUS (b) all depreciation and amortization charges for
such period, in each case as determined in accordance with GAAP, MINUS (c) the
aggregate amount of taxes payable by such Person in cash with respect to such
period.
OUTSTANDING. With respect to the Term Loan, the aggregate unpaid
principal thereof as of any date of determination.
PARENT CREDIT AGREEMENT. The Revolving Credit Agreement, dated as of
July 11, 1994 among Moran, the Restricted Subsidiaries named therein,
BankBoston, N.A. (f/k/a The First National Bank of Boston), individually and as
agent for itself and the other banks which are or may become a party thereto,
which term as used herein shall include any refinancing thereof or replacement
financing therefor.
PBGC. The Pension Benefit Guaranty Corporation created by Section
4002 of ERISA and any successor entity or entities having similar
responsibilities.
PERFECTION CERTIFICATE. The "Perfection Certificate" as defined in
the Security Agreements.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 7.2.
PERSON. Any individual, corporation, partnership, trust, limited
liability company, unincorporated association, business, or other legal entity,
and any government or any governmental agency or political subdivision thereof.
REQUIREMENTS. Any law, ordinance, code, order, rule or regulation of
any Governmental Authority relating in any way to the ownership, use, occupancy
and operation of the Vessel.
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RESTRICTED PREPAYMENT. As to any Person, any payment or prepayment of
principal or repurchase of any Indebtedness of such Person in advance of the
scheduled maturity thereof (as the terms of such Indebtedness are in effect on
the Effective Date).
RESTRICTED SUBSIDIARY. Any Subsidiary of Moran that is designated as
a Restricted Subsidiary under the Parent Credit Agreement (all of which, other
than the Borrower, Curtis Bay Towing Company of Pennsylvania, a Pennsylvania
corporation, and Curtis Bay Towing Company of Virginia, a Virginia corporation,
are Guarantors hereunder). Moran and the Borrower hereby agree that if any
inactive Subsidiaries of Moran (including, without limitation, Curtis Bay Towing
Company of Pennsylvania and Curtis Bay Towing Company of Virginia) cease to be
inactive, they shall become Guarantors hereunder.
SECTION 20 SUBSIDIARY. A Subsidiary of the bank holding company
controlling the Lender and/or BKB, which Subsidiary has been granted authority
by the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
SECURITY DOCUMENTS. The Guaranty and the Vessel Mortgage.
SENIOR INDENTURE. The Indenture, dated as of July 11, 1994, between
Moran and Fleet National Bank, as successor to Shawmut Bank, N.A., as trustee,
which term as used herein shall include any additional indenture or other
governing documentation relating to any refinancing of, or replacement financing
for, the Senior Notes.
SENIOR NOTES. The promissory notes in the original aggregate
principal amount of $80,000,000 issued by Moran pursuant to the Senior
Indenture, which term as used herein shall include any notes issued in
refinancing thereof or replacement financing therefor.
SUBSIDIARY. Any corporation, trust, association, or other business
entity of which the designated parent shall at any time own, directly or
indirectly, at least a majority (by number of votes) of the outstanding voting
stock.
TERM LOAN. As defined in the first Whereas clause hereof, it being
understood that such term as used herein shall refer to the $3,500,000 term loan
originally made to Interlake by the Lender pursuant to the Existing Loan
Agreement, the outstanding portion of which is hereby assumed by the Borrower
and amended and restated hereby, as described in Section 2.1 hereof.
TOTAL FINANCIAL OBLIGATIONS. With respect to any fiscal period and
any Person, an amount equal to the sum of all principal payments on long-term
Indebtedness that become due and payable or that are to become due and payable
during such fiscal period pursuant to any agreement or instrument to which such
Person is a party relating to the borrowing of money or the obtaining of credit
or in respect of Capitalized Leases.
TOTAL INTEREST EXPENSE. For any Person, for any period the aggregate
amount of interest in respect of Indebtedness (including amortization of
original issue discount on any Indebtedness and amortization of deferred
financing costs, in each case calculated in accordance with GAAP) and the
interest component of Indebtedness in respect of Capitalized Leases, paid or
accrued (without duplication) by such Person and its Restricted Subsidiaries
during such period, determined on a consolidated basis in accordance with GAAP.
For purposes of this definition, (a) interest on Indebtedness determined on a
fluctuating basis for periods succeeding the date of determination shall be
deemed to accrue at a rate equal to the rate of interest on such Indebtedness as
in effect on the date of determination and (b) interest on Indebtedness in
respect of Capitalized Leases shall be deemed to accrue at an interest rate
reasonably determined by the chief financial officer of such Person to be the
rate of interest implicit in such Indebtedness in respect of Capitalized Leases
in accordance with GAAP.
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TYPE. As to all or any portion of the Term Loan, its nature as a Base
Rate Loan, a Eurodollar Rate Loan or a Fixed Rate Loan.
UNRESTRICTED SUBSIDIARY. Those Subsidiaries of Moran that are not
designated as Restricted Subsidiaries.
VESSEL. The tug "April Moran", Official Number: 644241.
VESSEL MORTGAGE. The First Preferred Fleet Mortgage, dated as of
December 11, 1997, by the Borrower, as owner, in favor of the Agent, as
mortgagee.
1.2 RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Loan Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to "the Guarantors" or "any Guarantor" means both (i)
the Guarantors collectively and (ii) each Guarantor individually.
(e) A reference to any Person includes its permitted successors and
permitted assigns.
(f) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.
(g) The words "include", "includes" and "including" are not limiting.
(h) All terms not specifically defined herein or by GAAP, which terms
are defined in the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with the term
"instrument" being that defined under Article 9 of the Uniform Commercial Code.
(i) Reference to a particular "Section " refers to that section of
this Loan Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Loan Agreement as a whole and not to any particular
section or subdivision of this Loan Agreement.
2. TERM LOAN.
2.1 AMENDMENT AND RESTATEMENT OF EXISTING LOAN AGREEMENT; ASSUMPTION OF
OBLIGATIONS. Subject to the terms and conditions set forth herein, the parties
hereto hereby agree that, on and as of the Effective Date, (i) the Borrower
hereby assumes the obligations of Interlake with respect to the outstanding
amount of the Term Loan, (ii) the Guarantors hereby assume the obligations of
the Interlake Guarantors under
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the Existing Loan Agreement to the extent applicable to the outstanding amount
of the Term Loan, (iii) Interlake is hereby released of its obligations as
borrower of the Term Loan and the Interlake Guarantors are hereby released of
their obligations as guarantors of Interlake's obligations with respect to the
Term Loan, and (iv) those portions of the Existing Loan Agreement concerning or
relating to the Term Loan shall be amended and restated as provided herein;
PROVIDED, that nothing contained herein shall, except as it relates to the Term
Loan and the guarantees of the Interlake Guarantors in respect of the Term Loan
(A) limit the liability or obligations of Interlake or the Interlake Guarantors
under or with respect to the Existing Loan Agreement, (B) affect in any manner
the rights or remedies of the Lender, the Agent or BKB with respect to any
liability of Interlake or the Interlake Guarantors under or with respect to the
Existing Loan Agreement, or (C) amend or otherwise modify any provision of, the
Existing Loan Agreement, including, without limitation, the liability of
Interlake and the Interlake Guarantors with respect to, the rights and remedies
of the Lender, the Agent and BKB with respect to, and the provisions of the
Existing Loan Agreement relating to, the "Construction Loans" or the "Mauthe
Term Loan" (as each such term is defined in the Existing Loan Agreement). Upon
the effectiveness of this Agreement and the other Loan Documents and the proper
recordation of the Vessel Mortgage with the National Vessel Documentation
Center, and evidence thereof having been delivered to the Agent, in each case in
form and substance thereof satisfactory to the Agent, the Agent will, at the
expense of the Borrower, cause to be taken all steps reasonably necessary to
cause the Vessel to be released from the grant of mortgage contained in the
First Preferred Fleet Mortgage, dated as of May 16, 1997, granted by Interlake
in favor of the Agent pursuant to the Mauthe Loan Agreement.
2.2 THE TERM NOTE. The Term Loan shall be evidenced by an amended and
restated promissory note of the Borrower in substantially the form of EXHIBIT A
hereto (the "Note"), dated the Closing Date and amended and restated as of the
Effective Date and completed with appropriate insertions. The Note shall be
payable to the order of the Lender in the principal amount of the Term Loan and
representing the obligation of the Borrower to pay to the Lender such principal
amount or, if less, the outstanding amount of the Term Loan, plus interest
accrued thereon, as set forth below. The Borrower irrevocably authorizes the
Lender to make or cause to be made a notation on the Note Record reflecting the
original principal amount of the Term Loan and, at or about the time of the
Lender's receipt of any principal payment on the Note, an appropriate notation
on the Note Record reflecting such payment. The aggregate unpaid amount set
forth on the Note Record shall be PRIMA FACIE evidence of the principal amount
thereof owing and unpaid to the Lender, but the failure to record, or any error
in so recording, any such amount on the Note Record shall not affect the
obligations of the Borrower hereunder or under the Note to make payments of
principal of and interest on the Note when due.
2.3 REPAYMENT OF THE PRINCIPAL OF THE TERM LOAN.
(a) The Borrower promises to pay to the Lender, on each Interest
Payment Date with respect to the Term Loan during any period during which the
Term Loan bears interest at the Fixed Rate, commencing with the Interest Payment
Date next succeeding the Drawdown Date thereof, equal quarterly installments of
principal and interest on the Term Loan, in an amount calculated on the Closing
Date to amortize the principal amount of the Term Loan on a mortgage style basis
over eight (8) years to a remaining principal amount of fifty percent (50%) of
the principal amount of the Term Loan outstanding on the Closing Date. The
Borrower promises to pay the remaining outstanding principal amount of the Term
Loan on the Maturity Date. No amount repaid with respect to the Term Loan may
be reborrowed.
(b) The Borrower promises to pay to the Lender, during any period
during which the Term Loan bears interest at the Base Rate or the Eurodollar
Rate, the principal amount of the Term Loan in equal quarterly installments,
payable on the last day of each fiscal quarter of the Borrower, each in an
amount calculated to amortize the principal amount of the Term Loan to a
remaining principal amount of fifty percent (50%) of the principal amount of the
Term Loan outstanding on the Closing Date. The Borrower promises to pay the
remaining outstanding principal amount of the Term Loan on the Maturity Date.
No amount repaid with respect to the Term Loan may be reborrowed.
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(c) In addition to the repayments required pursuant to Sections
2.3(a) and (b), the Borrower promises to offer to repay the entire outstanding
principal amount of the Term Loan, together with all interest accrued thereon to
the date of repayment, the Make-Whole Amount and the other amounts due under
Section 2.4(a), if applicable, and all other fees and expenses due under this
Loan Agreement (a "Repayment Offer") in connection with any refinancing of, or
replacement financing for, the Parent Credit Agreement or the Senior Notes. The
Borrower will make the Repayment Offer by written notice to the Lender no later
than ten (10) days before the date on which such refinancing or replacement
financing becomes effective. The Lender may, in its sole and absolute
discretion and at any time within thirty (30) days from the receipt of such
Repayment Offer, decline or accept the Repayment Offer by written notice to the
Borrower. If the Lender accepts the Repayment Offer, and if the Borrower has
effected such refinancing or replacement financing, then the Borrower will,
within one hundred twenty (120) days from its receipt of the Lender's acceptance
of the Repayment Offer, repay the entire outstanding principal amount of the
Term Loan, together with all interest accrued thereon to the date of repayment,
the Make-Whole Amount and the other amounts due under Section 2.4(a), if
applicable, and all other fees and expenses due under this Loan Agreement.
Notwithstanding the prohibitions on prepayment set forth in Section 2.4(a)(i),
the Lender may, in its sole and absolute discretion, accept a Repayment Offer
before the date that is two (2) years after the Closing Date, in which case the
prepayment of the outstanding principal amount of the Term Loan, together with
all interest accrued thereon to the date of repayment, the Make-Whole Amount and
the other amounts due under Section 2.4(a), and all other fees and expenses due
under this Loan Agreement, shall be made in accordance with Section 2.4(a)(ii).
(d) In addition to the repayments required pursuant to Sections
2.3(a), (b), and (c), the Borrower promises to offer to repay the entire
outstanding principal amount of the Term Loan, together with all interest
accrued thereon to the date of repayment, the Make-Whole Amount and the other
amounts due under Section 2.4(a), if applicable, and all other fees and expenses
due under this Loan Agreement (a "Change of Control Repayment Offer") upon the
occurrence of any "Change of Control" under, and as defined in, the Senior
Indenture. The Borrower will make the Change of Control Repayment Offer by
written notice to the Lender not later than the earlier to occur of (i) the date
that any notice of such "Change of Control" is given to the trustee under the
Senior Indenture or the holders of the Senior Notes and (ii) ten (10) days after
the occurrence of such Change of Control. The Lender may, in its sole and
absolute discretion and at any time within thirty (30) days from the receipt of
such Change of Control Repayment Offer, decline or accept the Change of Control
Repayment Offer by written notice to the Borrower. If the Lender accepts the
Change of Control Repayment Offer, then the Borrower will, within thirty (30)
days from its receipt of the Lender's acceptance of the Change of Control
Repayment Offer, repay the entire outstanding principal amount of the Term Loan,
together with all interest accrued thereon to the date of repayment, the Make-
Whole Amount and the other amounts due under Section 2.4(a), if applicable, and
all other fees and expenses due under this Loan Agreement. Notwithstanding the
prohibitions on prepayment set forth in Section 2.4(a)(i), the Lender may, in
its sole and absolute discretion, accept a Change of Control Repayment Offer
before the date that is two (2) years after the Closing Date, in which case the
prepayment of the outstanding principal amount of the Term Loan, together with
all interest accrued thereon to the date of repayment, the Make-Whole Amount and
the other amounts due under Section 2.4(a), and all other fees and expenses due
under this Loan Agreement, shall be made in accordance with Section 2.4(a)(ii).
2.4 OPTIONAL PREPAYMENT OF TERM LOAN.
(a) Prepayment of the Term Loan During the Fixed Rate Period. So
long as the Term Loan bears interest calculated by reference to the Fixed Rate,
the following provisions shall apply to the prepayment of the Term Loan:
(i) The Borrower shall have no right to prepay the Term Loan
until the date that is two (2) years after the Closing Date.
(ii) At any time during the period beginning on the date that
is two (2) years after the Closing Date and ending on the day
immediately preceding the date that is three (3) years after the
Closing Date, the Borrower
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shall have the right to prepay the Term Loan, in whole or in
part, upon not less than three (3) Business Days' prior written
notice to the Lender; PROVIDED that (A) the Borrower shall,
together with such prepayment, pay the Lender the Make-Whole
Amount with respect to such principal prepayment PLUS an amount
equal to one percent (1%) of the principal amount of the Term
Loan so prepaid and (B) each partial prepayment shall be in a
principal amount of at least $250,000 or a larger integral
multiple thereof.
(iii) At any time after the date that is three (3) years after
the Closing Date, the Borrower shall have the right to prepay the
Term Loan, in whole or in part, upon not less than three (3)
Business Days' prior written notice to the Lender; PROVIDED that
(A) the Borrower shall, together with such prepayment, pay the
Lender the Make-Whole Amount with respect to the principal amount
so prepaid and (B) each partial prepayment shall be in a
principal amount of at least $250,000 or a larger integral
multiple thereof.
(b) Prepayment of the Term Loan During the Floating Rate Period. So
long as the Term Loan bears interest calculated by reference to the Base Rate or
the Eurodollar Rate, the Borrower shall have the right to prepay the Term Loan,
without penalty and in whole or in part, upon not less than three (3) Business
Days' prior written notice to the Lender; PROVIDED that (i) each partial
prepayment shall be in a principal amount of at least $250,000 or a larger
integral multiple thereof and (ii) no portion of the Term Loan bearing interest
at the Eurodollar Rate may be prepaid pursuant to this Section 2.4(b) except on
the last day of the Interest Period relating thereto, unless the Borrower pays
the Lender all fees and expenses resulting from the prepayment of such portion
of the Term Loan on a day other than the last day of the Interest Period
relating thereto.
(c) In General. Any prepayment of principal of the Term Loan
pursuant to Section 2.4(a) or Section 2.4(b) shall include all interest accrued
to the date of prepayment and shall be applied against the scheduled
installments of principal due on the Term Loan PRO RATA; PROVIDED that, in the
case of a prepayment of a portion of the Term Loan bearing interest at the Fixed
Rate, the payments of principal and interest on the Term Loan determined
pursuant to Section 2.3(a) shall be recalculated to amortize the then-remaining
principal amount of the Term Loan on a mortgage style basis over the remaining
period to the Maturity Date to a principal amount of fifty percent (50%) of the
then remaining principal amount of the Term Loan. No amount prepaid or repaid
with respect to the Term Loan may be reborrowed.
2.5 INTEREST ON THE TERM LOAN.
(a) Interest Rate on the Term Loan. Except as otherwise provided in
Section 3.10, the Term Loan shall bear interest during each Interest Period
relating to all or any portion of the Term Loan at the following rates:
(i) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Fixed Rate, the Term
Loan or such portion shall bear interest during such Interest Period
at the rate per annum equal to the Fixed Rate determined for such
Interest Period PLUS 1.75%.
(ii) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Base Rate, the Term
Loan or such portion shall bear interest during such Interest Period
at the rate per annum equal to the Base Rate determined from time to
time during such Interest Period.
(iii) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Eurodollar Rate, the
Term Loan or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Eurodollar Rate determined
for such Interest Period PLUS 1.75%.
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(b) Interest Rate Options; Notice by Borrower.
(i) After the Closing Date, the Term Loan shall initially
bear interest during the first Interest Period relating thereto at the
Fixed Rate. After such first Interest Period, the Borrower may,
subject to the conditions set forth herein, elect to have the Term
Loan bear interest at the Base Rate, the Eurodollar Rate or the Fixed
Rate; PROVIDED that (A) with respect to any such conversion of a
Eurodollar Rate Loan to a Fixed Rate Loan or a Base Rate Loan, the
Borrower shall give the Lender at least two (2) Business Days' prior
written notice of such election; (B) with respect to any such
conversion of a Fixed Rate Loan or a Base Rate Loan to a Eurodollar
Rate Loan, the Borrower shall give the Lender at least three (3)
Eurodollar Business Days' prior written notice of such election; (C)
with respect to any such conversion of a Eurodollar Rate Loan into a
Fixed Rate Loan or a Base Rate Loan, such conversion shall only be
made on the last day of the Interest Period with respect thereto,
unless the Borrower pays the Lender all fees and expenses resulting
from a conversion on a date other than the last day of an Interest
Period; (D) no Base Rate Loan or Fixed Rate Loan may be converted into
a Eurodollar Rate Loan and no Base Rate Loan or Eurodollar Rate Loan
may be converted into a Fixed Rate Loan when any Default or Event of
Default has occurred and is continuing and (E) any conversion of a
Fixed Rate Loan shall only be made on the last day of the Interest
Period relating thereto. On the date on which such conversion is
being made the Lender shall take such action as is necessary to
transfer the Loan to its Domestic Lending Office or its Eurodollar
Lending Office, as the case may be. Each Conversion Request relating
to the conversion of a Base Rate Loan or a Fixed Rate Loan to a
Eurodollar Rate Loan shall be irrevocable by the Borrower for the
applicable Interest Period.
(ii) Any Loan of any Type may be continued as a Loan of the
same Type upon the expiration of an Interest Period with respect
thereto by compliance by the Borrower with the notice provisions
contained in Section 2.5(b)(i) hereof; PROVIDED that no Eurodollar
Rate Loan or Fixed Rate Loan may be continued as such when any Default
or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance
of any Default or Event of Default of which officers of the Lender
active upon the Borrower's account have actual knowledge.
(c) Payment of Interest. The Borrower promises to pay interest on
the Term Loan or any portion thereof outstanding during each Interest Period in
arrears on each Interest Payment Date applicable to such Interest Period and on
the Maturity Date.
(d) Amounts, etc. Any portion of the Term Loan bearing interest
calculated by reference to the Eurodollar Rate relating to any Interest Period
shall be in the minimum amount of $500,000. No Interest Period relating to the
Term Loan or any portion thereof bearing interest at a rate calculated by a
reference to the Eurodollar Rate shall extend beyond the date on which a
regularly scheduled installment payment of the principal of the Term Loan is to
be made unless a portion of the Term Loan at least equal to such installment
payment has an Interest Period ending on such date or is then bearing interest
at a rate calculated by reference to the Base Rate.
3. CERTAIN GENERAL PROVISIONS.
3.1 [INTENTIONALLY OMITTED].
3.2 FUNDS FOR PAYMENTS.
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3.2.1 PAYMENTS TO LENDER. All payments of principal, interest, and
any other amounts due hereunder or under any of the other Loan Documents shall
be made to the Lender at the Lender's Head Office or at such other location in
the Boston, Massachusetts, area that the Lender may from time to time designate
by written notice to the Borrower, in each case in immediately available funds.
3.2.2 NO OFFSET, ETC. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such deduction
or withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Lender, on the date on which such amount
is due and payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Lender to receive the same
net amount which the Lender would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly
to the Lender certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
3.3 COMPUTATIONS. All computations of interest on the Loan and of
commitment or other fees shall be based on a 360-day year and paid for the
actual number of days elapsed. Except as otherwise provided in the definition
of the term "Interest Period" with respect to Eurodollar Rate Loans, whenever a
payment hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension. The Outstanding amount of the Loan as reflected on the Note Record
from time to time shall be prima facie evidence of the amount so Outstanding.
3.4 INABILITY TO DETERMINE EURODOLLAR RATE. In the event that, prior to
the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Lender shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Lender shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower) to the Borrower. In such event
(a) each Conversion Request with respect to each Eurodollar Rate Loan shall be
automatically withdrawn and shall be deemed a request for a Base Rate Loan, (b)
each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period thereof, become a Base Rate Loan, and (c) the
obligations of the Lender to convert Loans of another Type into Eurodollar Rate
Loans shall be suspended until the Lender determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Lender shall so
notify the Borrower.
3.5 ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for the Lender to maintain Eurodollar
Rate Loans, the Lender shall forthwith give notice of such circumstances to the
Borrower and thereupon (a) the commitment of the Lender to maintain Eurodollar
Rate Loans or convert Base Rate Loans or Fixed Rate Loans to Eurodollar Rate
Loans shall forthwith be suspended and (b) all or any portion of the Term Loan
then Outstanding as a Eurodollar Rate Loan, if any, shall be converted
automatically to a Base Rate Loan on the last day of each Interest Period
applicable to such Eurodollar Rate Loan or within such earlier period as may be
required by law. The Borrower hereby agrees to promptly pay the Lender, upon
demand, any additional amounts necessary to compensate the Lender for any costs
incurred by the Lender in making any conversion in accordance with this Section
3.5, including any interest or fees payable by the Lender to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.
3.6 ADDITIONAL COSTS, ETC. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with
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the administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to the Lender by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(a) subject the Lender to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Loan Agreement, the
other Loan Documents, the Commitment or the Loan (other than taxes based upon or
measured by the revenue, income or profits of the Lender), or
(b) materially change the basis of taxation (except for changes in
taxes on revenue, income or profits) of payments to the Lender of the principal
of or the interest on the Loan or any other amounts payable to the Lender under
this Loan Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Loan Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or commitments of an office of the Lender,
or
(d) impose on the Lender any other conditions or requirements with
respect to this Loan Agreement, the other Loan Documents, the Loan, the
Commitment, or any class of loans or commitments of which the Loan or the
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to the Lender of making, funding,
issuing, renewing, extending or maintaining the Term Loan or the
Commitment, or
(ii) to reduce the amount of principal, interest or other amount
payable to the Lender hereunder on account of the Commitment or the
Term Loan, or
(iii) to require the Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by the Lender
from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by the Lender
at any time and from time to time and as often as the occasion therefor may
arise, pay to the Lender such additional amounts as will be sufficient to
compensate the Lender for such additional cost, reduction, payment or foregone
interest or other sum.
3.7 CAPITAL ADEQUACY. If after the date hereof the Lender determines that
(a) the adoption of or change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (b) compliance by the Lender or any corporation
controlling the Lender with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) of any such
entity regarding capital adequacy, has the effect of reducing the return on the
Commitment or the Term Loan to a level below that which the Lender could have
achieved but for such adoption, change or compliance (taking into consideration
the Lender's then existing policies with respect to capital adequacy and
assuming full utilization of the Lender's capital) by any amount deemed by the
Lender to be material, then the Lender may notify the Borrower of such fact. To
the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower agrees to pay the Lender for the amount
of such reduction in the return on capital as
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and when such reduction is determined upon presentation by the Lender of a
certificate in accordance with Section 3.8 hereof. The Lender shall allocate
such cost increases among its customers in good faith and on an equitable basis.
3.8 CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Section 3.6 or 3.7 and a brief explanation of such amounts
which are due, submitted by the Lender to the Borrower, shall be conclusive
evidence, absent manifest error, that such amounts are due and owing.
3.9 INDEMNITY. The Borrower agrees to indemnify the Lender and to hold
the Lender harmless from and against any loss, cost or expense (including loss
of anticipated profits) that the Lender may sustain or incur as a consequence of
(a) default by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Rate Loans or Fixed Rate Loans as and when due and
payable, including any such loss or expense arising from interest or fees
payable by the Lender to lenders of funds obtained by it in order to maintain
its Eurodollar Rate Loans or Fixed Rate Loans, (b) default by the Borrower in
converting or continuing all or a portion of the Term Loan after the Borrower
has given (or is deemed to have given) a Conversion Request relating thereto in
accordance with Section 2.5 or (c) the making of any payment on a Eurodollar
Rate Loan or the making of any conversion of any such Loan to a Base Rate Loan
or a Fixed Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by the
Lender to lenders of funds obtained by it in order to maintain the Term Loan.
3.10 INTEREST AFTER DEFAULT.
3.10.1 OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Term Loan and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per annum equal to
two percent (2%) above the rate applicable to Base Rate Loans until such amount
shall be paid in full (after as well as before judgment).
3.10.2 AMOUNTS NOT OVERDUE. During the continuance of an Event of
Default the principal of the Loan not overdue shall, from and after the fifth
day after such Event of Default and until such Event of Default has been cured
or remedied or such Event of Default has been waived by the Lender pursuant to
Section 22, bear interest at a rate per annum equal to the greater of (i) two
percent (2%) above the rate of interest otherwise applicable to the Term Loan
pursuant to Section 2.5 and (ii) the rate of interest applicable to overdue
principal pursuant to Section 3.10.1.
4. SECURITY AND GUARANTIES.
4.1 SECURITY OF BORROWER. The Obligations shall be secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in the Vessel.
4.2 GUARANTIES OF THE GUARANTORS. The Obligations shall also be
guaranteed by the Guarantors pursuant to the terms of the Guaranty.
5. REPRESENTATIONS AND WARRANTIES. The Borrower and the Guarantors represent
and warrant to the Lender as follows:
5.1 CORPORATE AUTHORITY.
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5.1.1 INCORPORATION; GOOD STANDING. Each of the Borrower and the
Guarantors (a) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, (b) has all requisite
corporate power to own its property and conduct its business as now conducted
and as presently contemplated, and (c) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where
such qualification is necessary except where a failure to be so qualified would
not have a materially adverse effect on the business, assets or financial
condition of the Borrower or the Guarantors, taken as a whole.
5.1.2 AUTHORIZATION. The execution, delivery and performance of this
Loan Agreement and the other Loan Documents to which the Borrower or any of the
Guarantors is or is to become a party and the transactions contemplated hereby
and thereby (a) are within the corporate authority of such Persons, (b) have
been duly authorized by all necessary corporate proceedings, (c) do not conflict
with or result in any breach or contravention of any provision of law, statute,
rule or regulation to which such Persons are subject or any judgment, order,
writ, injunction, license or permit applicable to such Persons and (d) do not
conflict with any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, such Persons.
5.1.3 ENFORCEABILITY. The execution and delivery of this Loan
Agreement and the other Loan Documents to which the Borrower or any of the
Guarantors is or is to become a party will result in valid and legally binding
obligations of each such Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
5.2 GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and the Guarantors of this Loan Agreement and the other Loan
Documents to which the Borrower or any of the Guarantors is or is to become a
party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any Governmental Authority other than
filings with the National Vessel Documentation Center with respect to the Vessel
Mortgage as contemplated by the Loan Documents.
5.3 TITLE TO PROPERTIES. Except as indicated on Schedule 5.3 hereto,
Moran and its consolidated subsidiaries own all of the assets reflected in the
consolidated balance sheet of Moran referred to in Section 5.4.1 or acquired
since the date thereof (except property and assets sold or otherwise disposed of
in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
5.4 FINANCIAL STATEMENTS AND PROJECTIONS.
5.4.1 FINANCIAL STATEMENTS. There has been furnished to the Lender a
consolidated balance sheet of Moran and its consolidated subsidiaries as at the
Balance Sheet Date, and a consolidated statement of income for the fiscal year
then ended, certified by Moran's independent certified public accountants. Such
balance sheet and statement of income have been prepared in accordance with GAAP
and fairly present the consolidated financial condition of Moran and its
consolidated subsidiaries as at the Balance Sheet Date and the consolidated
results of operations for the fiscal year then ended. There are no contingent
liabilities of Moran or any of its subsidiaries as of such date involving
material amounts, known to the officers of the Borrower or any of the Guarantors
not disclosed in said balance sheet and the related notes thereto.
5.4.2 BUDGET. The annual operating budget of Moran and its
consolidated subsidiaries for the 1997 fiscal year, a copy of which has been
delivered to the Lender, was prepared on the basis of the assumptions stated
therein. To the knowledge of the Borrower and the Guarantors, no facts exist
that (individually or in the aggregate) would reasonably be expected to result
in any material adverse change in such budget.
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5.5 NO MATERIAL CHANGES, ETC.
(a) Since the Balance Sheet Date there has occurred no materially
adverse change in the financial condition or business of (i) the Borrower or
(ii) Moran and its Restricted Subsidiaries, determined on a consolidated basis
for such Persons, as shown on or reflected in the consolidated balance sheet of
Moran and its Restricted Subsidiaries as at the Balance Sheet Date, or on the
consolidated statement of income for the fiscal year then ended. Since the
Balance Sheet Date, neither the Borrower nor any of the Guarantors has made any
Distributions or Restricted Prepayments.
(b) The Borrower and the Guarantors (before and after giving effect
to the transactions contemplated by this Loan Agreement and the other Loan
Documents) (i) are solvent, (ii) have assets having a fair value in excess of
their liabilities, (iii) have assets having a fair value in excess of the amount
required to pay their liabilities on existing debts as such debts become
absolute and matured, and (iv) have, and expect to continue to have, access to
adequate capital for the conduct of their respective businesses and the ability
to pay their debts from time to time incurred in connection with the operation
of their respective businesses as such debts mature.
5.6 FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and the Guarantors
possess all franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the conduct of
their respective businesses substantially as now conducted without known
conflict with any rights of others.
5.7 LITIGATION. There are no actions, suits, proceedings, orders,
injunctions, decisions or investigations of any kind pending, threatened or
issued against the Borrower or the Guarantors before any court, tribunal,
administrative agency or board which (a) if adversely determined, would
reasonably be expected to materially adversely affect or materially impair (i)
the properties, assets, financial condition or business of the Borrower or of
the Guarantors and their subsidiaries on a consolidated basis, (ii) the ability
of the Borrower or the Guarantors to perform their respective obligations under
the Loan Documents, (iii) the right of the Borrower or of the Guarantors and
their subsidiaries on a consolidated basis, to carry on their respective
businesses substantially as now conducted by them, or (iv) the ability of the
Lender to exercise its rights hereunder or under the other Loan Documents; or
(b) question the validity of this Loan Agreement or any of the other Loan
Documents or any action taken or to be taken pursuant hereto or thereto.
5.8 NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any of
the Guarantors is subject to any charter, corporate or other legal restriction,
or any judgment, decree, order, rule or regulation that has or is expected in
the future to have a materially adverse effect on the respective businesses,
assets or financial condition of the Borrower or of the Guarantors and their
subsidiaries on a consolidated basis. Neither the Borrower nor any of the
Guarantors is a party to any contract or agreement that has or is expected, in
the judgment of the officers of the Borrower and the Guarantors, to have any
materially adverse effect on the business of the Borrower or of the Guarantors
and their subsidiaries on a consolidated basis.
5.9 COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of the Guarantors is in violation of (i) any provision of their
respective charter documents or bylaws, or (ii) any agreement or instrument to
which they may be subject or by which they or any of their properties may be
bound or (iii) any law (including without limitation, any Environmental Law),
decree, order, judgment, statute, license, rule or regulation, in any of the
foregoing cases in a manner that would reasonably be expected to materially and
adversely affect the respective financial conditions, properties or businesses
of the Borrower or the Guarantors and their Restricted Subsidiaries on a
consolidated basis.
5.10 TAX STATUS. The Borrower and each of the Guarantors (a) have filed
all federal and, except where the failure to file could not have a materially
adverse effect on the business, assets or financial condition of Moran and its
Restricted Subsidiaries on a consolidated basis, state income and all other tax
returns, reports and declarations required by any jurisdiction to which any of
them is subject, (b) have paid all taxes
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and other governmental assessments and charges shown or determined to be due on
such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings and (c) have set aside on their books, to
the extent required by GAAP, reserves for taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due from the Borrower or the
Guarantors by the taxing authority of any jurisdiction.
5.11 NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.
5.12 HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower nor
any of the Guarantors is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
5.13 ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security, agreement, ship
mortgage or other document filed or recorded with any filing records, registry,
or other public office, that purports to cover, affect or give notice of any
lien on, or security interest in any of the Collateral.
5.14 PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary, under applicable law, to establish and
perfect the Agent's, the Lender's or, as the case may be, BKB's security
interest in the Collateral. The Collateral and the Agent's, the Lender's or, as
the case may be, BKB's rights with respect to the Collateral are not subject to
any setoff, claims, withholdings or other defenses. The Borrower is the owner
of the Collateral free from any lien, security interest, encumbrance and any
other claim or demand, except for Permitted Liens. All of the Obligations of
the Borrower will, from and after the execution and delivery of the Vessel
Mortgage, be entitled to the benefits of and be secured by the Vessel Mortgage.
5.15 CERTAIN TRANSACTIONS. Except for transactions permitted under the
Parent Credit Agreement, none of the officers, directors, or employees of the
Borrower or any of the Guarantors is currently a party to any transaction with
Borrower or any of the Guarantors (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrower or any
of the Guarantors, any corporation, partnership, trust or other entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
5.16 EMPLOYEE BENEFIT PLANS. The representations and warranties of the
Borrower and the Guarantors contained in Section 7.16 of the Parent Credit
Agreement (other than the second sentence of Section 7.16.1) are hereby
incorporated herein by reference and shall be deemed made by the Borrower and
the Guarantors on and as of the Closing Date.
5.17 PURPOSE; REGULATIONS U AND X. No portion of the Loan is to be used
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
5.18 SUBSIDIARIES, ETC. The Borrower and the Guarantors have only those
Subsidiaries listed on Schedule 5.18 hereto and except as set forth on such
Schedule 5.18, neither the Borrower nor any Guarantor is engaged in any joint
venture or partnership with any other person.
5.19 [INTENTIONALLY OMITTED].
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5.20 DISCLOSURE. Neither this Loan Agreement nor any of the other Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein or therein not
misleading. There is no fact known to either the Borrower or any of the
Guarantors which materially adversely affects, or which would reasonably be
expected to materially adversely affect in the future, exclusive of effects
resulting from changes in general economic or industry conditions, the business,
assets, financial condition or prospects of the Borrower or of the Guarantors
and their subsidiaries on a consolidated basis.
5.21 FISCAL YEAR. The fiscal year of the Borrower, Moran and the other
Guarantors is the twelve months ending December 31 of each year.
5.22 INSURANCE. Schedule 5.22 attached hereto lists the P&I and hull
policies and types and amounts of P&I and hull coverage (including deductibles)
owned or held by the Borrower on the date hereof. Such policies of insurance
are maintained with financially sound and reputable insurance companies, funds,
underwriters or mutual indemnification associations. All such policies are in
full force and effect; are sufficient for material compliance by the Borrower
and the Guarantors with all requirements of law and all agreements to which the
Borrower or the Guarantors are a party; are by their terms valid and enforceable
policies that will remain in full force and effect through the respective dates
set forth in such schedule; and coverage thereunder will not be reduced by, or
terminate or lapse by reason of, the transactions contemplated by this Loan
Agreement.
5.23 CONCERNING THE VESSEL. The Vessel complies, in all material respects,
with all applicable laws and all applicable regulations thereunder. The Vessel
is (i) covered by hull and machinery, protection and indemnity and excess
liability insurance in accordance with the requirements of the Vessel Mortgage,
and (ii) operated and maintained as a vessel in accordance in all material
respects with all applicable laws and regulations. The Vessel is maintained and
operated in compliance, in all material respects, with all applicable
Environmental Laws.
6. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS. The Borrower and
the Guarantors covenant and agree that, so long as the Loan or the Note is
Outstanding:
6.1 PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loan in accordance with the terms
of this Loan Agreement and the Note.
6.2 MAINTENANCE OF OFFICE. The Borrower and each of the Guarantors will
maintain its chief executive office at those locations listed on Schedule 6.2,
or at such other place in the United States of America as the Borrower or the
Guarantors shall designate upon written notice to the Lender, where notices,
presentations and demands to or upon the Borrower and the Guarantors in respect
of the Loan Documents may be given or made.
6.3 RECORDS AND ACCOUNTS. The Borrower and each of the Guarantors will
(a) keep true and accurate records and books of account in which full, true and
correct entries will be made in accordance with GAAP and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence and amortization of its properties contingencies, and
other reserves.
6.4 FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower will
cause to be delivered to the Lender:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of Moran, the consolidated balance
sheet of Moran and its subsidiaries as at the end of such year, and the related
consolidated statements of income and of cash flow for such year, each setting
forth in comparative form the figures for the previous fiscal year, all such
statements to be in reasonable detail, prepared in accordance with GAAP, and
certified without qualification by Price Waterhouse LLP or by other independent
certified public
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accountants satisfactory to the Lender, together with a written statement from
such accountants to the effect that they have read a copy of this Loan
Agreement, and that, in making the examination necessary to said certification,
they have obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or Event
of Default they shall disclose in such statement any such Default or Event of
Default; PROVIDED that such accountants shall not be liable to the Lender for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of Moran, a
copy of the unaudited consolidated balance sheet of Moran and its subsidiaries
as at the end of such quarter, and the related consolidated statements of income
and cash flow for the portion of Moran's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with GAAP, together with a
certification by the principal financial or accounting officer of Moran that the
information contained in such financial statements fairly presents the financial
position of Moran and its consolidated subsidiaries on the date thereof (subject
to year-end adjustments);
(c) as soon as practicable, but in any event not later than one
hundred twenty (120) days after the end of each fiscal year, the annual budget
for Moran and its consolidated subsidiaries for the next succeeding fiscal year,
such annual budget to be set forth in reasonable detail;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of Moran (the "Compliance
Certificate"), substantially in the form of Exhibit C hereto and setting forth
in reasonable detail computations evidencing compliance with the covenants
contained in Section 8 and (if applicable) reconciliations to reflect changes in
GAAP since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower or any of the Guarantors;
and
(f) from time to time such other financial data and information
(including accountants' management letters) as the Lender may reasonably
request.
6.5 NOTICES.
6.5.1. DEFAULTS. The Borrower will promptly notify the Lender in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Loan Agreement, the
Note, or any other note, evidence of indebtedness, indenture or other obligation
to which or with respect to which the Borrower or the Guarantors are a party or
obligor, whether as principal or surety, the Borrower or such Guarantor shall
forthwith give written notice thereof to the Lender, describing the notice or
action and the nature of the claimed default.
6.5.2. ENVIRONMENTAL EVENTS. The Borrower and the Guarantors will
promptly give notice to the Lender (a) of any violation of any Environmental Law
that the Borrower or any Guarantor reports in writing or that is reportable by
such Person in writing (or for which any written report supplemental to any oral
report is made) to any federal, state or local environmental agency and (b) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability,
or any federal, state or local environmental agency or board, that, in each
instance, relates to the Vessel or would reasonably be expected to materially
adversely affect the respective assets, liabilities, financial conditions or
operations of the Borrower and the Guarantors and their subsidiaries on a
consolidated basis, or the Agent's, BKB's, or the Lender's security interests
pursuant to the Vessel Mortgage.
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6.5.3. NOTIFICATION OF CLAIMS AGAINST COLLATERAL. The Borrower and
each Guarantor will, immediately upon becoming aware thereof, notify the Lender
in writing of any setoff, claims, withholdings or other defenses to which any of
the Collateral, or the Agent's, BKB's, or the Lender's rights with respect to
the Collateral, are subject.
