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EXHIBIT 10.30
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TRANSCOASTAL MARINE SERVICES, INC.
and
Its Subsidiaries Parties Hereto
CREDIT AGREEMENT
Dated as of January 13, 1999
$35,000,000
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TABLE OF CONTENTS
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ARTICLE I
Definitions .............................................................................................1
Section 1.1 Definitions ...............................................................................1
Section 1.2 Other Definitions Provisions .............................................................12
Section 1.3 Computation of Time Periods ..............................................................12
ARTICLE II
Term Loan ..............................................................................................13
Section 2.1 Term Loan ................................................................................13
Section 2.2 Note .....................................................................................13
Section 2.3 Interest .................................................................................13
Section 2.4 Repayment of Principal and Accrued Interest on the Term Loan .............................13
Section 2.5 Additional Interest on the Term Loan .....................................................14
Section 2.6 Use of Proceeds ..........................................................................14
Section 2.7 Commitment Fee ...........................................................................14
Section 2.8 Co-Borrowers; Joint and Several Liability ................................................14
ARTICLE III
Payments ...............................................................................................18
Section 3.1 Method of Payment ........................................................................18
Section 3.2 Prepayment ...............................................................................19
Section 3.3 Taxes ....................................................................................19
Section 3.4 Computation of Interest ..................................................................20
ARTICLE IV
Yield Protection and Illegality ........................................................................20
Section 4.1 Increased Costs ..........................................................................20
Section 4.2 Capital Adequacy .........................................................................21
ARTICLE V
Security ...............................................................................................21
Section 5.1 Collateral ...............................................................................21
Section 5.2 Setoff ...................................................................................22
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TABLE OF CONTENTS
(Continued)
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ARTICLE VI
Conditions Precedent ...................................................................................23
Section 6.1 Term Loan ................................................................................23
ARTICLE VII
Representations and Warranties .........................................................................25
Section 7.1 Corporate Existence ......................................................................25
Section 7.2 Financial Statements .....................................................................25
Section 7.3 Corporate Action; No Breach ..............................................................26
Section 7.4 Operation of Business ....................................................................26
Section 7.5 Litigation and Judgments .................................................................26
Section 7.6 Rights in Properties; Liens ..............................................................26
Section 7.7 Enforceability ...........................................................................27
Section 7.8 Approvals ................................................................................27
Section 7.9 Debt .....................................................................................27
Section 7.10 Taxes ....................................................................................27
Section 7.11 Use of Proceeds; Margin Securities .......................................................27
Section 7.12 ERISA ....................................................................................27
Section 7.13 Disclosure ...............................................................................27
Section 7.14 Subsidiaries .............................................................................28
Section 7.15 Agreements ...............................................................................28
Section 7.16 Compliance with Laws .....................................................................28
Section 7.17 Inventory ................................................................................28
Section 7.18 Investment Company Act ...................................................................28
Section 7.19 Public Utility Holding Company Act .......................................................28
Section 7.20 Environmental Matters ....................................................................28
Section 7.21 Year 2000 Compliance .....................................................................29
Section 7.22 Insurance ................................................................................30
Section 7.23 Hedging Agreements .......................................................................31
Section 7.24 Restriction on Liens .....................................................................31
Section 7.25 Material Debt Agreements .................................................................31
ARTICLE VIII
Positive Covenants ......................................................................................31
Section 8.1 Reporting Requirements ...................................................................31
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TABLE OF CONTENTS
(Continued)
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Section 8.2 Maintenance of Existence; Conduct of Business ............................................34
Section 8.3 Maintenance of Properties ................................................................34
Section 8.4 Taxes and Claims .........................................................................34
Section 8.5 Insurance ................................................................................34
Section 8.6 Inspection Rights ........................................................................35
Section 8.7 Keeping Books and Records ................................................................35
Section 8.8 Compliance with Laws .....................................................................35
Section 8.9 Compliance with Agreements ...............................................................35
Section 8.10 Further Assurances .......................................................................35
Section 8.11 ERISA ....................................................................................35
Section 8.12 Year 2000 Compliant ......................................................................36
Section 8.13 Mortgaged Property .......................................................................36
Section 8.14 Subsidiary Guaranties and Pledge of Assets ...............................................36
Section 8.15 Post Closing Matters .....................................................................37
ARTICLE IX
Negative Covenants .....................................................................................37
Section 9.1 Debt .....................................................................................37
Section 9.2 Limitation on Liens ......................................................................37
Section 9.3 Mergers, Acquisitions, Etc ...............................................................38
Section 9.4 Restricted Payments ......................................................................38
Section 9.5 Investments ..............................................................................39
Section 9.6 Limitation on Issuance of Capital Stock ..................................................39
Section 9.7 Transactions With Affiliates .............................................................39
Section 9.8 Disposition of Assets ....................................................................39
Section 9.9 Sale and Leaseback .......................................................................40
Section 9.10 Prepayment of Debt .......................................................................40
Section 9.11 Nature of Business .......................................................................40
Section 9.12 Environmental Protection .................................................................40
Section 9.13 Accounting ...............................................................................40
Section 9.14 Compliance with ERISA ....................................................................40
Section 9.15 Proceeds of Note .........................................................................40
Section 9.16 Negative Pledge Agreements ...............................................................41
Section 9.17 Hedging Agreements .......................................................................41
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TABLE OF CONTENTS
(Continued)
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ARTICLE X
Financial Covenants ....................................................................................41
Section 10.1 Consolidated Tangible Net Worth ..........................................................41
Section 10.2 Capital Expenditures .....................................................................41
Section 10.3 Total Funded Debt to Capitalization ......................................................42
Section 10.4 Fixed Charge Coverage Ratio ..............................................................42
Section 10.5 Senior Funded Debt to EBITDA Coverage Ratio ..............................................42
ARTICLE XI
Default ................................................................................................42
Section 11.1 Events of Default ........................................................................42
Section 11.2 Remedies .................................................................................44
Section 11.3 Performance by the Lender ................................................................45
ARTICLE XII
Miscellaneous ..........................................................................................45
Section 12.1 Expenses .................................................................................45
Section 12.2 Indemnification ..........................................................................46
Section 12.3 Limitation of Liability ..................................................................46
Section 12.4 No Duty ..................................................................................46
Section 12.5 No Fiduciary Relationship ................................................................46
Section 12.6 Equitable Relief .........................................................................46
Section 12.7 No Waiver; Cumulative Remedies ...........................................................47
Section 12.8 Successors and Assigns ...................................................................47
Section 12.9 Survival .................................................................................48
Section 12.10 ENTIRE AGREEMENT .........................................................................48
Section 12.11 Amendments, Etc . ........................................................................48
Section 12.12 Maximum Interest Rate ....................................................................48
Section 12.13 Notices ..................................................................................49
Section 12.14 LAW AND JURISDICTION .....................................................................49
Section 12.15 Counterparts .............................................................................50
Section 12.16 Severability .............................................................................50
Section 12.17 Headings .................................................................................50
Section 12.18 Non-Application of Chapter 346 of Texas Finance Code .....................................50
Section 12.19 Construction .............................................................................50
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TABLE OF CONTENTS
(Continued)
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Section 12.20 Independence of Covenants ...............................................................50
Section 12.21 JURY WAIVER .............................................................................51
Section 12.22 Confidentiality .........................................................................51
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of January 13,1999, is among
TRANSCOASTAL MARINE SERVICES, INC., a Delaware corporation and each of the
Subsidiaries of TransCoastal which is party hereto (each individually, a
"Borrower", and collectively, the "Borrowers"), and HELLER FINANCIAL LEASING,
INC., a Delaware corporation ("Lender").
ARTICLE I
Definitions
Section 1.1 Definitions. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to,
both the singular and the plural forms of the terms defined):
"Acts of Mortgage" means those certain Acts of Mortgage,
Assignment of Production, Security Agreement and Financing Statements
of each Borrower owning Real Property, in favor of the Lender, dated
as of even date herewith, as the same may be amended, supplemented or
modified from time to time.
"Advance" means the advance of the Term Loan in a single
advance by the Lender to the Borrowers pursuant to Article II.
"Affiliate" means, as to any Person, any other Person (a)
that directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such
Person; (b) that directly or indirectly beneficially owns or holds 10%
or more of any class of voting stock of such Person; or (c) 10% or
more of the voting stock of which is directly or indirectly
beneficially owned or held by the Person in question. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract, or otherwise; provided, however, in no event shall the
Lender be deemed an Affiliate of any Borrower or any of their
Subsidiaries.
"Agreement" means this Credit Agreement, as the same may be
amended, supplemented or modified from time to time.
"Assignment" means that certain Assignment of Notes, Liens,
Security Interests and Loan Documents of Subordinated Lender in favor
of the Lender and Bank One, dated as of even date herewith.
"Bank One" means Bank One, Texas, National Association.
"Bank One Loan Documents" means that certain Credit Agreement
dated of even date herewith among Bank One and the Borrowers and the
other "Loan Documents" as therein defined, as the same may be amended
or modified from time to time.
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"Borrower" and "Borrowers" have the meaning specified in the
introductory paragraph of this Agreement.
"Business Day" means any day of the year except Saturday,
Sunday and any day on which commercial banks are authorized or
required to close in Chicago, Illinois, or Houston, Texas and which is
also a day on which dealings are carried out in the London interbank
Eurodollar market.
"Capitalization" means the sum of Total Funded Debt plus Net
Worth.
"Capital Lease Obligations" means, as to any Person, the
capitalized amount, determined in accordance with GAAP, of the
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) real and/or
personal property, which obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person
under GAAP.
"CMLTD" means any contractual principal installment due and
payable within one year or less from the time of the calculation
thereof on Debt that by its terms is payable more than one year from
the date of origination thereof or which is renewable at the option of
the obligor beyond one year from such date of origination.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor Federal tax code and the
regulations, promulgated and rulings issued thereunder, and any
reference to any statutory provision of the Code shall be deemed to be
a reference to any successor provision or provisions.
"Collateral" has the meaning specified in Section 5.1.
"Commitment" means the obligation of the Lender to make the
Term Loan to Borrowers in a single Advance in the aggregate principal
amount of $35,000,000.
"Consolidated" and "Consolidating" refer to the consolidation
of the accounts of the TransCoastal and its Subsidiaries in accordance
with GAAP.
"Consolidated Net Income" means with respect to TransCoastal
and its Consolidated Subsidiaries, for any period, the aggregate of
the net income (or loss) of TransCoastal and its Consolidated
Subsidiaries after allowances for taxes for such period, determined on
a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise
included therein) the following: (i) the net income of any Person in
which TransCoastal or any of its Consolidated Subsidiary has an
interest (which interest does not cause the net income of such other
Person to be consolidated with the net income of TransCoastal and its
Consolidated Subsidiaries in accordance with GAAP), except to the
extent of the amount of dividends or distributions actually paid in
such period by such other Person to TransCoastal or to one of its
Consolidated Subsidiaries, as the case may be; (ii) the net income
(but not loss) of any Consolidated Subsidiary to the extent that
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the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Subsidiary is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument or Governmental Requirement applicable to such Consolidated
Subsidiary, or is otherwise restricted or prohibited in each case
determined in accordance with GAAP; (iii) the net income (or loss) of
any Person acquired in a pooling-of-interests transaction for any
period prior to the date of such transaction; (iv) any extraordinary
gains or losses, including gains or losses attributable to Property
sales not in the ordinary course of business (net of fees and expenses
relating to such transaction); and (v) the cumulative effect of a
change in accounting principles and any gains or losses attributable
to writeups or writedowns of assets.
"Consolidated Subsidiaries" means each Subsidiary of
TransCoastal (whether now existing or hereafter created or acquired)
the financial statements of which shall be (or should have been)
consolidated with the financial statements of TransCoastal in
accordance with GAAP.
"Consolidated Tangible Net Worth" means, at any particular
time, all amounts which, in conformity with GAAP, would be included
as stockholders' equity on a Consolidated balance sheet of
TransCoastal and its Subsidiaries; provided, however, there shall be
added thereto the Subordinated Debt and there shall be excluded
therefrom: (a) any amount at which shares of capital stock of
TransCoastal appear as an asset on TransCoastal's balance sheet, (b)
goodwill, including any amounts, however designated, that represent
the excess of the purchase price paid for assets or stock over the
value assigned thereto, (c) patents, trademarks, trade names, and
copyrights, (d) deferred expenses (except deferred expenses incurred
in the ordinary course of business), and (e) all other assets which
are properly classified as intangible assets.
"Debt" of any Person means at any time (without duplication)
and whether direct or contingent: (a) obligations for borrowed money
which (i) are evidenced by bonds," notes, debentures, loan agreements,
credit agreements or similar instruments or agreements and (ii) are or
should be shown on a balance sheet as debt in accordance with GAAP,
(b) obligations to pay the deferred purchase price of property or
services, (c) Capital Lease Obligations, (d) Debt or other
obligations of others guaranteed, (e) obligations secured by a Lien
existing on property owned by such Person, whether or not the
obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person, (f) reimbursement
obligations (whether contingent or otherwise) in respect of letters of
credit, bankers' acceptances, surety or other bonds and similar
instruments, (g) liabilities in respect of unfunded vested benefits
under any Plan, (h) Guarantees, and (i) Swap Transactions; provided,
however, that Debt shall not include (i) obligations under performance
bonds, performance guarantees, surety bonds, appeal bonds, security
deposits or similar obligations to the extent incurred in the ordinary
course of business, (ii) any trade payables and other current
liabilities and deferred credits (in each case other than with respect
to borrowed money) incurred in the ordinary course of business which
are not overdue by more than 90 days unless either (y) such trade
payables, current liabilities or deferred credits are being contested
in good faith by appropriate proceedings for which
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adequate reserves have been made in accordance with GAAP
(collectively, the "Contested Amounts") or (z) the aggregate amount of
such overdue trade payables, current liabilities and deferred credits
(other than Contested Amounts) exceeds $500,000, in which case such
excess constitutes "debt"; or (iii) debt arising from agreements of
the Borrowers providing for indemnification adjustments, or hold back
of purchase price or similar obligations, in each case assumed in
connection with the acquisition or disposition of any assets, business
or subsidiary otherwise permitted hereunder.
"Default" means an Event of Default or the occurrence of an
event or condition which with notice or lapse of time or both would
become an Event of Default.
"Default Rate" means the lesser of (a) the sum of the
Interest Rate in effect from day to day plus 4.0%, and (b) the Maximum
Rate.
"Dickson Payment" has the meaning specified in Section 10.1.
"Dollars" and "$" mean lawful money of the United States of
America.
"EBITDA" means, for any period, the sum of Consolidated Net
Income for such period plus the following expenses or charges to the
extent deducted from Consolidated Net Income in such period: interest,
taxes, depreciation, depletion and amortization, minus all non-cash
income (provided that no adjustments shall be made for non-cash items
required pursuant to accrual-based GAAP accounting) added to
Consolidated Net Income in such period.
"Environmental Laws" means any and all applicable foreign,
Federal, state, and local laws, regulations, statutes, ordinances,
rules, orders, decisions, decrees, judgments, permits, licenses,
authorizations and requirements pertaining to health, safety, or the
environment, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 et seq., the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Section 6901 et seq., the Occupational Safety
and Health Act, 29 U.S.C. Section 65l et seq., the Clean Air Act, 42
U.S.C. Section 740l et seq., the Clean Water Act, 33 U.S.C. Section
1251 et seq., and the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., as such laws, regulations, statutes, ordinances, rules,
orders, decisions, decrees, judgments, permits, licenses,
authorizations and requirements may be amended or supplemented from
time to time.
"Environmental Liabilities" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages,
costs, and expenses (including, without limitation, all reasonable
fees, disbursements and expenses of counsel, expert and consulting
fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim
or demand, by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute,
including any Environmental Law, permit, order or agreement with any
Governmental Authority or other Person, arising from
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environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment,
resulting from the past, present, or future operations of such Person
or its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute of
similar import, and the regulations and published interpretations
thereunder, as in effect from time to time.
"ERISA Affiliate" means any corporation or trade or business
(whether or not incorporated) which is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the
Code) as any Borrower or is under common control (within the meaning
of Section 414(c) of the Code) with any Borrower.
"Eurocurrency Liabilities" has the meaning prescribed to
such term in Regulation D of the Federal Reserve Board, as in effect
from time to time.
"Event of Default" has the meaning specified in Section 11.1.
"Excluded Equipment" means the equipment, machinery and
vessels described on Schedule 1.
"Financing Transaction" means any Swap Transaction that is
intended primarily as a borrowing of funds.
"Fixed Charge Coverage" means all EBITDA plus all Operating
Lease expenses less cash taxes, less cash dividends divided by the sum
of interest expense plus Operating Lease expenses plus contractual
principal reductions required during the period of calculation
(including the principal component of Capital Lease Obligation
payments), plus nondiscretionary capital expenditures (not less than
$4,000,000 per annum). This ratio shall be calculated on a cumulative
quarterly basis beginning January 1, 1999, until such time as four
quarters have been reached at December 31, 1999, at which time the
covenant shall be calculated on a Rolling Period basis. The first
covenant test for the Fixed Charge Coverage Ratio will be determined
as of March 31, 1999.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis, as set forth in Opinions of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or their respective successors and which are
applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material
respects to those accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any
state or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government.
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"Government Requirement" means any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
other directive or requirement (whether or not having the force of
law), including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls,
of any Governmental Authority.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt
or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or
other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose
of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect the obligee against
loss in respect thereof (in whole or in part), provided that the term
"Guarantee" shall not include endorsements for collection or deposit
in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Guarantor" means, individually and/or collectively, any
Person who executes a Guaranty.
"Guaranty" means, individually and/or collectively, the
guaranty and/or guaranties executed and/or to be executed from time to
time in the future by any and all Subsidiaries of TransCoastal, any of
the Borrowers, or any of their Subsidiaries, in each case, acquired or
created after the date hereof, for the benefit of the Lender, relating
to the Obligations, in form satisfactory to Lender, as any of such
guaranties, from time to time, may be amended, modified, restated or
supplemented.
"Hazardous Material" means any substance, product, waste,
pollutant, material, chemical, contaminant, constituent, or other
material which is or becomes listed, regulated, or addressed under any
Environmental Law, including, without limitation, asbestos, petroleum,
and polychlorinated biphenyls.
"Hedging Agreements" means any commodity, interest rate or
currency swap, cap, floor, collar, forward agreement or other exchange
or protection agreements or any option with respect to any such
transaction.
"Increased Costs" has the meaning specified in Section 4.1.
"Insufficiency" means, with respect to any Plan, the amount,
if any, but which the present value of the accrued benefits under such
Plan exceeds the fair market value of the assets of such Plan
allocable to such benefits, provided that with respect to any offset
arrangement between any Plans, the assets of the Plans attributable to
such offset
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arrangement shall be aggregated in determining whether an
Insufficiency exists for the Plan to which the offset applies.
"Insurance Assignment" means each Assignment of Insurances of
each Borrower owning a Vessel which is covered by a Vessel Mortgage in
favor of the Lender, as the same may be amended, supplemented or
modified from time to time.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of even date of herewith by and among Borrowers,
Lender, and Bank One, as the same may be amended, supplemented, or
modified from time to time.
"Interest Period" means each calendar quarter ending on the
day immediately preceding the next scheduled Payment Date.
"Interest Rate" has the meaning specified in Section 2.3.
"Lender" has the meaning specified in the first paragraph of
this Agreement, and shall include any financial institution which
becomes a Lender pursuant to Section 12.8.
"LIBOR Rate" means the interest rate per annum determined by
the Lender and equal to the interest rate per annum based on the rates
at which Dollar deposits with a six-month period are displayed on the
"LIBOR" page of the Reuters Monitor Money Rates Service ("Reuters") at
or about 11:00 A.M. (London time) two Business Days prior to the first
day of such Interest Period; provided, that if two or more such rates
appear on such page, the rate will be the arithmetic average of such
displayed rates will be used; provided further, that if there are
fewer than two offered rates or Reuters ceases to provide LIBOR
quotations, such rate shall be the average rate of interest determined
by the Lender at which deposits in Dollars are offered for six-month
periods by Bankers Trust Company and The Chase Manhattan Bank (or
their respective successors) to banks with combined capital and surplus
in excess of $500,000,000 in the London interbank market as of
11:00 A.M. (London time) on the applicable interest rate determination
date.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or
title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement and all promissory
notes, security agreements, deeds of trust, acts of mortgage, vessel
mortgages, assignments, guaranties, and other instruments, documents,
and agreements executed and delivered pursuant to or in connection
with this Agreement, as such instruments, documents, and agreements
may be amended, modified, renewed, extended, or supplemented from time
to time.
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"Maintenance Capital Expenditures" means all
non-discretionary capital expenditures required by Borrowers and their
Subsidiaries to maintain their current level of business operations,
but not less than $4,000,000 during any Rolling Period.
"Material Adverse Effect" means a material adverse effect on
any Borrower's or any Subsidiary's ability (considered as a whole) to
meet its obligations to the Lender under the Loan Documents or a
material adverse effect (considered as a whole) on the business,
operations, assets or financial condition of any of the Borrowers or
any of the Subsidiaries considered as a whole.
"Maturity Date" means 11:00 A.M. Chicago, Illinois time on
January 1, 2006, or such earlier date and time on which the
Commitments terminate as provided in this Agreement.
"Maximum Rate" means, at any time and with respect to the
Lender, the maximum rate of interest under applicable law that the
Lender may charge the Borrowers. The Maximum Rate shall be calculated
in a manner that takes into account any and all fees, payments, and
other charges in respect of the Loan Documents that constitute
interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a
change in the Maximum Rate shall take effect without notice to the
Borrowers at the time of such change in the Maximum Rate. For purposes
of determining the Maximum Rate under Texas law, the applicable rate
ceiling shall be the indicated rate ceiling described in, and computed
in accordance with, Chapter 303 of the Texas Finance Code.
"Multi-employer Plan" means a Multi-employer plan defined as
such in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means an employee benefit plan,
other than a Multiemployer Plan, subject to Title IV of ERISA to which
any Borrower or any ERISA Affiliate, and more than one employer other
than any Borrower or an ERISA Affiliate, is making or accruing an
obligation to make contributions or, in the event that any such plan
has been terminated, to which any Borrower or any ERISA Affiliate made
or accrued an obligation to make contributions during any of the five
plan years preceding the date of termination of such plan.
"Net Worth" means, at any particular time, all amounts which,
in conformity with GAAP, would be included as stockholder's equity on
a consolidated balance sheet of TransCoastal and its Subsidiaries.
"Note" means the promissory note of the Borrowers dated of
even date herewith and payable to the order of the Lender, the
original principal amount of $35,000,000, and all extensions,
renewals, amendments, rearrangements, increases, and/or modifications
thereof, and/or all substitutions therefor.
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"Obligated Party" means any Guarantor or any other Person
who is or becomes party to any agreement that guarantees or secures
payment and performance of the Obligations or any part thereof.
"Obligations" means all obligations, indebtedness, and
liabilities of the Borrowers to the Lender, or any of them, arising
pursuant to any of the Loan Documents, now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and
several, including, without limitation, the obligations,
indebtedness, and liabilities of the Borrowers under this Agreement and
the other Loan Documents, and all interest accruing thereon and all
attorneys' fees and other expenses incurred in the enforcement or
collection thereof.
"Operating Lease" means any lease (other than a lease
constituting a Capital Lease Obligation) of real or personal property.
"Other Taxes" has the meaning specified in Section 3.4(b).
"Payment Date" means the first day of each January, April,
July and October, in each year, the first of which shall be April 1,
1999.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, firm or other entity, or a
government of any political subdivision or agency, department or
instrumentality thereof.
"Plan" means any employee benefit plan (other than a
Multi-employer Plan) which is (or, in the event that any such plan has
been terminated within five years after a transaction described in
Section 4069 of ERISA, was) maintained for employees of the Borrowers
or any ERISA Affiliate and is covered by Title IV of ERISA.
"PMSI Property" means any Property of the Borrowers or any
Subsidiary (a) now owned which is encumbered by a Permitted Lien in
respect of the financing thereof other than in favor of Bank One or
the Subordinated Lender or (b) hereafter acquired and encumbered by
Liens permitted under Section 9.2(g).
"Prepayment Make-Whole Amount" means (a) 3% of any amount
prepaid during the one year period ending the first anniversary date
of the making of the Term Loan, (b) 2% of any amount prepaid during
the two year period beginning on the day immediately after the first
anniversary date of the making of the Term Loan and ending on the
third anniversary date of the making of the Term Loan, and, (c) 1% of
any amount prepaid thereafter.
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"Principal Office" means the principal office of the Lender,
presently located at 500 West Monroe Street, Suite 1600, Chicago,
Illinois 60661.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Real Property" the real property and related improvements
and fixtures described and/or located on the real property described
on Schedule 2.
"Release" means, as to any Person, any material release,
spill, emission, leaking, pumping, injection, deposit, disposal,
disbursement, leaching, or migration of Hazardous Materials into the
indoor or outdoor environment or into or out of property owned by such
Person, including, without limitation, the movement of Hazardous
Materials through or in the air, soil, surface water, ground water, or
property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat, or otherwise address Hazardous Materials in the indoor
or outdoor environment, (b) prevent the Release or threat of Release
or minimize the further Release of Hazardous Materials so that they do
not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, or (c) perform
pre-remedial studies and investigations and post-remedial monitoring
and care.
"Responsible Officer" means, as to any Person, the Chief
Executive Officer, the President or any Executive Vice President or
Senior Vice President of such Person and, with respect to financial
matters, the term "Responsible Officer" shall mean the Chief Executive
Officer, Executive Vice President, Chief Financial Officer, or the
Director of Finance of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible
Officer of TransCoastal.
"RICO" means the Racketeer Influenced and Corrupt
Organization Act of 1970, as amended from time to time.
"Rolling Period" shall mean each four-quarter period, ending
on the last day of each March, June, September and December.
"Security Agreement" means the Security Agreement of the
Borrowers for the benefit of the Lender, dated as of even date
herewith, together with all Security Agreements of any Subsidiary
formed or acquired after the date hereof, as the same may be amended,
supplemented, or modified from time to time.
"Senior Funded Debt" means all obligations for borrowed money
from the Lender and Bank One, Capital Lease Obligations, letters of
credit, Guarantees and Guaranties.
"Subordinated Debt" means all Debt of any or all of Borrowers
which is subordinated pursuant to a subordination agreement on terms
satisfactory to the Lender, in Lender's sole
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discretion, including, without limitation, the Debt as in effect
(without amendment) as of the date hereof to Subordinated Lender
subject to the Subordination Agreement.
"Subordinated Lender" means the Joint Energy Development
Investments II Limited Partnership II, a Delaware limited partnership.
"Subordinated Liens" means all Liens in favor of Subordinated
Lender that are permitted under and covered by the Subordination
Agreement.
"Subordinated Loan Documents" mean the loan documents in
favor of and/or payable to the Subordinated Lender (and any successor
and/or assign(s)) which are subject to the Subordination Agreement.
"Subordination Agreement" means that certain Subordination
and Intercreditor Agreement dated as of even date herewith, among the
Lender, Bank One, the Borrowers and Subordinated Lender, as the same
may be amended, supplemented, or modified from time to time.
"Subsidiary" means any corporation of which at least a
majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled
by any Borrower or one or more of the Subsidiaries or by any Borrower
and one or more of the Subsidiaries.
"Swap Transaction" means any interest rate, currency or
commodity swap, collar or cap or other similar derivatives-related
transaction.
"Taxes" has the meaning specified in Section 3.3(a).
"Term Loan" means the loan to the Borrowers by the Lender in
original principal amount of the Commitment.
"Termination Event" means (a) the occurrence with respect to
any Plan or Multiemployer Plan of a "reportable event," as such term
is described in Section 4043 of ERISA (other than a "reportable event,"
not subject to the provision for 30-day notice to the PBGC), or an
event described in Section 4062(e) of ERISA, or (b) the withdrawal by
any Borrower or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a "substantial employer," as such
term is defined in Section 4001(a)(2) of ERISA, or the incurrence of
liability by any Borrower or any ERISA Affiliate under Section 4064 of
ERISA upon the termination of a Multiple Employer Plan or (c) the
distribution of a notice of intent to terminate a Plan pursuant to
Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as
a termination under Section 4041 of ERISA, or (d) the institution to
proceedings to terminate a Plan by the PBGC under Section 4042 of
ERISA, or (e) any other
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event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Total Funded Debt" means any Debt that by its terms is
payable more than one year from the date of origination thereof or
which is renewable at the option of the obligor beyond one year from
such date or origination.
"TransCoastal" means TransCoastal Marine Services, Inc., a
Delaware corporation.
"UCC" means the Uniform Commercial Code as in effect in the
State of Texas.
"Vessel Mortgage" means each ship, fleet and/or naval
mortgage of Borrower owning a Vessel in favor of the Lender, dated as
of the date hereof, and all subsequent ship, fleet and/or naval
mortgage hereafter executed and delivered by any Borrower or any
Subsidiary pursuant to the terms hereof, as the same may be amended,
supplemented or modified from time to time.
"Vessels" means all vessels now owned or hereafter acquired
by any Borrower or any Subsidiary (other than the Excluded
Equipment), including, without limitation, the vessels listed on
Schedule 3.
"Withdrawal Liability" has the meaning specified for such
term in Part I of Subtitle E of Title V of ERISA.
"Year 2000 Compliant" shall mean, in regard to any entity,
that all software, hardware, firmware, equipment, fixtures, goods or
systems utilized by or material to the business operations or
financial condition of such entity, will properly perform
date-sensitive functions before, during and after the year 2000.
Section 1.2 Other Definitional Provisions. The words "hereof,"
"herein," and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise specified, all Article and
Section references pertain to this Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC. The term "including" means "including,
without limitation."
Section 1.3 Computation of Time Periods. In the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including" and the words "until" and "to" each means "to but
excluding." Unless otherwise indicated, all references to a particular time are
references to Chicago, Illinois time.
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ARTICLE II
Term Loan
Section 2.1 Term Loan. Subject to the terms and conditions of this
Agreement, the Lender agrees to make the Term Loan to the Borrowers in one
Advance in an aggregate principal amount equal to the amount of the Lender's
Commitment.
Section 2.2 Note. The obligation of the Borrowers to repay the Term
Loan and interest thereon shall be evidenced by the Note executed jointly and
severally by the Borrowers, payable to the order of the Lender, in the original
principal amount of the Lender's Commitment as originally in effect, and dated
the date hereof.
Section 2.3 Interest. The unpaid principal amount of the Term Loan
shall bear interest at a varying rate per annum equal from day to day to the
lesser of (a) the Maximum Rate, or (b) the sum of the LIBOR Rate, plus 2.5%
(the "Interest Rate"). If at any time the Interest Rate for the Term Loan shall
exceed the Maximum Rate, thereby causing the interest accruing on the Term Loan
to be limited to the Maximum Rate, then any subsequent reduction in the
Interest Rate for the Term Loan shall not reduce the rate of interest on the
Term Loan below the Maximum Rate until the aggregate amount of interest accrued
on the Term Loan equals the aggregate amount of interest which would have
accrued on the Term Loan if the Interest Rate had at all times been in effect.
Section 2.4 Repayment of Principal and Accrued Interest on the Term
Loan. The Borrowers jointly and severally agree to repay the unpaid principal
amount of the Term Loan and accrued and unpaid interest thereon as follows:
(a) four installments in the principal amount of $875,000
each, plus accrued and unpaid interest on the Term Loan, shall be due and
payable in the year 1999, the first installment of which shall be due and
payable on April 1, 1999, with subsequent installments to be due and payable on
each subsequent Payment Date until and including January 1, 2000; and
thereafter
(b) 23 subsequent installments in the principal amount of
$1,312,500 each, plus accrued and unpaid interest on the Term Loan shall be due
and payable thereafter, the first installment of which shall be due and payable
on April 1, 2000, with subsequent installments to be due and payable on each
subsequent Payment Date until and including October 1, 2005; and thereafter
(c) a final installment in the entire remaining outstanding
principal amount of the Term Loan, plus accrued and unpaid interest thereon,
shall be due and payable in full on the Maturity Date.
