-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fat3gmhNv3eS4l5SxXqkvVuH759KGvXP+HLrI7eCp+tJO9+gt5R0M9nzn7mBhhew ojRJCii7xBWBJkzuHm5I6w== 0000925328-98-000017.txt : 19980226 0000925328-98-000017.hdr.sgml : 19980226 ACCESSION NUMBER: 0000925328-98-000017 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980213 ITEM INFORMATION: FILED AS OF DATE: 19980225 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HVIDE MARINE INC CENTRAL INDEX KEY: 0000922341 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 650524593 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-28732 FILM NUMBER: 98549141 BUSINESS ADDRESS: STREET 1: 2200 ELLER DR BUILDING 27 STREET 2: PO BOX 13038 CITY: FORT LAUDERDALE STATE: FL ZIP: 33316 BUSINESS PHONE: 3055232200 MAIL ADDRESS: STREET 1: 2200 ELLER DRIVE BLDG 27 STREET 2: 2200 ELLER DRIVE BLDG 27 CITY: FT LAUDERDALE STATE: FL ZIP: 33316 8-K/A 1 FORM 8-K/A FOR HVIDE MARINE INCORPORATED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (date of earliest event reported): February 13, 1998 Hvide Marine Incorporated (Exact name of registrant as specified in its charter) Florida 0-28732 65-0524593 (State of (Commission File No.) (IRS Employer Incorporation) Identification No.) 2200 Eller Drive, P.O. Box 13038 Fort Lauderdale, Florida 33316 (Address of principal executive offices, including zip code) (954) 523-2200 (Registrant's telephone number, including area code) Item 2. Acquisition or Disposition of Assets On February 13, 1998, the Company substantially completed the acquisition of a diversified fleet of 37 offshore energy support vessels from Care Offshore, Inc. and related parties ("Care"). The fleet is comprised of 23 deepwater-capable anchor handling tug/supply boats, seven anchor handling tugs, three supply boats, three crew boats, and one survey vessel. As currently deployed, the fleet consists of 21 vessels offshore West Africa, eight vessels offshore Southeast Asia, three vessels in the North Sea, two vessels offshore Argentina, two vessels offshore South Africa, and one vessel in the Arabian Gulf. The Company is currently operating 11 of the vessels pursuant to bareboat charters pending their acquisition pursuant to the exercise of purchase options, which it expects to occur during the second quarter of 1998. The Company has entered into a management agreement with an affiliate of Care pursuant to which the affiliate will continue to manage the operations of the fleet, in exchange for a per diem management fee per vessel, for a minimum term of six months that may be extended up to an additional 30 months at the Company's option. Of the $289.7 million purchase price, $271.1 had been paid as of February 13, and the remainder is payable upon the exercise of the purchase options. The amount paid through February 13 was funded with cash drawn under the Company's credit facility with BancBoston, N.A., as Syndication Agent and Citibank, N.A., as Administrative Agent, and the Company anticipates funding the balance with additional borrowings. - 2 - Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (A) Pro Forma Financial Information Pro Forma Condensed Consolidated Balance Sheet (September 30, 1997) Pro Forma Condensed Consolidated Statement of Operations (September 30, 1997) Pro Forma Condensed Consolidated Statement of Operations (December 31, 1996) (B) Financial Statements of Business Acquired The financial statements of the business acquired were previously reported in the Company's registration statement on Form S-3 (File No. 333-42039) filed with the Securities and Exchange Commission on December 11, 1997. (C) Exhibits Purchase Agreement between Hvide Marine Incorporated and Care Offshore, Inc. - 3 - PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET September 30, 1997 (unaudited)
Company Company Pro Forma as Pro Forma Condensed Reported Bay Adjustments(1) Consolidated (dollars in thousands) ASSETS Cash and cash equivalents...................... $ 7,790 $ 2,814 $ (1,700) $ 8,904 Accounts receivable, net....................... 30,617 2,104 32,721 Inventory, spares and supplies................. 7,928 285 8,213 Prepaid expenses and other..................... 10,990 782 11,772 ------------ ------------- -------------- ------------ Total Current Assets........................ 57,325 5,700 (1,415) 61,610 Property, net.................................. 358,939 26,760 210,314 596,013 Goodwill, net.................................. 8,233 102,194 110,427 Deferred costs, net............................ 5,806 5,802 11,608 Investment in affiliates....................... 1,537 1,537 Other.......................................... 1,427 952 2,379 ------------ ------------- -------------- ------------ Total Assets................................ $ 433,267 $ 33,412 $ 316,895 $ 783,574 ============ ============= ============== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of debt..................... $ 6,847 $ 924 $ 30,724 $ 38,495 Current obligation under capital lease......... 1,534 1,534 Accounts payable............................... 11,214 97 11,311 Other.......................................... 13,368 866 14,234 ------------ ------------- -------------- ------------ Total Current Liabilities................... 