S-4

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As filed with the Securities and Exchange Commission on October 31, 2003

Registration No. 333-            

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

Seabulk International, Inc.*
(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	4412 (Primary Standard Industrial Classification Code Number)	65-0966399 (I.R.S. Employer Identification No.)
2200 Eller Drive* Post Office Box 13038 Ft. Lauderdale, Florida 33316 (954) 523-2200 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices)		Alan R. Twaits* Senior Vice President, General Counsel and Secretary 2200 Eller Drive Post Office Box 13038 Ft. Lauderdale, Florida 33316 (954) 523-2200 (Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
James M. Prince
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
(713) 758-2222
(713) 758-2346 (Fax)

        Approximate date of commencement of proposed sale to the public:    As soon as practicable after this Registration Statement becomes effective.

        If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Note(1)	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee
91/2% Senior Notes due 2013	$150,000,000	100%	$150,000,000	$12,135
Guarantees by certain subsidiaries of Seabulk International, Inc.*	—	—	—	— (2)

(1)

Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) under the Securities Act of 1933, as amended.

(2)

Pursuant to Rule 457(n), no separate fee for the guarantees is payable because the guarantees relate to other securities that are being registered concurrently.

*

Includes certain subsidiaries of Seabulk International, Inc. identified on the following pages.

Lone Star Marine Services, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	76-0565277 (I.R.S. Employer Identification Number)
Seabulk Arizona USA, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	11-3685229 (I.R.S. Employer Identification Number)
Seabulk Chemical Carriers, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-1604658 (I.R.S. Employer Identification Number)
Seabulk Marine International, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-1789754 (I.R.S. Employer Identification Number)
Seabulk Marine Services, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0511419 (I.R.S. Employer Identification Number)
Seabulk Ocean Systems Corporation (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0021811 (I.R.S. Employer Identification Number)
Seabulk Ocean Systems Holdings Corporation (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0021810 (I.R.S. Employer Identification Number)
Seabulk Offshore Abu Dhabi, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0785745 (I.R.S. Employer Identification Number)
Seabulk Offshore Dubai, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0804816 (I.R.S. Employer Identification Number)
Seabulk Offshore International, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0608734 (I.R.S. Employer Identification Number)
Seabulk Offshore Operators, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0813896 (I.R.S. Employer Identification Number)
Seabulk Operators, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0868890 (I.R.S. Employer Identification Number)
Seabulk Tankers, Inc. (Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	76-0270930 (I.R.S. Employer Identification Number)
Seabulk Towing, Inc. (Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	59-2754468 (I.R.S. Employer Identification Number)
Seabulk Towing Services, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	76-0565247 (I.R.S. Employer Identification Number)
Seabulk Transmarine II, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-1835095 (I.R.S. Employer Identification Number)
Seabulk Transport, Inc. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-2120296 (I.R.S. Employer Identification Number)
Seabulk Tankers, Ltd. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-1444561 (I.R.S. Employer Identification Number)
Seabulk America Partnership, Ltd. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-2324484 (I.R.S. Employer Identification Number)
Seabulk Offshore, Ltd. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	65-0156025 (I.R.S. Employer Identification Number)
Seabulk Transmarine Partnership, Ltd. (Exact name of registrant as specified in its charter)
Florida (State or other jurisdiction of incorporation or organization)	59-2580172 (I.R.S. Employer Identification Number)

Each registrant hereby amends this registration statement on such dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

        This registration statement covers the registration of an aggregate principal amount of $150,000,000 of our 9¹/2% Senior Notes Due 2013, or the new notes, that may be exchanged for an equal principal amount of our outstanding 9¹/2% Senior Notes Due 2013. This registration statement also covers the registration of new notes for resale by Credit Suisse First Boston LLC in market-making transactions. The complete prospectus relating to the exchange offer follows immediately after this explanatory note. Following the exchange offer prospectus are selected pages of the prospectus relating solely to these market-making transactions, including alternate front and back cover pages, and alternate sections entitled "Use of Proceeds" and "Plan of Distribution." In addition, the market-making prospectus will not include the following captions, or the information set forth under these captions, included in the exchange offer prospectus: "Prospectus Summary—The Exchange Offer," "Risk Factors—Risks Related to the Notes—If you do not properly tender you outstanding notes, you will continue to hold unregistered outstanding notes and your ability to transfer outstanding notes will be adversely affected," "Exchange Offer" and "U.S. Federal Income Tax Considerations." The table of contents of the market-making prospectus will reflect these changes accordingly. All other sections of the exchange offer prospectus will be included in the market-making prospectus.

SUBJECT TO COMPLETION, DATED OCTOBER     , 2003

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS

Seabulk International, Inc.

Offer to Exchange up to
$150,000,000 of 9¹/2% Senior Notes due 2013
For
$150,000,000 of 9¹/2% Senior Notes due 2013
that have been registered under the Securities Act of 1933

Terms of the Exchange Offer

•

We are offering to exchange up to $150,000,000 of our outstanding 9¹/2% Senior Notes due 2013 for new notes with substantially identical terms that have been registered under the Securities Act and are freely tradable.



•

We will exchange all outstanding notes that you validly tender and do not validly withdraw before the exchange offer expires for an equal principal amount of new notes.     



•

The exchange offer expires at 5:00 p.m., New York City time, on                        , 2003, unless extended. We do not currently intend to extend the exchange offer.



•

Tenders of outstanding notes may be withdrawn at any time prior to the expiration of the exchange offer.



•

The exchange of outstanding notes for new notes will not be a taxable event to you for U.S. federal income tax purposes.

Terms of the New 9¹/2% Senior Notes Offered in the Exchange Offer

Maturity

•

The new notes will mature on August 15, 2013.

Interest

•

Interest on the new notes is payable on February 15 and August 15 of each year, beginning February 15, 2004.



•

Interest will accrue from August 5, 2003.

Redemption

•

We may redeem some or all of the new notes at any time on or after August 15, 2008 at redemption prices listed in "Description of New Notes—Optional Redemption," and prior to that date we may redeem all, but not less than all, of the new notes by the payment of the applicable premium stated in this prospectus.



•

Subject to certain limitations, at any time on or before August 15, 2006, we may also redeem up to 35% of the new notes using the net proceeds of certain equity offerings.

Change of Control

•

If we experience a change of control, subject to certain conditions, we must offer to purchase the new notes.

Ranking

•

The new notes are unsecured. The new notes rank equally in right of payment with all of our other existing and future unsecured senior debt and senior in right of payment to all of our existing and future subordinated debt.



•

The new notes are effectively subordinated to our existing and future secured debt to the extent of that security.

Guarantees

•

If we cannot make payment on the new notes when they are due, certain of our subsidiaries have guaranteed the notes and must make payment instead.

Please read "Risk Factors" beginning on page 6 for a discussion of factors you should consider before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

        Each broker-dealer that receives new notes for its own account pursuant to this offering must acknowledge that it will deliver a prospectus in connection with any resale of such new notes received in the exchange. The letter of transmittal included in this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, until                        , 2004, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

The date of this prospectus is                        , 2003.

        This prospectus is part of a registration statement we filed with the Securities and Exchange Commission. In making your investment decision, you should rely only on the information contained in this prospectus and in the accompanying letter of transmittal. We have not authorized anyone to provide you with any other information. If you receive any unauthorized information, you must not rely on it. We are not making an offer to sell these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus, or the documents incorporated by reference into this prospectus, is accurate as of any date other than the date on the front cover of this prospectus or the date of such document, as the case may be.

TABLE OF CONTENTS

EXPLANATORY NOTE	i
FORWARD-LOOKING INFORMATION	ii
WHERE YOU CAN FIND MORE INFORMATION	ii
PROSPECTUS SUMMARY	1
RISK FACTORS	6
SELECTED CONSOLIDATED FINANCIAL DATA	18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
BUSINESS	37
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	43
EXCHANGE OFFER	44
USE OF PROCEEDS	52
DESCRIPTION OF NEW NOTES	53
U.S. FEDERAL INCOME TAX CONSIDERATIONS	93
PLAN OF DISTRIBUTION	94
LEGAL MATTERS	95
EXPERTS	95
GLOSSARY	96
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1
LETTER OF TRANSMITTAL	A-1

i

FORWARD-LOOKING INFORMATION

        This prospectus contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are statements regarding our expected financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital and other expenditures, competitive position, growth opportunities for existing or new services, management plans and objectives, markets for securities and other matters. Some of the forward-looking statements can be identified by the use of words such as "believes," "belief," "expects," "plans," "anticipates," "intends," "projects," "estimates," "may," "might," "would," "could" or other similar words. All statements in this prospectus other than statements of historical fact or historical financial results are forward-looking statements.

        Like other businesses, we are subject to risks and other uncertainties that could cause our actual results to differ materially from any projections or that could cause other forward-looking statements to prove incorrect. Our forward-looking statements reflect our views and assumptions on the date of this prospectus regarding future events and operating performance. We believe that they are reasonable, but they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Accordingly, you should not put undue reliance on any forward-looking statements. Factors that could cause our forward-looking statements to be incorrect and actual events or our actual results to differ from those that are anticipated are described in "Risk Factors" appearing elsewhere in this prospectus.

        All forward-looking statements in this prospectus are qualified by these cautionary statements and are only made as of the date of this prospectus. We do not undertake any obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

WHERE YOU CAN FIND MORE INFORMATION

        We file annual, quarterly, and special reports, proxy statements, and other information with the SEC under the Exchange Act. You may read and copy any of the reports, statements, or other information that we have filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC are also available to the public from commercial document retrieval services and at the SEC's web site at "http:/ /www.sec.gov."