Notwithstanding the foregoing, any outstanding principal of the Term Loan and
(to the fullest extent permitted by law) any other amount payable by the
Borrowers under this Agreement or any other Loan Document that is not paid in
full when due (whether at stated maturity, by acceleration, or otherwise, and
without taking into account any applicable grace or cure periods) shall bear
interest
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at the Default Rate for the period from and including the due date thereof to
but excluding the date the same is paid in full. Interest payable at the Default
Rate shall be payable from time to time on demand. In addition to the
foregoing, if any outstanding principal of the Term Loan and (to the fullest
extent permitted by law) any other amount payable by Borrowers under this
Agreement or any other Loan Documents is not paid in full within 10 days after
the date when due (whether at stated maturity, by acceleration, or otherwise,
and without taking into account any applicable grace or cure periods),
Borrowers jointly and severally agree to pay, upon demand by the Lender
therefor, a late payment fee in the amount of 5% of such amount not paid within
10 days of the date when due.
Section 2.5 Additional Interest on the Term Loan. If the Lender is
required under regulations of the Federal Reserve Board to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, and if as a result thereof there is an increase in the cost to the
Lender of agreeing to make or making, funding or maintaining the Term Loan,
then the Borrowers shall from time to time, upon demand by the Lender, pay to
the Lender additional amounts as additional interest sufficient to compensate
the Lender for such increased cost. A certificate as to the basis for such
increased cost, in reasonable detail and specifying the amount requested
submitted to the Borrowers by the Lender shall be conclusive and binding absent
manifest error.
Section 2.6 Use of Proceeds. The proceeds of the Term Loan shall be
used by the Borrowers to refinance $35,000,000 of senior indebtedness currently
outstanding to Subordinated Lender.
Section 2.7 Commitment Fee. The Borrowers have paid to the Lender a
commitment fee equal to $175,000.
Section 2.8 Co-Borrowers; Joint and Several Liability.
(a) Each Borrower acknowledges and agrees that it has
determined independently that, in light of the conduct of the business of
Borrowers as an integrated operation and a common enterprise that requires
financing on a basis permitting the availability of credit to each Borrower, it
will benefit specifically, directly and materially from the advances of credit
contemplated by the Lender's financing and that the value of the consideration
it is receiving from the Term Loan made hereunder is reasonably worth at least
the sum at which it is taken by such Borrower.
(b) It is expressly agreed and understood by each Borrower
that the Lender shall have no responsibility to inquire in the apportionment,
allocation, or disposition of the Term Loan to Borrowers. The Term Loan is to
be made for the collective account of Borrowers.
(c) Each Borrower hereby jointly, severally, irrevocably, and
unconditionally guarantees to the Lender the full and prompt payment of each of
the Obligations under the Loan Documents by each other Borrower and the
performance by each other Borrower of such Borrower's Obligations hereunder and
thereunder and shall fully and promptly perform all of the Obligations and
agrees, as a primary obligation, to indemnify the Lender on demand for and
against any loss
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incurred by the Lender as a result of any voidable, unenforceable, or
ineffective provision herein or in any of the Loan Documents, for any reason
whatsoever, whether or not known to the Lender, or any Person, the amount of
such loss being in the amount to which the Lender would otherwise have been
entitled to recover from borrowers. This is a guaranty of payment and of
performance and not of collection.
(d) Each Borrower consents and agrees that the Lender may, at
any time and from time to time, without notice or demand, except as otherwise
required herein, whether before or after any actual or purported termination,
repudiation or revocation of any of the Loan Documents, including this
Agreement, by any one or more Borrowers, and without affecting the
enforceability or continuing effectiveness hereof as to each Borrower, agree
with one or more Borrowers or any other Person to: (i) supplement, restate,
compromise, modify, amend, increase, decrease, extend, discharge, renew,
accelerate, or otherwise change the time for payment or the terms of the
Obligations or any part thereof, including any increase or decrease of the
rate(s) of interest thereon; (ii) supplement, restate, modify, amend, increase,
decrease or waive, or enter into or give any agreement, approval, or consent
with respect to, the Obligations or any part thereof, or any of the Loan
Documents or any additional security or guarantees, or any condition, covenant,
default, remedy, right, representation or term thereof or thereunder; (iii)
accept new or additional instruments, documents or agreements in exchange for
or relative to any of the Loan Documents or the Obligations or any part
thereof, (iv) accept partial payments on the Obligations; (v) receive and hold
additional security or guarantees for the Obligations or any part thereof; (vi)
release, reconvey, terminate, waive, abandon, fail to perfect, subordinate,
exchange, substitute, transfer or enforce any security or guarantees, and apply
any security and direct the order or manner of the sale thereof as the Lender
in its sole and absolute discretion may determine; (vii) release any Person
from any personal liability with respect to the Obligations or any part
thereof; (viii) settle, discharge, release on terms satisfactory to the Lender
or by operation of applicable laws or otherwise liquidate or enforce any
Obligations and any security therefor or guaranty thereof in any manner,
consent to the transfer of any security and bid and purchase at any sale; (ix)
consent to the merger, change, or any other restructuring or termination of the
corporate existence of any Borrower and correspondingly restructure the
Obligations, and any such merger, change, restructuring or termination shall
not affect the liability of any Borrower or the continuing effectiveness
hereof, or the enforceability hereof with respect to all or any part of the
Obligations, or (x) take or refrain from taking any other action as the Lender,
in its sole and absolute discretion, may elect, or any or some of the
foregoing.
(e) The Lender may enforce this Agreement independently as to
each Borrower and independently of any other remedy or security the Lender at
any time may have or hold in connection with the Obligations or the Loan
Documents, or both, and it shall not be necessary for the Lender to marshal
assets in favor of any Borrower or any other Person or to proceed upon or
against or exhaust any security or remedy before proceeding to enforce this
Agreement. Each Borrower expressly waives any right to require the Lender to
marshal assets in favor of any Borrower, or any other Person or to proceed
against any other Borrower or any collateral provided by any Person, and agrees
that the Lender may proceed against one or more Borrowers or any Collateral in
such order as it shall determine in its sole and absolute discretion.
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(f) If any Borrower makes a payment in respect of the
Obligations, it shall have the rights of contribution and reimbursement set
forth below against the other Borrowers, and shall be indemnified as set forth
below; provided that no Borrower shall enforce its rights to any payment by
exercising its rights of contribution, reimbursement or indemnification unless
and until all the obligations shall have been paid in full. Each Borrower
waives any right of subrogation, contribution, reimbursement, and other rights
of indemnity it may have against any Obligated Party.
(g) If any Borrower makes a payment in respect of the
Obligations that is greater than its Pro Rata Percentage (hereinafter defined)
of the Obligations, calculated as of the date such payment is made, the
Borrower making such payment shall have the right to receive from each of the
other Borrowers, and the other Borrowers jointly and severally agree to pay to
such Borrower, when permitted by paragraph (f) above, an amount such that the
net payments made by the Borrowers in respect of the Obligations shall be
shared among the Borrowers pro rata in proportion to their respective Pro Rata
Percentages of the Obligations. The Borrowers hereby jointly and severally
indemnify each of the other Borrowers and jointly and severally agree to hold
each of them harmless from and against any and all amounts which any such
Borrower shall ever be required to pay in respect of the Obligations in excess
of such Borrower's respective Pro Rata Percentage of the Obligations.
Notwithstanding anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of any Borrower that shall accrue
pursuant to this Agreement shall be paid nor shall it be deemed owed pursuant
to this Agreement or any Loan Documents unless and until all of the Obligations
shall be paid in full. As used herein, the term "Pro Rata Percentage" shall
mean, for each Borrower, the percentage derived by dividing (a) the amount by
which the fair saleable value of its assets on December 30, 1998, exceeds its
liabilities (such excess for each Borrower, its "Net Worth"), by (b) the Net
Worth of all of the Borrowers.
(h) The Lender may file a separate action or actions against
any Borrower, whether such action is brought or prosecuted with respect to any
security or against any other Person, or whether any other Person is joined in
any such action or actions. Each Borrower agrees that the Lender and any
Responsible Officer of any Borrower may deal with each other in connection with
the Obligations or otherwise, or alter any contracts or agreements now or
hereafter existing between any of them, in any manner whatsoever, all without
in any way altering or affecting the continuing efficacy of this Agreement.
(i) The Lender's rights hereunder shall be reinstated and
revived, and the enforceability of this Agreement shall continue, with respect
to any amount at any time paid on account of the Obligations that thereafter
shall be required to be restored or returned by the Lender, all as though such
amount had not been paid. The rights of the Lender created or granted herein
and the enforceability of this Agreement at all times shall remain effective to
cover the full amount to all the Obligations even though the Obligations,
including any part thereof or any other security or guaranty therefor, may be
or hereafter may become invalid or otherwise unenforceable as against any
Obligated Party or any Borrower and whether or not any Obligated Party or any
other Borrower shall have any personal liability with respect thereto.
(j) To the maximum extent permitted by applicable law, each
Borrower expressly waives any and all defenses now or hereafter arising or
asserted by reason of (i) any disability or
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other defense of any other Borrower with respect to the Obligations, (ii) the
unenforceability or invalidity of any security or guaranty for the Obligations
or the lack of perfection or continuing perfection or failure of priority of
any security for the Obligations, (iii) the cessation for any cause whatsoever
of the liability of any other Borrower (other than by reason of the full
payment and performance of all Obligations), (iv) any failure of the Lender to
marshal assets in favor of any Borrower or any other Person, (v) any failure of
the Lender to give notice of sale or other disposition of Collateral to any
Borrower or any other Person, or any defect in any notice that may be given in
connection with any sale or disposition of Collateral, (vi) any failure of the
Lender to comply with applicable law in connection with the sale or other
disposition of any Collateral or other security for any Obligation, including
any failure of the Lender to conduct a commercially reasonable sale or other
disposition of any Collateral or other security for any Obligation, (vii) any
act or omission of the Lender or others that directly or indirectly results in
or aids the discharge or release of any Borrower any other Obligated Party, or
the Obligations or any security or guaranty therefor by operation of law or
otherwise, (viii) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's or
guarantor's obligation in proportion to the principal obligation, (ix) any
failure of the Lender to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person, (x) the election by the Lender of the
application or non-application of Section 1111(b)(2) of the Federal
Bankruptcy Code, (xi) any extension of credit or the grant of any lien under
Section 364 of the Federal Bankruptcy Code, (xii) any use of cash collateral
under Section 363 of the Federal Bankruptcy Code, (xiii) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person, (xiv) the avoidance of any lien in favor
of the Lender for any reason, or (xv) any action taken by the Lender that is
authorized by this Agreement or any Loan Document. Until such time, if any, as
all of the Obligations have been paid and performed in full and no portion of
any commitment of the Lender to any Borrower under any Loan Document remains in
effect, no Borrower shall have any right of subrogation, contribution,
reimbursement or indemnity, and each Borrower expressly waives any right to
enforce any remedy that the Lender may now have or hereafter may have against
any other Person, and waives the benefit of, or any right to participate in,
any Collateral now or hereafter held by the Lender. Each Borrower expressly
waives all presentments, demands for payment or performance, notices of
nonpayment, notices of intent to accelerate, notices of acceleration and
notices of nonperformance, protests, notices of protest, notices of dishonor
and all other notices or demands of any kind or nature whatsoever with respect
to the Obligations, and all notices of acceptance of this Agreement or of the
existence, creation or incurring of new or additional Obligations.
(k) To the fullest extent permitted by applicable law, each
Borrower expressly waives any suretyship defenses to the enforcement of this
Agreement or any rights of the Lender created or granted hereby or to the
recovery by any such Person including any other Obligated Party, against any
Borrower, or any other Person liable therefor of any deficiency after a
judicial or nonjudicial foreclosure or sale, even though such a foreclosure or
sale may impair the subrogation rights of Borrowers and may preclude Borrowers
from obtaining reimbursement or contribution from the other Borrowers. Each
Borrower expressly waives any defenses or benefits that may be derived pursuant
to or from Rule 31 of the Texas Rules of Civil Procedure, Section 17.001 of the
Civil Practice and Remedies Code and Chapter 34 of the Texas Business and
Commerce Code, as
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amended, or comparable provisions of the laws of any other jurisdiction, and
all other suretyship defenses it otherwise might or would have under Texas law
or other applicable law.
(l) Each Borrower warrants and agrees that each of the
waivers and consents set forth in this Section 2.8 are made after consultation
with legal counsel and with full knowledge of their significance and
consequences, with the understanding that events giving rise to any defense or
right waived may diminish, destroy or otherwise adversely affect rights which
such Borrower otherwise may have against the other Borrowers, the Lender or
others, or against Collateral, and that, under the circumstances, the waivers
and consents herein given are reasonable and not contrary to public policy or
law. If any of the waivers or consents herein are determined to be contrary to
any applicable law or public policy, such waivers and consents shall be
effective to the maximum extent permitted by law.
(m) Each Borrower represents and warrants to the Lender that
(i) such Borrower has established adequate means of obtaining from the other
Borrowers on a continuing basis financial and other information pertaining to
the business, operations, and condition (financial and otherwise) of the other
Borrowers, and their property, and (ii) such Borrower now is and hereafter will
be familiar with the business, operations and condition (financial and
otherwise) of the other Borrowers, and their property. Each Borrower hereby
waives and relinquishes any duty on the part of the Lender to disclose to such
Borrower any matter, fact or thing relating to the business, operations or
condition (financial or otherwise) of the other Borrowers, or the property of
the other Borrowers, whether now or hereafter known by the Lender during the
term of this Agreement.
ARTICLE III
Payments
Section 3.1 Method of Payment. All payments of principal, interest,
and other amounts to be made by the Borrowers under this Agreement and the
other Loan Documents shall be made to the Lender at such places as the Lender
may designate in Dollars and in immediately available funds, without setoff,
deduction, or counterclaim, not later than 11:00 A.M. on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). The
Borrowers shall, at the time of making each such payment, specify to the Lender
the sums payable by the Borrowers under this Agreement and the other Loan
Documents to which such payment is to be applied (and in the event that the
Borrowers fail to so specify, or if a Default has occurred and is continuing,
the Lender may apply such payment to the Obligations in such order and manner
as it may elect in its sole discretion). Whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of the payment of interest and letter of credit and facility fees,
as the case may be. Unless otherwise agreed to in writing or otherwise required
by applicable law, payments will be applied first to any unpaid collection
costs, late charges and other charges and fees, then to accrued, unpaid
interest, and any remaining amount to principal, provided, however, upon
delinquency or
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other default, the Lender reserves the right to apply payments among principal,
interest, late charges, collection costs and other charges and fees at its sole
discretion.
Section 3.2 Prepayment. (a) The Borrowers may, upon at least thirty
days prior notice to the lender, prepay the term loan in whole on any Payment
Date or from time to time in part on any Payment Date, in each case with
accrued interest to the date of prepayment on the amount so prepaid, plus the
applicable Prepayment Make-Whole Amount, provided that each partial prepayment
shall be in the principal amount of $1,000,000 or an integral multiple thereof.
All notices under this Section shall be irrevocable and shall be given not
later than 11:00 A.M. on the day which is not less than the number of days
specified above for such notice.
(b) Prepayment Make-Whole Amounts are (i) payable as
liquidated damages, (ii) are a reasonable pre-estimate of the losses, costs and
expenses that the Lender would incur for any prepayment to which such
Prepayment Make-Whole Amount pertains, (iii) are not a penalty, (iv) will not
require claim for, or proof of, actual damages, and (v) the Lender's
determination thereof shall constitute prima facie evidence that such
determination is accurate and correct.
(c) if at any time any of the Borrowers or any Subsidiary
sells or otherwise disposes any of its fixed assets securing the Obligations or
issues or incurs any other Debt, the Borrower or Subsidiary involved shall
immediately (and in any event with three Business Days) notify the Lender in
writing of such event and pursuant to this Section 3.2(c), the Lender shall
have 30 days to direct the Borrowers that: (i) 100% of the proceeds received
shall be applied as a mandatory prepayment on the Note immediately (and in any
event within three Business Days) after receipt of notice of the Lender's
direction; or (h) the Lender has decided that no mandatory prepayment is
required as a result thereof. Nothing in this Section 3.2(c) shall be construed
as approval for any disposition of Collateral, which is expressly prohibited by
Section 9.8.
Section 3.3 Taxes.
(a) All payments by the Borrowers of principal of and
interest on the Term Loan and of all fees and other amounts payable under any
Loan Document are payable without deduction for or on account of any present or
future taxes, levies, imposts, deductions, charges, fees, duties or
withholdings, and all liabilities with respect thereto, excluding in the case
of the Lender the following: (i) taxes imposed on such person's income, and
franchise taxes imposed on it, by the jurisdiction order which such person is
organized or any political subdivision thereof and, in the case of the Lender,
taxes imposed on its income, and franchise taxes imposed on it; (ii) income
taxes imposed by the United States of America; and (iii) any taxes imposed by
the United States of America by means of withholding at the source if and to
the extent that such taxes shall be in effect and shall be applicable, on the
date hereof, to payments to be made to the Lender (all such nonexcluded taxes,
levies, imposes, deductions, changes, fees, duties, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Borrower is
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Note to the Lender, the Borrowers shall pay additional
interest or shall make additional payments in such amounts so that every net
payment of principal of and interest on the affected Term Loan and of all other
amounts payable by it under any
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Loan Document, after withholding or deduction for or on account of any such
Taxes will not be less than the amount provided for herein or therein.
(b) Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Note or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or the Note (the "Other Taxes").
(c) The Borrowers, to the fullest extent permitted by law,
will indemnify the Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 3.3) paid by the Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto
except as a result of the gross negligence or willful misconduct of the Lender,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date the Lender
makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by
or at the discretion of the Borrowers, the Borrowers will furnish to the
Lender, at its address referred to herein, the original or a certified copy of
a receipt evidencing payment thereof. Should the Lender ever receive any
refund, credit or deduction from any taxing authority to which the Lender would
not be entitled but for the payment by the Borrowers of Taxes as required by
this Section 3.3 (it being understood that the decision as to whether or not to
claim, and if claimed, as to the amount of any such refund, credit or deduction
shall be made by the Lender in its sole discretion), the Lender thereupon shall
repay to the Borrowers an amount with respect to such refund, credit or
deduction equal to any net reduction in Taxes actually obtained by the Lender
and determined by the Lender to be attributable to such refund, credit or
deduction.
Section 3.4 Computation of Interest. Interest on the Term Loan and all
other amounts payable by the Borrowers hereunder shall be computed on the basis
of a year of 360 days and the actual number of days elapsed (including the
first day but excluding the last day) unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a
year of 365 or 366 days, as the case may be.
ARTICLE IV
Yield Protection and Illegality
Section 4.1 Increased Costs. The Borrowers shall, jointly and
severally, pay to the Lender from time to time, within 15 days following demand
by the Lender such additional amounts as the Lender may determine to be
necessary to compensate it for any increased costs incurred by it which it
determines are attributable to its making or maintaining of the Term Loan
hereunder or any reduction in any amount receivable by the Lender hereunder in
respect of the Term Loan or such obligation other than increased costs
described in Section 2.5 or in Section 4.2 (such increases in costs and
reductions in amounts receivable being herein called "Increased Costs"),
resulting from either (i) the introduction of or any change in or in the
interpretation of any law or regulation by any
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Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) the compliance with any
guideline or request from any Governmental Authority, central bank or
comparable agency (whether or not having the force of law).
The Lender will furnish the Borrowers with a certificate, in
reasonable detail, setting forth the basis and the amount of such Increased
Costs of the Lender. The Borrowers shall reimburse the Lender for such
increased cost in accordance with this Section 4.1.
Section 4.2 Capital Adequacy. If after the date hereof, the Lender
shall have determined that the adoption or implementation of any applicable
law, rule, or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any central bank,
comparable agency, or other Governmental Authority charged with the
interpretation or administration thereof, or compliance by the Lender (or its
lending office or parent) with any guideline, request, or directive regarding
capital adequacy (whether or not having the force of law) of any central bank,
comparable agency, or other Governmental Authority (except to the extent such
request or directive arises as a result of the individual credit-worthiness of
the Lender), has the effect of increasing the amount of capital required or
expected to be maintained as a result of its Commitment hereunder, or has or
would have, the effect of reducing the rate of return on the Lender's (or its
parent's) capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which the Lender (or its
parent) could have achieved but for such adoption, implementation, change or
compliance (taking into consideration the Lender's policies with respect to
capital adequacy) by an amount deemed by the Lender to be material, then from
time to time, within 10 Business Days after demand by the Lender, the Borrowers
shall, jointly and severally, pay to the Lender such additional amount or
amounts as will compensate the Lender (or its parent) for such reduction. A
certificate of the Lender, in reasonable detail, claiming compensation under
this Section and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive, absent manifest errors, although the failure
to give any such notice shall not diminish any of the Borrowers' obligations to
pay such additional amounts, and, the Borrowers shall, jointly and severally,
pay such additional amounts as provided herein. In determining such amount or
amounts, the Lender may use any reasonable averaging and attribution methods.
ARTICLE V
Security
Section 5.1 Collateral. To secure full and complete payment and
performance of the Obligations, the Borrowers shall execute and deliver or
cause to be executed and delivered the documents described below covering the
property and collateral described in this Section 5.1 (which, together with any
other property and collateral which may now or hereafter secure the Obligations
or any part thereof, is sometimes herein called the "Collateral"):
(a) The Borrowers shall grant to the Lender a first priority
security interest in all of their respective equipment and machinery (other
than the Excluded Equipment and PMSI
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Property), Vessels, fixtures, inventory, chattel paper, documents, instruments,
a collateral assignment of and accounts arising out of the charter or other
lease and/or rental of any Vessel, and general intangibles, whether now owned
or hereafter acquired, and all products and proceeds thereof, pursuant to the
security agreement.
(b) The Borrowers owning an interest in the Vessels (other
than PMSI Property) shall grant to the Lender a first priority mortgage on the
Vessels and all of such Vessels' engines, machinery, boats, tackle, outfit,
spare gear, fuel, consumable or other stores, belongings and appurtenances,
whether on board or shore and whether now owned or hereafter acquired, and all
insurance policies and proceeds related thereto, pursuant to the Vessel
Mortgages or the Security Agreement, as applicable and the Insurance
Assignments, respectively.
(c) The applicable Borrowers owning an interest in the Real
Property (other than PMSI Property) shall grant to the Lender a first priority
mortgage, lien and security interest in the Real Property and all present and
future rents, leases, and profits relating to the Real Property pursuant to the
Acts of Mortgage.
(d) The applicable Borrowers shall grant to the Lender a
first priority lien on and security interest in all spare parts or replacement
parts, now owned or hereafter acquired, for all vessels, including, but not
limited to, propellers, engines, pumps, generators, drive shafts,
transmissions, winches, cranes, and other equipment which is held by any
Borrower whether or not affixed to a vessel, for the purpose of becoming a
fixture, part, component or addition to any of such vessels to replace a
component that breaks down, wears out or is to be replaced pursuant to the
Security Agreement.
(e) The Borrowers and the Subsidiaries shall execute and
cause to be executed such further documents and instruments, including without
limitation, Uniform Commercial Code financing statements, as the Lender, in its
reasonable discretion, deems necessary or desirable to evidence and perfect its
liens on and security interests in the Collateral, including, without
limitation, with respect to Collateral (other than PMSI Property) acquired
after the date hereof by any Borrower or any Subsidiary created or acquired
after the date hereof.
(f) The Borrowers authorize the Lender to deliver a copy of
the Security Agreement and/or the addendum thereto with respect to the
assignment of charters, bareboat charters, hires, leases and/or rentals of
Vessels ("Charters") to any such charter party from time to time in Lender's
sole discretion. In addition, the Borrowers shall include language in each such
Charter reasonably acceptable to the Lender that such Charter is assignable to
the Lender.
Section 5.2 Setoff. If an Event of Default shall have occurred and is
continuing, the Lender is hereby authorized at any time and from time to time,
without notice to the Borrowers (any such notice being hereby expressly waived
by the Borrowers), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender to or for the credit or the
account of the Borrowers against any and all of the obligations of any of the
Borrowers now or hereafter existing under this Agreement, the Note, or any
other Loan Document, irrespective of whether or not the Lender shall
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have made any demand under this Agreement or the Note or such other Loan
Document and although such obligations may be unmatured. The Lender agrees
promptly to notify the Borrowers after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights and remedies of the Lender hereunder
are in addition to other rights and remedies (including, without limitation,
other rights of setoff) which the Lender may have.
ARTICLE VI
Conditions Precedent
Section 6.1 Term Loan. The obligation of the Lender to make the Term
Loan is subject to the condition precedent that the Lender shall have completed
its due diligence, which due diligence shall have been satisfactory to the
Lender in its reasonable discretion and the Lender shall have received on or
before the day of such Advance all of the following, each dated (unless
otherwise indicated) the date hereof, in form and substance satisfactory to the
Lender:
(a) Resolutions. Resolutions of the Board of Directors of the
Borrowers certified by such Person's Secretary or an Assistant Secretary which
authorize the execution, delivery, and performance by such Person of this
Agreement and the other Loan Documents to which any Borrower is to be a party;
(b) Incumbency Certificate. A certificate of incumbency for
each of the Borrowers certified by the Secretary or an Assistant Secretary of
such Person certifying the names of the officers of such Person authorized to
sign this Agreement and each of the other Loan Documents to which such Person
is to be a party (including the certificates contemplated herein) together with
specimen signatures of such officers;
(c) Articles of Incorporation. The articles of incorporation
of each of the Borrowers certified by the Secretary of State of the state of
incorporation of such Person and dated a date acceptable to the Lender;
(d) Bylaws. The bylaws of each of the Borrowers certified by
the Secretary or an Assistant Secretary of such Person;
(e) Governmental Certificates. Certificates of the
appropriate government officials of the state of incorporation of each of the
Borrowers as to the existence and good standing of such Person, each dated
within 30 days prior to the date of the Term Loan;
(f) Note. The Note executed by the Borrowers;
(g) Vessel Mortgages. The Vessel Mortgages (and any related
powers of attorney and applications in connection therewith) required by the
Lender to be executed by the Borrowers owning a Vessel;
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(h) Security Agreement. The Security Agreement executed by
the Borrowers;
(i) Acts of Mortgage. The Acts of Mortgage executed by the
Borrowers owning Real Property;
(j) Insurance Assignments. The Insurance Assignments executed
by the Borrowers owning a Vessel covered by a Vessel Mortgage;
(k) Financing Statements. Uniform Commercial Code financing
statements executed by the Borrowers and covering the Collateral;
(l) Intercreditor Agreement. The Intercreditor Agreement
executed by each Person which is to be a party thereto;
(m) Subordination Agreement. The Subordination Agreement
executed by each Person which is to be a party thereto;
(n) Assignments. The Assignment (and the related assignments
and UCC-3's to be filed of record) executed by the Subordinated Lender;
(o) Insurance Policies. Copies of all insurance policies
required by Section 8.5, together with loss payable endorsements in favor of
the Lender with respect to all insurance policies covering Collateral;
(p) UCC Searches. The results of a Uniform Commercial Code
searches showing all financing statements and other documents or instruments on
file against the applicable Borrowers in the offices of the Secretary of State
of Texas, Louisiana, California, Alabama and Mississippi, such searches to be
as of a date no more than 30 days prior to the date of the Term Loan;
(q) Opinions of Counsels. Favorable opinions of
TransCoastal's general counsel and Vinson & Elkins and Phelps Dunbar, L.L.P.,
special legal counsel to the Borrowers, acceptable to the Lender in its sole
discretion;
(r) Attorneys' Fees and Expenses. Evidence that the costs and
expenses (including attorneys' fees) referred to in Section 12.1, to the
extent incurred, shall have been paid in full by the Borrowers;
(s) Vessels. Lender shall have been furnished evidence of
proper perfection of each Vessel Mortgage, all Vessels owned by the Borrowers,
and that such Vessel Mortgages are first priority, and, in each case, are
subject only to such Liens as are acceptable to the Lender in its sole
discretion.
(t) No Default. No Default shall have occurred and be
continuing, or would result from such Advance;
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(u) Representations and Warranties. All of the
representations and warranties contained in Article VII hereof and in the other
Loan Documents shall be true and correct in all material respects on and as of
the date of such Advance with the same force and effect as if such
representations and warranties had been made on and as of such date;
(v) No Material Adverse Change. No Material Adverse Effect
shall have occurred since October 31, 1998; and
(w) Additional Documentation. The Lender shall have received
such additional approvals, opinions, or documents as the Lender or its legal
counsel, Winstead Sechrest & Minick P.C., may reasonably request.
ARTICLE VII
Representations and Warranties
To induce the Lender to enter into this Agreement, each Borrower
represents and warrants to the Lender that:
Section 7.1 Corporate Existence. Each Borrower and each Subsidiary (a)
is a corporation duly incorporated, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation or organization, as
applicable; (b) has all requisite corporate power and authority to own its
assets and carry on its business as now being or as proposed to be conducted;
and (c) is qualified to do business in all jurisdictions in which the nature of
its business makes such qualification necessary and where failure to be so
qualified would have a Material Adverse Effect. Each Borrower has the corporate
power and authority to execute, deliver, and perform its obligations under this
Agreement and the other Loan Documents to which it is or may become a party.
Section 7.2 Financial Statements. TransCoastal has delivered to the
Lender audited Consolidated financial statements of TransCoastal and its
Consolidated Subsidiaries as at and for the fiscal year ended December 31,
1997, and unaudited Consolidated financial statements of TransCoastal and its
Consolidated Subsidiaries for the ten-month period ended October 31, 1998,
subject to normal year-end adjustments with respect to the unaudited interim
financial statements and the absence of notes in the interim statements. Such
financial statements are true and correct in all material respects, have been
prepared in accordance with GAAP, and fairly and accurately present, on a
Consolidated basis, the financial condition of TransCoastal and its
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Neither TransCoastal
nor any of its Subsidiaries has any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or unrealized
or anticipated losses from any unfavorable commitments except as referred to or
reflected in such financial statements or otherwise disclosed in writing to the
Lender. As of the date of this Agreement there has been no material adverse
change in the business, condition (financial or otherwise), operations, or
properties of TransCoastal or any of its Subsidiaries taken as a whole since
the effective date of the most recent financial statements referred to in this
Section.
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Section 7.3 Corporate Action, No Breach. The execution, delivery, and
performance by the Borrowers of this Agreement and the other Loan Documents to
which the Borrowers are or may become a party and compliance with the terms and
provisions hereof and thereof have been duly authorized by all requisite
corporate action on the part of the Borrowers and do not and will not (a)
violate or conflict with, or result in a breach of, or require any consent
under (i) the articles of incorporation or other organizational documents, as
applicable, or bylaws of the Borrowers or any of their Subsidiaries, (ii) any
applicable law, rule, or regulation or any order, writ, injunction, or decree
of any Governmental Authority or arbitrator, or (iii) any material agreement or
instrument to which the Borrowers or any of their Subsidiaries is a party or by
which any of them or any of their property is bound or subject, which in the
case of (ii) or (iii) could reasonably be expected to have a Material Adverse
Effect, or (b) constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien (except as provided in Article
V) upon any of the assets of the Borrowers or any of their Subsidiaries.
Section 7.4 Operation of Business. The Borrowers and each of their
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, except where the failure to possess the same could not
reasonably be expected to have a Material Adverse Effect.
Section 7.5 Litigation and Judgments. Except as disclosed on Schedule
7.5, there is no action, suit, investigation, or proceeding before or by any
Governmental Authority or arbitrator pending, or to the knowledge of the
Borrowers, threatened against or affecting any Borrower or any Subsidiary, that
would, if adversely determined, have a Material Adverse Effect. There are no
outstanding judgments against any Borrower or any Subsidiary.