32,963 1,887 30,724 65,574 Long-term debt................................. 47,164 19,689 295,459 362,312 Obligations under capital lease................ 6,312 6,312 Deferred income taxes.......................... 13,795 1,748 15,543 Other liabilities.............................. 2,161 800 2,961 ------------ ------------- -------------- ------------ Total Liabilities........................... 102,395 24,124 326,183 452,702 Company-obligated mandatorily redeemable preferred securities issued by a consolidating subsidiary.................... 115,000 115,000 Minority partners' equity...................... 818 818 Common stock, paid-in capital retained earnings and treasury stock................. 215,054 9,288 (9,288) 215,054 ------------ ------------- -------------- ------------ Total stockholders' equity..................... 215,054 9,288 (9,288) 215,054 ------------ ------------- -------------- ------------ Total liabilities and equity................... $ 433,267 $ 33,412 $ 316,895 $ 783,574 ============ ============= ============== ============
See notes to pro forma condensed consolidated financial statements. - 4 - PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the nine months ended September 30, 1997 (unaudited)
Company Pro Forma Company as GMMOS Pro Forma Condensed Reported (a) Bay Care Adjustments Consolidated (dollars in thousands) Revenues......................... $ 142,853 $ 7,035 $ 10,787 $ 45,036 $ 4,143 (2) $ 209,854 Operating expenses............... 77,134 3,083 4,666 22,520 1,058 (2) 108,461 Overhead expenses................ 17,568 296 2,854 6,265 (3,237) (2) 23,746 Depreciation and amortization.... 13,021 2,288 1,505 5,296 8,385 (3) 30,495 ---------- ---------- ---------- ---------- ----------- ------------- Income (loss) from operations.... 35,130 1,368 1,762 10,955 (2,063) 47,152 Net interest..................... 4,529 1,200 4,433 13,036 (4) 23,198 Other income (expense): Minority interest and equity in subsidiaries.............. (1,807) (1,807) Other.......................... (286) 832 (1,392) (846) ---------- ---------- ---------- ---------- ----------- ------------- Total other income (expense)................... (2,093) 832 (1,392) (2,653) ---------- ---------- ---------- ---------- ----------- ------------- Income before provision for income taxes................... 28,508 1,368 1,394 5,130 (15,099) 21,301 Provision (benefit) for income taxes.......................... 10,662 584 (3,152) (5) 8,094 ---------- ---------- ---------- ---------- ----------- ------------- Net income (loss) before non- recurring items directly attributable to the transaction $ 17,846 $ 1,368 $ 810 $ 5,130 $ (11,947) $ 13,207 ========== ========== ========== ========== =========== ============ Earnings (loss) per common share.......................... $ 1.19 $ 0.88 ============= ============= Weighted average number of common shares and common share equivalents outstanding.................... 14,973,772 15,048,027 ============= ============= Earnings (loss) per common share assuming full dilution (b)................... $ 1.16 $ 0.87 ============= ============= Weighted average number of common shares assuming full dilution.................. 16,476,346 16,550,601 ============= =============
(a) Amounts represent results of operation for the three month period ended March 31, 1997 for GMMOS. (b) For the purpose of calculating earnings per common share assuming full dilution, net income before non-recurring items directly attributable to the transaction has been increased for interest expense of $1,246,000 related to the assumed conversion of convertible preferred securities of a subsidiary trust. See notes to the pro forma condensed consolidated financial statements. - 5 - NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Adjustments to reflect the purchase price allocation of the Bay and Care acquisitions
Bay Care Total Cash............................................ $ $ (1,700) $ (1,700) Inventory, spares and supplies 285 285 Deferred costs.................................. 5,802 5,802 Property, net................................... 14,664 195,650 210,314 Goodwill, net................................... 12,548 89,646 102,194 ------------- ------------- -------------- $ 27,212 $ 289,683 $ 316,895 ============= ============= ============== Current maturities of debt...................... $ (313) $ 31,037 $ 30,724 Long-term debt.................................. 36,813 258,646 295,459 Common stock, paid-in capital retained earnings and treasury stock.................. (9,288) (9,288) ------------- ------------- -------------- $ 27,212 $ 289,683 $ 316,895 ============= ============= ==============
(2) Reflects the adjustments for the historical results of operations for the period from April 1, 1997 to May 23, 1997 for the GMMOS acquisition. Historical operating and overhead expenses are adjusted for drydocking expense to reflect the Company's deferral method; adjustments to reflect incremental corporate overhead and management fees and the reduction of historical overhead expenses pursuant to contractually agreed upon management rates.