        This prospectus incorporates business and financial information about us that is not included in or delivered with this prospectus. We incorporate by reference into this prospectus the documents listed below which we have previously filed with the SEC:

•

our Annual Report on Form 10-K for the year ended December 31, 2002;



•

our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003;



•

our Current Reports on Form 8-K filed since January 1, 2003, excluding all information deemed furnished under Items 9 or 12 of Form 8-K.

ii

        You may request a copy of any of these filings, at no cost, by writing or calling us at the following address or phone number:

Seabulk International, Inc.
2200 Eller Drive, P.O. Box 13038
Fort Lauderdale, Florida 33316
Attention: Investor Relations
Telephone: (954) 523-2200

To obtain timely delivery, you should request this information no later than                        , 2003, which is five business days before the expiration of the offer.

        The information incorporated by reference is an important part of this prospectus. The written information contained in this prospectus may update, modify or supersede information contained in our documents previously filed with the SEC that are incorporated by reference in this prospectus.

iii

PROSPECTUS SUMMARY

The following summary contains information about us and the offering of the new notes. It does not contain all of the information that you should consider in making your investment decision. For a more complete understanding of us and this offering, you should read and consider carefully all of the information in this prospectus, particularly the information set forth under "Risk Factors" and the financial information appearing elsewhere in this prospectus. In addition, certain statements include forward-looking information which involves risks and uncertainties. Please read "Forward-Looking Statements." Except as otherwise indicated herein, or as the context may otherwise require, the words "we," "our" and "us" refer to Seabulk International, Inc. and its consolidated subsidiaries, and the words "restricted group" refer to Seabulk International, Inc. and its consolidated subsidiaries, excluding the Non-recourse Subsidiaries, as we have defined that term in this prospectus. References to the "notes" in this prospectus include both the outstanding notes and the new notes.

Our Company

        We are a leading provider of marine support and transportation services to the oil, natural gas and chemical industries. We have extensive operations in three lines of business: offshore energy support, marine transportation and marine towing. We operate over 150 vessels in diverse geographic markets, including the U.S. Gulf of Mexico, West Africa, Southeast Asia, and the Middle East. We believe our diverse business lines, the global markets in which we operate and the mobility of our offshore fleet reduce the impact of cyclical fluctuations in any particular line of business or geographic region.

        We are a publicly traded company with our common stock listed on the NASDAQ Stock Market under the symbol "SBLK."

        Our corporate offices are located at 2200 Eller Drive, Post Office Box 13038, Ft. Lauderdale, Florida 33316, Attention: Corporate Secretary (telephone: (954) 523-2200).

The Exchange Offer

        On August 5, 2003, we completed a private offering of the outstanding notes. As part of the private offering that closed on August 5, 2003, we entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we agreed, among other things, to deliver this prospectus to you and to use our reasonable best efforts to complete the exchange offer within 210 days after the date we issued the outstanding notes. The following is a summary of the exchange offer.

Exchange Offer	We are offering to exchange new notes for outstanding notes.
Expiration Date	The exchange offer will expire at 5:00 p.m. New York City time, on            2003, unless we decide to extend it.
Condition to Exchange Offer	The registration rights agreement does not require us to accept outstanding notes for exchange if the exchange offer or the making of any exchange by a holder of the outstanding notes would violate any applicable law or interpretation of the staff of the SEC. A minimum aggregate principal amount of outstanding notes being tendered is not a condition to the exchange offer.

1

Procedures for Tendering Outstanding Notes	To participate in the exchange offer, you must follow the procedures established by The Depository Trust Company, which we call "DTC," for tendering notes held in book-entry form. These procedures, which we call "ATOP," require that the exchange agent receive, prior to the expiration date of the exchange offer, a computer generated message known as an "agent's message" that is transmitted through DTC's automated tender offer program and that DTC confirm that:
	•	DTC has received your instructions to exchange your notes, and
	•	you agree to be bound by the terms of the letter of transmittal.
	For more details, please read "Exchange Offer—Terms of the Exchange Offer" and "—Procedures for Tendering."
Guaranteed Delivery Procedures	None.
Withdrawal of Tenders	You may withdraw your tender of outstanding notes at any time prior to the expiration date. To withdraw, you must submit a notice of withdrawal to the exchange agent using ATOP procedures before 5:00 p.m. New York City time on the expiration date of the exchange offer. Please read "Exchange Offer—Withdrawal of Tenders."
Acceptance of Outstanding Notes and Delivery of New Notes	If you fulfill all conditions required for proper acceptance of outstanding notes, we will accept any and all outstanding notes that you properly tender in the exchange offer on or before 5:00 p.m. New York City time on the expiration date. We will return any outstanding notes that we do not accept for exchange to you without expense as promptly as practicable after the expiration date. We will deliver the new notes as promptly as practicable after the expiration date and acceptance of the outstanding notes for exchange. Please read "Exchange Offer—Terms of the Exchange Offer."
Fees and Expenses	We will bear all expenses related to the exchange offer. Please read "Exchange Offer—Fees and Expenses."
Use of Proceeds	The issuance of the new notes will not provide us with any new proceeds. We are making this exchange offer solely to satisfy our obligations under our registration rights agreement.

2

Consequences of Failure to Exchange Outstanding Notes	If you do not exchange your outstanding notes in this exchange offer, you will no longer be able to require us to register the outstanding notes under the Securities Act except in the limited circumstances provided under our registration rights agreement. In addition, you will not be able to resell, offer to resell or otherwise transfer the outstanding notes unless we have registered the outstanding notes under the Securities Act, or unless you resell, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act.
U.S. Federal Income Tax Considerations	The exchange of new notes for outstanding notes in the exchange offer should not be a taxable event to you for U.S. federal income tax purposes. Please read "Federal Income Tax Consequences."
Exchange Agent	We have appointed Wachovia Bank, National Association as exchange agent for the exchange offer. You should direct questions and requests for assistance and requests for additional copies of this prospectus (including the letter of transmittal) to the exchange agent addressed as follows: Wachovia Bank, National Association, Corporate Actions-NC1153, 1525 West W.T. Harris Blvd., 3C3, Charlotte, North Carolina 28288-1153 (use 28262 as zip code for overnight deliveries), Attention: Tiffany Williams. Eligible institutions may make requests by facsimile at (704) 590-7628.

Terms of the New Notes

        The new notes will be identical to the outstanding notes except that the new notes are registered under the Securities Act and will not have restrictions on transfer, registration rights or provisions for additional interest and will contain different administrative terms. The new notes will evidence the same debt as the outstanding notes, and the same indenture will govern the new notes and the outstanding notes.

        The following summary contains basic information about the new notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the new notes, please read "Description of New Notes."

Issuer	Seabulk International, Inc.
Securities Offered	$150,000,000 in aggregate principal amount of 91/2% Senior Notes Due 2013.
Maturity Date	August 15, 2013.
Interest on New Notes	91/2% annually.
Interest Payment Dates	Interest will be payable semi-annually in arrears on February 15 and August 15 of each year, commencing February 15, 2004.

3

Subsidiary Guarantees	The new notes will be jointly and severally guaranteed on a senior unsecured basis by certain of our U.S. subsidiaries.
Ranking	The new notes are our senior unsecured obligations. Accordingly, the new notes and the related subsidiary guarantees will rank:
	•	effectively junior in right of payment to all our and the guarantors' existing and future secured indebtedness;
	•	equal in right of payment with any of our and the guarantors' existing and future senior unsecured indebtedness; and
	•	senior in right of payment to any of our and the guarantors' future subordinated indebtedness.
	In addition, the new notes will be effectively subordinated to the existing and future liabilities, including trade payables, of our non-guarantor subsidiaries.
Optional Redemption	At any time prior to August 15, 2008, we may redeem any of the notes at a make-whole redemption price equal to the principal amount plus the Applicable Premium, as defined in "Description of New Notes—Optional Redemption," plus accrued and unpaid interest to the date of redemption.
	We may redeem any of the notes at any time on or after August 15, 2008, in whole or in part, in cash, at the redemption prices described in this prospectus, plus accrued and unpaid interest to the date of redemption.
	In addition, at any time prior to August 15, 2006, we may redeem up to 35% of the aggregate principal amount of the notes issued under the indenture with the net proceeds of certain equity offerings at a redemption price equal to 109.50% of the principal amount of the notes plus accrued and unpaid interest to the date of redemption. We may make that redemption only if, after the redemption, at least 65% of the aggregate principal amount of notes issued under the indenture remains outstanding.
Change of Control	If we experience a Change of Control (as defined under "Description of New Notes—Repurchase at the Option of Holders"), we will be required to make an offer to repurchase the notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase.
Certain Covenants	The terms of the notes will limit our ability and the ability of our restricted subsidiaries to, among other things:
	•	incur additional indebtedness or issue preferred stock;
	•	pay dividends or make other distributions to our stockholders;

4

	•	purchase or redeem capital stock or subordinated indebtedness;
	•	make investments;
	•	create liens securing indebtedness;
	•	incur restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us;
	•	sell assets;
	•	consolidate or merge with or into other companies or transfer all or substantially all of our assets; and
	•	engage in transactions with affiliates.
	These limitations will be subject to a number of important qualifications and exceptions. See "Description of New Notes—Certain Covenants."
Transfer Restrictions; Absence of a Public Market for the Notes	The new notes generally will be freely transferable, but will also be new securities for which there will not initially be a market. There can be no assurance as to the development or liquidity of any market for the new notes.

Risk Factors

        Please read "Risk Factors" beginning on page 6 for a discussion of certain factors you should consider before participating in the exchange offer.

5

RISK FACTORS

        In addition to the other information set forth elsewhere in this prospectus, the following factors relating to us, the exchange offer and the new notes should be considered carefully in deciding whether to participate in the exchange offer.

Risks Relating to Our Business

Demand for many of our services substantially depends on the level of activity in the offshore oil and natural gas exploration, development and production industry.