Section 7.6 Rights in Properties; Liens. (a) The Borrowers and each
Subsidiary have good and indefeasible title to or valid leasehold interests in
their respective properties and assets, real and personal, including the
properties, assets, and leasehold interests reflected in the financial
statements described in Section 7.2, and none of the properties, assets, or
leasehold interests of any Borrower or any Subsidiary is subject to any Lien,
except as permitted by Section 9.2.
(b) All leases and agreements necessary for the conduct of
the business of the Borrowers and their Subsidiaries are valid and subsisting,
in full force and effect and there exists no default or event which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which could reasonably be expected to have a
Material Adverse Effect.
(c) The rights, Collateral and other Property presently
owned, leased or licensed by the Borrowers and their Subsidiaries including,
without limitation, all easements and rights of way, include all rights,
Collateral and other Property necessary to permit the Borrowers and their
Subsidiaries to conduct their business in all material respects in the same
manner as its business has been conducted prior to the date hereof.
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(d) Except as set forth on Schedule 7.6, all of the Property
and Collateral of the Borrowers, and their Subsidiaries which are reasonably
necessary for the operation of their businesses are in good working condition,
reasonable wear and tear excepted, and are maintained in accordance with
prudent business standards.
Section 7.7 Enforceability. This Agreement constitutes, and the other
Loan Documents to which any Borrower is party, when delivered, shall constitute
the legal, valid, and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
Section 7.8 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by any of the
Borrowers of this Agreement and the other Loan Documents to which any of the
Borrowers is or may become a party or for the validity or enforceability
thereof.
Section 7.9 Debt. The Borrowers and their Subsidiaries have no Debt,
except as disclosed on Schedule 7.9.
Section 7.10 Taxes. The Borrowers and each Subsidiary have filed all
tax returns (Federal, state, and local) required to be filed, including all
income, franchise, employment, property, and sales tax returns, and have paid
all of their respective liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable. Except as set forth in
Schedule 7.10, the Borrowers know of no pending investigation of any Borrower
or any Subsidiary by any taxing authority or of any pending but unassessed tax
liability of any Borrower or any Subsidiary, the assessment of which could
reasonably be expected to have a Material Adverse Effect.
Section 7.11 Use of Proceeds; Margin Securities. The proceeds of the
Note shall be used to repay $35,000,000 of debt currently outstanding to
Subordinated Lender. Neither any Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations G, T, U, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Advance will be
used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying margin stock.
Section 7.12 ERISA. Each Borrower and each Subsidiary are in
compliance in all material respects with all applicable provisions of ERISA. No
Termination Event has occurred or, to the knowledge of TransCoastal, is
reasonably expected to occur with respect to any Plan. Neither any Borrower nor
any ERISA Affiliate has received any notification (or has knowledge of any
reason to expect) that any Multi-employer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA.
Section 7.13 Disclosure. No statement, information, report,
representation, or warranty made by any Borrower in this Agreement or in any
other Loan Document or furnished to the Lender in connection with this Agreement
or any transaction contemplated hereby contains any untrue
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statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading.
Section 7.14 Subsidiaries. TransCoastal and the other Borrowers have
no Subsidiaries other than those listed on Schedule 7.14, and Schedule 7.14
sets forth the jurisdiction of incorporation of each Subsidiary and the
percentage of each Borrower's ownership of the outstanding voting stock of each
Subsidiary. All of the outstanding capital stock of each Subsidiary has been
validly issued, is fully paid, and is nonassessable.
Section 7.15 Agreements. Neither any Borrower nor any Subsidiary is in
default in any respect in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in this Agreement or any
agreement or instrument material to its business to which it is a party.
Section 7.16 Compliance with Laws. Neither any Borrower nor any
Subsidiary is in violation in any material respect of any law, rule,
regulation, order, or decree of any Governmental Authority or arbitrator.
Section 7.17 Inventory. All inventory of each Borrower has been and
will hereafter be produced in compliance with all applicable laws, rules,
regulations, and governmental standards, including, without limitation, the
minimum wage and overtime provisions of the Fair Labor Standards Act, as
amended (29 U.S.C. Sections. 201-219), and the regulations promulgated
thereunder.
Section 7.18 Investment Company Act. Neither any Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 7.19 Public Utility Holding Company Act. Neither any Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public, Utility Holding Company Act of 1935,
as amended.
Section 7.20 Environmental Matters. Except as disclosed on Schedule
7.20:
(a) Each Borrower, each Subsidiary, and all of their
respective properties, assets, and operations are in full compliance with all
Environmental Laws applicable to such Person, except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect.
No Borrower is aware of, nor has any Borrower received notice of, any past,
present, or future conditions, events, activities, practices, or incidents
which would interfere with or prevent the compliance or continued compliance of
the Borrower and the Subsidiaries with all Environmental Laws applicable to
such Person, except where the failure to be in compliance would not reasonably
be expected to have a Material Adverse Effect;
(b) Each Borrower and each Subsidiary have obtained all
permits, licenses, and authorizations that are required under applicable
Environmental Laws, and all such permits are in good standing and each Borrower
and its Subsidiaries are in compliance with all of the terms and
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conditions of such permits, except where the failure to obtain or be in
compliance could not reasonably be expected to have a Material Adverse Effect;
(c) No Hazardous Materials exist on, or within or have been
used, generated, stored, transported, disposed of on, or released from any of
the properties or assets of any Borrower or any Subsidiary, except in
compliance with all Environmental Laws applicable to such Person. The use which
the Borrowers and their Subsidiaries make and intend to make of their
respective properties and assets will not result in the use, generation,
storage, transportation, accumulation, disposal, or Release of any Hazardous
Material on, in, or from any of their properties or assets in violation of any
Environmental Law applicable to such Person;
(d) Neither any Borrower nor any of their Subsidiaries nor
any of their respective currently or previously owned or leased properties or
operations is subject to any outstanding or, to the best of its knowledge,
threatened order from or agreement with any Governmental Authority or other
Person or subject to any judicial or docketed administrative proceeding with
respect to (i) failure to comply with Environmental Laws, (ii) Remedial Action,
or (iii) any Environmental Liabilities arising from a Release or threatened
Release;
(e) There are no conditions or circumstances associated with
the currently or previously owned or leased properties or operations of the
Borrowers or any of their Subsidiaries that could reasonably be expected to
give rise to any Environmental Liabilities that in the aggregate could
reasonably be expected to have a Material Adverse Effect;
(f) Neither any Borrower nor any of its Subsidiaries is a
treatment, storage, or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., regulations
thereunder or any comparable provision of state law. The Borrowers and their
Subsidiaries are in compliance with all applicable financial responsibility
requirements of all Environmental Laws, except where the failure to be in
compliance could not reasonably be expected to have a Material Adverse Effect;
(g) Neither any Borrower nor any of its Subsidiaries has
filed or failed to file any notice required under applicable Environmental Law
reporting a Release; and
(h) No Lien arising under any Environmental Law has attached
to any property or revenues of any Borrower or its Subsidiaries.
Section 7.21 Year 2000 Compliance. As of the date hereof, as of the
date of any renewal, extension, amendment, rearrangement, increase, and/or
modification of this Agreement, and at all times this Agreement is
outstanding:
(a) To TransCoastal's knowledge, after due inquiry, all
devices, systems. machinery, information technology, computer software and
hardware, and other date sensitive technology (jointly and severally the
"Systems") used by Borrowers to carry on their businesses as presently
conducted and as contemplated to be conducted in the future are Year 2000
Compliant or will be Year 2000 Compliant within a period of time calculated to
result in no material disruption
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of any of Borrowers' business operations. For purposes of these provisions,
"Year 2000 Compliant" means that such Systems are designed to be used prior to,
during and after the Gregorian calendar year 2000 A.D. and will operate during
each such time period without error relating to date data, specifically
including any error relating to, or the product of, date data which represents
or references different centuries or more than one century.
(b) Borrowers have: (1) undertaken a detailed inventory,
review, and assessment of all areas within their businesses and operations that
could be adversely affected by the failure of Borrowers to be Year 2000
Compliant on a timely basis; (2) developed a detailed plan and time line for
becoming Year 2000 Compliant on a timely basis, and (3) to date, implemented
that plan in accordance with that timetable in all material respects.
(c) Borrowers have made written inquiry of each of its key
suppliers, vendors, and customers, and is undertaking to obtain in writing
confirmations from all such persons as to whether such persons have initiated
programs to become Year 2000 Compliant and on the basis of such confirmations,
Borrowers reasonably believe that all such persons will be or become so
compliant. For purposes hereof, "key suppliers, vendors, and customers" refers
to those suppliers, vendors, and customers of Borrowers whose business failure
would, with reasonable probability, result in a material adverse change in the
business, properties, condition (financial or otherwise), or prospects of any
of the Borrowers.
(d) The fair market value of all real and personal property
pledged to the Lender as Collateral to secure the Term Loan hereunder is not
and shall not be less than currently anticipated or subject to substantial
deterioration in value because of the failure of such Collateral to be Year
2000 Compliant.
Section 7.22 Insurance. Schedule 7.22 contains an accurate and
complete description of all material policies of fire, liability, workmen's
compensation and other forms of insurance owned or held by the Borrowers and
each Subsidiary. All such policies are in full force and effect, all premiums
with respect thereto covering all periods up to and including the date of the
closing have been paid, and no notice of cancellation or termination has been
received with respect to any such policy. Such policies are sufficient for
compliance with all requirements of law and of all agreements to which the
Borrowers or any Subsidiary is a party; are valid, outstanding and enforceable
policies; provide adequate insurance coverage in at least such amounts and
against at least such risks (but including in any event public liability) as
are usually insured against in the same general area by companies engaged in
the same or a similar business for the assets and operations of the Borrowers
and each Subsidiary; will remain in full force and effect through the
respective dates set forth in Schedule 7.22 without the payment of additional
premiums; and will not in any way be affected by, or terminate or lapse by
reason of, the transactions contemplated by this Agreement. Schedule 7.22
identifies all material risks, if any, which the Borrowers and the Subsidiaries
and their respective Board of Directors or officers have designated as being
self insured. None of the Borrowers nor any Subsidiary has been refused any
insurance with respect to its Property or operations, nor has its coverage been
limited below usual and customary policy limits, by an insurance carrier to
which it has applied for any such insurance or with which it has carried
insurance during the last three years.
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Section 7.23 Hedging Agreements. Schedule 7.23 sets forth, as of the
date hereof, a true and complete list of all Hedging Agreements (including
commodity price swap agreements, forward agreements or contracts of sale which
provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities), Financing Transactions and Swap Transactions of the Borrowers and
each Subsidiary, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net mark
to market value thereof, all credit support agreements relating thereto
(including any margin required or supplied), and the counterparty to each such
agreement.
Section 7.24 Restriction on Liens. Except as set forth on Schedule
9.2, none of the Borrowers nor any of the Subsidiaries is a party to any
agreement or arrangement (other than this Agreement and the other Loan
Documents, the Bank One Loan Documents and the Subordinated Loan Documents), or
subject to any order, judgment, writ or decree, which either restricts or
purports to restrict its ability to grant Liens to other Persons on or in
respect of their respective Property or Collateral.
Section 7.25 Material Debt Agreements. Set forth on Schedule 7.25
hereto is a complete and correct list of all material agreements, leases,
indentures, purchase agreements, obligations in respect of letters of credit,
guarantees, joint venture agreements, and other instruments in effect or to be
in effect following the date hereof (other than Hedging Agreements) providing
for, evidencing, or otherwise relating to any Debt of any of the Borrowers or
any of the Subsidiaries, and all obligations of any of the Borrowers or any of
the Subsidiaries to issuers of surety or appeal bonds issued for account of any
of the Borrowers or any such Subsidiary, and such list correctly sets forth the
names of the debtor or lessee and creditor or lessor with respect to the Debt
or lease obligations outstanding or to be outstanding and the property subject
to any Lien securing such Debt or lease obligation.
ARTICLE VIII
Positive Covenants
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding, the Borrowers will perform and observe the
following positive covenants:
Section 8.1 Reporting Requirements. The Borrowers will furnish to the
Lender:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of TransCoastal, the
audited consolidated and unaudited consolidating statements of income,
stockholders' equity, changes in financial position and cash flow of
TransCoastal and its Consolidated Subsidiaries for such fiscal year, and the
related audited consolidated and unaudited consolidating balance sheets of
TransCoastal and its Consolidated Subsidiaries as at the end of such fiscal
year, and setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, and accompanied by the related
unqualified opinion of independent public accountants of recognized national
standing acceptable to the Lender
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which opinion shall state that said financial statements fairly present the
consolidated and consolidating financial condition and results of operations of
TransCoastal and its Consolidated Subsidiaries as at the end of, and for, such
fiscal year and that such financial statements have been prepared in accordance
with GAAP except for such changes in such principles with which the independent
public accountants shall have concurred and such opinion shall not contain a
"going concern" or like qualification or exception; and, in addition thereto,
if required by the Lender, as soon as available, and in any event within 60
days after the end of each fiscal year of TransCoastal, pro forma projections
in form and substance satisfactory to the Lender for the ensuing five year
period on a year-by-year basis, including, without limitation, the consolidated
and consolidating statements of income and cash flow of TransCoastal and its
Consolidated Subsidiaries for such periods, and the related consolidated and
consolidating balance sheets of TransCoastal and its Consolidated Subsidiaries
for such period, and the estimated capital expenditures for such periods;
(b) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the end of each of the first three fiscal
quarterly periods of each fiscal year of TransCoastal, consolidated and
consolidating statements of income, stockholders' equity, changes in financial
position and cash flow of TransCoastal and its Consolidated Subsidiaries for
such period and for the period from the beginning of the respective fiscal year
to the end of such period, and the related consolidated and consolidating
balance sheets as at the end of such period, and setting forth in each case in
comparative form the corresponding figures for the corresponding period in the
preceding fiscal year, accompanied by the certificate of a Responsible Officer,
which certificate shall state that said financial statements fairly present the
consolidated and consolidating financial condition and results of operations of
TransCoastal and its Consolidated Subsidiaries in accordance with GAAP, as at
the end of, and for, such period (subject to normal year-end audit
adjustments).
(c) Certificate of Compliance and No Default. Concurrently
with the delivery of each of the financial statements referred to in Sections
8.1(a) and 8.1(b), a certificate of a Responsible Officer (i) stating that a
review of the activities of the Borrowers has been made under his supervision
with a view to determining whether the Borrowers have fulfilled all of their
obligations under this Agreement, the other Loan Documents, and the Note; (ii)
stating that the Borrowers have fulfilled their obligations under such
instruments and that all representations and warranties made herein continue to
be true and correct in all material respects (or specifying the nature of any
change); (iii) to the extent requested from time to time by the Lender,
specifically affirming compliance of the Borrowers with any of their
representations or obligations under such instruments; (iv) containing or
accompanied by such financial or other details, information and material as the
Lender may reasonably request to evidence such compliance; (v) stating that to
the best of such officer's knowledge, no Default has occurred and is
continuing, or if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that is proposed to be taken with respect
thereto; and (vi) showing in reasonable detail the calculations demonstrating
compliance with Article X;
(d) Management Letters. Promptly upon receipt thereof, a copy
of any management letter or written report submitted to any Borrower or any
Subsidiary by independent certified public accountants;
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(e) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any Governmental
Authority or arbitrator affecting any Borrower or any Subsidiary which, if
determined adversely to any Borrower or such Subsidiary, could have a Material
Adverse Effect;
(f) Notice of Default. As soon as possible and in any event
within five Business Days after the occurrence of each Default, a written
notice setting forth the details of such Default and the action that the
Borrowers have taken and propose to take with respect thereto;
(g) ERISA Reports. As soon as possible and in any event (i)
within five Business Days after any Borrower or any ERISA Affiliate knows or
has reason to know that any Termination Event described in clause (i) of the
definition of Termination Event with respect to any Plan, has occurred and (B)
within five Business Days after any Borrower or any ERISA Affiliate knows or
has reason to know that any other Termination Event with respect to any Plan,
has occurred or is reasonably expected to occur, a statement of the chief
financial officer of the applicable Borrower describing such Termination Event
and the action, if any, which such Borrower or such ERISA Affiliate has taken
and proposes to take with respect thereto; (ii) promptly and in any event
within five Business Days after receipt thereof by any Borrower or any ERISA
Affiliate, copies of each notice received by such Borrower or any ERISA
Affiliate from the PBGC stating its intention to terminate any Plan or to have
a trustee appointed to administer any Plan; and (iii) promptly and in any event
within five Business Days after receipt thereof by any Borrower or any ERISA
Affiliate from the sponsor of a Multi-employer Plan, a copy of each notice
received by such Borrower or any ERISA Affiliate;
(h) Reports to Other Creditors. Promptly after the furnishing
thereof, copies of any material statement or report furnished to any other
party pursuant to the terms of any indenture, loan, or credit or similar
agreement and not otherwise required to be furnished to the Lender pursuant to
any other clause of this Section;
(i) Notice of Material Adverse Change. As soon as possible
and in any event within five days after the occurrence thereof, written notice
of any matter that could have a Material Adverse Effect;
(j) Proxy Statements, Etc. Promptly upon its becoming
available, one copy of each financial statement, report, notice or final proxy
statement sent by any Borrower or any Subsidiary to its stockholders generally
and one copy of each regular, periodic or special report, registration
statement, or prospectus filed by any Borrower or any Subsidiary with any
securities exchange or the Securities and Exchange Commission or any successor
agency, and of any order issued by any Governmental Authority in any proceeding
to which any Borrower is a party. For purposes of this subsection (j),
"Governmental Authority" shall mean any government (or any political
subdivision or jurisdiction thereof), court, bureau, agency or other
governmental entity having or asserting jurisdiction over any Borrower or any
of its business, operations or properties;
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(k) Purchase Money Purchases. Promptly, and in any event
within five days after the consummation thereof, written notice of all Debt
incurred under Section 9.1(c), if such aggregate Debt incurred under such
Section during any calendar year is in excess of $1,000,000;
(l) Charter Hire of Vessels. Promptly, and in any event at
least five days prior to any charter, hire, rental or lease of any Vessel
("Charter") provide written notice of all the material details of such Charter
including, without limitation the Vessel, the Charter party including contact
details, the duration and the payment terms; and
(m) General Information. Promptly, such other information
concerning any Borrower or any Subsidiary as the Lender may from time to time
reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. The
Borrowers will preserve and maintain, and will cause each Subsidiary to preserve
and maintain, its corporate existence and all of its leases, privileges,
licenses, permits, franchises, qualifications, and rights that are necessary or
desirable in the ordinary conduct of its business. The Borrowers will conduct,
and will cause each Subsidiary to conduct, its business in an orderly and
efficient manner in accordance with good business practices.
Section 8.3 Maintenance of Properties. The Borrowers will maintain,
keep, and preserve, and cause each Subsidiary to maintain, keep, and preserve,
all of its properties (tangible and intangible) necessary or useful in the
proper conduct of its business in good working order and condition, reasonable
wear and tear excepted.
Section 8.4 Taxes and Claims. The Borrowers will pay or discharge,
and will cause each Subsidiary to pay or discharge, at or before maturity or
before becoming delinquent (a) all taxes, levies, assessments, and governmental
charges imposed on it or its income or profits or any of its property, and (b)
all lawful claims for labor, material, and supplies, which, if unpaid, might
become a Lien upon any of its property; provided, however, that neither any
Borrower nor any Subsidiary shall be required to pay or discharge any tax,
levy, assessment, or governmental charge which is being contested in good faith
by appropriate proceedings diligently pursued, and for which adequate reserves
have been established in accordance with GAAP.
Section 8.5 Insurance. Each Borrower will maintain, and will cause
each of the Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies in such amounts and covering such risks as is
usually carried by corporations engaged in similar businesses and owning
similar properties in the same general areas in which the Borrowers and the
Subsidiaries operate, provided that in any event each Borrower will maintain
and cause each Subsidiary to maintain (a) with respect to all Vessels, hull and
machinery increased value, pollution liability, Protection and Indemnity Risks
(as hereinafter defined) and when a Vessel is laid up, port risk insurance, and
War Risks (as hereinafter defined) protection and indemnity (or its equivalent)
insurance, and (b) generally and with respect to all other Collateral, as
applicable, workmen's compensation insurance, property insurance, comprehensive
general liability insurance, products liability insurance, and business
interruption insurance in each case, satisfactory to the Lender in its sole
discretion; provided, however, War Risks protection and indemnity (or its
equivalent) insurance
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shall be required only when a Vessel is outside of the territorial waters of
the United States ("US Waters") when the Lender, in its sole discretion, which
may be exercised at any time and from time to time, waives such insurance
coverage in writing. Notwithstanding the foregoing, unless the Lender
determines in its reasonable discretion that there has been a material adverse
development in the political climate in Mexico, no War Risk protection and
indemnity (or its equivalent insurance) shall be required in the territorial
waters of Mexico. The Borrowers shall give the Lender at least 10 days advance
written notice of the departure of any Vessel from US Waters and the relocation
from one foreign jurisdiction to another foreign jurisdiction in each case
stating the destination and the projected duration of stay and deliver to the
Lender a certificate of insurance evidencing such coverage. As used herein,
"Protection and Indemnity Risks" means the usual risks covered by protection
and indemnity associations of international repute including the proportion not
recoverable in case of collision under the ordinary running down clause and
"War Risks" means the risk of mines, confiscation risk, political risk and all
risks excluded from the standard form of English maritime policy by the free of
capture and seizure clause. Each insurance policy covering Collateral shall
name the Lender as loss payee and additional insured and shall provide that
such policy will not be canceled or reduced without 30 days' prior written
notice to the Lender.
Section 8.6 Inspection Rights. During normal business hours, the
Borrowers will permit, and will cause each Subsidiary to permit,
representatives of the Lender to examine, copy, and make extracts from its
books and records, to visit and inspect its properties, including without
limitation, the Collateral, and to discuss its business, operations, and
financial condition with Responsible Officers and independent certified public
accountants.
Section 8.7 Keeping Books and Records. Each Borrower will maintain,
and will cause each Subsidiary to maintain, proper books of record and account
entries in conformity with GAAP.
Section 8.8 Compliance with Laws. Each Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, rules, regulations, orders, and decrees of any Governmental Authority or
arbitrator including, without limitation, all applicable Environmental Laws.
Section 8.9 Compliance with Agreements. Each Borrower will comply, and
will cause each Subsidiary to comply, in all material respects with all
agreements, contracts, and instruments binding on it or affecting its
properties or business.
Section 8.10 Further Assurances. Each Borrower will, and will cause
each Subsidiary to, execute and deliver such further agreements and instruments
and take such further action as may be reasonably requested by the Lender to
carry out the provisions and purposes of this Agreement and the other Loan
Documents and to create, preserve, and perfect the Liens of the Lender in the
Collateral.
Section 8.11 ERISA. Each Borrower will comply, and will cause each
Subsidiary (other than Subsidiaries organized in jurisdictions outside of the
United States and its territories) to comply, with all minimum funding
requirements, and all other material requirements, of ERISA, if applicable, so
as not to give rise to any liability thereunder.
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Section 8.12 Year 2000 Compliant. Borrowers covenant and agree with
the Lender that, while any of the Obligations are outstanding, Borrowers will:
(a) Furnish such additional information, statements and other
reports with respect to Borrowers' activities, course of action and progress
towards becoming Year 2000 Compliant as the Lender may request from time to
time.
(b) In the event of any change in circumstances that causes
or will likely cause any of Borrowers' representations and warranties with
respect to its being or becoming Year 2000 Compliant to no longer be true
(hereinafter, referred to as a "Change in Circumstances") then Borrowers shall
promptly, and in any event within ten days of receipt of information regarding
a Change in Circumstances, provide the Lender with written notice (the
"Notice") that describes in reasonable detail the Change in Circumstances and
how such Change in Circumstances caused or will likely cause Borrowers'
representations and warranties with respect to being or becoming Year 2000
Compliant to no longer be true. Borrowers shall, within five days of a request,
also provide the Lender with any additional information the Lender requests of
Borrowers in connection with the Notice and/or a Change in Circumstances.
(c) Upon reasonable notice, give any representative of the
Lender access during all reasonable business hours to, and permit such
representative to examine, copy or make excerpts from, any and all books,
records and documents in the possession of Borrowers and relating to their
affairs, and to inspect any of the properties and Systems of Borrowers, and to
project test the Systems to determine if they are Year 2000 Compliant in an
integrated environment, all at the sole cost and expense of the Lender.
Section 8.13 Mortgaged Property. The Borrowers will cause the Loan
Documents delivered on the date hereof to cover substantially all of their
Property and the Property of their Subsidiaries (in each case other than the
"Bank One Exclusive Collateral," as defined in the Intercreditor Agreement, the
PMSI Property and Property owned by Dickson Nigeria, Ltd., a company organized
under the laws of Nigeria and Servicios y Construcciones Petroleras Ventura,
C.A., a company organized under the laws of Venezuela (the "Existing Foreign
Subsidiaries")) and when and if any Borrower or any Subsidiary (other than the
Existing Foreign Subsidiaries) acquires additional properties, including
additional Subsidiaries (without affecting the restrictions herein contained
regarding additional Subsidiaries), it shall grant or cause such Subsidiaries
to grant liens and security interests in favor of the Lender by the execution
of Loan Documents required by the Lender in form and substance satisfactory to
the Lender covering all of such newly acquired Properties.
Section 8.14 Subsidiary Guaranties and Pledge of Assets. Within 30
days after the acquisition or formation of any Subsidiary of any of the
Borrowers, the Borrowers shall cause such new Subsidiary to execute and deliver
to the Lender such Guaranty and other Loan Documents as may be designated by
the Lender not inconsistent with the Intercreditor Agreement, together with
such resolutions, certificates and opinions regarding the authorization and
binding effect of such Guaranty and such Loan Documents as the Lender may
reasonably require.
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Section 8.15 Post Closing Matters. Upon the request of the Lender the
Borrowers will promptly, and in any event within 90 days of the Lender's
written request therefor, (a) provide at the Borrowers' expense, and in each
case satisfactory to the Lender in its sole discretion, the following with
respect to each Real Property (other than PMSI Property): (i) survey, (ii)
title commitment, (iii) appraisal, (iv) environmental assessments and (v)
mortgage title policy, and (b) use their best efforts to obtain at the
Borrowers' expense satisfactory landlord waivers for each leased facility of
any Borrower.
ARTICLE IX
Negative Covenants
Each Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding, the Borrowers will perform and observe the
following negative covenants:
Section 9.1 Debt. The Borrowers will not incur, create, assume, or
permit to exist, and will not permit any Subsidiary to incur, create, assume,
or permit to exist, any Debt, except:
(a) Debt to the Lender pursuant to the Loan Documents;
(b) Existing Debt described on Schedule 7.9;
(c) Purchase money obligations incurred in the ordinary
course of business not to exceed an aggregate amount for all Borrowers and
their Subsidiaries of $5,000,000 in the aggregate at any time;
(d) The $15,000,000 Debt evidenced by the Bank One Loan
Documents (which may be increased to as much as $25,000,000 so long as such
increase is permitted under the terms of the Subordination Agreement);
(e) Swap Transactions (other than Financing Transactions)
pursuant to Hedging Agreements with Bank One or its Affiliates; and
(f) The Subordinated Debt evidenced by the Subordinated Loan
Documents (as in existence as of the date hereof with such amendments only as
agreed to in writing by the Lender) in favor of Subordinated Lender not in
excess of $20,000,000.
Section 9.2 Limitation on Liens. The Borrowers will not incur, create,
assume, or permit to exist, and will not permit any Subsidiary to incur,
create, assume, or permit to exist, any Lien upon any of its property, assets,
or revenues, whether now owned or hereafter acquired, except:
(a) Liens disclosed on Schedule 9.2;
(b) Liens in favor of the Lender;
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(c) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that do not
(individually or in the aggregate) materially affect the value of the assets
encumbered thereby or materially impair the ability of any Borrower or the
Subsidiaries to use such assets in their respective businesses, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(d) Liens for taxes, assessments, or other governmental
charges which are not delinquent or which are being contested in good faith and
for which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
or other similar statutory Liens securing obligations that are not yet due and
are incurred in the ordinary course of business;
(f) Liens resulting from good faith deposits to secure
payments of workmen's compensation or other social security programs or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, contracts (other than for payment of Debt), or leases made in the
ordinary course of business; and
(g) Liens to secure purchase money indebtedness permitted
under Section 9.1(c) provided such Liens are placed within 30 days of the
incurrence of such debt.
Section 9.3 Mergers, Acquisitions, Etc. None of TransCoastal, any other
Borrower nor any Subsidiary will merge into or with or consolidate with any
other Person, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property or assets to any other Person, or wind-up, dissolve, or liquidate
itself; provided, however, if (i) TransCoastal gives at least 30 days' prior
written notice to the Lender, (ii) no Default or Event of Default has occurred
or is continuing or will result from the action proposed to be taken and
(iii) the Lender's Lien on the Collateral would not be adversely affected, then
any Subsidiary of TransCoastal may merge or consolidate with TransCoastal or
with any other Subsidiary of TransCoastal or sell, lease, or otherwise dispose
of (at fair market value) all or any substantial part of its Property or assets
to TransCoastal or to any other Subsidiary of TransCoastal. The Borrowers will
not, and will not permit any Subsidiary to, purchase or otherwise acquire all
or any part of the business or assets of any Person or any shares or other
evidence of beneficial ownership of any Person except that TransCoastal will be
permitted to acquire entities in the same industry provided that (x)
TransCoastal gives at least 30 days' prior written notice to the Lender, (y) no
Default or Event of Default has occurred or is continuing or will result from
the action proposed to be taken, and (z) the pro forma effect of which will
not cause a Default or an Event of Default. Notwithstanding the foregoing, any
single cash or debt assumption acquisition in excess of $5,000,000 or
acquisitions in the aggregate in excess of $5,000,000 in any fiscal year of
TransCoastal, will require the prior written consent of the Lender.
Section 9.4 Restricted Payments. TransCoastal will not declare or pay
any dividends or make any other payment or distribution (whether in cash,
property, or obligations) on account of its capital stock, or redeem, purchase,
retire, or otherwise acquire any of its capital stock, or return any
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capital to its stockholders, or make any distribution of its assets to its
stockholders, or permit any of its Subsidiaries to purchase or otherwise
acquire any capital stock of TransCoastal or another Subsidiary, or set apart
any money for a sinking or other analogous fund for any dividend or other
distribution on its capital stock or for any redemption, purchase, retirement,
or other acquisition of any of its capital stock, provided that, so long as no
Default or Event of Default has occurred and is continuing (or result
therefrom) TransCoastal may declare and deliver dividends solely in the form of
stock.
Section 9.5 Investments. The Borrowers will not make, and will not
permit any Subsidiary to make, any advance, loan, extension of credit, or
capital contribution to or investment in, or purchase or own, or permit any
Subsidiary to purchase or own, any stock, bonds, notes, debentures, or other
securities of, any Person, except:
(a) readily marketable direct obligations of the United
States of America or any agency thereof with maturities of one year or less
from the date of acquisition;
(b) fully insured certificates of deposit with maturities of
one year or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in excess
of $50,000,000;
(c) commercial paper of a domestic issuer if at the time of
purchase such paper is rated in one of the two highest rating categories of
Standard and Poor's Corporation or Moody's Investors Service, Inc.;
(d) acquisitions permitted under Section 9.3; and
(e) employee loans, advances or expenses in the ordinary
course of business not to exceed $50,000 per person or $500,000 in the
aggregate outstanding at any time.
Section 9.6 Limitation on Issuance of Capital Stock. The Borrowers
(other than TransCoastal) will not, and will not permit any of their
Subsidiaries to, at any time issue, sell, assign, or otherwise dispose of (a)
any of its capital stock, (b) any securities exchangeable for or convertible
into or carrying any rights to acquire any of its capital stock, or (c) any
option, warrant, or other right to acquire any of its capital stock.
Section 9.7 Transactions With Affiliates. No Borrower will enter
into, and no Borrower will permit any Subsidiary to enter into, any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate of any Borrower
or such Subsidiary, except in the ordinary course of and pursuant to the
reasonable requirements of such Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to such Borrower or such
Subsidiary than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate of any such Borrower or such Subsidiary.