GMMOS Bay Care Total Revenues: Historical revenues.......... $ 4,143 $ $ $ 4,143 ============= ============= ============= ============== Operating Expenses: Historical operating expenses................... $ 1,816 1,816 Drydocking................... (758) (758) ------------- ------------- ------------- -------------- $ 1,816 $ $ (758) $ 1,058 ============= ============= ============= ============== Overhead Expenses: Historical overhead expenses................... $ 174 $ $ $ 174 Management and consulting fees............ (413) (2,998) (3,411) ------------- ------------- ------------- -------------- $ 174 $ (413) $ (2,998) $ (3,237) ============= ============= ============= ==============
- 6 - (3) The adjustment to depreciation and amortization is comprised of: Depreciation adjustment to reflect the historical depreciation for the period from April 1, 1997 to May 23, 1997 for GMMOS...................................... $ 1,347 Depreciation adjustment to reflect the Company's policies applied to the acquired cost of GMMOS assets..................................................... (1,374) Depreciation adjustment to reflect the Company's policies applied to the acquired cost of Bay assets....................................................... (621) Depreciation adjustment to reflect the Company's policies applied to the acquired cost of Care assets...................................................... 5,200 Amortization of goodwill over the estimated economic life of 20 years for Bay......................................................................... 471 Amortization of goodwill over the estimated economic life of 20 years for Care........................................................................ 3,362 ----------- $ 8,385 ===========
(4) The adjustment to net interest is comprised of: Interest expense on note payable issued pursuant to GMMOS acquisition.................... 238 Interest expense on additional borrowings pursuant to GMMOS acquisition.................. 1,086 Interest expense on additional borrowings pursuant to Bay acquisition.................... 2,087 Interest expense on additional borrowings pursuant to Care acquisition................... 9,965 Reduction of interest expense due to repayment of Bay term loan at acquisition date......................................................................... (340) ----------- $ 13,036 ===========
(5) To adjust pro forma income taxes to combined federal and state statutory rates.................................................................................... $ (3,152) ===========
- 7 - PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the year ended December 31, 1996 (Unaudited)
Company IPO Pro Forma Company as Acquisitions Pro Forma Condensed Reported (a) GMMOS Bay Care Eliminations Adjustments Consolidated (dollars in thousands) Revenues.................. $ 109,356 $ 51,702 $ 21,733 $ 12,452 $43,235 $ (27,548) (1) $ 4,762 (2) $ 215,692 Operating expenses........ 63,777 43,717 10,767 5,749 28,218 (27,548) (1) 4,202 (2) 128,882 Overhead expenses......... 14,979 1,132 1,244 3,360 7,132 (3,042)(2) 24,805 Depreciation and amortization............ 9,830 2,880 6,390 1,742 5,897 11,470 (3) 38,209 ---------- --------- -------- -------- ------- --------- -------- --------- Income (loss) from operations.............. 20,770 3,973 3,332 1,601 1,988 (7,868) 23,796 Net interest.............. 11,631 2,022 1,213 4,491 18,615 (4) 37,972 Other income (expense): Minority interest and equity in subsidiaries........ 894 (66) 828 Other................... (457) 857 (1,480) (1,080) ---------- --------- -------- -------- ------- --------- -------- --------- Total other income (expense)......... 437 791 (1,480) (252) ---------- --------- -------- -------- ------- --------- -------- --------- Income before provision for income taxes and extraordinary item...... 9,576 1,951 3,332 1,179 (3,983) (26,483) (14,428) Provision (benefit) for income taxes............ 3,543 (272) 450 (4,921)(5) (1,200) ---------- --------- -------- -------- ------- --------- -------- --------- Net income (loss) before non-recurring items directly attributable to the transaction............. $ 6,033 $ 2,223 $ 3,332 $ 729 $(3,983) $ $(21,562) $ (13,228) ========== ========= ======== ======== ======= ========= ======== ========= Earnings (loss) per common share................... $ 1.04 $ (2.22) ========== ========== Weighted average number of common shares and common share equivalents outstanding............. 5,818,076 5,959,836 ========== ========== Earnings (loss) per common share assuming full dilution.......... $ 0.99 $ (1.87) ========== ========== Weighted average number of common shares and common share equivalents outstanding assuming full dilution 6,644,963 6,786,723 ========== ==========