        The level of offshore oil and natural gas exploration, development and production activity has historically been volatile and is likely to continue to be so in the future. The level of activity is subject to large fluctuations in response to relatively minor changes in a variety of factors that are beyond our control, including:

•

prevailing oil and natural gas prices and expectations about future prices and price volatility;



•

the cost of exploring for, producing and delivering oil and natural gas offshore;



•

worldwide demand for energy and other petroleum products as well as chemical products;



•

availability and rate of discovery of new oil and natural gas reserves in offshore areas;



•

local and international political and economic conditions and policies;



•

technological advances affecting energy production and consumption;



•

weather conditions;



•

environmental regulation; and



•

the ability of oil and natural gas companies to generate or otherwise obtain funds for capital.

        We expect levels of oil and natural gas exploration, development and production activity to continue to be volatile and affect the demand for and rates of our offshore energy support services and marine transportation services.

        A prolonged material downturn in oil and natural gas prices is likely to cause a substantial decline in expenditures for exploration, development and production activity. Lower levels of expenditure and activity would result in a decline in the demand and lower rates for our offshore energy support services and marine transportation services. Moreover, almost 25% of our offshore energy support services are currently conducted in the Gulf of Mexico and are therefore dependent on levels of activity in that region, which may differ from levels of activity in other regions of the world.

Excess vessel supply could depress day rates and adversely affect our operating results.

        Increases in oil and natural gas prices and higher levels of expenditure by oil and natural gas companies for exploration, development and production may not result in increased demand for our offshore energy support services and marine transportation services. For example, our offshore energy support segment is affected by the supply of and demand for offshore energy support vessels. During periods when supply exceeds demand, there is significant downward pressure on the rates we can obtain for our vessels. Because vessel operating costs cannot be significantly reduced, any reduction in rates adversely affects our results of operations. Currently, demand for our offshore energy support vessels in the Gulf of Mexico market is weak and offshore drilling activity has decreased in the Gulf of Mexico over the last two years. A significant increase in the capacity of the offshore energy support industry through new construction could not only potentially lower day rates, which would adversely

6

affect our revenues and profitability, but could also worsen the impact of any downturn in oil and natural gas prices on our results of operations and financial condition. Similarly, should our competitors in the domestic petroleum and chemical product marine transportation industry construct a significant number of new tankers or large capacity integrated or articulated tug and barges, demand for our marine transportation tanker assets could be negatively impacted. Over the last year there have been no newly built tankers and four tug and barge tank vessels have been announced or delivered in the domestic industry.

The consolidation or loss of companies that charter our offshore energy support and marine transportation vessels could adversely affect demand for our vessels and reduce our revenues.

        Oil and natural gas companies and drilling contractors have undergone substantial consolidation in the last few years and additional consolidation is likely. Consolidation results in fewer companies to charter or contract for our vessels. Also, merger activity among both major and independent oil and natural gas companies affects exploration, development and production activity as the consolidated companies integrate operations to increase efficiency and reduce costs. Less promising exploration and development projects of a combined company may be dropped or delayed. Such activity may result in an exploration and development budget for a combined company that is lower than the total budget of both companies before consolidation, adversely affecting demand for our offshore energy support vessels and reducing our revenues.

Intense competition in our lines of business could result in reduced profitability and loss of market share for us.

        Contracts for our vessels are generally awarded on a competitive basis, and competition in the offshore energy support segment is intense. The most important factors determining whether a contract will be awarded include:

•

suitability, reliability and capability of equipment;



•

safety record;



•

age of equipment;



•

personnel;



•

price;



•

service; and



•

reputation.

        Many of our major competitors are much larger companies with substantially greater financial resources and substantially larger operating staffs than we have. They may be better able to compete in making vessels available more quickly and efficiently or in constructing new vessels, meeting customers scheduling needs and withstanding the effect of downturns in the market. As a result, we could lose customers and market share to these competitors.

Acquisitions of vessels and businesses involve risks that could adversely affect our results of operations.

        From time to time we consider possible acquisitions of vessels, vessel fleets and businesses that complement our existing operations. Consummation of such acquisitions is typically subject to the negotiation of definitive agreements. We can give no assurance that we will be able to identify desirable acquisition candidates or that we will be successful in entering into definitive agreements on terms we regard as favorable or satisfactory. Moreover, even if we do enter into a definitive acquisition

7

agreement, the related acquisition may not thereafter be completed. We may be unable to integrate any particular acquisition into our operations successfully or realize the anticipated benefits of the acquisition. The process of integrating acquired operations into our own may result in unforeseen operating difficulties, may absorb significant management attention and may require significant financial resources that would otherwise be available for the ongoing development or expansion of our existing operations. Future acquisitions could result in the incurrence of additional indebtedness and liabilities which could have a material adverse effect on our financial condition and results of operations.

We conduct international operations, which involve additional risks.

        We operate vessels worldwide. Operations outside the United States involve additional risks, including the possibility of:

•

restrictive actions by foreign governments, including vessel seizure;



•

foreign taxation and changes in foreign tax laws;



•

limitations on repatriation of earnings;



•

changes in currency exchange rates;



•

local cabotage and local ownership laws and requirements;



•

nationalization and expropriation;



•

loss of contract rights; and



•

political instability, war and civil disturbances or other risks that may limit or disrupt markets.

        Our ability to compete in the international offshore energy support market may be adversely affected by foreign government regulations that favor or require the awarding of contracts to local persons, or that require foreign persons to employ citizens of, or purchase supplies from, a particular jurisdiction. Further, our foreign subsidiaries may face governmentally imposed restrictions on their ability to transfer funds to their parent company.

Revenue from our marine transportation segment and towing segment could be adversely affected by a decline in demand for domestic refined petroleum products, crude oil or chemical products, or a change in existing methods of delivery in response to certain conditions that may develop.

        A reduction in domestic consumption of refined petroleum products, crude oil or chemical products may adversely affect revenue from our marine transportation segment and towing segment and therefore our financial condition and results of operation. Greater reliance on importation to the United States of foreign petroleum and chemical products may adversely affect revenue from our marine transportation business and therefore our financial condition and results of operations. Weather conditions also affect demand for our marine transportation services and towing services. For example, a mild winter may reduce demand for heating oil in our areas of operation. Moreover, alternative methods of delivery of refined petroleum or chemical products or crude oil may develop as a result of:

•

insufficient availability of marine transportation services and towing services;



•

the cost of compliance with environmental regulations;



•

increased liabilities connected with the transportation of refined petroleum or chemical products and crude oil; or



•

increased acceptance of integrated or articulated tug and barge tank units.

8

Construction of additional refined petroleum product and natural gas pipelines could have a material adverse effect on our tanker revenues.

        Long-haul transportation of refined petroleum products, crude oil and natural gas is generally less costly by pipeline than by tanker. Existing pipeline systems are either insufficient to meet demand in, or do not reach all of, the markets served by our marine transportation vessels. While we believe that high capital costs, tariff regulation and environmental considerations discourage building in the near future of new pipelines or pipeline systems capable of carrying significant amounts of refined petroleum products, crude oil or natural gas, new pipeline segments may be built or existing pipelines converted to carry such products. Such activity could have an adverse effect on our ability to compete in particular markets.

Our offshore energy support fleet includes many older vessels.

        The average age of our U.S. offshore energy support vessels, based on the later of the date of construction or rebuilding, is approximately 17 years, and approximately 50% of these vessels are more than 20 years old. We believe that after a vessel has been in service for approximately 30 years, repair, vessel certification and maintenance costs may not be economically justifiable. We may not be able to maintain our fleet by extending the economic life of existing vessels through major refurbishment or by acquiring new or used vessels. Some of our competitors have newer fleets and may be able to compete more effectively against us.

We are subject to complex laws and regulations, including environmental laws and regulations, that can adversely affect the cost, manner or feasibility of doing business.

        Increasingly stringent federal, state, local and international laws and regulations governing worker safety and health and the manning, construction and operation of vessels significantly affect our operations. Many aspects of the marine industry are subject to extensive governmental regulation by the U.S. Coast Guard, Occupational Safety and Health Administration, the National Transportation Safety Board and the U.S. Customs Service and to regulation by port states and class society organizations such as the American Bureau of Shipping, as well as to international regulations from international treaties such as the Safety of Life at Sea Convention (SOLASC) administered by port states and class societies. The U.S. Coast Guard, Occupational Safety and Health Administration, and the National Transportation Safety Board set safety standards and are authorized to investigate vessel accidents and recommend improved safety standards. The U.S. Customs Service is authorized to inspect vessels at will.

        Our business and operations are also subject to federal, state, local and international laws and regulations that control the discharge of oil and hazardous materials into the environment or otherwise relate to environmental protection and occupational safety and health. Compliance with such laws and regulations may require installation of costly equipment or operational changes, and the phase-out of certain product tankers. Failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Some environmental laws impose strict and, under certain circumstances, joint and several liability for remediation of spills and releases of oil and hazardous materials and damages to natural resources, which could subject us to liability without regard to whether we were negligent or at fault. These laws and regulations may expose us to liability for the conduct of or conditions caused by others, including charterers. Moreover, these laws and regulations could change in ways that substantially increase our costs. We cannot be certain that existing laws, regulations or standards, as currently interpreted or reinterpreted in the future, or future laws and regulations will not have a material adverse effect on our business, results of operations and financial condition. For more information, see "Business—Environmental and Other Regulations."