Section 9.8 Disposition of Assets. The Borrowers will not sell, lease,
assign, transfer, or otherwise dispose of any of their Property, or permit any
Subsidiary to do so with any of its Property.
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except dispositions of inventory in the ordinary course of business and
dispositions of Property that does not exceed $2,000,000 in the aggregate,
provided (a) that such dispositions do not involve any Collateral in excess of
$100,000 in gross proceeds in the aggregate in any calendar year, and (b) such
dispositions do not cover any of the vessels.
Section 9.9 Sale and Leaseback. The Borrowers will not enter into, and
will not permit any Subsidiary to enter into, any arrangement with any Person
pursuant to which it leases from such Person real or personal property that has
been or is to be sold or transferred, directly or indirectly, by it to such
Person.
Section 9.10 Prepayment of Debt. The Borrowers will not prepay, and
will not permit any Subsidiary to prepay, any Debt, except the Obligations in
compliance with the provisions of Article III hereof.
Section 9.11 Nature of Business. The Borrowers will not, and will not
permit any Subsidiary to, engage in any business other than the businesses in
which they are engaged on the date hereof.
Section 9.12 Environmental Protection. The Borrowers will not, and
will not permit any of their Subsidiaries to, (a) use (or permit any tenant to
use) any of their respective properties or assets for the handling, processing,
storage, transportation, or disposal of any Hazardous Material, (b) generate
any Hazardous Material, (c) conduct any activity that is likely to cause a
Release or threatened Release of any Hazardous Material, or (d) otherwise
conduct any activity or use any of their respective properties or assets in any
manner that is likely to violate any Environmental Law or create any
Environmental Liabilities for which any of the Borrowers or any of their
Subsidiaries would be responsible.
Section 9.13 Accounting. The Borrowers will not, and will not permit
any of their Subsidiaries to, change its fiscal year or make any change (a)
in accounting treatment or reporting practices, except as required by GAAP and
disclosed to the Lender, or (b) in tax reporting treatment, except as required
by law and disclosed to the Lender.
Section 9.14 Compliance with ERISA. The Borrowers will not, and will
not permit any of their Subsidiaries (other than any Subsidiary which is
organized outside of the United States or its territories) to, (a) terminate,
or permit any ERISA Affiliate to terminate, any Plan, or (b) permit
circumstances which give rise to a Termination Event described in Clause (b),
(d) or (e) of the definition of Termination Event with respect to a Plan.
Section 9.15 Proceeds of Note. The Borrowers will not permit the
proceeds of the Note to be used for any purpose other than those permitted by
Section 7.11. Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any or the Loan
Documents to violate Regulation G, U, or X, or any other regulation of the
Board of Governors of the Federal Reserve System, or to violate Section 7 of
the Securities Exchange Act of 1934 or any rule or regulation thereunder, in
each case as now in effect or as the same may hereinafter be in effect.
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SECTION 9.16 Negative Pledge Agreements. Neither any Borrower nor any
Subsidiary will create, incur, assume or suffer to exist any contract,
agreement, or understanding (other than this Agreement, the Loan Documents, the
Bank One Loan Documents and the Subordinated Loan Documents as such
Subordinated Loan Documents exist (without amendment not approved in writing by
the Lender) as of the date hereof) which in any way prohibits or restricts the
granting, conveying, creation, or imposition of any Lien on any of its Property
or restricts any Subsidiary from paying dividends to TransCoastal or which
requires the consent of or notice to other Persons in connection therewith.
Section 9.17 Hedging Agreements. Neither any Borrower nor any
Subsidiary will enter into any Swap Transaction or any Hedging Agreement with
any Person other than Bank One or any of its Affiliates. Notwithstanding the
foregoing, neither any Borrower nor any Subsidiary will enter into any
Financing Transaction without written approval of the Lender.
ARTICLE X
Financial Covenants
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding, each Borrower will perform and observe the
following financial covenants:
Section 10.1 Consolidated Tangible Net Worth. TransCoastal and its
Subsidiaries will at all times maintain Consolidated Tangible Net Worth in an
amount not less than $57,000,000, except as may be adjusted below, increasing
annually by 90% of annual Consolidated Net Income (not reduced by losses)
beginning for the 12-month period ending December 31, 1999, and increasing by
(a) 100% of the amount of any equity issued by TransCoastal including, without
limitation, a secondary offering, and (b) the value of the net tangible assets
acquired by issuing TransCoastal's stock in the acquisition of another entity.
For fiscal year 1999 only, the required increase, will be 90% of the net amount
of the actual reported fiscal year 1999 Consolidated Net Income minus
TransCoastal's cash payment of up to $7,300,000 payable to the sellers of
Dickson GMP International, Inc. (the "Dickson Payment"), but only if such
amount is positive. If the amount derived by calculating the difference in the
fiscal 1999 Consolidated Net Income and the Dickson Payment is negative, the
minimum Consolidated Tangible Net Worth shall be the greater of: (a)
$55,000,000, or (b) $60,000,000 less (1) the Dickson Payment plus (2) fiscal
1999 Consolidated Net Income less (3) $1,000,000. In years subsequent to 1999,
such adjusted minimum Consolidated Tangible Net Worth shall be increased
annually by 90% of annual Consolidated Net Income (not reduced by losses) and
by (a) 100% of the amount of any equity issued by TransCoastal, including,
without limitation, a secondary offering, and (b) the value of the net tangible
assets acquired by issuing TransCoastal's stock in the acquisition of another
entity.
Section 10.2 Capital Expenditures. The Borrowers will not permit the
aggregate capital expenditures of the Borrowers and the Subsidiaries to exceed
$7,000,000 during any fiscal year.
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Section 10.3 Total Funded Debt to Capitalization. TransCoastal will
not permit its ratio of Total Funded Debt to Capitalization, on a Consolidated
basis, to exceed 0.40 at any time.
Section 10.4 Fixed Charge Coverage Ratio. TransCoastal and its
Subsidiaries on a Consolidated basis will at all times maintain a Fixed Charge
Coverage Ratio that exceeds 1.10 to 1.00. This ratio shall be calculated on a
cumulative quarterly basis beginning January 1, 1999, until such time as four
quarters have been reached on December 31, 1999. Thereafter, the ratio will be
calculated on a Rolling Period basis. The first test will be calculated on
March 31, 1999.
Section 10.5 Senior Funded Debt to EBITDA Coverage Ratio. The
Borrowers will not permit TransCoastal's ratio of Senior Funded Debt to EBITDA,
on a Consolidated basis (EBITDA being determined on a Rolling Period basis) to
be greater than the ratio for the times indicated below:
Time Period Ratio
12/01/1998 - 12/31/1999 2.50:1.0
01/01/2000 - 12/31/2000 2.25:1.0
01/01/2001 and thereafter 2.00:1.0
Upon the consummation of an acquisition not prohibited hereunder (including
historic acquisitions consummated within 12 months from the date hereof), the
calculation of EBITDA shall include, pro forma, the historical consolidated
EBITDA for TransCoastal and its Consolidated Subsidiaries for the relevant
period prior to TransCoastal's acquisition of such Subsidiaries.
ARTICLE XI
Default
Section 11. 1 Events of Default. Each of the following shall be deemed
an "Event of Default":
(a) Any principal amount of the Obligations or any part
thereof shall not have been paid when due or any other Obligations or any part
thereof shall not have been paid within five days when such is due.
(b) Any representation or warranty made or deemed made by any
Borrower or any Obligated Party (or any of their respective officers) in any
Loan Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with this Agreement shall be false,
misleading, or erroneous in any material respect when made or deemed to have
been made.
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(c) Any Borrower shall fail to perform, observe, or comply
with any covenant, agreement, or term contained in Section 8.1 or 8.5, Article
IX, or Article X of this Agreement; or any Borrower or any Obligated Party
shall fail to perform, observe, or comply with any other covenant, agreement,
or term contained in this Agreement or any other Loan Document (other than
covenants to pay the Obligations) and such failure shall continue for a period
of 30 days.
(d) Any Borrower, any Subsidiary, or any Obligated Party
shall commence a voluntary proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar
official of it or a substantial part of its property or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it or shall make a
general assignment for the benefit of creditors or shall generally fail to pay
its debts as they become due or shall take any corporate action to authorize
any of the foregoing.
(e) An involuntary proceeding shall be commenced against any
Borrower, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or a substantial part of its property, and such
involuntary proceeding shall remain undismissed and unstayed for a period of 30
days.
(f) Any Borrower, any Subsidiary, or any Obligated Party
shall fail to discharge within a period of 30 days after the commencement
thereof any attachment, sequestration, or similar proceeding or proceedings
involving an aggregate amount in excess of $1,000,000 against any of its
assets or properties.
(g) A final judgment or judgments for the payment of money in
excess of $1,000,000 in the aggregate shall be rendered by a court or courts
against any Borrower, any of its Subsidiaries, or any Obligated Party and the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within 30
days from the date of entry thereof and the relevant Borrower or the relevant
Subsidiary or Obligated Party shall not, within said period of 30 days, or such
longer period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal.
(h) Any Borrower, any Subsidiary, or any Obligated Party
shall fail to pay when due any principal of or interest on any Debt (other
than the Obligations), including, without limitation, Debt under the Bank One
Loan Documents and/or the Subordinated Loan Documents) or the maturity of any
such Debt shall have been accelerated, or any such Debt shall have been
required to be prepaid prior to the stated maturity thereof, or any event shall
have occurred that permits (or, with the giving of notice or lapse of time or
both, would permit) any holder or holders of such Debt or any Person acting on
behalf of such holder or holders to accelerate the maturity thereof or require
any such prepayment.
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(i) This Agreement or any other Loan Document shall cease to
be in full force and effect or shall be declared null and void or the validity
or enforceability thereof shall be contested or challenged by any Borrower, any
Subsidiary, any Obligated Party or any of their respective shareholders, or any
borrower or any obligated party shall deny that it has any further liability or
obligation under any of the Loan Documents, or any lien or security interest
created by the Loan Documents shall for any reason cease to be a valid, first
priority perfected security interest in and lien upon any of the Collateral
purported to be covered thereby.
(j) Any Termination Event as defined in clause (b), (d) or
(e) of the definition thereof with respect to a Plan shall have occurred and,
five days after notice thereof shall have been given to any Borrower by the
Lender, (i) such Termination Event shall still exist.
(l) Any Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multi-employer Plan that it has incurred
Withdrawal Liability to such Multi-employer Plan.
(1) Any Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multi-employer Plan that such Multi-employer Plan
is in reorganization or is being terminated, within the meaning of Title IV of
ERISA.
(m) Any Borrower or any of its Subsidiaries, or any of their
properties, revenues, or assets, shall become the subject of an order of
forfeiture, seizure, or divestiture (whether under RICO or otherwise) and the
same shall not have been discharged (or provisions shall not be made for such
discharge) within 30 days from the date of entry thereof.
(n) Any Person or Persons constituting a group (as such term
is used in Rule 13d-5 under the Securities Exchange Act of 1934 as in effect on
the date hereof) shall, in the aggregate, directly or indirectly, control or
own (beneficially or otherwise) more than 30% (by number of shares) of the
issued and outstanding voting stock of TransCoastal.
(o) Nathan Avery or a reasonable substitute thereof shall
cease to be active in the senior management of TransCoastal.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Lender may do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and
accrued and unpaid interest on the Note and all other obligations of any of the
Borrowers under the Loan Documents immediately due and payable, and the same
shall thereupon become immediately due and payable, all without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, protest, or other formalities of any kind, all of which are hereby
expressly waived by the Borrowers.
(b) Judgment. Reduce any claim to judgment.
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(c) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Lender to secure payment and performance of the Obligations in
accordance with the terms of the Loan Documents.
(d) Rights. Exercise any and all rights and remedies afforded
by the laws of the State of Illinois or any other jurisdiction, by any of the
Loan Documents, by equity, or otherwise.
Provided, however, that upon the occurrence of an Event of Default under
Section 11.1(d) or 11.1(e), the outstanding principal of and accrued and
unpaid interest on the Note and all other obligations of the Borrowers under
the Loan Documents shall thereupon become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all of
which are hereby expressly waived by the Borrowers.
Section 11.3 Performance by the Lender. If any Borrower shall fail to
perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Lender may perform or attempt to perform such covenant or
agreement on behalf of the Borrowers. In such event, the Borrowers shall, at
the request of the Lender, promptly pay any amount expended by the Lender in
connection with such performance or attempted performance to the Lender at the
Principal Office, together with interest thereon at the Default Rate from and
including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that the Lender shall not have any liability or responsibility for the
performance of any obligation of any Borrower under this Agreement or any of
the other Loan Documents.
ARTICLE XII
Miscellaneous
Section 12.1 Expenses. The Borrowers hereby agree, jointly and
severally, to pay on demand: (a) all reasonable costs and expenses of the
Lender in connection with the preparation, negotiation, execution, and delivery
of this Agreement and the other Loan Documents and any and all amendments,
modifications, renewals, extensions, and supplements thereof and thereto,
including, without limitation, the fees and expenses of legal counsel for the
Lender and Lender's due diligence activities, (b) all costs and expenses of
the Lender in connection with any Default and the enforcement of this Agreement
or any other Loan Document, including, without limitation, the fees and
expenses of legal counsel for the Lender, (c) all transfer, stamp,
documentary, or other similar taxes, assessments, or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all costs, expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by this Agreement or any other Loan
Document, and (e) all other reasonable costs and expenses incurred by the
Lender in connection with this Agreement or any other Loan Document, including,
without limitation, all costs, expenses, and other charges incurred in
connection with obtaining any mortgagee title insurance policy, survey, audit,
or appraisal in respect of the Collateral.
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Section 12.2 Indemnification. The Borrowers, jointly and severally,
shall indemnify the Lender and each Affiliate thereof and their respective
officers, directors, employees, attorneys, and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims, damages,
penalties, judgments, disbursements, costs, and expenses (including attorneys'
fees) to which any of them may become subject which directly or indirectly
arise from or relate to (a) the negotiation, execution, delivery, performance,
administration, or enforcement of any of the Loan Documents, (b) any of the
transactions contemplated by the Loan Documents, (c) any breach by any Borrower
of any representation, warranty, covenant, or other agreement contained in any
of the Loan Documents, (d) the presence, Release, threatened Release, disposal,
removal, or cleanup of any Hazardous Material located on, about, within, or
affecting any of the properties or assets of any Borrower or any Subsidiary, or
(e) any investigation, litigation, or other proceeding, including, without
limitation, any threatened investigation, litigation, or other proceeding
relating to any of the foregoing. Without limiting any provision of this
Agreement or of any other Loan Document, it is the express intention of the
parties hereto that each Person to be indemnified under this Section shall be
indemnified from and held harmless against any and all losses, liabilities,
claims, damages, penalties, judgments, disbursements, costs, and expenses
(including attorneys' fees) arising out of or resulting from the sole or
contributory negligence of such Person.
Section 12.3 Limitation of Liability. None of the Lender or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and any Borrower hereby waives, releases, and
agrees not to sue any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by any Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents, except for gross negligence or
willful misconduct in which event damages will be limited to actual damages.
Each Borrower hereby waives, releases, and agrees not to sue the Lender or any
of its Affiliates, officers, directors, employees, attorneys, or agents for
punitive damages in respect of any claim in connection with, arising out of, or
in any way related to, this Agreement or any of the other Loan Documents, or
any of the transactions contemplated by this Agreement or any of the other Loan
Documents.
Section 12.4 No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by the Lender shall have
the right to act exclusively in the interest of the Lender and shall have no
duty of disclosure, duty of loyalty, duty of care, or other duty or obligation
of any type or nature whatsoever to any Borrower or any of the Borrowers'
shareholders or any other Person.
Section 12.5 No Fiduciary Relationship. The relationship between each
Borrower and the Lender is solely that of debtor and creditor, and the Lender
has no fiduciary or other special relationship with any Borrower, and no term
or condition of any of the Loan Documents shall be construed so as to deem the
relationship between any Borrower and the Lender to be other than that of
debtor and creditor.
Section 12.6 Equitable Relief. Each Borrower recognizes that in the
event any Borrower fails to pay, perform, observe, or discharge any or all of
the Obligations, any remedy at law may
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prove to be inadequate relief to the Lender. Each Borrower therefore agrees
that the Lender, if the Lender so requests, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
Section 12.7 No Waiver, Cumulative Remedies. No failure on the part of
the Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement and the other Loan Documents
are cumulative and not exclusive of any rights and remedies provided by law.
Section 12.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. The
Borrowers may not assign or transfer any of their rights or obligations
hereunder without the prior written consent of the Lender. The Lender may sell
without notice to or consent of any Borrower participations to one or more
banks or other institutions in or to all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of the Term Loan owing to it); provided,
however, that (i) the Lender's obligations under this Agreement and the other
Loan Documents shall remain unchanged, (ii) the Lender shall remain solely
responsible to the Borrowers for the performance of such obligations, (iii) the
Lender shall remain the holder of its Note for all purposes of this Agreement,
(iv) the Borrowers shall continue to deal solely and directly with the Lender
in connection with the Lender's rights and obligations under this Agreement and
the other Loan Documents, and (v) the Lender shall not sell a participation
that conveys to the participant the right to vote or give or withhold consents
under this Agreement or any other Loan Document, other than the right to vote
upon or consent to (A) any reduction of the principal amount of, or interest to
be paid on, the Term Loan of the Lender, (B) any reduction of any commitment
fee or other amount payable to the Lender under any Loan Document, or (C) any
postponement of any date for the payment of any amount payable in respect of
the Term Loan to the Lender.
(b) The Lender may, without notice to or consent of any
Borrower, sell, assign or transfer to any one or more persons or entities, all
or any part of the Term Loan or all or any part of the Loan Documents and each
such assignee or transferee shall have the right to enforce the Term Loan, and
such Loan documents as fully as the Lender, provided that the Lender shall
continue to have the unimpaired right to enforce the provisions of the Loan
Documents and the Term Loan that it has not sold, assigned or transferred.
(c) In connection with and prior to and after any such sale,
transfer, assignment or participation, the Lender may disclose and furnish to
any prospective or actual purchaser, transferee, assignee or participant, any
and all reports, financial statements and other information obtained by the
Lender at any time and from time to time in connection with the Term Loan, the
Loan Documents or otherwise. The Borrowers shall fully cooperate with the
Lender in connection with any such assignment and shall execute and deliver
such consents and acceptances to any such
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assignment as the Lender shall reasonably request that are necessary or
desirable to effect any such assignment.
Section 12.9 Survival. All representations and warranties made in
this agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by the Lender or any closing shall affect the representations and
warranties or the right of the Lender to rely upon them. Without prejudice to
the survival of any other obligation of the Borrowers hereunder, the
obligations of the Borrowers under Article IV and Sections 12.1 and 12.2 shall
survive repayment of the Note and termination of the Commitments.
Section 12. 10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE, AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO.
Section 12.11 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes, or any other Loan Document to which any
Borrower is a party, nor any consent to any departure by any Borrower
therefrom, shall in any event be effective unless the same shall be agreed or
consented to by the Lender and the Borrowers, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
Section 12.12 Maximum Interest Rate.
(a) The collateral covered in the Vessel Mortgage and the
Obligations covered by this Agreement, the Note and other Loan Documents is or
will be secured by a "Preferred Mortgage" on the United States-flagged Vessels
within the meaning of Section 31322 of 46 U.S.C. 131301-31343 (1994), as amended
(the "Ship Mortgage Act"), and the regulations promulgated thereunder. If, for
any reason, the provisions of Section 31322 of the Ship Mortgage Act shall be
found not to exempt any and all interest and other charges contracted for,
charged, taken, received or reserved in connection with the Obligations covered
by this Agreement, the Note, and other Loan Documents from any limitations
otherwise applicable, then the provisions of Section 12.12(b) shall apply, but
otherwise the provisions of Section 31322 of the Ship Mortgage Act shall be
applicable.
(b) No provision of this Agreement or of any other Loan
Document shall require the payment or the collection of interest in excess of
the maximum amount permitted by applicable law. If any excess of interest in
such respect is hereby provided for, or shall be adjudicated to be so provided,
in any Loan Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither any of the
Borrowers nor the sureties, guarantors, successors, or assigns of any of the
Borrowers shall be obligated to pay the excess
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amount of such interest or any other excess sum paid for the use, forbearance,
or detention of sums loaned pursuant hereto. In the event the Lender ever
receives, collects, or applies as interest any such sum, such amount which
would be in excess of the maximum amount permitted by applicable law shall be
applied as a payment and reduction of the principal of the indebtedness
evidenced by the Note; and, if the principal of the Note has been paid in full,
any remaining excess shall forthwith be paid to the Borrowers. In determining
whether or not the interest paid or payable exceeds the Maximum Rate, the
Borrowers and the Lender shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
indebtedness evidenced by the Note so that interest for the entire term does
not exceed the Maximum Rate.
Section 12.13 Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which any Borrower is a
party shall be given or made by telex, telegraph, telecopy, cable, or in
writing and telexed, telecopied, telegraphed, cabled, mailed by certified mail
return receipt requested, or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party at such other address as shall be designated by such party
in a notice to each other party given in accordance with this Section. Except
as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telex or telecopy, subject
to telephone confirmation of receipt, or delivered to the telegraph or cable
office, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, when duly deposited in the mails,
in each case given or addressed as aforesaid; provided, however, notices to the
Lender pursuant to Article II shall not be effective until received by the
Lender.
Section 12.14 LAW AND JURISDICTION.
THIS AGREEMENT AND THE LOAN DOCUMENTS PROVIDED FOR HEREIN
(INCLUDING, BUT NOT LIMITED TO THE VALIDITY AND ENFORCEABILITY HEREOF
AND THEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ILLINOIS, OTHER THAN CONFLICT OF LAWS THEREOF
ANY LEGAL ACTION OR PROCEEDING AGAINST ANY OF THE BORROWERS WITH
RESPECT TO THIS AGREEMENT OR ANY LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF ILLINOIS. THE U.S. FEDERAL COURTS IN SUCH
STATE, SITTING IN THE COUNTY OF COOK, OR IN THE COURTS OF ANY OTHER
JURISDICTION WHERE SUCH ACTION OR PROCEEDING MAY BE PROPERLY BROUGHT,
AND THE BORROWERS HEREBY IRREVOCABLY ACCEPT THE JURISDICTION OF SUCH
COURTS FOR THE PURPOSE OF ANY ACTION OR PROCEEDING. EACH OF THE
BORROWERS DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, 208 SOUTH
LASALLE STREET, CHICAGO, ILLINOIS 60604 TO RECEIVE ON THEIR BEHALF,
SERVICE OF ALL PROCESS IN ANY PROCEEDING IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED BY EACH CREDIT PARTY TO BE EFFECTING
AND BINDING SERVICE IN EVERY RESPECT. A copy
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of such service of process shall be mailed by U.S. registered or
certified mail postage prepaid to the party to be served at its
address designated in Section 12.13 hereof except that unless
otherwise required by law, any failure to mail such copy shall not
affect the validity of service of process. The Borrowers agree that a
final judgment in any action or proceeding shall be conclusive and may
be enforced in any other jurisdiction by suit on the judgment or in
any other manner provided by law. Nothing in this Section 12.14 shall
affect the right of the Lender to serve legal process in any other
manner permitted by law or affect the right of the Lender to bring any
action or proceeding against any Borrower or its Properties in the
courts of any other jurisdiction. To the extent that any Borrower has
or hereafter may acquire any immunity from jurisdiction of any court
or from any legal process (whether through service of notice,
attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to either itself or its Property,
such Borrower hereby irrevocably waives such immunity in respect of
its obligations under this Agreement and the other Loan Documents to
the extent permitted by law. To the extent permitted by law each of
the Borrowers hereby irrevocably waives any objection that it may now
or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any loan
Document brought in any state or federal court located within the
County of Cook, State of Illinois, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 12.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 12.16 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 12.17 Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 12.18 Non-Application of Chapter 346 of Texas Finance Code.
The provisions of Chapter 346 of the Texas Finance Code are specifically
declared by the parties hereto not to be applicable to this Agreement or any of
the other Loan Documents or to the transactions contemplated hereby.
Section 12.19 Construction. The Borrowers and the Lender acknowledge
that each of them has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the parties hereto.
Section 12.20 Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the
50
57
limitations of, another covenant shall not avoid the occurrence of a Default if
such action is taken or such condition exists.
Section 12.21 JURY WAIVER. THE BORROWERS AND THE LENDER (BY THEIR
ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG ANY
BORROWER AND THE LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT,
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY RELATIONSHIP BETWEEN THE LENDER AND ANY
BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDER TO PROVIDE THE
FINANCING DESCRIBED HEREIN OR IN THE OTHER LOAN DOCUMENTS.
Section 12.22 Confidentiality. In the event that any of the Borrowers
provides to the Lender written confidential information belonging to such
Borrower, if such Borrower shall denominate such information in writing as
"confidential", the Lender shall thereafter maintain such information in
confidence in accordance with the standards of care and diligence that it
utilizes in maintaining its own confidential information. This obligation of
confidence shall not apply to such portions of the information which (i) are in
the public domain, (ii) hereafter become part of the public domain without the
Lender breaching its obligation of confidence to such Borrower, (iii) are
previously known by the Lender from some source other than such Borrower, (iv)
are hereafter developed by the Lender without using the Borrower's information,
(v) are hereafter obtained by or made available to the Lender from a third
party who the Lender is not aware owes an obligation of confidence to such
Borrower with respect to such information or through any other means other than
through disclosure by such Borrower, (vi) are disclosed with such Borrower's
consent, (vii) must be disclosed either pursuant to any Governmental
Requirement or to Persons regulating the activities of the Lender, or (viii) as
may be required by law or regulation or order of any Governmental Authority in
any judicial, arbitration or governmental proceeding. Further, the Lender may
disclose any such information to Bank One, the Subordinated Lender, its
independent certified public accountants, and/or any legal counsel employed by
such Person in connection with this Agreement or any other Loan Document,
including without limitation, the enforcement or exercise of all rights and
remedies thereunder, or any assignee or participant (including prospective
assignees and participants) in the Term Loan; provided, however, that the
Lender shall receive a confidentiality agreement from the Person to whom such
information is disclosed such that said Person shall have the same obligation
to maintain the confidentiality of such information as is imposed upon the
Lender hereunder. Notwithstanding anything to the contrary provided herein,
this obligation of confidence shall cease three years from the date the
information was furnished, unless such Borrower requests in writing at least 30
days prior to the expiration of such three year period, to maintain the
confidentiality of such information for an additional three year period. Each
Borrower waives any and all other rights it may have to confidentiality as
against the lender arising by contract, agreement, statute or law except as
expressly stated in this Section 12.22.
51
58
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.]
[SIGNATURE PAGES TO FOLLOW.]
59
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWERS:
TRANSCOASTAL MARINE SERVICES, INC.;
DICKSON MARINE, INC.;
VENTURA RESOURCES, INC.;
WOODSON CONSTRUCTION COMPANY, INC.;
ENVIROSYSTEMS, INC.;
KORI CORPORATION;
C.S.I. HYDROSTATIC TESTERS, INC.;
HARGETT MOORING AND MARINE, INC.;
HBH, INC.;
TRANSCOASTAL MARINE SERVICES OF LA, INC.;
DICKSON GMP INTERNATIONAL, INC.;
THE RED FOX COMPANIES OF NEW IBERIA, INC.;
TRANSCOASTAL VESSELS, INC.;
By: /a/ PAMELA L. REILAND
--------------------------------------------
Pamela L. Reiland
Authorized Officer for each Borrower
1. Address for Notices (all Borrowers):
2925 Briarpark Drive, Suite 930
Houston, Texas 77042
Fax No.: (713) 781-6364
Telephone No.: (713) 787-1384
Attention: President
60
LENDER:
HELLER FINANCIAL LEASING, INC.
By: /s/ B. FORREST TAYLOR
------------------------------------
B. Forrest Taylor
Vice President
2. Address for Notices:
500 West Monroe Street
Chicago, Illinois 60661
Fax No.: (312) 441-7519
Telephone No.: (312) 441-6719
Attention: Region Credit Manager
61
INDEX TO SCHEDULES
Schedule Description of Schedule
1 Excluded Equipment
2 Real Property
3 Vessels
7.5 Litigation and Judgments
7.6 Property Condition Disclosure
7.9 Debt
7.10 Tax Disclosure
7.14 List of Subsidiaries
7.20 Environmental Matters
7.22 Insurance
7.23 Hedging Agreements
7.25 Material Agreements
9.2 Disclosed Liens
1
62
SCHEDULE 1
TO
CREDIT AGREEMENT
List of Excluded Assets
(as more fully described in attachment hereto)
===================================================================================================
ASSET NAME TYPE DESCRIPTION
===================================================================================================
Drydock Drydock 3,400 ton; Dimensions of 236' x 100' with 85' between wing walls
- ---------------------------------------------------------------------------------------------------
Jetting Jet Pumps, Etc. TCMS Equipment #10697, EMD Engine Model #16-567-03A with Bingham
Equipment 8' x 10' 4-stage Jet Pump and Lufkin Gear Box Model #N1460C;
(Mexican site) jet sleds and pipe; located on Cable 1 Vessel
- ---------------------------------------------------------------------------------------------------
Jetting Jet Pumps, Etc. 3 single stage pumps; 5 5-stage pumps; EMD Engine Model #16-567-
Equipment D3A with Bingham 8' x 10' 4-stage Jet Pump with Lufkin Gear Box
(Lafayette site) Model #N1604C; jet sleds and pipe
- ---------------------------------------------------------------------------------------------------
BH 103 Spud Barge American flag; dimensions of 120' x 39' x 8'; built by Conrad
Industries, Inc. in Morgan City, LA in 1991
- ---------------------------------------------------------------------------------------------------
BH 101 Spud Barge American flag; dimensions of 120' x 36' x 7'; built in Houma,
LA in 1979
- ---------------------------------------------------------------------------------------------------
BH 100 Spud Barge American flag; dimensions of 110' x 34' x 6'
- ---------------------------------------------------------------------------------------------------
Rowe 14 Crane Barge American flag; dimensions of 110' x 34' x 7.3'; approximately
20 years old
- ---------------------------------------------------------------------------------------------------
Barge Construction American flag; dimensions of 250' x 50' x 12; built by Nashville
Barge Bridge Company in Nashville, TN in 1953
- ---------------------------------------------------------------------------------------------------
#7101 Spud Barge American flag; dimensions of 136' x 35' x 7.6'; built by
Nashville Bridge Company in Nashville, TN in 1966
- ---------------------------------------------------------------------------------------------------
#7102 Spud Barge American flag; dimensions of 136' x 35' x 7.6'; built by Nashville
Bridge Company in Nashville, TN in 1966
- ---------------------------------------------------------------------------------------------------
Barge Office Barge American flag; dimensions of 208' x 26' x 5'; built by Nashville
Bridge Company in Nashville, TN (forward vessel in 1941, hull no.
579 and after vessel in 1955, hull no. 1134)
- ---------------------------------------------------------------------------------------------------
TCMS 612 Spud Barge American flag; dimensions of 140' x 39' x 9'
- ---------------------------------------------------------------------------------------------------
BH 7 Deck Barge American flag; dimensions of 120' x 20' x 7'; built by Alexander
Shipyard
- ---------------------------------------------------------------------------------------------------
Missy Ann Tug Boat American flag; dimensions of 48' x 16.7' x 5.8'; built in Houma,
LA in 1975
- ---------------------------------------------------------------------------------------------------
Danny Boy II Tug Boat American flag; dimensions of 36.5' x 14' x 4.7'; built in Harvey,
LA in 1969
- ---------------------------------------------------------------------------------------------------
BH 201 Spud Barge American flag; dimensions of 90' x 23' x 5'
- ---------------------------------------------------------------------------------------------------
MMVII Spud Barge American flag; dimensions of 120' x 32' x 7'; approximately 25
years old
===================================================================================================
63
[BACHRACH, WOOD, PETERS AND ASSOCIATES, INC. LETTERHEAD]
DECEMBER 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 7, 1998
SURVEY REPORT NO. 9812-1225
3400 TON DRYDOCK
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on December
7, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for the account
of Bank One, Texas, NA, survey the 3400 ton drydock (Transcoastal Marine
Services, Inc.- reported owners) while subject drydock was lying afloat at the
facilities of Red Fox on Industrial Canal in New Orleans, Louisiana, in order to
ascertain the general condition and in order to estimate her present day fair
market value and orderly liquidation value as of December 7, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
Note: For reporting purposes, the end of the drydock with the male notch
assembly is considered to be the bow.