6.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower and the
Guarantors will give notice to the Lender in writing within fifteen (15) days
after becoming aware of any litigation or proceedings threatened in writing or
any pending litigation and proceedings affecting the Borrower or the Guarantors
or to which the Borrower or the Guarantors is or becomes a party involving an
uninsured claim against the Borrower or the Guarantors that would reasonably be
expected to have a materially adverse effect on the respective businesses,
assets or financial conditions of the Borrower, the Guarantors and their
subsidiaries on a consolidated basis, stating the nature and status of such
litigation or proceedings. The Borrower and the Guarantors will give notice to
the Lender, in writing, in form and detail satisfactory to the Lender, within
ten (10) days after any judgment not covered by insurance, final or otherwise,
against the Borrower or the Guarantors in an amount in excess of $1,500,000.
6.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower and each
of the Guarantors will do or cause to be done all things necessary to preserve
and keep in full force and effect their respective corporate existence, rights
and franchises. Each (a) will cause all of its properties used or useful in the
conduct of its business to be maintained and kept in good condition, repair and
working order, subject to normal wear and tear, and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower or the Guarantors, as the case may be, may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times, and (c) will continue to engage primarily in the
businesses now conducted by them and in related businesses; PROVIDED that
nothing in this Section 6.6 shall prevent the Borrower or the Guarantors from
discontinuing the operation and maintenance of any of their respective
properties if such discontinuance is, in the judgment of the Borrower or the
Guarantors, as the case may be, desirable in the conduct of its or their
business and does not in the aggregate materially adversely affect the business
of Moran and its Restricted Subsidiaries or the ability of the Borrower or of
the Guarantors to perform their obligations hereunder and under the other Loan
Documents.
6.7 INSURANCE. The Borrower and each of the Guarantors will maintain with
financially sound and reputable insurers insurance with respect to their
respective properties and businesses against such casualties and contingencies
as shall be in accordance with general practices of businesses engaged in
similar activities in similar geographic areas.
6.8 TAXES. The Borrower and each of the Guarantors will duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all federal taxes, charges and assessments and, except where the
failure to pay could not reasonably be expected to have a material adverse
effect on the business, assets or financial condition of Moran and its
Restricted Subsidiaries, taken as a whole, all other taxes, assessments and
other governmental charges, in each case imposed upon each of them and their
respective real properties, sales and activities, or any part thereof, or upon
the income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of their
respective property; PROVIDED that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrower or the
Guarantors shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrower and the Guarantors will pay all
such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor.
6.9 INSPECTION OF PROPERTIES AND BOOKS, ETC.
6.9.1. GENERAL. The Borrower and each of the Guarantors shall permit
the Lender or any of its designated representatives, to visit and inspect any of
the properties of the Borrower or the Guarantors, including, without limitation,
the Vessel, to examine the books of account
<PAGE>
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of the Borrower or the Guarantors (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of the Borrower or
the Guarantors with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Lender may
reasonably request.
6.9.2. COMMUNICATION WITH ACCOUNTANTS. The Borrower and the
Guarantors authorize the Lender to, in the presence of representatives of the
Borrower or the Guarantors, communicate directly with the Guarantors' and the
Borrower's independent certified public accountants and authorize such
accountants to disclose to the Lender any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other affairs of
the Borrower or the Guarantors. At the request of the Lender, the Borrower and
the Guarantors shall deliver a letter addressed to such accountants instructing
them to comply with the provisions of this Section 6.9.2.
6.10 COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The Borrower
and each of the Guarantors will comply with (a) the applicable laws and
regulations wherever its business is conducted, including all Environmental
Laws, except where the failure to comply would not reasonably be expected to
have a material adverse effect on the Vessel or on the business, assets or
financial condition of Moran and its Restricted Subsidiaries taken as a whole,
(b) the provisions of their respective charter documents and by-laws, (c) all
agreements and instruments by which they or any of their respective properties
may be bound, except where the failure to comply would not reasonably be
expected to have a material adverse effect on the Vessel or the business, assets
or financial condition of Moran and its Restricted Subsidiaries taken as a whole
and (d) all applicable decrees, orders, and judgments, except where the failure
to comply would not reasonably be expected to have a material adverse effect on
the Vessel or the business, assets or financial condition of Moran and its
Restricted Subsidiaries taken as a whole. If at any time while any portion of
the Loan is Outstanding, any authorization, consent, approval, permit or license
from any officer, agency or instrumentality of any government shall become
necessary or required in order that the Borrower or the Guarantors may fulfill
any of their obligations hereunder, the Borrower and the Guarantors will
immediately take or cause to be taken all reasonable steps within the power of
the Borrower and the Guarantors to obtain such authorization, consent, approval,
permit or license and furnish the Lender with evidence thereof.
6.11 [INTENTIONALLY OMITTED].
6.12 APPROVALS. The Borrower will give all such notices to, and take all
such other actions with respect to, each Governmental Authority as may be
required in order to comply with all applicable Requirements in the use and
operation of the Vessel.
6.13 CONCERNING THE VESSEL. The Borrower shall at all times operate the
Vessel in compliance in all material respects with all Requirements and in
compliance in all material respects with all rules, regulations and requirements
of the American Bureau of Shipping or any other classification society selected
by the Borrower and reasonably acceptable to the Lender. Upon the Lender's
request, the Borrower shall furnish to the Lender a copy of the certificate of
such classification society covering the Vessel no later than thirty (30) days
after the end of each fiscal year of the Borrower.
6.14 FURTHER ASSURANCES. The Borrower and each of the Guarantors will
cooperate with the Lender and execute such further instruments and documents as
the Lender shall reasonably request to carry out to its satisfaction the
transactions contemplated by this Loan Agreement and the other Loan Documents.
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS. The
Borrower and the Guarantors covenant and agree that, so long as any portion of
the Term Loan is Outstanding:
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7.1 RESTRICTIONS ON INDEBTEDNESS. Neither the Borrower nor the Guarantors
will create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Lender arising under any of the Loan
Documents;
(b) Indebtedness of the Borrower or the Guarantors otherwise
permitted under the Parent Credit Agreement or the Senior Indenture; and
(c) Indebtedness existing on the date of this Loan Agreement and
listed and described on Schedule 7.1 hereto and renewals, extensions or
refinancings thereof, provided that such renewals, extensions or refinancings
shall not increase the aggregate amount of such Indebtedness, materially
increase the amount of collateral securing such Indebtedness or materially
change the terms thereof.
7.2 RESTRICTIONS ON LIENS. Neither the Borrower nor the Guarantors will
(a) create or incur or suffer to be created or incurred or to exist any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest of
any kind upon any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom; (b) transfer any
of such property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) except as set
forth in Section 7.1, acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title retention or purchase
money security agreement, device or arrangement; (d) suffer to exist for a
period of more than sixty (60) days after the same shall have been incurred any
Indebtedness or claim or demand against it that if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
its general creditors; or (e) except as permitted under the Parent Credit
Agreement, sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles, chattel paper or instruments, with or without
recourse; PROVIDED that the Borrower and the Guarantors may create or incur or
suffer to be created or incurred or to exist:
(a) currently outstanding liens listed on Schedule 7.2 hereto and
renewals or extensions thereof (including any liens arising under a refinancing
of the type described in Section 7.1(c) hereof);
(b) liens on property of the Borrower and the Guarantors (other than
the Vessel) otherwise permitted under the Parent Credit Agreement or the Senior
Indenture; and
(c) liens in favor of the Agent, BKB and the Lender under the Loan
Documents.
7.3 RESTRICTIONS ON INVESTMENTS. Neither the Borrower nor the Guarantors
will make or permit to exist or to remain outstanding any Investment except
Investments in:
(a) Investments existing on the date hereof and listed on
Schedule 7.3 hereto;
(b) Investments consisting of the Guaranty;
(c) Investments of the Guarantors and the Borrower otherwise
permitted under the Parent Credit Agreement or the Senior Indenture; and
(d) Investments of the Borrower and the Guarantors constituting the
repurchase of the promissory notes issued by Moran pursuant to the Senior
Indenture, provided that, the aggregate amount of Investments permitted pursuant
to this Section 7.3(d) in any one fiscal year
<PAGE>
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plus the aggregate amount of Restricted Prepayments permitted pursuant to
Section 7.4.2 in any one fiscal year shall not exceed the greater of (i)
$3,000,000 and (ii) the amount of such Investments as is permitted under the
Parent Credit Agreement.
7.4 RESTRICTED PREPAYMENTS. Neither the Borrower nor any of the
Guarantors shall make any Restricted Prepayment constituting the repurchase of
the promissory notes issued by Moran pursuant to the Senior Indenture if, after
making such Restricted Prepayment and after giving effect thereto, the aggregate
amount of Restricted Prepayments permitted pursuant to this Section 7.4.2 made
during any one fiscal year plus the aggregate amount of Investments made during
such fiscal year and permitted pursuant to Section 7.3(d) shall exceed the
greater of (i) $3,000,000 and (ii) the amount of Restricted Prepayments
permitted pursuant to the Parent Credit Agreement; provided, however, that the
foregoing shall not limit the ability of the Borrower and the Guarantors to
effect repurchases of such notes under Sections 5.10, 5.15, 5.18 or Article 12
of the Senior Indenture.
7.5 MERGER; CONSOLIDATION; SUBSIDIARIES.
7.5.1. MERGERS AND ACQUISITIONS. The Borrower shall not (i)
become a party to any merger or consolidation, except as otherwise permitted
under the Parent Credit Agreement or the Senior Indenture, provided that the
perfected first priority security interest of the Agent in the Vessel continues
after such merger or consolidation or (ii) agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices or except as
otherwise permitted under the Parent Credit Agreement or the Senior Indenture).
None of the Guarantors will become a party to any merger or consolidation, or
agree to or effect any asset acquisition or stock acquisition, except as
permitted under the Parent Credit Agreement or the Senior Indenture.
7.5.2. DISPOSITION OF ASSETS. The Borrower will not become a party
to or agree to or effect any disposition of assets other than the disposition of
assets other than the Vessel to the Guarantors or in the ordinary course of
business; provided that, with respect to any assets or Collateral other than the
Vessel, the Borrower may transfer assets in accordance with the Parent Credit
Agreement or the Senior Indenture. None of the Guarantors will become a party
to or agree to or effect any disposition of assets, except the disposition of
assets to the other Guarantors or the Borrower and except as permitted under the
Parent Credit Agreement or the Senior Indenture.
7.6 SALE AND LEASEBACK. Except as permitted under the Parent Credit
Agreement or the Senior Indenture, neither the Borrower nor the Guarantors will
enter into any arrangement, directly or indirectly, whereby the Borrower or any
Guarantor shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the Borrower or
any Guarantor intends to use for substantially the same purpose as the property
being sold or transferred.
7.7 COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not (a) use the
Vessel for the handling, processing, storage or disposal of Hazardous Substances
(other than in compliance with all applicable Environmental Laws), (b) cause or
permit to be located on the Vessel any receptacle for Hazardous Substances
(other than in compliance with all applicable Environmental Laws), (c) generate
any Hazardous Substances on the Vessel (other than in compliance with all
applicable Environmental Laws), (d) conduct any activity on the Vessel or use
the Vessel in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances on
or from the Vessel which would reasonably be expected to have a material adverse
effect on the Vessel or the business, assets or financial condition of the
Borrower or Moran and its Restricted Subsidiaries taken as a whole, or (e)
otherwise conduct any activity on the Vessel or use the Vessel in any manner
that would violate any Environmental Law or bring the Vessel in violation of any
Environmental Law, in each case if such violation would have a material adverse
effect on Vessel or the business, assets or financial condition of the Moran and
its Restricted Subsidiaries taken as a whole.
7.8 [INTENTIONALLY OMITTED].
<PAGE>
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7.9 CHANGE OF PRINCIPAL PLACE OF BUSINESS OR CORPORATE NAME. Neither the
Borrower nor any of the Guarantors will change its principal place of business
or corporate name unless it shall have (a) given the Lender at least thirty (30)
days' advance written notice of such change, and (b) filed in all necessary
jurisdictions such documents as may be necessary to continue without impairment
or interruption the perfection and priority of the liens on the Collateral in
favor of the Agent, BKB and the Lender pursuant to the Security Documents.
7.10 FISCAL YEAR. Neither the Guarantors nor the Borrower will change its
fiscal year from that set forth in Section 5.21 hereof.
7.11 TRANSACTIONS WITH AFFILIATES. Neither the Borrower nor the Guarantors
will (a) engage in any transaction with any Affiliate on terms more favorable to
such Affiliate than would have been obtainable on an arms'-length basis,
considered from the perspective of the Borrower or such Guarantor or (b) pay, or
enter into any agreement requiring the Borrower or such Guarantor to pay, salary
or bonus or other compensation payments to any officer or management employee of
the Borrower or such Guarantor or holder of any title or office, in an amount in
excess of reasonable compensation paid for similar service by similar businesses
similarly situated, provided that, the Borrower and the Guarantors shall be
permitted to engage in those transactions permitted under the Parent Credit
Agreement.
7.12 BUSINESS ACTIVITIES. Neither the Borrower nor any of the Guarantors
will use the Vessel in any business activity other than the general tug
business.
7.13 NEGATIVE PLEDGE. The Borrower will not enter into any agreement
limiting such Person's right to grant the Agent, BKB, or the Lender a lien or
security interest in the Collateral.
7.14 ADDITIONAL GUARANTORS. Neither the Borrower nor any of the Guarantors
may acquire or form any Subsidiary after the Effective Date unless (a) such
Subsidiary, if designated as a Restricted Subsidiary, shall have duly executed
and delivered to the Agent and the Banks, on the date of such acquisition or
formation, a guaranty substantially in the form of Exhibit B attached hereto,
and all other instruments and documents, including, without limitation,
corporate authority documents and legal opinions, as the Agent may reasonably
request in connection with the delivery of such guaranty, and (b) Moran shall
have delivered to the Agent, on the date of such acquisition or formation, an
updated Schedule 5.18.
7.15 OTHER DEBT AGREEMENTS. Moran will not (i) amend, supplement or
otherwise modify the terms of any of the Senior Indenture or the Senior Notes or
any document or instrument pertaining to the terms of any of the foregoing so as
to (a) shorten the maturity or the weighted average life to maturity of the
Senior Notes, (b) increase the interest rate payable on the Senior Notes, (c)
change the date or amount of any scheduled payment of principal of or interest
on the Senior Notes, or (d) make the covenants contained in the Senior Indenture
and the Senior Notes more onerous to Moran or add covenants thereto, or (ii)
give any notice of optional redemption or defeasance or optional prepayment or
offer to repurchase, or make, either directly or indirectly, any payment of
principal of or interest on or in redemption, defeasance, retirement or
repurchase of any of the Senior Notes, except (i) for the regularly scheduled
payments of principal and interest required by the terms of such instruments and
the Senior Indenture, (ii) the optional redemption of the Senior Notes with the
net proceeds of any public offering of common stock of Moran in accordance with
the terms of the Senior Indenture and (iii) as expressly permitted under Section
7.4 hereunder; provided, that nothing contained in this Section 7.15 shall
prevent Moran from refinancing or replacing the Parent Credit Agreement or the
Senior Notes so long as the requirements of Section 2.3(c) are satisfied.
8. FINANCIAL COVENANTS OF THE BORROWER AND THE GUARANTORS.
8.1 DEBT SERVICE. Neither the Borrower nor the Guarantors will permit the
Debt Service Coverage Ratio, calculated as of the end of each fiscal quarter of
Moran, to be less than 1.35:1.00 as of any fiscal quarter end.
<PAGE>
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8.2 LEVERAGE. Neither the Borrower nor the Guarantors will permit the
Leverage Ratio, calculated as of the end of each fiscal quarter of Moran, to be
greater than 6.00:1.00 as of any fiscal quarter end.
9. CONDITIONS TO EFFECTIVE DATE. The obligations of the Lender to amend and
restate the Existing Loan Agreement as herein provided shall be subject to the
satisfaction of the following conditions precedent on or prior to December 12,
1997:
9.1 LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the Lender.
9.2 CERTIFIED COPIES OF CHARTER DOCUMENTS. The Lender shall have received
from each of the Guarantors and the Borrower a copy, certified by a duly
authorized officer of each such Person to be true and complete on the Effective
Date, of (a) its charter or other incorporation documents as in effect on such
date of certification, and (b) its by-laws as in effect on such date.
9.3 CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Guarantors and the Borrower of this
Loan Agreement and the other Loan Documents to which such Person is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Lender shall have been provided to the Lender.
9.4 INCUMBENCY CERTIFICATE. The Lender shall have received from the
Guarantors and the Borrower an incumbency certificate, dated as of the Effective
Date, signed by a duly authorized officer of each such Person and giving the
name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of each of such Person the
Loan Documents to which each such Person is or is to become a party; (b) in the
case of the Borrower, to make Conversion Requests; and (c) to give notices and
to take other action on its behalf under the Loan Documents.
9.5 VALIDITY OF LIENS. The Vessel Mortgage shall be effective to create
in favor of the Agent, BKB or, as the case may be, the Lender a legal, valid and
enforceable first preferred (except for Permitted Liens) ship mortgage on the
Vessel. All filings, recordings, deliveries of instruments and other actions
necessary or desirable in the opinion of the Lender to protect and preserve such
security interests shall have been duly effected. The Lender shall have
received evidence thereof in form and substance satisfactory to the Lender.
9.6 PERFECTION CERTIFICATE AND UCC SEARCH RESULTS. The Lender shall have
received from the Borrower a completed and fully executed Perfection Certificate
and the results of UCC searches, indicating no liens other than Permitted Liens
and otherwise in form and substance satisfactory to the Lender.
9.7 CERTIFICATES OF INSURANCE. The Lender shall have received a
certificate of insurance from an independent insurance broker dated on or within
fifteen days of the Effective Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Vessel Mortgage.
9.8 SOLVENCY CERTIFICATE. The Lender shall have received an officer's
certificate of the Borrower and the Guarantors dated as of the Effective Date as
to the solvency of the Borrower and the Guarantors following the consummation of
the transactions contemplated herein and in form and substance satisfactory to
the Lender.
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9.9 OPINION OF COUNSEL. The Lender shall have received a legal opinion
addressed to the Lender, dated as of the Effective Date, in form and substance
satisfactory to the Lender, from Finn Dixon & Herling LLP, counsel to the
Borrower and the Guarantors.
10. EVENTS OF DEFAULT; ACCELERATION; ETC.
10.1 EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of, or interest on,
the Term Loan or any other sums due hereunder or under the other Loan Documents,
when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower or any Guarantor shall fail to comply with any of
its covenants contained in Section 6 (other than those specified in Section
10.1(c)), Section 7 or Section 8 hereof;
(c) the Borrower or any Guarantor shall fail to comply with any of
its covenants contained in Sections 6.3 through 6.5 hereof, the second sentence
of Section 6.6 hereof, or Sections 6.8 through 6.14 hereof and such failure
shall continue for ten (10) days;
(d) the Borrower or any Guarantor shall fail to perform any term,
covenant or agreement contained herein or in any of the other Loan Documents
(other than those specified elsewhere in this Section 10) for fifteen (15) days
after written notice of such failure has been given to the Borrower or such
Guarantor by the Lender;
(e) any representation or warranty of any Guarantor or the Borrower
in this Loan Agreement, any of the other Loan Documents, or in any other
document or instrument delivered pursuant to or in connection with this Loan
Agreement or any other Loan Document shall prove to have been false in any
material respect upon the date when made;
(f) any Guarantor or the Borrower shall fail to pay at maturity, or
within any applicable period of grace, any obligation for borrowed money or
credit received or in respect of any Capitalized Leases in excess, individually
or in the aggregate, of $3,000,000, or fail to observe or perform any material
term, covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money or credit received or in respect of any
Capitalized Leases in excess, individually or in the aggregate, of $3,000,000
for such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof provided that if the Borrower or
any of the Guarantors fails to perform the covenant set forth in Section 5.18 of
the Senior Indenture, such failure shall not constitute an Event of Default
under this clause (f) if the Borrower or such Guarantor and the Holders (as
defined in the Senior Indenture)
<PAGE>
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are negotiating a waiver of such default under the Senior Indenture diligently
and in good faith and such waiver is obtained or such default is cured within
thirty (30) days;
(g) any Guarantor or the Borrower shall make an assignment for the
benefit of creditors, or admit in writing its inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or receiver of any
Guarantor or the Borrower or of any substantial part of the assets of any
Guarantor or the Borrower or shall commence any case or other proceeding
relating to any Guarantor or the Borrower under the bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against any Guarantor or the Borrower and any Guarantor or
the Borrower shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition or application shall not have been
dismissed within forty-five (45) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Guarantor or the Borrower
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of any
Guarantor or the Borrower in an involuntary case under federal bankruptcy laws
as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Guarantors or the Borrower that, with other outstanding
final judgments, undischarged, against the Guarantors and the Borrower exceeds
in the aggregate $3,000,000;
(j) if any one or more of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's, BKB's, or the Lender's security
interests, mortgages or liens in the Vessel shall cease to be perfected, or
shall cease to have the priority contemplated by the Vessel Mortgage, in each
case otherwise than in accordance with the terms thereof or with the express
prior written agreement, consent or approval of the Lender, or any action at
law, suit or in equity or other legal proceeding to cancel, revoke or rescind
any of the Loan Documents shall be commenced by or on behalf of any of the
Guarantors or the Borrower party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Lender shall have determined in its reasonable
discretion that such event reasonably would be expected to result in liability
of the Borrower or any of the
<PAGE>
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Guarantors to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $1,000,000 and such event in the circumstances occurring reasonably
could constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Guaranteed Pension Plan; or a trustee shall have
been appointed by the United States District Court to administer such Guaranteed
Pension Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;
(l) any of the Guarantors or the Borrower shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days;
(m) there shall occur any material damage to, or loss, theft or
destruction of, the Vessel or any material assets of the Borrower, whether or
not insured, or any strike, lockout, labor dispute, embargo, condemnation, act
of God or public enemy, or other casualty, which in any such case causes, for
more than thirty (30) consecutive days, the cessation or substantial curtailment
of revenue producing activities at any facility of any of the Guarantors or the
Borrower if such event or circumstance is not covered by business interruption
insurance and would reasonably be expected to have a material adverse effect on
the business or financial condition of Moran and its Restricted Subsidiaries on
a consolidated basis;
(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by any of
the Guarantors or the Borrower if such loss, suspension, revocation or failure
to renew would reasonably be expected to have a material adverse effect on the
business or financial condition of Moran and its Restricted Subsidiaries on a
consolidated basis;
(o) any of the Guarantors or the Borrower shall be indicted for a
state or federal crime, or any civil or criminal action shall otherwise have
been brought or threatened against any of the Guarantors or the Borrower by any
Governmental Authority, a punishment for which in any such case could include
the forfeiture of any assets of such Guarantor or the Borrower having a fair
market value in excess of $1,500,000;
(p) Moran shall at any time, legally or beneficially own, directly or
indirectly, less than one hundred percent (100%) of the common stock of the
Borrower, as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of such corporation;
(q) the Lender shall have received a report by the American Bureau of
Shipping or any other classification society, or by any marine engineer or
surveyor following an inspection at the request of the Lender, that the Vessel
is not in compliance with the requirements of applicable law for use as intended
and action shall not have been commenced
<PAGE>
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within fifteen (15) days after written notice thereof shall have been given by
the Lender to the Borrower and such corrective action shall not be diligently
prosecuted or completed in a manner and time schedule consistent with industry
standards; or
(r) any "Event of Default" under and as defined in the Parent Credit
Agreement shall have occurred and be continuing or any "Default" under and as
defined in the Parent Credit Agreement shall have occurred and be continuing;
provided that until such "Default" under the Parent Credit Agreement constitutes
an "Event of Default" thereunder, it shall constitute a Default, but not an
Event of Default hereunder;
then, and in any such event, so long as the same may be continuing, the Lender
may, by notice in writing to the Borrower declare all amounts owing with respect
to this Loan Agreement, the Note and the other Loan Documents to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower and the Guarantors; PROVIDED that in the
event of any Event of Default specified in Section 10.1(g) or Section 10.1(h)
hereof, all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Lender.
10.2 REMEDIES. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Lender shall have accelerated
the maturity of the Loan pursuant to Section 10.1 hereof, the Lender, if owed
any amount with respect to the Loan, may, proceed to protect and enforce its
rights by suit in equity, action at law or other appropriate proceeding, whether
for the specific performance of any covenant or agreement contained in this Loan
Agreement and the other Loan Documents or any instrument pursuant to which the
Obligations are evidenced, including as permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Lender. No remedy herein
conferred upon the Lender or on any other holder of the Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision of law.
10.3 DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Lender receives any monies in connection with the enforcement of any of the
Security Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent, BKB and the Lender for or in respect of all
reasonable costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Agent, BKB and the Lender in connection with the
collection of such monies by the Agent, BKB and the Lender, for the exercise,
protection or enforcement by the Agent, BKB and the Lender of all or any of the
rights,
<PAGE>
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remedies, powers and privileges of the Agent, BKB and the Lender under this Loan
Agreement or any of the other Loan Documents or in respect of the Collateral,
the Obligations and to support the provision of adequate indemnity to the Agent,
BKB and the Lender against all taxes or liens which by law shall have, or may
have, priority over the rights of the Agent, BKB and the Lender to such monies;
(b) Second, to all other Obligations in such order or preference as
the Agent, BKB and the Lender may determine; PROVIDED, HOWEVER, that the Agent,
BKB and the Lender may in their discretion make proper allowance to take into
account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Agent, BKB and the Lender of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
11. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from the Lender to the Borrower or any of the Guarantors and any securities
or other property of the Borrower or any of the Guarantors in the possession of
BKB or the Lender may be applied to or set off by BKB or the Lender against the
payment of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
of the Borrower or any of the Guarantors to BKB or the Lender.
12. EXPENSES. The Borrower and the Guarantors agree to pay (a) the reasonable
costs of producing and reproducing this Loan Agreement, the other Loan Documents
and the other agreements and instruments mentioned herein, (b) any taxes
(including any interest and penalties in respect thereto) payable by the Lender
(other than taxes based upon the Lender's revenue or net income) on or with
respect to the transactions contemplated by this Loan Agreement (the Borrower
and the Guarantors hereby agreeing to indemnify the Lender with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Lender's
Special Counsel and any local counsel to the Lender incurred in connection with
the preparation, administration or interpretation of the Loan Documents and the
other instruments mentioned herein, each closing hereunder, and any amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the fees,
expenses and disbursements incurred by the Lender in connection with the
preparation, administration or interpretation of the Loan Documents and the
other instruments mentioned herein, (e) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, and
reasonable consulting, accounting, appraisal, vessel appraisal, investment
banking and similar professional fees and charges) incurred by the Lender in
connection with (i) the enforcement of or preservation of rights under
<PAGE>
- 36 -
any of the Loan Documents against the Borrower or the Guarantors or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to the Lender's relationship with the Borrower or
the Guarantors and (f) all reasonable fees, expenses and disbursements of the
Lender incurred in connection with lien searches or mortgage recordings. The
covenants of this Section 12 shall survive payment or satisfaction of payment of
amounts owing with respect to the Note.
13. INDEMNIFICATION. The Borrower and the Guarantors agree to indemnify and
hold harmless the Lender from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Loan Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by the Borrower of the proceeds of any of the Loan, (b) the Borrower or the
Guarantors entering into or performing this Loan Agreement or any of the other
Loan Documents or (c) with respect to the Borrower or the Guarantors and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to claims with respect to wrongful death,
personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrower agrees
to pay promptly the reasonable fees and expenses of such counsel. If, and to
the extent that the obligations of the Borrower or the Guarantors under this
Section 13 are unenforceable for any reason, the Borrower and the Guarantors
hereby agree to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law. The covenants
contained in this Section 13 shall survive payment and satisfaction in full of
the Obligations.
14. SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations and
warranties made herein, in the Note, in any of the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrower or the
Guarantors pursuant hereto shall be deemed to have been relied upon by the
Lender, notwithstanding any investigation heretofore or hereafter made by it,
and shall survive the amendment and restatement by the Lender of the Existing
Loan Agreement, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Loan Agreement or the Note or any of
the other Loan Documents remains Outstanding, and for such further time as may
be otherwise expressly specified in this Loan Agreement. All statements
contained in any certificate or other paper delivered to the Lender at any time
by or on behalf of any of the Guarantors or the Borrower pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Guarantor hereunder.
<PAGE>
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15. ASSIGNMENT AND PARTICIPATION.
15.1 ASSIGNMENT BY THE LENDER. The Lender may assign to one or more banks
all or a portion of its interests, rights and obligations under this Loan
Agreement (including all or a portion of the Term Loan at the time owing to it,
and the Note held by it), provided that the Borrower shall have given its prior
written consent to such assignment, which consent will not be unreasonably
withheld. Upon the request of the Lender, the Borrower and the Guarantors shall
consent to the amendment of this Loan Agreement and the other Loan Documents in
order to enable the Lender to make such assignments.
15.2 PARTICIPATIONS. The Lender may sell participations to one or more
banks or other entities in all or a portion of the Lender's rights and
obligations under this Loan Agreement and the other Loan Documents; provided
that (a) the Borrower shall have given its prior written consent to such
participation (except for participations to affiliates of the Lender), (b) each
such participation shall be in an amount of not less than $1,000,000, (c) any
such sale or participation shall not affect the rights and duties of the Lender
hereunder to the Borrower, and (d) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on the Term Loan, or extend any regularly scheduled payment date for
principal or interest or release all or substantially all of the Collateral.
15.3 DISCLOSURE. The Borrower agrees that in addition to disclosures made
in accordance with standard and customary banking practices the Lender may
disclose confidential information obtained by the Lender in connection with this
Loan Agreement to assignees and participants and potential assignees and
potential participants hereunder; provided that such assignees or participants
or potential assignees or potential participants shall agree in writing (a) to
treat in confidence such information, (b) not to disclose such information to a
third party and (c) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
15.4 MISCELLANEOUS ASSIGNMENT PROVISIONS. Anything contained in this
Section 17 to the contrary notwithstanding, the Lender may at any time pledge
all or any portion of its interest and rights under this Loan Agreement
(including all or any portion of the Note) to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or the enforcement thereof shall release the Lender from
its obligations hereunder or under any of the other Loan Documents.
15.5 ASSIGNMENT BY BORROWER; GUARANTORS. Neither the Borrower nor any of
the Guarantors shall assign or transfer any of their rights or obligations under
any of the Loan Documents; provided, however, that nothing contained herein
shall limit the ability of the Borrower and the Guarantors to effect
transactions in compliance with Section 7.5 hereof.
<PAGE>
- 38 -
16. NOTICES, ETC. Except as otherwise expressly provided in this Loan
Agreement, all notices and other communications made or required to be given
pursuant to this Loan Agreement or the Notes shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telecopy and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower or the Guarantors, at: Two Greenwich Plaza,
Greenwich, Connecticut 06830, Attention: Alan Marchisotto, Esq., or at such
other address for notice as the Borrower shall last have furnished in writing to
the Person giving the notice; and
(b) if to the Lender, at BancBoston Leasing Inc., 100 Federal Street,
Boston, Massachusetts 02110, USA, Attention: Director of Administration,
Telecopier 617.434.0474, with a copy to, BankBoston, N.A., 100 Federal Street,
Boston, Massachusetts 02110, USA, Attention: Transportation Division,
Telecopier: 617.434.1955, or such other address for notice as the Lender shall
last have furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (a) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (b) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
17. GOVERNING LAW. THIS LOAN AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS,
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AND
EACH OF THE GUARANTORS AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS LOAN
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWER AND THE GUARANTORS BY MAIL AT THE ADDRESS
SPECIFIED IN Section 16 HEREOF. THE BORROWER AND EACH OF THE GUARANTORS HEREBY
WAIVE ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
18. HEADINGS. The captions in this Loan Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
<PAGE>
- 39 -
19. COUNTERPARTS. This Loan Agreement and any amendment hereof may be executed
in several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Loan Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
20. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents executed
in connection herewith or therewith express the entire understanding of the
parties with respect to the transactions contemplated hereby. Neither this Loan
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in Section 22 hereof.
21. WAIVER OF JURY TRIAL. The Borrower and each of the Guarantors hereby waive
their right to a jury trial with respect to any action or claim arising out of
any dispute in connection with this Loan Agreement, the Notes or any of the
other Loan Documents, any rights or obligations hereunder or thereunder or the
performance of such rights and obligations. Except as prohibited by law, the
Borrower and each of the Guarantors hereby waive any right they may have to
claim or recover in any litigation referred to in the preceding sentence any
special, exemplary, punitive or consequential damages or any damages other than,
or in addition to, actual damages. The Borrower and each of the Guarantors (a)
certify that no representative, agent or attorney of the Lender has represented,
expressly or otherwise, that the Lender would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledge that the Lender has
been induced to amend and restate the Existing Loan Agreement and to enter into
this Loan Agreement and the other Loan Documents to which it is a party by,
among other things, the waivers and certifications contained herein.
22. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly provided
in this Loan Agreement, any consent or approval required or permitted by this
Loan Agreement to be given by the Lender may be given, and any term of this Loan
Agreement or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower or the Guarantors of
any terms of this Loan Agreement or such other instrument or the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrower and the written consent of the Lender.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Lender in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
23. SEVERABILITY. The provisions of this Loan Agreement are severable and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision
<PAGE>
- 40 -
in any other jurisdiction, or any other clause or provision of this Loan
Agreement in any jurisdiction.
24. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
24.1 SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrower and
each of the Guarantors acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to the
Borrower, the Guarantors or one or more of their Subsidiaries, in connection
with this Loan Agreement or otherwise, by a Section 20 Subsidiary. Each of the
Borrower and each Guarantor, for itself and each of its Subsidiaries, hereby
authorizes (a) such Section 20 Subsidiary to share with BKB and the Lender any
information delivered to such Section 20 Subsidiary by the Borrower, a Guarantor
or any of their Subsidiaries, and (b) BKB and the Lender to share with such
Section 20 Subsidiary any information delivered to BKB or the Lender by the
Borrower, a Guarantor or any of their Subsidiaries pursuant to this Loan
Agreement, or in connection with the decision of the Lender to enter into this
Loan Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Loan Agreement. Such authorization shall survive the payment
and satisfaction in full of all of Obligations.
24.2 CONFIDENTIALITY. Each of the Lender and BKB agrees, on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower, any Guarantor or any of
their Subsidiaries pursuant to this Loan Agreement that is identified by such
Person as being confidential at the time the same is delivered to the Lender or
BKB, provided that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this Section 24, (b) to the extent required by statute,
rule, regulation or judicial process, (c) to counsel for the Lender or BKB, (d)
to bank examiners or any other regulatory authority having jurisdiction over the
Lender or BKB, or to auditors or accountants, (e) to the Agent, BKB or any
Section 20 Subsidiary, (f) in connection with any litigation to which any one or
more of the Lender, BKB or any Section 20 Subsidiary is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of the Lender or BKB or
(h) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant agrees to be bound by the provisions of
Section 15.3.
24.3 PRIOR NOTIFICATION. Unless specifically prohibited by applicable law
or court order, each of the Lender and BKB shall, prior to disclosure thereof,
notify the Borrower and the Guarantors of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with
<PAGE>
- 41 -
an examination of the financial condition of the Lender or BKB by such
governmental agency) or pursuant to legal process.
24.4 OTHER. In no event shall the Lender or BKB be obligated or required
to return any materials furnished to it or any Section 20 Subsidiary by the
Borrower, any Guarantor or any of their Subsidiaries. The obligations of the
Lender and BKB under this Section 24 shall supersede and replace the obligations
of the Lender and BKB under any confidentiality letter in respect of this
financing signed and delivered by the Lender and/or BKB to the Borrower or a
Guarantor prior to the date hereof and shall be binding upon any assignee of, or
purchaser of any participation in, any interest in the Term Loan.
<PAGE>
- 42 -
IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Term Loan Agreement as a sealed instrument as of the date first set
forth above.
MORAN TOWING CORPORATION
By: /s/ Jeffrey J. Mcaulay
----------------------------------
Name: Jeffrey J. McAulay
Title: Vice President
MORAN TRANSPORTATION COMPANY,
as Guarantor
By: /s/ Jeffrey J. Mcaulay
----------------------------------
Name: Jeffrey J. McAulay
Title: Vice President
JAKOBSON SHIPYARD, INC.,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN BARGE CORPORATION,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN SHIPYARD CORPORATION,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
<PAGE>
- 43 -
MORAN TOWING OF TEXAS, INC.,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
PETROLEUM TRANSPORT CORPORATION,
as Guarantor
By: /s/ William P. Muller
----------------------------------
Name: William P. Muller
Title: President
SEABOARD BARGE CORPORATION,
as Guarantor
By: /s/ William P. Muller
----------------------------------
Name: William P. Muller
Title: President
MORAN TOWING OF DELAWARE, INC.,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN BULK CORPORATION,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
<PAGE>
- 44 -
HAMPTON ROADS LAND CO., INC.,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
PORTSMOUTH NAVIGATION CORPORATION,
as Guarantor
By: /s/ Alan Marchisotto
----------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN SERVICES CORPORATION,
as Guarantor
By: /s/ William P. Muller
----------------------------------
Name: William P. Muller
Title: President
MORAN INSURANCE COMPANY LIMITED,
as Guarantor
By: /s/ Jeffrey J. Mcaulay
----------------------------------
Name: Jeffrey J. McAulay
Title: Vice President
<PAGE>
- 45 -
BANCBOSTON LEASING, INC.,
individually and as Agent
By: /s/ Susan K. Sintros
----------------------------------
Name: Susan K. Sintros
Title: Assistant Vice President
<PAGE>
EXHIBIT 10.5(b)
AMENDED AND RESTATED TERM NOTE
$3,500,000 amended and restated as of December 12, 1997
FOR VALUE RECEIVED, the undersigned MORAN TOWING CORPORATION, a New York
corporation (the "Borrower"), hereby promises to pay to the order of BANCBOSTON
LEASING INC. (the "Lender") at the Lender's Head Office (as defined in the Loan
Agreement referred to below):
(a) on or prior to the Maturity Date the principal amount of THREE MILLION
FIVE HUNDRED THOUSAND DOLLARS ($3,500,000) or, if less, the aggregate unpaid
principal amount of the Term Loan outstanding under the Amended and Restated
Term Loan Agreement, amended and restated as of December 12, 1997 (as amended
and in effect from time to time, the "Loan Agreement"), among the Borrower, the
Guarantors named therein, the Lender, and BancBoston Leasing Inc., as agent; and
(b) interest on the principal balance hereof from time to time outstanding
from the Closing Date through and including the Maturity Date at the times and
at the rates provided in the Loan Agreement.
This Note has been issued by the Borrower in accordance with the terms of
the Loan Agreement. This Note has been issued as an amendment and restatement
of, but does not evidence payment or satisfaction of, the April Term Note, dated
as of May 16, 1997, issued by Interlake Transportation, Inc. to the Lender. As
set forth in the Loan Agreement, the obligations of Interlake Transportation,
Inc. under such April Term Note have been assumed by the Borrower pursuant to
the Loan Agreement. The Lender and any holder hereof is entitled to the
benefits of the Loan Agreement, the Security Documents and the other Loan
Documents, and may enforce the agreements of the Borrower contained therein, and
any holder hereof may exercise the respective remedies provided for thereby or
otherwise available in respect thereof, all in accordance with the respective
terms thereof. All capitalized terms used in this Note and not otherwise
defined herein shall have the same meanings herein as in the Loan Agreement.
This Note is guaranteed by the Guarantors pursuant to the terms of the
Guaranty, of even date herewith, executed by the Guarantors in favor of the
Lender.
The Borrower irrevocably authorizes the Lender to make or cause to be made,
at the time of the amendment and restatement of this Note or at the time of
receipt of any payment of principal of this Note, an appropriate notation on the
grid attached to this Note, or the continuation of such grid, or any other
similar record, including computer records, reflecting the
<PAGE>
-2-
amendment and restatement of the Term Loan or (as the case may be) the receipt
of such payment. The outstanding amount of the Term Loan set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Lender with respect to the
Term Loan shall be PRIMA FACIE evidence of the principal amount thereof owing
and unpaid to the Lender, but the failure to record, or any error in so
recording, any such amount on any such grid, continuation or other record shall
not limit or otherwise affect the obligation of the Borrower hereunder or under
the Loan Agreement to make payments of principal of and interest on this Note
when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Loan Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Loan Agreement.