(a) Amounts represent the 1996 results of operations for OMI Chemical Carriers, Seal Fleet, GBMS, Royal Runner and OSTC as reported in the Company's S-1 of January 28, 1997. (b) For the purpose of calculating earnings per common share assuming full dilution, net income before non-recurring items directly attributable to the transaction has been increased for interest expense of $515,000 related to the assumed conversion of a portion of the Junior Notes into shares of Common Stock. See notes to pro forma condensed consolidated financial statements. - 8 - NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Elimination of historical revenue and expense associated with OSTC charter hire of vessels from Hvide and OMI..................................................... $ 27,548 ===========
(2) Reflects the adjustments for the historical results of operations for the period from July 1, 1996 to August 14, 1996 for the IPO acquisitions. Historical operating and overhead expenses are adjusted for insurance expense based upon quotations received from the Company's insurance underwriters; adjustments to drydocking expense to reflect the Company's deferral method; elimination of operating lease expense on acquired IPO vessels that were financed by Hvide; adjustments to reflect incremental corporate overhead and management fees and reduction of historical overhead expenses pursuant of contractually agreed upon management rates.
IPO Acquisitions Bay Care Total Revenues: Historical revenues...................... $ 4,762 $ $ $ 4,762 ============ ========= =========== =========== Operating Expenses: Historical operating expenses............ $ 2,364 $ $ $ 2,364 Insurance................................ (352) (352) Maintenance & Repair..................... 410 410 Drydocking............................... 1,764 771 2,535 Operating lease expense.................. (755) (755) ------------ --------- ----------- ----------- $ 3,431 $ $ 771 $ 4,202 ============ ========= =========== =========== Overhead Expenses: Historical overhead expenses............. $ 145 $ $ $ 145 Salaries and benefits.................... 186 186 Management and consulting fees........... (550) (2,533) (3,083) Other.................................... (290) (290) ------------ --------- ----------- ----------- $ 41 $ (550) $ (2,533) $ (3,042) ============ ========= =========== ===========
(3) The adjustment to depreciation and amortization is comprised of: Depreciation adjustment to reflect the historical depreciation for the period from July 1, 1996 to August 14, 1996 for the IPO acquisitions $ 754 Depreciation adjustment to reflect the Company's policies applied to the acquired cost of the vessels: 1996 acquisitions................................................................. 1,398 GMMOS............................................................................. (3,376) Bay............................................................................... (491) Care.............................................................................. 8,098 ----------- 6,383
- 9 - Amortization adjustment related to deferred loan costs for the IPO acquisitions............................................................................. (22) Amortization of goodwill over the estimated economic life of 20 years for Bay......................................................................... 627 Amortization of goodwill over the estimated economic life of 20 years for Care........................................................................ 4,482 ----------- 5,087 $ 11,470 ===========
(4) The adjustment to net interest is comprised of: Historical interest for the period from July 1, 1996 to August 14, 1996 for IPO acquisitions.................................................................... $ 2,146 Interest expense on assumed Title XI debt................................................ (2,352) Interest expense on additional borrowings pursuant to the IPO acquisitions............................................................................ 1,116 Reduction of interest expense due to the repayment of Junior Notes in conjunction with the IPO................................................................ (1,460) Reduction of interest expense due to the repayment of Senior Notes in conjunction with the IPO................................................................ (1,167) Reduction of interest expense due to the repayment of other subordinated notes in conjunction with the IPO....................................................... (85) Commitment fee on acquisition line of credit in conjunction with the IPO..................................................................................... 63 Interest expense on note payable issued pursuant to GMMOS acquisition............................................................................. 608 Interest expense on additional borrowings pursuant to GMMOS acquisition............................................................................. 2,757 Interest expense on additional borrowings pursuant to Bay acquisition.................... 2,783 Interest expense on additional borrowings pursuant to Care acquisition................... 14,420 Reduction of interest expense due to the repayment of Bay term loan at acquisition date........................................................................ (214) ----------- $ 18,615 ===========