9

        We are subject to the Merchant Marine Act of 1920, commonly referred to as the Jones Act. The Jones Act requires that vessels used to carry cargo between U.S. ports be constructed, owned and operated by U.S. citizens. To ensure that we are determined to be a U.S. citizen as defined under these laws, our articles of incorporation and by-laws contain certain restrictions on the ownership of our capital stock by persons who are not U.S. citizens and establish certain mechanisms to maintain compliance with these laws. If we are determined at any time not to be in compliance with these citizenship requirements, our vessels would become ineligible to engage in the U.S. coastwise trade, and our business and operating results would be adversely affected. We are subject to the rules and regulations of the U.S. Coast Guard mandated by the Maritime Security Act of 2002. These rules require individual vessel security plans and crew identification systems. Failure of our U.S. flag vessels to comply with these requirements could result in the suspension of their operating rights by the U.S. Coast Guard.

We could lose Jones Act protection which would result in additional competition.

        A substantial portion of our operations is conducted in the U.S. coastwise trade. Under the Jones Act, this trade is restricted to vessels built in the United States, owned and manned by U.S. citizens and registered under U.S. law. There have been attempts to repeal or undermine the Jones Act, and these attempts are expected to continue in the future. Repeal or waiver of, or exemptions from, the Jones Act could result in additional competition from vessels built in lower-cost foreign shipyards and owned and manned by foreign nationals accepting lower wages and benefits than U.S. citizens, which could have a material adverse effect on our business, results of operation and our financial condition.

We will have to phase out some of our vessels from petroleum product transportation service in U.S. waters.

        The Oil Pollution Act of 1990, commonly referred to as OPA 90, establishes a phase-out schedule, depending upon vessel size and age, for single-hull vessels carrying crude oil and petroleum products in U.S. waters. The phase-out dates for our single-hull tankers are as follows: Seabulk Magnachem—2007, HMI Defender—2008, Seabulk Trader—2011, Seabulk Challenge—2011 and Seabulk America—2015. As a result of this requirement, these vessels will be prohibited from transporting crude oil and petroleum products in U.S. waters after their phase-out dates. They would also be prohibited from transporting crude oil and petroleum products in most foreign and international markets under a more accelerated IMO international phase-out schedule, were we to attempt to enter those markets.

Our business involves hazardous activities and other risks of loss against which we may not be adequately insured.

        Our business is affected by a number of risks, including:

•

terrorism;



•

the mechanical failure of our vessels;



•

collisions;



•

vessel loss or damage;



•

cargo loss or damage;



•

hostilities; and



•

labor strikes.

10

        In addition, the operation of any vessel is subject to the inherent possibility of a catastrophic marine disaster, including oil, fuel or chemical spills and other environmental mishaps, as well as other liabilities arising from owning and operating vessels. Any such event may result in the loss of revenues and increased costs and other liabilities.

        OPA 90 imposes significant liability upon vessel owners, operators and certain charterers for certain oil pollution accidents in the United States. This has made liability insurance more expensive and has also prompted insurers to consider reducing available liability coverage. We may be unable to maintain or renew insurance coverage at levels and against risks we believe are customary in the industry at commercially reasonable rates, and existing or future coverage may not be adequate to cover claims as they arise. Because we maintain mutual insurance, we are subject to funding requirements and coverage shortfalls in the event claims exceed available funds and reinsurance, and to premium increases based on prior loss experience. Any shortfalls could have a material adverse impact on our financial condition.

We depend on attracting and retaining qualified, skilled employees to operate our business and protect our business know-how.

        Our results of operations depend in part upon our business know-how. We believe that protection of our know-how depends in large part on our ability to attract and retain highly skilled and qualified personnel. Any inability we experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage and maintain our business and to protect our know-how.

        We require skilled employees who can perform physically demanding work on board our vessels. As a result of the volatility of the oil and natural gas industry and the demanding nature of the work, potential employees may choose to pursue employment in fields that offer a more desirable work environment at wage rates that are competitive with ours. With a reduced pool of workers, it is possible that we will have to raise wage rates to attract workers from other fields and to retain our current employees. If we are not able to increase our service rates to our customers to compensate for wage-rate increases, our operating results may be adversely affected.

Our employees are covered by federal laws that may subject us to job-related claims in addition to those provided by state laws.

        Some of our employees are covered by provisions of the Jones Act, the Death on the High Seas Act and general maritime law. These laws typically operate to make liability limits established by state workers' compensation laws inapplicable to these employees and to permit these employees and their representatives to pursue actions against employers for job-related injuries in federal courts. Because we are not generally protected by the limits imposed by state workers' compensation statutes, we may have greater exposure for any claims made by these employees.

Our success depends on key members of our management, the loss of whom could disrupt our business operations.

        We depend to a large extent on the business know-how, efforts and continued employment of our executive officers, directors and key management personnel. The loss of services of certain key members of our management could disrupt our operations and have a negative impact on our operating results.

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Our borrowing agreements contain covenants that restrict our activities.

        Our borrowing agreements:

•

require us to meet certain financial tests, including the maintenance of minimum ratios of leverage, and debt service and indebtedness to net worth;



•

limit certain liens;



•

limit additional borrowing;



•

restrict us from making certain investments;



•

restrict certain payments, including dividends, on shares of any class of capital stock; and



•

limit our ability to do certain things, such as entering into certain types of business transactions, including mergers and acquisitions.

        These provisions could limit our future ability to continue to pursue actions or strategies that we believe would be beneficial to our company, our stockholders or the holders of the notes or may result in default of our borrowing agreements.

The interests of our principal stockholders may not be aligned with your interests as a holder of notes.

        Following our recapitalization in September 2002, a group of investors owns approximately 75% of our outstanding stock and can appoint a majority of our board of directors pursuant to a stockholders' agreement. Circumstances may occur in which the interests of these stockholders could be in conflict with the interests of the holders of the notes. For example, these stockholders may have an interest in pursuing acquisitions, divestitures, business combinations, capital projects or other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to holders of the notes.

Our insurance costs are escalating and no assurance can be given that they will not continue to escalate.

        Our primary P&I marine insurance club, Steamship Mutual, is a mutual association and relies on member premiums, investment reserves and income, and reinsurance to manage liability risks on behalf of its members. Recently investment losses, underwriting losses, and high costs of reinsurance have caused Steamship Mutual, and other international marine insurance clubs, to substantially raise the cost of premiums, resulting not only in higher premium costs but also much higher levels of deductibles and self-insurance retentions. Continued deterioration in this insurance market could lead to even higher levels of premiums, deductibles and self-insurance.

Risks Related to the Notes

If you do not properly tender your outstanding notes, you will continue to hold unregistered outstanding notes and your ability to transfer outstanding notes will be adversely affected.

        We will only issue new notes in exchange for outstanding notes that you timely and properly tender. Therefore, you should allow sufficient time to ensure timely tender of the outstanding notes and you should carefully follow the instructions on how to tender your outstanding notes. Neither we nor the exchange agent is required to tell you of any defects or irregularities with respect to your tender of outstanding notes.

        If you do not exchange your outstanding notes for new notes pursuant to the exchange offer, the outstanding notes you hold will continue to be subject to the existing transfer restrictions. In general, you may not offer or sell the outstanding notes except under an exemption from, or in a transaction

12

not subject to, the Securities Act and applicable state securities laws. We do not plan to register outstanding notes under the Securities Act unless our registration rights agreement with the initial purchasers of the outstanding notes requires us to do so. Further, if you continue to hold any outstanding notes after the exchange offer is consummated, you may have trouble selling them because there will be fewer such notes outstanding.

Our substantial indebtedness could adversely affect our financial condition and impair our ability to fulfill our obligations under the notes.

        We will continue to have substantial debt and substantial debt service requirements following the completion of the exchange offer.

        Our level of indebtedness may have important consequences for you, including:

•

impairing our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes or to repurchase the notes from you upon a change of control;



•

requiring us to dedicate a substantial portion of our cash flow to the payment of principal and interest on our indebtedness, which reduces the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;



•

subjecting us to the risk of increased sensitivity to interest rate increases on our indebtedness with variable interest rates, including our borrowings under our credit facilities;



•

increasing the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and



•

limiting our ability to adjust to rapidly changing market conditions, reducing our ability to withstand competitive pressures and making us more vulnerable to a downturn in general economic conditions or our business than our competitors with less debt or lower interest rates.

        If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required to refinance all or a portion of our existing debt, including the notes, or to obtain additional financing. We cannot assure you that any such refinancing would be possible or that any additional financing could be obtained. Our inability to obtain such refinancing or financing may have a material adverse effect on us.

We depend on our subsidiaries for cash. Our ability to access the cash flow of our subsidiaries may be contingent upon our ability to refinance the debt of our subsidiaries.

        We derive a substantial portion of our revenue and cash flow from our subsidiaries. Not all of our subsidiaries will guarantee the notes. Creditors of such subsidiaries (including trade creditors) generally will be entitled to payment from the assets of those subsidiaries before those assets can be distributed to us. As a result, the notes will be effectively subordinated to the prior payment of all of the debts (including trade payables) of our non-guarantor subsidiaries.

        We cannot assure you that any of our subsidiaries who have any of their debt accelerated will be able to repay any such indebtedness. We also cannot assure you that our assets and our subsidiaries' assets will be sufficient to fully repay the notes and our other indebtedness.

13

Despite our and our subsidiaries' current levels of indebtedness, we may incur substantially more debt, which could further increase the risks associated with our substantial indebtedness.

        Although the agreements governing our credit facilities and the indenture governing the notes contain restrictions on the incurrence of additional indebtedness by us and our restricted subsidiaries, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. In addition to amounts that may be borrowed under our credit facilities, the indenture governing the notes also allows us and our restricted subsidiaries to borrow significant amounts of money from other sources and places no restrictions on borrowings by our unrestricted subsidiaries. Also, these restrictions do not prevent us from incurring obligations that do not constitute "indebtedness" as defined in the relevant agreement. If new debt is added to the current debt levels, the related risks that we now face could intensify.