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of the Collateral and any other collateral and
to the addition or release of any other party or person primarily or secondarily
liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN THE LOAN AGREEMENT. THE BORROWER
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
<PAGE>
-3-
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
<PAGE>
-4-
IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated
Term Note to be signed by its duly authorized officer as of the day and year
first above written.
MORAN TOWING CORPORATION
By: /s/ Jeffrey J. Mcaulay
--------------------------
Name: Jeffrey J. McAulay
Title: Vice President
<PAGE>
<TABLE>
<CAPTION>
Amount of
Principal Paid Balance of
Amount of Type of Interest Principal Notation
Date Loan Loan Period or Prepaid Unpaid Made By:
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT 10.5(c)
GUARANTY
GUARANTY, dated as of December 12, 1997, by MORAN TRANSPORTATION COMPANY
("Moran"), a Delaware corporation, and each of the other entities listed on the
signature pages hereto (collectively, the "Guarantors") in favor of BANCBOSTON
LEASING INC. (individually, and in its capacity as collateral agent under the
Loan Agreement referred to below, the "Lender").
WHEREAS, MORAN TOWING CORPORATION, a New York corporation (the "Borrower"),
the Guarantors and the Lender have entered into an Amended and Restated Term
Loan Agreement, amended and restated as of December 12, 1997 (as amended and in
effect from time to time, the "Loan Agreement"), pursuant to which (i) the
Borrower has agreed to assume the obligations of Interlake Transportation, Inc.
with respect to the outstanding portion of the Term Loan (as such term is
defined in the Loan Agreement), and (ii) the Lender, subject to the terms and
conditions contained therein, has agreed to amend and restate the Term Loan made
pursuant to the Existing Loan Agreement (as such terms are defined in the Loan
Agreement);
WHEREAS, Moran is the owner of one hundred percent of the issued and
outstanding stock of the Borrower and the Borrower and the Guarantors are
members of a group of related corporations, the success of any one of which is
dependent in part on the success of the other members of such group;
WHEREAS, the Guarantors expect to receive substantial direct and indirect
benefits from the amendment and restatement of the Term Loan pursuant to the
Loan Agreement (which benefits are hereby acknowledged);
WHEREAS, it is a condition precedent to the Lender's agreeing to amend and
restate the Term Loan that the Guarantors execute and deliver to the Lender a
guaranty substantially in the form hereof; and WHEREAS, the Guarantors wish
to guaranty the Borrower's obligations to the Lender under or in respect of the
Loan Agreement as provided herein;
NOW, THEREFORE, the Guarantors hereby agree with the Lender as follows:
1. DEFINITIONS.
The term "Obligations" and all other capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Loan
Agreement.
2. GUARANTY OF PAYMENT AND PERFORMANCE.
The Guarantors hereby, jointly and severally, guaranty to the Lender the
full and punctual payment when due (whether at stated maturity, by required pre-
payment, by acceleration or otherwise), as well as the performance, of all of
the Obligations including all such which would become due but for the operation
of the automatic stay pursuant to Section 362(a) of the Federal bankruptcy Code
and the operation of Sections 502(b) and 506(b) of the Federal Bankruptcy Code.
This Guaranty is an absolute, unconditional and continuing guaranty of the full
and punctual payment and performance of all of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Lender first attempt to collect any of the Obligations from the Borrower or
resort to any collateral security or other means of obtaining payment. Should
the Borrower default in the payment or performance of any of the Obligations,
the obligations of the Guarantors hereunder with respect to such Obligations in
default shall become immediately due and payable to the Lender, without demand
or notice of any nature, all of which are expressly waived by the Guarantors.
Payments by the Guarantors hereunder may be required by the Lender on any number
of occasions.
<PAGE>
-2-
3. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS, ETC.
The Guarantors further agree, jointly and severally, as principal obligors
and not as guarantors only, to pay to the Lender, on demand, all costs and
expenses (including court costs and legal expenses) incurred or expended by the
Lender in connection with the Obligations, this Guaranty and the enforcement
thereof, together with interest on amounts recoverable under this Section 3 from
the time when such amounts become due until payment, whether before or after
judgment, at the rate of interest for overdue principal set forth in the Loan
Agreement, PROVIDED that if such interest exceeds the maximum amount permitted
to be paid under applicable law, then such interest shall be reduced to such
maximum permitted amount.
4. WAIVERS BY GUARANTORS; LENDER'S FREEDOM TO ACT.
The Guarantors agree that the Obligations will be paid and performed
strictly in accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Lender with respect thereto. Each Guarantor
waives promptness, diligence, presentment, demand, protest, notice of
acceptance, notice of any Obligations incurred and all other notices of any
kind, all defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any right to
require the marshalling of assets of the Borrower or any other entity or other
person primarily or secondarily liable with respect to any of the Obligations,
and all suretyship defenses generally. Without limiting the generality of the
foregoing, each Guarantor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any Obligation and agrees that
the obligations of such Guarantor hereunder shall not be released or discharged,
in whole or in part, or otherwise affected by (i) the failure of the Lender to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations; (ii) any extensions, compromise,
refinancing, consolidation or renewals of any Obligation; (iii) any change in
the time, place or manner of payment of any of the Obligations or any
rescissions, waivers, compromise, refinancing, consolidation, amendments or
modifications of any of the terms or provisions of the Loan Agreement, the Note,
the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations; (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (v) the adequacy of any rights which the Lender may
have against any collateral security or other means of obtaining repayment of
any of the Obligations; (vi) the impairment of any collateral securing any of
the Obligations, including without limitation the failure to perfect or preserve
any rights which the Lender might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (vii) any other act or omission which might in any
manner or to any extent vary the risk of such Guarantor or otherwise operate as
a release or discharge of any Guarantor, all of which may be done without notice
to the Guarantors. To the fullest extent permitted by law, each Guarantor
hereby expressly waives any and all rights or defenses arising by reason of (A)
any "one action" or "anti-deficiency" law which would otherwise prevent the
Lender from bringing any action, including any claim for a deficiency, or
exercising any other right or remedy (including any right of set-off), against
each Guarantor before or after the Lender's commencement or completion of any
foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (B) any other law which in any other way would otherwise require
any election of remedies by the Lender.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWER. If for any reason
the Borrower has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from the Borrower by reason of the Borrower's insolvency, bankruptcy or
reorganization or by other operation of law or for any other reason, this
Guaranty shall nevertheless be binding on each Guarantor to the same extent as
if each such Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of any of
the Obligations is stayed upon the insolvency, bankruptcy or reorganization of
the Borrower, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of the Loan Agreement, the Note, the other Loan
Documents or any other agreement evidencing, securing or otherwise executed in
connection with any Obligation shall be immediately due and payable by each such
Guarantor.
6. SUBROGATION.
<PAGE>
-3-
6.1 WAIVER OF RIGHTS AGAINST BORROWER.
Until the final payment and performance in full of all of the
Obligations, no Guarantor shall exercise any rights against the
Borrower arising as a result of payment by any Guarantor hereunder, by
way of subrogation, reimbursement, restitution, contribution or
otherwise, and will not prove any claim in competition with the Lender
in respect of any payment hereunder in any bankruptcy, insolvency or
reorganization case or proceedings of any nature; no Guarantor will
claim any setoff, recoupment or counterclaim against the Borrower in
respect of any liability of any such Guarantor to the Borrower; and
each of the Guarantors waives any benefit of and any right to
participate in any collateral security which may be held by the
Lender.
6.2 PROVISIONS SUPPLEMENTAL.
The provisions of this Section 6 shall be supplemental to and not
in derogation of any rights and remedies of the Lender under any
separate subordination agreement which the Lender may at any time and
from time to time enter into with any Guarantor.
7. SETOFF.
Regardless of the adequacy of any collateral security or other means of
obtaining payment of any of the Obligations, the Lender is hereby authorized,
upon the occurrence and during the continuance of an Event of Default, without
notice to any Guarantor (any such notice being expressly waived by each
Guarantor) and to the fullest extent permitted by law, to set off and apply all
deposits (general or special, time or demand, provisional or final) and other
sums credited by or due from the Lender to such Guarantor or subject to
withdrawal by such Guarantor, against the obligations of each of the Guarantors
under this Guaranty, whether or not the Lender shall have made any demand under
this Guaranty and although such obligations may be contingent or unmatured.
8. FURTHER ASSURANCES.
Each of the Guarantors agrees to do all such things and execute all such
documents as the Lender may consider necessary or desirable to give full effect
to this Guaranty and to perfect and preserve the rights and powers of the Lender
hereunder. Each of the Guarantors acknowledges and confirms that each such
Guarantor itself has established its own adequate means of obtaining from the
Borrower on a continuing basis all information desired by such Guarantor
concerning the financial condition of the Borrower and that each Guarantor will
look to the Borrower and not to the Lender in order for such Guarantor to keep
adequately informed of changes in the Borrower's financial condition.
9. TERMINATION; REINSTATEMENT.
This Guaranty shall remain in full force and effect until the indefeasible
payment in full, in cash, of the Obligations. This Guaranty shall be reinstated
if at any time any payment made or value received with respect to any Obligation
is rescinded or must otherwise be returned by the Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or any Guarantor, or otherwise, all
as though such payment had not been made or value received.
10. SUCCESSORS AND ASSIGNS.
This Guaranty shall be binding upon each of the Guarantors and each of
their respective successors and assigns, and shall inure to the benefit of and
be enforceable by the Lender and its successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, the Lender
<PAGE>
-4-
may assign or otherwise transfer the Loan Agreement, the Note, the other Loan
Documents or any other agreement or note held by it evidencing, securing or
otherwise executed in connection with the Obligations, or sell participations in
any interest therein, to any other entity or other person, and such other entity
or other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to the Lender herein.
11. AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Guaranty nor consent to any
departure by any of the Guarantors therefrom shall be effective unless the same
shall be in writing and signed by the Lender. No failure on the part of the
Lender 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.
12. NOTICES.
All notices and other communications called for hereunder shall be made in
the manner and with the effect provided for in the Loan Agreement.
13. GOVERNING LAW; CONSENT TO JURISDICTION.
THIS GUARANTY IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS. Each Guarantor agrees that any suit for the
enforcement of this Guaranty may be brought in the courts of the Commonwealth of
Massachusetts or any federal court sitting therein and consents to the
nonexclusive jurisdiction of such court and to service of process in any such
suit being made upon each such Guarantor by mail at the address specified by
reference in Section 12. Each Guarantor hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit was brought in an inconvenient court.
14. WAIVER OF JURY TRIAL.
EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH RIGHTS OR
OBLIGATIONS. Except as prohibited by law, each Guarantor hereby waives any
right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. Each Guarantor (i)
certifies that neither the Lender nor any representative, agent or attorney of
the Lender has represented, expressly or otherwise, that the Lender would not,
in the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in agreeing to amend and restate the Term Loan and in
entering into the Loan Agreement and the other Loan Documents to which the
Lender is a party, the Lender is relying upon, among other things, the waivers
and certifications contained in this Section 14.
15. MISCELLANEOUS.
This Guaranty constitutes the entire agreement of the Guarantors with
respect to the matters set forth herein. The rights and remedies herein
<PAGE>
-5-
provided are cumulative and not exclusive of any remedies provided by law or any
other agreement, and this Guaranty shall be in addition to any other guaranty of
or collateral security for any of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined.
<PAGE>
-6-
IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be
executed and delivered as of the date first above written.
MORAN TRANSPORTATION COMPANY
By: /s/ Jeffrey J. Mcaulay
---------------------------------
Name: Jeffrey J. McAulay
Title: Vice President
JAKOBSON SHIPYARD, INC.
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN BARGE CORPORATION
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN SHIPYARD CORPORATION
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN TOWING OF TEXAS, INC.
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
<PAGE>
-7-
PETROLEUM TRANSPORT CORPORATION
By: /s/ William P. Muller
---------------------------------
Name: William P. Muller
Title: President
SEABOARD BARGE CORPORATION
By: /s/ William P. Muller
---------------------------------
Name: William P. Muller
Title: President
MORAN TOWING OF DELAWARE, INC.
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
MORAN BULK CORPORATION
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
HAMPTON ROADS LAND CO., INC.
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
PORTSMOUTH NAVIGATION CORPORATION
By: /s/ Alan Marchisotto
---------------------------------
Name: Alan Marchisotto
Title: Secretary
<PAGE>
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MORAN SERVICES CORPORATION
By: /s/ William P. Muller
---------------------------------
Name: William P. Muller
Title: President
MORAN INSURANCE COMPANY LIMITED
By: /s/ Jeffrey J. Mcaulay
---------------------------------
Name: Jeffrey J. McAulay
Title: Vice President
<PAGE>
EXHIBIT 10.5(d)
FIRST PREFERRED FLEET MORTGAGE
(UNITED STATES)
This FIRST PREFERRED FLEET MORTGAGE (hereinafter called the "Mortgage"),
was executed on December 10, 1997 to be effective on December 12, 1997 by MORAN
TOWING CORPORATION, a New York corporation having its principal place of
business at Two Greenwich Plaza, Greenwich, Connecticut 06830 (hereinafter
called the "Owner") in favor of BANCBOSTON LEASING INC., a Massachusetts
corporation with an office at 100 Federal Street, Boston, MA 02110 (hereinafter
called the "Mortgagee").
W H E R E A S
WHEREAS, the Owner is the sole owner of the whole of the vessel the April
Moran, Official No. 644241 (f/k/a the "April") (referred to herein, together
with any additional vessels which may from time to time become subject to this
Mortgage, individually as a "Vessel" and collectively as the "Vessels");
WHEREAS, pursuant to an Amended and Restated Term Loan Agreement, dated as
of December 12, 1997, (the "Loan Agreement") between the Owner and the
Mortgagee, (i) the Owner has assumed the obligations of Interlake
Transportation, Inc., a Delaware corporation ("Interlake") in respect of the
outstanding portion of the principal amount of Three Million Five Hundred
Thousand Dollars ($3,500,000) term loan (as amended and restated, the "Term
Loan") made by the Mortgagee to Interlake, pursuant to that certain Construction
and Term Loan Agreement, dated as of May 16, 1997 (as amended from time to time
the "Existing Loan Agreement"), by and among Interlake, Interlake Holding
Company, as Guarantor, The Interlake Steamship Company, as Guarantor,
BankBoston, N.A., as Construction Lender, the Mortgagee, and BancBoston Leasing
Inc., as agent for the Lenders referred to in the Existing Loan Agreement and
(ii) the Owner and the Mortgagee have agreed to amend and restate the provisions
of the Existing Loan Agreement relating to the outstanding portion of the Term
Loan;
WHEREAS, the Term Loan is evidenced by an amended and restated promissory
note of the Owner in substantially the form attached hereto and incorporated by
reference herein as EXHIBIT A (the "Note"), with the same force and effect as if
fully set forth herein, due and payable in the amounts and upon the terms and
conditions therein recited or referenced, to the order of the payee therein
named, with interest as set forth in or by reference in said Note;
WHEREAS, the Owner, in order to secure the payment of the Obligations
(including all principal of and interest on the Term Loan and any related costs
and expenses), and such additional sums as the Owner may be obligated to pay
under the covenants, terms and conditions in this Mortgage contained, and in
order to secure the performance and observance of and compliance with
<PAGE>
-2-
all agreements, covenants, terms and conditions in this Mortgage contained, has
duly authorized the execution and delivery of this Mortgage under and pursuant
to Title 46 United States Code Section 31301 ET SEQ in favor of the Mortgagee;
WHEREAS, capitalized terms which are used herein without definition and
which are defined in the Loan Agreement shall have the same meanings herein as
in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises and of the sums loaned as
above recited, and of other good and valuable consideration, the receipt and
adequacy whereof is hereby acknowledged, the Owner, in order to secure the
payment and performance of the Obligations and such additional sums as the Owner
may be obligated to pay under the agreements, covenants, terms and conditions in
this Mortgage contained, and in order to secure the performance and observance
of and compliance with all the agreements, covenants, terms and conditions in
the Loan Agreement, the Note and in this Mortgage contained, the Owner has
granted, conveyed, mortgaged, pledged, set over and confirmed and does by these
presents grant, convey, mortgage, pledge, set over and confirm unto the
Mortgagee, its successors and assigns, all of the following described property:
The whole of those certain vessels listed and described on SCHEDULE 1
attached hereto.
together with their engines, boilers, machinery, masts, boats, anchors, cables,
chains, rigging, tackle, apparel, furniture, equipment, spare parts and gear and
all other appurtenances thereunto appertaining or belonging, whether now owned
or hereafter acquired, whether on board or not, and any and all additions,
improvements and replacements hereafter made in, on or to said vessels, or any
part thereof, or in or to the equipment and appurtenances aforesaid, all the
foregoing being hereinafter referred to as the "Vessels".
TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto the Mortgagee, and its successors and assigns, forever; upon the
terms herein set forth for the enforcement of the payment of the Obligations in
accordance with the terms of the Loan Agreement and the Note and to secure the
performance and observance of, and compliance with, all agreements, covenants,
terms and conditions in this Mortgage contained;
PROVIDED ONLY, and the condition of these presents is such, that if the
Owner, or its successors or assigns, shall fully discharge the Obligations
including, without limitation, the irrevocable payment in full in cash of all of
the indebtedness evidenced by the Note and all interest, expenses and fees
thereon, and all other such sums as may hereafter become secured by this
Mortgage and shall perform, observe and comply with all agreements, covenants,
terms and conditions in this Mortgage, expressed or implied, to be performed,
observed or complied with by and on the part of the Owner, then these presents
and the rights hereunder shall cease, determine and be void, and otherwise shall
be and remain in full force and effect.
<PAGE>
-3-
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Vessels are to be
held subject to the further covenants, conditions, provisions, terms and uses
hereinafter set forth:
ARTICLE I
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OWNER
The Owner represents to, and covenants and agrees with, the Mortgagee as
follows:
Section 1.1. PERFORMANCE. The Owner will observe, perform and comply
with all the covenants, terms and conditions herein and in the Loan Agreement
and the Note, expressed or implied, on its part to be observed, performed or
complied with and will pay the Obligations including, without limitation, its
indebtedness as set forth in the Note and interest thereon in accordance with
the terms thereof.
Section 1.2. CORPORATE AUTHORIZATION; CITIZENSHIP. The Owner was duly
organized and is now validly existing as a corporation under the laws of the
State of New York with a principal place of business at Two Greenwich Plaza,
Greenwich, Connecticut 06830. The Owner is now, and shall so remain during the
life of this Mortgage, a citizen of the United States as defined in Section 2 of
the Shipping Act of 1916, as amended, entitled to own and operate the Vessels
under their respective Certificates of Documentation, which the Owner shall
maintain in full force and effect, and is duly qualified to engage in the
coastwise trade. The Owner is duly authorized to mortgage the Vessels; all
corporate action of the Owner necessary for the execution and delivery of the
Note, the Loan Agreement and this Mortgage has been duly and effectively taken;
and the Note and the Loan Agreement secured hereby and this Mortgage in the
hands of the holder thereof are the valid and enforceable obligations of the
Owner in accordance with their terms.
Section 1.3. TITLE. The Owner lawfully owns and is lawfully possessed of
each of the Vessels, free from any lien, encumbrance, security interest or
charge of any kind (except the lien of this Mortgage and other liens permitted
by the Loan Agreement (any such lien, a "Permitted Lien")), and the Owner
warrants, and will 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 whosoever. Each of the Vessels is tight, staunch and strong and well
and sufficiently tackled, appareled, furnished and equipped and in all respects
seaworthy, as far as due diligence can make it so.
Section 1.4. FIRST PREFERRED MORTGAGE. The Owner will, at its expense
and at no cost to the Mortgagee, comply with and satisfy all the provisions of
Title 46 United States Code Section 31301 ET SEQ. in order to establish, record
and maintain this Mortgage as a first preferred fleet mortgage thereunder upon
each of the Vessels and will do all such other acts and execute all such
instruments, deeds, conveyances, mortgages and assurances as the Mortgagee shall
reasonably require in order to subject all Vessels to the lien of this Mortgage
as aforesaid.
Section 1.5. OPERATION. The Owner will at all times operate each Vessel
in compliance, in all
<PAGE>
-4-
material respects, with all governmental rules, regulations and requirements,
applicable to such Vessels (including without limitation, all requirements of
the Shipping Act of 1916, as amended) and to the extent such Vessels are
classified in compliance in all material respects with all rules, regulations
and requirements of the applicable classification society. The Owner will
neither cause nor permit any Vessel to be operated in any manner contrary, in
any material respect, to the applicable law or to carry any cargo that will
expose any Vessel to penalty, forfeiture or capture and will not do or suffer or
permit anything to be done which can or might adversely affect the documentation
of any Vessel under the laws and regulations of the United States of America and
will at all times keep each of the Vessels duly documented thereunder.
Section 1.6. GOVERNMENT ASSESSMENTS. The Owner will pay and discharge or
cause to be paid and discharged, when due and payable from time to time, all
taxes, assessments, governmental charges, fines and penalties imposed on all or
any one of the Vessels or any income therefrom and all lawful claims which if
unpaid might become a lien or charge upon all or any one of the Vessels, except
that it shall be entitled to contest any such taxes, assessments, governmental
charges, fines and penalties in good faith, provided it obtains a bond, or an
insurance underwriter's letter of undertaking or sets aside on its books
adequate reserves with respect thereto.
Section 1.7. PERMITTED LIENS. Neither the Owner, the Master of any
Vessel, any charterer nor any other person has or shall have any right, power or
authority to suffer to continue, create, incur or permit to be placed or imposed
upon any Vessel, its freights, profits or hire, any liens, encumbrance, security
interest or charge whatsoever other than Permitted Liens.
Section 1.8. NOTICE OF MORTGAGE. The Owner will carry or cause to be
carried a properly certified copy of this Mortgage on board each Vessel with
such Vessel's documents and will cause such certified copy and the documents of
each Vessel to be exhibited to any and all persons having business with such
Vessel which might give rise to a maritime lien thereon or to any sale,
conveyance, mortgage or lease thereof, and to any representative of the
Mortgagee; and will cause to be placed and kept prominently displayed in the
chart room and in the Master's cabin of each Vessel a notice, framed under
glass, printed in plain type of such size that the paragraph of reading matter
shall cover a space not less than six inches wide and nine inches high, reading
as follows:
NOTICE OF FIRST PREFERRED FLEET MORTGAGE
This Vessel is owned by Moran Towing Corporation and is subject to a First
Preferred Fleet Mortgage in favor of BancBoston Leasing Inc., as agent for
itself and certain other lenders, as mortgagee, under authority of Title 46
United States Code Section 31301 ET SEQ. Under the terms of said Mortgage
neither the owner of this Vessel, nor any one on the owner's behalf, nor, any
charterer, the Master, nor any other person has any right, power or authority to
create, incur or permit to be placed or imposed upon this Vessel, its freights,
profits or hire, any lien whatsoever, other than the lien of said Mortgage, and
other Permitted Liens under said Mortgage, and liens for wages of crew or the
Master of this Vessel arising from the current voyage, for wages of stevedores
when employed directly by the Vessel, or for general average or salvage, repairs
and towage.
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Section 1.9. REMOVAL OF LIENS. If a notice of claim of lien be recorded
against any one or all of the Vessels, or a libel be filed against any one or
all of the Vessels and any one or more of the Vessels be attached, levied upon
or taken into custody as a result thereof, or if any one or more of the Vessels
be otherwise attached, levied upon or taken into custody by virtue of any
proceedings in any court or tribunal, the Owner will promptly notify the
Mortgagee thereof by telecopy or telex, confirmed by letter; and within fifteen
(15) days of such recording, filing, attachment, levy, or taking, will cause a
certificate of discharge to be recorded in the case of any such recording of
notice of claim or will cause such Vessels to be released in the case of any
such attachment, levy or other taking into custody and will cause all liens
thereon relating to such recording, libel, attachment, levy or other taking into
custody to be discharged and will promptly notify the Mortgagee thereof.
Section 1.10. MAINTENANCE OF VESSELS. The Owner will at all times and
without cost and expense to the Mortgagee maintain and preserve or cause to be
maintained and preserved the Vessels in good running order and repair, and will
cause all equipment and parts thereof which become worn out, broken or damaged
to be repaired or replaced and will keep the Vessels, or cause them to be kept,
in such condition as will entitle each Vessel which is classed by the American
Bureau of Shipping (or other classification society) 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
satisfactory to the Mortgagee) in class without recommendation, and annually
will furnish to the Mortgagee a certificate or certificates of such society that
such classification is maintained, or, as to Vessels which are not so classed,
to be covered by a valid Coast Guard Certificate of Inspection. Notwithstanding
the preceding sentence, if at any time any Vessel shall fail to meet such
standard, the Owner shall not be in breach of this Section 1.10 provided such
failure is cured within the earlier of (i) thirty days and (ii) the time
prescribed by the American Bureau of Shipping for curing such condition. Each
Vessel shall, and the Owner covenants that it will, at all times comply, in all
material respects, with all applicable United States law, treaties and
conventions, and rules and regulations issued thereunder, and shall have on
board, when required thereby, valid certificates showing compliance therewith.
The Owner will not make, or permit to be made, any substantial change in the
structure, type or speed of any of the Vessels or change in any of the Vessels'
rig without first receiving the written approval thereof by the Mortgagee, not
to be unreasonably withheld or delayed if no Default or Event of Default shall
then exist.
Section 1.11. ACCESS. The Owner will at all reasonable times, upon
reasonable prior notice if no Default or Event of Default then exists, afford
the Mortgagee or its authorized representatives full and complete access to each
of the Vessels where located for the purpose of inspecting the same and their
cargoes and papers and, at the request of the Mortgagee, will deliver for
inspection copies of any and all contracts and documents relating to the
Vessels, whether on board or not.
Section 1.12. SALE OR OTHER DISPOSITION OF THE VESSELS. (a) The Owner
will not sell (other than sales permitted under the Loan Agreement), mortgage,
transfer or demise charter any one or all of the Vessels without the written
consent of the Mortgagee first had and obtained, which consent in the case of a
demise charter shall not be unreasonably withheld or delayed, and any such
written
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consent to any one sale, mortgage, transfer or demise charter shall not be
construed to be a waiver of this provision with respect to any subsequent
proposed sale, mortgage, transfer or demise charter.
(b) The Owner will not charter any Vessel to, or permit any Vessel to
serve under any contract of affreightment with, a person included within the
definition of "designated foreign country" or a "national" of a "designated
foreign country" in the "Foreign Assets Control Regulations" or "Cuban Assets
Control Regulations" of the United States Treasury Department, 31 C.F.R. Chapter
V, as amended, within the meaning of said regulations or of any regulation,
interpretation or ruling issued thereunder.
(c) The Owner shall not enter into (i) any charter with any entity in
excess of one year (inclusive of all extension and renewal option periods and
other than such charters terminable at will by the parties thereto) or (ii) any
demise or bareboat charter with any entity in excess of ninety days, without in
each case providing Mortgagee a copy thereof. The Owner undertakes and
covenants that any charter of any of the Vessels shall contain a provision
prohibiting the charterer and any other persons from incurring or acquiring any
lien on any Vessel.
Section 1.13. INSURANCE. At all times while and so long as this Mortgage
shall be outstanding:
(a) The Owner will, at its own expense insure each of the Vessels and keep
the same insured (in lawful money of the United States) for hull and machinery,
pollution liability, and against protection and indemnity risks, generally
insured against by prudent companies engaged in the same or similar business, in
such form, and with such financially sound and reputable insurance companies,
underwriters, funds, mutual insurance associations or clubs, acceptable to the
Mortgagee, as shall be declared from time to time by a firm of independent
marine insurance brokers acceptable to the Mortgagee, to be reasonably necessary
or advisable for the protection of the Mortgagee and in accordance with the
provisions of this Section 1.13.
(b) The Owner will furnish to the Mortgagee, concurrently with the
execution hereof and thereafter at intervals of not more than twelve (12)
calendar months, a detailed report of the terms and conditions of the
insurances, including the amount and scope of coverage, deductibles, identity of
underwriters and share of placement by each underwriter, signed by a firm of
independent marine insurance brokers, appointed by the Owner and acceptable to
the Mortgagee, with respect to the insurance carried and maintained on the
Vessels together with their opinion that the insurance coverages in place and
the amount thereof are prudent and reasonable taking into account existing
industry practices, the operating area and trade of the Vessels and the risks
associated with such operations, and that such insurance is in compliance with
the provisions of this Section 1.13. The Owner will cause such firm to agree to
advise the Mortgagee promptly of any lapse of any such insurance by expiration,
failure to renew or otherwise and of any default in payment of any premium,
whether for new insurance or for insurance replacing, renewing or extending
existing insurance, and of any other act or omission on the part of the Owner of
which it has knowledge and which might, in its opinion, invalidate or render
unenforceable, or cause the lapse of or prevent the renewal or extension of, in
whole or in part, any insurance on the Vessels. The Owner will furnish or cause
to be
<PAGE>
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furnished to the Mortgagee, from time to time, upon request, detailed
information with respect to any insurance carried or maintained on the Vessels
or required or approved by the Mortgagee to be carried or maintained thereon.
The Owner will also cause such firm to agree to mark its records and to use its
best efforts to advise the Mortgagee, at least thirty (30) days prior to the
expiration date of any insurance carried pursuant to this Mortgage, that such
insurance has been renewed or replaced with new insurance which complies with
the provisions of this Section 1.13 and such advice shall be in the same detail
in respect to such renewed or replacement insurance as is required in respect of
insurance described in the aforesaid reports.
(c) Until otherwise required by the Mortgagee, the protection and
indemnity and hull and machinery insurance required by this Section 1.13 may be
on the American Institute forms current at the time such insurance takes effect
with deductibles or franchises no higher than the amounts set forth on SCHEDULE
2 hereto. Protection and indemnity insurance in respect to each Vessel shall be
by unlimited entry in a mutual insurance association or placed with underwriters
acceptable to the Mortgagee and shall include pollution liabilities (including
coverage for third party claims, statutory and governmental cleanup liabilities,
penalties and fines in the minimum amount for any one occurrence set forth on
SCHEDULE 2 hereto) with deductibles or franchises no higher than the respective
amounts set forth on SCHEDULE 2 hereto. For the purposes of insurance against
total loss, each Vessel shall be insured for and valued at an amount at least
equal to the greater of: (i) the full commercial value of such Vessel, or (ii)
the amount set forth opposite such Vessel's name on SCHEDULE 2 hereto. For
purposes of the broker's reports and opinions referred to above, the broker
giving the same may rely on a statement as to the full commercial value of each
of the Vessels and the gross tonnage of each of the Vessels as furnished
annually by the Owner to such broker and the Mortgagee at the time insurance is
negotiated with underwriters.
(d) All insurance shall be taken out in the names of the Owner and the
Mortgagee as their respective interests may appear; the policies or certificates
shall provide that there shall be no recourse against the Mortgagee for payment
of premiums; all insurance shall provide for at least thirty (30) days' prior
notice to be given to the Mortgagee by the underwriters in event of cancellation
or any material change in coverage.
(e) All insurance policies or certificates shall provide that losses
thereunder shall be payable to the Mortgagee, and all insurance moneys received
by the Mortgagee shall be distributed as provided below in this Section 1.13.
However, the policies or certificates may provide that (and it is agreed that):
(i) any loss under any insurance on the Vessels with respect to
protection and indemnity or collision liability risks may be paid directly to
the person to whom any liability covered by such insurance has been incurred, or
to the Owner to reimburse it for any loss, damage or expense incurred by it and
covered by such insurance, provided that in the latter event the underwriter
shall have first received evidence that the liability insured against has been
discharged; and
(ii) in the case of any loss (other than a loss covered by
subparagraph (i) above
<PAGE>
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in this paragraph (e) or by paragraph (f) of this Section 1.13) under any
insurance with respect to the Vessels involving any damage to a Vessel or
liability of a Vessel, the underwriters may pay directly for the repair,
salvage, liability or other charges involved, or, if the Owner shall have first
fully repaired the damage and paid the cost thereof or discharged the liability
or paid other charges and the underwriters shall have first received evidence
thereof, may pay the Owner as reimbursement therefor; PROVIDED, however, that
(a) if such damage involves a loss in excess of One Million Dollars ($1,000,000)
(after application of deductibles), the underwriters shall not make such payment
without first obtaining the written consent of the Mortgagee, and (b) no payment
shall be made to the Owner if there shall have occurred and be continuing an
event of default under this Mortgage, the Loan Agreement or the Note or an event
that, with the giving of notice or the lapse of time, or both, could, in the
discretion of Mortgagee, reasonably be expected to constitute an event of
default under this Mortgage, the Loan Agreement or the Note. Any loss which is
paid to the Mortgagee but which should have been paid, in accordance with the
provisions of this paragraph, directly to the Owner, shall be paid by the
Mortgagee to or as directed by the Owner, but only if there shall not have
occurred any event of default under this Mortgage, the Loan Agreement or the
Note, or any event that, with the giving of notice or lapse of time, or both,
could, in the discretion of the Mortgagee, reasonably be expected to constitute
an event of default under this Mortgage, the Loan Agreement or the Note.
Subject to the immediately preceding sentence, any insurance monies paid to the
Mortgagee shall, in the Mortgagee's sole and absolute discretion, be applied to
the repayment of the Obligations as provided in the Loan Agreement or to the
repair or replacement of the property so damaged.
(f) In the event of an actual or constructive total loss or an agreed or a
compromised constructive total loss of or requisition of title to or seizure or
forfeiture of any Vessel, all amounts payable therefor shall be paid to the
Mortgagee and shall be applied: FIRST, to the payment of the expenses of the
Mortgagee in collecting such payments; SECOND, to the payment of the then
accrued but unpaid interest on the Note; THIRD, to the payment of the unpaid
principal indebtedness evidenced by the Note; FOURTH, to the payment of such
additional sums as the Owner may be obligated to pay the Mortgagee or any other
Person under the terms of this Mortgage, the Note and the Loan Agreement; and
any funds remaining after such payments shall be paid to the Owner, its
successors in interest or its assigns or to whomsoever may be entitled thereto.
(g) The Owner shall deliver to the Mortgagee the originals of all cover
notes, binders and certificates of entry in protection and indemnity
associations, and all endorsements and riders amendatory thereof in respect of
insurance maintained under this Mortgage.
(h) The Owner agrees that it will not do any act, or voluntarily suffer or
permit any act to be done, whereby any insurance required hereunder shall or may
be suspended, impaired or defeated and will not suffer or permit any of the
Vessels to engage in any voyage or to carry any cargo not permitted under the
policies of insurance in effect, without first covering such Vessel with
insurance, satisfactory in all respects, including the amount thereof, to the
Mortgagee in the exercise of its reasonable discretion, for such voyage or the
carriage of such cargo.
<PAGE>
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(i) In the event that any claim or lien is asserted against any Vessel for
loss, damage or expense which is covered by insurance hereunder, and it is
necessary for the Owner to obtain a bond or supply other security to prevent the
arrest of such Vessel or to release such Vessel from arrest on account of such
claim or lien, the Mortgagee may, in its sole discretion, and upon notice to the
Owner, assign to any person, firm or corporation executing a surety or guarantee
bond or other agreement to save or release such 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 such person,
firm or corporation against liability under said bond or other agreement.
Section 1.14. REIMBURSEMENT. The Owner will, upon demand therefor, pay or
reimburse the Mortgagee, with interest at the rate for overdue amounts set forth
in the Loan Agreement, for: (i) any and all reasonable expenses or expenditures
which the Mortgagee may from time to time incur or make in connection with
insurance premiums, discharge or purchase of any lien, libel or seizure of any
one or all of the Vessels, taxes, dues, assessments, governmental charges, fines
and penalties, repairs, attorneys' fees and any other expenses or expenditures
which the Owner is obligated herein to incur or make, but fails to incur or
make; and (ii) all reasonable costs, fees and expenses suffered, incurred or
made by the Mortgagee in exercising, protecting or pursuing its rights or
remedies under this Mortgage (including, but not limited to, expenses of any
sale or taking of any Vessel, attorneys' fees and court costs). Such obligation
of the Owner to reimburse the Mortgagee shall be an additional indebtedness due
from the Owner, secured by this Mortgage, and shall be payable by the Owner on
demand. The Mortgagee, though privileged so to do, shall be under no obligation
to the Owner or to any other person to incur or make any such expenses or
expenditures, nor shall the incurring or making thereof relieve the Owner of any
default in that respect.
ARTICLE II
EVENTS OF DEFAULT AND REMEDIES
Section 2.1. EVENTS OF DEFAULT. The Owner shall be in default hereunder
upon the happening of any one or all of the following events or conditions (each
an "event of default"):
(a) any Event of Default (as defined in the Loan Agreement) shall have
occurred and be continuing; or
(b) default shall be made in the due and punctual observance or
performance of any of the provisions of this Mortgage; or
(c) any notice shall have been issued on behalf of the United States of
the seizure of any Vessel or to the effect that the Certificate of Documentation
of any Vessel is subject to revocation or cancellation, for any reason
whatsoever and such notice is not rescinded or revoked within five (5) days of
the issuance thereof; or
(d) the Owner or any charterer shall abandon any one or all of the Vessels
or remove or
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attempt to remove any one or all of the Vessels beyond the limits of the United
States, except on voyage made with the intention of returning to the United
States; or
(e) the termination of the Owner's or any charterer's status as a citizen
of the United States under Section 2 of the Shipping Act of 1916, as amended.
If any event of default as specified herein shall have occurred and be
continuing, then and in each and every such case the Mortgagee shall have the
right to:
(1) exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of Title 46 United States
Code Section 31301 ET SEQ. and all acts amendatory thereof and supplemental
thereto, or the applicable law of any other jurisdiction;
(2) Bring suit at law, in equity or in admiralty to recover judgment
for any and all outstanding Obligations or any sum secured by this
Mortgage, or otherwise, and collect the same out of any and all property of
the Owner whether covered by this Mortgage or otherwise;
(3) Take and enter into possession of any one or all of the Vessels,
at any time, wherever the same may be, without legal process and without
being responsible for loss or damage; and the Owner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to the
Mortgagee possession of such Vessels, and the Mortgagee may, without being
responsible for loss or damage, hold, lay up, lease, charter, operate or
otherwise use the Vessels, for such time and upon such terms as it may deem
to be for its best advantage, and demand, collect and retain, compromise
and sue for 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 the
Vessels, including any amounts payable in respect of any insurance in
connection with the Vessels, from any person whomsoever, accounting only
for the net profits, if any, arising from such use of the Vessels and
charging upon all receipts from the use of the Vessels or from the sale
thereof by court proceedings or pursuant to subparagraph (4) 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 to take any one or more of all of the Vessels, the Mortgagee
shall have the right to dock such Vessels for a reasonable time at any
dock, pier or other premises of the Owner without charge, or to dock it at
any other place at the cost and expense of the Owner;
(4) Take and enter into possession of all or any one or more of the
Vessels, 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 Vessels at public or private sale, at any place
and at such time as the Mortgagee may deem advisable, free from any claim
by the Owner in admiralty, in equity, at law or by statute. In the case of
a public sale, the Mortgagee shall give notice of the time and place of the
sale with a general
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description of the property in the following manner:
(i) by publishing such notice for ten (10) consecutive days in a
daily newspaper of general circulation published in the port of
documentation and the places of sale of such Vessels; and
(ii) by mailing a similar notice to the Owner at least fourteen
(14) days prior to the date fixed for such sale.
In the event that any Vessel shall be offered for sale by a private sale,
no newspaper publication of notice shall be required, but the Mortgagee
shall mail written notice of sale to the Owner at least fourteen (14) days
prior to the date fixed for entering into the contract of sale. The
Mortgagee may, without notice or publication, adjourn any public or private
sale or cause such sale to be adjourned from time to time by announcement
at the time and place fixed for sale or for entering into a contract of
sale, and such sale or contract of sale may, without further notice, be
made at the time and place to which the sale or contract of sale was so
adjourned. The Mortgagee shall not be obligated to make any sale of any
Vessel if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. Any sale may be conducted without
bringing the Vessel or Vessels to the place designated for such sale and in
such manner as the Mortgagee may deem to be for the best advantage of the
Mortgagee.
(5) Instruct the Owner to terminate any existing management
agreements affecting all or any one of the Vessels, and the Owner shall,
upon the giving of such instructions by the Mortgagee, immediately
terminate any such management agreements and shall appoint other managers
satisfactory to the Mortgagee and upon terms and conditions satisfactory to
the Mortgagee.
(6) If commercially reasonable to do so, instruct the Owner to make
application, if relevant, to the United States Maritime Administration
("MarAd") for permission of MarAd to sell all or any one of the Vessels for
purposes of foreign scrapping of such Vessels or other purposes requiring
such permission, and the Owner shall, upon the giving of such instructions
by the Mortgagee, immediately apply for such permission of MarAd.