The drydock was built of all welded steel construction by securing four (4)
smaller drydock sections into one (1) larger unit with an overall dimension of
236'x 100' with 85' between the wing walls and a combined capacity of 3,400
tons.
Original thickness of all plating appears to be 3/8".
Deck fittings consists of various single and double bitts, as well as padeyes
ranged across the forward and after ends of the main deck.
HULL SECTIONS:
The hull sections are arranged as follows:
64
SURVEY REPORT NO. 9812-1225
HULL SECTIONS: (continued)
First Section:
The forward section is a 39'x 100' section with two (2) 16'x 7.5' x 15' wing
walls ranged along both port and starboard sides. Extending forward of the bow
is a fabricated steel male notch assembly which measures 19'x 60' with a 48"
cast steel kevel location in way of the center line. Each wing wall has its
upper perimeter contained by cable handrails.
Atop the port wing wall was the following:
One (1) 6" double bitt.
Two (2) valve handles.
Two (2) 6" vents.
One (1) manual securing winch.
One (1) covered shack.
Two (2) U.S. Motors, Model F407A, 15 HP electric motors each rated at 1765 RPM
which power two (2) low lift pumps of unknown capacity.
Atop the starboard wing wall was the following:
One (1) 6" diameter double bitt.
One (1) manually operated winch.
Two (2) 6' vents.
Three (3) Valve handles.
One (1) electrical panel/operators station which has a surrounding steel shack.
Two (2) U.S. Motors, model F407A, 15 HP electric motors each rated at 1765 RPM
which power two (2) low lift pumps of unknown capacity.
Second Section:
The second section is a 70'x 100' section with one (1) 70'x 7.5' x 16' wing wall
section ranged along both port and starboard side. Each wing wall has its upper
ranged along both port and starboard side. Each wing wall has its upper
perimeter contained by round bar handrail system.
Atop the port wing wall is the following:
Two (2) 12" double bitts ranged along the outboard edge.
Two (2) mercury vapor lights.
Two (2) 4" vents.
One (1) 12" vent.
One (1) valve handle.
One (1) manually operated winch.
Five (5) 10" single bitts.
65
SURVEY REPORT NO. 9812-1225
HULL SECTIONS: (continued)
SECOND SECTION: (continued)
One (1) 50 HP electric motor which powers a Fairbanks Morse deepwell pump of
unknown capacity.
Atop the starboard wing wall is the following:
Two (2) 12" double bitts ranged along the outboard edge.
Two (2) valves.
One (1) 12" vent.
Two (2) 4" vents.
Two (2) mercury vapor lights.
One (1) manually operated winch.
One (1) 10" D ring.
Seven (7) 6" single bitts.
One (1) electrical panel covered by a steel top.
One (1) 50 HP electric motor which powers a Fairbanks Morse deepwell pump of
unknown capacity.
Third Section:
The third section is a 70' x 100' section with one (1) 70' x 7.5' x 18' wing
wall section ranged along both port and starboard sides. Each wing wall has its
upper perimeter contained by round bar handrail system.
Atop the port wing wall is the following:
Two (2) 12" double bitts ranged along the outboard edge.
One (1) mercury vapor light.
Two (2) manually operated winches.
One (1) 12" vent.
Two (2) 4" vents.
One (1) valve handle.
Six (6) single bitts.
One (1) cover shack.
One (1) 50 HP electric motor which powers a Fairbank Morse deepwell pump of
unknown capacity.
Atop the starboard wing well is the following:
Two (2) 12" double bitts ranged along the outboard edge.
Two (2) valve handles.
Two (2) 4" vents.
66
SURVEY REPORT NO. 9812-1225
HULL SECTIONS: (continued)
Third Section: (continued)
One (1) 12" vent.
One (1) manually operated winch.
Nine (9) 6" single bitts.
One (1) mercury vapor light.
One (1) 50 HP electric motor which powers a Fairbanks Morse deepwell pump of
unknown capacity.
Fourth Section:
The fourth section is a 56' x 100' section with two (2) 16' x 7.5' x 15' wing
wall section ranged along both port and starboard sides. Each wing wall has its
upper perimeter contained by pipe handrail system.
Atop the port wing wall is the following:
Two (2) 6" double bitts ranged along the inboard edge.
One (1) 8" D ring.
Four (4) 8" vents.
Four (4) valve handles.
One (1) electric winch complete with a 5 HP motor.
Two (2) mercury vapor lights.
One (1) 30 lb. fire extinguisher.
One (1) 30" ring buoy.
One (1) 15 HP electric motor which powers a Fairbank Morse deepwell pump of
unknown capacity.
Atop the starboard wing wall is the following:
One (1) 6" double bitt located aft.
One (1) 8" double bitt located inboard.
Four (4) valve handles.
Four (4) 8" vents.
Nine (9) 6" single bitts.
One (1) electric winch without a motor.
One (1) manually operated winch.
Two (2) mercury vapor lights.
One (1) electrical panel/operator station covered by a steel roof.
One (1) 30" ring buoy.
67
SURVEY REPORT NO. 9812-1225
HULL SECTIONS: (continued)
Fourth Section: (continued)
One (1) 15 HP electric motor which powers a Fairbank Morse deepwell pump of
unknown capacity.
EXTERNAL CONDITION:
Note: Only an external survey could be performed due to the lower hull
compartments containing ballast water.
The drydock was sighted afloat with a 250' vessel hauled out.
The deck was partially covered with 6" to 1' of blasting sand. Where sighted,
deck plating was lightly washboarded with random indents of 0 to 1".
The wing walls contain light distortion with random indents of 0 to 1".
External coating was recently applied over 90% of the vessel and appears to
be in excellent condition.
Electrical wiring, where sighted, appears to be in excellent condition.
VALUATION:
Estimated present day fair market value
as of December 7, 1998.................................$ 2,750,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and
seller, each acting prudently, knowledgeably, and assuming the price
is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale where title is passed from seller to buyer
under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider
their own best interest.
3. A reasonable time is allowed for exposure in the open market.
68
SURVEY REPORT NO. 9812-1225
VALUATION: (continued)
Estimated orderly liquidation value
as of December 7, 1998................................... $ 2,400,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find
a purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
Reportedly, all wasted external hull plating has been cropped and renewed as
found necessary.
Reportedly, internal hull compartments had all wasted structural members
cropped and renewed as found necessary with additional internals added to
reinforce the deck.
Reportedly, all internal and external anodes have recently been renewed.
Reportedly, all lower hull compartments have been cleaned and recoated with
Texaco Compound H.
All machinery and equipment on the drydock appears to be in good condition and
well coated.
This drydock, as described herein, is in satisfactory condition for its
intended service.
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject drydock
is either expressed or implied.
The drydock was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems, or
opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned drydock and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is in no way
contingent upon the values reported herein.
Survey made, signed and submitted without prejudice to rights and/or interests
of whom it may concern.
69
SURVEY REPORT NO. 9812-1225
SURVEYOR'S NOTES: (continued)
Attending Surveyor:
Kevin A. Jacomine
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
KAJ:ktb
Distribution:
(2) Reports & (2) invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
70
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 08, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 4, 1998
SURVEY REPORT NO. 9812-1227
TRANSCOASTAL MARINE SERVICES, INC. JETTING EQUIPMENT
MEXICO
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on December
4, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for the account
of Bank One, Texas, NA, survey Jetting Equipment temporarily on board the barge
"Cable I", and reportedly owned by Transcoastal Marine Services, Inc. while the
Cable I lay afloat and anchored approximately 5 miles northeast of Ciudad Del
Carmen, Campeche, Mexico in order to ascertain the general condition of the
equipment and in order to estimate its present day fair market value and orderly
liquidation values as of December 4, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL DESCRIPTION AND CONDITION:
One steel, state of the art, jetting sled with adjustable legs capable of
operating at pressures of 500 psi and a volume of 3600 gallons per minute and
capable of burying pipe 12" to 36" in diameter to a depth of as much as 16 feet
below mud line. This equipment was found in excellent condition.
One skid mounted "A" frame approximately 50 feet long and constructed with steel
30" "I" beam legs and two 30" "I" beam cross beams. The "A" frame is fit with a
36" diameter x 20 foot long hose roller, has an 80 ton capacity and can be
raised and lowered utilizing built-in hydraulic rams. The unit is capable of
being moved from vessel to vessel as a unit. The unit was found to be in
excellent condition.
One skid mounted 3 cylinder General Motors, model 3-53, diesel engine drives a
Vickers vane pump for operating the hydraulic rams of the "A" frame. The engine
is electric starter and radiator cooled and appeared in very good condition.
71
SURVEY REPORT NO. 9812-1227
GENERAL DESCRIPTION AND CONDITION:
One Continental skid mounted model TMD 27, 4 cylinder diesel engine drives a
Parker model PFV 125B1711FNI vane pump to power a large diameter hose reel. The
engine is electric starting and radiator cooled and appears in new condition.
One skid mounted hydraulic powered 12 foot diameter steel hose reel which is
remotely powered from a hydraulic pressure source. The reel is fit with 300
feet of 8" diameter 1000 psi water hose. The hose reel is additionally fit
with 300 feet of 6" diameter high pressure air supply hose. The hose reel was
built by Marine Project Development Limited of Hull in Great Britain and the
hose reel unit and hoses appeared in very good condition.
2,600 feet of 1/2" high pressure hydraulic hose for the sensor units used for
positioning a jetting sled. The hoses appeared in good condition.
One steel water manifold for a jet pumping system constructed of 8" diameter
pipe and 8" valves which can be arranged to operate two high pressure water
pumps. This unit appeared in very good condition.
One skid mounted Viking, 50 ton line pull, 48" diameter single drum which driven
by a Hagglunds hydraulic motor through a Hagglund reduction gear. The drum is
fit with 4,000 feet of 1" steel cable. The unit and cable appeared in excellent
condition.
One skid mounted, Deutz 6 cylinder, turbocharged diesel engine driving a 12"
Gorman-Rupp 7,000 gallon per minute water supply pump which can deliver at 40
psi. The engine is electric starting and air cooled and appeared in nearly new
condition.
Two frame mounted Gardner-Denver 750 cubic feet per minute at 125 psi, air
compressors are each driven by General Motors 6 cylinder model 6-71 diesel
engine. Each engine is electric starting and radiator cooled. Each engine was
reportedly recently overhauled and each unit appeared in good condition.
One skid mounted 16 cylinder EMD model 16-645E5, turbocharged, 3,000 brake horse
power diesel engine drives a Lufkin 4 to 1 increase gear and a Bingham model
MSB 5/4 8 x 10 x 12.5, 3,000 gallon per minute at 1,000 psi, high pressure water
pump. The engine is air starting and heat exchanger cooled. The Lufkin gears
are reportedly new and appear in excellent condition. The Bingham pump appears
in excellent condition and is reportedly operative. The main engine appears in
excellent condition and was reportedly last overhauled 900 operating hours ago.
One Rasmussen Equipment Company skid mounted, double drum Skagit, model RB-90
winch is driven by General Motors 8 cylinder model V-8-71 diesel engine through
a Twin Disc torque converter and a system of gears and chains. The engine is
electric starting and radiator cooled. The engine is fit with a takeoff for
running its own winch controls. The
72
SURVEY REPORT NO. 9812-1227
GENERAL DESCRIPTION AND CONDITION:
engine appears in excellent condition and it reportedly nearly new. The winch
appears in excellent condition.
VALUATION:
Estimated present day fair market value of above described equipment as
sighted December 04, 1998.................................$ 1,300,000.00
Fair Market Value:
A sum of money that equipment should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value of above described equipment as sighted
of December 04, 1998.......................................$ 1,000,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
This survey represents the good faith opinion of the surveyor and does not
make any representations of fact. It was performed for insurance
underwriting and/or appraisal purposes only, and no warranty of
correctness of this surveyor as to the condition, seaworthiness, value, or
marketability of subject vessel is either expressed or implied.
The undersigned Marine Surveyor has no present or contemplated future
interest in the aforementioned vessel and/or its equipment, and
compensation for services has been arranged for on an independent fee
basis and is in no way contingent upon the values reported herein.
73
SURVEY REPORT NO. 9812-1227
SURVEYOR'S NOTES: (continued)
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom may concern.
Attending Surveyor:
John M. Swanson
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
[SEAL]
JMS:maw
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
74
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 8, 1998
SURVEY REPORT NO. 9812-1226
JETTING EQUIPMENT
(LAFAYETTE SITE)
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
December 8, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for
the account of Bank One Texas, NA, survey miscellaneous jetting equipment
(Transcoastal Marine Services, Inc. reported owners) while the equipment was
located at the facility of CSI in Lafayette, Louisiana, in order to ascertain
the general condition of the equipment and in order to estimate its present day
fair market value and orderly liquidation values of December 8, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL DESCRIPTION AND CONDITION:
The following equipment was sighted in Lafayette, Louisiana. All appeared to be
in good condition and reportedly operative.
SINGLE STAGE PUMPS:
Unit No. FP-8, Goulds single stage pump, powered by a GM 8V-71 diesel engine
(see photo No. 1).
Unit No. FP-11, Carver, model ETN-20-50, single stage 10"x8" pump powered by a
GM 8V-71 diesel engine (see photo No. 2).
Unit No. FP-13, Carver, model ETN-20-50, single stage 10"x8" pump powered by GM
8V-71 diesel engine (see photo No. 3).
75
SURVEY REPORT NO. 9812-1226
GENERAL DESCRIPTION AND CONDITION: (continued)
4-STAGE PUMPS:
Unit No. HFP-97, Bingham, model MSB 5/4, 4-stage (destaged from 5-stage) 8 x 10
x 12.5 pump, powered by a 16 cylinder EMD, model 16-567-D3A, turbocharged, 1,800
brake horse power diesel engine, which drives a Lufkin, model N1604C, 3.977 to 1
gear box. The engine is air starting and heat exchanger cooled. The Lufkin gears
are reportedly new and appear in excellent condition. The Bingham pump appears
in excellent condition and is reportedly operative. The main engine appears in
excellent condition (see photos Nos. 4 and 5).
5-STAGE PUMPS:
Unit No. HFP-1, Carver, model 1500 N5, 5-stage 8" x 6" pump powered by a GM
12V-92 diesel engine (see photo No. 6).
Unit No. HFP-2, Carver, model 1500 N5, 5-stage 8" x 6" pump powered by a GM
16V-71 diesel engine (see photo No.7).
Unit No. HFP-3, Carver, model 1500 N5, 5-stage 8" x 6" pump powered by a GM
16V-71 diesel engine (see photo No.8).
Unit No. HFP-4, Carver, model 1500 N5, 5-stage 8" x 6" pump powered by a GM
16V-71 diesel engine (see photo No.9).
Unit No. HFP-98, Carver, model 1500B-5, 5-stage 8" x 6" pump powered by a GM
16V-71 turbocharged diesel engine (see photo No. 10).
Unit No. HR-3, a skid mounted hydraulic powered 8-foot diameter steel hose
reel, which has an onboard diesel powered hydraulic pressure source. The reel
is designed to hold 4* diameter high pressure air supply hose, but without any
hose at the time of survey (see photo No. 12).
HOSE REELS:
Unit No. HR-1, a skid mounted hydraulic powered 10-foot diameter steel hose
reel, which is remotely powered from a hydraulic pressure source. The reel is
fit with 300 feet of 5" diameter 1000 psi water hose. The hose reel is
additionally fit with 300 feet of 3" diameter high pressure air supply hose
(see photo No. 11).
Unit No. HR-3, a skid mounted hydraulic powered 8-foot diameter steel hose reel,
which has an onboard diesel powered hydraulic pressure source. The reel is
designed to hold diameter high pressure air supply hose, but without any hose at
the time of survey (see photo No. 12).
JET SLEDS:
Unit No. JS-1, a small jetting sled designed to accept a 6" high pressure water
line and a to 3" high pressure air supply line, capable of burying pipe up to
6" in diameter to a depth 4 feet below the mud line (see photo No. 13).
76
SURVEY REPORT NO. 9812-1226
GENERAL DESCRIPTION AND CONDITION: (continued)
JET SLEDS: (CONTINUED)
Unit No. JS-2, a medium sized jetting sled, designed to accept a 6" high
pressure water line and a 2" to 3" high pressure air supply line. Unit No. JS-2
could not be visually sighted due to it being currently used at job sight in
New Orleans, Louisiana.
MISCELLANEOUS EQUIPMENT:
300 feet of 8" diameter 1000 psi jet hose is being stored at the CSI Facility,
which is designed to reel onto Unit No. HR-2, which is currently in use in
Mexico. This hose is in almost new condition and was recently purchased for a
reported amount of $50,000.00
VALUATION:
Estimated present day fair market value of above described
equipment as sighted December 8, 1998............................. $ 935.000.00
FAIR MARKET VALUE:
A sum of money that equipment should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and
seller, each acting prudently, knowledgeably, and assuming the price is
not affected by undue stimulus. Implicit in this definition is the
consummation of a sale where title is passed from seller to buyer under
condition whereby:
1. The buyer and seller typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value of above described equipment
as sighted of December 08, 1998................................... $ 840,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find
a purchaser(s), the seller being compelled to sell on an is-where is
basis.
SURVEYOR'S NOTES:
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal
77
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 2, 1998
SURVEY REPORT NO. 9811-1221
SPUD BARGE "BH 100"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
December 2, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for
the account of Bank One, Texas, NA, survey the spud barge "BH 100" (an
undocumented vessel; Transcoastal Marine Services, Inc. - reported owners)
while subject vessel was lying afloat in a laden condition and moored in
Venice, Louisiana, in order to ascertain the general condition and in order to
estimate her present day fair market value and orderly liquidation value as of
December 2, 1998.
NOTE: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction. Builder and date of
construction was unknown at the time of survey.
Dimensions are: Length - 110', breadth - 34', depth - 6'.
The vessel has a flush deck, a square raked bow, a square raked stern, and a
total of six (6) compartments consisting of one (1) bow rake compartment, four
(4) main body compartments, and one (1) stern rake compartment.
Access to each hull compartment is made through a manhole fitted with a center
bolt secured cover on a 4" high coaming. The No. 2 starboard main hull
compartment is used as a supply room.
The hull is fitted with two (2) strakes of formed plate rub rail which extends
from the bow to the stern on both port and starboard sides.
78
SURVEY REPORT NO. 9812-1221
GENERAL CONSTRUCTION PARTICULARS: (continued)
Deck fittings consists of the following:
One (1) 8" diameter cast steel double bitt is located near amidships.
Two (2) 30" cast steel kevels are ranged along both port and starboard sides.
One (1) 24" cast steel kevel is located on both port and starboard sides of
the bow.
One (1) 22" x 22" spudwell fitted atop a 36" coaming, is located on each
port and starboard sides near amidships. Starboard and port spudwell
each contain one (1) 18" x 18" x 40' spud.
One (1) 2-tier handrail, constructed of approximately 6" diameter pipe, is
located across the stern and on both port and starboard sides, extending
forward to spudwells.
CERTIFICATES/DOCUMENTS:
Subject vessel does not require regulatory bodies, certificates and/or
documents:
DECK EQUIPMENT:
Deck equipment consists of the following:
One (1) cutting torch set up.
One (1) triple drum winch powered by a General Motors 4-71 diesel engine.
One (1) American Amhoist, model 7750, 75 ton pedestal crane located on the
bow center line.
One (1) Miller portable welding machine
One (1) 2" pump
One (1) 2" Teel electric pump.
One (1) 40' long set of pile driving leads with 4,000 lb. drive hammer and
follow block.
One (1) 19' x 4' x 18" work pontoon.
TANK CAPACITIES:
Tank capacities are as follows:
Gas Tank...................200 gallons.
Diesel Tank................175 gallons.
QUARTERS BUILDING:
On the deck is one (1) quarter building, located from the stern, extending
forward to amidships. Arrangements are as follows:
79
SURVEY REPORT NO. 98112-1221
QUARTERS BUILDING: (continued)
Forward to port is a closet.
Aft to port is a crew's quarters with two (2) bunk beds and one (1) Fedders
window air-conditioning unit.
Aft to starboard is one (1) head containing three(3) sinks, two (2) showers,
two (2)commodes, and one (1) Sharp window air conditioning unit.
Aft to port is a storage closet.
Aft to port is a crew's quarters with five (5) triple bunks and one (1) Roper
and one (1) Sharp window air-conditioning units.
Aft to starboard is the galley/mess area which contains the following equipment
and/or furniture:
One (1) stove and oven.
One (1) Whirlpool refrigerator/freezer.
One (1) Amana refrigerator/freezer.
One (1) double stainless steel sink.
One (1) Sharp microwave.
One (1) Samsung TV.
One (1) JVC - VCR.
One (1) Standard Horizon VHF.
One (1) Pitney Bowes fax machine.
One (1) Scottsman ice maker.
One (1) cellular phone.
One (1) large chest-type Kenmore freezer.
Two (2) Carrier window air-conditioning units.
One (1) Roper window air-conditioning unit.
Atop the quarters is the following:
One (1) 30 KW generator powered by a Detroit Diesel 4-71 engine.
One (1) 15' flat boat with a 25 HP Evinrude outboard motor.
NO.2 STARBOARD MAIN HULL COMPARTMENT:
This compartment is used as a supply room and contains the following:
Two (2) fresh water pumps.
One (1) Red Fox, model Hustler, serial No.2940, sewer treatment plant.
80
SURVEY REPORT NO. 9812-1221
EXTERNAL CONDITION:
External coating of coal tar epoxy is in good condition.
Barge does not appear to have any significant corrosion, wastage, or major
indents.
INTERNAL CONDITION:
Internals are in good condition and appear to have a fair coating of Texaco
Compound H.
No significant damage or corrosion was sighted.
VALUATION:
Estimated present day fair market value
as of December 2, 1998.....................................$ 350,000.00
Fair Market Value:
A sum of money that a vessel should bring in competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value
as of December 2, 1998.........................................$ 275,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This vessel, as described herein, is in satisfactory condition for its intended
service.
81
SURVEY REPORT NO. 9812-1221
SURVEYOR'S NOTES: (continued)
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition of seaworthiness; value, or marketability of subject
vessel is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical
systems, or opening up any of those places ordinarily closed or concealed.
Therefore,deficiencies may exist other than those conditions noted in this
report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for services
has been arranged for on an independent fee basis and is in no way contingent
upon the value reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
Wade R. Olsen
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
--------------------------------------
Anthony C. Peters,
Principal Surveyor.
WRO:ktb
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(Surveyor's Notes Continued Next Page)
82
SURVEY REPORT NO. 9812-1221
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
83
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
November 30, 1998
SURVEY REPORT NO. 9811-1211
CRANE BARGE "ROWE 14"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
November 30, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for
the account of Bank One, Texas, NA, survey the steel crane barge "ROWE 14" (an
undocumented vessel of approximately 250 gross tons; Transcoastal Marine
Services, Inc. - reported owners The Woodson Companies - operators) while
subject vessel was lying afloat and moored at the facilities of the Woodson
companies at Delcambre, Louisiana, in order to ascertain the general condition
and in order to estimate her present day fair market value and orderly
liquidation value as of November 30, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction. Date and circumstance of
construction were unknown at the time of survey; however, the vessel appears to
be approximately twenty (20) years old.
Overall Dimensions are: Length - 110', breadth - 34', depth - 7.3'.
The vessel was designed for crane service, has a flush deck, square raked bow,
square transom stern, one (1) bow rake compartment, one (1) stern transom
compartment and thirteen (13) main hull compartments.
Access to each hull compartment is made via an 18" flush deck manhole with a
center bolt cover.
84
SURVEY REPORT NO. 9811-1211
GENERAL CONSTRUCTION PARTICULARS: (continued)
The vessel is fit with one (1) course of rub rail fender constructed of 18" x
3/8" formed plate which is located 2' below deck elevation and extends from bow
around the stern on both port and starboard sides, and is filled with concrete.
DECK FITTINGS:
Deck fittings are comprised of the following:
One (1) each approximately 6" double bitts located at each corner.
Two (2) each approximately 36" kevels are ranged down port and starboard sides.
One (1) each closed chocks located aft on both port and starboard sides.
The bow deck is fit with a single tier 36" high cargo railing constructed of 6"
diameter pipe with stanchions located on 12' centers.
Bottom, side and deck plating are estimated to have been 3/8" original
thickness.
The vessel is framed longitudinally and stiffened transversely. Longitudinal
bottom frames are 5" x 3" x 5/16" angle spaced on 25" centers. Longitudinal
side frames are 4" x 3" x 1/4" angle spaced on 24" centers. The vessel is
stiffened transversely with transverse trusses spaced on 7' centers. Top and
bottom chords are constructed of 10" channels and outboard chords are
constructed of 5" channels.
SPUD SYSTEM:
The vessel is fit with three (3) internal spudwells. Two (2) are located near
mid-length on port and starboard sides, and one (1) is located on forward
center line. The mid-length port and starboard spudwells are 22" square and the
forward center line spudwell is 33" square.
The vessel is fit with two (2) approximately 40' long 17" and 17" steel spuds,
and one (1) approximately 60' long 17" x 17" square steel spud.
Spuds are raised and lowered utilizing a three drum, single gypsy head spud
winch of unknown manufacturer driving. Spud winch is driven by a General
Motors, 4-cylinder, model 4-71 diesel engine through a torque converter and a
system of sprockets and gears.
DRAGLINE EQUIPMENT:
The vessel is designed for dredging utilizing a deck crawler crane with a
three-yard drag [ILLEGIBLE] bucket. The stern deck is fit with an approximately
20' x 20' x 12" high timber mat to distribute the crane load. Secured on the
timber mat is a crawler type crane.
85
SURVEY REPORT NO. 9811-1211
DRAGLINE EQUIPMENT: (continued)
The crane is a Bucyrus-Erie, model 71-B, series T, crawler crane in a dragline
configuration 100 with a 100' boom with a reported 70 tons of lifting capacity.
A General Motors, 12-cylinder, model V-12-71 diesel engine drives multiple
drums through a torque converter and a system of sprockets and chains.
DECKHOUSE ARRANGEMENT:
Located forward is a single level crew berthing area house which is constructed
of steel and is fit with portholes and designed watertight doors. The interior
is fit with overhead paneling, painted bulkheads, and linoleum floors.
Arrangements is as follows:
Forward, on the port side is a bunkroom with one (1) single double bunk, one
(1) General Electric 17 cu. ft. combination refrigerator/freezer, one (1)
clothes closet with a head and toilet, sink, and built in shower stall.
Forward, on the starboard side, is a bunkroom with three (3) double built in
wooden bunks and wooden storage closets.
A second bunkroom is located on the port side and contains two (2) double built
in wooden bunks and one (1) wooden clothes locker.
Located aft of the bunkroom on the port side is a head with one (1) double
built in shower stall, a toilet, and two (2) wooden storage lockers.
Located aft on the starboard side is a galley which contains a one hundred
(100) gallon electric water heater, a 4-element electric stove and oven, a
double stainless steel sink, and one (1) approximately 30 cu.ft. chest type
freezer, a mess table, and wooden dish racks and cabinets.
AUXILIARY EQUIPMENT:
In the lower hull is an auxiliary and storage room which contains one (1) 5 HP
electric motor driving a 2" fuel oil transfer pump and a fractional HP electric
motor driving a fresh water pressure set.
Located forward on the starboard side at main deck elevation of the house is a
generator room. The generator room contains one (1) 6-cylinder Cummins engine
driving a 75 KW/AC. The engine is electric starting and radiator cooled.
CERTIFICATES/DOCUMENTS:
No certification was on board the vessel at the time of survey.
86
SURVEY REPORT NO. 9811-1211
CONDITION:
The vessel was sighted afloat. Reportedly, the vessel was last hauled out during
May 1995. Poor housekeeping prevails. Poor preventative maintenance prevails.
Deck fittings appear in satisfactory condition.
The deck is open in way of hull vents for each compartment on both the port and
starboard sides. The vessel is not ready for service and is in need of cleaning
and major maintenance prior to human habitation.
The rub rail is heavily flattened at scattered locations and across the stern
and is fractured away from side plating forward on the port side. The main deck
bow cargo rail is broken away at two (2) locations and is heavily distorted at
the bow. Poor housekeeping prevails and the interior of the house is in poor
condition with all surfaces dirty and in need of maintenance.
Spudwells, where visible, show moderate wastage. Spuds, where visible, appear in
satisfactory condition. The spud winch appears in satisfactory condition. The
spud winch engine is reported in satisfactory condition but was not test
operated at time of survey.
The crane deck mats shows moderate dry rot. Crane securing is poor with heavy
wastage of connections. The crane tracks are heavily corroded and obviously
lack maintenance. The crane appears in good condition and undamaged and
reportedly major maintenance was performed in 1997. The crane appears disused
and lacks preventative maintenance. The forward windshield of the operators cab
is broken out and glass debris is on deck. An annual inspection for a 28,000
lb. capacity was completed May 26, 1998. The engine exhaust insulation is
adrift.
Crew berthing house doors are in poor condition and at several locations show
generous use of silicon caulking to cover waste holes. The interior of the
house is in disarray, dirty, and unkempt. Deterioration and unhealthy
conditions are at nearly every location. The port forward bunkroom is in
disarray. The associated head is in disarray with plumbing suspect. The after
head is in disarray and suffering the affects of disuse.
The forward starboard bunkroom is in poor condition with silicone caulk being
used for bulkhead cable runs. The forward spudwell is visible in a closet in
the house and is wasted through at a location 1' above main deck elevation and
this has been repaired with silicone caulk. Crew area wiring is in disarray and
circuits are open at scattered locations. The after bunkroom is being used for
storage and is in disarray.
The galley is unusable in its present condition.
Fire fighting equipment is in poor condition.
Life saving equipment is in poor condition.
87
SURVEY REPORT NO. 9811-1211
CONDITION: (continued)
The main generator appears to have been last maintained 3,000 hours ago and is
in need of preventative maintenance. Wiring in the generator room is improper
and open and the room is suffering from disuse.
The lower hull storage area is in poor condition and is unkempt.
Fuel oil transfer pump piping is in poor condition. The fresh water pressure set
appears inoperative and some wiring is open.
The hull exterior coating appears in satisfactory condition with moderate
pitting throughout. The interior of the hull is uncoated and in the lower
portion shows moderate rust scale and some internal members are wasted through
and fractured.
VALUATION:
Estimated present day fair market value
as of November 30, 1998.....................................$300,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and
seller, each acting prudently, knowledgeably, and assuming the price is
not affected by undue stimulus. Implicit in this definition is the
consummation of a sale where title is passed from seller to buyer under
condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value
as of November 30, 1998....................................$200,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find
a purchaser(s), the seller being compelled to sell on an is-where is
basis.
88
SURVEY REPORT NO. 9811-1211
SURVEYOR'S NOTES:
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject vessel is
either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting se trials, testing or tying out machinery or electrical systems, or
opening up any of those place ordinarily closed or concealed. Therefore,
deficiencies may exist other than those condition noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in th aforementioned vessel and/or its equipment, and compensation for services
has bee arranged for on an independent fee basis and is in no way contingent
upon the value reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom may concern.