The instruments governing our debt contain cross default provisions that may cause all of the debt issued under such instruments to become immediately due and payable as a result of a default under an unrelated debt instrument.

        The indenture governing the notes contains numerous operating covenants, and our credit facility contains numerous operating covenants and requires us and our subsidiaries to meet certain financial ratios and tests. Our failure to comply with the obligations contained in the indenture, the credit facility or other instruments governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds may not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell our assets and otherwise curtail operations in order to pay our creditors.

To service our indebtedness, including the notes, we will require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

        Our ability to make scheduled payments of principal or interest with respect to our indebtedness, including the notes, will depend on our ability to generate cash and on our future financial results. Our ability to generate cash depends on the demand for our services, which is subject to levels of activity in offshore oil and gas exploration, development and production, general economic conditions, and financial, competitive, regulatory and other factors affecting our operations, many of which are beyond our control. We cannot assure you that our operations will generate sufficient cash flow or that future borrowings will be available to us under our credit facilities or otherwise in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs.

The notes are structurally subordinated to all indebtedness of our subsidiaries that are not guarantors of the notes.

        Some, but not all of our subsidiaries guarantee the notes. You will not have any claim as a creditor against our subsidiaries that are not guarantors of the notes. Accordingly, all obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, of us or a guarantor of the notes. As of June 30, 2003, our non-guarantor subsidiaries had approximately $39.4 million of total liabilities (including trade payables but excluding intercompany liabilities and guarantees and $214.9 million of net liabilities of our Non-recourse Subsidiaries). Revenue related to our non-guarantor subsidiaries constituted 57.2% of our operating revenue during 2002.

14

The notes and the guarantees are unsecured and effectively subordinated to our and our subsidiary guarantors' secured indebtedness.

        The notes and the related subsidiary guarantees are not secured by any of our assets. As of June 30, 2003, on an as adjusted basis after giving effect to the offering and our use of proceeds therefrom, we and our subsidiary guarantors would have had $101.9 million of secured debt outstanding. In addition, the indenture governing the notes will permit the incurrence of additional debt, some of which may be secured debt. Holders of our secured debt will have claims that are effectively senior to your claims as holders of the notes to the extent of the value of the assets securing the secured debt. The notes are effectively subordinated to all secured debt to the extent of the value of the assets securing such debt.

        If we become insolvent or are liquidated, or if payment under any secured debt is accelerated, the lender thereunder would be entitled to exercise the remedies available to a secured lender. Accordingly, the lender will have priority over any claim for payment under the notes or the guarantees to the extent of the assets that constitute its collateral. If this were to occur, it is possible that there would be no assets remaining from which claims of the holders of the notes could be satisfied. Further, if any assets did remain after payment of these lenders, the remaining assets might be insufficient to satisfy the claims of the holders of the notes and holders of other unsecured debt that is deemed the same class as the notes, and potentially all other general creditors who would participate ratably with holders of the notes.

Restrictive covenants in our debt agreements may restrict the manner in which we can operate our business.

        Our credit facility and the indenture relating to the notes limit, among other things, our ability and the ability of our restricted subsidiaries to:

•

borrow money or issue guarantees;



•

pay dividends, redeem capital stock or make other restricted payments;



•

incur liens to secure indebtedness;



•

make certain investments;



•

sell certain assets;



•

enter into transactions with our affiliates; or



•

merge with another person or sell substantially all of our assets.

        If we fail to comply with these covenants, we would be in default under our credit facility and the indenture, and the principal and accrued interest on the notes and our other outstanding indebtedness may become due and payable. See "Description of New Notes—Certain Covenants." In addition, our credit facility contains, and our future indebtedness agreements may contain, additional affirmative and negative covenants, which are generally more restrictive than those contained in the indenture.

        As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be considered beneficial to us. Our credit facility also requires, and our future credit facilities may require, us to maintain specified financial ratios and satisfy certain financial condition tests. Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those tests. The breach of any of these covenants could result in a default under our credit facility. Upon the occurrence of an event of default under our current or future credit facilities, the lenders could elect to

15

declare all amounts outstanding under such credit facilities, including accrued interest or other obligations, to be immediately due and payable. If amounts outstanding under such credit facilities were to be accelerated, there can be no assurance that our assets would be sufficient to repay in full that indebtedness and our other indebtedness, including the notes.

A court could subordinate or void the obligations under our subsidiaries' guarantees.

        Under the U.S. federal bankruptcy laws and comparable provisions of state fraudulent conveyance laws, a court could void obligations under the subsidiary guarantees, subordinate those obligations to other obligations of our subsidiary guarantors or require you to repay any payments made pursuant to the subsidiary guarantees, if:

(1)

fair consideration or reasonably equivalent value was not received in exchange for the obligation; and



(2)

at the time the obligation was incurred, the obligor:



•

was insolvent or rendered insolvent by reason of the obligation;



•

was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or



•

intended to incur, or believed that it would incur, debts beyond its ability to pay them as the debts matured.

        The measure of insolvency for these purposes will depend upon the law of the jurisdiction being applied. Generally, however, a company will be considered insolvent if:

•

the sum of its debts, including contingent liabilities, is greater than the saleable value of all of its assets at a fair valuation;



•

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and matured; or



•

it could not pay its debts as they become due.

Moreover, regardless of solvency, a court might void the guarantees, or subordinate the guarantees, if it determined that the transaction was made with intent to hinder, delay or defraud creditors.

        Each subsidiary guarantee contains a provision intended to limit the guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its subsidiary guarantee to be a fraudulent transfer. This provision, however, may not be effective to protect the subsidiary guarantees from attack under fraudulent transfer law.

        The indenture requires that certain subsidiaries must guarantee the notes in the future. These considerations will also apply to these guarantees.

We may not have the ability to repurchase the notes upon a change of control as required by the indenture.

        Upon the occurrence of a change of control (as defined in the indenture), we will be required to offer to purchase all outstanding notes at 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. Upon such a change of control, we may not have sufficient funds available to repurchase all of the notes tendered pursuant to this requirement. In addition, we are prohibited by our credit facility from repurchasing any of the notes unless the lenders thereunder consent. Our failure to repurchase the notes would be a default under the indenture, which would, in

16

turn, be a default under our credit facility and, potentially, other debt. If any debt were to be accelerated, we may be unable to repay these amounts and make the required repurchase of the notes. See "Description of New Notes—Repurchase at the Option of Holders."

An active trading market may not develop for the notes, which may limit your ability to resell them.

        The notes will constitute a new class of securities for which there is no established trading market. We do not intend to list the notes on a stock exchange or seek their admission for trading in the National Association of Securities Dealers Automated Quotation System. Although an initial purchaser has advised us that it intends to make a market in the notes, it is not obligated to do so, and it may cease to do so at any time without notice. Accordingly, we cannot assure you that an active trading market for the notes will develop or, if a trading market develops, that it will continue. The lack of an active trading market for the notes would have a material adverse effect on the market price and liquidity of the notes. If a market for the notes develops, they may trade at a discount from par.

The market price of the notes may be volatile.

        You may not be able to sell your notes at a particular time or at a price favorable to you. Future trading prices of the notes will depend on many factors, including:

•

our operating performance and financial condition;



•

our ability to complete the offer to exchange the notes for registered notes or to register the notes for resale;



•

the interest of securities dealers in making a market;



•

the market for similar securities; and



•

prevailing interest rates.

        Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in prices. The market for the notes, if any, may be subject to similar disruptions. A disruption may have a negative effect on you as a holder of the notes, regardless of our prospects or performance.

17

SELECTED CONSOLIDATED FINANCIAL DATA

        The selected consolidated financial data as of and for the periods ended on or prior to December 31, 2002 are derived from our consolidated financial statements which have been audited by our independent auditors. The selected financial data as of and for the six months ended June 30, 2002 and 2003, are derived from our unaudited consolidated financial statements. The results for the six months ended June 30, 2003 are not necessarily indicative of the results that may be expected for the full year.

        Upon emergence from our Chapter 11 proceeding on December 15, 1999, we adopted fresh start reporting under American Institute of Certified Public Accountant Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code. The principal differences between these periods relate to reporting changes relating to our capital structure, changes in our indebtedness, and the revaluation of our long-term assets to reflect reorganization value at the effective date of the reorganization. Thus, our consolidated balance sheets and statements of operations and cash flows after the effective date of our plan of reorganization reflect a new reporting entity and are not comparable to periods prior to the effective date.

        The selected consolidated financial data presented below should be read in conjunction with our consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our most recent Annual Report on

18

Form 10-K and our most recent Quarterly Report on Form 10-Q, each of which is incorporated by reference in this prospectus.