Section 2.2. FINALITY OF SALE. Any sale of any Vessel made in pursuance
of this Mortgage, whether by exercise of the power of sale granted herein or by
virtue of any judicial proceedings, shall operate to divest all right, title and
interest of any nature whatsoever of the Owner therein and thereto, and shall
bar the Owner, 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 the case of any such sale,
any purchaser who is the holder of the Note shall be entitled, for the purpose
of making settlement or payment for the property purchased and subject to the
sharing provisions set forth in the Loan Agreement, to apply the balance due
under the Note or a part thereof as part or
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all of the purchase price to the extent of the amount remaining due and unpaid
thereon. At any such sale, the holder of the Note 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 2.3. APPOINTMENT OF ATTORNEY. (a) The Mortgagee is hereby
appointed attorney in-fact of the Owner, with full power of substitution, upon
the occurrence and during the continuance of any event of default, to make
application, if relevant, to MarAd for permission of MarAd to sell all or any of
the Vessels.
(b) To the extent permitted under the Federal Ship Mortgage Act, the
Mortgagee is hereby appointed attorney in-fact of the Owner, with full power of
substitution, upon the occurrence and during the continuance of any event of
default, to execute and deliver to any purchaser upon any sale of all or any one
or more of the Vessels made in pursuance of this Mortgage, whether by exercise
of the power of sale granted herein or by virtue of any judicial proceedings,
and is hereby vested with full power and authority to make, in the name and in
behalf of the Owner, a good conveyance of the title to such Vessels when so
sold. In the event of any sale of any Vessel by exercise of any power herein
contained, the Owner will, if and when required by the Mortgagee, execute such
form of conveyance of such Vessel as the Mortgagee may direct or approve.
(c) To the extent permitted under the Federal Ship Mortgage Act, the
Mortgagee is hereby irrevocably appointed attorney-in-fact of the Owner, with
full power of substitution, upon the occurrence and during the continuance of
any event of default, in the name of the Owner 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 Vessels, including 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 occurrence and during the continuance of any event of default in
respect of the Vessels, or in respect of any insurance thereon, from any person
whomsoever, and to make, give and execute in the name of the Owner acquittance,
receipts, releases or other discharges for the same, whether under seal or
otherwise, to take possession of, sell or otherwise dispose of or manage or
employ the Vessels, to execute and deliver charters and a bill of sale with
respect to the Vessels and to endorse and accept in the name of the Owner all
checks, notes, drafts, warrants, agreements and other instruments in writing
with respect to the foregoing.
Section 2.4. ADDITIONAL RIGHTS. Whenever any right to enter and take
possession of all or any one of the Vessels accrues to the Mortgagee, it may
require the Owner to deliver and the Owner shall on demand, at its own cost and
expense, deliver such Vessels to the Mortgagee. If any legal proceedings shall
be taken to enforce any right under this Mortgage, the Mortgagee shall be
entitled as a matter of right to the appointment of a receiver of the Vessels
and the freights, hire, earnings, issues, revenues and profits due or to become
due and arising from the operation thereof.
Section 2.5. RELEASE OF LIENS. The Owner authorizes and empowers the
Mortgagee or its appointees or any of them to appear in the name of the Owner,
its successors and assigns, in any
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court of any country or nation of the world where a suit is pending against all
or any one of the Vessels because of or on account of any alleged lien against
such Vessels from which such Vessels have not been released and to take such
proceedings as to them may seem proper toward the defense of such suit, and the
purchase or discharge of such lien, and all reasonable expenditures made or
incurred by them for the purpose of such defense or purchase or discharge shall
be a debt due from the Owner, its successors and assigns, to the Mortgagee and
shall be secured by the lien of this Mortgage.
Section 2.6. CUMULATIVE REMEDIES; NO WAIVER. 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 consistent or inconsistent power or remedy.
No delay or omission by the Mortgagee in the exercise of any right or power or
in the prosecution of any remedy accruing upon any event of default 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 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 arising out of any future event of default or of any past event of
default not completely cured thereby. In 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 Owner and the Mortgagee
shall be restored to their former positions and rights hereunder with respect to
the property subject 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 2.7. OFFERS TO CURE. If at any time after the occurrence of an
event of default and prior to the actual sale of the Vessels by the Mortgagee or
prior to commencement of any foreclosure proceedings, the Owner offers to cure
completely all events of default and to pay all expenses and advances to the
Mortgagee consequent on such event of default, with interest at the rate of
interest for overdue amounts set forth in Section 3.10 of the Loan Agreement,
then the Mortgagee may, if it in its sole discretion so elects, accept such
offer and payment and restore the Owner to its former position, but such action
shall not affect any subsequent event of default or impair any rights consequent
thereon.
Section 2.8. APPLICATION OF PROCEEDS. In the event of any taking of the
Vessels by the Mortgagee or any sale of the Vessels under any of the powers
herein specified, the proceeds of any such sale and the net earnings of any
charter operation or other use of the Vessels by the Mortgagee under any such
power, together with any and all moneys received by the Mortgagee pursuant to or
under the terms of this Mortgage or in any proceedings hereunder or with respect
hereto, the application of
<PAGE>
-14-
which has not elsewhere herein been specifically provided for, shall be applied
as set forth in the Loan Agreement.
Section 2.9. FURTHER ASSURANCES. In the event that this Mortgage, the
Loan Agreement or the Note, or any provision hereof or thereof, shall be deemed
invalid in whole or in part by reason of any present or future law or any
decision of any court having jurisdiction, or if the documents at any time held
by the Mortgagee shall be deemed by the Mortgagee for any reason insufficient to
carry out the provisions, true intent or spirit of this Mortgage, the Loan
Agreement or the Note, then, from time to time, the Owner will execute, on its
own behalf, such other and further assurances and documents as in the opinion of
the Mortgagee may be required more effectually to subject the Vessels to the
payment of the principal sum of the Obligations, as in the Loan Agreement and as
herein provided, and to the performance of the terms and provisions of the Note,
the Loan Agreement and this Mortgage.
Section 2.10. SEVERABILITY. Any provision of this Mortgage which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 2.11. REQUISITION OF TITLE, USE. (a) In the event that the title
or ownership of any Vessel shall be requisitioned, purchased or taken by any
government of any country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, decree, order or otherwise,
the lien of this Mortgage shall be deemed to attach to the claim for
compensation therefor, and the compensation, purchase price, reimbursement or
award for such requisition, purchase or other taking of such title or ownership
is hereby agreed to be payable to the Mortgagee, who shall be entitled to
receive the same and shall apply it as provided in the Loan Agreement. In the
event of any such requisition, purchase or taking, and the failure of the
Mortgagee to receive proceeds as herein provided, the Owner shall promptly
execute and deliver to the Mortgagee such documents, if any, and shall promptly
do and perform such acts, if any, as in the opinion of the Mortgagee may be
necessary or useful to facilitate or expedite the collection by the Mortgagee of
such part of the compensation, purchase price, reimbursement or award as is
payable to it hereunder.
(b) In the event that any government of any country or any department,
agency or representative thereof shall not take over the title or ownership of
any Vessel but shall requisition, charter or in any manner take over the use of
such Vessel pursuant to any present or future law, proclamation, decree, order
or otherwise and shall, as a result of such requisitioning, chartering or taking
of the use of such Vessel pay or become liable to pay sums by reason of the loss
of or injury to or depreciation of such Vessel, any such sum is hereby made
payable to the Mortgagee, who shall apply it as provided in the Loan Agreement.
In the event of any such requisitioning, chartering or taking of the use of any
Vessel, the Owner shall promptly execute and deliver to the Mortgagee such
documents, if any, and shall promptly do and perform such acts, if any, as in
the reasonable opinion of the Mortgagee may be necessary or useful to facilitate
or expedite the collection by the Mortgagee of such claims arising out of the
requisitioning, chartering or taking of the use of such Vessel.
<PAGE>
-15-
(c) Unless and until an event of default shall have occurred and be
continuing, the Owner (a) shall be suffered and permitted to retain actual use
and possession of the Vessels 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 or substitute for,
free from the lien hereof, any boilers, engines, machinery, bowsprits, masts,
spars, rigging, boats, anchors, cables, chains, tackle, apparel, furniture,
fittings, capstans, outfit, tools, pumps, pumping or other equipment or any
other appurtenances and spares to any of the Vessels that are no longer useful,
necessary, profitable or advantageous in the operation of the Vessels; provided
that, simultaneously with such disposal, the Owner shall replace such item(s)
disposed of with similar new or refurbished items, such replacement property to
be free and clear of all liens and encumbrances, other than liens permitted
hereunder, and all of which replacement property shall forthwith become subject
to the lien of this Mortgage as a preferred mortgage thereon.
ARTICLE III
DEFEASANCE
If the Owner shall indefeasibly pay and discharge the entire indebtedness
secured hereby by well and truly paying or causing to be paid the principal of
and interest due under the Note and all of the other Obligations under the Loan
Agreement as and when the same becomes due and payable and if the Owner shall
also indefeasibly pay or cause to be paid all other sums payable hereunder by
the Owner, then this Mortgage and the lien, rights and interest hereby granted
shall cease, determine and become null and void, and the Mortgagee shall, at the
request of the Owner, execute and deliver such instrument or instruments of
satisfaction as may be necessary to satisfy and discharge the lien hereof; and
forthwith the estate, right, title and interest of the Mortgagee in and to all
property subject to this Mortgage shall thereupon cease, determine and become
null and void.
ARTICLE IV
SUNDRY PROVISIONS
Section 4.1. INDEBTEDNESS SECURED. For the purpose of recording of this
First Preferred Fleet Mortgage, as required by Title 46 United States Code
Section 31301 ET SEQ., the total amount of obligations that is or may become
secured by this Mortgage is the principal sum of Three Million Four Hundred
Twenty Thousand Six Hundred Fifty-Seven Dollars and Seventy-Six Cents
($3,420,657.76) plus interest, expenses and fees, plus any additional amounts
for which the Owner may become liable in connection with the performance of the
covenants of this Mortgage and the Loan Agreement. The total discharge amount
is the same as the total amount. The Owner's interest in each of the Vessels is
100% and the interest mortgaged with respect to each of the Vessels is 100%.
Section 4.2. SUCCESSORS AND ASSIGNS. All of the covenants, promises,
stipulations and agreements of the Owner in this Mortgage contained shall bind
the Owner and its successors and assigns and
<PAGE>
-16-
shall inure to the benefit of the Mortgagee and its successors and assigns
PROVIDED, that the Owner shall not assign or transfer any of its rights or
obligations hereunder.
Section 4.3. 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, and the act or acts of such agent or agents when taken shall constitute
the act or acts of the Mortgagee hereunder.
Section 4.4. NOTICES. Any notice, request, demand, direction, consent or
waiver or other documents in respect of this Mortgage shall be sufficient for
every purpose if in writing and sent either by telegram, telecopy or letter
(delivered by hand or sent by registered or certified mail, return receipt
requested, postage prepaid) or telecopy confirmed by letter (sent as aforesaid),
addressed as follows:
(a) To the Owner:
Moran Towing Corporation
Two Greenwich Plaza
Greenwich, CT 06830
Attention: Alan Marchisotto, Esq.
with a copy to:
Michael Herling, Esquire
Finn Dixon & Herling LLP
One Landmark Square
Stamford, CT 06901
Telecopier: (203) 348-5777
(b) To the Mortgagee:
BancBoston Leasing Inc.
100 Federal Street
Boston, MA 02110
Attention: Director of Administration
Telecopier: (617) 434-0974
with a copy to:
BankBoston, N.A.
100 Federal Street
Boston, MA 02110
Attention: Mr. Victor Garcia
Telecopier: (617) 434-1955
<PAGE>
-17-
Any notice, request or communication hereunder shall be deemed to have been
given in the case of a letter, when delivered by hand at the address provided in
this Section or three (3) days after having been deposited in the mail with
first class postage prepaid, addressed as aforesaid, or in the case of a
telecopy, at the time of dispatch thereof, if in the normal business hours in
the state or country where received or otherwise at the opening of business on
the next succeeding business day. Any party may change the person or address to
whom or which the notices are to be given hereunder, by notice duly given
hereunder.
Section 4.5. NO WAIVER OF PREFERRED STATUS. Notwithstanding anything
contained in this Mortgage to the contrary, nothing herein shall waive the
preferred status of this Mortgage and if any provision herein shall be construed
to waive such status, then such provision shall to the extent so construed be
void and of no effect.
Section 4.6. INDEMNITY. The Owner assumes liability for, and agrees to
indemnify and hold the Mortgagee harmless from, all claims, costs, expenses
(including reasonable legal fees and expenses), damages and liabilities arising
from or pertaining to this Mortgage or the ownership, use, possession or
operation of the Vessels; PROVIDED that the Owner shall have no obligation
hereunder for indemnified liabilities arising from the gross negligence or
willful misconduct of the Mortgagee. The agreements and indemnities contained
in this section shall survive the maturity or earlier discharge of this Mortgage
and payment in full of the Note.
Section 4.7. CITIZENSHIP. Notwithstanding any other language in this
Mortgage to the contrary, the Mortgagee shall not take any action in violation
of Section 9 of the Shipping Act, 1916, as amended by Public Law 100-700 (46
U.S.C. Chapter 313). To the extent any provision of this Mortgage contravenes
Section 9 of the Shipping Act, 1916, such provision may be deemed void without
affecting the validity and enforceability of the other provisions of this
Mortgage.
Section 4.8. CONSENT TO FORUM. THE OWNER HEREBY IRREVOCABLY CONSENTS AND
AGREES THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR IN ANY WAY
IN CONNECTION WITH THIS MORTGAGE MAY BE INSTITUTED OR BROUGHT IN THE COURTS OF
THE COMMONWEALTH OF MASSACHUSETTS OR THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MASSACHUSETTS, AS THE MORTGAGEE MAY ELECT, AND BY EXECUTION AND
DELIVERY OF THIS MORTGAGE, THE OWNER HEREBY IRREVOCABLY ACCEPTS AND SUBMITS TO,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT, AND TO ALL PROCEEDINGS IN SUCH
COURTS. THE OWNER IRREVOCABLY CONSENTS TO SERVICE OF ANY SUMMONS AND/OR LEGAL
PROCESS BY REGISTERED OR CERTIFIED UNITED STATES MAIL, POSTAGE PREPAID, TO THE
OWNER AT ITS ADDRESS AS SET FORTH IN SECTION 4.4 OF ARTICLE IV HEREOF, SUCH
METHOD OF SERVICE TO CONSTITUTE, IN EVERY RESPECT, SUFFICIENT AND EFFECTIVE
SERVICE OF PROCESS IN ANY SUCH
<PAGE>
-18-
LEGAL ACTION OR PROCEEDING. NOTHING IN THIS MORTGAGE SHALL AFFECT THE RIGHT OF
THE MORTGAGEE TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR LIMIT THE RIGHT OF THE MORTGAGEE TO BRING ACTIONS, SUITS OR PROCEEDINGS
WHETHER IN REM, IN PERSONAM, IN LAW, EQUITY, ADMIRALTY OR OTHERWISE IN THE
COURTS OF ANY OTHER JURISDICTION. THE OWNER FURTHER AGREES THAT FINAL JUDGMENT
AGAINST IT IN ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION, WITHIN OR OUTSIDE THE UNITED STATES
OF AMERICA, BY SUIT ON THE JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH
SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF THE LIABILITY.
<PAGE>
-19-
IN WITNESS WHEREOF, the Owner has executed this Mortgage the day and year
first above written.
MORAN TOWING CORPORATION
By: /s/ Jeffrey J. Mcaulay
---------------------------
Title: Vice President
ACKNOWLEDGMENT
STATE OR COMMONWEALTH OF CONNECTICUT )
) ss.:
COUNTY OF FAIRFIELD )
On this 10th day of December, 1997 before me personally came Jeffrey J.
McAulay, to me known, who being by me duly sworn, did depose and say that he
resides at 315 W. 223rd St., New York, NY 10015; that he is the Vice President
of Moran Towing Corporation, a New York corporation, the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of said corporation and acknowledged
the same to be his act and deed as such Vice President on behalf of the
corporation.
/s/ Daniel Klaben
------------------------
Notary Public
My commission expires: December 31, 1998.
<PAGE>
SCHEDULE 1
VESSEL NAME OFFICIAL NUMBER
April Moran 644241
<PAGE>
SCHEDULE 2
VESSEL NAME OFFICIAL NUMBER VALUE INSURED
April Moran 644241 $5,000,000
<PAGE>
EXHIBIT A
[Attach Note]
<PAGE>
EXHIBIT 10.6
AGREEMENT
Dated: December 10, 1997
Interlake Transportation, Inc., a Delaware corporation with its principal
place of business at Three Landmark Square, Stamford, CT 06901 (hereinafter
called the "Seller"), has agreed to sell, and Moran Towing Corporation, a New
York corporation with its principal place of business at Two Greenwich Plaza,
Greenwich, Connecticut 06830 (hereinafter called the "Buyer"), has agreed to buy
the following marine equipment:
Name: the tug April (to be renamed "April Moran") further described as:
Classification Society/Class: American Bureau of Shipping/+A1
Towing Service, +AMS
Built: 6/30/82 By: McDermott Shipyards
Flag: United States Homeport: Philadelphia, Pennsylvania
Call Sign: WRA 7927 Grt/Nrt: 272/185
Register Number: 644241
(hereinafter called the "Tug"). The purchase of the Tug shall be on the
following terms and conditions:
DEFINITIONS
"Banking Days" are days on which banks are open in New York, New York.
"In writing" or "written" means a letter handed over from the Sellers to
the Buyers or vice versa, a registered letter, a telex or a telefax.
"Classification Society" means the Society referred to above. "Class"
means the designation of the Tug conferred by the Classification Society.
1. PURCHASE PRICE - Buyer shall (i) assume the debt as described on attached
Schedule A (the "Assumed Debts"), and (ii) pay, or be paid, the cash
purchase price calculated on Schedule A.
2. PAYMENT
On delivery of the Tug and the documentation set forth in paragraph 5, the
Purchase Price shall be paid in full in immediately available U.S. funds
via wire transfer to such bank account as may be directed in writing by
Seller or Buyer, as the case may be or their respective Assignees, or if
no such account is specified, by cashier's or bank teller's check.
3. SPARES/BUNKERS, ETC; EXISTING BAREBOAT CHARTER.
<PAGE>
- 2 -
a) The Tug is currently in possession of the Buyer pursuant to a
bareboat charter, dated February 21, 1997 (the "Bareboat Charter")
and shall become the property of the Buyer together with her full
equipment, spares and appurtenances.
b) Upon delivery of the Tug pursuant to the terms hereof, the Bareboat
Charter shall terminate and be of no further force and effect. In
connection with the termination of such Bareboat Charter, Seller
shall pay to Buyer an amount equal to $200,000, as a retroactive
charter hire adjustment, less unpaid charter hire payable by Buyer
in respect of the months of October and November 1997 in the amount
of $167,140. The net payment by Seller to Buyer upon termination of
such Bareboat Charter shall be $32,860.
4. DOCUMENTATION
Place of delivery: wherever the Tug is situated on the date of the
closing.
Time of delivery: a date mutually agreeable to Seller and Buyer, but no
later than December 31, 1997.
a) In exchange for payment of the Purchase Price, the Seller shall
furnish the Buyer with the following delivery documents:
4.1 A valid and original bill of sale for the Tug in a form
recordable in the United States, duly notarially attested,
reflecting that the sale is "AS IS, WHERE IS," and warranting
that the Tug is free from all incumbrances, mortgages and
liens and from any other debts or claims whatsoever, except
the Assumed Debts.
4.2 The current Certificate of Documentation for the Tug issued by
the United States Coast Guard.
4.3 A fax copy of Confirmation of Class for the Tug issued on a
recent date, with the originals sent the same day as the fax
by overnight courier to Buyer c/o Moran Services Corporation,
Two Greenwich Plaza, Greenwich, CT 06830.
4.4 Any such additional documents as may be required by the
competent authorities in the United States for the purpose of
registering the Tug in the name of the Buyer.
4.5 A copy of resolutions of the Board of Directors of Seller
approving the sale of the Tug to Buyer and authorizing
execution and delivery of all documents necessary to
effectuate said sale.
b) The Buyer shall furnish to the Seller, in addition to the Purchase
Price, (i) a copy of resolutions of the Board of Directors of Buyer,
approving the purchase of the Tug
<PAGE>
- 3 -
by Buyer and authorizing execution and delivery of all documents
necessary to effectuate said sale and to assume the Assumed Debts,
and (ii) such assumption documents as are required for Buyer to
assume the Assumed Debts.
c) Concurrently with delivery of the Tug, Buyer and Seller shall sign
and exchange with each other a Protocol of Delivery and Acceptance
confirming the date and time of delivery of the Tug from Seller to
Buyer.
d) Concurrently with delivery of the Tug, Seller shall deliver to Buyer
or to its duly authorized representative, one set of certificates,
drawings, instruction books, operational manuals and plans
applicable to the Tug that are in Seller's possession on the date of
this Agreement. Notwithstanding the foregoing, Seller may retain
manuals in its office that are the sole copies and that pertain also
to other vessels owned by Seller provided that a copy thereof of is
provided to Buyer.
e) Concurrently with the delivery of the Tug, the Seller shall effect
payment to Buyer in the amount of $32,860, as contemplated by
Section 3(b) hereof.
f) Concurrently with the delivery of the Tug, the Seller shall deliver
a release of mortgage in such form as is acceptable to the Buyer.
5. ASSIGNMENT
Buyer shall have the right to assign to an affiliate all Buyer's rights
hereunder to purchase the Tug. In such event, Buyer shall given written
notice thereof to Seller at least two Banking Days prior to the closing
date, said notice to contain all necessary information to enable Seller to
prepare the closing documents set forth in paragraph 4. Said affiliate
shall be a citizen of the United States, within the meaning of Section 2
of the Shipping Act, 1916, as amended, entitled to own a vessel engaged in
the United States coastwise trade.
6. ENCUMBRANCES
Seller warrants that the Tug, at the time of delivery, shall be free from
all charters, encumbrances, mortgages and maritime liens or any other
debts whatsoever, except the Assumed Debts. The Seller hereby undertakes
to indemnify the Buyer against all consequences arising out of any breach
of said warranty. Seller's undertaking shall survive the closing.
Except as expressly warranted above, Seller makes no warranties or
representations express or implied, as to the value of the Tug or as to
the seaworthiness, condition, design, operation, fitness for a particular
purpose or trade or merchantability of the Tug or any parts or equipment
thereof. The Tug is sold "AS IS, WHERE IS."
In the event that the documents referred to in paragraph 4.5 and 4(b)(i)
are not presented at the delivery of the Tug, each side represents and
warrants to the other that it is authorized to consummate the transactions
contemplated by this Agreement and that it will deliver said documents as
soon as reasonably practical.
<PAGE>
- 4 -
7. TAXES, ETC.
Any taxes, fees and expenses in connection with the purchase and
registration under the Buyer's name shall be for the Buyer's account. Fees
and expenses in connection with the deletion of the Seller's name from the
U.S. Coast Guard register shall be for Seller's account.
8. CONDITION ON DELIVERY
The Tug with everything belonging to her shall be at the Seller's risk and
expense until she is delivered to the Buyer, subject to the terms and
conditions of this Agreement, fair wear and tear excepted.
Notwithstanding the foregoing, the Tug shall be delivered with her class
maintained without condition/recommendation, free of average damage
affecting the Tug's class, and with her classification certificates and
national certificates, as well as all other certificates the Tug had at
the time of inspection, valid and unextended without
condition/recommendation by Class or the relevant authorities at the time
of delivery.
Notwithstanding the foregoing, Seller shall be entitled to remove from the
Tug certificates of documentation, radio licenses, COFRs, Tovalop and such
other documents as may be required to be removed by law.
9. LOSS OR DAMAGE
In the event that the Tug becomes a loss or a constructive total loss
prior to delivery hereunder to Buyer, this Agreement shall become null and
void.
In the event that the Tug is damaged prior to delivery hereunder to Buyer,
Seller shall be responsible for repairing all such damage to the
reasonable satisfaction of Buyer's surveyor to the extent that Buyer is
not required to make such repairs under the terms of the Bareboat Charter.
Said repair shall be completed prior to deliver of the Tug hereunder and,
for such purpose, the closing may be rescheduled at a mutually agreeable
date no later than December 31, 1997. If, based on surveyors' estimates,
the Tug cannot be repaired within that time or if the cost of repairs will
exceed $500,000.00, either party may cancel this Agreement on written
notice to the other.
10. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
law of the State of Connecticut and should any dispute arise out of this
Agreement, the matter in
<PAGE>
- 5 -
dispute shall be referred to three persons at Connecticut, one to be
appointed by each of the parties hereto, and the third by the two so
chosen; their decision or that of any two of them shall be final, and for
purpose of enforcing any award, this Agreement may be made a rule of the
Court. The proceedings shall be conducted in accordance with the rules of
the Society of Maritime Arbitrators, Inc., New York.
11. WARRANTY OF U.S. CITIZENSHIP
11.1 Seller represents and warrants that it is and shall remain
through the date of delivery of the Tug a citizen of the
United States within the meaning Section 2 of the Shipping Act
of 1916, as amended, entitled to own a vessel engaged in the
United States coastwise trade. Seller further represents and
warrants that it is the sole owner of the Tug and is possessed
of full authority to enter into and perform this Agreement.
11.2 Buyer represents and warrants that it, and its assignee, if
any, are and shall remain through the date of delivery of the
Tug a citizen of the United States within the meaning of
Section 2 of the Shipping Act of 1916, as amended, entitled to
own a vessel engaged in the United States coastwise trade.
Buyer further represents that it shall register the Tug under
the laws and flag of the United States and it is possessed of
full authority to enter into and perform this Agreement.
INTERLAKE TRANSPORTATION, MORAN TRANSPORTATION COMPANY
INC.
By: /s/ Andrew P. Langlois By: /s/ Jeffrey J. McAulay
-------------------------- --------------------------
Name: Andrew P. Langlois Name: Jeffrey J. McAulay
Title: Vice President Title: Vice President
<PAGE>
SCHEDULE A
Purchase Price
(Settlement Date = December 10, 1997)
Seller's Cost $3,500,000.00
less Debt of Seller to BancBoston Leasing (3,420,657.76)
Inc. as of Settlement Date, in respect of
current outstanding principal amount of
term loan in the original principal amount
of $3,500,000 under Construction and Term Loan
Agreement dated as of May 16, 1997.
------------
NET PURCHASE PRICE $ 79,342.24
=============
(if positive, due Seller;
if negative, due Buyer)
<PAGE>
EXHIBIT 10.9
AGREEEMENT
BETWEEN THE
SEAFARERS INTERNATIONAL UNION
OF NORTH AMERICA, ATLANTIC, GULF, LAKES
AND INLAND WATER DISTRICT, AFL-CIO
AND
MORAN TOWING OF PENNSYLVANIA
AND
MORAN TOWING OF MARYLAND
DIVISION OF MORAN TOWING CORPORATION
MAY 1, 1996 THROUGH APRIL 30, 2001
<PAGE>
TABLE OF CONTENTS
TABLE OF CONTENTS 1
ARTICLE I 4
EMPLOYMENT 4
SECTION 1. UNION RECOGNITION 4
SECTION 2. UNION FURNISHING EMPLOYEES 4
SECTION 3 UNION SECURITY 5
SECTION 4. HIRING OF NEW EMPLOYEES 5
SECTION 5. COMPANY REJECTION OF EMPLOYEES 5
SECTION 6. EQUAL OPPORTUNITY 5
SECTION 7. INDEMNIFICATION 6
SECTION 8. SPECIAL WORKING CONDITIONS 6
SECTION 9. TOTALITY OF AGREEMENT 6
ARTICLE II 7
GRIEVANCE AND ARBITRATION PROCEDURE 7
ARTICLE III 8
DUES CHECK-OFF AND INITIATION FEES 8
ARTICLE IV 9
GENERAL RULES 9
SECTION 1. NO STRIKES OR LOCKOUTS 9
SECTION 2. PICKET LINES AND INDUSTRIAL DISPUTES 9
SECTION 3. SUBSTITUTE PROVISION - CONFORMITY
TO LAW SAVINGS CLAUSE 9
SECTION 4. SEAFARERS HARR LUNDEBERG SCHOOL
OF STEAMSHIP 10
SECTION 5. HOLIDAY 10
SECTION 6. WAGES AND MANNING SCALES 10
SECTION 7. EXCLUSIVENESS OF CONTRACT 10
SECTION 8. ANNUAL PHYSICAL 11
SECTION 9. UNION RE-PRESENTA T10N ONBOAD VESSEL 11
APPENDIX A 12
SECTION 1. SEAFARERS WELFARE PLAN 12
National Health Care Plan 12
SECTION 2. SEAFARERS PENSION PLAN 12
SECTION 3. SEAFARERS HARRY LUNDEBERG SCHOOL OF STEAMSHIP 13
SECTION 4. TRANSPORTATION 13
SECTION 5. SEAFARERS JOINT EMPLOYMENT FUND 13
<PAGE>
SECTION 6. ARBITRATION 14
APPENDIX B 16
SECTION 1. BASE DAILY WAGES RATES 16
SECTION 2. LEAVE OF ABSENCE 16
SECTION 3. LOSS OF PERSONAL EFFECTS 17
SECTION 4. WHEELHOUSE MANNING 17
SECTION 5. CARE OF LIVING QUARTERS 17
SECTION 6. MANNING SCALES 17
SECTION 7. SAILING ORDERS 17
SECTION 8. DEATH IN THE IMMEDIATE FAMILY 17
SECTION 9. SUBSISTANCE 18
SECTION 10. PAY PERIOD 18
SECTION 11. PERMISSION TO LEAVE 18
SECTION 12. NON-CREWMEMBERS ONBOARD TUGS 18
SECTION 13. MAINTENANCE AND CURE 18
SECTION 14. VESSEL SALES AND TRANSFERS 18
APPENDIX C 20
PHILADELPHIA 20
SECTION 1. COMPANY SENIORITY, PROMOTIONS AND TRANSFERS 20
SECTION 2. MOST FAVORED NATION CLAUSE 21
SECTION 3. SAFETY AND COMFORT 21
SECTION 4. CUSTOAMRY DUTIES 22
SECTION 5. ROTATION 22
SECTION 6 SAILING ORDERS 22
SECTION 7. HOLIDAYS 22
SECTION 8. MAINENTENANCE WORK 22
SECTION 9. PLANNED REPAIRS 23
SECTION 10. TIME FOR ORDERING OUT CREWS 23
APPENDIX I-C 24
PHELADELPHIA 24
MAINT'ENANCE MEN 24
SECTION 1. NOTICE OF LAYOFF 24
SECTION 2. PIECE WORK 24
SECTION 3. WORK WEEK AND OVERTIME RATES 24
SECTION 4. VACATION 25
SECTION 5. WAGES 25
APPENDIX D 26
BALTIMORE 26
SECTION 1. SENIORITY, LAYOFFS & TIE-UPS PROMOTIONS
AND TRANSFERS 26
SECTION 2. PROBATIONARY PERIOD 28
SECTION 3. DISCIPLIAARY PROCEDURE 28
SECTION 4. LEAVE OF ABSENCE 28
<PAGE>
SECTION 5. WORKING ROTATION 28
SECTION 6 ORDERING SYSTEM 29
SECTION 7. HOLIDAYS 29
SECTION 8. SAFETY AND COMFORT 29
SECTION 9. SAFETY AND GRIEVANCE MEETINGS 29
SECTION 10. UNION DELEGATES 30
APPENDIX I-D 31
BAILTIMORE 31
SHOP AGREEMENT 31
SECTION 1. HOURS, RATE OF PAY, WORKING CONDITIONS 32
SECTION 2. UNIFORMS 32
SECTION 3. TANK AND BILGE CLEANING 32
SECTION 4. HOLIDAYS 32
TERM OF AGREEMENT 33
<PAGE>
THIS AGREEMENT, made and entered into on this 1st day of May, 1996
by and between the SEAFARERS INTERNATIONAL UNION, ATLANTIC, GULF, LAKES AND
INLAND WATERS DISTRICT, AFL-CIO (hereinafter referred to as the "Union") and
its successors, party of the first part and MORAN TOWING OF PENNSYLVANIA,
DIVISION, and its successors and assigns, party of the second part, and MORAN
TOWING OF MARYLAND, DIVISION, and its successors and assigns, party of the
third part (hereinafter referred to as the "Company" and/or "Employer").
This agreement shall remain in effect until midnight of the 30th day of April
2001.
ARTICLE I
EMPLOYMENT
SECTION 1. UNION RECOGNITION
This Agreement applies to non-supervisory employees, including all
mates, engineers deckhands, tankerman, electricians, handymen, helpers and
machinist, excluding engineers and engineer/machinist in the port of
Philadelphia, (hereinafter called "employees"), when employed on tugboats,
barges and shoreside facilities of the Company. Excluding all office,
clerical and supervisory employees. This recognition shall not apply to
bareboat charters, to other operators nor to crews of vessels of subsidiary
or affiliated companies.
SECTION 2. UNION FURNISHING EMPLOYEES
The Union agrees to furnish the Company with capable, competent,
drug free, physically fit and properly licensed personnel as required by
Company policy when and where they are required to fill vacancies
necessitating the employment of employees covered hereunder, in ample time to
prevent any delay in the scheduled departure of any vessel covered by this
Agreement. To assure maximum harmonious relations, and in order to obtain
the best qualified employees with the least risk of a delay in the scheduled
departure of any vessel covered by this Agreement, the Company agrees to
secure all its personnel through the hiring halls of the Union. Whenever
possible, the Company shall give the Union at least twenty-four (24) hours'
notice in order for the Union to have sufficient time to comply with the
above. If for any reason the Union does not furnish the Company with
capable, competent and physically fit persons, when and where they are
required to fill such vacancies, in ample time to prevent any delay in the
scheduled departure of any vessel covered by this Agreement, the Company may
obtain employees from any available source, in which case the Union shall be
notified, within three (3) business days of such hiring.
Minimum qualifications for hiring as, or promotion to, mate will be
the possession of a valid license as mate 500 ton Inland (no Colregs
restriction) and the agreement to upgrade to master as soon as sufficient
seatime is accumulated.
Minimum qualifications for hiring as, or promotion to engineer,
will be the possession of a valid license as chief engineer 4000 or greater.
Engineers currently on the seniority list will secure a Chief Engineer 4000
BP license or greater, during the term of this agreement as soon as
sufficient seatime is accumulated and recognized by the U.S. Coast Guard.
<PAGE>
SECTION 3. UNION SECURITY
A. Subject to the provisions of the Labor Management Relations
Act, 1947, as amended, all present employees who are members of the Union on the
effective date of this Agreement, shall remain members of the Union in good
standing as a condition of employment or pay the required agency fee.
Furthermore, all new employees shall be obligated to become and remain members
of the Union as a condition of employment or pay the required agency fee.
B. Notwithstanding anything to the contrary therein, Paragraph A
above shall not be applicable if all or any part thereof shall be in conflict
with applicable law, provided however, that if all or any part of Paragraph A
becomes permissible by virtue of a change in applicable law, whether by
legislative or judicial action, the provisions of Paragraph A held valid
shad] immediately apply.
SECTION 4. HIRNG OF NEW EMPLOYEES
The Union shall refer to the Employer, at his request, individuals
to perform the particular classification or character of work required by the
Employer. Registrants shall be referred to available employment
opportunities in seniority order as contained in the Inland Shipping Rules.
SECTION 5. COMPANY REJECTION OF EMPLOYEES
A. The Union agrees that the Company has the right to reject,
any applicant for employment who the Company considers unsatisfactory or
unsuitable for the position, or to discharge any employee, who, in the
opinion of the Company is not satisfactory.
B. Except as provided in Sections 7B and C herein, if the union
considers the discharge of any employee as being without reasonable cause,
such actions shall be dealt with under the grievance procedure as provided
for herein and the Union agrees that the discharge shall not cause any vessel
to be delayed on her scheduled departure.
C. If an applicant referred by the Union is rejected or an
employee is discharged or demoted for medical reasons, the Union may
challenge the decision of the Company physician. The applicant or employee
shall then be re-examined by the Seafarers' physician. In the event that the
two physicians do not agree, a third physician shall re-examine, and his
opinion shall be final and binding.
SECTION 6. EOUAL OPPORTUNITY
During the term of this Agreement neither party shall discriminate
against employee or applicant for employment because of race, color, sex,
age, religion, national origin, handicap, veterans' status or Union
membership. This nondiscriminatory policy shall include, but not be limited
to the following: employment, promotion, upgrading, transfer layoff,
demotion, termination, rates of pay, forms of compensation, recruitment or
recruitment advertising and selection for training.
<PAGE>
SECTION 7. INDEMNIFICATION
The Union shall protect and indemnify the Company in any cause of
action based on improper application by the Union of the employment
provisions of Article I of this Agreement. The Company shall protect and
indemnify the Union in any cause of action based on improper application by
the Company of the employment provisions of Article I of this Agreement.
SECTION 8. SPECIAL WORKING CONDITIONS
The parties agree that working conditions established in the ports
of Philadelphia and Baltimore will be covered under Appendices "C" and "D"'
respectively.
SECTION 9. TOTALITY OF AGREEMENT
The parties acknowledge that during negotiations which resulted in
this Agreement each had the unlimited opportunity to make demands and
proposals with respect to any subject matter not removed by law from the area
of collective bargaining and that the understanding and agreements arrived at
by the parties after the exercise of that right and opportunity are set forth
herein. The employer shall not be obligated to continue any benefit or
employee practice which it has given or engaged in prior to the execution of
this agreement unless specifically set forth in this Agreement.
<PAGE>
ARTICLE II
GRIEVANCE AND ARBITRATION PROCEDURE
In the event that any controversy or dispute arises concerning the
interpretation or application of, or compliance with the provisions of this
Agreement, the Employer and the Union shall make every reasonable effort the
settle the dispute informally within seven (7) business days of being
notified of the existence of the complaint. A party shall have five (5)
business days after learning of the dispute to initiate the seven (7) day
period of informal discussions. All disputes must be submitted to the Union
by the affected employee within five (5) business days from the latter of the
date the employee leaves the vessel or the day in which the employee has a
reasonable opportunity to learn of the existence of the dispute.
In the event the dispute remains unsettled after the seven (7) day
period, the complainant may file a formal written grievance. The grievance
must be presented to the party against whom the complaint has been filed
within seventy-two (72) hours of the expiration of the seven (7) day period.
The party against whom the complaint has been filed shall have seventy-two
(72) hours to provide its answer to the grievance. if no answer is filed
within the stated time it will be treated as a denial of the grievance.
If the parties are unable to settle the dispute within thirty (30)
days after the answer, the grieving party may invoke arbitration by notifying
the other party in writing of it's desire to submit the matter to binding
arbitration. The party invoking arbitration shall simultaneously file a copy
of the notice with the American Arbitration Association. All matters
pertaining to the arbitration hearing and the selection of an arbitrator will
be subject to the Rules of the American Arbitration Association. Cost
incurred by the arbitrator shall be borne by the party ruled against. All
time limits imposed by this Article can be extended by mutual agreement.
It is understood that the sole function of the arbitrator is to
interpret the express provisions of this Agreement and to apply them to the
facts of the grievance. The arbitrator shall have no power to change, amend.
modify, add to, subtract from, or otherwise alter this Agreement.
<PAGE>
ARTICLE III
DUES CHECK-OFF AND INITATION FEES
The Union, an unincorporated association consisting of employees of
the Company and other employers, and the Company, to facilitate and implement
the desire of employees of the Company to maintain their Union, and to assist
such employees to comply with their monetary obligations to their Union,
agree to establish and maintain a voluntary check-off procedure for. the
employees covered by this Agreement. The Union and the Company further
acknowledge that such check-off hereafter fully set forth, is in accordance
with the authority and direction of exclusive federal law and decisions to
- -the NLRB regulating labor management relations such as the relationship
which is the subject of this Agreement between the parties.
In accordance with the provisions of Section 302 (c) (4) of the
Federal Labor Management Relations Act a amended, the Company agrees that
upon receipt of a voluntary written authorization executed by employees
covered by this Agreement, it will deduct the employees' regular initiation
fees and regular dues from employees' compensation, including payments for or
made during time off periods, if any, in the amounts and at the time
hereafter set forth in the written authorization and timely remit such
amounts to the Union. The Company agrees to hold all sums deducted in trust
for the Union. The authorization for the foregoing shall be the following
form signed and dated by the employee.
CHECK-OFF AUTHORIZATION
Seafarers International Union of North America.