(5) Adjustment for historical income taxes for the period from July 1, 1996 to August 14, 1996.......................................................................... $ (258) To adjust pro forma income taxes to combined federal and state statutory rates................................................................................... (4,663) ----------- $ (4,921) ===========
- 10 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Hvide Marine Incorporated By: /S/ GENE DOUGLAS Gene Douglas Vice President-Legal, General Counsel and Secretary Date: February 25, 1998 - 11 - EX-10.1 2 PURCHASE AGREEMENT This Agreement is made the BETWEEN: (1) HVIDE MARINE INCORPORATED of Fort Lauderdale, Florida, United States of America (hereinafter called "the Buyers") and (2) CARE OFFSHORE INC. of 80 Broad Street, Monrovia, Liberia (hereinafter called "COI") for itself as Bareboat Charterer with purchase option on the Vessels numbered 16 to 29 in Schedule A and as purchaser of the Vessels numbered 32 and 33 in Schedule A and as agents for the Owners numbered 1 - 15 in Schedule A (hereinafter called "the Owners") and as agent for Care Inc. as the Bareboat Charterers of the Vessels numbered 30 and 31 in Schedule A (hereinafter called "Care Inc."). COI, Care Inc. and the Owners are hereinafter together called "the Sellers". WHEREAS: (1) The Owners are the owners of the St Vincent and the Grenadines, or Cypriot flag vessel listed against their name in Schedule A ("the Owned Vessels"). (2) COI is the Bareboat Charterer of each of the Vessels listed against its name in Schedule A (the "Bareboat Chartered Vessels") and currently has the legal right to acquire title to each such Vessel subject to the terms of the Bareboat Charterer's purchase options and are presently negotiating the purchase of MV "DEA SUPPLIER" Bahamian flag DNV 09985 to be renamed MV "RED GREBE" and THE "REM CONTEST" BV No 922Y74 to be renamed MV "RED CORMORANT" ("the New Vessels"). (3) Care Inc. is the Bareboat Charterer of each of the Vessels listed against its name in Schedule A and currently has the legal right to acquire title to each such Vessel subject to the terms of the Bareboat Charter purchase option. (4) The Owned Vessels, the Bareboat Chartered Vessels and the New Vessels are hereinafter called "the Vessels". (5) COI and Care Inc. wish to exercise its purchase options and COI, Care Inc. and the Owners wish to sell the Vessels owned by the Owners and bareboat chartered by COI or to be owned by COI and Care Inc. (hereinafter called "the Vessels") to the Buyers and the Buyers wish to purchase the Vessels upon the terms and conditions as hereinafter appear. 1 (6) Sosema S.A. is at the date hereof the manager of the Vessels on behalf of the Owners COI and Care Inc. IT IS HEREBY AGREED: 1. SUBJECT This Agreement is subject to the Buyers carrying out a reasonable investigation of the chartering, crewing, management agency arrangements class records and outstanding tenders affecting the Vessels and such other enquiries in relation to the Vessels as the Buyers consider appropriate. In the event of the Buyers not being satisfied with any aspect of their enquiries and investigation they shall give full details to the Sellers. The Buyers shall confirm in writing or by fax their satisfaction of this condition by 28 November 1997. Such confirmation shall be deemed to have been given upon the expiration of 28 November 1997 if no matter of concern substantially affecting the value of the transaction has been specified to the Sellers. 2. MEMORANDA OF AGREEMENT Concurrently with the signing of this Agreement, the Buyers shall sign Memoranda of Agreement with COI, Care Inc. and each of the Owners with respect to each of the Vessels. The Memorandum of Agreement for the New Vessels shall be subject to acquisition by COI or their nominee. The Buyers shall acquire no other assets or property, including any goodwill, tangibles or contractual rights of the Sellers, land base facilities, employees, distribution systems, customers, operating rights or production techniques of the Sellers save as set out herein and in each Memorandum of Agreement save that on delivery of each Vessel the Sellers shall deliver to the Buyers the Vessel's technical manuals. 