Attending Surveyor:
John M. Swanson
BACHRACH, WOOD PETERS & ASSOCIATES, INC
[SEAL]
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
SJB:smk
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
89
SURVEY REPORT NO. 9811-1211
DISTRIBUTION: (continued)
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
90
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 4, 1998
SURVEY REPORT NO. 9812-1223
CONSTRUCTION BARGE
250'x50'x12'
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on December
4, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for the
account of Bank One, Texas, NA, survey the 250' construction barge (an
undocumented vessel; Transcoastal Marine Services, Inc. - reported owners) while
subject vessel was lying afloat in an unladen condition and moored at the
facilities of Red Fox on Industrial Canal in New Orleans, Louisiana, in order to
ascertain the general condition and in order to estimate her present day fair
market value and orderly liquidation value as of December 4, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction by Nashville Bridge
Company in Nashville, Tennessee during 1953.
Dimensions are: Length - 250', breadth - 50', depth - 12'.
The vessel has a cambered deck with a dead rise in way of the bow rake and No. 1
main compartments, a spoon raked bow, a transom stern, and a total of ten (10)
compartments consisting of one (1) bow rake compartment, eight (8) main body
compartments, and one (1) stern transom compartment.
Access to each hull compartment is made through a 21"x16" oval deck type
manhole on 3-1/2" raised coaming fitted with a 4-dog secured cover.
91
SURVEY REPORT NO. 9812-1223
GENERAL CONSTRUCTION PARTICULARS: (continued)
The hull is fitted with two (2) strakes of 9" split pipe rub rail, located at
4-1/2' and 10' elevations which extend from the bow to the stern on both port
and starboard sides. A 7" x 3/4" rub bar is located 1' below the deck on both
port and starboard sides. Additionally, twenty-two (22) large truck tires
suspended by heavy chain from double padeyes are ranged along the port side.
Forward half of the deck is fitted with a 1-1/4" diameter 2-tier pipe handrail.
After half of the deck is fitted with a 2-tier handrail fabricated of 3" x 3"
angle and 1/4" wire rope.
Deck fittings consists of the following:
One (1) 48" cast steel kevels is located on bow and stern center line.
Five (5) 48" cast steel kevels are ranged along both the starboard side.
Two (2) 48" cast steel kevels are ranged along the port side.
Three (3) 36" cast steel kevels are ranged along the port side.
One (1) 60" cast steel kevel is on port side.
One (1) 10" button bitt is located on the port side forward.
One (1) 8" single bitt is located to both port and starboard of amidship.
One (1) 12" double steel bitt is located at each corner of the stern.
Two (2) 10" button bitts, two (2) 12" button bitts, and one (1) 10" roller
button bitt are located at the port stern corner.
Three (3) 10" button bitts and two (2) 12" button bitts are located at the
starboard stern corner.
Two (2) 24" diameter spudwells fitted atop 5" coamings are located on the
starboard side. Each contains one (1) 42' spud.
Two (2) 16" x 16" spudwells fitted atop 8" coamings are located on the
starboard side. Each contains one (1) 16" diameter x 42' spud.
CERTIFICATES/DOCUMENTS:
Subject vessel does not require regulatory bodies, certificates and/or
documents.
DECK EQUIPMENT:
Deck equipment consists of the following:
One (1) hand operated single drum winch.
One (1) American, model No. 9720, serial No. 658720, 90 ton crane is mounted on
a 16' x 15' x 14' pedestal.
92
SURVEY REPORT NO. 9812-1223
DECK ARRANGEMENT:
Deck consists of three(3) construction decks, one (1) pedestal crane, and a
metal storage building.
Arrangement is as follows:
Forward to starboard is a 15' x 40' x 10' metal storage building. In the after
end of the building, a stairway leads down to additional storage in No. 1 port
and starboard main compartments. Access to the port main compartment is through
a 5' x 7' opening in the longitudinal bulkhead. Building does not use
watertight doors.
Aft on center line is a 10' x 40" diameter boom rest fitted with gusset plates.
Aft is a 36' x 50' x 12" cement deck. Atop the Cement deck is a 36' x 20' x 16"
construction fabricated of 9" channel and 4" x 3" angle.
Aft is a 36' x 40' x 26" steel construction deck fabricated of 16" I-beam and
3" x 3" angle.
Aft is the pedestal crane.
At the stern is a 60' x 40' x 26" steel construction deck fabricated of 15"
channel, 16" I-beam, and 4" x 3" angle.
ELECTRICAL:
The vessel is wired with a combination of basket weave metal armored type
cable, galvanized flexible conduit, and PVC insulated cable. Lighting system is
110 volt AC. Overload protection is via circuit breakers. Electricity is
provided by shore power.
EXTERNAL CONDITION:
External coating of coal tar epoxy is in excellent condition in way of sides,
transom, and bow rake.
Deck coating is in fair condition.
Starboard side plating contains washboarding and numerous indents of 0 to 3".
Starboard rub rail appears recently renewed in most areas.
Reportedly, bottom plating has its anodes renewed.
Port side plating contains washboarding and large diameter indents of 0 to 5".
93
SURVEY REPORT NO. 9812-1223
EXTERNAL CONDITION: (condition)
All tires and chains have recently been renewed on the port side.
Transom plating set in and washboarded 0 to 5" over its full breadth and width.
Side plating, gunwale, and deck contain numerous doublers throughout.
Most wire rope handrails have wires adrift with three (3) 10' sections missing
wires and posts.
Pipe handrail is in good condition.
Deck plating contains washboarding of 0 to 2" in a few areas.
After work deck is uncoated and in good condition.
All other work decks are recently coated and in good condition.
Crane pedestal is in like-new condition.
All deck fittings and manholes have been recently coated with yellow epoxy.
Numerous manholes have their coamings cropped off and covers replaced with
steel plating not fitted with gaskets.
INTERNAL CONDITION:
Internals are in fair condition with a coating of silver paint in way of the
upper 10', mostly intact. Lower 2' displays mild to moderate corrosion.
Numerous internal stiffeners were distorted to conform to external distortion.
VALUATION:
Estimated present day fair market value
as of December 4, 1998.......................................$ 300,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit of this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
94
SURVEY REPORT NO. 9812-1223
VALUATION: (continued)
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value
as of December 4, 1998.......................................$200,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This vessel, as described herein, is in satisfactory condition for its intended
service.
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject vessel
is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is in no way
contingent upon the values reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
Joseph L. Aveton
95
SURVEY REPORT NO. 9812-1223
SURVEYOR'S NOTES: (continued)
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
----------------------------------------
Anthony C. Peters,
Principal Surveyor.
JLA:ktb
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
96
[BACHRACH, WOOD, PETERS, & ASSOCIATES, INC. LETTERHEAD]
December 07, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
November 30, 1998
SURVEY REPORT NO. 9811-1213
SPUD BARGE "7101"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on November
30, 1998, at the request of Ms. Karen S. Shouse, and on behalf of and for the
account of Bank One, Texas, NA, survey the undocumented steel Spud Barge "7101",
the Ex-NBC 1857, a vessel of approximately 315 gross tons; reported owners
Transcoastal Marine Services, Inc. - operators The Woodson Companies - while
subject vessel lay afloat and moored in an unladened condition at the facilities
of The Woodson Companies at Delcambre, Louisiana, in order to ascertain the
general condition of the vessel and in order to estimate her present day fair
market value and orderly liquidation values as of November 30, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction by Nashville Bridge
Company at Nashville, Tennessee, during 1966.
Overall dimensions are: Length - 136', breadth - 35', depth - 7'6".
This vessel is designed for crane service, has a flush deck, a square raked
bow, a square raked stern, three (3) bow rake compartments, four (4) main body
compartments, and one (1) stern rake compartment.
Access to each hull compartment is made via an 18" flush deck manhole with
a center bolt cover.
The vessel is not fit with rub rail fenders.
97
SURVEY REPORT NO. 9811-1213
GENERAL CONSTRUCTION PARTICULARS: (continued)
The hull of the vessel is constructed with a 3/4" thick headlog, 3/4" rake
knuckles, 1/2" thick deck, 3/8" thick sides and bottom plating, 3/8" rake bottom
plating and 5/16" thick bulkheads. The vessel is longitudinally framed and
transversely stiffened. Longitudinal deck beams approximately 5" channels spaced
on 11" centers. Longitudinal side frames are 5" x 3" x 5/16" inch angles spaced
on 25" centers. Longitudinal bottom frames are 5" x 3" x 3/8" angles spaced on
23" centers.
The hull is stiffened transversely with transverse trusses spaced on 72"
centers. Top and bottom cords are 15" "I" beams. Outboard cords 14" "I" beams.
Trusses are stiffened with 12" "I" beam verticals spaced on 4 ft. centers and
with inboard and outboard diagonals of 5" "I" beams. Bulkheads are stiffened
with 5" x 5/16" flatbars spaced on 24" centers.
Deck fittings consist of:
One (1) each approximately 6" double bitts located on each barge corner and
three (3) each approximately 42" kevels ranged down both port and starboard
sides.
The vessel is fitted with one (1) each approximately 6" diameter x 6" high
compartment pump-out pipes with caps located in way of the port and starboard
bow rake compartments.
The vessel is fitted with approximately 6" high steel pollution barrier fit with
2 1/2" drains with plugs which is constructed of approximately drains with plugs
which is constructed of approximately 1/4" thick steel and extends around the
entire periphery of the deck edge.
Port and starboard sides are each fit with an approximately 44" high two tier
safety hand rail constructed of 4" diameter pipe stanchions and two courses of
3/8" wire cable.
Forward and aft on the starboard side are a total of two (2) internal spud
wells. Each spud well is fit with sheaves and fairlead blocks to the spud winch
which is located forward on the starboard side. The spud winch is skid mounted,
double drum, double gypsy head Conmaco winch driven by General Motors,
4-cylinder model 4-71 diesel engine. The engine is electric starting and
radiator cooled. The winch is additionally fit with a 12 volt battery and
approximately 50 gallon capacity diesel oil tank.
The vessel is fit with a total of two (2) approximately 40 ft. long, 21" x 21"
square steel spuds.
The area over the spud winch is fit with a 20 ft. x 8 ft. x 12 ft. steel
platform constructed of 6" diameter pipe stanchions and 8" "H" beam frames. The
top of the platform is fit with a 36" high two tier pipe safety hand rail.
The starboard side #1 main body compartment is fit with a steel access trunk
with a weather tight steel door.
98
SURVEY REPORT NO. 9811-1213
GENERAL CONSTRUCTION PARTICULARS: (continued)
The vessel has on board two (2) 30" ring buoys with throw lines and water lights
and one (1) 15 lb. portable CO(2) fire extinguisher which was last date tagged
during January 1998.
CERTIFICATES/DOCUMENTS:
No documents were on board the vessel at time of survey.
CONDITION:
The vessel was sighted afloat. Reportedly the vessel was last hauled out during
July, 1998. Head log plating is devoid of indents. Bow rake bottom plating was
inaccessible at time of survey, however, an internal examination showed no major
upsets at any location. Starboard side plating and rake knuckle and deck edge
show minor indents of 0 to 2" in the forward 12 ft. portion. Starboard side
plating is generally wavy to a depth of 0 to 1" throughout with very occasional
major indents of 0 to 2". Stern log plating is devoid of indents. Stern rake
bottom plating is devoid of upsets. Port side plating showed numerous minor
indents of 0 to 1" at random locations. No noteworthy damage was found
internally. No noteworthy wastage was sighted at any location and the vessel is
well coated internally and externally. The pollution barrier is open at some
locations. Hand rails have been partially dismantled. The spud winch appears in
excellent condition and was reportedly recently rebuilt. The date of rebuilding
was unknown at the time of survey and the spud winch was not test operated at
time of survey.
VALUATION:
Estimated present day fair market value
as of November 30, 1998........................................ $285,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
99
SURVEY REPORT NO. 9811-1213
VALUATION: (continued)
Estimated orderly liquidation value
as of November 30, 1998.........................................$255,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This survey represents the good faith opinion of the surveyor only and does
not make any representations of fact. It was performed for insurance
underwriting and/or appraisal purposes only, and no warranty of
correctness of this surveyor as to the condition, seaworthiness, value, or
marketability of subject vessel is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for an independent fee basis and is in no way
contingent upon the values reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
John M. Swanson
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
----------------------------------------
Anthony C. Peters,
Principal Surveyor.
100
SURVEY REPORT NO. 9811-1213
SURVEYOR'S NOTES: (continued)
JMS:maw
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
101
[BACHRACH, WOOD, PETERS, & ASSOCIATES, INC. LETTERHEAD]
December 8, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
November 30, 1998
SURVEY REPORT NO. 9811-1214
SPUD BARGE "7102"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
November 30, 1998, at the request of Ms. Karen S. Shouse, and on behalf of and
for the account of Bank One, Texas, NA, survey the undocumented steel Spud
Barge "7102", the ex-"NBC 1856, a vessel of approximately 315 gross tons;
reported owners Transcoastal Marine Services, Inc. - operators The Woodson
Companies - while subject vessel lay afloat and moored in an unladened
condition at the facilities of The Woodson Companies at Delcambre, Louisiana,
in order to ascertain the general condition of the vessel and in order to
estimate her present day fair market value and orderly liquidation values as of
November 30, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction by Nashville Bridge
Company at Nashville, Tennessee, during 1966.
Overall dimensions are: Length - 136', breadth - 35', depth - 7'6".
This vessel is designed for crane service, has a flush deck, a square raked
bow, a square raked stern, three (3) bow rake compartments, four (4) main body
compartments, and one (1) stern rake compartment.
Access to each hull compartment is made via made an 18" flush deck manhole with
a center bolt cover.
The vessel is not fit with rub rail fenders.
102
SURVEY REPORT NO. 9811-1124
GENERAL CONSTRUCTION PARTICULARS: (continued)
The hull of the vessel is constructed with a 3/4" thick headlog, 3/4" rake
knuckles, 1/2" thick deck, 3/8" thick sides and bottom plating, 3/8" rake
bottom plating and 5/16" thick bulkheads. The vessel is longitudinally framed
and transversely stiffened. Longitudinal deck beams approximately 5" channels
spaced on 11" centers. Longitudinal side frames are 5" x 3" x 5/16" inch angles
spaced on 25" centers. Longitudinal bottom frames are 5" x 3" x 3/8" angles
spaced on 23" centers.
The hull is stiffened transversely with transverse trusses spaced on 72"
centers. Top and bottom cords are 15" "I" beams. Outboard cords 14" "I" beams.
Trusses are stiffened with 12" "I" beam verticals spaced on 4 ft. centers and
with inboard and outboard diagonals of 5" "I" beams. Bulkheads are stiffened
with 5" x 5/16" flatbars spaced on 24" centers. Deck fittings consist of:
One(1) each approximately 6" double bitts located on each barge corner and
three(3) each approximately 42" kevels ranged down both port and starboard
sides.
The vessel is fitted with one(1) each approximately 6" diameter x 6" high
compartment pump-out pipes with caps located in way of the port and starboard
bow rake compartments.
The vessel is fitted with approximately 6" high steel pollution barrier fit with
2 1/2" drains with plugs which is constructed of approximately 1/4" thick steel
and extends around the entire periphery of the deck edge.
Port and starboard sides are each fit with an approximately 44" high two tier
safety hand rail constructed of 4" diameter pipe stanchions and two courses of
3/8" wire cable.
Forward and aft on the starboard side are a total of two (2) internal spud
wells. Each spud well is fit with sheaves and fairlead blocks to the spud winch
which is located forward on the starboard side. The spud winch is a skid
mounted, triple drum, double gypsy head Conmaco winch driven by General Motors,
4-cylinder model 4-71 diesel engine with a local control station. The engine is
electric starting and radiator cooled. The winch is additionally fit with a 12
volt battery and approximately 50 gallon capacity diesel oil tank.
The vessel is fit with a total of two (2) approximately 40 ft. long, 21" x 21"
square steel spuds.
The area over the spud winch is fit with a 20 ft. x 8 ft. x 12 ft. steel
platform constructed of 6" diameter pipe stanchions and 8" "H" beam frames. The
top of the platform is fit with a 36" high two tier pipe safety hand rail.
The starboard side #1 main body compartment is fit with a steel access trunk
with a weather tight steel door.
103
SURVEY REPORT NO. 9811-1124
GENERAL CONSTRUCTION PARTICULARS: (continued)
The vessel has on board two (2) 30" ring buoys with throw lines and water lights
and one (1) 15 lb. portable CO(2) fire extinguisher which was last date tagged
during January 1998.
CERTIFICATES/DOCUMENTS:
No documents were on board the vessel at time of survey.
CONDITION:
The vessel was sighted afloat. Reportedly the vessel was last hauled out
during July, 1998. Head log plating is devoid of notable indents. Bow rake
bottom plating is devoid of indents. Starboard side plating shows numerous
minor indents of 0-1" throughout. Starboard side plating is set in 0-4" over an
area of 15' X full depth of vessel, near mid-length. Sternlog plating is devoid
of major indents. Stern rake bottom plating is devoid of indents. Port side
plating shows numerous minor indents of 0-1" at scattered locations and several
sharp minor indents of 0-3". Port bow rake knuckle plating and port side
plating set in 0-6" over 6' x 2' located in way of the port bow double bitts.
No noteworthy damage was found internally. No noteworthy wastage was sighted
at any location and the vessel is well coated internally and externally. The
pollution barrier is open at some locations. Hand rails have been partially
dismantled. The spud winch appears in excellent condition and was reportedly
recently rebuilt. The date of rebuilding was unknown at the time of survey and
the spud winch was not test operated at time of survey.
VALUATION:
Estimated present day fair market value
as of November 30, 1998........................................ $280,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
104
SURVEY REPORT NO. 9811-1124
VALUATION: (continued)
Estimated orderly liquidation value
as of November 30, 1998.........................................$250,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This survey represents the good faith opinion of the surveyor only and does
not make any representations of fact. It was performed for insurance
underwriting and/or appraisal purposes only, and no warranty of
correctness of this surveyor as to the condition, seaworthiness, value, or
marketability of subject vessel is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is no way
contingent upon the values reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
John M. Swanson
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
JMS:maw
105
Distribution: (continued from previous page)
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
106
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 4, 1998
SURVEY REPORT NO. 9812-1224
OFFICE BARGE
208' x 26' x 5'
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
December 4, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for
the account of Bank One, Texas, NA, survey the 208' office barge (an
undocumented vessel; Transcoastal Marine Services, Inc. - reported owners)
while subject vessel was lying afloat in an unladen condition and moored at the
facilities of Red Fox on Industrial Canal in New Orleans, Louisiana, in order
to ascertain the general condition and in order to estimate her present day
fair market value and orderly liquidation value as of December 4, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessels were built of all welded steel construction by Nashville Bridge
Company in Nashville, Tennessee. The forward vessel was built in 1941, hull No.
579. The after vessel was built in 1955, hull No. 1134.
Overall dimensions are: Length - 208', breadth - 26', depth - 5'.
The vessel consists of two (2) barges bolted together stern to stern. Forward
vessel has a flush deck, a square raked bow, a square raked stern, and a total
of five (5) compartments consisting of one (1) bow rake compartment, three (3)
main body compartments, and one (1) stern rake compartment. The after vessel
has a flush deck, a square raked bow, a transom stern and a total of three (3)
compartments consisting of one (1) port main compartment and two (2) starboard
main compartments.
107
SURVEY REPORT NO. 9812-1224
GENERAL CONSTRUCTION PARTICULARS: (continued)
Access to each hull compartment is made through various design 18" to 20"
diameter deck type manholes.
Forward hull is fitted with one (1) strake of 15" formed plate rub rail,
located just below the deck which extends from the bow to the stern on both port
and starboard sides. After hull is fitted with a 7" x 3/4" rub bar located just
below the deck which extends from the bow to the stern on the port side.
Starboard side has no fender system.
Port deck gunnel is fitted with a 3" diameter 1-tier pipe guardrail with 3"
diameter vertical stanchions 9" high which extend from the bow to the stern.
Deck fittings consists of the following:
Eleven (11) 7" diameter steel H bitts are ranged along the port side.
One (1) 36" cast steel kevel is located on the stern center line.
One (1) 48" cast steel kevel is located at the starboard stern corner.
Three (3) 14" diameter spudwells are surface mounted to the starboard side.
Each contains one (1) spud.
CERTIFICATES/DOCUMENTS:
Subject vessel does not require regulatory bodies, certificates and/or
documents.
DECK EQUIPMENT:
Deck equipment consists of the following:
Three (3) Nabrico 40 single drum electric winches.
One (1) Woods 20 cubic foot freezer.
One (1) Oasis water fountain.
Three (1) 5' x 46" x 30 Knaack toolboxes.
DECK ARRANGEMENTS:
Deck contains two (2) single level steel buildings located on the forward barge
and one (1) two level steel building located on the after barge.
Arrangement is as follows:
At the bow is one (1) 18' x 7'6" building used for storage of personnel
equipment and as as break area.
108
SURVEY REPORT NO. 9812-1224
DECK ARRANGEMENTS:
Aft is a 40' x 18' building containing a pipe fabrication shop. In the center
is a 4' x 15' steel work table. At various locations in the building are
stations for connections to air, oxygen, argon, propane, and water. All
connections are color coded. All gases and water are supplied from shore. Pipe
shop also contains fourteen (14) 2000 lb. jack stands and one (1) 6" vice.
Aft is a breezeway. A trolley system consisting of a 8" I-beam suspended
overhead is used for loading equipment from the starboard side to a tool room
located aft.
Aft is a 40' x 18' building used as a company tool room. This building contains
the following:
Drop lights. Torches. Life jackets.
Hand tools. Grinders. Safety Equipment.
Circular saws. Ladders. Fire extinguishers.
Come-alongs. Bilge pumps. Welding equipment.
Paint brushes. Battery chargers. Welding rods.
Nuts, bolts, and washers.
Aft is a 70' x 21' building used for storage of electrical and welding
equipment. This building contains eight (8) Thermal ARC electric welding
machines, one (1) General Electric refrigerator, two (2) 1-3/4" diameter
pneumatic pumps, and various extension cords, high pressure hoses, and rope.
Second level in the after building is used for office space that measures 35' x
50'. Equipment in the office area consists of the following:
One (1) Ricoh, model FT4727, copy machine.
One (1) Hotpoint refrigerator.
One (1) Panasonic fax machine/copier.
Six (6) Kenwood VHF marine hand held radios with chargers.
Four (4) Standard VHF marine hand held radios with chargers.
One (1) Daytron microwave oven.
One (1) Magic Chef toaster oven.
One (1) Mr. Coffee coffeemaker.
At the after end of the building is a head with five (5) commodes.
ELECTRICAL:
Vessel is wired with basketweave metal armored type cable. Lighting system is
110 volt AC. Overload protection is via circuit breakers. Electricity is
provided by shore power.
109
SURVEY REPORT NO. 9812-1224
EXTERNAL CONDITION:
External coating of coal tar epoxy is in good condition.
Deck coating of red epoxy is in good condition.
Perimeter of the deck and the deck fittings are well coated with yellow epoxy.
All buildings are fabricated of 1/4" plate and their internal and external
coating is in good condition.
Barge contains light washboarding and few indents of 0 to 1" throughout.
Reportedly, bottom plating has had its anodes recently renewed.
INTERNAL CONDITION:
Internals are in good to fair condition, with no coating evident and light
corrosion throughout.
No significant damage was sighted.
VALUATION:
Estimated present day fair market value
as of December 4, 1998..................................$210,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
110
SURVEY REPORT NO. 9812-1224
VALUATION: (continued)
Estimated orderly liquidation value
as of December 4, 1998...................................$140,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This vessel, as described herein, is in satisfactory condition for its intended
service.
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject vessel
is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is in no way
contingent upon the values reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
Joseph L. Aveton
111
SURVEY REPORT NO. 9812-1224
SURVEYOR'S NOTES: (continued)
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
JLA:ktb
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
112
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
December 4, 1998
SURVEY REPORT NO. 9812-1222
SPUD BARGE "TCMS 612"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
December 4, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for
the account of Bank One Texas, NA, survey the spud barge "TCMS 612" (an
undocumented vessel, of 401 gross and net tons; Transcoastal Marine Services,
Inc. - reported owners) while subject vessel was lying afloat in a laden
condition and moored at the facilities of Coastal Machinery in Belle Chasse,
Louisiana, in order to ascertain the general condition and in order to estimate
her present day fair market value and orderly liquidation value as of December
4, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction. Builder and date of
construction was unknown at time of survey.
Dimensions are: Length - 140', breadth - 39', depth - 9'.
The vessel has a flush deck, a square raked bow, a square raked stern, and a
total of eight (8) compartments consisting of two (2) bow rake compartments,
four (4) main body compartments, and two (2) stern rake compartments.
Access to each hull compartment is made through both flush deck type 18"
diameter manholes fitted with a center bolt secured covers.
The hull is fitted with two (2) strakes of formed plate rub rail located at the
3' and [ILLEGIBLE] elevations which extend from the bow to the stern on both
port and starboard sides [ILLEGIBLE] interim vertical strakes at strategic
locations.
113
SURVEY REPORT NO. 9812-1222
GENERAL CONSTRUCTION PARTICULARS: (continued)
Approximately 60% of the deck is laid out with timbers.
Deck fittings consists of the following:
One (1) 10" diameter cast steel double bitt is located in way of each corner of
the barge hull.
Two (2) 36" cast steel kevels are located on the starboard side.
Three (3) 36" cast steel kevels are located on the port side.
Two (2) 21" diameter spudwells fitted atop an 18" coamings, are located forward
and aft on the starboard side. Each contains one (1) 40' spud.
Two (2) davits for spuds, each approximately 40' high.
CERTIFICATES/DOCUMENTS:
Subject vessel does not require regulatory bodies, certificates and/or
documents.
EXTERNAL CONDITION:
External coating of coal tar epoxy is in good condition.
Barge does not appear to have any significant corrosion or wastage.
Hull contains random washboarding and indents of 0 to 1-1/2".
Deck plating contains random washboarding and indents of 0 to 1-1/2" where
sighted.
Reportedly, bilge knuckles have been renewed on both port and starboard sides
for the full length.
Reportedly, 8' of bottom plating has been renewed.
Reportedly, bow and stern rake compartments have been cleaned and recoated.
Reportedly, anodes have been renewed.
INTERNAL CONDITION:
Internals are in good condition and appear to have a fair coating of Texaco
Compound H.
No significant damage or corrosion was sighted.
114
SURVEY REPORT NO. 9812-1222
VALUATION:
ESTIMATED PRESENT DAY FAIR MARKET VALUE
AS OF DECEMBER 4, 1998.........................................$ 200,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time allowed for exposure in the open market.
ESTIMATED ORDERLY LIQUIDATION VALUE
AS OF DECEMBER 4, 1998.........................................$ 160,000.000
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This vessel, as described herein, is in satisfactory condition for its intended
service.
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject vessel
is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
115
SURVEY REPORT NO. 9812-1222
SURVEYOR'S NOTES: (continued)
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is in no way
contingent upon the values reported herein.
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
Wade R. Oslen
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
/s/ ANTHONY C. PETERS [SEAL]
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
WRO:ktb
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
116
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 11, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
November 30, 1998
SURVEY REPORT NO. 9811-1216
SPUD BARGE "BH 201"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
November 30, 1998, at the request of Ms. Karen S. Shouse, on behalf of and for
the account of Bank One, Texas, NA, survey the spud barge "BH 201" (an inland,
undocumented vessel; Transcoastal Marine Services, Inc. - reported owners)
while subject vessel was lying afloat in an unladen condition and moored at the
facilities of H.B.H., Inc. in Harvey, Louisiana, in order to ascertain the
general condition and in order to estimate her present day fair market value
and orderly liquidation value as of November 30, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction. Builder and date of
construction was unknown at time of survey.
Dimensions are: Length - 90', breadth - 23', depth - 5'.
The vessel is two (2) 90' x 8'6" x 5' independent floats connected by means of
two (2) 10' x 6' x 9'6" A-frames fabricated of 16" I-beams, located forward
and aft. Each float has a flush deck, square raked bow, a square raked stern,
and a total of four (4) compartments consisting of one (1) bow rake
compartment, two (2) main body compartments, and one (1) stern rake compartment.
Access to each hull compartment is made through a 18" diameter flush deck type
manhole fitted with a center bolt secured cover.
117
SURVEY REPORT NO. 9811-1216
GENERAL CONSTRUCTION PARTICULARS:
Deck fittings are comprised of the following:
Three (3) 24" cast-steel kevels are ranged along both port and starboard sides.
Two (2) 12" high securing pads are located on both port and starboard sides of
the bow welded to an estimated 8' x 3' doubler.
One (1) 6' x 5' doubler is located on both port and starboard sides just abaft
the forward hoist, each is fitted with one (1) hinge.
One (1) 7' stanchion is located to port on the bow.
Two (2) 12" x 12" spudwells with 30" raised coaming, one (1) located forward on
the starboard side and one (1) located aft on the port side. Each spudwell
has one 30 spud.
Two (2) 8" high retainers each estimated at 18' x 5' are located on the port
half of the deck.
Two (2) 8" high retainers estimated at 15' x 5' are located on the port half of
the deck.
One (1) 8" high retainer estimated at 12' x 5' is located aft on the starboard
side.
Two (2) 30" stanchions fabricated of 6" diameter pipe are located on both port
and starboard sides.
Located aft is a 23' x 18' x 7' building constructed of 4-1/2" pipe with a
corrugated steel roof.
CERTIFICATES/DOCUMENTS:
Subject vessel does not require regulatory bodies, certificates and/or
documents.
EXTERNAL CONDITION:
General:
External coating of coal tar appears in good condition.
Barge does not appear to have any significant corrosion or wastage.
Bow Rake:
Bow rake plating could not be sighted due to the moored position of the barge
at the time of survey.
Stern Rake:
Stern rake plating could not be sighted due to the moored position of the barge
at the time of survey.
118
SURVEY REPORT NO. 9811-1216
EXTERNAL CONDITION: (continued)
Headlog:
Headlog plating contains scattered indents of 0 to 1".
Starboard Side:
Side plating contains scattered indents of 0 to 1".
Sternlog:
Sternlog plating contains scattered indents of 0 to 1".
Port Side:
Side plating contains scattered indents of 0 to 1".
Deck:
Deck plating does not appear to have any significant damage.
Roof of metal building is in poor condition.
DECK EQUIPMENT:
Deck equipment consists of the following:
One (1) triple drum spud winch, powered by a Detroit Diesel 2-71 radiator
cooled.
One (1) Detroit Diesel 2-71, radiator cooled, powering the hydraulic unit.
One (1) single drum winch is located atop the A-frame.
INTERNAL CONDITION:
Interior was void of coating with light rust prevalent.
No significant damage or corrosion was sighted.
119
SURVEY REPORT NO. 9811-1216
VALUATION:
Estimated present day fair market value
as of November 30, 1998.................................$70,000.00
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value
as of November 5, 1998..................................$55,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find a
purchaser(s), the seller being compelled to sell on an is-where is basis.
SURVEYOR'S NOTES:
This vessel, as described herein, is in satisfactory condition for its intended
service.
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject vessel
is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is in no way
contingent upon the values reported herein.
120
SURVEY REPORT NO. 9811-1216
SURVEYOR'S NOTES: (continued)
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom it may concern.
Attending Surveyor:
Joseph L. Aveton
BACHRACH, WOOD, PETERS & ASSOCIATES, INC.
[SEAL]
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
JLA:ktb
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
121
[BACHRACH, WOOD, PETERS & ASSOCIATES, INC. LETTERHEAD]
December 08, 1998
Inspection - Ascertain
General Condition and
Fair Market Value
as of
November 30, 1998
SURVEY REPORT NO. 9811-1212
SPUD BARGE "MM VII"
THIS IS TO CERTIFY that the undernamed attending Marine Surveyor did on
November 30, 1998, at the request of Ms. Karen S. Shouse, and on behalf of and
for the account of Bank One, Texas, NA, survey the undocumented steel Spud
Barge "MM VII", an undocumented vessel of approximately 300 gross tons,
previously assigned the official number 613041; reported owners Transcoastal
Marine Services, Inc. - operators The Woodson Companies - while subject vessel
lay afloat and moored in an unladened condition at the facilities of The
Woodson Companies at Delcambre, Louisiana, in order to ascertain the general
condition of the vessel and in order to estimate her present day fair market
value and orderly liquidation values as of November 30, 1998.
