EXHIBIT 10.5
RECONCILIATION AGREEMENT
This Reconciliation Agreement made and entered into as of the 14th day of
August, 1996 by and between Seal Fleet, Inc., a Nevada corporation ("Seal
Fleet"), Three R Trusts ("Three R Trusts"), Xxxx Seal Partners, Ltd., Bengal
Seal Partners, Ltd., Indian Seal Partners, Ltd., Baffin Seal Partners, Ltd.,
Baltic Seal Partners, Ltd., each a Texas limited partnership (collectively the
"Partnerships").
Whereas, Seal Fleet, the Partnerships and Three R Trusts have entered into
Asset Purchase Agreements (the "Asset Purchase Agreements") with Hvide Marine
Incorporated of even date herewith;
Whereas Seal Fleet and/or its wholly owned subsidiaries serve as vessel
manager of certain vessels (the "Trust Vessels") owned by the Partnerships on
behalf of the Three R Trusts;
Whereas Seal Fleet, the Partnerships and Three R Trusts desire to provide
for reconciliation of certain intercompany accounts relating to the operation of
the Trust Vessels.
Now, therefore, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the parties
agree as follows:
1. Reconciliation of Accounts.
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(a) On the closing date of the Asset Purchase Agreements (the "Closing
Date"), Seal Fleet, the Partnership and Three R Trusts shall reconcile their
intercompany accounts by payment of an amount based upon: (i) the amount Seal
Fleet has billed customers for services rendered by the Trust Vessels, and has
either not collected or has collected and has not been applied to Trust Vessel
expenses or disbursed to the Partnerships or Three R Trusts, and (ii) the amount
of expenses of the Trust Vessels (including Seal Fleet's management fees) paid
out by Seal Fleet (carried on Seal Fleet's books as Notes and Accounts
Receivable: Related Party) that has not been reimbursed by the Partnerships or
Three R Trusts. If (i) is greater than (ii), Seal Fleet shall pay the
Partnership or Three R Trusts the difference on the Closing Date. If (i) is less
than (ii), the Partnerships or Three R Trusts shall pay Seal Fleet the
difference on the Closing Date.
(b) On the day 60 days following the Closing Date (the "Final
Reconciliation Date"), Seal Fleet, the Partnerships and Three R Trusts shall
reconcile their intercompany accounts by payment of an amount based upon: (i)
the amount Seal Fleet has collected during the period from the Closing Date to
the Final Reconciliation Date from customers for services rendered by the Trust
Vessels prior to the Closing Date but were not billed as of the Closing Date;
(ii) the amount of expenses of the Trust Vessels (including Seal Fleet's
management fees) paid out by Seal Fleet during the period from the Closing Date
to the Final Reconciliation Date; and (iii) the amount that Seal Fleet had
billed customers as of the Closing Date for services rendered by the Trust
Vessels that remains uncollected as of the Final Reconciliation Date. If (i) is
greater than (ii) plus (iii), Seal Fleet shall pay the Partnerships or Three R
Trusts the
difference on the Final Reconciliation Date. If (ii) plus (iii) is greater than
(i), the Partnerships or Three R Trusts shall pay Seal Fleet the difference on
the Final Reconciliation Date.
(c) On the Final Reconciliation Date, Seal Fleet shall assign to the
Partnerships or Three R Trusts any accounts receivable from customers for
services rendered by the Trust Vessels prior to the Closing Date and uncollected
by the Final Reconciliation Date. Following the Final Reconciliation Date, the
Partnerships or Three R Trusts shall be solely responsible for collection and
payment of accounts relating to the operation of the Trust Vessels, and there
shall be no further payments between Seal Fleet and Three R Trusts and/or the
Partnerships relating to such accounts; provided, however, that Seal Fleet shall
cooperate with the Partnerships and Three R Trusts in connection with the
collection and payment of such accounts.
2. Collections. Prior to the Final Reconciliation Date, Seal Fleet shall
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use its reasonable efforts to collect accounts receivable resulting from
services rendered by the Trust Vessels.
3. Notices. All notices that may be given under any provision of this
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Agreement shall be deemed to have been given, and duly given, when:
(a) Served by: (i) facsimile or telex to be confirmed by certified,
first class mail, (ii) personal delivery, (iii) mailed by certified, first class
mail, return receipt requested, postage prepaid, or (iv) forwarded by Federal
Express, Airborne Express, United Parcel Service or other established and
reputable courier service; and
(b) Properly addressed to Seal Fleet, Three R Trusts, or the
Partnerships, as the case may be, as follows:
(i) In case of notice to Seal Fleet:
c/o Seal Fleet, Inc.
0000 Xxxxxx X
Xxxxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000
(ii) In case of notice to Three R Trusts:
Three R Trusts
c/o Xxxxx X. Xxxx, Xx., Trustee
Xxxxx, Herz & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx 00000
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(iii) In the case of notice to the Partnership:
Three R Markets, Inc.
702 Xxxxx National Bank Building
0000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxx 00000
4. Severability. If any provision of this Agreement is held to be
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invalid or unenforceable, in any respect, such invalidity or unenforceability
shall not affect or impair the validity or enforceability of the remaining
provisions of this Agreement, but, to the contrary, this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein.
5. Modification; Amendment. This Agreement may only be modified or
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amended only in writing by an instrument executed by each party hereto.
6. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original, but all which
together shall constitute but one in the same instrument.
7. Assignment; Survival. This Agreement may not be assigned by either
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party except upon the prior written consent of the other party.
8. Governing Law. This Agreement shall be governed by the laws of the
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State of Texas and, when applicable, the general maritime law of the United
States.
9. Incorporation; Entire Agreement. This Agreement constitutes the
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entire understanding of the parties and supersedes any and all other
understandings or agreements, written or oral, with respect to the subject
matter hereof.
10. No Third-Party Beneficiaries. This Agreement is for the sole benefit
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of the parties hereto and their permitted assigns, and nothing herein expressed
or implied shall give or be construed to give to any person or entity, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.
11. Non-Liability. The trustee of the Three R Trusts shall not be charged
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personally or held individually contractually liable under any term or provision
of this Agreement, or of any supplement, modification or amendment to this
Agreement.
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In Witness Whereof, the parties have executed this Agreement on the date
first hereinabove written.
Seal Fleet, Inc.:
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President
Three R Trusts:
By: /s/ Xxxxx X. Xxxx, Xx.
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Xxxxx X. Xxxx, Xx.
Trustee
Xxxx Seal Partners, Ltd.:
By: /s/ Xxxx Xxxxxxxxx
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General Partner
Bengal Seal Partners, Ltd.:
By: /s/ Xxxx Xxxxxxxxx
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General Partner
Indian Seal Partners, Ltd.:
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
General Partner
Baffin Seal Partners, Ltd.:
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
General Partner
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Baltic Seal Partners, Ltd.:
By: /s/ Xxxx Xxxxxxxxx
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General Partner
Three R Trusts:
By:
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Xxxxx X. Xxxx, Xx.
Trustee
Xxxx Seal Partners, Ltd.:
By: Three R Markets, Inc.
General Partner
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx,
President
Bengal Seal Partners, Ltd.:
By: Three R Markets, Inc.
General Partner
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Xxxx Xxxxxxxxx,
President
Indian Seal Partners, Ltd.:
By: Three R Markets, Inc.
General Partner
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Xxxx Xxxxxxxxx,
President
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Baffin Seal Partners, Ltd.:
By: Three R Markets, Inc.
General Partner
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx,
President
Baltic Seal Partners, Ltd.:
By: Three R Markets, Inc.
General Partner
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx,
President
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