3. PURCHASE PRICE In consideration for the transfer of title to and delivery of the Vessels, the Buyers shall pay to the Sellers in aggregate the sum of US$240,000,000 in cash and a number of shares of the common stock of the Buyers fully paid and non-assessable, class 'A' Common Stock par value US$0.001 per share ("the Common Stock") having a market value of US$25,000,000. The cash and Common Stock will be apportioned between the Sellers as set out in Schedule A. For the purpose of this Agreement, the market value of the Common Stock shall mean the closing price of the Common Stock on the NASDAQ 2 National Market on the trading day immediately preceding the announcement of the execution of this Agreement. 4. DEFINITE SALE Upon signing this Agreement each Memorandum of Agreement for the sale of each Vessel will be final and binding in accordance with the terms set out in each Memorandum of Agreement with the exception of those for the New Vessels. 5. PROVISION OF INFORMATION Prior to and after delivery of each Vessel, the Sellers will furnish the Buyers on a timely basis such information concerning each Vessel and its operation as the Buyers may reasonably request, with the exception of the beneficial ownership of the Sellers' shares. Prior to and after the delivery of each Vessel the Sellers will furnish the Buyers on a timely basis all financial information for the current year as Buyers may reasonably request including the right to conduct at the expense of Buyers any independent audit of the operating results for the current year. The Buyers agree that they will hold in complete confidence all information and any documents obtained as a result of this investigation and information supplied by the Sellers and in the event of this Agreement being terminated, the Buyers agree that all documents received by the Buyers shall be promptly returned to the Sellers. All documents and information provided by the Sellers shall remain the property of the Sellers and shall not be copied distributed or shown to any third party or used by the Buyers other than in connection with their investigation as provided in this clause. The Sellers will not unreasonably withhold consent to the disclosure of any information to any governmental authority or in connection with its financing of the transaction contemplated by this Agreement. The completion or non completion of any audit shall not affect this Agreement or the Memoranda of Agreement in any way. Prior to the Closing Date, the information shall be supplied by the Sellers to the Buyers without charge. After the Closing Date, the Buyers will reimburse the Sellers for all costs and expenses incurred in supplying historical financial information requested. 6. CARE WARRANTIES COI warrants that: 6.1 the details and facts described in Recitals (1), (2) and (3) of this Agreement are true, complete and accurate; 6.2 the Sellers are corporations duly incorporated, validly existing and in good standing under the laws of their respective jurisdictions of incorporation and the Sellers have all requisite power and authority to execute and deliver this Agreement and the other agreements, certificates and instruments contemplated hereby. 3 6.3 The execution, delivery and performance of this Agreement and the other agreements, certificates and instruments contemplated hereby and the consummation of the transactions contemplated hereby have been duly authorised and approved by all requisite corporate action on the part of the Sellers. This Agreement and, when executed and delivered, each other agreement, certificate and instrument required to be executed has been or will be duly executed and delivered by the Sellers constitutes or will constitute the legal, valid and binding obligations of the Sellers enforceable against them in accordance with the respective terms. 6.4 Neither the execution, delivery or performance by the Sellers of this Agreement nor the consummation of the transaction contemplated hereby will violate or contravene the Sellers' Incorporation documents or any judgement, decree, order or award of any court or other governmental agency or any law, rule or regulation applicable to the Sellers or any of their properties or asset or conflict with, result in a breach of or constitute a default under, any agreement, instrument or contractual obligation (other than the Charters entered into by the Sellers) to which the Sellers are a party or by which they or their properties are bound. 