		Predecessor Company
					Period from January 1 to December 15, 1999															Six Months Ended June 30,
								Period from December 16 to December 31, 1999			Year Ended December 31,
		Year Ended December 31, 1998
											2000			2001			2002			2002			2003
		(in thousands)						(in thousands)
Statement of Operations Data:
Revenue		$	404,793		$	328,751		$	13,479		$	320,483		$	346,730		$	323,997		$	164,838		$	157,153
Operating expenses			213,601			212,753			8,047			205,226			199,327			182,558			92,481			83,953
Overhead expenses			43,179			47,814			1,643			39,630			37,002			38,657			18,658			18,758
Depreciation, amortization and drydocking			64,244			79,410			2,069			50,271			59,913			66,376			33,191			32,417
Write-down of assets held for sale			—			—			—			—			1,400			—			—			—
Income (loss) from operations			83,769			(11,226	)		1,720			25,356			49,088			36,406			20,508			22,025
Interest expense			49,723			71,215			2,756			62,714			55,907			44,715			25,078			16,301
Interest income			(8,485	)		(841	)		(68	)		(704	)		(240	)		(475	)		(137	)		(209	)
Minority interest in (gains) losses of subsidiaries			(5,848	)		(2,596	)		(408	)		1,639			35			219			(117	)		(227	)
Gain (loss) on disposal of assets			—			(25,658	)		—			3,863			(134	)		1,364			1,354			1,183
Other income (expense)			156			(437,148	)		(189	)		7,072			(73	)		(154	)		(49	)		(65	)
Income (loss) before income taxes
and extraordinary item			36,839			(547,002	)		(1,565	)		(24,080	)		(6,751	)		(6,405	)		(3,245	)		6,824
Provision for (benefit from) income taxes			13,489			(32,004	)		—			4,872			5,210			4,642			3,408			2,578
Income (loss) before extraordinary item			23,350			(514,998	)		(1,565	)		(28,952	)		(11,961	)		(11,047	)		(6,653	)		4,246
Extraordinary gain (loss) on extinguishment of debt(1)			(1,602	)		266,643			—			—			—			(27,823	)		—			—
Net income (loss)		$	21,748		$	(248,355	)	$	(1,565	)	$	(28,952	)	$	(11,961	)	$	(38,870	)	$	(6,653	)	$	4,246
Net income (loss) per common share:
	Basic	$	1.42		$	(16.02	)	$	(0.16	)	$	(2.89	)	$	(1.16	)	$	(2.72	)	$	(0.63	)	$	0.18
	Diluted	$	1.35		$	(16.02	)	$	(0.16	)	$	(2.89	)	$	(1.16	)	$	(2.72	)	$	(0.63	)	$	0.18
Other Financial Data:
Ratio of earnings to fixed charges(2)			1.7x			(6.5)	x		0.4x			0.6x			0.9x			0.9x			0.9x			1.4x
Balance Sheet Data (at period end):
Total assets			1,355,267						830,740			775,476			744,765			703,095						708,843
Long-term debt(3)			860,476						597,519			577,525			554,716			466,926						467,177
Stockholders' equity			248,035						165,326			136,514			124,687			176,800						181,280
Book value per share			16.09						16.53			13.49			11.87			7.65						7.77
Cash dividends per share			—						—			—			—			—						—

(1)

Reflects gain (loss) on the extinguishment of debt, net of applicable income taxes. Pursuant to Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements Nos. 4, 44 and 64, Amendment of FASB Statement No. 14, and Technical Corrections," the Company will be required to reclassify to continuing operations amounts previously reported as extinguishments of debt in applicable reporting periods subsequent to January 1, 2003.

(2)

For purposes of computing the ratio of earnings to fixed charges, earnings consist of income before provision for income taxes and extraordinary items plus interest expense; and fixed charges consist of interest expense, amortization of debt issuance costs and a portion of operating lease rent expense deemed to be representative of interest.

For the periods in which the ratio of earnings to fixed charges indicates less than one-to-one coverage, the dollar amount of the deficiency was as follows:

Period	Deficiency (in thousands)
Year Ended December 31, 1998	$	—
Period from January 1 to December 15, 1999		547,002
Period from December 16 to December 31, 1999		1,565
Year Ended December 31, 2000		24,080
Year Ended December 31, 2001		6,751
Year Ended December 31, 2002		6,405
Six Months Ended June 30, 2002		3,245
Six Months Ended June 30, 2003		—

(3)

Includes current maturities and capital lease obligations.

19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        This discussion and analysis of our financial condition and historical results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

        On December 15, 1999 (the Effective Date), we emerged from our Chapter 11 proceeding and adopted fresh start accounting. Thus our consolidated statements of operations and cash flows after the Effective Date reflect a new reporting company and are not comparable to periods prior to the Effective Date.

        For purposes of comparative analysis, the twelve months ended December 31, 1999 include the results of the Predecessor Company for the period from January 1, 1999 to December 15, 1999 and the Successor Company for the period from December 16, 1999 to December 31, 1999. The principal differences between these periods relate to reporting changes regarding our capital structure, changes in indebtedness, and the revaluation of our long-term assets to reflect the reorganization value at the Effective Date. These changes primarily affect depreciation and amortization expense and interest expense in our results of operations.

Critical Accounting Policies and Estimates

        The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, useful lives of vessels and equipment, deferred tax assets, and certain accrued liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

        We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

•

Revenue Recognition.  Revenue is generally recorded when services are rendered, we have a signed charter agreement or other evidence of an arrangement, pricing is fixed and determinable and collection is reasonably assured. For the majority of the offshore energy support and marine towing segments, revenues are recorded on a daily basis as services are rendered. For the marine transportation segment, revenue is earned under time charters, bareboat charters, or affreightment/voyage contracts. Revenue from time charters is earned and recognized on a daily basis. Certain time charters contain performance provisions, which provide for decreased fees based upon actual performance against established targets such as speed and fuel consumption. Revenue for affreightment/voyage contracts is recognized based upon the percentage of voyage completion. The percentage of voyage completion is based on the number of voyage days worked at the balance sheet date divided by the total number of days expected on the voyage.



•

Allowance for Doubtful Accounts.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

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•

Asset Impairment.  We record impairment losses on long-lived assets used in operations when indications of impairment are present and the estimated undiscounted cash flows to be generated by those assets are less than the assets carrying amounts. If the carrying value is not recoverable, the carrying value of the assets is reduced to estimated fair value.



•

Useful Lives of Fixed Assets.  We determine the useful lives of the vessels and equipment based upon regulatory requirements such as OPA 90, market conditions and operational considerations. We continue to evaluate the reasonableness of the useful lives of the vessels and equipment.



•

Major Maintenance Costs.  Currently, the costs incurred to drydock our vessels are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 30 to 36 months. In June 2001, the Accounting Executive Committee of the American Institute of Certified Public Accountants issued an exposure draft of a proposed Statement of Position (SOP) entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, we would expense major maintenance costs as incurred and prohibit the use of the deferral of the entire cost of a planned major maintenance activity. Management has determined that this SOP, if issued as proposed, would have a material effect on the consolidated financial statements. In the year of adoption, we would write off the net book value of the deferred drydocking costs and record the write off as a change in accounting principle ($23.2 million as of June 30, 2003). Additionally, all drydock expenditures incurred after the adoption of the SOP would be expensed as incurred.



•

Valuation of Deferred Tax Assets.  We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. After application of the valuation allowance, our net deferred tax assets and liabilities are zero at June 30, 2003 and at December 31, 2002 and 2001.

Revenue Overview

        We derive our revenue from three main lines of business—offshore energy support, marine transportation, and marine towing. Seabulk Offshore, our domestic and international offshore energy support business, accounted for approximately 49% and 53% of our revenue for the six months ended June 30, 2003 and 2002, respectively, and approximately 53% and 55% of our revenue in the years 2002 and 2001, respectively. Marine transportation, under the name Seabulk Tankers, consists of our Jones Act tanker business, in which we own nine vessels and lease one vessel under a bareboat charter, and accounted for approximately 39% and 37% of our revenue for the six months ended June 30, 2003 and 2002, respectively. Our inland tug and barge assets, previously a part of our marine transportation business, were sold in March 2002 and our shipyard assets were sold in July 2002. Our marine transportation business accounted for approximately 37% and 35% of our revenue in the years 2002 and 2001, respectively. Seabulk Towing, our domestic harbor and offshore towing business, accounted for approximately 12% and 10% of our revenue for the six months ended June 30, 2003 and 2002, respectively, and 10% for each of the years 2002 and 2001.

Seabulk Offshore

        Revenue from our offshore energy support operations is primarily a function of the size of our fleet, vessel day rates or charter rates, and fleet utilization. Rates and utilization are primarily a function of offshore exploration, development, and production activities, which are in turn heavily dependent upon the price of crude oil and natural gas. Further, in certain areas where we conduct offshore energy support operations (particularly the U.S. Gulf of Mexico), contracts for the utilization of offshore energy support vessels commonly include termination provisions with three- to five-day

21

notice requirements and no termination penalty. As a result, companies engaged in offshore energy support operations (including us) are particularly sensitive to changes in market demand.

        The following table represents revenue for the Seabulk Offshore by major operating area for the periods indicated (in thousands):

		Year Ended December 31,						Six Months Ended June 30,
		2000		2001		2002		2002		2003
Domestic(1)		$	54,491	$	83,686	$	47,490	$	25,457	$	19,164
West Africa			48,268		69,305		84,576		42,871		39,729
Middle East			34,242		22,450		23,683		11,839		10,833
Southeast Asia			14,394		15,737		15,730		7,205		7,342
	Total	$	151,395	$	191,178	$	171,479	$	87,372	$	77,068

(1)

Domestic consists of vessels primarily operating in the United States, the Gulf of Mexico and Mexico.

        The following tables set forth, by primary area of operation, average day rates achieved by the offshore energy fleet owned or operated by us and average utilization for the periods indicated. Average day rates are calculated by dividing total revenue by the number of days worked. Utilization percentages are based upon the number of working days over a 365/366-day year and the number of vessels in the fleet on the last day of the period.