Atlantic, Gulf, Lakes and Inland Waters District,
AFL-CIO
The undersigned employee, a member of the Seafarers International
Union of North America, Atlantic, Gulf, Lakes and Inland Waters District, an
unincorporated association, or desiring to become a member of the above
Union. hereby directs you, my employer, effective from this date, to deduct
from my compensation to be paid to me by you, including payments for or made
during time-off periods, if any, a sum equal to the regular initiation fees
and regular membership dues of such Union. Such sum may be deducted in
installment payments, as may be directed by the Union. The moneys so
deducted shall be remitted by you to the Union monthly within ten (10) days
after the end of each month. All moneys deducted by you, p t to this
Authorization, shall be held by you in trust. Written notification by the
Union to you of the amount of such regular initiation fees and membership
dues and/or the amounts owed by the undersigned for the same shall be
conclusive authority to you for such deductions.
I submit this Authorization and assignment with the understanding
that it will be effective irrevocably for a period of one year from this
date, or up to the termination date of the current Collective Bargaining
Agreement (if any), between your Company and the above Union, whichever
occurs sooner.
This Authorization and assignment shall continue in full force and
effect for yearly periods beyond the irrevocable period set forth above, and
each subsequent yearly period shall be similarly irrevocable unless revoked
by me within fifteen (15) days after any irrevocable period. Such revocation
shall be effected by individual written notice by registered mail or
certified mail to both you, as the employer, and the Union, within such
fifteen (15) day period.
<PAGE>
This Authorization and assignment is made and executed in
accordance with the authority and directions of Section 302(c)(4) of the
Labor-Management Relations Act, as Amended, and applicable law.
NAME: DATE OF HERE:
-------------------------- --------------------
ADDRESS: COMPANY:
------------------------ ------------------------
SOC. SEC.#: BOOK #:
--------------------- --------------------------
City State Zip
---------------------- ------------------------------
SIGNATURE: DATE:
---------------------- ----------------------------
<PAGE>
ARTICLE TV
GENERAL RULES
SECTION 1. NO STRIKES OR LOCKOUTS
There shall be no strike, lockout or stoppage of work of any kind
while the provisions of this Agreement are in effect.
SECTION 2. PICKET LINES AND INDUSTRLAL DISPUTES
No employee covered by this Agreement shall be compelled to work
with strikebreakers or cross any picket lines approved by the Union where to
do so would involve injury or threat to this person or would involve such
employee's breach of his obligations as a Union member or where to do so
would violate such employee's moral, ethical, and trade union beliefs.
Further, an employee's refusal to do any of the aforesaid acts or an
employee's exercise of the rights and immunities described in the first
proviso to Section 8(b)(4) of the National Labor Relations Act, 1947, as
amended, shall not constitute a breach of this Agreement and shall not be
cause for the discipline or discharge. The Union agrees to notify the
Company whenever any of its members notify them that they will exercise any
rights under this Section or under law and agrees that the Company will be
given an opportunity to deliver or arrange for the delivery of anything in
its physical possession or pick up or arrange to receive any specific thing
that its services are already ordered for or received up to midnight of the
date of the notification.
SECTION 3. SUBSTITUTE PROVISIONS - CONFORMITY TO LAW SAVINGS CLAUSE
A. If any provision or the enforcement or performance of any
provision of this Agreement is or shall at any time be contrary to law, then
such provision shall be applicable or enforced or performed, except to the
extent permitted by law. If at any time thereafter such provision or its
enforcement or performance shall no longer conflict with the law, then it
shall be deemed restored in full force and effect as if it had never been in
conflict with the law.
B. If any such provision of this Agreement or the application of
such provision to any person or circumstance shall be held invalid, the
remainder of this Agreement, or the application of such provision to other
persons or circumstances, shall not be affected thereby.
C. If any provision of this Agreement is invalidated or the
enforcement of any provision is enjoined by a court of competent
jurisdiction, the parties shall meet for the purposes of agreeing upon a
substitute provision. If they are unable to agree, the matter shall
constitute a complaint, dispute, or grievance and shall be referred to
arbitration pursuant to the terms and provisions of this Agreement. The
arbitrators are given the express power to draft a substitute provision in
the light of the relationships existing between the parties, and such
substitute provision shall be deemed incorporated in this Agreement in lieu
of such invalidated provision.
SECTION 4. SEAFARERS HARRY LUNDEBERG SCHOOL OF SEAMANSHIIP
A. The Union and the Company do hereby mutually agree that they
shall encourage all employees to upgrade their skills through attendance
at the Harry Lundeberg School. Any employee having at least six (6)
<PAGE>
months' service with the Company desiring to attend the Harry Lundeberg
School shall be given a leave of absence and the Company shall pay round-trip
transportation to and from the School upon satisfactory completion of the
course of training.
B. The Company agrees to reimburse up to four (4) employees, a
sum not to exceed twenty five hundred dollars ($2500.00) each, in loss wages,
upon satisfactory completion of upgrading courses. In order to receive
reimbursement, such employee (s) must remain available for employment with
the company for a period of one year from the date of completion.
SECTION 5. HOLIDAY, TRANSPORTATION AND LIVING AND WORKING CONDITIONS
Holidays, transportation, and additional conditions of employment
aboard Company vessels shall be set forth in the Appendixes to this
Agreement, which are incorporated into and made a part of this Agreement.
SECTION 6. WAGES AND MANNING SCALES
Wages, manning scales and special conditions, if any, that apply to
the Company shall be set forth in Appendices "B", "C", "I-C", "D" and "I-D"
of this Agreement, which is incorporated and made a part of this Agreement as
applicable to the specific Company signatory to Appendices "B", "C", "I-C",
"D" and "I-D".
SECTION 7. EXCLUSIVENESS OF CONTRACT
This Agreement constitutes the sole and exclusive agreement between
the parties hereto, and neither any representative of the Company or any
representative of the Union shall have any authority to construe, modify, or
make any changes in the terms and conditions hereof. Any change or
modification of the language of the Agreement and the terms and conditions
hereof shall be the subject of an Addendum executed by both the duly
authorized representatives of the Union and of the Company, providing that
nothing herein contained shall be construed as limiting the right of any
arbitrator under the arbitration provisions hereof to interpret the Agreement.
SECTION 8. ANNUAL PHYSICAL
The Company may require an annual physical at the employer's
expense, and all permanent employees shall be required to submit to it.
SECTION 9. UNION REPRESENTATION ONBOARD VESSELS
Absent an emergency, the Union shall give advance notice and shall
execute a release prior to boarding the vessel.
<PAGE>
APPENDIX A
SECTION 1. SEAFARERS WELFARE PLAN
The Company, commencing with the effective date indicated below,
shall pay to the Seafarers Welfare Plan a jointly administered
Labor-Management Trust Fund and/or its successors, a sum equal to twenty-six
dollars ($26.00) per man per day worked by the employees covered by the
Collective Bargaining Agreement or any supplements or addenda thereto between
the Union and said Company. Payment shall be made monthly and shall be
accompanied by reports in such form as the trustees of the Plan may
determine. Such payments shall be used to provide welfare and similar
benefits for eligible employees, their families and dependents, as well as
for the administration of the Plan and for any other purpose which the
Trustees may determine from time to time, in accordance with the provisions
of the Trust Agreement, as amended. This provision shall become effective
May 1, 1996.
By execution of this agreement, the Company becomes a party and
subscriber to the Trust Agreement establishing the aforesaid Seafarers
Welfare Plan, as amended, and acknowledges receipt of a copy of such
Agreement, as amended.
NATIIONAL HEALTH CARE PLAN
If a National Health Care Plan is enacted and implemented during
the term of this Agreement then the parties agree to meet and discuss its
impact on the costs of providing medical benefits by Employers and the
Seafarers' Welfare Plan.
SECTION 2. SEAFARERS PENSION PLAN
The Company, commencing with the effective date indicated below,
shall pay to the Seafarers Pension Plan a jointly administered
Labor-Management Trust Fund and/or its successors, a sum equal to nine
dollars ($9.00) per man per day worked by the employees covered by the
Collective Bargaining Agreement or any supplements or addenda thereto between
the Union and said Company. Payment shall be made monthly and shall be
accompanied by reports in such form as the Trustees of the Plan may
determine. Such payments shall be used to provide pension benefits for
eligible employees, as well as for the administration of the Plan and for any
other purpose which the Trustees may determine from time to time, in
accordance with the provisions of the Trust Agreement, as amended. This
provision shall become effective May 1, 1996.
The above rate represents one and one third (1/3) days
contributions.
Each eligible employee shall receive one and one-third (1/3) days
of employment credit for each day worked. (i.e.): if any employees work one
(1) or more days he (and other employees) shall receive one and one third
(1/3) days credit towards his pension eligibility time.
By execution of this agreement, the Company becomes a party and
subscriber to the Trust Agreement establishing the aforesaid Seafarers
Pension Plan as amended, and acknowledges receipt of a copy of such
Agreement, as amended.
<PAGE>
SECTION 3. SEAFARERS HARRY LUNDEBERG SCHOOL OF SEAMANSHIP
The Company, commencing with the effective date indicated below,
shall pay to the Seafarers Harry Lundeberg School of Seamanship, a jointly
administered Labor Management Trust Fund and/or its successors, a sum equal
to seventy-five cents ($.75) per man per day worked by the employees covered
by the Collective Bargaining Agreement or any supplements or addenda thereto
between the Union and said Company. Payment shall be made monthly and shall
be accompanied by reports in such form as the Trustees of the Plan may
determine. Such payments shall be used to provide training programs, as well
as for the administration of the Plan and for any other purpose, which the
Trustees may determine from time to time, in accordance with the provisions
of the Trust Agreement, as amended effective November 21, 1993.
By execution of this contract, the Company becomes a party and
subscriber to the Trust Agreement establishing the aforesaid Seafarers Harry
Lundeberg School of Seamanship, as amended, and acknowledges receipt of a
copy of such Agreement, as amended.
SECTION 4. TRANSPORTATION INSTITUTE
The Company, commencing with the effective date indicated below,
shall pay to the Transportation Institute, a Management-Trust Fund, a sum
equal to seventy-five cents ($.75) per man per day worked by the employees
covered by the Collective Bargaining Agreement or any supplements or addenda
thereto between the Union and said Company. Payment shall be made monthly
and shall be accompanied by reports in such form as the Trustees of the Plan
may determine. This Trust is established to research issues and problems
affecting the American maritime industry; to publish the results thereof
together with appropriate recommendations, and to engage in all other similar
and comparable activities which the Trustees may determine from time to time,
in accordance with the provisions of the Trust Agreement, as amended
effective November 21, 1993.
By execution of this contract, the Company becomes a party and
subscriber to the Trust Agreement establishing the aforesaid Transportation
Institute, and acknowledges receipt of a copy of such Trust Agreement.
SECTION 5. SEAFARERS JOINT EMPLOYMENT FUND
The Company, commencing with the effective date indicated below,
shall pay to the Seafarers Hiring Hall Trust Fund, a jointly administered
Labor-Management Trust Fund and/or its successors, a sum equal to
seventy-five cents ($.75) per man per day worked by the employees covered by
the Collective Bargaining Agreement or any supplements or addenda thereto
between the Union and the Company. Payment shall be made monthly and shall
be accompanied by reports in such form as the Trustees of the Plan may
determine. Such payments shall be used to provide benefits in accordance
with the provisions of the Trust Agreement establishing the said Fund
effective November 21, 1993.
By execution of this contract, the Company becomes a party and
subscriber to the Trust Agreement establishing the aforesaid Seafarers Hiring
Hall Trust Fund, and acknowledges receipt of a copy of said Agreement.
<PAGE>
SECTION 6. ARBITRATION
In order to avoid the necessity of litigation procedures the
parties agree that any question regarding the payment of moneys due to any of
the Seafarers Plans may be submitted to arbitration in the Court of Prince
George's County, State of Maryland. Either the Union or any Company which
has a question concerning the payment of contributions, interest, or other
moneys due to the Plans shall set forth the question or question in a written
Demand to be served upon the opposing party by Certified Mail, Return Receipt
Requested. Within five days after receipt of the Demand for Arbitration, the
parties shall cause a copy of such Demand to be served upon any of the
following arbitrators: John Sand, Esq. 80 New Scotland Avenue, Albany, New
York 12208; Thomas Giblin, Esq., 16 Commerce Drive, Cranford, New Jersey
07016; or Robert Bogucki, Esq., 26 Court Street, Brooklyn, New York 11242,
who shall arrange for a Hearing. The arbitrator shall notify the parties in
writing of the date, time and place of the Hearing at last three (3) days
prior to the scheduled date. In the event that the permanent Arbitrator is
unable to hear and determine the question within a reasonable time after his
receipt of the demand, he may designate another Arbitrator to hear and
determine the question in his place and stead. In the event that the parties
are in agreement as to all of the facts bearing upon the question, they may
submit the issue to the Arbitrator by a written stipulation of facts and they
may agree to waive a formal hearing. Any waiver of hearing shall be executed
in writing by the parties. The failure of any party to attend an Arbitration
hearing as scheduled by the Arbitrator shall not delay said arbitration and
the Arbitration is authorized to proceed to take evidence and to issue an
award as though such party were present. The Arbitrator shall not have
authority to alter in any way the terms and conditions of the Agreement or
the various applicable Agreements and Declarations of Trust. The award of the
Arbitrator shall e in writing and shall be sworn to and may be issued with or
without an opinion. The award shall be issued within seven (7) days of the
hearing or submission of stipulated facts, if the latter procedure is agreed
upon and shall be final, binding, and enforceable by any court of competent
jurisdiction. Any extension of time for the rendering of the Arbitrator's
award must be mutually agreed upon by the parties. Expenses and fees of the
Arbitrator shall be shared equally by the parties.
This Appendix A shall be incorporated in and made a part of the
Master Collective Bargaining Agreement between the Union and the Company.
Contributions and reports made pursuant to this Memorandum of
Understanding shall be made monthly on the tenth (10th) day thereof covering
the preceding month's working force. Notwithstanding anything herein to the
contrary, the Company further agree to provide the following information on
each employee:
a. Name of Employee
b. Employee's Rating
C. Employee's Social Security Number
d. Employee's on and off dates during the pay period
e. Employee's total number of days worked during the pay period.
Payroll Data and other pertinent records may be examined by the
Plans or their representatives on demand at any reasonable hour provided at
least five (5) days notice of said examination is given to the Company.
<PAGE>
APPENDIX B
SECTION 1. BASE DAILY WAGE RATES
Throughout the effective period of this Agreement, crewmembers
shall be paid the following wage scale.
<TABLE>
<CAPTION>
Rating Effective Effective Effective Effective Effective
5/1/96 5/1/97 5/1/98 5/1/99 5/1/2000
<S> <C> <C> <C> <C> <C>
Mate $180.28 $185.69 $191.26 $197.95 $204.88
Engineer Utility $185.74 $191.31 $197.05 $203.95 $211.09
Asst.Eng./Util $158.43 $163.18 $168.08 $173.96 $180.05
Tankerman $120.19 $123.80 $127.51 $131.97 $136.59
Deckhand $92.40 $97.40 $102.40 $105.47 $108.64
</TABLE>
Inexperienced deckhands shall be paid $80.00 per day for the first
30 days of work. However, if the union certifies that he has successfully
completed a basic training course in seamanship at the Seafarers Harry
Lundeberg School of Seamanship, or has six months previous experience as a
deckhand aboard tugboats, he will be paid at the rate then in effect.
B. When the Company requires a deckhand to sail as Able Bodied
Seaman, said employee shall receive an additional $10.00 per day.
SECTION 2. LEAVE OF ABSENCE
It is agreed that the Company with the agreement of the Union may
grant leave of absence for illness or accident, whether occupational or
non-occupational death in the immediate family, attendance at schools,
preparation for and sitting for license, and position with the Union without
loss of seniority or position on the roster. Any such leave of absence shall
be in writing and may be granted for a period of three (3) months and is
subject to renewal or extension by agreement in writing between the Company
and the Union. Leave of absence for position with the Union shall be
co-extensive with the duration of his Union position, provided that the
seniority rights of any person on leave of absence for a position in the
Union shall terminate within thirty (30) days should the Union cease to be
the collective bargaining agent for the Company covered herein.
SECTION 3. LOSS OF PERSONAL EFFECTS
If the personal effects of an employee "through no fault of his
own" become totally lost or partially damaged because of fire on, or sinking
of, a vessel, he shall be paid his actual loss by the Company up to but not
to exceed the sum of Two Hundred Fifty Dollars ($250.00) in full compensation
for such loss.
<PAGE>
SECTION 4. WHEELHOUSE MANNING
Unlicensed personnel shall not be permitted to man the wheelhouse
when neither the Master nor the Mate is in the wheelhouse.
SECTION 5. CARE OF LIVING QUARTERS
The Company shall be required to keep the living quarters heated
and free from vermin at all times, and living quarters shall be fumigated
when required. The Union agrees that its members shall cooperate at all
times in keeping living quarters clean and sanitary. The quarters of all
boars shall be adequately ventilated and insulated against heat and cold.
SECTION 6. MANNING SCALES
The manning scales shall be set by the Company based on the type of
work being performed, but in no event shall any tug have less than a four-man
crew at any time. However, should the union be unable to provide a fall
complement, the Company may operate that vessel with three (3) crewmembers
for up to twelve (12) hours.
The parties agree to discuss manning levels on newly constructed or
converted equipment.
SECTION 7. SAILING ORDERS
Orders for employees returning from scheduled days off shall be
given between 6:00 p.m. and 8:00 p.m. on the day preceding their scheduled
return to work.
SECTION 8. DEATH IN THE IMMEDIATE FAMILY
In the event of death in the immediate family, an employee covered
by this Agreement shall receive two days off with pay. Death in the
immediate family shall be limited to the death of a father, mother, spouse,
child, brother, or sister. No payment will be made under this section if an
employee chooses to work on the two bereavement days.
SECTION 9. SUBSTISTANCE
There shall be no cooks on any vessels and, in lieu of subsistence,
the Company shall pay ten dollars ($10.00) per man per day, where applicable.
The subsistence money shall be paid along with regular wages.
Subsistence shall be increased according to the following schedule:
5/1/98 5/1/99 5/1/00
$.50 $.50 $.50
<PAGE>
SECTION 10. PAY PERIOD
The pay period shall be on a biweekly basis. The pay period shall
end on Sunday and wages and other moneys due for that period shall be paid
between 0900 and 1200 hours the following Friday. Should a holiday occur on
Friday, payment win be made between 1300 - 1700 hours on the preceding
Thursday. No employee shall be paid except on the regular payday following
the completion of any services rendered, and no employee shall be permitted
to draw advancements from the Company on account of his pay.
SECTION 11. PERMISSION TO LEAVE
All crewmembers must remain aboard the tug or company property
unless permission to leave is granted by the Master.
SECTION I2. NON-CREWMEMBERS ONBOARD TUGS
No person other than crewmembers shall be permitted aboard tugs at
any time without the permission of the Company's office.
SECTION 13. MAINTENANCE AND CURE
When an employee is entitled to maintenance and cure under maritime
law, he shall be paid maintenance at the rate of seventeen dollars and fifty
cents ($I 7.50) per day for each day or part thereof. The payments due
hereunder shall be paid to the employee weekly. This payment shall be made
regardless of whether that employee has or has not retained an attorney,
filed a claim for damages, or taken any other steps to that end and
irrespective of any insurance arrangements in effect between the Company and
the insurer.
SECTION 14. VESSEL SALES AND TRANSFERS
Prior to any vessel contracted to the Seafarers International Union
of North America, Atlantic, Gulf, Lakes and Inland Waters District, AFL-CIO,
being disposed of in any fashion, including but not limited to sale, scrap,
transfer, bareboat, charters, etc., ninety (90) days notification in writing
must be sent to Union Headquarters, 5201 Auth Way, Camp Springs, Maryland
20746.
The Union recognizes that the Company may not in all cases be able
to provide the Union with ninety (90) days notice as provided above. However,
when ninety (90) days notice is not given, the Company shall call the Union's
headquarters and confirm in writing as far in advance as possible and in no
event any later than the date of sale, scrap, transfer, bareboat charter, etc.
In addition, the Company must give the Union the name and address
and telephone number of the purchaser and will attempt to assist the Union in
meeting with the buyer.
<PAGE>
APPENDIX C
PHILADELPHIA
The parties agree that working conditions established in the port
of Philadelphia shall be covered under this Appendix and this Appendix shall
be incorporated into and made a part of this Agreement.
SECTION 1. COMPANY SENIORITY, PROMOTIONS AND TRANSFERS
A. The date of entering the service of the Company shall govern
seniority among the employees of that Company. The Company shall prepare the
seniority list immediately following the execution of this Agreement, which
list shall be posted in the office of the Company with a copy delivered to
the Union. Within one (1) month following delivery to the Union, the Union
may take objection to this list. In the absence of any such objection by the
Union, the fist shall be the official list of seniority standing and binding
upon the parties. No employee shall lose any seniority rights during service
in the Armed Forces of the United States or in the Merchant Marine of the
United States during time of national emergency or by a suspension of license
by the appropriate authorities. Layoffs and/or tie-ups shall be in the
inverse order of seniority, provided that the employee with the greater
seniority is qualified to do the available work. Employees who are laid off
in the inverse order of seniority shall continue for a period of twelve (12)
months to accumulate seniority with the Company. Employees having such
seniority shall be recalled to work in the inverse order of layoff provided
they are qualified to perform the available work.
The Company shall, in writing, notify an employee that a job is
available and shall mail, by Registered Mail, Return Receipt Requested, a
notice to the employee's last known address in the Company's record. If the
employee does not report for work within one (1) week from the date of
notice, his re-employment rights shall cease. Company shall be under no
obligation to recall employees who have been laid off for more than twelve
(12) months. Periods during which the Union is engaged in a legal strike
shall not be included in the computation of such twelve (12) month period.
In the event that an employee is laid off for a period of twelve (12) months
or less, or is on a bona fide leave of absence, which must be for an agreed,
definite period, his seniority shall continue uninterrupted through such
period.
A. A deckhand, steadily employed by the Company, who procures a
license to work as mate in accordance with the requirements of the Company,
as determined by the Company, may place his name on the steady job list of
the Union, at which time he must elect one of the two (2) following
alternatives:
(1) He shall give up his steady job as deckhand and work relief
as mate until he reaches the position on the steady job fist to apply for the
next steady job available with any company (subject at all times to said
company's right of rejection) or,
(2) He shall retain his steady job as deckhand, but when he
reaches the position on the steady job list to take a steady job, he shall be
entitled to the next available job only with the company by whom he is
steadily employed (subject at all times to said company's right of rejection)
and shall have no right to a steady job with any other company.
(All persons having a license required by the Company prior to
October 1, 1975 shall be governed by the rules of company seniority in
existence prior to October 1, 1975, which means, among other things, that
such
<PAGE>
persons shall have first right to any steady job with their company prior to
non-employees on the steady job list regardless of such person's position on
the steady job list, subject at all times to Company's right of rejection.)
The Company agrees to make its best efforts to utilize employees of
the Company, prior to chartering equipment from other sources.
SECTION 2. MOST FAVORED NATIONAL CAUSE
In the event that, during the life of this Agreement or any
extension or renewal thereof, any contract is entered into by the Union or an
affiliate with any employer in this ship-docking industry in the Port of
Philadelphia and the Port of Baltimore wherein the scale of wages is less
than the wages specified herein, or the hours or working conditions or other
terms are more favorable for such other employer than the terms of this
Agreement, then the scale of wages, hours, and working conditions and any
other terms contained herein shall, at the option of the Company, become
immediately and automatically modified to conform to such other contract in
whole or in part, and in the event that any contract with an employer entered
into by the Union or an affiliate is altered or modified, then the Company
may elect to modify this Agreement, in whole or in part, in accordance
therewith, providing that this paragraph shall have no application whatsoever
to contracts entered into between the Union and an employer who is engaged
exclusively in the oil towing industry.
SECTION 3. SAFETY AND COMFORT
Union and Company agree to cooperate at all times in protecting the
safety of employees, and to form a Safety Committee with an equal number of
representatives on each side to discuss and resolve grievances involving
safety. Company shall supply employees with clean blankets and soap. Clean
blankets shall be furnished once a tour, provided that the Company shall have
no obligation in this connection unless soiled linens previously issues are
returned. Crewmembers shall not be allowed to transfer from tug to tug in
midstream south of the mouth of the Schuylkill River. North of the mouth of
the Schuylkill River, transfer of crewmembers from tug to tug midstream shall
be at the discretion of the Master. Each tug on an out-of-harbor operation
shall be equipped with an inflatable life rate and suitable grab rails for
deck duty. Out-of-harbor tugs, when engaged in towing barges carrying
poisonous volatile chemicals, shall not carry less than one (1) gas mask for
each crewmember. No tug not so equipped shall be sent out of harbor.
SECTION 4. CUSTOMARY DUTIES
Crewmembers of all departments shall perform the necessary and
customary duties of that department. Each crew member shall additionally
assist in duties not customarily associated with his particular rating when
so directed by the Company or a designated representative of the Company or
by the Master as may be required in order to fulfill the assigned duties and
tasks of the vessel aboard which such crew member is serving.
SECTION 5. ROTATION
During the period of this agreement, such rotation shall be based
on a two (2) days on for one (1) day off concept.
<PAGE>
SECTION 6. SAILING ORDERS
Orders for employees returning from scheduled days off shall be
given between 6:00 p.m. and 8:00 p.m. on the day preceding their scheduled
return to work.
SECTION 7. HOLIDAYS
The following days, if worked, shall be designated as holidays, and
as such, all employees who work on these days shall receive as a bonus an
amount equal to a day's wages in addition to the regular daily wage rate.
The Employer shall post a fist of dates each January for all holidays with a
copy to the Union.
1. New Year's Day
2. Lincoln's Birthday
3. Washington's Birthday
4. Good Friday
5. Fourth of July
6. Labor Day
7. Columbus Day
8. Christmas Day
SECTION 8. MAINTENANCE WORK
Maintenance work such as painting, chipping or scrubbing shall be
done when the captain deems it safe and practical to do so. The cleaning of
the pilot house, galley and sleeping quarters shall be done daily. Employees
shall not be required to make fenders and bow mats or large stem fenders.
Repairs shall not be considered to be maintenance work.
SECTION 9. PLANNED REPAIRS
If the Company requires crewmembers to work on vessels under
repairs, the Company shall reimburse the crew members for their reasonable
and authorized travel and lodging expenses.
SECTION 10. TIME FOR ORDERING OUT CREWS
The Company must order crews out on the hour or on the half-hour.
The workday begins at 0001 hours.
<PAGE>
APPENDIX I-C
PHILADELPHIA
MAINTENANCE MEN
SECTION 1. NOTICE OF LAYOFF
a. The Company will give every employee forty (40) working hours
(5 days) notice of its intention to lay off said employee, and such notice
shall be given to the employee at the end of the regular shift only.
Saturdays and Sundays shall not be counted as part of the forty (40) hours (5
days) notice.
b. The Company may, in lieu of the notice aforesaid, pay the
employee an amount equal to forty (40) hours pay.
c. The above lay-off notice shall be considered waived for the
week where an employee refuses to work overtime.
SECTION 2. PIECE WORK
No piecework shall be instituted for the life of this Agreement.
SECTION 3. WORK WEEK AND OVERTIME RATES
a. The regular hours of work shall be eight (8) hours per day
and forty(40) hours per week, from Monday to Friday inclusive. AB work
performed in excess of forty (40) hours per week or twelve hours in any one
day shall be compensated at overtime rates as set forth in this Appendix.
Each employee shall be notified at the time of his employment (or the date of
execution of this Agreement, whichever is later) as to the starting time of
his regular eight (8) hour shift.
b. For work performed on Saturdays, Sundays or holidays,
employees shall be paid at time and one-half (1-1/2) the straight time rate.
c. The holidays in Appendix C, Section 7, shall be designated as
holidays for all maintenance employees.
d. When a holiday falls on a Saturday or Sunday it shall be
celebrated on the following Monday. Regular employees, who do not work on a
holiday, shall be paid eight hours, at the straight time hourly rate.
e. An employee required to go away from his home pier shall be
paid traveling time at his applicable straight time rate for all such hours
worked, including regular meals. His time, at the straight time rate, shall
be continuous until he arrives back at the dock at which he is employed.
<PAGE>
f. When overtime work is required under any provision of this
Appexdix, there shall be a minimum payment of one (1) hour overtime with half
(1/2) hour increments therafter.
Section 4. VACATION
Each employee covered by this Agreement shall be eligible for
vacation benefits as follows:
a. If hired between January and March 31, the employee will,
after completing six (6) months of service, be eligible for a one (1) week
vacation benefit.
1. In the following calendar year and up to five (5)
years of service, the benefit is two (2) weeks.
2. After six (6) years of service, the benefit three
(3) weeks.
b. All vacations must be used in the year earned. There shall
be no carrying over of time permitted. In addition, during the period of
time from June 1 through September 30 of any given calendar year, the maximum
number of consecutive vacation weeks, which may be used, is three (3).
c. If in any year an employee shall be entitled to a vacation
and he shall not be able to take such vacation at the time assigned to him
because of illness or accident, then the Company shall pay him an allowance
in lieu of such vacation equal to the amount of vacation pay which he would
have been titled to receive for the period of such vacation.
d. If an employee who is entitled to a vacation in any year
shall die before taking such vacation, the amount of said vacation pay shall
be paid to his next of kin or designated beneficiary.
e. Any employee separating from the Company for any reason
whatsoever shall be paid the vacation pay accumulated up to the date of his
separation.
SECTION 5. WAGES
The straight time hourly rate of pay for employees covered by this
Agreement shall be as follows:
<TABLE>
<CAPTION>
Rating Effective Effective Effective Effective Effective
5/1/96 5/1/97 5/1/98 5/1/99 5/1/2000
<S> <C> <C> <C> <C> <C>
Machinist $13.54 $13.95 $14.36 $14.87 $15.39
</TABLE>
<PAGE>
APPENDIX D
BALTIMORE
The parties agree that working conditions established in the port
of Baltimore shall be covered under this Appendix and this Appendix shall be
incorporated into and made a part of this Agreement.
SECTION 1. SENIORITY, LAYOFFS & TIE-UPS, PROMOTIONS AND TRANSFERS
SENIORITY
The employee's length of service for the purpose of determining
seniority rights shall be deemed to have commended on the first day of his
last continuous permanent employment with the Employer. Seniority shall be
maintained in the separate classification of personnel.
No person shall lose any seniority right during service in the Armed
Forces of the United States, during the time of national emergency,
provided such person is entitled to reinstatement under applicable laws of
the United States.
The Employer shall prepare seniority lists immediately following
execution of this Agreement, which lists shall be available to the
employees involved and a copy delivered to the Union. Within one (1) month
following delivery to the Union, the Union may take exception to the lists.
In the absence of any such objection by the Union, the list shall be the
official lists of seniority standing and be binding upon the parties.
Unlicensed tugboat employees transferred into the shop shall
accumulate seniority with respect to both the shop and the Employer's
tugboats. Tugboat engineers transferred into the shop shall accumulate
seniority with respect to the Employer's tugboats only
LAYOFFS & TIE-UPS
Long-term lay-off for lack of work shall be in inverse order of
seniority in the separate classifications, provided that the employees
claiming seniority shall be capable and competent to perform the available
work. Employees who are laid off for lack of work shall be recalled to
work in the inverse order of layoff in the separate classifications,
provided that the employees claiming seniority shall be capable and
competent to perform the available work. Where such layoff or recall is
not made according to seniority, the Employer must immediately give his
reasons in writing to the employees involved, with a copy to the Union,
with the Employer's determination being subject to the grievance and
arbitration procedure set forth herein. The Employer shall notify such
employee by telephone, telegram personal notice, registered mail or in any
other reasonable manner when a job is available. If the employee does not
return to work within five (5) days of receiving notice of return to work
or in any within one (1) week of the date of mailing such notice by
registered mail, return receipt requested, to the employee's last known
address on the Employer's records, the employee shall lose all seniority
rights, and the Employer shall not be obligated to re-employ him.
For employees that have taken employment on vessels, an additional
twenty-five (25) days will be allowed to return to work but the time
allowed will not exceed a total of thirty (30) days.
<PAGE>
Employees who are laid off in the inverse order of seniority and who
are recalled back to a permanent position within six (6) months of the date
of their layoff shall not lose their seniority. After six (6) months
layoff, such employees shall lose all seniority rights and the Employer
shall not be obligated to recall such employee to work, except as provided
below. An employee's scheduled days off shall not be construed as lay-off
because the scheduled days off are compensated for in the daily wages rates
contained in the collective bargaining agreement.
The Company agrees to allow bumping for all "one day tie-ups."
PROMOTIONS AND TRANSFERS
In connection with permanent promotions to a higher classification or
with permanent transfers, if skill and ability are equal, seniority shall
govern.
This section does not affect transfers on a temporary basis. If a
permanent promotion to a higher classification or permanent transfer is not
made according to seniority, the Employer must immediately give his reasons
in writing to the employees involved, with a copy of the Union, with the
Employer's determination being subject to the grievance and arbitration
procedure set forth herein. In the event of an opening, employees shall
have the right to request promotion or transfer said opening, by requesting
the same in writing to the Employer with two (2) weeks of the occurrence of
such opening. Permanent a permanent transfers shall be made at the
beginning of a workweek. During the time before promotion or permanent
transfer is effected, the Company may make temporary assignments.
There shall be a probationary period of the first thrity (30) days
worked within sixty (60) days for employees promoted to a higher
classification. If the employee is unable to perform in this period he has
the right to return to his lower classification with no loss of seniority
and without recourse to the grievance machinery.
SECTION 2. PROBATIONARY PERIOD
All new employees shall be on probation for the first thirty (30)
days worked with the Employer within sixty (60) days. Such new employee may
have his employment terminated by the Employer during this probationary
period without recourse to the grievance and arbitration provisions of this
Agreement. Probationary employees who are retained beyond the probationary
period shall receive seniority in their classification in accordance with
Section I of this Article. A new employee is defined as an individual with a
permanent position in the Company whose name appears on a seniority list.
SECTION 3. DISCIPLINARY PROCEDURE
The Employer may dismiss or discipline an employee for just cause
only.
No disciplinary action against an employee shall be taken without
notice being given to the Union and the affected Shop Steward or Stewards.
The Union win be informed of the reason for the disciplinary action and the
disciplinary action the Employer plans to take. The unavailability of a
Union official or the affected Shop Steward or Stewards shall not prohibit
the Employer from initiating disciplinary action and will not relieve the
Employer from notifying the Union as soon as possible.
<PAGE>
SECTION 4. LEAVE OF ABSENCE
Employees may be granted leaves of absence without pay up to six
(6) months upon the mutual agreement of all parties. Such leave may be
extended by mutual agreement. Employees elected to Union Office will be
granted leaves of absence without pay for the term of their office, if
satisfactory. and competent replacements are provided. Any such employee
shall continue to accrue seniority during such period. Such leave of absence
terminates when the employee ceases to be a Union officer or should the Union
cease to be the bargaining representative of the employees. Any such
employee shall retain his seniority rights, which shall include the seniority
that accrued during such leave of absence, upon returning to the employment
with the Company, provided the employee makes himself available for
employment immediately upon the termination of his leave of absence and
continues to be capable of performing his assigned work. Any employee who is
transferred to a supervisory position with the Employer will be granted a
leave of absence under the same terms and conditions granted to employees
elected to the Union office up to a maximum of three (3) years after the date
of transfer.
SECTION 5. WORK ROTATION
During the period of this agreement the Employees will work a
schedule mutually agreeable between the parties. Effective January 1, 1994,
the work rotation will be 14 days on and 7 days off.
SECTION 6. ORDERING SYSTEM
All employees who are off work due to their job rotation, shall
call at 1800 hours on the day prior to their scheduled return to work to
receive work orders.
<PAGE>
SECTION 7. HOLIDAYS
The following days if worked shall be designated as holidays and as
such, all employees who work on these days, shall receive as a bonus, an
amount equal to a day's wage in addition to the regular daily wage rate:
1. New Year's Day
2. Washington's Birthday
3. Fourth of July
4. Labor Day
5. Thanksgiving Day
6. Memorial Day
7. Christmas Eve
8. Christmas Day
SECTION 8. SAFETY AND COMFORT
Not later than July 30, 1967, every boat of the Company must be
equipped with a Coast Guard approved inflatable or float-off life raft of a
size to accommodate the maximum number of crewmembers, which might be
carried. Every boat, likewise, shall be equipped with Coast Guard approved
life rings and Coast Guard approved life preservers in sufficient numbers to
accommodate the maximum number of crewmembers, which night be carried.
When the Company builds any new tugs, they will be air-conditioned.
The Company may assign an Engineer to go in the Shop with his tug
while his tug is under repairs.
The Company will maintain and furnish adequate first aid equipment to
all boat crews.
SECTION 9. SAFETY AND GRIEVANCE MEETINGS
All elected Union Delegates representing licensed, unlicensed, and
shop personnel of MORAN TOWING OF MARYLAND, Union representatives and Company
representatives shall meet monthly at 10:00 a.m. on the Wednesday following
the first Sunday of each month at a place mutually agreed upon between the
Employer and the Union. A written agenda shall be provided to all members'
two days in advance of the meeting. It will be the function and the purpose
of the meetings to study and make recommendations on any problem involving
safety. In addition, the representative shall have the right to consider
problems relating to the interpretation or enforcement of the contract terms.
It is understood that the establishment and function of the meetings
provided herein shall in no way alter, vary, or modify the right of any
employee, the Union or the Employer, to pursue any matter through the
grievance and arbitration provisions of this contract.
Union Delegates who are not scheduled for work during the Safety
and Grievance Meeting will be paid for their attendance at the meeting at the
rate of twenty-five percent (25%) of their daily pay.
During the time that the Safety and Grievance Meeting is in
session, no boat shall be immobilized because of the absence of any employee,
and to facilitate the mobility of boats during the period, the Company may
sail shorthanded, may transfer personnel from other boats, or may do anything
else necessary to preserve the mobility of the boats.
<PAGE>
SECTION 10. UNION DELEGATES
The Company agrees to recognize Union Delegates designated by the
Union. The duties of the Union Delegate shall be to see that rights and
interests of the employees under this Agreement are protected, including, but
not limited to, assisting employees in filing grievances. There shall be one
Union Delegate per covered classification.
<PAGE>
APPENDIX I-D
BALTIMORE
SHOP AGREEMENT
SECTION 1. HOURS, RATE OF PAY, WORKING CONDITIONS
OVERTIME
Overtime shall be paid at one and one-half (1-1/2) times the basic
rate for work performed over forty (40) hours in the workweek.
SHIFTS
A regular shift shall begin at 8:30 a.m. unless the Employer notifies
the employees differently.
RATES OF PAY
Rates of pay per hour shall be as follows:
<TABLE>
<CAPTION>
5/1/96 5/1/97 5/1/98 5/1/99 5/1/00
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
ELECTRICIAN
Day $13.32 $13.72 $14.13 $14.63 $15.14
Night $14.89 $15.34 $15.80 $16.35 $16.92
MECHANICS
Day $12.42 $12.79 $13.18 $13.64 $14.11
Night $13.81 $14.22 $14.65 $15.16 $15.69
HANDYMAN
Day $11.64 $11.99 $12.35 $12.78 $13.23
Night $12.96 $13.35 $13.75 $14.23 $14.73
HELPERS
Day $11.34 $11.68 $12.03 $12.45 $12.89
Night $12.66 $13.04 $13.43 $13.90 $14.39
</TABLE>
FOUR HOUR CALL-OUT
An employee called back from his home after having completed his
regular shift, in the same calendar day to perform in accordance with past
practices shall receive a guarantee of four (4) hours work or, if work is not
available, four (4) hours pay at one and one-half (1-1 /2) times his straight
time hourly rate.
<PAGE>
CLEAN-UP TIME
Employees shall have ten (10) minutes at the end of their shift to
secure their tools and equipment and to wash up.
VESSEL RATES
If any shopman is employed on a tug as a member of the crew, he shall
be paid at the applicable daily rate as per Appendix B.
SECTION 2. UNIFORMS
The Company shall furnish shop employees with rental work clothes.
SECTION 3. TANK AND BILGE CLEANING
Whenever shop employees are required to clean bilge's, fuel or
ballast tanks or perform work below the engine room floor plates, the Company
will provide to the men engaged ion this work clean overalls, work gloves and
also boots and safety helmets if needed. Adequate cleansing soaps and towels
will be provided. Whenever shop employees are required to do the work
described above, they will be given ten (10) minutes at the finish of this
work to clean up. If the finish of this work immediately precedes the finish
of a shift, the man will be given ten (10) minutes to wash up in addition to
the time prescribed in Section I (e) of this Appendix.