6.5 (i) Schedule B Part I lists the employment contracts, copies of which have been given to the Buyers; (ii) Schedule B part II lists the bareboat charter contracts, copies of which have been given to the Buyers. 6.6 Schedule C contains, the weekly summaries of contract bids with respect to each of the Vessels prepared by the Vessel's managers from 2 July 1997. 6.7 Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated hereby will result in any liability to Buyers or their affiliates under any pension, retirement or other employee benefit plan relating to any person employed as a member of the crew of any of the Vessels or otherwise arising out of the employment of any such person prior to the delivery of the Vessel on which such person is employed. 6.8 The Sellers have disclosed to the Buyers details of all litigation in which they are engaged relevant to the transaction Contemplated by this Agreement and have disclosed all commercial arrangements with sponsors, brokers and agents. 6.9 There is no pending litigation or claim known to the Sellers, the outcome of which could have a materially adverse effect upon the current employment of the Vessels or their continued operation in the service in which they are currently being operated. 4 6.10 No kickbacks or bribes have been paid to customers suppliers or government officials, in order to obtain the current charters for any of the Vessels, and, to the best of the Sellers' knowledge, no such payment is required for the renewal of any such charter. 6.11 COI shall indemnify Buyers against any direct but not indirect loss, damages or liability resulting from the breach of any of the warranties contained in Clause 6. 7. BUYERS' WARRANTIES The Buyers warrant that: 7.1 The execution, delivery and performance of this Agreement and the other agreements, certificates and instruments contemplated hereby and thereby and the consummation of the transactions contemplated hereby and thereby have been duly authorised and approved by all requisite corporate action of the Buyers. This Agreement constitutes the legal, valid and binding obligation of the Buyers enforceable against them in accordance with its terms. 7.2 On the Closing Date (as defined in the Memoranda of Agreement) the issuance, sale and delivery of the Common Stock of the Buyers to the Sellers or their nominee shall then have been duly and unconditionally authorised by all necessary corporate action on the part of the Buyer, and such Common Stock when so issued, sold and delivered in accordance with the provisions of this Agreement, will be duly authorised, validly issued, fully paid and non-assessable shares of Buyers' Common Stock. 7.3 Neither the execution, delivery or performance by Buyers of this Agreement nor the consummation of the transactions contemplated hereby will violate any judgement, decree, order or award of any court or other governmental agency or any law, rule or regulation applicable to Buyers or their property or assets or conflict with, result in a breach of or constitute a default under, any contractual obligation of Buyers. 7.4. The Buyers are a corporation duly incorporated, validly existing and in good standing under the laws of the State of Florida and have all requisite corporate power to execute, deliver and perform their obligations under this Agreement and the other agreements, certificates and other instruments contemplated hereby and thereby. 7.5 The Buyers have and will have on the dates of delivery of each of the Vessels the financial resources to enable them to meet their obligations under this Agreement and each of the Memoranda of Agreement. 7.6 The Buyers will provide the Sellers with a copy of their executed loan agreement entered into with the Bank of Boston. 5 7.7 The Buyers shall indemnify the Sellers against any direct but not indirect loss, damages or liability resulting from the breach of any of the warranties contained in Clause 7. 8. REGISTRATION RIGHTS AGREEMENT On or before the Closing Date, the Buyers shall execute and deliver to COI a Registration Rights Agreement substantially in the form of the draft annexed hereto as Schedule D in favour of each person or corporation receiving any of the shares of the Buyers' Common Stock referred to in Clause 3. 9. MANAGEMENT/NON-COMPETITION On or before the Closing Date, the Buyers shall enter into a Management Agreement with Sosema S.A. for a duration of 6 months in respect of all of the Vessels. Thereafter for all or some of the Vessels the Buyers may extend the management for 6 monthly periods up to a total of 3 years upon giving 90 days prior written notice to Sosema S.A. Sosema S.A. shall not be required at any time to manage less than 80% of the acquired Vessels on behalf of the Buyers and COI and the Buyers shall enter into a Non-Competition Agreement. On or before the Closing Date Mr Frederic Dor will sign a Non-Competition Agreement. The Non-Competition Agreement between COI and the Buyer shall not apply: (i) to any Vessel during such time as the Sellers are the Owners or Bareboat Charterers of such Vessel; (ii) in relation to any charter being completed by Sellers pursuant to Clause 23 of the Memorandum of Agreement. 