	AHTS/Supply								AHT/Tugs								Crew/Utility								Other								Total
	2000		2001		2002		1st Half 2003		2000		2001		2002		1st Half 2003		2000		2001		2002		1st Half 2003		2000		2001		2002		1st Half 2003		2000		2001		2002		1st Half 2003
Domestic(1)
Vessels		26		26		21		21		—		—		—		—		32		32		28		25		2		1		2		2		60		59		51		48
Bareboat-out		—		—		—		—		—		—		—		—		2		—		—		—		1		1		—		—		3		1		—		—
Laid-Up		2		—		—		—		—		—		—		—		—		—		—		—		2		1		1		1		4		1		1		1
Effective Utilization		76%		76%		63%		61%		—		—		—		—		83%		84%		65%		65%		—		—		—		—		80%		80%		63%		63%
Fleet Utilization		67%		76%		63%		61%		—		—		—		—		81%		84%		65%		65%		—		—		—		—		72%		79%		62%		62%
Day Rate	$	4,689	$	7,261	$	5,826	$	5,081		—		—		—		—	$	2,111	$	2,904	$	2,473	$	2,394		—		—		—		—	$	3,158	$	4,791	$	3,897	$	3,584
West Africa
Vessels		26		27		30		32		4		4		4		4		6		6		6		1		1		1		1		—		37		38		41		37
Laid-Up		1		—		—		—		2		—		—		—		1		—		—		—		1		—		—		—		5		—		—		—
Effective Utilization		85%		82%		82%		82%		63%		55%		85%		74%		65%		77%		79%		—		—		—		—		—		81%		78%		82%		81%
Fleet Utilization		80%		82%		82%		82%		45%		55%		85%		74%		54%		77%		79%		—		—		—		—		—		70%		78%		82%		81%
Day Rate	$	5,679	$	7,228	$	7,635	$	7,211	$	4,938	$	6,556	$	6,332	$	6,165	$	2,773	$	2,937	$	2,874		—		—		—		—		—	$	5,286	$	6,558	$	6,910	$	6,976
Middle East
Vessels		12		6		6		6		16		8		7		6		19		8		7		7		8		5		5		6		55		27		25		25
Laid-Up		6		—		—		—		5		1		—		—		8		1		—		—		—		1		1		1		19		3		1		1
Effective Utilization		90%		84%		85%		90%		63%		48%		64%		52%		74%		78%		87%		91%		62%		69%		66%		41%		71%		69%		77%		70%
Fleet Utilization		48%		84%		85%		90%		48%		44%		64%		52%		42%		76%		87%		91%		62%		53%		50%		51%		48%		64%		74%		73%
Day Rate	$	2,535	$	2,983	$	3,431	$	3,339	$	3,258	$	4,384	$	4,523	$	4,879	$	1,425	$	1,585	$	1,657	$	1,680	$	6,251	$	4,565	$	4,346	$	4,735	$	3,026	$	2,971	$	3,197	$	3,165
Southeast Asia
Vessels		10		7		8		8		2		—		—		—		5		6		—		—		2		2		2		1		19		15		10		9
Laid-Up		2		—		—		—		1		—		—		—		—		—		—		—		—		—		—		—		3		—		—		—
Effective Utilization		75%		79%		64%		75%		—		—		—		—		66%		62%		—		—		70%		64%		67%		—		70%		71%		64%		76%
Fleet Utilization		62%		79%		64%		75%		—		—		—		—		66%		62%		—		—		61%		64%		67%		—		59%		71%		64%		76%
Day Rate	$	4,461	$	5,147	$	5,987	$	5,570		—		—		—		—	$	1,523	$	1,583		—		—	$	5,481	$	7,626	$	8,457		—	$	3,723	$	4,115	$	6,505	$	6,081

(1)

Domestic consists of vessels primarily operating in the United States, the Gulf of Mexico and Mexico.

22

        Domestic revenue for the six months ended June 30, 2003 was adversely affected by the continued slowdown in natural gas and crude oil drilling activity in the U.S. Gulf of Mexico. Despite relatively high natural gas prices and dwindling inventories, exploration and production companies in the U.S. Gulf of Mexico were unwilling to invest in new projects until there was clear evidence of the sustainability of commodity prices and an increase in energy demand. Although there is still uncertainty in the market, the rise in both crude oil and natural gas prices that began in the fourth quarter of 2002, the temporary shutoff of Iraqi and Venezuelan imports, dwindling inventories of both crude oil and natural gas as the winter of 2002/2003 turned out to be much colder than expected, and other factors, should eventually aid a recovery in the Gulf of Mexico offshore vessel market. In the meantime, we are exploring charter opportunities in Mexico, which remains an active market. On the other hand, some exploration and drilling companies have reduced expectations for energy prospects in the mature Gulf of Mexico market.

        International offshore revenues for the six months ended June 30, 2003 decreased slightly from the same period in the prior year. In West Africa, the demand for vessels, and hence utilization, remained strong as this is an oil-driven deepwater market with longer time horizons and increasing exploration and production budgets primarily from oil company majors. We redeployed one vessel and added one newbuild vessel to our West African operations during the eight months ended August 31, 2003. The unrest in Nigeria did not have a significant impact on our operations.

        International vessel demand is primarily driven by crude oil exploration and production. During the second quarter of 2003, crude oil prices and demand remained firm. We expect international exploration and production spending to continue to increase in West Africa, which should strengthen vessel demand in that area. Revenue decreased from the prior year for our Middle East operations as both vessel count and utilization decreased. In Southeast Asia, revenue increased over the year-earlier period due to an increase in utilization.

        Day rates currently available to our anchor handling tug supply vessels and supply boats average approximately $5,000 for Domestic, $7,300 for West Africa, $3,300 for the Middle East and $5,200 for Southeast Asia. We had two offshore vessels in "held-for-sale" status as of August 31, 2003.

Seabulk Tankers

        Revenue from our marine transportation services is derived from the operations of ten tankers carrying crude oil, petroleum products and chemical products in the U.S. Jones Act trade, including our five double-hull tankers owned and operated by our Non-recourse Subsidiaries.

        Petroleum Tankers.    Demand for our crude oil and petroleum product transportation services is dependent both on production and refining levels in the United States as well as on domestic consumer and commercial consumption of petroleum products and chemicals. We owned eight petroleum product tankers at June 30, 2003. Five of these are double-hull, state-of-the-art vessels, of which two have chemical-carrying capability. Since January 2002, a major oil company charterer has had exclusive possession and control of one of the petroleum product tankers and is responsible for all operating and drydocking expenses of the vessel. That bareboat charter is expected to be converted to a transportation contract during the fourth quarter of 2003 in which the operation of the vessel is returned to us, but the obligation to pay the financing and operating elements of the charter remains with the former bareboat charterer. In the third quarter of 2002, a vessel previously trading under a voyage charter entered into a three-year time charter with a major oil company, and two of our existing time charters were extended through July 10, 2010. Under a time charter, fuel and port charges are borne by the charterer and are therefore not reflected in the charter rates. Consequently, both the revenue and cost side of time charter vessels are reduced by the amount of the fuel and port charges. Our Jones Act fleet is benefiting from a tightening domestic tanker market, which should continue to be strong as OPA 90 forces out older, single-hull vessels. On the other hand, increased importation of

23

foreign petroleum has acted to restrain charter rates fixed during the third quarter period. None of our single-hull vessels is scheduled for retirement under OPA 90 before 2007.

        Chemical Tankers.    Demand for our industrial chemical transportation services generally coincides with overall domestic economic activity. We operated two chemical tankers and one of the five double-hull vessels in the chemical trade as of June 30, 2003. The two chemical tankers are double-bottom ships. The higher day rate environment for petroleum product tankers is carrying over into the chemical tanker market as charterers look for quality tonnage to replace older single-hull vessels.

        Our tanker fleet operates on either long-term time charters, bareboat charters, or pursuant to contracts of affreightment. As of August 31, 2003, we have six tankers operating under long-term time charters, three on contracts of affreightment and one under a bareboat charter.

        The following table sets forth the number of vessels and revenue for our petroleum and chemical product carriers for the periods indicated:

	Year Ended December 31,							Six Months Ended June 30,
	2000			2001		2002		2002		2003
Number of single-hull tankers owned at end of period		5	(1)		5		5		5		5
Revenue (in thousands)	$	67,335	(2)	$	52,772	$	56,202	$	27,169	$	31,204
Number of double-hull tankers owned at end of period(3)		5			5		5		5		5
Revenue (in thousands)	$	59,335		$	59,922	$	61,284	$	30,711	$	30,723

(1)

During 2000, we scrapped one tanker that was at the end of its OPA 90-mandated useful life and terminated a charter-in contract for another tanker.

(2)

Includes revenue from chartered in vessels of $9.7 million in 2000.

(3)

Owned by our Non-recourse Subsidiaries.

        Inland Tugs and Barges.    On March 22, 2002, as part of our ongoing program to focus on our core businesses, we sold the fixed assets, consisting primarily of our inland tugs and barges, of our subsidiary, Sun State Marine Services for $3.9 million in cash. Revenue from all of Sun State's operations totaled $3.2 million for the three months ended March 31, 2002 and $3.9 million, $9.4 million and $9.3 million for the years ended December 31, 2002, 2001 and 2000, respectively. The increase in Sun State revenue was due to the completion of various large ship repair projects in the first quarter of 2002.

        On May 20, 2002, we sold the marine terminal facility assets at Port Arthur, Texas for $3.0 million. Fifty percent of the proceeds ($1.5 million) were received at closing in cash and the remainder will be deferred and received over the next three years in the form of either cash or shipyard repair credits from the buyer. The assets consisted of land, an office building, docks and parking and warehouse storage facilities with a carrying value of $1.3 million. As a result, we recognized a gain of $1.7 million. The proceeds from the sale of these assets were used to repay a portion of our term loans that existed prior to the refinancing in September 2002.

Seabulk Towing

        Revenue derived from our tug operations is primarily a function of the number of tugs available to provide services, the rates charged for their services, the volume of vessel traffic requiring docking and other ship-assist services and competition. Vessel traffic, in turn, is largely a function of the general trade activity in the region served by the port.

24

        The following table summarizes certain operating information for our tugs for the periods indicated:

	Year Ended December 31,						Six Months Ended June 30,
	2000		2001		2002		2002		2003
Number of tugs owned at end of period		33		31		31		31		28	(1)
Towing Revenue (in thousands)	$	33,106	$	33,493	$	31,147	$	16,043	$	18,301

(1)

The fleet was reduced from 31 to 28 by the sale of one tug, the scrapping of another and the return of a third tug to its owner at the conclusion of a bareboat charter.