SECTION 4. HOLIDAYS
DESIGNATED HOLIDAYS
Holidays listed in Appendix D above shall be celebrated on the
day as determined by the Employer, in December of each year for the
following calendar year.
PAY
When a Holiday is not worked, an employee covered by this
Agreement who is eligible for Holiday pay as set forth below shall be
paid at the employee's basic straight time daily rate for eight (8)
hours. Employees shall be eligible for Holiday pay if they qualify
under 4 (c) below.
QUALIFICATION
Any employee with Company seniority covered by this Agreement who
works at least five (5) days in the fourteen (14) days,
immediately preceding the Holiday, shall be eligible for Holiday
pay, provided, that the employee who terminates his employment or
is terminated for a just cause prior to a Holiday will not be
eligible for pay for the Holiday.
<PAGE>
PREMIUM
When any employee covered by this Agreement is required to work on any
of the specified holidays, he shall be paid at the rate of one and one-half
(1-1/2) times his/her basic rate.
TERM OF AGREEMENT
This contract shall expire on April 30, 2001.
The parties executed this Agreement hereto; whose duly authorized
representative's signatures appear this 25 day July of 1997.
MORAN TOWING CORPORATION SEAFARERS INTERNATIONAL UNION,
MORAN TOWING OF PENNSYLVANIA, DIVISION OF NORTH AMERICA, ATLANTIC
MORAN TOWING OF MARYLAND, DIVISION GULF, LAKES AND INLAND WATERS
DISTRICT, AFL-CIO
Company Official Signature: Union Officials Signatures:
/S/ Edmond J. Moran, Jr /S/ Augie Tellez
- ----------------------- ----------------
EDMOND J. MORAN, JR AUGIE TELLEZ
PRESIDENT VICE PRESIDENT
/S/ Walter Naef /S/ Joseph Soresi
- --------------- -----------------
WALTER NAEF JOSEPH SORESI
VICE PRESIDENT PORT AGENT
/S/ Paul Swensen /S/ Dennis Metz
- ---------------- ---------------
PAUL SWENSEN DENNIS METZ
VICE PRESIDENT PORT AGENT
<PAGE>
LICENSED AGREEMENT
BETWEEN
AMERICAN MARITIME OFFICERS
AND
MORAN TOWING OF PENNSYLVANIA
DIVISION OF MORAN TOWING CORPORATION
MAY 19 1996 - APRIL 30, 2001
1
<PAGE>
TABLE OF CONTENTS
PAGE
PREAMBLE 1
Section 1 - SCOPE OF AGREEMENT 1
Section 2 - RECOGNITION 2
Section 3 - EMPLOYMENT 2
Section 4 - UNION MEMBERSHIP 3
Section 5 - SENIORITY 3
Section 6 - REJECTION OF EMPLOYEES 4
Section 7 - DIRECTION 5
Section 8 - TIE-UP NOTICE 5
Section 9 - VACANCIES, PROMOTIONS AND TRANSFERS 5
Section 10 - LEAVE OF ABSENCE 6
Section 11 - MOST FAVORED CONTRACT 7
Section 12 - MANNING SCALE 7
Section 13 - CUSTOMARY DUTIES 7
Section 14 - DEATH IN THE IMMEDIATE FAMILY 8
Section 15 - LOSS OF PERSONAL EFFECTS 8
Section 16 - DUES CHECK-OFF 8
Section 17 - HOLIDAYS 10
Section 18 - SAFETY AND SANITARY CONDITIONS 11
Section 19 - QUARTERS 12
Section 20 - GRIEVANCE AND ARBITRATION PROCEDURE 12
Section 21 - RESORT TO INTERNAL APPEALS PROCEDURE OF
AMERICAN MARITIME OFFICERS 13
Section 22 - WAGES AND SUBSISTENCE 14
Section 23 - MINIMUM RATES 14
2
<PAGE>
PAGE
Section 24 - PLANNED REPAIRS 15
Section 25 - TRAVEL AND TRAVEL TIME 15
Section 26 - PLANT PREPARATION AND SECURING 15
Section 27 - MAINTENANCE WORK 15
Section 28 - SAILING ORDERS 16
Section 39 - ROTATION 16
Section 30 - SHORT-HANDED CREW 16
Section 31 - PAYMENT OF WAGES 16
Section 32 - PERMISSION TO LEAVE 16
Section 33 - UNAUTHORIZED PERSONNEL 17
Section 34 - NO DISCRIMINATION 17
Section 35 - NO STRIKES OR LOCKOUTS 17
Section 36 - PICKET LINES AND INDUSTRIAL DISPUTES 17
Section 37 - MAINTENANCE 18
Section 38 - INDEMNIFICATION 18
Section 39 - VESSELS, SALES AND TRANSFERS 18
Section 40 - SENIORITY LISTS 19
Section 41 - AGREEMENT MODIFICATION 19
Section 42 - LEGAL APPLICATIONS 20
Section 43 - NEW EQUIPMENT-MANNING SCALE 20
Section 44 - WITNESS FOR COMPANY 20
Section 45 - ENGINEER/MACHINIST 21
Section 46 - MANNING 23
Section 47 - TOTALITY OF AGREEMENT 23
Section 48 - RTM CENTER FOR ADVANCED MARITIME
OFFICERS TRAINING 23
Section 49 - BENEFITS & CONTRIBUTIONS 24
NOTIFICATION AND SIGNATORY PAGE 25
3
<PAGE>
LICENSED AGREEMENT
BETWEEN
AMERICAN MARITIME OFFICERS
AND
MORAN TOWING OF PENNSYLVANIA
DIVISION OF MORAN TOWING CORPORATION
PREAMBLE
This Agreement, entered into the 24th day of June, 1996, effective as of the
first day of May, 1996, by and between American Maritime Officers (hereinafter
referred to as the "Union") and Moran Towing of Pennsylvania, Division of Moran
Towing Corporation (hereinafter referred to as the "Company and/or Operator"),
shall remain in effect until midnight of the 30th day of April, 2001.
Thereafter, it shall continue in effect from one year, and so on, from one year
to the next, unless either party shall give the other party written notice,
sixty (60) days prior to the expiration of any term of its intention to modify
or terminate this Agreement.
SECTION 1 - SCOPE OF AGREEMENT:
This Agreement applies to all licensed Engineers employed aboard the tugboats
operated by the Company and also one Engineer/Machinist employed ashore.
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SECTION 2 - RECOGNITION:
The Company agrees to recognize the Union as the sole bargaining agent for
all Engineers as defined in Section 1 of this Agreement in the Port of
Philadelphia (hereinafter referred to as "employees"), on boats owned, operated
or chartered on a bareboat basis by the Company, when the crew onboard such
boats are employees of and on the payroll of the Company. This recognition
shall not apply to bare boat charters to other operators, nor to crews of
vessels of subsidiary or affiliated companies.
SECTION 3 - EMPLOYMENT:
The Union agrees to furnish the Company with capable, qualified competent
and physically fit substance free persons when and where they are required to
fill vacancies necessitating the employment of personnel covered hereunder, in
ample time to prevent any delay in the scheduled departure of any vessel covered
by this Agreement. The minimum qualification for hiring as, or promotion to
Engineers, will be the possession of a valid license as Chief Engineer 4,000 HP
or greater. Engineers currently on the seniority list will secure a Chief
Engineer 4,000 HP license or greater, during the term of this agreement as soon
as sufficient sea time is accumulated and recognized by the U. S. Coast Guard.
To assure maximum harmonious relations, and in order to obtain the best
qualified employees with the least risk of a delay in the schedule departure of
any vessel covered by this Agreement, the Company agrees to secure all its
personnel through the hiring halls of the Union. If for any reason, the Union
does not furnish the Company with capable, qualified competent and physically
fit persons, when and where they are required to fill such vacancies, in ample
time to prevent any delay in the scheduled departure of any vessel covered by
this Agreement, the Company may obtain employees from any available source, in
which case the Union shall be notified.
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SECTION 4 - UNION MEMBERSHIP:
A. Subject to the provisions of the Labor-Management Relations Act,
1947, as amended, it shall be a condition of employment that all employees of
the Company covered by this Agreement, who are members of the Union in good
standing on the date of execution of this Agreement, or the effective date of
execution of this Agreement, or the effective date thereof whichever is later,
shall continue to remain members thereof in good standing throughout the entire
term of this Agreement, and those employees who are not members of the Union on
the date of execution of this Agreement or the effective date thereof shall, on
the 30th day following the date of execution of this Agreement, or the effective
date thereof, whichever is later, become and remain members in good standing in
the Union. It shall also be a condition of employment that all employees
covered by this Agreement hired on or after its execution or effective date
shall, on the 30th day following the beginning of such employment, become and
remain members in good standing in the Union.
B. Notwithstanding anything to the contrary therein, Paragraph A
above shall not be applicable, if all or any part thereof shall be in conflict
with applicable law; provided, however that if all or part of Paragraph A
becomes permissible by virtue of a change in applicable law, whether by
legislative or judicial action, the provision of Paragraph A held valid shall
immediately apply.
SECTION 5 - SENIORITY:
The Date of entering the service of an Operator in the capacity of
steady Engineer shall govern Company seniority among licensed Engineers of that
Operator. The seniority list shall be prepared by each operator immediately
following the execution of this Agreement, which list shall be posted in the
office of the Operator with a copy delivered to the Union. Within one month,
following delivery to the Union, the Union may take objection to the list. In
the absence of any such objection by the Union, the list shall be the official
list of seniority standing and binding upon the parties. No licensed Engineers
shall lose any seniority rights during service in the Armed Forces of the United
States during time of national emergency, or by a suspension of license by the
United States Local Inspectors. Layoffs and/or tie-ups shall be in the inverse
order of seniority, provided that the Engineer with greater seniority is
qualified to do the available work. Licensed Engineers who are laid off in the
inverse order of seniority shall continue for a period of twelve (12) months to
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accumulate seniority with the Operator concerned. Licensed Engineers having
such seniority shall be recalled to work in the inverse order of layoff provided
that they are qualified to perform the work available. The operator shall, in
writing, notify eligible Engineers that a job is available, and shall mail,
registered mail, return-receipt requested, the notice to the engineer's last
known address on the Operator's records. If the Engineer does not report for
work within one week from the date of notice, his re- employment rights shall
cease. The Operator shall be under no obligation to recall to work Engineers
who have been laid off for more than twelve (12) months. Periods during which
the Union is engaged in a legal strike shall not be included in the combination
of such twelve (12) months. In the event that an Engineer is laid off for a
period of twelve months or less, or is on a bona fide leave of absence which
must be for an agreed definite period, his seniority shall continue
uninterrupted through such period. The Company agrees to make its best effort
to utilize employees of the Company prior to chartering equipment from other
sources.
SECTION 6 - REJECTION OF EMPLOYEES:
A. The Union agrees that the Company has the right to reject any
applicant for employment, who the Company considers unsatisfactory or unsuitable
for the position, or to discharge any employee, who, in the opinion of the
Company is not satisfactory. If the Union considers the rejection of any
applicant for employment or the discharge of any employee as
being without reasonable cause, such action by the Company shall be dealt with
under the grievance procedure as provided herein, and the Union agrees that any
such rejection or discharge shall not cause any vessel to be delayed on her
scheduled departure.
B. If an applicant, referred by the Union, is rejected or any employee is
discharged or demoted for medical reasons, the Union may challenge the decision
of the Company physician. The applicant, or employee shall then be re-examined
by a physician selected by the Union. In the event that the two physicians do
not agree, a third physician shall reexamine and his opinion shall be final and
binding.
SECTION 7 - DIRECTION:
Licensed Engineers shall be under the direction and subject to the orders
only of such person or persons as the Operators may designate or appoint.
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SECTION 8 - TIE-UP NOTICE:
In the event of a temporary tie-up of a boat, the Operators shall give
permanent licensed Engineers four (4) hours notice of such tie-up and its
expected duration.
SECTION 9 - VACANCIES, PROMOTIONS AND TRANSFERS:
When vacancies occur promotions and transfers of Engineers shall be made in
accordance with seniority. A vacancy shall be deemed to have occurred when a
permanently assigned Engineer either dies, quits, is discharged for cause, or a
new permanent Engineer's job is created.
The Operator agrees to post such vacancy within thirty (30) days of
occurrence. The vacancy shall remain posted for a two week period during which
time the Engineers holding
seniority with the Operator, may bid in writing for such vacancy. The period
of posting may be increased or decreased by mutual agreement between the Union
and the Operator.
At the end of the bidding period, the Operator shall assign the vacancy to
the Engineer, who holds the most seniority and has bid for the job, provided he
is capable and qualified to hold the new position. Promotions, Transfers and
new assignments shall be made at the beginning of the week.
Any dispute regarding promotions and/or transfers shall be resolved by
submitting said dispute to an arbitrator to be selected by mutual agreement of
the Operator and the Union. In the event such mutual agreement cannot be
reached the dispute shall be submitted to the American Arbitration Association
for selection of an Arbitrator in accordance with their procedures. The
decision of the Arbitrator shall be binding upon the parties hereto.
SECTION 10 - LEAVE OF ABSENCE:
It is agreed that the Operator, with the approval of the Union, may grant
leave of absence for illness or accident, whether occupational or
non-occupational, death in the immediate family, attendance at schools,
promotion to a supervisory capacity, position with the Union, or for any reason
agreed upon between the operator and the Union, without loss of seniority or
position on the roster. Any such leave of absence shall be in writing and may
be granted for a period of three (3) months, and is subject to renewal or
extension by agreement in writing between the Operator and the Union. Leave of
absence for position with the Union shall be coextensive with the duration of
his Union position. Any leave of absence granted in accordance with this
Section shall not deprive an Engineer of any promotion to which he would have
been entitled otherwise.
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SECTION 11 - MOST FAVORED CONTRACT:
In the event that during the life of this Agreement or any extension or
renewal hereof, any contract is entered into by the Union with any employer in
the industry operating in the Delaware River, Delaware Bay, or their tributaries
wherein the scale of wages is less than the wages specified herein, or the hours
or working conditions or other terms are more favorable to such other employer
than the terms of this Agreement then the scale of wages, hours and working
conditions or other terms contained herein shall, at the option of the Company
become immediately and automatically modified to conform to such other contract,
in whole or in part, and in the event that any contract with any Employer
entered into by the Union is altered or modified, then the Company may elect to
modify this Agreement, in whole or in part, in accordance therewith, provided
that this Paragraph shall have no application whatsoever to contracts entered
into between the Union and an Employer, who is engaged exclusively in the oil
towing industry.
SECTION 12 - MANNING SCALE:
Vessels shall be manned by at least one licensed Engineer. The company may
increase the manning, at its discretion, based upon the operations or as
required by Governmental regulation, but in no event except as stated in Section
30 shall any tug have less than a four man crew at any time. The parties agreed
to discuss manning levels on newly constructed or converted equipment.
SECTION 13 - CUSTOMARY DUTIES:
Crew members of all departments shall perform the necessary and customary
duties of that department, and each crew member shall additionally assist in
duties not customarily associated with his particular rating when so directed by
the Company or a designated representative of the Company or by the Master as
may be required in order to fulfill the assigned duties and tasks of the vessels
aboard which such crew member is serving. It was specifically agreed that all
crew members, including the Engineer will work together to handle lines aboard
the tug, assist in various engine room duties including changing of oil filters
and any other work required so that the tug could perform its assigned task.
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SECTION 14 - DEATH IN THE IMMEDIATE FAMILY:
In the event of death in the immediate family, an employee covered by
this Agreement shall receive two days off with pay. Death in the immediate
family shall be limited to the death of father, mother, spouse, child, brother
or sister.
No payment will be made under this section if an employee chooses to
work on the bereavement days.
SECTION 15 - LOSS-OF PERSONAL EFFECTS:
If personal effects of any Engineer through no fault of his own become
totally lost or partially damaged because of fire on, or sinking of a vessel, he
shall be paid his actual loss by the Operator up to, but not to exceed the sum
of $250.00 in full compensation for such loss.
SECTION 16 - DUES CHECK-OFF:
The Union, an unincorporated association consisting of employees of the
Company and other employers, and the Company, to facilitate and implement the
desire of employees of the Company to maintain their Union, their unincorporated
association organization, and to assist such employees to comply with their
monetary obligations to their Union, agree to the establishment and maintenance
of a voluntary check off procedure for the employees covered by this Agreement.
The Union and the Company further acknowledge that such check-off hereafter
fully set forth, is in accordance with the authority and direction of exclusive
federal law and decisions of the N.L.R.B. regulating labor management relations
such as the relationship which is the subject of this Agreement between the
parties. In accordance with the provisions of Section 302 (c) (4) of the
Federal Labor Management Relations Act, as amended, the Company agrees that upon
receipt of a voluntary written authorization executed by employees covered by
this Agreement, it will deduct the employees' regular initiation fees and
regular dues from non-supervisory compensation, including payments for or made
during time off periods, if any, in the amounts and at the times hereafter set
forth in the written authorization and timely remit such amounts to the Union.
The Company agrees to hold all sums deducted in trust for the Union.
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CHECK OFF AUTHORIZATION
AMERICAN MARITIME OFFICERS
"The undersigned employee, a member of the American Maritime Officers (the
"Union"), or desiring to become a member of the Union, hereby direct you, my
employer, effective from this date, to deduct from my compensation, including
payments for or made during time-off periods, if any, a sum equal to the regular
initiation fees and regular membership dues of such Union. Such sum may be
deducted in installment payments, as may be directed by the Union. The monies
so deducted shall be remitted by you to the Union monthly, within 10 days after
the end of each month. All monies deducted by you pursuant to this
authorization shall be held in trust. Written notification by the Union to you
of the amount if such regular initiation fees and membership dues, and/or the
amounts owed by the undersigned for the same, shall be conclusive authority for
you for such deduction."
"I submit this authorization and assignment with the understanding that it
will be effective irrevocably for a period of one year from this date, or up to
the termination date of the current Collective Bargaining Agreement between the
Company and the Union, whichever occurs sooner.
"This authorization and assignment shall continue in full force and effect
for yearly periods beyond the irrevocable period set forth above and each
subsequent yearly period shall be similarly irrevocable unless revoked by me
within 15 days after any irrevocable period. Such revocation shall be effected
by individual written notice by registered mail or certified mail to both you,
as the employer, and the Union, within such 15-day period. "
"This authorization and assignment is made and executed in accordance with
the authority and directions of Section 302(c) (4) of the Labor Management
Relations Act, as amended, and applicable law."
NAME: (Print)_______________________________ DATE OF HIRE: ______________
ADDRESS: _________________________________ COMPANY: ___________________
___________________________________________ S.S. NO: ___________________
CITY_________________STATE______ZIP______ BOOK NO: ___________________
SIGNATURE: _______________________________ DATE: ______________________
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SECTION 17 - HOLIDAYS:
The following days if worked, shall be designated as holidays, and as such, all
employees who work these days shall receive as a bonus an amount equal to a day
wages in addition to the regular daily rate:
<TABLE>
<CAPTION>
<S> <C>
1 - Christmas Day 5- Good Friday
2 - New Years Day 6 -Independence Day
3 - Lincoln's Birthday (Feb. 12) 7 - Columbus Day (October 12)
4 - Washington's Birthday (Feb. 22) 8 - Labor Day
</TABLE>
SECTION 18 - SAFETY AND SANITARY CONDITIONS:
The Union and Company agree to cooperate at all times in protecting the
safety of Engineers and to form a Safety Committee with an equal number of
representatives on each side to discuss and resolve grievances involving safety.
Engineers shall supply their own sheets, pillow cases and towel. The
Company shall supply Engineers with clean blankets and soaps. Clean blankets
shall be furnished once a tour, provided that the Company shall have no
obligation in this connection unless soiled blankets previously issued are
returned.
Engineers shall not be allowed to transfer from tug to tug in midstream
south of the mouth of the Schuylkill River. North of the mouth of the
Schuylkill River, transfer of Engineers from tug to tug midstream shall be at
the discretion of the Master.
Each tug, on an out-of-harbor operation, shall be equipped with an
inflatable life raft and suitable grab rails for deck duty. Out of harbor tugs,
when engaged in towing barges carrying poisonous volatile chemicals shall not
carry less than one (1) gas mask for each crew member. No tug not so equipped
shall be sent out-of-harbor. Engineers required to enter tanks (i.e. ballast,
fuel) shall be provided quality Tyvek overalls.
The Company agrees to provide back supports to all Engineers. The Union
agrees that Engineers shall use back supports while performing strenuous duties.
New back supports will be provided to Engineers when previously issued supports
are returned.
The Company agrees to meet with the Union within 60 days of the effective
date of this agreement to discuss remedies of vessels electrical limitations.
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SECTION 19 -QUARTERS:
Operators shall be required to keep the living quarters heated and screened
and free from vermin at all times, and living quarters shall be fumigated, when
required. Union agrees that its members shall cooperate at all times in keeping
living quarters sanitary.
SECTION 20- GRIEVANCE AND ARBITRATION PROCEDURE:
Except as may be otherwise provided in this Agreement,
All complaints, disputes or grievances arising between the parties hereto
relating to or in connection with or involving questions or interpretation or
application of any clause of this Agreement, or any acts, conduct or relations
between the parties, directly or indirectly, shall be processed pursuant to this
Article. Except as otherwise provided, the Union and the Company agree that
there shall be no strike or lockout or work stoppage during the term of the
Agreement.
In the event that any controversy or dispute arises concerning the
interpretation or application of, or compliance with the provisions of this
Agreement, the Employer and the Union shall make every reasonable effort to
settle the dispute informally within seven (7) business days of being notified
of the existence of the complaint. A party shall have five (5) business days
after learning of the dispute to initiate the seven (7) day period of informal
discussions. All disputes must be submitted to the Union by the affected
employee within five (5) business days from the latter of the date the employee
leaves the vessel or the day in which the employee has a reasonable opportunity
to learn of the existence of the dispute.
In the event the dispute remains unsettled after the seven (7) day period,
the complainant may file a formal written grievance. The grievance must be
presented to the party against whom the complaint has been filed within
seventy-two (72) hours of the expiration of the seven (7) day period. The party
against whom the complaint has been filed shall have seventy-two (72) hours to
provide its answer to the grievance. If no answer is filed within the stated
time it will be treated as a denial of the grievance.
If the parties are unable to settle the dispute within thirty (30) days
after the answer, the grieving party may invoke arbitration by notifying the
other party in writing of its desire to submit the matter to binding
arbitration. The party invoking arbitration shall simultaneously file a copy of
the notice with the American Arbitration Association. All matters pertaining to
the arbitration hearing and the selection of an arbitrator will be subject to
the Rules of the American Arbitration
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Association. Cost incurred by the arbitrator shall be borne by the party ruled
against. All time limits imposed by this Article can be extended by mutual
agreement.
It is understood that the sole function of the arbitrator is to
interpret the express provisions of this Agreement and to apply them to the
facts of the grievance. The arbitrator shall have no power to change, amend,
modify, and to, subtract from, or otherwise alter this Agreement.
This Article shall be a complete and bona fide defense to any action or
proceeding instituted contrary to the terms hereof.
SECTION 21 - RESORT TO INTERNAL APPEALS PROCEDURE OF AMERICAN
MARITIME OFFICERS:
The parties recognize that in situations when the Union decides
that a grievance arising under this Agreement will not be processed through the
grievance procedure or to arbitration, the individual grievant or grievants
involved have certain internal appeal rights within American Maritime Officers.
Whenever such Internal Appeal Procedures are timely initiated, with respect to
any such grievance arising under this contract, then the grievance and
arbitration procedure time limits contracted herein will be suspended until such
time as the Internal Appeals Procedure is exhausted concerning the question of
whether the contractual grievance(s) the subject of the Internal Appeals
Procedure will be pursued through the remaining steps of the grievance procedure
and arbitrated.
SECTION 22 - WAGES AND SUBSISTENCE:
A. Throughout the effective period of this Agreement, Engineers working
aboard the boats shall be paid the following wage scale, where applicable. The
following shall represent the day wage rates.
<TABLE>
<CAPTION>
WAGES
5/l/96 5/l/97 5/l/98 5/l/99 5/l/2000
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Chief Engineers - $ 181.80 $ 187.25 $ 192.87 $ 199.62 $206.61
5/l/96 5/l/97 5/l/98 5/l/99 5/l/2000
------ ------ ------ ------ --------
Assistant Engineers - $ 154.49 $ 159.12 $ 163.90 $ 169.63 $175.57
- -------------------
</TABLE>
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B. In addition to the wage rates described herein, Engineers shall be
paid subsistence for each day worked. The following shall represent the
subsistence rate:
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<CAPTION>
5/l/96 5/l/97 5/l/98 5/l/99 5/l/2000
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Subsistence $ 10.00 $ 10.00 $ 10.50 $ 11.00 $ 11.50
- -----------
</TABLE>
SECTION 23 - MINIMUM RATES:
Engineers called for duty on any day shall be paid the day rate as set
forth in Section 22.
SECTION 24 - PLANNED REPAIRS:
If the Company requires crew members to work on vessels under
repairs, the Company shall reimburse the crew members for their reasonable and
authorized travel and lodging expenses.
SECTION 25 - TRAVEL AND TRAVEL TIME:
All Engineers covered by this Agreement shall normally start and stop
work only at the Operator's designated home pier. However, should the Operator
choose to tie up or change crews at a safe place elsewhere, he shall supply safe
transportation to and from the home pier. Engineers tying up or leaving the tug
with the change of crew shall remain on boat time until the transportation
supplied by the Employer arrives. No crew member shall be permitted to operate
any vehicle providing transportation. On the authorized change of crew days,
the man being relieved shall be paid one-half (1/2) a day's pay, and the man
relieving shall be paid one half (1/2) a day's pay.
SECTION 26 - PLANT PREPARATION AND SECURING:
Any Engineer, when so ordered and directed by the Operator, shall
report before sailing time in order to prepare a diesel plant for operation.
SECTION 27 - MAINTENANCE WORK:
Maintenance work such as painting, chipping or scrubbing shall be done
when the Captain deems it safe and practical to do so. The cleaning of the
pilot house, galley, sleeping quarters and engine room shall be done daily.
Employees shall not be required to make fenders and boy mates or large stern
fenders. Repairs shall not be considered to be maintenance work.
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SECTION 28 - SAILING ORDERS:
Orders for employees returning from scheduled days off shall be given
between 6:00 p.m. and 8:00 p.m. on the day preceding their scheduled return to
work. (Work day to commence at 12:01 AM)
SECTION 29 - ROTATION:
During the period of this agreement employees will work a mutually agreed
schedule. Such rotation shall be based on a (2) days on for (1) day off
concept.
SECTION 30 - SHORT HANDED CREW:
Should the Union be unable to provide a full complement it is agreed that
the Company will be able to operate the vessel for up to twelve (12) hours.
SECTION 31 - PAYMENT OF WAGES:
The pay period shall be on a biweekly basis. The pay period shall end on
Sunday and wages and other monies due for that period shall be paid between 0900
and 1200 hours the following Friday, unless a holiday should occur on Friday of
that week, in which event payment would be made between 1300 - 1700 hours on
Thursday. No employee shall be paid except on the regular pay day following the
completion of any services rendered, and no employee shall be permitted to draw
advancements from the Company on account of his pay.
SECTION 32 - PERMISSION TO LEAVE:
All crew members must remain aboard the tug or company property, unless
permission to leave is given by the master.
SECTION 33 - UNAUTHORIZED PERSONNEL:
No person other than crew members shall be permitted aboard tugs at any
time without the permission of the Operator's Office.
SECTION 34 - NO DISCRIMINATION:
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During the term of this Agreement, neither party shall discriminate against
any employee or applicant for employment because of race, color, sex, age,
religion, national origin, handicap, veterans status or Union membership. This
non- discriminatory policy shall include, but not be limited to the following:
employment, promotion, upgrading, transfer, layoff, demotion, termination, rates
of pay, forms of compensation, recruitment or recruitment advertising and
selection for training.
SECTION 35 - NO STRIKES OR LOCKOUTS:
There shall be no strike, lockout, or stoppage of work while the provisions
of this Agreement are in effect.
SECTION 36 - PICKET LINES AND INDUSTRIAL DISPUTES:
No employee covered by this Agreement shall be compelled to do work with
strike breakers or cross any picket lines approved by the Union, where to do so
would involve injury or threat to his person or would involve such employee's
breach of his obligations as a Union member or where to do so would violate such
employee's moral, ethical and trade union beliefs. Any action by an individual
employee must be sanctioned by the Union.
Further, an employee's refusal to do any of the aforesaid acts or an
employee's exercise of the rights and immunities described in the first proviso
to Section 8 (b) (4) of the National Labor Relations Act of 1947, as amended,
shall not constitute a breach of this Agreement and shall not be cause for
discipline or discharge. The insistence on the part of the Company that any of
its employees, covered by this Agreement, go through a picket line after having
elected not to, or any other breach by this Company's operations,
notwithstanding any other provision of this Agreement. The Union agrees to
notify the Company, whenever any of its members notify them they will exercise
any rights under this Section or under law.
SECTION 37 - MAINTENANCE:
When a employee is entitled to maintenance under Maritime Law, he shall be
paid maintenance at the rate of seventeen dollars and fifty cents (17.50) per
day for each day or part thereof. The payments shall be made regardless of
whether the employee has or has not retained an attorney, filed a claim for
damages, or taken any other steps to that end and, irrespective of any insurance
arrangements in effect between the company and insurer.
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SECTION 38 - INDEMNIFICATION:
The Union shall protect and indemnify the Company in any cause of
action based upon improper application by the Union of the employment provisions
of this Agreement. The Company shall protect and indemnify the Union in any
cause of action based upon improper application by the Company of the employment
provisions of this Agreement.
SECTION 39 - VESSELS SALES AND TRANSFERS:
Prior to any vessel contracted to the Union, being disposed of in any
fashion, including, but not limited to sale, scrap, transfer, bareboat charter,
etc., ninety (90) days notification in writing, if possible, must be sent to the
Union's Philadelphia Office, 2604 South 4th Street, Philadelphia, PA 19148.
The Union recognizes that the Company may not in all cases be able to
provide the Union with ninety (90) days notice as provided above. However, when
ninety (90) days notice is given, the Company shall call the Union's Office and
confirm in writing as far in advance as possible and in no event any later than
the date of sale, scrap, transfer, bareboat charter, etc.
In addition, the Company must give the Union the name, address and
telephone number of the purchaser and will attempt to assist the Union in
meeting the buyer.
SECTION 40 - SENIORITY LISTS:
Seniority Lists shall be provided to the Union immediately following the
execution of the Agreement. Within ninety (90) days following delivery to the
Union, the Union may take objection to the lists. In the absence of any such
objection by the Union, the lists shall be the official lists of seniority
standing and binding upon the parties. Such lists shall include the employee's
name, job classification, vessel on which employed, date of hire, social
security number, and current address and phone number.
SECTION 41 - AGREEMENT MODIFICATION:
This Agreement constitutes the sole and exclusive Agreement between the
parties hereto, and neither any representative of the Operator, nor any
representative of the Union shall have any authority to construe, modify, or
make any changes in the terms and conditions hereof. Any change or modification
of the language of the Agreement and the terms and conditions hereof shall be
the subject of an Addendum executed by both the duly authorized representatives
of the Union and the
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Operators, provided that nothing herein contained shall be construed as limiting
the right of any Arbitrator under the Arbitration provisions hereof to interpret
the Agreement.
SECTION 42 - LEGAL APPLICATION:
A. If any provision or the enforcement or performance of any provisions
of this Agreement is or at any time be contrary to law, then such provision
shall not be applicable or enforced or performed, except to the extent permitted
by law. If at any time thereafter such provision or its enforcement or
performance shall no longer conflict with the law, then it shall be deemed
restored in full force and effect, as if it had never been in conflict with the
law.
B. If any provisions of this Agreement or the application of such
provision to any person or circumstance shall be held invalid, the remainder of
this Agreement, or the application of such provision to other persons or
circumstances, shall not be affected thereby.
C. If any provision of this Agreement is invalidated or the enforcement
of any provision is enjoined by a Court of competent jurisdiction the parties
shall meet for the purposes of agreeing upon a substitute provision.
SECTION 43 - NEW EQUIPMENT-MANNING SCALE:
Minimum crew requirements shall be as set fourth in this agreement.
SECTION 44 - WITNESS FOR COMPANY:
In the event an employee shall be a witness or otherwise appear for the
Company, he shall be paid a day's pay plus contributions for every day so
employed. This does not apply to an employee who has initiated litigation
against the Company.
SECTION 45 - ENGINEER/MACHINIST:
<TABLE>
<CAPTION>
WAGES
5/1/96 5/1/97 5/1/98 5/1/99 5/1/2000
------ ------ ------ ------ --------
<S> <C> <C> <C> <C>
Engineer Machinist
Hourly Rate - $ 13.06 $ 13.45 $ 13.85 $ 14.34 $ 14.84
Holiday Rate - 13.55 13.95 14.37 14.87 15.39
Overtime Rate - 20.32 20.92 21.55 22.30 23.08
</TABLE>
A. The regular hours of work shall be from (8: A.M. - 4:30 P.M.) eight
(8) hours per day and forty (40) hours per week, from Monday to Friday
inclusive. All work performed in excess
19
<PAGE>
of forty (40) hours per week shall be compensated at the overtime rate. Each
employee shall be notified at the time of his employment (or the date of
execution of this Agreement, whichever is later) as to the starting time of his
regular eight (8) hour shift. For any week where an employee refuses to work
overtime, the regular forty (40) hour work week shall be considered waived.
B. For work performed on Saturdays, Sundays and/or holidays such
employees shall be paid the overtime rate.
C. The following shall be observed as Holidays for eligible employees
covered by this
Agreement:
<TABLE>
<CAPTION>
<S> <C>
1 - Christmas 5 - Good Friday
2 - New Years Day 6 - Independence Day (July 4)
3 - Lincoln's Birthday (Feb. 12) 7 - Columbus Day (October 12)
4 - Washington's Birthday (Feb. 22) 8 - Labor Day
</TABLE>
When a holiday falls on a Saturday or Sunday it shall be celebrated on the
following Monday. Regular employees who do not work on a holiday shall be paid
eight (8) hours at the Holiday rate.
When any employee covered by this Agreement is required to work on any of
the specified holidays, he shall be paid eight (8) hours at the overtime rate.
D. An employee required to go away from his home pier shall be paid
traveling time at his applicable straight time rate before and after his regular
shift, including regular meals. His time, at the straight time rate, shall be
continuous until he arrives back at the dock at which he is employed.
E. Seniority shall be based on an employee's length of service with the
employer in this particular classification. The employees with the longest
years of service shall be the first ones rehired and the last ones laid off.
F. Each engineer/machinist covered by this Agreement shall be eligible
for vacation benefits as follows:
1. If hired between January 1 and March 31, the employee will, after
completing 6 months of service, be eligible for a one week vacation
benefit.
2. In the following calendar year and up to 5 years of service the
benefit is 2 weeks.
3. After six (6) years of service the benefit is three (3) weeks.
20
<PAGE>
4. All vacations must be used in the year earned. Other shall be no
carryover of time permitted. In addition during the period of the
time from June I through September 30 of any given calendar year the
maximum number of consecutive vacation weeks which may be used is
three.
SECTION 46 - MANNING:
"During the term of this Agreement, should an employee covered under
this Section sever his employment for any reason, the position vacated may be
eliminated where the Company determines that the position is no longer
required."
SECTION 47 - TOTALITY OF AGREEMENT:
"The parties acknowledge that during negotiations which resulted in this
Agreement each had the unlimited right and opportunity to make demands and
proposals with respect to any subject matter not removed by law from the area of
collective bargaining and that the understanding and agreements arrived at by
the parties after the exercise of the right and opportunity are set forth
herein. The employer shall not be obligated to continue any benefit or employee
practice which it has given or engaged in prior to the execution of this
Agreement unless specifically set forth in this Agreement."
SECTION 48 - RTM CENTER FOR ADVANCED- MARITIME OFFICERS TRAINING-
The Union and the Company do hereby agree that they shall encourage all
employees to upgrade their skills through attendance at the Raymond T. McKay
Center for Advanced Maritime Officers Training. Any employee having at least
six (6) months service with the Company desiring to attend the Raymond T. McKay
Center for Advanced Maritime Officers Training shall be given a leave of absence
and the Company agrees to pay transportation and lost wages up to ($2500.00) for
up to four (4) Employees, per term of the Agreement, who upgrade their license,
provided the Engineers are available for work with Moran for a minimum of one
(1) year thereafter. Such employees must receive prior approval from the
Company.
21
<PAGE>
SECTION 49 - BENEFITS & CONTRIBUTIONS:
A. - 1. The Company agrees to become and/or remain party to the various
AMO Plans, Committees and other entities and make contributions
thereto as provided for in the confidential "Contribution Letter"
which is made part of this Agreement.
2. The Company further agrees to execute all appropriate Agreements
and Declarations of Trust within thirty (30) days of the
execution of this Agreement.
3 . The Parties agree that such Agreements and Declarations of Trust
shall continue in effect for a period of one (1) year beyond the
expiration of this Agreement.
B. The Parties agree that the AMO Vacation Plan shall be the recipient
Plan for contributions to the Vacation Plan, S&E, JEC and AMOS. The
Vacation Plan shall retain for the Plan sufficient funds to pay taxes
and administrative costs and allocate the balance to the other
entities in accordance with Trustees approval. The Parties authorize
the Allocation Committee consisting of Joseph B. Cecire and Jerome E.
Joseph to adjust any and all contributions and to transfer funds from
one Plan(s) or entity(ies) to another, provided that the Plan where
the rates are decreased are not adversely affected and that the action
of the Allocation Committee does not increase the total amount
contributed by the Company.
C. For computing Pension Benefits, wages are at the levels as in effect
on January 1, 1991.
22
<PAGE>
AUTHORIZED SIGNATURES
This Agreement was executed by the parties hereto, whose duly authorized
representatives' signatures appear below, this __19__ Day of May, 1996.
MORAN TOWING OF PENNSYLVANIA AMERICAN MARITIME OFFICERS
DIVISION OF MORAN TOWING CORP. 2 WEST DIXIE HIGHWAY
2799 SOUTH DELAWARE AVENUE DANIA, FLORIDA 33004
PHILADELPHIA, PA 19148
/S/ Edmond J. Moran, Jr. /S/ Michael R. McKay
- ------------------------------------ ------------------------------------
EDMOND J. MORAN, JR MICHAEL R. MCKAY
PRESIDENT, MID-ATLANTIC CORPORATION PRESIDENT
/S/ Walter Naef /S/ Robert W. McKay
- ------------------------------------ ---------------------------------
WALTER NAEF ROBERT W. MCKAY
DIVISION V.P. -GENE MANAGER SECRETARY-TREASURER
/S/ Robert J. Kieler
-----------------------------------
ROBERT J. KIEFER
EXECUTIVE BOARD
23
<PAGE>
MEMORANDUM OF AGREEMENT
Agreement made the llth day of September, 1995, between Local 333,
United Marine Division, International Longshoremen's Association, AFL-CIO
("Local 333") and Moran Towing & Transportation Co., Inc, ("Moran")
(collectively referred to as "the parties"),
WHEREAS, in April, 1995, Local 333 and Moran reached an agreement in
principle resolving their outstanding contractual and unfair labor
practice disputes;
WHEREAS, because the National Labor Relations Board did not complete
its review of the settlement of the pending unfair labor practice
proceedings until August, 1995, the parties agreement in principle was not
fully embodied in a Settlement Agreement and Memorandum of Agreement ("the
August MOA") and was not submitted for membership ratification until later
in August, 1995;
WHEREAS, the August MOA was not ratified in part because of the delay
in finalizing and submitting it to ratification thereby delaying the
implementation dates of the various economic improvements, which were to
be effective upon ratification;
WHEREAS, thereafter the parties met to negotiate modifications in the
August MOA designed to address its diminished economic value as a result
of the unforeseen delay in the ratification vote, as referred to above, as
well as to consider other adjustments;
WHEREAS, the parties are desirous of reaching mutually acceptable
modifications and having negotiated hard in that effort;
NOW, THEREFORE the undersigned parties have reached a new agreement
for submission to ratification on the following terms:
1. Except as modified below, the terms and conditions of the August
MOA (inclusive of any side letters) are reaffirmed, adopted and
incorporated herein by reference for a three year term beginning on the
date of ratification.
2. The wage scales shall be modified to provide that the daily rate
scales that were to be effective in year two under the August MOA will be
effective upon ratification of this agreement. The 4% increase in daily
rate scales shall be effective on January 1, 1997. By way of example, the
daily rate for New York Port Area will be increased as follows:
<PAGE>
Upon Ratification 1/1/97
Captains $ 283.50 ($270 + 5%) +4%
Mates/Engineers $ 246.75 ($235 + 5%) +4%
Asst Engineers $ 194.25 ($185 + 5%) +4%
A/B Deckhand $ 152.25 ($145 + 5%) +4%
OIS Deckhand $ 147.00 ($140 + 5%) +4%
The other wage scales (e.g., those applicable to barge and tanker crews
and to voyages outside the New York Port Area) shall be adjusted in the
same manner.