Note: All sizes, measurements, distances, et cetera, mentioned herein are
approximate, unless otherwise specified.
GENERAL CONSTRUCTION PARTICULARS:
The vessel was built of all welded steel construction. Date and circumstances
of construction were unknown at time of survey. However, the vessel appears to
be approximately 25 years old.
Overall dimensions are: Length - 120', breadth - 36', depth - 7'3".
This vessel is a typical inland deck cargo barge, converted for use as a spud
barge and has a flush deck, a square raked bow, a square raked stern, one (1)
bow rake compartment, four (4) main body hull compartments, and one (1) stern
rake compartment.
The vessel is not fit with rub rail fenders.
122
SURVEY REPORT NO. 9811-1212
GENERAL CONSTRUCTION PARTICULARS: (continued)
The vessel is not fit with skegs.
Access to each hull compartment is made via 24" diameter flush deck manhole
with a center bolt cover.
Head log and stern log plating are estimated to be 3/4" original thickness.
Rake knuckle plating is estimated to have been 1/2" original thickness. Bottom
side and deck plating is estimated to have been 3/8" original thickness.
Bulkheads are estimated to have been 5/16" original thickness. The vessel is
framed longitudinally and stiffened transversely. Longitudinal deck beams are 5"
channel spaced on 18" centers. Longitudinal side frames are 4" channel spaced
on 18" centers. Longitudinal bottom frames are 5" channel spaced on 22"
centers. Bulk heads are stiffened vertically with 3" x 2 1/2" angle spaced on
28" centers.
The vessel is stiffened transversely with transverse trusses spaced on 7 foot
centers. All top, bottom and outboard cords are 8" channels. Trusses are
additionally stiffened with 4" x 4" x 1/4" angle vertically spaced on 5 foot
centers and two 4" x 3 1/2" x 1/4" angle diagonals in way of each truss.
The deck fittings consist of one (1) each, approximately 7" double bitts
located on each corner, two (2) each approximately 30" kevels ranged on both
port and starboard sides and one (1) each approximately 7" single bitts located
near mid-length on both port and starboard side.
The vessel is fit with an approximately 6" high steel pollution barrier which
extends around the entire peripheral of the vessel and is fit with drains with
threaded plugs.
The vessel is fit with the remnants of a safety handrail system along both port
and starboard sides.
The vessel is fit with one (1) each approximately 24" square internal spud
wells located fore and aft on the starboard side. Each spud well is fit with
fair lead sheaves to the spud winch which is located forward on the starboard
side. The spud winch is a skid mounted double drum winch of unknown
manufacturer driven by a General Motors 3 cylinder model 3-71 diesel engine
through a power takeoff and a system of shafts and chains. The spud winch is
fit with a local control station and is complete with an approximately 30
gallon fuel oil reserve tank and a 12 volt heavy duty marine battery.
The vessel is fit with two (2) each approximately 18" square by 40 foot long
steel spuds [ILLEGIBLE] the spud wells.
The area over the spud winch is fit with an approximately 15' x 8' x 8'
platform constructed of 4" diameter pipe stanchions and 4" H beam frames.
123
SURVEY REPORT NO. 9811-1212
GENERAL CONSTRUCTION PARTICULARS: (continued)
The starboard number one main body compartment is fit with a steel access trunk
with a weather tight steel door and stairs leading to the lower hull.
CERTIFICATES/DOCUMENTS:
No documents were on board the vessel at time of survey.
CONDITION:
The vessel was sighted afloat. Reportedly the vessel was last hauled out
during April, 1990. The exterior coating of the vessel is good with only very
occasional light rust patches. The interior of the vessels coating is fair and
approximately 60% effective. Head log plating is heavily distorted on
centerline and shows minor indents throughout. Rake bottom plating is devoid of
major indents. Starboard side plating and rake knuckle set in 0 to 3" over an
area of 8 feet by full depth of vessel in way of the bow double bits. Starboard
side plating shows washboarding and is wavy 0 to 1" throughout with very
occasional major indents of 0 to 2" at scattered locations. Stern log shows
light scattered indents at random locations. Stern rake bottom plating is
devoid of major indents. Port side plating is set in 0 to 3" over 12 feet by
full depth of the vessel extending from the stern forward. Port side plating is
set in 0 to 3" over an area of 12 feet by full depth of the vessel in way of
the bow rake compartment. Remainder of the port side plating shows minor
indents of 0 to 1" throughout and is lightly to moderately pitted and shows
major wastage throughout.
The deck is heavily pitted and wasted throughout with areas of greater than 50%
wastage obvious. The deck shows numerous minor indents due to thin plating.
Bulkheads are obvious. Frames are obvious. Many longitudinal deck beams are
crushed in way of the trusses. The entire deck in way of the stern rake
compartment is set down from 0 to 3" with internals heavily distorted to
conform. The spud wells appear nearly new and in satisfactory condition. The
winch and winch engine appear in satisfactory condition. The stern double
bitts are set inboard in way of the deck distortion. The pollution barrier is
open at scattered locations. The safety hand rails on port and starboard sides
are incomplete. The winch engine was not test operated at time of survey.
VALUATION:
Estimated present day fair market value
as of November 30, 1998....................................$50,000.00
124
SURVEY REPORT NO. 9811-1212
VALUATION: (continued)
Fair Market Value:
A sum of money that a vessel should bring in a competitive and open market
under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale
where title is passed from seller to buyer under condition whereby:
1. The buyer and seller are typically motivated.
2. Both parties are well informed and acting in what they consider their
own best interest.
3. A reasonable time is allowed for exposure in the open market.
Estimated orderly liquidation value
as of November 30, 1998...................................$45,000.00
The estimated gross amount expressed in terms of money which could be
typically realized from a sale, given a reasonable period of time to find
a purchaser(s), the seller being compelled to sell on an is-where is
basis.
SURVEYOR'S NOTES:
All machinery and equipment aboard the barge appears to be in good condition
and well coated.
This survey represents the good faith opinion of the surveyor only and does not
make any representations of fact. It was performed for insurance underwriting
and/or appraisal purposes only, and no warranty of correctness of this surveyor
as to the condition, seaworthiness, value, or marketability of subject vessel
is either expressed or implied.
The vessel was sighted afloat, without testing for tightness, hull gauging,
conducting sea trials, testing or trying out machinery or electrical systems,
or opening up any of those places ordinarily closed or concealed. Therefore,
deficiencies may exist other than those conditions noted in this report.
The undersigned Marine Surveyor has no present or contemplated future interest
in the aforementioned vessel and/or its equipment, and compensation for
services has been arranged for on an independent fee basis and is in no way
contingent upon the values reported herein.
125
SURVEY REPORT NO. 9811-1212
SURVEYOR'S NOTES: (continued)
Survey made, signed, and submitted without prejudice to rights and/or interests
of whom may concern.
Attending Surveyor:
John M. Swanson
BACHRACH, WOOD, PETERS & ASSOCIATES, INC
[SEAL]
/s/ ANTHONY C. PETERS
-----------------------------------------
Anthony C. Peters,
Principal Surveyor.
JMS:maw
Distribution:
(2) Reports & (2) Invoices:
Bank One, Texas, NA
Attention: Ms. Karen S. Shouse
910 Travis Street, 7th Floor
TX-2 4260
Houston, Texas 77002
(1) Report:
Transcoastal Marine Services, Inc.
Attention: Mr. John Nowlin
183 Beadle Road
Lafayette, Louisiana 70508
126
SCHEDULE 2
TO
CREDIT AGREEMENT
OWNER: ADDRESS:
PROPERTY #1 TransCoastal Marine Services of LA, Inc. 2701 Engineers Road
Belle Chase, LA 70037
PROPERTY #2 TransCoastal Marine Services of LA, Inc. 183-185 South Beadle Road
Lafayette, LA 70508
PROPERTY #3 C.S.I Hydrostatic Testers, Inc. 103 and 108 Pinehurst Street
Lafayette, LA 70508
PROPERTY #4 TransCoastal Marine Services of LA, Inc. 2205 West Pinhook
Lafayette, LA 70708
107 Pinehurst
Lafayette, LA 70508
PROPERTY #5 TransCoastal Marine Services of LA, Inc. 4506 South Lewis Street
(Port of Iberia Leasehold Interest) New Iberia, LA 70560
PROPERTY #6 TransCoastal Marine Services, Inc. 756 Peters Road
Harvey, LA
All property listed above is described more fully in Attachment A to this
Schedule 2 attached hereto, and includes all buildings, improvements, fixtures
and other personal property attached thereto.
127
ATTACHMENT A TO SCHEDULE 2
(PROPERTY DESCRIPTIONS)
PROPERTY #1:
Acquired by purchase from Hughes Lands, Inc., per act passed before Stewart F.
Peck, Notary Public, dated October 27, 1983, recorded October 28, 1983,
registered in COB 580, folio 473.
A certain tract of land, containing 14.217 acres, situated in and being a part
of Section 91, Township 14 South, Range 24 East, West of the Mississippi River,
Plaquemines Parish, Louisiana, and being more fully described as follows,
to-wit:
Commence at the intersection of the northwesterly right of way line of the Gulf
Intracoastal Waterway-Alternate Route with northeasterly line of Lots 1, 3, 5,
7, etc. of Concord Canal Subdivision - Bayou Barataria Section and run
N53 degrees 44'04"E, along the said northwesterly right of way line of the Gulf
Intracoastal Waterway-Alternate Route, for a distance of 307.12 feet, to the
point of beginning of the tract herein described located 270 feet northeasterly
from and perpendicular to the said northeasterly line of Lots 1, 3, 5, 7, etc.
of Concord Canal Subdivision - Bayou Barataria Section;
Run thence N64 degrees 43'40"W, for a distance of 182.00 feet, to a point;
Run thence S53 degrees 44'04", for a distance of 216.12 feet, to a point;
Run thence N64 degrees 43'40"W, for a distance of 469.06 feet, to a point
located N25 degrees 25'20"E, at a distance of 80.00 feet, from a Grate Bar
having coordinate values of X = 2,407,918.45 and Y = 428,147.52, which Grate Bar
marks the most northerly corner of Lot 1 of said Concord Canal Subdivision -
Bayou Barataria Section;
Run thence N64 degrees 25'40"W, for a distance of 20.00 feet, to a point;
Run thence N53 degrees 44'04"E, for a distance of 835.85 feet, to a point;
Run thence S36 degrees 15'56"E, for a distance of 590.00 feet, to a point;
Run thence N53 degrees 44'04"E, for a distance of 300.00 feet, to a point;
Run thence S36 degrees 15'56"E, for a distance of 425.00 feet, to a point in the
center-line of the Gull Intracoastal Waterway-Alternate Route;
Run thence S53 degrees 44'04"W, along the center-line of the Gulf Intracoastal
Waterway-Alternate Route for a distance of 600.00 feet, to a point;
Run thence N36 degrees 15'56"W, for a distance of 425.00 feet, to the point of
beginning.
128
The tract hereinabove described is bounded northwesterly by the right of way for
Engineers Road, northeasterly by property owned by Power Enterprises, Inc. or
assigns and by property owned by Hero Lands Company or assigns, southeasterly by
property owned by Hero Lands Company or assigns and southwesterly by the right
of way for Concord Road and by property owned by Hero Lands Company or assigns
and is subject to a 60-foot wide road and rail servitude in favor of Hero Lands
Company which lies southeasterly from and contiguous to the said right of way
for Engineers Road and is subject to a 425-foot wide servitude in favor of the
United States of America for the Gulf Intracoastal Waterway-Alternate Route
which lies northwesterly from and contiguous to the southeasterly boundary as
hereinabove described. All as more fully shown on map or survey by Hugh B.
McCurdy, Jr., dated July 23, 1981, as amended on March 24, 1982, whereon the
hereinabove described tract is the area encompassed by connecting the letters
H-J-K-A-B-C-D-E-F-G-H. Survey data refers to the State Plane Coordinate System.
LESS AND EXCEPT THE FOLLOWING DESCRIBED PROPERTY:
A certain tract of land situated in and being a part of Section 91, Township 14
South, Range 24 East, West of the Mississippi River, Plaquemines Parish,
Louisiana, and being more fully described as follows, to-wit:
Commence at the intersection of the northwesterly right of way line of the Gulf
Intracoastal Waterway-Alternate Route northeasterly line of Lots 1, 3, 5, 7,
etc. of Concord Canal Subdivision-Bayou Barataria Section and run North 53
degrees 44 minutes 04 seconds East, along Intracoastal Waterway-Alternate Route,
for a distance of 607.12 feet to the Point of Beginning of the tract herein
described:
Run thence North 53 degrees 44 minutes 04 seconds East, for a distance of 300.00
feet to a point;
Run thence South 36 degrees 15 minutes 56 seconds East, for a distance of 71.30
feet, to a point;
Run thence South 52 degrees 11 minutes 41 seconds West, for a distance of
304.82 feet to a point;
Run thence North 35 degrees 45 minutes 40 seconds West, for a distance of 79.50
feet, to a point;
Run thence North 35 degrees 27 minutes 33 seconds West, for a distance of 82.21
feet to a point;
Run thence North 53 degrees 44 minutes 40 seconds East, for a distance of 2.85
feet to a point;
Run thence South 36 degrees 15 minutes 56 seconds East, for a distance of 82.20
feet to a Point of Beginning.
The tract hereinabove described is bounded northwesterly by property owned by
Power Enterprises, Inc., northeasterly by property owned by Power Enterprises,
Inc., and by property owned by Hero Lands Company or assigns, southeasterly by
property formerly owned by Hughes Lands, Inc., and southwesterly by property
formerly owned by Hughes Lands, Inc. All as more fully shown on the map of
survey by Hugh B. McCurdy, Jr., dated May 22, 1986. Survey data refers to the
State Plane Coordinate System.
Municipal Address: 2701 Engineers Road, Belle Chase, LA 70037
129
PROPERTY #2:
Acquired by purchase from Louis Woodson and Georgia Zeringue Woodson, per act
passed before Paul J. Breaux, Notary Public, dated December 20, 1979, filed
December 27, 1979, as File No. 79-32625, Lafayette Parish, Louisiana.
THAT CERTAIN TRACT OR PARCEL OF LAND, situated in Sections 55 and 51, Township
10 South, Range 4 East, in the Parish of Lafayette, Louisiana, containing 14.973
acres, and more particularly described as follows:
Commencing at an iron rod marking the intersection of the eastern right-of-way
of South Beadle Road with the Northwestern property line being the Point of
Beginning:
thence North 54 degrees 58'57" East, a distance of 1265.77 feet to an iron rod;
thence South 36 degrees 14'13" East, a distance of 514.28 feet to an iron rod;
thence South 54 degrees 55'15" West, a distance of 1267.87 feet to an iron rod;
thence North 36 degrees 00'00" West, a distance of 515.61 feet to the Point of
Beginning.
Municipal address: 183-185 South Beadle Road, Lafayette, Louisiana 70508.
PROPERTY #3:
Tract A:
Acquired by Chemical Service, Inc., by purchase from D. H. Deboisblanc, per act
passed before Lucien C. Bertrand, Jr., Notary Public, dated June 7, 1955, filed
July 7, 1955, registered under File No. 320689, Lafayette Parish, Louisiana; and
further acquired by Amendment to Articles of Incorporation changing the name
of Chemical Service, Inc., to C.S.I. Hydrostatic Testers Inc., a Delaware
corporation, registered under File No. 353903, Lafayette Parish, Louisiana.
Tract B:
Acquired by Act of Exchange between C.S.I. Hydrostatic Testers, Inc. and Alfred
B. Leonpacher, per act passed before (illegible), Notary Public, dated April 25,
1980, filed July 9, 1973, as File No. 608872, Lafayette Parish, Louisiana.
Said Tracts A and B being a tract of 2.507 acres, and more particularly
described as follows:
Commencing at an iron rod marking the intersection of the western right-of-way
of Pinehurst Street with the northeastern property line being the Point of
Beginning:
thence South 43 degrees 09'36" West, a distance of 207.12 feet to an iron rod;
thence South 45 degrees 54'57" East, a distance of 3.89 feet to an iron rod;
thence South 39 degrees South 39 degrees 49'13" West, a distance of 299.50 to an
iron rod; thence North 46 degrees 26'42" West, a distance of 188.01 feet to a
fence corner; thence North 39 degrees 20'05" East, a distance of 260.77 feet;
thence North 41 degrees 27'33" East a distance of 40.72 feet to a fence corner;
thence North 46 degrees 42"56" West a distance of 79.90 feet to an iron pipe;
thence North 39 degrees 25'48" East, a distance of 4.37 feet to the beginning of
a curve tangent to said line; thence
130
northeasterly a distance of 157.04 feet along the curve concave to the
southeast, having a radius of 364.83 feet and a central angle of 24 degrees
39'45"; thence North 64 degrees 05'33" East tangent to said curve, a distance of
52.42 feet; thence South 45 degrees 55'17" East, a distance of 223.47 feet to
the Point of Beginning.
Municipal address: 308 Pinehurst Street, Lafayette, Louisiana 70508.
PROPERTY #4:
Acquired by purchase from Yvette Bonin, Wife of/and Daniel N. Hargett, Sr., per
act passed before (illegible), Notary Public, dated July 3, 1996, filed July 15,
1996, registered as File No. 96-025759, Lafayette Parish, Louisiana.
Tract A:
A certain parcel of land located in Sections 46 and 50, Township 10 South, Range
4 East, within the City of Lafayette, Lafayette Parish, Louisiana, and being
more particularly described as follows:
Beginning at the southeast corner of the intersection of Pinhook Road (La. Hwy
182) and Pinehurst Street, being the northern most point of the right-of-way
flare; thence North 39 degrees 33 minutes 44 seconds East a distance of 235.06
feet; thence South 46 degrees 50 minutes 52 seconds East a distance of 186.99
feet; thence South 39 degrees 15 minutes 34 seconds West a distance of 253.99
feet; thence North 46 degrees 53 minutes 14 seconds West a distance of 170.56
feet; thence North 01 degrees 53 minutes 14 seconds West a distance of 26.78
feet back to the Point of Beginning, being more particularly shown on that
certain certificate of survey by Montagnet and Dominque, Inc. dated April 12,
1996.
Tract B:
A certain parcel of land located in Sections 50 and 46 Township 109 South,
Range 4 East, Lafayette Parish, Louisiana, and being more particularly described
as follows:
Beginning at the southeastern corner of the intersection of Pinhook Road (LA HWY
182) and Pinehurst Street; Being the northern point of the right-of way flare;
thence North 39 degrees 33 minutes 44 seconds East a distance of 235.06 feet to
the Point of Beginning; thence North 39 degrees 33 minutes 44 seconds East a
distance of 84.54 feet; thence South 46 degrees 49 minutes 32 seconds East a
distance of 186-54 feet; thence South 39 degrees 15 minutes 34 seconds West a
distance of 84.49 feet; thence North 46 degrees 50 minutes 52 seconds West a
distance of 186.99 feet to the Point of Beginning, being more particularly shown
on that certain certificate of survey by Montagnet and Dominque, Inc. dated
April 12, 1996.
Municipal Address: Tract A - 2205 West Pinhook, Lafayette, Louisiana 70508
Tract B - 107 Pinehurst, Lafayette, Louisiana 70508
131
PROPERTY #5
Acquired leasehold interest per Lease by and between Port of Iberia District,
and Beldon E. Fox, Sr., recorded July 31, 1987, in COB 930, folio 760, Entry No.
87-7302, Iberia Parish; and further acquired by Assignment of Lease by Beldon E.
Fox, Sr., to The Beldon E. Fox, Sr. Grandchildren's Trust No. 1, dated March 11,
1997, recorded July 13, 1997, in COB 1141, folio 426, Entry No. 97-6296, Iberia
Parish, Louisiana.
The entire Lease and all of tenant's rights, interests and obligations contained
in the Lease dated July 21, 1987 regarding the following described property, to
wit:
Tract A:
Part of lot 10 at the Port of Iberia located in Section 3, Township 13 South,
Range 6 East, Iberia Parish, Louisiana, containing and measuring 469.1 feet on
the west side of Lewis Street (Parish Road No. 605), being irregular in shape
and being bounded on the North by Lot 9 and part of Lot 10, on the south by Lot
11, on the East by Lewis Street (Parish Road 605) and on the West by Commercial
Canal, being part of Lot 10 as shown in part on plat of K B. Marie, Land
Surveyor, dated October 12, 1978, a copy of which is attached to that certain
Lease dated July 21, 1987 and is recorded under Entry No. 87-7302 of the records
of the Clerk of Court's office for the Parish of Iberia, Louisiana.
Subject to that certain five foot utilities easement running along the entire
Eastern boundary of the subject property parallel and adjacent to Lewis Street
(Parish Road 605) as more particularly shown on plat of R. B. Marie, Land
Surveyor, dated October 12, 1978.
Tract B:
Part of Lot 10 at the Port of Iberia located in Section 3, Township 13 South,
Range 6 East, Iberia Parish, Louisiana, being bounded on the North by Lot 8,
South by the remainder of Lot 10, East by Lot 9 and Wet by Commercial Canal as
shown on plat of R. B. Marie, Land Surveyor, dated January 30, 1979, a copy of
which is attached to that certain Lease dated July 21, 1987 and is recorded
under Entry No. 87-7302 of the records of the Clerk of Court's Office for the
Parish of Iberia, Louisiana.
Municipal address: 4506 South Lewis Street, New Iberia, Louisiana 70560
PROPERTY #6
(TO BE PROVIDED BY BORROWER POST-CLOSING)
132
SCHEDULE 3
to
CREDIT AGREEMENT
SUMMARY INFO - TRANSCOASTAL
===============================================================================================================================
TCMS Official
Equip # Name Type Flag Number Description Owner
- -------------------------------------------------------------------------------------------------------------------------------
70001 Vermillion Bay Pipelay Barge Vanuatu 634 350'x60'x22.5' all welded steel TransCoastal
construction pipelay barge Vessels, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
30001 BH400 Lay Bury USA 1035377 260'x72'x16' all welded steel HBH, Inc.
Barge construction pipelay/bury barge
- --------------------------------------------------------------------------------------------------------------------------------
16001 M/V Discovery Multi-purpose Panamanian 12543-82- 243'x42'x19' all welded steel Hargett
D construction multi-purpose Mooring and
offshore utility supply vessel Marine, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
70002 Atchafalaya Bay Bury Barge US 528068 256'x72'x16' all welded steel TransCoastal
construction pipeline bury barge Vessels, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
16002 M/V Sealevel No. Multi-Purpose US 616274 155'x40'x11.5' all steel welded Hargett
21 construction offshore utility/dive Mooring and
support vessel Marine, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
40012 BH300 Lay Bury US 642150 185'x45'x9' all welded steel HBH, Inc.
Barge construction pipelay/bury barge
- --------------------------------------------------------------------------------------------------------------------------------
16003 M/V Sand Queen Utility Boat US 586067 85'x24'x7' all welded steel C.S.I.
construction offshore utility Hydrostatic
supply vessel Testers, Inc.
- ---------------------------------------------------------------------------------------------------------------------------------
40005 BH105 Spud Barge US 558253 150'x40'x9' all welded steel HBH, Inc.
construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
20116 #116 Spud/Lay Undocumented 140'x38'x7' all welded steel
Barge construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
20118 #118 Spud/Lay Undocumented 140'x38'x7' all welded steel
Barge construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
40006 BH200 Spud Barge Undocumented 523759 110'x30'x7' all welded steel
construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
40008 BH202 Spud Barge US 651251 110'x32'x6' all welded steel HBH, Inc.
construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
40004 BH104 Spud Barge Undocumented 110'x34'x6' all welded steel
construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
20119 #119 Spud/Lay Undocumented 140'x38'x7' all welded steel
Barge construction spud barge
- ---------------------------------------------------------------------------------------------------------------------------------
40009 BH203 Spud Barge Undocumented 90'x25'x5' all welded steel
construction spud barge
=================================================================================================================================
133
SCHEDULE 7.5
LITIGATION
Sirpi Alusteel Construction, Ltd. v. Dickson GMP International
This case involves a contractual dispute in which Dickson has filed a cross
claim that if successful would eliminate any damages alleged by Sirpi and in
addition would result in a monetary judgement in favor of Dickson. We have been
told by counsel for Dickson that maximum exposure in this case is approximately
$95,000.00 (NINETY-FIVE THOUSAND AND NO/00 DOLLARS).
Dr. Abdo Husseiny, et al v. United Gas Pipeline Company, et al.
This is a class action lawsuit filed in 1994 as a result of a gas leak in St.
John the Baptist Parish in Louisiana. Approximately 7858 plaintiffs have joined
the class and are seeking damages ranging from $500.00 to $2500.00 each. The
liability portion of the case was tried to the bench. The court found Woodson
75% at fault and assessed punitive damages on a one to one ratio. Punitive
damages are uninsured. The case was appealed to the Fifth Circuit Court of
Appeals and writs were denied. We are currently negotiating with our underwriter
to approach the plaintiff with a settlement offer in which the entire case
(including punitives) would be settled within policy limits with Woodson
offering a cash contribution to the settlement. Such cash contribution would not
have a material impact on the operations of the Company. If we do not reach a
settlement, this case would begin trial in March of 1999. For the court to hear
all 7858 cases, trial could potentially extend for three to seven years.
134
SCHEDULE 7.6(d)
RIGHTS IN PROPERTIES; LIENS
ALL OF THE PROPERTY AND COLLATERAL OF THE BORROWERS AND THEIR SUBSIDIARIES
WHICH ARE REASONABLY NECESSARY FOR THE OPERATION OF THEIR BUSINESS ARE IN GOOD
WORKING CONDITION AND ARE MAINTAINED IN ACCORDANCE WITH PRUDENT BUSINESS
STANDARDS WITH THE FOLLOWING EXCEPTION:
The Atchafalaya Bay is currently out of class and in process of being
refurbished. The Company's intention is to spend an additional $2,000,000 by
March 31, 1999, to bring the vessel into class and ready to be a first class
Jetting Barge.
135
SCHEDULE 7.9
DEBT AND LIENS
The Borrowers and their Subsidiaries have no Debt as defined in the Credit
Agreement, except as disclosed below:
LENDER COLLATERAL/LIEN
------ ---------------
1. MR. & MRS. MARCUS DICKSON 3 1/2 acres of land @
MORTGAGE - Dickson GMP 4001 Woodland Highway
$313,786 OUTSTANDING AT 11-30-98 New Orleans, LA
2. TRANSAMERICA INSURANCE FINANCE - Unsecured
Transcoastal Marine Services, Inc.
$2,042,730 OUTSTANDING AT 11-30-98
3. BANKONE - TransCoastal Marine Accounts Receivables and Certain
Services, Inc. Equipment
$15,000,000 REVOLVER IN PLACE AT
CLOSING
4. ENRON CAPITAL & TRADE RESOURCES Subordinated lien on all Equipment and
CORP. - TransCoastal Marine Services, in Accounts Receivables
Inc.
$20,000,000 SUBORDINATED DEBT IN
PLACE AT CLOSING
5.
(Intentionally Deleted)
6. WOODSON FAMILY - Woodson Company Unsecured
$1,091,907 OUTSTANDING AT 11-30-98
7. NEW COURT FINANCIAL - Dickson GMP Forklift
$73,513 OUTSTANDING AT 11-30-98
8. NEW COURT FINANCIAL - Dickson GMP Forklift
$75,298 OUTSTANDING AT 11-30-98
9. LCA FINANCIAL - DICKSON GMP
Dickson GMP $46,853 OUTSTANDING AT 990 CFM Air Compressor
11-30-98
136
SCHEDULES 7.10
TAXES
The Borrowers and their Subsidiaries have the following pending federal and
state tax investigations underway:
---------------------------------------------------------------------------------
ENTITY AND YEARS UNDER INVESTIGATION TYPE OF TAX AND TAXING AUTHORITY
=================================================================================
1. CSI - Years ending May 31, 1996 Federal Income Tax-I.R.S.
and 1997
2. Red Fox of New Iberia, Inc. - Years
ending December 31, 1996, 1997, 1998 Sales Tax-State of Louisiana
3. HBH, Inc. - Years ending December
31, 1995 and 1996 Sales Tax-State of Louisiana
4. Dickson GMP Limited, Inc. - Years
ending December 31, 1994, 1995, and
1996 Sales Tax-State of Louisiana
---------------------------------------------------------------------------------
137
SCHEDULE 7.12
ERISA
NONE
138
SCHEDULE 7.14
SUBSIDIARIES
NAME STATE OF INCORPORATION % OWNERSHIP
- ---- ---------------------- -----------
TransCoastal Marine Services of LA, Inc. Louisiana 100%
The Red Fox Companies of New Iberia, Inc. Louisiana 100%
Woodson Construction Company Louisiana 100%
Hargett Mooring & Marine, Inc. Louisiana 100%
EnviroSystems, Inc. Louisiana 100%
Kori Corporation Louisiana 100%
CSI Hydrostatic Testers, Inc. Delaware 100%
TransCoastal Vessels, Inc. Delaware 100%
TransCoastal Ventures, Inc. Delaware 100%
TransMar, LLC Delaware 60%
Dickson GMP International, Inc. Louisiana 100%
Dickson Marine, Inc. Louisiana 100%
Dickson Nigeria, Ltd. Nigeria 100%
Servicios y Construcciones Petroleras
Ventura, C.A. Venezuela 100%
Ventura Resources, Inc. Louisiana 100%
139
SCHEDULE 7.20
ENVIRONMENTAL MATTERS
(a) None known
(b) None known
(c) Hazardous Waste such as: spent paint and solvents are stored in specific
areas for transportation to approved disposal facilities. TCMS Senior
Environmental Specialist has inspected the disposal facility for compliance
with regulations and permits.
(d) None known
(e) None known
(f) None known
(g) None known
(h) None known
140
SCHEDULE 7.22
INSURANCE COVERAGE
Please see attached.
141
TRANSCOASTAL MARINE SERVICES, INC.
COMPREHENSIVE GENERAL LIABILITY
LIMITS OF LIABILITY: $1,000,000 PER OCCURRENCE
$2,000,000 GENERAL AGGREGATE
$2,000,000 PRODUCTS/COMPLETED OPS AGGREGATE
$1,000,000 FIRE LEGAL LIABILITY
$ 5,000 MEDICAL PAYMENTS PER PERSON
PREMIUM BASIS: ESTIMATED GROSS RECEIPTS: $167,300,000.
RATE/DEDUCTIBLE OPTIONS:
DEDUCTIBLE STOP LOSS RATE PREMUIM TAX TOTAL
- ---------- --------- ---- -------- --- -----
$25,000 $125,000 .1804% $301,809 $15,090.45 $316,899.45
$25,000 $250,000 .165% $276,045 $13,802.25 $289,847.25
$25,000 $NIL .150% $250,950 $12,547.50 $263,497.50
$50,000 $300,000 .135% $225,855 $11,292.75 $237,147.75
$50,000 $NIL .120% $200,760 $10,038.00 $210,798.00
COVERAGE INCLUDES: ACTIONS OVER
FULL OCCURRENCE FORM, INCLUDING PRODUCTS/COMPLETED OPERATIONS
BROAD FORM GENERAL LIABILITY, ISO DEFINITION OF INSURED CONTRACT
BROAD FORM NAMED INSURED
INSURED OPERATIONS: "ALL OPERATIONS OF NAMED INSURED & SUBSIDIARIES"
NO EXCLUSION FOR PUNITIVE DAMAGES
"PER PROJECT" AND "PER LOCATION" ENDORSEMENT AVAILABLE AS REQUESTED
DEFENSE IS IN ADDITION TO POLICY LIMITS
XCU HAZARDS; UGR&E; BLOWOUT & CRATERING
WORLDWIDE TERRITORY (FOR SUITS BROUGHT WITHIN THE U.S.)