10. FEES AND EXPENSES Buyers and COI shall each pay their own out-of-pocket fees and expenses, including, without limitation, all legal, accounting, advisory and other fees and expenses, arising in connection with any transactions contemplated by this Agreement. The Buyers shall be liable for and pay any auditors' fees incurred in relation to the transaction contemplated by this Agreement. 11. ENTIRE AGREEMENT This Agreement together with the Memoranda of Agreement, Registration Rights Agreement and Non-Competition Agreement contemplated hereby and two side letters constitutes the entire agreements and understanding of the Buyers and Sellers with respect to the subject matter hereof and hereby supersedes any other prior agreements with respect to the matters set forth herein whether written or oral. Any modification, waiver or amendment shall be in writing and executed by the Buyers and Sellers. 6 12. NOTICES Except as may otherwise be expressly provided herein, any notice herein required or permitted to be given shall be in writing or facsimile transmission with subsequent written confirmation, any notice may be personally served, sent by registered mail or by overnight delivery service providing for evidence of receipt and shall be deemed to have been given upon receipt by the party notified. For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section 12) shall be as set forth opposite each party's name on the signature page hereof. 13. SEVERABILITY: COUNTERPARTS In case any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of such counterparts shall together constitute one and the same instrument. 14. GOVERNING LAW This Agreement shall by governed by and construed in accordance with the laws of England and the Buyers and the Sellers hereby irrevocably submit to the exclusive jurisdiction of the Courts of England. 15. SUCCESORS AND ASSIGNS This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that neither Buyers nor Sellers shall be permitted to assign its rights under this Agreement without the prior written consent of the other parties (other than the Buyers' and Sellers' assignment of its rights to one or more of its affiliates). Notwithstanding any assignment the Buyers and Sellers shall both remain liable and responsible for the performance of this Agreement. 16. PUBLICITY Any press release or public announcement or disclosure by the Buyers or Sellers or any of their respective affiliates regarding this Agreement or the transactions contemplated hereby must first be submitted to and be given the prior written approval of the otber, who shall be entitled to require reasonable modifications to be made. The Buyers shall make no public or other announcement concerning this transaction until such time as their loan documentation has been executed and this Agreement and all Memoranda of Agreement shall become unconditional save for inspection of the Vessels. 7 ARBITRATION 17. The arbitration clause contained in Clause 16 of the Memorandum of Agreement shall apply mutatis mutandis as if set out in full herein. 18. (a) Any default by the Buyers under the terms of any of the Memoranda of Agreement shall be a default of the terms hereof and any default by the Buyers under the terms of this Agreement shall be an event of default under each of the Memoranda of Agreement and the Sellers shall be entitled to terminate this Agreement and each of the Memoranda of Agreement without affecting the Sellers' rights to claim damages or exercising any other rights and remedies they may have. (b) In the event of one of the Sellers refusing to deliver a Vessel under its control to the Buyers the Sellers shall be in default under the terms of this Agreement and the Buyers shall be entitled to terminate this Agreement and the Memoranda of Agreement without affecting the Buyers' rights to claim damages or exercising any other right and remedies they may have. IN WITNESS WHEREOF, the duly authorised representatives of the parties have caused this Agreement to be executed on the date first written above. By: HVIDE MARINE INCORPORATED Address: 2200 Eller Drive Fort Lauderdale Florida 33316 USA Fax No: (954) 527 1772 By: CARE OFFSHORE INC. Address: C/o Constant & Constant Sea Containers House 20 Upper Ground London SE1 9QT England Fax No: (44 171) 401 2161 8 -----END PRIVACY-ENHANCED MESSAGE-----