3. Moran shall convert its existing pension plan for marine
employees to a defined contribution plan that allows voluntary employee
contributions (commonly and hereinafter referred to as a "401(k) plan").
(a) Moran shall contribute to the pension plan the sum of $1, 000 on
account of each eligible employee for the calendar year 1995.
Said
contribution by Moran shall be made within 30 days after
December 31, 1995. Immediately after the 1995 pension plan
contribution is made, Moran shall convert the pension plan to a
401(k) plan. To the extent permitted by law, the accrued balance
for each individual in the pension plan shall be rolled over
into the 401(k) plan.
(b) Moran shall contribute to the 401(k) plan the sum of $1,000 on
account of each eligible employee for the calendar year
1996. Said contribution by Moran shall be made within 30 days
after December 31, 1996.
(c) Moran shall contribute to the 401(k) plan a sum equal to 4% of
the gross wages, as reported on form W-2, of each eligible employee
for the calendar year 1997. Said contribution by Moran
shall be made within 30 days after December 31, 1997.
(d) Moran shall contribute to the 401(k) plan a sum equal to (1) 4%
of the gross wages, as reported on form W-2, for the calendar
2
<PAGE>
year 1998 plus (2) an amount equal to 25% of the first $1,000 of
voluntary contributions made to the 401(k) plan by each eligible
employee during the calendar year 1998. Said contribution by
Moran shall be made within 30 days after December 31, 1998.
(e) Eligible employees of Moran shall be permitted to make voluntary
contributions to the 401(k) plan to the extent permitted by law.
The vesting and eligibility requirements, as well as any
allocation of administrative expense, under the 401 (k) plan
shall be no less favorable to the participants than now exists
under the existing pension plan. Moran shall consult with and keep
Local 333 informed concerning the development and
implementation of the 401(k) plan.
(f) The last two sentences of the first paragraph of Article 1,
Section 15b of the August MOA shall continue to apply to the 401(k)
plan.
4. Stony Point shall be substituted for Albany in the description
of the geographical area in Article IV Section 2.c. of the August MOA.
5. Moran shall confirm in a letter addressed to Local 333 "that
during the life of this agreement, Moran will continue to pay, as is its
practice, all its eligible captains a year end vacation allowance of up to
14 days pay at the rate then in effect. Eligibility will be determined in
the same manner currently employed by Moran."
6. Moran will consider former Moran cooks for hire as deckhands
where vacancies exist provided that they are fully able to perform the
required tasks. Moran will be obligated to hire no more than 3 such
cooks.
7. This agreement shall be subject to ratification of the Local 333
membership and shall become effective the day after it is ratified.
3
<PAGE>
IN WITNESS WHEREOF, this agreement has been duly executed by the parties
hereto.
MORAN TOWING & LOCAL 333, UNITED MARINE
TRANSPORTATION CO., INC. DIVISION, ILA, AFL-CIO
BY___________________________ BY:
MALCOLM W. MACLEOD, PRESIDENT ALBERT M. CORNETTE, PRESIDENT
4
<PAGE>
MEMORANDUM OF AGREEMENT
Moran Towing & Transportation Co., Inc. ("Moran" or "Employer")
and Local 333, United Marine Division, I.L.A. AFL-CIO ("Union") hereby
agree to the following changes to the parties' expired collective
bargaining agreement.
AGREEMENTS OF GENERAL APPLICATION
(1) Delete the grant of bargaining rights to the "Association"
and all references to the "Marine Towing and Employers' Association" and
modify all language which refers to Association-related items.
(2) Change "Employers" to "Employer" throughout the Agreement.
(3) Change the word "vessel" to "tugboat" throughout the
Agreement unless otherwise agreed.
(4) Delete all provisions relating to self-propelled oil
tankers, self -propelled lighters, and steam tugboats. Should Moran
acquire such vessels and operate such vessels within the geographical area
covered by this agreement, it recognizes Local 333 as the representative
of its crew members and will negotiate terms and conditions of employment.
Barges are covered by the barge agreement.
<PAGE>
(5) Delete "Cooks" from the contract.
INTRODUCTORY PROVISIONS
(1) Change the first paragraph to the following:
Agreement made, effective as of September 26, 1995, by
and between Moran Towing & Transportation Co., Inc. ("Employer") and
Local 333, I.L.A., AFL-CIO ("Union") in its own behalf and on behalf of
all licensed and unlicensed personnel employed on the Employer's tugboats,
including Captains.
(2) Delete first WHEREAS paragraph.
ARTICLE I. GENERAL PROVISIONS
Section 1. Application of Agreement
Delete reference to self-propelled lighters. In subsection (e),
delete all references to the "special panel" or "special committee" and
any procedures relating thereto, and substitute language providing for
direct referral to an AAA-designated Arbitrator after the Parties continue
to disagree as per the fourth paragraph at page 4 of the expired contract.
For purposes of Article I, Section 42, and Article IV, Section
1, the term "New York Port area", shall have the same meaning as the term
"Port of New York and Vicinity" as defined in Article I, Section 1 (a) (1)
, of this Agreement, except that the term "New York Port area" shall not
extend to work or ports on the Great Lakes; and it is further understood
that the term "New York Port area" shall not extend to an uninterrupted
run to or from a point south of the north end of Cape May, New Jersey,
including Norfolk, Baltimore and Philadelphia, which run is considered to
be a coastwise run.
2
<PAGE>
The Employer can subcontract, hire or charter vessels provided:
a) All Employer tugs are working, are laid up for repairs or are
not
suitable for the work (i.e., such matters as size and/or horsepower); and
b) The Employer is not required to break out a tug unless there is
a day's (12 hours) scheduled work for the tug and unless this
scheduled work is known the day before.
Section 2. Contract Signatures
Delete section.
Section 3. Hiring Employees
Delete reference to "Steward's Department. "Add language providing
for a probationary period for new Employees of two complete tours but not
less than 28 work days. In the event the Employer discharges a
probationary employee, the Union shall have the right to discuss the
matter; however, if the parties disagree regarding the discharge, the
Employer's decision will become final and not subject to arbitration.
Section 4. Non-Discrimination
Add "age or disability" only.
Section 5. Union Shop
Change dates, delete words "in good standing" and delete last
sentence of first paragraph and substitute the following: "Thereafter, the
Employer shall advise the Union of the names of all employees who are
newly hired or whose employment has terminated."
3
<PAGE>
Section 6. Suspension or Discharge
Continue unchanged.
Section 7. Employee Sublect to Orders of Employer's Appointee..
Continue unchanged.
Section 8. Stoppage of Work
Continue unchanged.
Section 9. Lockouts
Modify by substituting the following sentence for the first sentence
of
Section 9:
The Employer agrees that during the life of this Agreement, there
shall be no lockout of the Employees and, upon violation of this
provision by the Employer, this Agreement may be terminated by the
Union.
Section 10. Seniority
Paragraph a. and b. shall be amended to provide as follows:
a. Seniority by Classification-Seniority by classification
shall be controlling in layoffs where fitness and ability
are
relatively equal.
An Employee shall be credited with seniority
4
<PAGE>
within each classification in which he has worked during his last unbroken
period of service with the Employer. The amount of seniority credit in
each such classification shall be computed from the date of his first
employment in each such classification during his last unbroken-period of
service. Service with Moran shall not be considered broken for employees
who went on strike on February 16, 1988 and returned to work as of the
effective date of this Agreement or in response to an offer of
reinstatement pursuant to the Settlement Agreement between Moran and the
Union dated February 8, 1996. However, returning strikers shall not
accrue seniority for the period in which they were not employed.
If, however, an employee is promoted from one classification to a higher
classification but fails within one year from the date of his promotion to
make good in the higher job, he may return to the classification from
which he was promoted without loss of seniority but, in such case, he will
not retain seniority in the higher classification for the period that he
worked in that classification. The decision by either the Employee or by
the Employer on the competency of the Employee in the higher
classification must be made not later than one (1) year from the time
of the promotion.
b. When an Employee transfers or is promoted from one
classification to another (and continues in unbroken service with the
Employer), in the event such Employee is scheduled to be laid off in
his classification he shall be entitled to replace the least senior
employee in his prior classification if his seniority in such
classification exceeds that of the employee to be replaced.
c. Modify to add: Employer may require physicals of bargaining
unit employees, not more frequently than annually, by licensed
physicians mutually agreed to by Employer and the Union. Employer
may also require random drug/alcohol testing as required by Coast
Guard regulations or in accord with Employer's past practice. The
Company may factor into its determination of relative fitness and
5
<PAGE>
ability the results of such Company administered physicals and drug
and alcohol tests obtained within the twelve (12) months
prior to the layoff, in accord with Employer's past practice or as
required by Coast Guard regulations.
Paragraphs d. through g.
Continue unchanged except modify the second sentence in paragraph
g(l) as follows:
The Employees of that vessel shall receive Health Insurance coverage
while standing-by.
In paragraph g(2) after the words "he is to stand-by on call", delete
the rest of this paragraph and substitute the following:
may exercise his rights of seniority after 21 calendar days. These
Employees shall receive Health Insurance coverage while
standing-by.
Delete the second paragraph of g(2). Delete paragraph g(5).
Subsection h. Rehiring by Seniority
Continue unchanged.
Subsection i. Seniority Review
Delete references to "Quick Settlement Committee" and "Review Board."
Subsection j.
Delete.
Section 11. Laws, Rules and Regulations
Continue unchanged except delete references to the "Adjustment
Committee" and substitute "the parties".
6
<PAGE>
Section 12. Existing Wages and New Personnel
Delete, and substitute the following: Employer shall not reduce
the wage rates of covered employees who are paid at wage rate in excess of
the daily wage rates set forth in Article IV, Section 1.
Section 13. Explosives Clause
Delete.
Section 14. Sanitation Towing Crew Change
Delete.
Section 15. Insurance and Pension
a. Insurance
Delete the entire section and substitute the Employer Plan
currently in place for vessel employees and currently administered by the
Employer. A copy of the insurance plan is attached hereto, as Attachment
A. Bargaining unit employees shall pay any adjustment in premiums during
the life of the Agreement as may be required of all other participants in
that Plan, provided, however, that Employer shall not require bargaining
unit employees to increase their contribution by more than $100 for
individual coverage and $200 for family coverage in each of the second and
third years of the agreement. There
shall be no waiting period for former Moran employees who return pursuant
to the settlement agreement.
b. Pension
Delete the entire section and substitute the Employer
7
<PAGE>
Plan currently in place for vessel employees. A copy of the summary plan
description is attached hereto, as Attachment B. Former Moran employees
reinstated pursuant to the settlement agreement shall be eligible for
pension coverage without a waiting period.
Eligible Employees who are no longer employed by the Employer on December
31 will be sent the contribution check directly by the Employer.
Employer contributions shall not be reduced during the first year of
the agreement.
In the event the Employer thereafter reduces or eliminates contributions
under the Plan, then the Union shall be entitled to a reopener to
negotiate for the same contributions previously made, and in the event the
parties fail to agree, the issue shall be decided through interest
arbitration.
Section 16. Compensation for Loss of Effects
Continue unchanged.
Section 17. Watching
Delete current provision and substitute the following: When
ordered to
watch a vessel, a crew member shall receive a day's pay for a 24 hour
watch. In the event
multiple tugs are tied up in the same facility the Employer may assign two
men to watch
three tugs.
Section 18. Riding Barges
Delete.
Section 19. Shoveling Grain (Barges)
8
<PAGE>
Delete.
Section 20. Pyramiding Overtime
Delete.
Section 21. Holidays
Modify to provide for five holidays to be paid at an additional
day's pay for each Employee who works on the holiday. The five holidays
shall be New Year's Day, Memorial Day, July 4th, Thanksgiving and
Christmas Day.
Delete second and third and fourth paragraphs, add following for
fourth paragraph:
"If a holiday falls on a Saturday and a vessel is not working
that day, then the holiday, as to that vessel, shall be celebrated the
previous Friday. If a holiday falls on a Sunday and a vessel is not
working that day, then the holiday, as to that vessel, shall be celebrated
the following Monday. If, however, the vessel is working on a holiday
falling on Saturday or Sunday, the holiday shall be celebrated on that
day."
Section 22. Vacations
Delete.
Section 23. Benefits Schedule
Delete.
Section 24. Maintenance and Cure
Continue unchanged.
9
<PAGE>
Section 25. Fitness for Duty
Continue unchanged.
Section 26. Linens and Towels
Continue unchanged.
Section 27. Telephone Calls
Continue unchanged.
Section 28. Yard Time
Change "regular rate of pay" to "day rate", change allowance to
$8.50 in year one; $9.00 in year 2; $9.50 in year 3."
Section 29. Interdepartmental Work
Delete.
Section 30. Licensed Officer Painting Etc.
Delete and replace with the following:
Licensed officers shall be required to soogee, chip or paint the
vessel or perform other maintenance work only while the tug is not under
way and only after they have had six hours of unbroken rest immediately
preceding such work, and in no event on Saturdays, Sundays, or holidays.
Section 31. Maintenance and Cleaning
Delete and replace with the following:
Painting, maintenance - Employees shall be required to soogee,
chip or paint the vessel or perform other maintenance work (other than
cleaning) only between the hours of 8:00 A.M. to 5:00 P.M. during
weekdays, and in the case of unlicensed employees from 10:00 A.M. to 2:00
P.M. on Saturdays. Such work shall not be required on Sundays or
holidays. Chipping shall be performed only during the hours of 12 Noon to
5:00 P.M.
Sanitary Work - Such as cleaning quarters, toilets and
10
<PAGE>
washrooms, shall be done on Saturdays between 8:00 A.M. and
noon, and between 8:00 A.M. and 10:00 A.M. on Sundays and
Holidays. On all other days of the week sanitary work shall be
done between 6:00 A.M. and 8:00 A.M.
Section 32. Handling Lines
Delete.
Section 33. Docking and Undocking Ships
In docking and undocking ships, if a deck hand off watch is
required to handle ship's, lines, such deck hand shall be paid $48 for all
such work with respect to the ship. In such event, time worked handling
lines shall not be included in calculating overtime.
Section 34. Refrigerators
Continue unchanged.
Section 35. Readying Diesel
Delete.
Section 36. Grub Checks
Continue unchanged.
Section 37. Shopping for Grub
Change "cook" to "the crew designated by the Captain."
otherwise, the
paragraph is unchanged.
Section 38. Area Pilotage
Delete.
11
<PAGE>
Section 39. Cook's Overtime and Premium
Delete.
Section 40. Bidding for Jobs
Continue unchanged.
Section 41. Mailed Paychecks
Continue unchanged.
Section 42. Overtime
Delete and replace with the following:
12
<PAGE>
For work in the New York Port area and with respect to coastwise
towing of oil barges and Blue Circle Cement barges onlv.
The regular work day shall be twelve (12) hours. If an employee
works more than one (1) hour off watch or is broken-out off watch
three (3) or more times, he shall be paid at straight-time rates for
all time worked off watch in one-half (1/2) hour increments. An
employee shall not, however, be entitled to such overtime pay unless
the Captain approves the work off-watch as set forth above. Except
as provided in the next paragraph the Employer shall not alter an
employee's work day to avoid the payment of overtime in accord with
this section.
The normal hours of work for the engineer shall be either 12
consecutive hours per day or 12 hours broken into two six-hour
shifts. Once an engineer's work schedule has been established it
shall not be changed for that tour of duty except for the purpose of
synchronizing the engineer's schedule with that of outside personnel
aboard the tug for the purpose of facilitating repairs or fueling.
On any day that the engineer is required to work overtime for any
reason, then, notwithstanding the first paragraph of Section 42, his
overtime pay shall commence after twelve hours on watch.
For coastwise towing, excerpt towing of oil barges and Blue Circle
Cement barges.
The overtime provisions applicable to New York Port area work shall
apply with the following exceptions:
1. overtime shall be paid only for work in excess of fifteen (15)
hours in any calendar day (midnight to midnight), at
straight-time rates in one-half (1/2) hour increments.
2. The Captain shall not be entitled to overtime. The Engineer
shall be entitled to overtime if there is no Assistant
Engineer on board; he shall not be
13
<PAGE>
entitled to overtime if there is an assistant Engineer on board.
Section 43. Company Travel Time
Change "8 hours pay" to "one day's pay."
Section 44. Mud and Garbage Scale
Delete.
Section 45. Bareboat Chartering
Delete all language after first sentence.
Section 46. Service Letters
Continue unchanged.
Section 47. Carfare to Discharged Employees
Continue unchanged.
Section 48. Transfer - Notice to Union
Continue unchanged.
Section 49. Committee on Safety, Training and Licensing
Modify to provide for the establishment of a Committee comprised
of two representatives of the Employer and two representatives of the
Employees, which shall make non-binding recommendations that are not
subject to the grievance and arbitration machinery. Delete reference that
Employer representatives must be "high level."
14
<PAGE>
Section 50. Payment of Medical Costs for Service Disability
Delete.
ARTICLE II. ADJUSTMENTS AND ARBITRATION OF DISPUTES
Section 1. Informal Settlement
Continue unchanged except add a provision requiring that the
Employer
and Union shall meet within 72 hours of the time the Employer is notified
of the filing of the grievance in an attempt to resolve the dispute or
grievance. The grievance is not waived if the parties are unable to meet
within this 72 hours.
Section 2. Ouick Settlement Committee
Add a new provision with respect to selection, assignment and
discipline of tug captains, as follows:
(1) If the Union disputes management's selection of captains
for openings within the Employer's fleet or the assignment of
captains within the fleet, or the demotion of a captain to mate,
then it shall be entitled to discuss the matter with a
high-level representative of management, but shall not be
entitled to grieve or arbitrate management's decision.
(2) If a captain is discharged, suspended, or otherwise
disciplined, except for demotion to mate, the Union shall be
entitled to grieve and arbitrate management's action, and the
usual "just cause" standard shall apply.
(3) In the case of demotion of a captain to mate, if a
captain's vacancy arises more than six months after the
demotion, the Company will in good faith consider reinstating
the demotee to the position of captain.
15
<PAGE>
Section 3. Arbitration
Delete references to Quick Settlement Committee and change the
last
sentence of paragraph (a) to "within thirty (30) days of the date the
Parties agree not to settle the grievance or the grievance is waived."
ARTICLE III
The Employer may operate up to three day boats per day with a
three-man crew (captain, engineer, and deck hand), not to exceed twelve
(12) hours per day. Crew members on a day boat shall be paid on an hourly
basis; the hourly rate for each classification shall be determined by
dividing the daily Harbor rate for that classification by twelve. The
minimum pay per calendar day on a day boat shall be twelve (12) hours of
pay. Employees will be paid the straight time hourly rate for all time
worked in excess of twelve (12) hours.
ARTICLE IV
Change title of this Article to "WAGES, MANNING AND WORKING
CONDITIONS." Delete entire Article and substitute the following:
Section 1.
a. Daily Wages for Twenty-Four Hour Boats
The daily wage rate for New York Port area work and for
coastwise towing of oil barges and Blue Circle Cement barge
16
<PAGE>
shall be as follows:
Rank Year 1 Year 2 Year
Captain - N.Y. Port Area $270 +5% +4%
Captain - Coastwise Oil
and Blue Circle Cement 275 +5% +4%
Licensed Mate 235 +5% +4%
Asst. Engineer 185 +5% +4%
Engineer 235 +5% +4%
Deckhand - A/B 145 +5% +4%
- O/S 140 +5% +4%
Year 1 rates shall be effective the first payroll period
after ratification of this agreement. Year 2 shall be effective one year
later. Year 3 rates shall be effective two years later.
b. The daily wage rate for coastwise towing, except for
towing of oil barges and Blue Circle Cement barges and the coal run to the
Bridgeport, Connecticut area, shall be as follows:
17
<PAGE>
Rank Year 1 Year 2 Year
Captain $265 +5% +4%
Mate 220 +5% +4%
Second Mate 190 +5% +4%
Chief Engineer 220 +5% +4%
Asst. Engineer 180 +5% +4%
Deckhand - A/B 125 +5% +4%
- O/S 110 +5% +4%
Utility 135 +5% +4%
C. The daily wage rate for the tug towing a coal barge on
the run to the Bridgeport, Connecticut area shall be as follows:
Rank Year 1 Year 2 Year
Captain $270 +5%. +4%
Mate 227.50 +5% +4%
Second Mate 190 +5%. +4%
Engineer 227.50 +5% +4%
Asst. Engineer 182.50 +5% +4-%
Deckhand - A/D 135 +5% +4%
- O/S 125 +5% +4%
d. New deckhands, i.e., those that have not previously been
employed by Moran, shall be paid at the following wage rate for their first
seventy-five (75) working days.
18
<PAGE>
New York Port area work and coastwise oil and
Blue Circle Cement towing
A/B $120
O/S 110
Coastwise towing, except for towing oil
barges and Blue Circle Cement barges
A/B $110
O/S 110
Section 2. Manning
a. Except as provided in this Section 2 (c) below,
manning on each automated tugboat shall consist of 1 captain, 1 mate, 1
engineer, and 2 deckhands. Docking pilots, unless they function as captain
or mate, will not be considered part of the crew for purposes of
satisfying manning requirements.
b. Manning on each non-automated tugboat shall
consist of 1 captain, 1 mate, a chief engineer, 1 assistant engineer and 2
deckhands.
c. Two (2) tugs when engaged solely in work in New
York Harbor, may be manned with four persons--a Captain and three crew
members as specified in subsection below. The New York Harbor means, for
purposes of this Section 2-c and of Article XII, the geographic area from
Execution Rock on the east to Albany (below the Locks) on the North to the
line between Sandy Hook and Rockaway Point on the South.
If the Company chooses to take advantage of this provision, it will name
the tugs at least one complete tour in advance. Once a year, the Company
may substitute different
19
<PAGE>
tugboats to be operated with a Captain and three crew members as specified
in subsection
(i) below under the same restrictions provided herein. If during the
course of a year, the Company requests a replacement of one of the four
person tugboats due to the retirement, sale, mothballing or major repair
of a tugboat, the Union will grant such a request.
For each tugboat operated with a Captain and three
crew members, the following will apply:
(i) Wages for the crew will be increased as
follows:
captain by $25 per day; engineer/deck hand by $25 per day; deck hand and
mate by $15 per day each. This increase in wages shall be fixed for the
term of this Agreement and will not be increased from year to year.
(ii) Where a tugboat begins a tour with a five
person crew (a Captain and four crew members), that tugboat will remain as
a five person tugboat for the remainder of the calendar week.
(iii) Where a tugboat begins a tour with a four
person crew (a Captain and three crew members as specified in subsection
(i)), that tugboat may increase crew size to a five person crew (a Captain
and four crew members). The pay rates will be adjusted to the contractual
rate for a five person crew (a Captain and four crew members) and the
tugboat will remain with a five person crew (a Captain and four crew
members) for the duration of the calendar week.
(iv) Where the fifth crew member is required
to travel to or from the tugboat, his travel expenses will be paid if not
otherwise reimbursed pursuant to another provision of the agreement.
20
<PAGE>
Section 3. Specific Working Conditions
a. Grub Money
Grub money shall be paid at the following rates
to all tugboat and launch crew members:
Year 1 - $ 9.00 per day
Year 2 - 9.50 per day
Year 3 - 10.00 per day
b. Twenty-Four Hour Operation
Tugboats in this group to be operated 24 hours
per day.
c. Split Time
The Employer shall pay not less than one full
day's pay to any Employee, that is, there shall be no split time. Except
on crew change day, an Employee shall receive a full day's pay if he works
(including being aboard the vessel off watch) for any portion of a
calendar day, that is, from midnight to midnight. On crew change day, the
Employee boarding the vessel shall receive a full day's pay; the Employee
leaving the vessel will not be paid for that day.
d. Designated Place to Tie Up
The Employer may have up to 3 tie-up
locations in New York Harbor which shall be interchangeable for the
Employer's equipment. The Employer may change the location of its tie-up
21
<PAGE>
points upon notice to the Union. The Employer may add additional tie-up
locations, in excess of three, with the Union's consent.
e. Carfare
Whenever, if it is legally possible, a crew
member is given time off, with the permission of the Master, the Employer
will, not more frequently than once in thirty (30) days, upon presentation
of proper travel vouchers, reimburse the Employee given time off for his
necessary expense in getting to and from the railroad, airline, or bus
terminal, and for the railroad, airline or bus fare (provided that the
means employed in getting to or from the terminal is the most economical
from the place where he leaves his vessel) to the base point designated by
Employer for the vessel (that is, the place at which the vessel is
normally crewed) and from the vessel's base point to the place where he
rejoins his vessel.
No later than the second pay period after presentation
of proper travel vouchers, the Employee will be reimbursed for one (1)
round trip per cycle. Carfare must be paid either from the vessel to the
home port or, if the Employee travels from the vessel to another city, to
that city, whichever is less, or vice versa. No claim for such travel
reimbursement shall be made, however, unless the Employee has spent at
least two dollars ($2.00) in connection with the round trip.
f. Crew Change Time
The Company may alter scheduled crew change times
upon notification to Employees. Upon failure to notify, the crew
22
<PAGE>
change must occur within 24 hours of scheduled change after which the crew
member will be deemed to be working.
g. Work Schedule
Employees shall be entitled to work equal time on
and equal time off. The normal tour of duty shall be between one week and
three weeks. A voyage may be extended to avoid crew changes at locations
that are not scheduled ports of call on that voyage.
ARTICLE V. TOWING OF UNMANNED AGGREGATE SCOWS
Except as provided herein, should the Employer intend
to engage in the business of towing aggregate scows within the geographic
area of this Agreement, it will apply the wage and manning provisions of
the Great Lakes Towing and Transportation Co. - Local 333 Agreement.
However, the Company may tow aggregate scows for not
more than 10 hours using the manning and wage provisions of Article IV
provided it is towing said aggregate scows for a Company that is regularly
engaged in such work and which has a signed agreement with Local 333.
Should the tow last longer than 10 hours, the Company will apply the Great
Lakes Towing and Transportation Co. scale for all hours worked.
Any additional manning required under the Great Lakes Contract shall be
operative after the 10-hour period. If delays are incurred in adding such
men, then said man's daily wage shall be divided among the remaining crew
until said man is added. The Company may not use multiple tugs on a job
to avoid
23
<PAGE>
the 10-hour limitation.
ARTICLE VI. MANNING REOUIREMENTS FOR
TUGS TOWING UNMANNED TANK BARGES
Delete Article.
ARTICLE VII
Delete and replace with the following:
The Employer and Union agree to establish a procedure, if
necessary, to resolve any dispute which should arise as to whether an
Employer tug is considered "automated" within the industry. If no
procedure is agreed to, the dispute shall be submitted to an
AAA-designated Arbitrator. If it is determined that the tugboat is not
automated, manning will require an assistant engineer under this
agreement.
ARTICLE VIII
Delete. The Employer does not now intend to operate
self-propelled lighters. If the Employer runs self-propelled lighters, it
will recognize the Union as the representative of the non-supervisory crew
members and it will negotiate with the Union concerning the applicable
terms and conditions.
ARTICLE IX. TRANSFER PROVISION
Delete and substitute the following provisions:
1. A subsidiary or affiliated company, including the
24
<PAGE>
mid-Atlantic affiliate, will not perform Current Employer Work unless no
suitable Employer vessel is available for the work. A vessel covered by
this agreement will not be transferred to a subsidiary or affiliated
company or division for the purpose of performing Current Employer Work.
2. Current Employer Work means work done by the Employer as of
January 1991 or thereafter acquired by the Employer. Work that the
Employer has not done (or in the future ceases to do) for at least two
years will no longer be considered Current Employer Work.
ARTICLE X. LIST OF OWNERS AND OPERATORS
Delete.
ARTICLE XI. ADDITIONAL OWNER PARTIES
Delete.
ARTICLE XII
One mid-Atlantic-based tug operated by a Moran affiliated
company may perform work in New York Harbor under the following
circumstances: (1) the mid-Atlantic boat is in New York Harbor by virtue
of an in-and-out voyage towing a barge; (2) all the Employer's tugs are
working, are laid up for repairs or are not suitable for the work (i.e.,
such matters as size and/or horsepower), but the Employer is not required
to break out a tug unless there is 12 hours scheduled work for the tug and
unless this
25
<PAGE>
scheduled work is known the day before; and (3) the mid-Atlantic boat may
perform work in New York Harbor for no longer than ten (10) hours
commencing with the time that the barge it towed into the Harbor starts
transferring cargo. The Company shall designate the tug to which this
Article will apply, and if that tug is unavailable for this purpose, the
Company may use another tug no more than five times a contract year.
ARTICLE XIII
If the Union enters into a collective bargaining agreement
with another employer with lower wage rates (based on the daily wage for
the vessel with comparable manning), then Moran shall be entitled to the
same wage scale for the same operations, except that this provision shall
not apply to the first year of the initial contract between the Union and
a newly-organized company with no more than three boats.
ARTICLE XIV. EFFECTIVE DATE OF AGREEMENT AND TERMINATION
Modify to provide for effective date of 12:01 a.m.,
September 26, 1995, and termination date of September 25, 1998.
Moran Towing & Transportation Local 333, United Marine
Co., Inc. Division, ILA, AFL-CIO
By: By:
26
<PAGE>
AGREEMENT
INTERNATIONAL ORGANIZATION OF
MASTERS, MATES & PILOTS
and
MORAN TOWING OF FLORIDA
A DIVISION OF MORAN TOWING CORPORATION
May 1, 1997
<PAGE>
<TABLE>
<CAPTION>
INDEX
SECTION TITLE PAGE #
------- ----- ------
<S> <C> <C>
1 Recognition................................ Page 2
2 Employment................................. Page 2
3 Handling of Grievances and Disputes........ Page 3
4 Passes to Representatives.................. Page 4
5 Picket Lines............................... Page 4
6 Discharge.................................. Page 4
7 Safety..................................... Page 5
8 Loss of Personal Effects................... Page 5
9 Leave of Absence........................... Page 6
10 Authority to Check Records................. Page 6
11 Days and Hours of Work..................... Page 6
12 Wages...................................... Page 8
13 Working Conditions......................... Page 9
14 Holidays................................... Page 11
15 Minimum Manning Scale...................... Page 11
16 Definition of Out-of-Harbor Towing......... Page 12
17 Transportation............................. Page 12
18 Payment of Wages........................... Page 13
<PAGE>
19 Food or Food Allowance..................... Page 13
20 Living Quarters............................ Page 13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INDEX
SECTION TITLE PAGE #
------- ----- ------
<S> <C> <C>
21 Vessels in Lay-
Up...................................... Page 13
22 Seniority, Continuity of Service, and
Layoff.................................. Page 14
23 Qualifications
Committee................................ Page 14
24 Roster................................... Page 14
25 Check Off................................ Page 14
26 Personnel Changes........................ Page 15
27 Military or Naval Service................ Page 15
28 Bidding on Vacancies..................... Page 15
29 Dockside Work............................ Page 16
30 Prohibited Work.......................... Page 16
31 Coast Guard Documents................... Page 16
32 Maintenance and Cure.................... Page 17
33 Qualifying for Docking Master........... Page 17
34 Pension, Health and Benefit, Training &
Safety Funds............................ Page 17
35 Sick Leave.............................. Page 18
36 Sales and Transfers of Vessels.......... Page 19
37 Savings Clause.......................... Page 20
38 Non-Discrimination...................... Page 20
<PAGE>
39 Personal Leave or Personal Day.......... Page 20
40 Probationary Period..................... Page 20
41 Vacation Benefit (I 997, 1998, 1999).... Page 20
42 Duration of Agreement................... Page 21
</TABLE>
<PAGE>
AGREEMENT
This Agreement is made and entered into as of the 1st day of May, 1997, by
and between the International Organization of Masters, Mates & Pilots, AFL-CIO,
its successors or assigns (hereinafter referred to as the Organization) and
Moran Towing of Florida, a Division of Moran Towing Corporation, its successors
or assigns (hereinafter referred to as the Company) covering all vessels owned
or operated by them for its own account in the Port of Jacksonville, Florida.
It is further agreed that during the life of this Agreement the Company
will not subcontract or direct work normally performed by personnel covered by
this Agreement to any other company without discussing said action with the
Organization.
WITNESSETH
Section 1. Recognition
The Company recognizes the Organization as the sole and exclusive
collective bargaining representative of all marine personnel employed on all
vessels owned or operated by the Company.
Section 2. Employment
A. The Company agrees that, during the period of this Agreement, it will
procure all its marine personnel except Captains through the Organization,
retaining the right to reject for cause any applicant referred by the
Organization. All referrals for employment shall be on a nondiscriminatory
basis without regard to race, color, creed, sex, age or national origin; Union
membership or lack thereof, of the applicant for employment.
B. Whenever qualified applicants who are registered with the Organization
are not readily available when required, the Company may secure employees from
any source whatsoever, but shall notify the Organization immediately in writing,
of the employment of any such employee. The Company shall make its best effort
to give the Organization twenty four (24) hour advance notice of needing
personnel. Before the Company hires an employee for a position lasting more
than thirty (30) days, it shall provide the Organization at least five (5) days
notice of the requirement. This requirement can be waived on a case by case
basis on the mutual agreement of the Organization and Company.
Company notice to the Organization of all new hires shall include the name,
address, telephone number, rating, social security number, and date of hire.
C. The Organization agrees that it will furnish the Company with marine
personnel believed to be capable, competent, physically fit and with the
required rating, and where
2
<PAGE>
reasonable notice has been given, to furnish such personnel when and where
required in ample time to prevent any delay in the operation of a vessel covered
by this agreement.
D. The Company with the full support of the Organization shall have sole
and unequivocal right and authority to hire, promote, demote, transfer and
assign captains. Company decisions in this respect shall not be subject to
grievance and/or arbitration procedures.
E. The Organization warrants and guarantees that it will maintain,
administer and operate its employment offices in accordance with all applicable
laws and agrees to indemnify and hold the Company harmless from all claims,
liability, damages or losses whatsoever occasioned or resulting directly or
indirectly from the Organization's failure to do so.
F. During the life of this Agreement, the Organization shall be granted
the highest degree of union security permissible under applicable State or
Federal law.
Section 3. Handling of Grievances and Disputes
As this Agreement provides for amicable adjustment of any and all disputes
and grievances, the Company agrees not to lock out any employee or group of
employees while this Agreement is in effect. The Organization agrees that it
will not cause, call or sanction any strike or stoppage of work until all
provisions of Section 3 have been exhausted.
A. Any employee covered by this Agreement who believes he has been
unjustly dealt with or that any provision of this Agreement has not been
properly applied or interpreted may present his grievance in writing to his
supervisor. Grievances must be presented within seven (7) working days of the
incident prompting the grievance, and will receive a decision within seven (7)
working days thereafter.
B. A representative of the Organization has the right to discuss or file
grievances with respect to any item in which he believes the contract has been
misinterpreted or violated at any time.
C. Should the procedure referred to in (A) and (B) fail to amicably and
mutually
adjust and settle the grievance or dispute, the matter shall then be submitted
to a Board of Arbitration selected as follows: Two arbitrators are to be chosen
by the Organization and two arbitrators are to be chosen by the Company; such
arbitrators shall meet within twenty-four (24) hours after written notice has
been served upon opposing party by the other party hereto (Saturdays, Sundays
and holidays excluded) and the arbitrators shall endeavor to adjust the
grievance or dispute and, should they fail to satisfactorily adjust said
grievance or dispute, they shall within seventy-two (72) hours from the time of
beginning of the first meeting on the matter agree on the selection of a fifth
arbitrator, who shall be acceptable to the parties of the dispute and who shall
be chairman of the Board of Arbitration. However, in the event that no chairman
is
3
<PAGE>
agreed upon at the end of the seventy-two (72) hours, an impartial chairman will
be requested from one of the recognized arbitration services mutually acceptable
to the Organization and the Company. The U. S. Mediation and Conciliation
Service shall be called upon for the impartial chairman in case of a deadlock.
The Board of Arbitration shall within five (5) days (Saturdays, Sundays and
holidays excluded) hold a meeting for the purpose of hearing all parties
interested in the submission of facts pertinent to the matter in dispute. The
decision of the majority of the Board shall be final and binding upon both the
Organization and the Company and shall be rendered in writing with all possible
promptitude. Each party shall bear the expense of their respective arbitrators,
and the expense of the Chairman, together with any other incidental expenses,
shall be shared equally by the Organization and the Company.
There shall be no strike nor lockout during the arbitration of any dispute.
Section 4. Passes to Representatives
Authorized representatives of the Organization shall be allowed to go on
board vessels of the Company to interview the marine personnel. The
Organization agrees to take out insurance and furnish the Company with a
certificate of such insurance which will protect the Company, its employees and
agents against any claim, loss, damage or liability for loss of life or injury
occurring to representatives of the Organization while on the property of or
while on board a vessel of the Company.
Section 5. Picket Lines
No employees shall be expected to pass through a picket line nor to perform
work for a member of any union engaged in an industrial dispute. Further, they
shall not be required to work under conditions which may endanger their health
or safety.
Section 6. Discharge
It is understood that the Company has the right to discipline or discharge
marine personnel for any just and sufficient cause. Any employee so discharged
shall be given, on the date of discharge, a written statement advising of the
discharge and an explanation of the reasons for the discharge. The Organization
shall be given a copy of this written statement immediately.
The failure of the Company to furnish such written statement shall
presumptively establish that said employee has been discharged without just
cause.
Should said employee feel that he has been unjustly treated he may, through
his representative, have his case considered as a grievance under the procedure
outlined in Section 3 to a conclusion.
4
<PAGE>
In the event the employee is cleared of the charges against him, he shall
be returned to his former position and rating without loss of seniority or any
other rights and privileges and if, in the interim, he has been suspended or
dismissed, the loss of wages suffered by him shall be restored to him by the
Company.
The possession of or use of illegal drugs or alcoholic drinks aboard the
Company vessels shall be just cause for immediate discharge from employment.
Reporting for duty under the influence of illegal drugs or legally intoxicated
constitutes grounds for immediate discharge from employment.
Section 7. Safety
A. Should a condition arise whereby an employee should feel that the
equipment under his care or the conditions under which he would be required to
work are unsafe, he may have said condition investigated by the Company. Should
the Company fail to correct said condition within a reasonable time, the
condition shall be reported to the Vice President of the Organization or his
designee. If the Company and the Organization fail to work out a prompt
settlement, the condition shall be reported to the U. S. Coast Guard, Bureau of
Marine Inspection or other appropriate organization for investigation and
decision.
B. The Organization and the Company agree to cooperate fully at all times
in protecting the safety of the marine personnel and protecting the health and
welfare of all employees. No employee shall be required to work under
conditions which may endanger his health and/or safety.
C. First-Aid Kits and adequate safety equipment shall be furnished on
boats of the Company and deficiencies shall be brought to the attention of the
Company.
Section 8. Loss of Personal Effects
If the personal effects of any employee become a total loss as a result of
fire or sinking of the vessel on which he is employed, he shall be paid by the
Company the sum of Three Hundred ($300.00) Dollars in full compensation for such
loss, whether or not the loss is greater or less than Three Hundred ($300.00)
Dollars, without prejudice to any claim for injury or illness he may have
resulting from said fire or sinking.
5
<PAGE>
Section 9. Leave of Absence
It is agreed that the Company, with the agreement of the Organization, will
grant leave of absence for illness or accident whether occupational or
non-occupational, death in the immediate family, attendance at schools,
obtaining or upgrading licenses, and position with the Organization, without
loss of seniority and position on the roster. Any such leave of absence shall
be in writing and will be granted for a period of up to three months and is
subject to renewal or extension by agreement in writing between the Company and
the Organization. Leave of absence for position with the Organization shall be
coextensive with the duration of his Organization position provided that the
seniority rights of any person on leave of absence for a position with the
Organization shall terminate within thirty (30) days should the Organization
cease to be the collective bargaining agent for personnel covered herein.
Marine personnel on leave for Jury duty shall remain on base wages for the
duration of such duty.
Section 10. Authority to Check Records
Organization representatives shall be permitted to check official records
of hours worked and computation of pay and other pertinent related data for
marine personnel upon request of such representative to the Company.
Section 11. Days and Hours of Work
A. Work Day
A work day shall be twenty-four (24) hours from 0500 to 0500 or any other
twenty-four (24) hour period agreed to between the Organization and the Company.