SEEPAGE & POLLUTION - TIME ELEMENT - 7-DAY DISCOVERY, 30-DAY REPORTING
BLANKET WAIVER OF SUBROGATION, ADDITIONAL INSURED & 60-DAY N.O.C.
PRIMARY INSURANCE CLAUSE AS REQUIRED BY CONTRACT
IN REM, GULF OF MEXICO, AND NON-OWNED WATERCRAFT EXTENSIONS
ALL OWNED BOATS 26' & UNDER (INCLUDING DEBRIS REMOVAL)
NO EXCLUSION UNDER CONTRACTUAL FOR WORK WITHIN 50' OF RAILROADS
CROSS SUITS
LIMITED EMPLOYEE BENEFITS LIABILITY - $1,000,000 AGGREGATE
CARE, CUSTODY, CONTROL EXCLUSION DELETED
DELETE THE "DAMAGE TO YOUR WORK" EXCLUSION (WORK MUST HAVE BEEN DELIVERED TO THE
BUYER, AND THE ASSURED MUST BE LEGALLY LIABLE TO PAY). THIS ADDITIONAL
COVERAGE HAS A SEPARATE $25,000 DEDUCTIBLE PER CLAIM.
FELLOW EMPLOYEE EXCLUSION DELETED
UNINTENTIONAL ERROR/FAILURE TO DISCLOSE CLAUSE
SHIPREPAIRERS LEGAL LIABILITY
ENVIROSYSTEMS: RETRO DATE OF 6/30/94
REMOVE PROFESSIONAL EXCLUSION FOR TRANSMAR ONLY, SUBJECT TO $50,000 DED.
EXCLUDING: P&I, PCB'S, ASBESTOS, E&O, D&O, LEASED EMPLOYEES, FORMALDEHYDE,
NUCLEAR, EMPLOYMENT PRACTICES.
SECURITY: STEADFAST INSURANCE COMPANY
ZURICH-AMERICAN INSURANCE GROUP (BEST RATING A+:XIV)
13
142
TRANSCOASTAL MARINE SERVICES, INC.
COMMERCIAL AUTO COVERAGE
LIABILITY :$1,000,000. COMBINED SINGLE LIMIT
MEDICAL PAYMENTS :$5,000
UNINSURED MOTORISTS: :$1,000,000
HIRED AND NON-OWNED :$1,000,000. COMBINED SINGLE LIMIT
COMPREHENSIVE :SEE BELOW
COLLISION :SEE BELOW
- --------------------------------------------------------------------------------
DESCRIPTION OF VEHICLES: PER SCHEDULE PROVIDED BY INSURED
AUTO LIABILITY RATING BASE: POWER UNITS - 125.
$5,000 DEDUCTIBLE ON LIABILITY.
COMPOSITE RATED $516.32.
AUTO PHYSICAL DAMAGE: $500 DEDUCTIBLE COMPREHENSIVE &
$500 COLLISION FOR ALL LIGHT TRUCKS
AND PRIVATE PASSENGER UNITS, MODEL YEAR 1994
AND NEWER. $5,000 DEDUCTIBLE COMPREHENSIVE
AND COLLISION FOR ALL OTHER UNITS. RATING
BASE: 75 UNITS. COMPOSITE RATED AT $270.
PREMIUM: $74,515.00 LIABILITY/MED PAY/U.M.
$20,249.00 PHYSICAL DAMAGE
----------
$94,764.00 TOTAL
COVERAGES INCLUDE: SYMBOL 1 ON LIABILITY - ALL AUTOS
BLANKET WAIVER OF SUBROGATION
BLANKET ADDITIONAL INSURED
BLANKET PRIMARY INS CLAUSE
60-DAY NOTICE OF CANCELLATION
HIRED/NON-OWNED COVERAGES, INCLUDING PHYSICAL DAMAGE
ON RENTAL CARS ($35,000 PD LIMIT)
BROAD FORM NAMED INSURED
FELLOW EMPLOYEE COVERAGE
MSC-90 & STATE FILINGS AVAILABLE AS REQUIRED
LIMITED POLLUTION - VEHICLE OVERTURN OR COLLISION
CA9948 - BROADENED POLLUTION
UNINTENTIONAL FAILURE TO DISCLOSE
EMPLOYEES AS ADDITIONAL INSUREDS
SECURITY: ZURICH AMERICAN INSURANCE COMPANY OF ILLINOIS 10/12/98
ZURICH-AMERICAN INSURANCE GROUP (BEST RATING A+:XIV)
143
TRANSCOASTAL MARINE SERVICES, INC.
HULL AND PROTECTION & INDEMNITY
I. HULL & MACHINERY: TOTAL VALUE OF $74,772,000 PER ATTACHED SCHEDULE
INCLUDING COLLISION & TOWERS
BREAKDOWN: WOODSON $2,039,500
HBH, INC. $24,865,000
CSI HYDRO. $24,195,000
RED FOX $972,500
TRANSCOASTAL $22,700,000
SPUD UNITS $665,000
DEDUCTIBLE: $5,000 FOR ALL VESSELS, EXCEPT:
$50,000 FOR ALL VESSELS VALUED OVER $1,000,000
- -------------------------------------------------------------------------------
II. PROTECTION & INDEMNITY: $1,000,000 LIMIT PER OCCURRENCE
INCLUDING EXCESS TOWERS & COLLISION
SP-23 FORM
DEDUCTIBLE: $10,000
- -------------------------------------------------------------------------------
PREMIUM: WOODSON: $ 40,142 HULL $30,240 P&I
HBH, INC.: $226,619 HULL $73,440 P&I
CSI: $195,423 HULL $12,960 P&I
RED FOX: $ 20,663 HULL $21,600 P&I
TRANSCOASTAL: $177,980 HULL $13,770 P&I
-------- -------
TOTALS: $660,827 HULL $152,010 P&I
PREMIUM TOTAL: $812,837.00
HULL DEDUCTIBLE OPTIONS: $50,000 DEDUCTIBLE - 10% PREMIUM CREDIT
$100,000 DEDUCTIBLE - 15% PREMIUM CREDIT
SECURITY: MOAC/BOSTON OLD COLONY (BEST RATING: A-:XIV) 10/15/98
16
144
HULL AND PROTECTION & INDEMNITY - TERMS & CONDITIONS
INCLUDES: AGREED VALUE ON HULL AMOUNTS
PARTS REMOVED CLAUSE
AFFILIATED COMPANIES CLAUSE
BLANKET ADD'L INSURED & WAIVER OF SUBROGATION, 60-DAY N.O.C.
BLANKET PRIMARY INSURANCE CLAUSE
AUTOMATIC ACQUISITION CLAUSE FOR PURCHASE OR CHARTER
PRIVILEGE TO CHARTER CLAUSE
CROSS LIABILITY CLAUSE
CONTRACTUAL LIABILITY
SEEPAGE & POLLUTION (B.I. & CARGO), EXCLUDING O.P.A., CERCLA
INCHMAREE EXTENDED TO PROVIDE COVERAGE FOR NEGLIGENCE OF
CHARTERS AND/OR REPAIRERS; ALSO EXTENDED TO PROVIDE
COVERAGE FOR CONTACT WITH AIRCRAFT
BLOWOUT & CRATER
DELIBERATE DAMAGE (POLLUTION) INCLUDING EQUIPMENT, GEAR,
MACHINERY DAMAGE
BURIAL EXPENSES CLAUSE
IN REM/IN PERSONAM LIABILITY
CARGO LEGAL LIABILITY
VESSEL IN DISTRESS CLAUSE
SISTERSHIP CLAUSE
TANKERMANS CLAUSE
DELETE THE EXCEPTIONS "OTHER THAN AN ASSURED, AND "AS OWNER
OF VESSEL" AS REQUIRED BY CONTRACT
SUE & LABOR PROVISIONS NOT TO APPLY TO ADDITIONAL INSURED IF
REQUIRED IN CONTRACT
REPAIRS & ALTERATIONS CLAUSE
TOWAGE EXCLUSIONS DELETED
BOOM COVERAGE ENDORSEMENT, OVERWEIGHT EXCLUSION DELETED
BROAD FORM NAMED INSURED ENDORSEMENT
STRIKES, RIOTS & CIVIL COMMOTIONS, & MALICIOUS DAMAGE CLAUSES
EXTENDED ADVENTURES & PERILS CLAUSE
EACH VESSEL DEEMED TO BE SEPARATELY INSURED
LEASED EQUIPMENT CLAUSE
SUBJECT TO AMERICAN HULL INS. SYNDICATE LINER NEGLIGENCE
CLAUSE
VOLUNTARY REMOVAL OF WRECK/DEBRIS
NO EXCLUSION FOR PUNITIVE DAMAGES
THIS INSURANCE AUTOMATICALLY EXTENDS TO COVER ANY VESSELS AND/OR CRAFT OF A
SIMILAR AGE & NATURE TO THAT INSURED HEREUNDER, WHICH HAVE BEEN PURCHASED,
LEASED, RENTED, TIME OR BAREBOAT CHARTERED BY INSURED SUBJECT TO ADVICE TO
UNDERWRITERS, AT TERMS AND RATES TO BE AGREED.
POLICY WILL PROVIDE LIABILITY COVERAGE FOR INSURED COMPANIES, EXCESS OF THE
$500,000 LIMIT CARRIED BY McDONOUGH MARINE, UP TO $1,000,000 COMBINED TOTAL
LIMITS. INSURED COMPANIES TO BE NAMED & WAIVED BY McDONOUGH MARINE. COVERAGE
APPLIES ONLY TO RENTED BARGES.
17
145
TRANSCOASTAL MARINE SERVICES, INC.
CHARTERERS' LEGAL LIABILITY
WHARFINGERS LIABILITY
LIMIT OF LIABILITY: $1,000,000
DEDUCTIBLE: $25,000
RATE: FLAT, NO ADJUSTMENT
PREMIUM: $15,000
NOTE: COVERAGE IS PROVIDED FOR BOTH DOMESTIC AND FOREIGN OPERATIONS. FOR
FOREIGN LIABILITY, UNDERWRITERS REQUIRE A COPY OF THE HULL/P&I POLICY
SERVING AS PRIMARY COVERAGE FOR TWO LIFEBOATS CHARTERED BY DICKSON GMP
INT'L, LOCATED OFFSHORE NIGERIA.
SECURITY: MOAC/BOSTON OLD COLONY 10/8/98
18
146
TRANSCOASTAL MARINE SERVICES, INC.
WATER QUALITY INSURANCE SYNDICATE
VESSEL POLLUTION COVERAGE
LIMITS OF LIABILITY:
OIL POLLUTION ACT OF 1990 - TO $5,000,000 PER VESSEL OR STATUTORY
LIMIT
CERCLA ($300 PER GROSS TON - $500,000 LIMIT)
SCHEDULE OF VESSELS: SEE ATTACHED
BLANKET WAIVER OF SUBROGATION AND ADDITIONAL INSURED.
SPUD PARGE BUYBACK ENDORSEMENT B
FOREIGN TRADE CLEAN-UP ENDORSEMENT - MEXICO & TRINIDAD
LIMITED OPA '90 CIVIL PENALTY CLAUSE - $500 DEDUCTIBLE/ACCIDENT
ANNUAL PREMIUM: $38,001.77 OPA/CERCLA
1,140.05 CIVIL PENALTY
----------
$39,141.82 10/22/98
19
147
TRANSCOASTAL MARINE SERVICES, INC.
COMMERCIAL UMBRELLA
LIMIT OPTIONS: $ 50,000,000 EXCESS OF ALL UNDERLYING COVERAGES
PREMIUM: $400,000
TERMS & CONDITIONS: $100,000 S.I.R.
FOLLOWS FORM OF UNDERLYING COVERAGES
EXCLUDES PUNITIVE DAMAGES
DROP DOWN ENDORSEMENT, REMOVING REQUIREMENT TO MAKE
REASONABLE EFFORT TO REINSTATE EXHAUSTED LIMITS
BLANKET WAIVER OF SUBROGATION
BLANKET ADDITIONAL INSURED
BLANKET 60-DAY NOTICE OF CANCELLATION
REMOVAL OF EXCLUSION FOR TREBLE & MULTIPLE DAMAGES
UNDERLYING COVERAGES AND LIMITS: DOMESTIC & FOREIGN
EMPLOYERS LIABILITY $1,000,000/1,000,000/1,000,000
MARITIME EMPLOYERS LIABILITY $1,000,000/1,000,000
GENERAL LIAB./SHIPREPAIRERS $1,000,000/2,000,000/2,000,000
AUTOMOBILE LIABILITY $1,000,000 C.S.L.
PROTECTION & INDEMNITY $1,000,000
CHARTERERS/WHARFINGERS $1,000,000
VESSEL POLLUTION/WQIS $5,000,000
SECURITY: RELIANCE NATIONAL INSURANCE COMPANY (A-:XIII) 10/8/98
BOSTON OLD COLONY/MOAC (A-XIV)
ZURICH INSURANCE COMPANY, U.S. BRANCH
20
148
TRANSCOASTAL MARINE SERVICES, INC.
COMMERCIAL PROPERTY
SPECIAL "ALL RISK" FORM, EXCLUDING QUAKE
BLANKET LIMITS, AGREED AMOUNT ENDORSEMENT (SUBJECT TO SURVEY AT
INSUROR'S EXPENSE TO DETERMINE ACCEPTABILITY OF LIMITS)
$250,000 SUBLIMIT ON FLOOD
$5,000 DEDUCTIBLE / $10,000 FOR FLOOD
INCLUDES BLANKET WAIVER OF SUBROGATION, ADDITIONAL INSURED, 60-DAY NOC
60% COINSURANCE LOSS OF RENTS
$10,000 AUTOMATIC COVERAGE FOR POLLUTION CLEAN-UP
TOTAL ALL VALUES, PER SCHEDULE: $5,174,500 REAL PROPERTY
$1,761,850 CONTENTS/PERSONAL PROPERTY
$ 162,950 DICKSON EDP EQUIPMENT
$ 284,000 LOSS OF RENTS
$ 250,000 VALUABLE PAPERS
$ 250,000 FLOOD SUBLIMIT
----------
TOTAL $7,883,300
ADJUSTABLE RATE: .28 PER $100 OF VALUE
ADDITIONAL COVERAGES: ORDINANCE OR LAW $1,000,000
BLANKET EXTRA EXPENSE $1,000,000
PREMIUM: BUILDINGS, CONTENTS, ETC. $22,073.00
ORDINANCE/EXTRA EXPENSE $ 7,000.00 FLAT
TOTAL ----------
$29,073.00
SECURITY: MOAC/BOSTON OLD COLONY (A-:XIV) 10/9/98
21
149
TRANSCOASTAL MARINE SERVICES, INC.
BUILDER'S RISK COVERAGE
LIMIT OF LIABILITY: $5,000,000 PER DISASTER
$1,000,000 TRANSIT COVERAGE
$2,000,000 FLOOD & QUAKE
$2,000,000 TRENCHING SUBLIMIT
DEDUCTIBLE: $25,000 ANY ONE JOB, INCLUDING FLOOD & QUAKE
$5,000 TRANSIT
TERMS & CONDITIONS: QUARTERLY REPORTING OF INSTALLATION RECEIPTS TO
INCLUDE VALUE OF CUSTOMERS' PIPE
MOAC REQUIRES ADVANCE NOTICE OF ANY JOB OVER
$2,000,000 IN SIZE TO BE COVERED HEREUNDER
BLANKET WAIVERS OF SUBROGATION
RATE: A) .10% - LAND
B) .20% - WATER
MINIMUM & DEPOSIT PREMIUM: $10,000.00
SECURITY: MOAC/BOSTON OLD COLONY (A-:XIV) 10/8/98
22
150
TRANSCOASTAL MARINE SERVICES, INC.
HULL BUILDER'S RISK COVERAGE
LIMIT OF LIABILITY: $3,000,000
RATE: .08 PER MONTH ON COMPLETED VALUES
DEDUCTIBLE PER ACCIDENT: 1%
REPORTING: MONTHLY
MINIMUM & DEPOSIT PREMIUM: $2,600.00
SECURITY: MOAC/BOSTON OLD COLONY (A-:XIV) 10/8/98
23
151
TRANSCOASTAL MARINE SERVICES, INC.
TRANSIT COVERAGE
LIMITS: $500,000 ON EQUIPMENT OF OTHERS BEING TRANSPORTED ABOARD
INSURED'S OWNED/OPERATED WATERCRAFT
COVERAGES: ALL RISK, INCLUDING THEFT
WATERCRAFT EXCLUSIONS DELETED
DEDUCTIBLE: $5,000
PREMIUM: $5,000.00 FLAT
SECURITY: MOAC/BOSTON OLD COLONY (A-:XIV) 10/8/98
24
152
TRANSCOASTAL MARINE SERVICES, INC.
CONTRACTORS EQUIPMENT COVERAGE
LIMITS OF LIABILITY: $15,004,844 OWNED EQUIPMENT (PER SCHEDULE)
$2,000,000 RENTAL EQUIPMENT
$1,000,000 LIFT LIABILITY, OVERWEIGHT EXCL.
DELETED
$250,000 FLOOD SUBLIMIT
DEDUCTIBLE: 2% OF VALUES, MINIMUM $1,000 AND MAXIMUM $10,000
$25,000 ON BOOM FOR RED FOX CRANE VALUED $650,000
$25,000 ON BOOM FOR HBH RENTAL CRANE VALUED $695,000
$5,000 ON RENTAL EQUIPMENT
$10,000 ON DOMESTIC & $25,000 ON FOREIGN LIFT LIABILITY
$10,000 ON FLOOD
RATES: .58% OF VALUE ON OWNED EQUIPMENT
.78% OF COST OF HIRE ON RENTAL EQUIPMENT
1.00% WITH BOOM & OVERWEIGHT COVERAGE
TERMS & CONDITIONS: WATERBORNE COVERAGE PROVIDED
ANNUAL ADJUSTMENT ON RENTAL EQUIPMENT
BLANKET WAIVER OF SUBROGATION
BLANKET ADDITIONAL INSURED
WORLDWIDE COVERAGE
60-DAY NOTICE OF CANCELLATION
BLANKET LIMITS, AGREED AMOUNT ENDORSEMENT
(SUBJECT TO SURVEY AT COMPANY EXPENSE)
PREMIUM: $87,028.00 OWNED EQUIPMENT
$5,000.00 M&D ON RENTAL EQUIPMENT
$15,000.00 FLAT ON LIFT LIABILITY
-----------
TOTAL $107,028.00
SECURITY: MOAC/BOSTON OLD COLONY (A-:XIV) 10/8/98
25
153
TRANSCOASTAL MARINE SERVICES, INC.
AIRCRAFT LIABILITY AND HULL PHYSICAL DAMAGE
AIRCRAFT INSURED: 1981 CESSNA 185 SEAPLANE, #N6860N
LOCATION: BELLE CHASSE, LA
PILOT INFORMATION: DENNIS SISUNG, OR ANY PILOT WITH 1,000 HOURS
TOTAL TIME, 350 HOURS IN SEAPLANE, AND 50 IN MAKE & MODEL.
LIMITS: $5,000,000 CSL LIABILITY
$1,000,000 SUBLIMIT PER PASSENGER
$120,000 HULL VALUE
DEDUCTIBLE: $250 NOT-IN-MOTION
$12,000 IN MOTION
INCLUDES: BLANKET WAIVER OF SUBROGATION, ADDITIONAL INSURED, AND
60-DAY NOTICE OF CANCELLATION
PREMIUM: $6,549.00 PREMIUM (25% MINIMUM EARNED)
$ 250.00 POLICY FEE
---------
$6,799.00 TOTAL
SECURITY: U.S. SPECIALITY (A+:VIII) RANGER (A-:VIII) 10/8/98
26
154
ENVIROSYSTEMS, INC. - POLLUTION & PROFESSIONAL
(GENERAL LIABILITY IS PROVIDED WITHIN THE STEADFAST
QUOTATION FOR TRANSCOASTAL)
COVERAGE FORM: CLAIMS-MADE
RETROACTIVE DATE: 7/26/93 ON POLLUTION/PROFESSIONAL
LIMIT: POLLUTION/PROFESSIONAL: $1,000,,000 OCCURRENCE/$2,000,000
AGGREGATE
DEDUCTIBLE: POLLUTION/PROFESSIONAL: $25,000
COVERAGES: ZURICH'S PROFESSIONAL ENVIRONMENTAL CONSULTANTS POLICY.
PROFESSIONAL LIABILITY; CONTRACTORS ENVIRONMENTAL IMPAIRMENT
DEFENSE FOR POLLUTION/PROFESSIONAL IS WITHIN POLICY LIMITS
ACTIONS OVER (POLLUTION LIABILITY ONLY)
CIRCUMSTANCE REPORTING WITH NO SUNSET CLAUSE
WORLDWIDE TERRITORY
BROAD FORM CONTRACTUAL INCLUDING VICARIOUS LIABILITY
BLANKET ADDITIONAL INSURED (POLLUTION LIABILITY ONLY)
SPECIFIC WAIVER OF SUBROGATION
60-DAY NOTICE OF CANCELLATION
MUTUAL PRIOR AGREEMENT ON SELECTION OF CLAIMS COUNSEL
CLEAN-UP COSTS
COMPLETE RADIOACTIVE COVERAGE, SUBJECT TO NUCLEAR EXCLUSION
FULL ASBESTOS COVERAGE
MEDIATION CREDIT
NO EXCLUSION FOR SUPERFUND
NO EXCLUSIONS FOR UNDERGROUND STORAGE TANK WORK
PRIMARY INSURANCE WORDING AS REQUIRED BY CONTRACT.
POLICY PROVIDES COVERAGE FOR WORK SUBBED OUT FROM TRANSCOASTAL
COMPANIES
COVERAGE EXCLUSIONS:
FRAUDULENT/INTENTIONAL ACTS
NON-COMPLIANCE WITH STATUTES, ETC.
CROSS LIABILITY
DISCRIMINATION
PATENT/COPYRIGHT INFRINGEMENT
EXPRESS WARRANTIES/GUARANTEES
PUNITIVE DAMAGES
WATERCRAFT/AIRCRAFT
WAR, CIVIL UNREST
PRODUCTS LIABILITY
PROPERTY DAMAGE TO THE NAMED INSURED'S WORK
PROFESSIONAL LIABILITY FOR FAULTY WORKMANSHIP/CONSTRUCTION
EXCLUDING: ANY LOSS AS A RESULT OF SERVICES OR OPERATIONS PERFORMED
AT SITES OWNED/OPERATED BY TRANSCOASTAL COMPANIES
27
155
RATES: POLLUTION/PROFESSIONAL: FLAT
ESTIMATED RECEIPTS: $1,000,000
PREMIUM: POLLUTION/PROFESSIONAL: $ 7,500.00 (FLAT, NO MINIMUM EARNED)
$ 375.00 (TAX)
----------
$ 7,875.00 (TOTAL)
SUBJECT TO: COMPLETED & SIGNED APPLICATION
AVAILABLE: SUPPLEMENTAL REPORTING PERIOD, ADDITIONAL CHARGE TO BE
NEGOTIATED.
SECURITY: STEADFAST INSURANCE COMPANY 10/14/98
(ZURICH-AMERICAN INSURANCE GROUP)
28
156
TRANSCOASTAL MARINE SERVICES, INC.
WORKERS' COMPENSATION COVERAGE
(ALL ENTITIES EXCEPT RED FOX)
COVERAGE A - WORKERS' COMPENSATION: Provides coverage for the statutory
obligation of an employer to provide benefits for employees as required by the
applicable state law or USL&H Act.
COVERAGE B - EMPLOYERS LIABILITY: Protects the insured against liability
imposed by law for injury to employees in the course of employment that is not
compensable under the Worker's Compensation section.
EMPLOYERS LIABILITY LIMIT OF LIABILITY : $1,000,000
MARITIME EMPLOYERS LIABILITY: $1,000,000
- -------------------------------------------------------------------------------
DEDUCTIBLE AND RATE OPTIONS - APPLICABLE TO STATE ACT, USL&H, & JONES ACT:
(RATES APPLY PER $100 OF PAYROLL)
97/98 LOSSES
DEDUCTIBLE RATE PAYROLL PREMIUM W/IN DEDUCT.
---------- ---- ------- ------- ------------
$ 25,000 2.1813 $30,000,000 $654,390 $236,339
$ 50,000 1.8746 $30,000,000 $562,380 $344,839
$100,000 1.597 $30,000,000 $479,100 $441,574
$150,000 1.5007 $30,000,000 $450,210 $451,374
$250,000 1.3997 $30,000,000 $419,910 $451,374
OPTION: $25,000 DEDUCTIBLE ANY ONE ACCIDENT, WITH $475,000 AGGREGATE
STOP LOSS (ADJUSTED AT 1.58% OF W.C. PAYROLL)
RATE: 2.35% OF PAYROLL = $705,029 PREMIUM
EXCROW REQUIRED FOR CLAIMS PAYMENTS IS EQUIVALENT OF THREE DEDUCTIBLES.
LETTER OF CREDIT REQUIRED CAN BE NEGOTIATED - BOTTOM END IS $100,000,
MAXIMUM OF $500,000.
ADDITIONAL COVERAGES:
- --------------------
BLANKET WAIVER OF SUBROGATION
BLANKET ALTERNATE EMPLOYER/BORROWED SERVANT
60-DAY NOTICE OF CANCELATION
USL&H, GULF OF MEXICO AND OUTER CONTINENTAL SHELF ACT ENDORSEMENTS
PAYROLL REPORTED FOR STATES OF LA, TX, CA, AL, MS
OTHER STATES ENDORSEMENT
COVERAGE FOR DOMESTIC EMPLOYEES WORKING TEMPORARILY ABROAD
VOLUNTARY COMPENSATION, FOREIGN VOLUNTARY COMPENSATION
JONES ACT, INCLUDING: IN REM, TWM&C. DEATH ON THE HIGH SEAS
NO EXCLUSION FOR PUNITIVE DAMAGES
NO EXCLUSION FOR OCCUPATIONAL DISEASE
STOP-GAP EMPLOYERS LIABILITY
SECURITY: ZURICH INSURANCE COMPANY, J.S. BRANCH 10/23/98
ZURICH-AMERICAN INSURANCE GROUP (BEST RATING A+:XIV)
9
157
TRANSCOASTAL MARINE SERVICES, INC.
WORKERS' COMPENSATION COVERAGE
THE RED FOX COMPANIES OF NEW IBERIA
COVERAGE A - WORKERS' COMPENSATION: Provides coverage for the statutory
obligation of an employer to provide benefits for employees as required by the
applicable state law or USL&H Act.
COVERAGE B - EMPLOYERS LIABILITY: Protects the insured against liability
imposed by law for injury to employees in the course of employment that is not
compensable under the Worker's Compensation section.
EMPLOYERS LIABILITY LIMIT OF LIABILITY: $1,000,000
MARITIME EMPLOYERS LIABILITY: $25,000
- --------------------------------------------------------------------------------
DEDUCTIBLE: NIL - FIRST DOLLAR
PREMIUM DEVELOPMENT:
CLASSIFICATION CODE PAYROLL RATE PREMIUM
- --------------------------------------------------------------------
IRON WORKS 3040 $5,506,000 4.3814 $241,240
SHIPREPAIR/CONVERSION 6872F $4,848,000 6.7314 326,338
SALESPERSONS 8742 $ 247,000 .4403 1,088
CLERICAL 8810 $1,270,000 .2125 2,699
INCREASED EMPLOYERS LIABILITY LIMITS 2.8% 15,998
MARITIME MINIMUM PREMIUM 4,000
EXPENSE CONSTANT 150
--------
TOTAL ESTIMATED ANNUAL PREMIUM $591,513
DEPOSIT PREMIUM: $ 30,000
LESS CURRENT DEPOSIT: -$ 20,000
ADDITIONAL DEPOSIT DUE: $ 10,000
ADDITIONAL COVERAGES:
BLANKET WAIVER OF SUBROGATION
BLANKET ALTERNATE EMPLOYER
30-DAY NOTICE OF CANCELLATION
USL&H, GULF OF MEXICO AND OUTER CONTINENTAL SHELF ACT ENDORSEMENTS
LIMITED OTHER STATES ENDORSEMENT
COVERAGE FOR DOMESTIC EMPLOYEES WORKING TEMPORARILY ABROAD
JONES ACT, INCLUDING: IN REM, TWM&C, DEATH ON THE HIGH SEAS
NO EXCLUSION FOR OCCUPATIONAL DISEASE
CANNOT PROVIDE VOLUNTARY COMPENSATION & STOP GAP ENDORSEMENTS
SECURITY: LOUISIANA WORKERS' COMPENSATION CORP. (B++:VIII) 10/8/98
10
158
SCHEDULE 7.23
HEDGING TRANSACTIONS
NONE
159
SCHEDULE 7.25
MATERIAL DEBT AGREEMENTS
The Borrowers and their Subsidiaries have the following material Debt
Agreements:
- -----------------------------------------------------------------------------------
LENDER COLLATERAL/LIEN
- -----------------------------------------------------------------------------------
1. MR. & MRS. MARCUS DICKSON 3 1/2 acres of land @
MORTGAGE-Dickson GMP 4001 Woodland Highway
$313,786 OUTSTANDING AT 11-30-98 New Orleans, LA
2. TRANSAMERICA INSURANCE FINANCE- Unsecured
TransCoastal Marine Services, Inc.
$2,042,730 OUTSTANDING AT 11-30-98
3. BANKONE-TransCoastal Marine Accounts Receivables and Certain
Services, Inc. Equipment
$15,000,000 REVOLVER IN PLACE AT
CLOSING
4. ENRON CAPITAL & TRADE RESOURCES Subordinated lien on all Equipment and
CORP.-TransCoastal Marine Services, Accounts Receivables
Inc.
$20,000,000 SUBORDINATED DEBT IN
PLACE AT CLOSING
5.
(INTENTIONALLY DELETED)
6. WOODSON FAMILY-Woodson Company Unsecured
$1,091,907 OUTSTANDING AT 11-30-98
7. NEW COURT FINANCIAL-Dickson GMP Forklift
$73,513 OUTSTANDING AT 11-30-98
8. NEW COURT FINANCIAL-DICKSON GMP Forklift
$75,298 OUTSTANDING AT 11-30-98
9. LCA FINANCIAL-DICKSON GMP 990 CFM Air Compressor
Dickson GMP $46,853 OUTSTANDING AT
11-30-98
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
160
SCHEDULE 9.2
DEBT AGREEMENTS AND LIENS
The Borrowers and their Subsidiaries have the following material Debt
Agreements:
- -----------------------------------------------------------------------------------
LENDER COLLATERAL/LIEN
- -----------------------------------------------------------------------------------
1. MR. & MRS. MARCUS DICKSON 3 1/2 acres of land @
MORTGAGE-Dickson GMP 4001 Woodland Highway
$313,786 OUTSTANDING AT 11-30-98 New Orleans, LA
2. TRANSAMERICA INSURANCE FINANCE- Unsecured
TransCoastal Marine Services, Inc.
$2,042,730 OUTSTANDING AT 11-30-98
3. BANKONE-TransCoastal Marine Accounts Receivables and Certain
Services, Inc. Equipment
$15,000,000 REVOLVER IN PLACE AT
CLOSING
4. ENRON CAPITAL & TRADE RESOURCES Subordinated lien on all Equipment and
CORP.-TransCoastal Marine Services, Accounts Receivables
Inc.
$20,000,000 SUBORDINATED DEBT IN
PLACE AT CLOSING
5.
(INTENTIONALLY DELETED)
6. WOODSON FAMILY-Woodson Company Unsecured
$1,091,907 OUTSTANDING AT 11-30-98
7. NEW COURT FINANCIAL-Dickson GMP Forklift
$73,513 OUTSTANDING AT 11-30-98
8. NEW COURT FINANCIAL-DICKSON GMP Forklift
$75,298 OUTSTANDING AT 11-30-98
9. LCA FINANCIAL-DICKSON GMP 990 CFM Air Compressor
Dickson GMP $46,853 OUTSTANDING AT
11-30-98
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------