B. Harbor Vessels
1). Vessels with Regular Assigned Crews
a). There shall be four (4) vessels with Regular Assigned Crews and relief
crews [a total of six (6) crews.] Each crew will be assigned to a
vessel or vessels and shall be available for work on a twenty-four
(24) hour day basis during his scheduled work period.
When determined that a Regular Assigned Crew will not be required for
a scheduled work day, the crew shall be ordered off-duty, meaning no
wages or benefits are payable to the crew. Notice of being off-duty
will be provided prior to 2400 of the evening preceding the scheduled
work day, or when the crew is released and the tug is tied up. The
Company will maintain and share records of off-duty days to assure an
equitable distribution of off-duty days among Regular Assigned Crews
over the course of each year. In no
6
<PAGE>
event shall a single Regular Assigned Crew be given more than two (2)
off-duty days in a single month.
b). Regular Assigned Crews when not required aboard their vessels at 0500
on a scheduled work day will routinely report to their assigned
vessels at 0700 excluding Saturdays, Sundays and Paid Holidays, unless
appropriately notified they are off-duty. Said crews shall be subject
to perform maintenance aboard their vessels until 1630.
Monday through Friday, excluding Paid Holidays: When a Regular
Assigned Crew is released for the day prior to 1700 on a scheduled
work day and they have performed less than two (2) towage services,
they will be paid at the twelve (12) hour rate for the day. If said
crews perform two (2) or more towage services, or are required to work
after 1700, they will be paid a 24-hour rate for the day.
Saturdays, Sundays, and Paid Holidays: When a Regular Assigned Crew
performs one (1) or more towage services, they will be paid a 24-hour
rate for the day.
Designated Company Holidays shall be treated the same as Saturdays,
Sundays, and Paid Holidays with respect to crews routinely reporting
for maintenance.
Tug Captains shall determine the timing and practicality of
assignments to maintenance work based on safety, work schedules, rest
for crew members, known towage service requirements, and any other
factors he may reasonably use to make his decision. Marine personnel
are subject to perform maintenance from 0700 to 1630, Monday through
Friday, excluding holidays. Personnel who are required to work (on
duty) two (2) hours or more between 0000 and 0700 shall have an equal
amount of time for rest but in no event shall the time for rest be
less than four (4) hours before being required to perform routine
maintenance. Sanitary and housekeeping chores shall be performed as required.
c). Crews assigned to Regular Manned Vessels shall be rotated on a two-
days on/one-day off formula. Any multiple greater than six-days
on/three-days off shall be by mutual agreement between the
Organization and the Company.
2). Call-out Vessels
Call-out crews shall be called to duty as required and be paid in
twelve (12) hour increments commencing at their ordered reporting
time. The 0500 to 0500
7
<PAGE>
work day of Regular Assigned crews shall not apply to call-out crews. This
will not affect the Regular Assigned Crews.
C. Out of Harbor Starting Time
Regular Assigned Crews which are ordered to report at 0500 or have
commenced a 0500 to 0500 work day cycle that are assigned to Ocean and/or
coastwise towage service shall remain on that work cycle and be paid at the
twenty-four (24) hour wage rate on the basis of 0500 to 0500 calendar days.
Regular Assigned Crews called into service for Ocean and/or Coastwise towage
service between 0001 and 0459 shall work on 0001 to 2400 calendar days and be
paid at the twenty-four (24) hour wage rate per calendar day.
In the case of all Ocean and/or Coastwise towage service, marine personnel
shall be available for work on a basis of twenty (20) days at work to be
followed by ten (10) days off each thirty (30) days. Watches shall be set in
the appropriate manner so that hours of work of personnel aboard the vessel are
equalized insofar as possible.
Marine personnel required to work in excess of twenty (20) days may take
one (1) day off for each two (2) days worked or pro-rate thereof.
Section 12. Wages
The wage rates for marine personnel shall be as follows:
May 1,1997 - April 30, 1998
<TABLE>
<CAPTION>
Rating 24-Hour Rate 12-Hour Rate
------ ------------ ------------
<S> <C> <C>
(A) Captain $198.00 $99.00
(A) Licensed Engineer/Utility $182.00 $91.00
*Unlicensed Engineer/Utility $140.00 $70.00
(A) Mate Utility $148.00 $74.00
Deckhand -A/B $106.00 $53.00
Deckhand - Ordinary I $102.00 $51.00
Deckhand - Ordinary II $85.00 $42.50
May 1,1998 - April 30, 1999
Rating 24-Hour Rate 12-Hour Rate
------ ------------ ------------
(A) Captain $202.00 $101.00
(A) Licensed Engineer/Utility $186.00 $93.00
*Unlicensed Engineer/Utility $143.00 $71.50
(A) Mate Utility $151.00 $75.50
Deckhand -A/B $108.00 $54.00
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C> <C>
Deckhand-Ordinary I $104.00 $ 52.00
Deckhand - Ordinary II $ 86.00 $ 43.00
May 1, 1999 - April 30, 2000
Rating 24-Hour Rate 12-Hour Rate
------ ------------ ------------
(A) Captain $206.00 $103.00
(A) Licensed Engineer/Utility $190.00 $95.00
*Unlicensed Engineer/Utility $146.00 $73.00
(A) Mate Utility $154.00 $77.00
Deckhand-A/B $110.00 $55.00
Deckhand-Ordinary 1 $106.00 $53.00
Deckhand - Ordinary II $ 87.00 $43.50
</TABLE>
(A) Licensed Position
1. Applicable to Persons Hired Before April 16, 1994
11. *Applicable to Persons Hired After April 16, 1994
Marine personnel assigned to Ocean and Coastwise Service shall be paid a bonus
for each day Worked in such service as follows:
<TABLE>
<CAPTION>
<S> <C>
Captain $15.00
Licensed Engineer/Utility $12.00
Unlicensed Engineer/Utility $10.00
Mate $10.00
Deckhand $ 8.00
</TABLE>
Section 13. Working Conditions
A. Marine personnel called for duty on any day shall not be credited with
less than twelve hours working time. All night calls shall be issued by the end
of the business day or at the conclusion of duty on weekdays whenever practical.
B. Orders for duty on Saturday or Sunday, when practical, will be given
at the end of the business day or at the conclusion of the tour of duty on
Friday or Saturday.
C. In cases where it is necessary for a crew or partial crew to be
transferred from
its original vessel to another in the course of the usual operation of the
vessel or if the vessel breaks down, there shall not be an additional day's pay
when personnel are so transferred.
D. Wheel Watch: A Deckhand standing a six-hour wheel watch on offshore
vessels will be entitled to a total of two (2) hours relief at the wheel.
9
<PAGE>
E. Rotation of Vessels: Vessels will be rotated consistent with good
operating practices, with a view toward equalization of the workload as fairly
as possible. Grievances arising under this provision shall be handled in
accordance with the procedures of Section 3 of the Agreement.
F. In the event a call-out vessel is required in any one day, all
personnel shall receive a minimum of twelve hours pay, and the Company shall
make appropriate contributions, in accordance with Section 34 to the Plans,
whether the marine personnel work a full twelve (12) hours or not. (Section I
I.B.2.)
G. The letter of April 6, 1977, assuring that certain personnel of the
Company will not be required to engage in or perform "sea duty" shall be
continued and is expressly incorporated in this Agreement. (See Appendix A for
letter and roster of affected personnel.)
H. Marine personnel working before 0500 shall not be required to do any
maintenance work other than sanitary work.
I. Deckhands and Mates shall not be required to maintain the Captain's
quarters or engine room.
J. The Company agrees that, when vessels are being prepared for sea or
when vessels return from sea, the Company will have the shore gang or the sea
crew prepare and outfit the vessel for going to sea or returning to harbor work,
if possible.
K. The Company will make its best effort to change crews as close as
possible to or prior to the scheduled crew change time.
In the event a ship job is in progress prior to crew change time and the
nature of the job prevents changing crews during the job, crews will be changed
immediately following the completion of the 'ob or will receive an additional
12-hour pay increment.
L. The Mate's position is a licensed position created to assist the
Captain in the wheelhouse when necessary as well as to perform Deckhand duties
as required.
M. Marine personnel working aboard a vessel engaged in one or more
services during a day will be permitted to leave their vessel and the area,
provided:
1). There is no work scheduled.
2). If work is scheduled, personnel can return to their vessel for the
next scheduled service.
10
<PAGE>
3). Provided their presence is not required aboard the vessel,
In any of these situations personnel are to be available by telephone or
beeper at all times while away from the vessel.
N. Regular Assigned Crews may when Company requirements necessitate be
temporarily assigned to vessels other than their normally assigned vessels.
If a Regular Assigned Crew reporting to duty to relieve a crew scheduled to
go off duty is assigned to perform a towage service that results in the delay of
the crew going off duty:
(1). The crew scheduled to go off duty will receive a penalty payment of
twelve 12) hour wage increment.
(2). The crew scheduled to go off duty shall be dismissed from duty
promptly after completing their one assigned job and will not be
required to do other work.
Regular Assigned Swing Crews can be transferred before 0500, however, it
shall not effect the earnings of the crew being relieved early.
Section 14. Holidays
The following will be observed as holidays:
President's Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
Christmas Day
New Years Day
If worked, employees will receive as a bonus an amount equal to a day's wage in
addition to the regular daily wage rate.
Section 15. Minimum Manning Scale
The minimum manning scale of a vessel shall be a three (3) man crew:
1 Captain
1 Engineer
1 Mate OR 1 Deckhand
11
<PAGE>
Any employees hired prior to April 25, 1997 shall not be laid off as a
result of this provision.
Call-Out Crews shall routinely be manned by three (3) man crews. Any
regularly manned vessel may be manned with a three (3) man crew, however, such
manning will be carefully considered by the Company in respect to hours the
vessel works and its service duty.
Regular employees, except Captains, shall remain with their assigned crews
except as provided in this Agreement.
Extra/Relief personnel shall be available for assignment as required.
In addition to the eighteen (1 8) regular crew positions consistent with
three (3) man minimum manning, the Company will maintain not less than (3)
Extra/Relief billets.
Extra/Relief employees shall be assigned as required and can expect an
opportunity to work a minimum of one hundred eighty days (180) days per year.
These employees are subject to lay off should a regular crew be laid off in
accordance with the provision in this Agreement.
Regular assigned crewmembers shall be mutually agreed between the Organization
and the Company and posted in writing.
Section 16. Definition of Out-of-Harbor Towing
For the purpose of this Agreement any towage service performed outside the
St. Johns Seabuoy lasting in excess of twenty-four (24) hours shall be defined
as Ocean and Coastwise Service.
Section 17. Transportation
A. All vessels shall have a home pier to tie up to or change crews.
However,
employees will at the Company's option change crews at any Company facility
without penalty
and the Company will provide prompt, appropriate transportation back to the
Company facility where the crew first boarded the vessel.
B. In the event marine personnel are required to report for work or
return from work at a place outside of the Port of Jacksonville, the Company
shall pay for or supply adequate transportation, subsistence and lodging to the
home port and traveling time at the employee's straight-time rate of pay.
C. The home port shall be Jacksonville, Florida, or such other ports as
the Company and the Organization may hereinafter designate.
12
<PAGE>
Section 18. Payment of Wages
A. Wages shall be paid between 11 00 and 13 00 not later than the fifth
day after the first (1st) and fifteenth (15th) day of each month. The pay
envelope or statement shall be
submitted by the Company at each pay period showing itemized account of wages
paid for such period. The itemized account will also show amounts deducted and
for what purposes the deductions were made.
B. The Company agrees to correct and pay all Company payroll errors
within three
(3) working days after said errors are brought to the attention of the Company.
Section 19. Food or Food Allowance
A. The Company will provide a healthful, nutritious, balanced supply of
food stores aboard vessels assigned to Ocean and Coastwise service. This shall
include fresh vegetables, fresh fruits, fruit juices, fresh milk and fresh cuts
of U. S. Choice meats. The Company agrees that these groceries shall be
purchased on the basis of ten dollars ($10.00) per man per day.
B. In lieu of food stores as provided in (A) above marine personnel
assigned to In-
Harbor service shall receive a food allowance as follows:
<TABLE>
<CAPTION>
5/1/97-4/30/98 5/1/98-4/30/99 5/1/99-4/30/00
-------------- -------------- --------------
<S> <C> <C> <C>
24-Hour Rate - $11.00 $12.00 $12.50
12-Hour Rate - $5.50 $ 6.00 $6.25
</TABLE>
The Company will provide tea, coffee, sugar, and non-dairy creamer aboard
all Company vessels.
Section 20. Living Quarters
A. The Company shall provide adequate living and sleeping quarters on
each boat and keep said living and sleeping quarters heated, ventilated or
cooled as required to be comfortable at all times. Living and sleeping quarters
shall be kept free of vermin and fumigated as required. The Organization agrees
that its members should cooperate in keeping the living and sleeping quarters
clean and sanitary.
B. The Company shall supply marine personnel with full-length lockers,
innerspring mattresses, clean blankets, sheets, pillow cases, towels, and soap
on all vessels. The Company agrees to re-issue these items when they become
worn and are returned.
Section 21. Vessels in Lay-Up
Marine personnel assigned on boats in repair yards shall not be required to
work longer
13
<PAGE>
hours than the regular straight time hours of the shop mechanics. Marine
personnel so assigned shall not be required to take a boat out other than the
boat to which he is assigned in the repair yard.
Section 22. Seniority, Continuity of Service, and Layoff
A. Seniority shall prevail, subject to fitness and ability, in their
respective classes,
among the marine personnel employed by the Company, with respect to promotions
and reduction in forces.
B. Continuity of service shall be broken by resignations, discharge for
cause, or layoff in excess of six (6) months, or failure to report to work
within one week from mailing by
Company (by registered mail, return receipt requested) of notice that a job is
available, sent to the employee's last known address as it appears on the
Company's records.
C. In the event of a major loss of business and the necessary layoff of a
tug and layoff of a Regular Assigned Crew, the Company shall give the crewman
and the Organization fifteen (I 5) calendar days advance written notice of such
tie up and its anticipated duration. In no case will a crewman be laid off less
than ten (10) calendar days. If any crewman is laid off and then called back to
work in less than ten (10) calendar days he shall be paid six (6) days wages at
the twelve (12) hour rate. No call out tugs/crews will be used while a Regular
Assigned Crew is laid off.
Section 23. Qualifications Committee
There shall be a Qualifications Committee consisting of a representative of
the Organization and a representative of the Company which shall determine the
qualifications and abilities of marine personnel to determine fitness for
promotion. In the event marine personnel are determined to be promotable, there
shall be a probationary period of sixty (60) days from the time of promotion
during which time the Qualifications Committee will monitor performance. In the
event an employee's performance is unsatisfactory, such employee has the right
to return to his lower classification with no loss of seniority and without
recourse to the grievance procedures. Marine personnel may be reconsidered for
promotion after achieving additional qualifications.
Section 24. Roster
The Company shall promptly provide rosters (Seniority Lists) and other
lists and information to the Organization upon request.
Section 25. Check Off
A. The Company agrees to deduct from the earnings of the employees who
have so authorized in writing the regular membership dues of the Organization
uniformly required
14
<PAGE>
and consisting of membership dues, service fees, assessments, and initiation
fees and remit same to the Organization. Such authorization, to be valid, shall
conform to applicable State and Federal laws.
Dues or service fees deducted shall be an amount equal to three (3) percent
of the gross earnings of each employee. Monies deducted shall be transmitted to
the Organization by the 15th of the month for the preceding month's deductions
and shall be accompanied by a report showing, for each employee, (including
those not on check off) the gross earnings, dues deducted, Social Security
number, and capacity in which served during the period involved.
B. It is agreed that the Company will, upon the appropriate written
authorization from employees covered by this Agreement, deduct as directed by
written authorization contributions of such personnel to the Organization's
Credit Union.
All funds deducted pursuant to the written authorization of this Section
shall be promptly remitted to the Masters, Mates & Pilots Federal Credit Union
and such shall be done at the same time that the Company makes their
contributions to the various MM&P Plans.
Section 26. Personnel Changes
The Vice President of the Organization or his designee shall be immediately
notified of any additions to or subtractions from the force of marine personnel
of the Company in order that the Organization's copy of the Company's rosters
may be kept completely up to date.
Section 27. Military or Naval Service
In the event that any marine employee covered by this Agreement enters into
military or naval forces, he shall retain his seniority and right to
re-employment upon his request in accordance with applicable law.
Section 28. Bidding on Vacancies
A vacancy shall be deemed to have occurred when a Regular Assigned employee
leaves a position as a result of death, resignation, discharge, promotion or
transfer, or when a new Regular Assignment is created.
When a vacancy occurs, the assignment of personnel shall be in accordance
with seniority, ability, safety record and work record.
The Company agrees to post such vacancy within thirty (30) days of
occurrence. The vacancy shall remain posted for a two-week period during which
time the employees holding seniority with the Company may bid in writing for
such vacancy. The period of posting may be increased or decreased by mutual
agreement of the Organization and the Company.
15
<PAGE>
At the end of the bidding period, the Company shall assign the vacancy to
the employee who holds the most seniority and has bid for the job provided he is
capable and qualified to hold the new position.
Any dispute regarding the bidding process may be resolved by submitting the
matter in accordance with Section 3 of this Agreement (Handling of Grievances
and Disputes),
Section 29. Dockside Work
A. Personnel regularly employed by the Company as maintenance men, making
repairs and adjustments to the tugboats shall be subject to the provisions of
this Agreement and their wage rate shall be equal to those outlined in Section
12 less food allowance.
B. Each operator will be given prior notice when maintenance work is to
be done on his vessel.
Section 30. Prohibited Work
Captains and Engineers shall not be required to do any maintenance work
normally done by deckhands and mates of the crew. Engineers shall, when
required, assist mates and/or deckhands with line handling.
Section 31. Coast Guard Documents
A. The Company and the Organization agree, each in its own behalf, that,
in addition to any applicable laws of the Federal, State or local governments,
each employee of the Company shall obtain and carry in his possession at all
times a valid U. S. Merchant Mariner's Document ("Seaman's Card" or "Z Card")
issued by the United States Coast Guard. It is further agreed that each current
employee not presently possessing such a valid Document shall apply for the same
within thirty (30) days after the effective date of this Agreement. Likewise it
is agreed that any new employees referred to the Company by the Organization in
the future shall provide the Company with adequate proof of possession of such a
valid Document prior to his being accepted for employment and/or his placement
aboard a vessel owned or operated by the Company.
B. Deckhands referred by the Organization to permanent assignment on
vessels of the company shall have in their possession a valid Able Bodied
Seaman's Document prior to such assignment. Deckhands who have permanent
assignments on vessels of the Company shall have the right to bid on open
Deckhand jobs on a seniority basis whether or not they have a valid AB Document.
C. In the event a vessel goes to sea and requires ABs and a Deckhand
thereon does not have a valid AB Document, such Deckhand will take a leave from
such vessel for the period the vessel is out of Port, at no cost to the Company.
16
<PAGE>
Section 32. Maintenance and Cure
A. Personnel who are entitled to maintenance under the general maritime
law doctrine of wages, maintenance and cure on account of injury or illness
incurred in the service of the vessel shall be paid maintenance at the rate of
Twenty Two Dollars ($22.00) per day, One Hundred Fifty Four Dollars ($154.00)
per week, with payments to be made once weekly. Wages, maintenance and cure,
under such doctrine, shall not be withheld in any case merely because the
claimant has also submitted a claim for damages or has filed suit for or has
taken steps toward that end.
B. Personnel may also apply for and shall be paid accrued sick leave
while being paid maintenance and cure.
Section 33. Qualifying for Docking Master
The Company and the Organization agree that it is desirable to encourage
marine personnel to pursue and qualify for available Docking Master positions.
Marine personnel wishing to be considered as a candidate for a Docking Master
position shall notify the Company in writing with details of his licenses,
experience and a personal log of ship handling jobs observed from aboard
specific vessels.
Section 34. Pension, Health and Benefit, Training & Safety Funds
All fringe benefits shall be paid on twelve (12) hour increments including
Health and Benefit. This shall mean: All fringe benefits shall be payable per
twenty-four (24) hour man day worked or where applicable at one-half (1/2) rate
for 12 hour man days worked. In no event shall Union benefits be payable on any
earnings or payments which are not man days worked.
A. Pension Fund:
The Company agrees that it shall participate in and contribute to the
Atlantic & Gulf Region Benefit Pension Fund for the duration of this Agreement
at the following rates:
<TABLE>
<CAPTION>
Rating 24-Hour Rate 12-Hour Rate
------ ------------ ------------
<S> <C> <C>
Captain $10.56 $5.28
Licensed Engineer[Utility 10.00 5.00
Unlicensed Engineer/Utility 7.54 3.77
Mate 7.54 3.77
Deckhand-Ordinary 5.90 2.95
Deckhand-A/B 5.90 2.95
</TABLE>
17
<PAGE>
B. Health and Benefit Plan
During the life of this Agreement, the Company shall contribute to the
Health and Benefit Plan Nineteen Dollars and Twenty Eight Cents ($19.28) per
twenty-four (24) hour man day worked and Ten Dollars and Ninety Three Cents
($10.93) per twelve (12) hour man day worked. The Organization shall select
coverages and carrier through which such benefits shall be provided and shall
furnish the Company with written directions concerning such payments.
The Company agrees to execute any acceptance of escrow or other agreements
necessary in connection with the contribution for welfare benefits and to make
the contributions at the time, in the manner, with the reports in accordance
with the direction from the Organization.
C. Training & Safety Fund:
The Company agrees that it shall participate in and contribute to the
Atlantic & Gulf
Maritime Region Educational Training and Safety Fund for the duration of this
Agreement.
Contributions shall be on a per man day on payroll basis at the following rates:
<TABLE>
<CAPTION>
<S> <C>
Twenty-four (24) hour rate $.75 per day
Twelve (12) hour rate $.38 per day
</TABLE>
Section 35. Sick Leave
Marine Personnel will not accrue additional sick leave days after March 31,
1988; however, the sick leave program enumerated below shall continue until each
employee has received payment for his last day of benefits.
A. The provisions of this section shall cover marine personnel absent
from work as a result of disability caused by accident or sickness and shall be
in lieu of all prior practices and policies pertaining to the salary continuance
during such absences.
B. Eligibility. To be eligible for payments under the provisions of this
Section,
reasonable evidence (including, in appropriate circumstances, a certificate from
a licensed medical doctor) of disability due to sickness or accident will be
required. NOTE: Marine personnel may be off sick up to two (2) days twice a
year without being required to provide a Doctor's Certificate.
C. Deckhands and mates retiring from employment with 20 or more years of
service shall be paid accumulated sick leave up to 180 days. Marine personnel
terminating with 20 years or more service shall be paid their accumulated sick
leave up to 90 days. Payment of sick leave shall be made at the time of
retirement or termination at the following rates of pay:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Mate $52.68 Deckhand $52.68
</TABLE>
18
<PAGE>
D. Captains and engineers retiring from employment with twenty (20) or
more years of service shall be paid accumulated sick leave up to 216 days.
Captains and engineers terminating with twenty (20) or more years of service
shall be paid their accumulated sick leave up to ninety (90) days at the
following rates of pay per day:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Captain $90.91 Engineer $90.03
</TABLE>
E. Marine personnel on maintenance and cure may request to be paid sick
leave at the following rates:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Captain $90.91 Engineer $90.03
Mate $52.68 Deckhand $52.68
</TABLE>
F. The following rates shall be paid for sick leave until the total
accrued amount reaches the maximums outlined for retirement:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Captain $80.51 Engineer $79.72
Mate $45.71 Deckhand $45.71
</TABLE>
G. Payments of sick leave shall be made at the time of retirement or
termination.
Section 36. Sales and Transfers of Vessels
Prior to any vessel contracted to the Union being disposed of in any
fashion, including but not limited to sale, scrap, transfer, bareboat charter,
etc., ninety (90) days notification in writing must be sent to the Vice
President, Atlantic & Gulf Maritime Region, IOMM&P, 349 East 20th Street,
Jacksonville, Florida 32206.
The Union recognizes that the Company may not in all cases be able to
provide the Union with ninety (90) days notice as provided above. However, when
ninety (90) days notice cannot be given, the Company shall call and notify the
Vice President, Atlantic & Gulf Maritime Region, IOMM&P, 349 East 20th Street,
Jacksonville, Florida 32206, telephone (904) 356-0041, and confirm in writing as
far in advance as possible and in no event any later than the date of sale,
scrap, transfer, bareboat charter, etc.
In addition, the Company must give the Union the name, address and
telephone number of the purchaser and will attempt to assist the Union meeting
the buyer.
The Company shall provide the Union with a list of the names and owners of
record of all vessels covered by this contract within fifteen (I 5) days of the
signing thereof and shall provide information on any further changes as provided
above.
19
<PAGE>
Section 37. Savings Clause
Should any part hereof or any provision herein contained be rendered or
declared illegal by reason of any existing or subsequently enacted Court Action,
legislation, or by any decree of a Court of Competent Jurisdiction, or by
decision of any authorized Government Agency, such invalidation shall affect
only such part of portions hereof, provided, however, upon such invalidation,
the par-ties agree immediately to meet and negotiate substitute provisions for
such parts or provisions rendered or declared illegal. The remaining parts or
provisions shall remain in full force and effect.
Section 38. Non-Discrimination
A. The Company and the Organization shall in no way discriminate against any
person covered by this Agreement because of race, religion, creed, sex,
age, national origin, disability or veteran status.
B. It is understood by the parties that whenever the masculine pronoun or
gender is used in this Agreement such use includes the feminine pronoun or
gender, except where a bona fide occupational requirement exists.
Section 39. Personal Leave or Personal Day
Each bargaining unit employee shall be given, as a personal paid day off to
be compensated at the employee's 24-hour rate of pay, the employee's birthday.
At the employee's option, this personal day may be taken on a day other than his
birthday, as mutually agreed between the company and the employee.
Section 40. Probationary Period
Each employee shall serve a probationary period of forty-five (45) work
days during which the employee may be terminated for any reason. The
termination shall not be subject to the grievance and arbitration provisions of
this Agreement.
Section 41. Vacation Benefit (1997, 1998, 1999)
The Company agrees to provide a vacation bonus to "Regular" employees and
those current "Extra/Relief" employees who work a minimum of 212 days during a
calendar year provided these employees have three (3) years service with the
Company.
A day worked shall be either a twelve (12) hour day or a twenty four (24) hour
day under this Agreement.
20
<PAGE>
The bonus shall be paid within fifteen (I 5) days of the employee working the
212 days minimum.
Flat bonus amounts based on the foregoing shall be:
<TABLE>
<CAPTION>
<S> <C>
Captains $1500
Licensed Engineer $1350
Unlicensed Engineer $1000
Mate $1200
Deckhand $ 800
</TABLE>
Section 42. Duration of Agreement
This Agreement shall become effective as of May 1, 1997 and shall continue
in full force and effect until May 1, 2000 and shall continue in full force and
effect until each succeeding May I thereafter, unless written notice of desire
to renegotiate is given by either party hereto to the other at least thirty (3
0) days prior to any expiration date or unless written notice of intention to
terminate is given by either party thereto to the other at least sixty (60) days
prior to any expiration date.
Application to open negotiations for changes in any condition of this
Agreement, excluding those provisions in Section 1, 2, 4, and 10, may be made by
either party at any time during the term of this Agreement. Such application or
applications shall not be deemed cause for termination of this Agreement or any
provisions thereof In petitioning for the opening of negotiations for changes in
any conditions of this Agreement, both parties agreed to clearly specify the
provisions therein to be discussed unless mutually agreeable to both parties.
If and when the parties shall have reached an agreement with respect to
matters on review, there shall be added to and incorporated in this Agreement
such additional provisions as shall have been agreed to with respect to such
matters only and no others, and this Agreement, as so modified, shall thereafter
continue in full force and effect.
IN WITNESS WBEREOF, the parties hereto have set their hands and seals.
MORAN TOWING OF FLORIDA INTERNATIONAL ORGANIZATION OF
A DIVISION OF MORAN TOWING MASTERS, MATES & PILOTS,
CORPORATION AFL-CIO
Donald J. Peck Carl T. Sturges
Division Vice President and Vice President
General Manager
21
<PAGE>
MORAN TOWING OF FLORIDA
CURRENT ROSTER OF EMPLOYEES - APRIL, 23,1997
<TABLE>
<CAPTION>
<S> <C>
ABERCROMBIE, JOHN L. TURNER, BYRON H.
BROWARD, CLAY R. WELLS, DALE C.*
CROCKETT, DOUGLAS WETHERINGTON, EDWARD H.
DAGLEY, LLOYD E. WILLIAMS, GREGORY B.
DETYENS, RUTLEDGE A.*
DONLAN, JOHN E.
EPPLEY, ROY D.
HARRIS, WILLIAM*
HOLLAND, THOMAS W.
JOY, BARRY L.
JUREK,KARL
LANE, LOWELL T.
MCLAUGHLIN, JAMES K.
ROHN, RONALD D.
ROWE, THOMAS L.
SCHILLER, EDMOND L.*
STEPHENS, STUART*
SWAFFORD, ALLEN R.
THOMAS, JERRY JR.
</TABLE>
*Indicates Extra/Relief Employees
22
<PAGE>
SIDEBAR AGREEMENT
BETWEEN
INTERNATIONAL ORGANIZATION OF MASTERS, MATES & PILOTS
AND MORAN TOWING OF FLORIDA
A DIVISION OF MORAN TOWING CORPORATION
A. PROBATIONARY PERIOD
The Company agrees that the probationary period as provided for in Section 40 of
our Agreement is applicable only to employees hired after the effective date of
the Agreement, May 1, 1997.
B. VACATION BONUS
The Company agrees that the Licensed Engineer bonus shall be applicable to the
following Engineers hired prior to May 1, 1997, whether licensed or unlicensed,
provided they meet the eligibility requirement of Section 41:
Lane, T.
Joy, B.
Dagley, L.
Crockett, D.
Turner, B.
Donlan, J.
Engineers hired on May 1, 1997 or later shall, if eligible, be paid in
accordance with the licensed or unlicensed rating of said employee.
<TABLE>
<CAPTION>
<S> <C>
Moran Towing of Florida International Organization of Masters
A division of Moran Mates & Pilots
Towing Corporation
Donald J. Peck, Division Vice Carl T. Sturges, Vice President
President & Atlantic & Gulf Region
General Manager
</TABLE>
<PAGE>
SIDEBAR AGREEMENT
BETWEEN
INTERNATIONAL ORGANIZATION OF MASTERS, MATES & PILOTS
AND
MORAN TOWING OF FLORIDA
A DIVISION OF MORAN TOWING CORPORATION
Subject: Collective Bargaining Agreement - Dated May 1, 1997
Section 11. Days and Hours of Work - Paragraph B (1) (c)
Should the Company elect to change crew rotation from four days on/two off to
six days on/three days off, the Company will notify the Union in advance.
Further, six months after such change, the Company and the Organization will
discuss whether the six days on/three days off schedule is satisfactory to the
majority of the marine personnel working the schedule. If the majority of the
bargaining unit wishes to return to the four on/two schedule, the Company will
agree.
<TABLE>
<CAPTION>
<S> <C>
Moran Towing of Florida International Organization of Masters,
A division of Moran Towing Mates & Pilots
Corporation
By:
Donald J. Peck, Division Vice Carl T. Sturges, Vice President
President & General Manager
</TABLE>
<PAGE>
APPENDIX A
Florida Towing Company
Independent Square, Suite 3208
One Independent Drive
Jacksonville, Florida 32202
(904) 354-0483
April 6, 1977
Captain Allen C. Scott, Regional Director
Atlantic and Gulf Region
International Organization of Masters,
Mates & Pilots - ILA. AFL-CIO
349 East 20th Street
Jacksonville, Florida 32206
Dear Captain Scott:
This is to clarify the Agreement on regular employees of Florida Towing Company
as of June 17, 1976.
The sixty seven (67) crew members and six (6) docking masters on the payroll on
the above date would have jobs in the harbor subject to the needs and
requirements of the harbor workload remaining the same.
The above employees may or may not elect to go to sea under the coastwise
contracts, subject to their having the proper license and ability.
This does not take away any rights of management under the contract or any part
of the
Agreements.
Sincerely,
Edmond J. Moran, Jr.
EMJ, JC:lc
<PAGE>
REGULAR EMPLOYEES OF RECORD AS OF JUNE 17, 1976
APPENDIX A
DOCKING MASTERS ENGINEERS
Ackerman, J. T. J. B. Free
Bouchelle, H. P J. E. Avers
Moore M. H. Williamson
Meares D. E. Griffin
Williamson, T. J. H. E. Mays
R. B. Sink
CAPTAINS H. C. Avera
E. Mathis C. R. Taylor
H. J. Danforth A. M. Avera
J. M. Lane T. E. Davis
A. J. Hayes J. Clyatt
W. W. Dickinson C. Broward
J. G. Furman L. T. Lane
W. D. Love
H. T. Lewis DECK HANDS
R. M. Thomas L. Marlow
T. J. Bowen R. H. Tucker
C. B. Williams A. D. Danforth
R. E. Johnson J. G. Davis
L. F. Stephens A. A. Mayers
R. D. Eppley J. McLain
F. L. Tullis B. J. Walker
R. L. Collins T. H. Smith
L. Harvey W. A. Hoffman
R. McAlister
COOKS T. Harvey
W. A. Watts E. R. Lewis
E. C. Salmon E. R. Lakes
L. W. Richards L. McGregor
L. W. Salmon
A. L. Carter
J. W. Coleman
H. C. Howell
Frank Phillips
<PAGE>
EXHIBIT 12.1
MORAN TRANSPORTATION COMPANY
Computation of Ratio of Earnings to Fixed Charges
(Amounts in thousands)
<TABLE>
<CAPTION>
Period Period
Year Jan. 1, 1994 July 1, 1994
Ended Thru Thru Year Ended December 31,
Dec 31, July 11, Dec. 31, -------------------------------
1993 1994 1994 1995 1996 1997
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Pretax income from
continuing operations ....... $ 9,764 $ 2,054 $ 1,536 $ (136) $ 2,113 2,233
Capitalized interest ........ (28) (62) 0 0 0 0
Undistributed income
from affiliiated
partnership (Shipmor) ....... (1,149) 0 0 0 0 0
-------- -------- -------- -------- -------- --------
$ 8,587 $ 1,992 $ 1,536 $ (136) $ 2,113 2,233
======== ======== ======== ======== ======== ========
Fixed charges
Interest expense and
amortization of debt discount
and premium on all
indebtedness (a) ............ $ 2,077 $ 975 $ 4,810 $ 10,192 $ 10,132 10,026
Rentals
1/3 rent expense (b) ........ 366 192 173 351 387 632
-------- -------- -------- -------- -------- --------
Total fixed charges ......... $ 2,443 $ 1,167 $ 4,983 $ 10,543 $ 10,519 10,658
======== ======== ======== ======== ======== ========
Earnings before
income taxes and
fixed charges ............... $ 11,030 $ 3,159 $ 6,519 $ 10,407 $ 12,632 12,891
======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges ............... 4.5 2.7 1.3 1.0 1.2 1.2
======== ======== ======== ======== ======== ========
</TABLE>
(a) Included in interest expense is capitalized interest related to the
construction of new equipment.
(b) The portion of rentals classified as fixed charges is deemed to be
representative of the interest factor.
<PAGE>
Exhibit 21-1
Subsidiaries of Moran Transportation Company
--------------------------------------------
Moran Towing Corporation
Moran Towing of Texas Inc.
Seaboard Barge Corporation
Petroleum Transport Corporation
Moran Insurance Company Limited
Moran Services Corporation
Moran Towing of Delaware, Inc.
Jakobson Shipyard, Inc.
Moran Shipyard Corporation
Hampton Roads Land Co., Inc.
Portsmouth Navigation Corporation
Moran Barge Corp.
Curtis Bay Towing Company of Virginia
Curtis Bay Towing Company of Pennsylvania
Florida Towing Company
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MORGAN
TRANSPORTATION COMPANY'S AUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF
AND FOR THE YEAR ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 9,945
<SECURITIES> 0
<RECEIVABLES> 14,319
<ALLOWANCES> 288
<INVENTORY> 4,161
<CURRENT-ASSETS> 30,912
<PP&E> 119,920
<DEPRECIATION> 30,114
<TOTAL-ASSETS> 160,290
<CURRENT-LIABILITIES> 13,351
<BONDS> 80,000
1,000
0
<COMMON> 1
<OTHER-SE> 13,643
<TOTAL-LIABILITY-AND-EQUITY> 160,290
<SALES> 100,526
<TOTAL-REVENUES> 100,526
<CGS> 73,859
<TOTAL-COSTS> 87,614
<OTHER-EXPENSES> 273
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,026
<INCOME-PRETAX> 2,232
<INCOME-TAX> 613
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,619
<EPS-PRIMARY> 36.30
<EPS-DILUTED> 35.20
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MORAN
TRANSPORTATION COMPANY'S AUDITED AND UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS AS OF AND FOR THE PERIODS INDICATED AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<C>
<PERIOD-TYPE> 12-MOS 12-MOS 3-MOS 6-MOS
9-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996 DEC-31-1996 DEC-31-1996
DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996 JAN-01-1996 JAN-01-1996
JAN-01-1996
<PERIOD-END> DEC-31-1995 DEC-31-1996 MAR-31-1996 JUN-30-1996
SEP-30-1996
<CASH> 3,006 5,827 2,568 6,121
2,444
<SECURITIES> 0 0 0 0
0
<RECEIVABLES> 12,047 12,744 11,846 11,790
12,790
<ALLOWANCES> 263 323 363 372
429
<INVENTORY> 4,330 4,395 4,229 4,303
4,296
<CURRENT-ASSETS> 21,331 37,031 20,214 23,483
21,163
<PP&E> 126,771 121,325 139,475 126,319
124,877
<DEPRECIATION> 12,392 22,024 14,891 17,538
0
<TOTAL-ASSETS> 174,094 172,717 170,690 174,581
172,046
<CURRENT-LIABILITIES> 13,723 27,898 12,374 15,938
14,227
<BONDS> 80,000 80,000 80,000 80,000
80,000
1,000 1,000 1,000 1,000
1,000
0 0 0 0
0
<COMMON> 1 1 1 1
1
<OTHER-SE> 10,569 12,024 10,780 11,494
11,828
<TOTAL-LIABILITY-AND-EQUITY> 174,094 172,717 170,690 174,581
172,046
<SALES> 77,343 91,458 20,809 42,105
65,756
<TOTAL-REVENUES> 77,343 91,458 20,809 42,105
65,756
<CGS> 45,672 57,451 12,666 25,039
40,016
<TOTAL-COSTS> 67,305 79,453 18,085 35,951
56,580
<OTHER-EXPENSES> 0 0 0 0
0
<LOSS-PROVISION> 0 0 0 0
0
<INTEREST-EXPENSE> 10,192 10,132 2,564 5,159
7,736
<INCOME-PRETAX> (136) 2,113 138 1,276
1,841
<INCOME-TAX> 200 808 77 501
732
<INCOME-CONTINUING> 0 0 0 0
0
<DISCONTINUED> 0 0 0 0
0
<EXTRAORDINARY> 0 0 0 0
0
<CHANGES> 0 0 0 0
0
<NET-INCOME> (336) 1,305 61 775
1,109
<EPS-PRIMARY> (7.53) 29.26 1.37 17.38
24.87
<EPS-DILUTED> (7.53) 28.56 1.34 17.00
24.27
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MORGAN
TRANSPORTATION COMPANY'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
PERIODS INDICATED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997
<CASH> 3,653 6,558 11,456
<SECURITIES> 0 0 0
<RECEIVABLES> 14,024 13,362 12,902
<ALLOWANCES> 383 460 541
<INVENTORY> 4,434 4,443 4,378
<CURRENT-ASSETS> 29,017 30,758 30,831
<PP&E> 120,564 118,900 114,524
<DEPRECIATION> 23,978 25,947 28,848
<TOTAL-ASSETS> 159,593 159,732 154,832
<CURRENT-LIABILITIES> 16,416 16,625 11,674
<BONDS> 80,000 80,000 80,000
1,000 1,000 1,000
0 0 0
<COMMON> 1 1 1
<OTHER-SE> 12,430 12,980 14,261
<TOTAL-LIABILITY-AND-EQUITY> 159,593 159,732 154,832
<SALES> 24,829 50,048 75,948
<TOTAL-REVENUES> 24,829 50,048 75,948
<CGS> 15,982 32,108 48,280
<TOTAL-COSTS> 21,607 43,366 64,994
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 2,512 5,020 7,512
<INCOME-PRETAX> 645 1,491 3,046
<INCOME-TAX> 240 536 810
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 405 955 2,236
<EPS-PRIMARY> 9.08 21.41 50.13
<EPS-DILUTED> 8.84 20.85 48.61
</TABLE>