        Towing revenue increased 14.1% in the first half of 2003 compared to the same period in the prior year due to increased vessel traffic in certain of the ports we serve and other factors including higher rates.

        We have been the sole provider of docking services in Port Canaveral, the smallest of our harbor towing markets. As a result of a recent proceeding before the Federal Maritime Commission, we are expected to have a competitor in Port Canaveral. Port Canaveral Towing intends to continue its operations in Port Canaveral.

Overview of Operating Expenses and Capital Expenditures

        Our operating expenses are primarily a function of fleet size and utilization. The most significant expense categories are crew payroll and benefits, maintenance and repairs, fuel, insurance and charter hire. During periods of decreased demand for vessels, we temporarily cease using certain vessels, i.e., lay up vessels, to reduce expenses for marine operating supplies, crew payroll and maintenance. At August 31, 2003, two of our 118 offshore energy support vessels were laid-up. We also had two vessels that were held for sale.

        The crews of company-manned chemical and product tankers are paid on a time-for-time basis under which they receive paid leave in proportion to time served aboard a vessel. The crews of offshore energy support vessels and certain tugs and towboats are paid only for days worked.

        In addition to variable expenses associated with vessel operations, we incur fixed charges, which are capitalized and amortized for our vessels and other assets. We provide for depreciation on a straight-line basis over the estimated useful lives of the related assets. OPA 90 mandates the useful life of our product and chemical carriers, except for the five double-hull carriers.

        We overhaul main engines and key auxiliary equipment in accordance with a continuous planned maintenance program. Under applicable regulations, our chemical and product carriers and offshore service vessels and our four largest tugs are required to be drydocked twice in each five-year period for inspection and routine maintenance and repairs. These vessels are also required to undergo special surveys every five years involving comprehensive inspection and corrective measures to insure their structural integrity and the proper functioning of their cargo and ballast tank and piping systems, critical machinery and equipment, and coatings. Our harbor tugs generally are not required to be drydocked on a specific schedule. During the first half of 2003, we drydrocked 22 vessels at an aggregate cost, exclusive of lost revenue, of $7.1 million. During the years ended December 31, 2002, 2001 and 2000, we drydocked 54, 66 and 62 vessels, respectively, at an aggregate cost (exclusive of lost revenue) of $23.4 million, $29.4 million and $14.4 million, respectively. The increase in drydock expenditures is due mainly to tanker drydockings, which generally cost more than offshore vessels. We account for our drydocking costs under the deferral method, under which capitalized drydocking costs are expensed over the period preceding the next scheduled drydocking. See Note 2 to our consolidated financial statements.

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        We had capital expenditures, including drydocking costs, in the years ended December 31, 2002, 2001 and 2000 of $27.2 million, $38.7 million and $26.4 million, respectively, and $29.6 million for the first half of 2003, of which $21 million was for the purchase of the Seabulk Africa plus related improvements in January 2003, the Seabulk Ipanema in April 2003, as well as the down payment on the first Brazilian newbuild.

        The cost of fuel has a significant impact on our operating results. Its cost was relatively high in 2002.

        Insurance costs consist primarily of substantial deductibles, substantial self-retention layers, and premiums paid for:

•

protection and indemnity insurance for our marine liability risks, which are insured by a mutual insurance association of which we are a member and through the commercial insurance markets;



•

hull and machinery insurance and other maritime-related insurance, which are provided through the commercial marine insurance markets; and



•

general liability and other traditional insurance, which is provided through the commercial insurance markets.

        Insurance costs, particularly costs of marine insurance, are directly related to overall insurance market conditions and industry and individual loss records, which vary from year to year.

        The increase in P&I costs due to higher deductibles and higher self insured retention levels will likely cause an increase in P&I insurance expense in 2003 of between $1.5 million and $2.5 million. Premiums by both marine and non-marine insurers have been adversely impacted by the erosion of claims reserves (including our underwriters), claims underwriting losses and increased reinsurance costs, as well as our own loss experience. No assurance can be given that affordable and viable direct and reinsurance markets will be available to us in the future. We maintain high levels of self-insurance for P&I and hull and machinery risks through the use of substantial deductibles and self insured retentions which may increase in the future. We carry coverage related to loss of earnings on revenues subject to fourteen day deductibles, for our tanker operations, but not for our offshore and tug operations. Insurance costs represented approximately 6.2% of operating costs in 2002.

Results of Operations

        The following table sets forth certain selected financial data and percentages of revenue for the periods indicated:

	Year Ended December 31,															Six Months Ended June 30,
	2000					2001					2002					2002					2003
	(Dollars in millions)
Revenues	$	320.5		100	%	$	346.7		100	%	$	324.0		100	%	$	164.8		100	%	$	157.2	100	%
Operating expenses		205.2		64			199.3		57			182.6		56			92.5		56			84.0	53
Overhead expenses		39.6		12			37.0		11			38.6		12			18.7		11			18.8	12
Depreciation, amortization, drydocking and other		50.3		16			61.3		18			66.4		21			33.2		20			32.4	21
Income (loss) from operations	$	25.4		8	%	$	49.1		14	%	$	36.4		11	%		20.5		12	%		22.0	14	%
Interest expense, net	$	62.0		19	%	$	55.7		16	%	$	44.2		14	%		24.9		15	%		16.1	10	%
Other income (expense), net	$	12.6		4	%	$	(0.2	)	0	%	$	1.4		0	%		1.2		0.7	%		0.9	0.1	%
Net income (loss)	$	(29.0	)	(9	)%	$	(12.0	)	(3	)%	$	(38.9	)	(12	)%		(6.7	)	(4	)%		4.2	3	%

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Six months ended June 30, 2003 compared with the six months ended June 30, 2002

        Revenue.    Revenue decreased 4.7% to $157.2 million for the six months ended June 30, 2003 from $164.8 million for the six months ended June 30, 2002.

        Offshore energy support revenue decreased 11.8% to $77.1 million for the six months ended June 30, 2003 from $87.4 million for the same period in 2002, primarily due to reduced revenue from the U.S. Gulf of Mexico. Revenue from the U.S. Gulf of Mexico decreased during the six months ended June 30, 2003 compared to the same period in 2002 primarily due to reduced exploration and production activity as oil companies were unwilling to invest in new projects until there was clear evidence of the sustainability of commodity prices and an increase in energy demand.

        Marine transportation revenue remains substantially the same at $61.9 million for the six months ended June 30, 2003 as compared to $61.6 million for the six months ended June 30, 2002.

        Towing revenue increased 14.1% to $18.3 million for the six months ended June 30, 2003 from $16.0 million for the six months ended June 30, 2002. The increase in revenue is due to increased vessel traffic in certain of the Company's ports, redeployment through the chartering out of certain vessels and other factors, including higher rates.

        Operating Expenses.    Operating expenses decreased 9.2% to $84.0 million for the six months ended June 30, 2003 from $92.5 million for the same period in 2002. The decrease is due to a variety of factors, including the elimination of operating expenses for our Sun State Marine Services subsidiary, which was discontinued in March 2002, a reduction in crewing payroll in the struggling U.S. Gulf of Mexico market, a decrease in repairs and maintenance for our tanker segment due to major repairs done in the first half of 2002, and a decrease in fuel and consumables in the West Africa operating region. As a percentage of revenue, operating expenses decreased to 53.4% for the six months ended June 30, 2003 from 56.1% for the 2002 period.

        Overhead Expenses.    Overhead expenses remain substantially the same at $18.8 million for the six months ended June 30, 2003 as compared to $18.7 million for the six months ended June 30, 2002.

        Depreciation, Amortization and Drydocking.    Depreciation, amortization and drydocking decreased 2.3% to $32.4 million for the six months ended June 30, 2003 from $33.2 million for the six months ended June 30, 2002 primarily due to a reduction in drydockings in the offshore energy segment as the Company has been selling its older and smaller vessels.

        Net Interest Expense.    Net interest expense decreased 35.5% to $16.1 million for the six months ended June 30, 2003 from $24.9 million for the same period in 2002. The decrease is primarily due to a lower debt balance and lower interest rates as a result of the recapitalization in September 2002.

        Other Income, Net.    Other income, net decreased to $0.9 million for the six months ended June 30, 2003 compared to $1.2 million for the same period in 2002, primarily due to a smaller gain on asset sales in 2003 compared to the same period in 2002.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

        Revenue.    Revenue decreased 6.6% to $324.0 million for 2002 from $346.7 million for 2001 due to decreased revenue from our offshore energy support segment.

        Offshore energy support revenue decreased 10.3% to $171.5 million for 2002 from $191.2 million for the same period in 2001, primarily due to reduced revenue from the U.S. Gulf of Mexico. This was offset in part by higher revenue from the West Africa operating region. Revenue from the U.S. Gulf of Mexico decreased during 2002 compared to the same period in 2001 primarily due to reduced exploration and production activity in response to average natural gas prices, high inventories and reduced demand for energy. The increase in West Africa revenue was driven by higher day rates and

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an expanded vessel count as offshore exploration and production activity remained strong. We took advantage of the expanding West Africa market by (1) mobilizing three of our Gulf of Mexico supply boats and one Southeast Asia utility boat for redeployment to West Africa and (2) reactivating one anchor-handling tug from "held-for-sale" status to active status in West Africa during the first half of 2002.

        Marine transportation revenue remained substantially the same at $121.4 million for 2002 as compared to $122.1 million for 2001. Tanker revenue increased by 4.3% as a result of improved rates for our three chemical carriers operating under contracts of affreightments, as well as better rates on long-term time charters. This was offset by a decrease in revenue for Sun State as a result of discontinuing operations in March 2002.

        Towing revenue decreased by 7.0% to $31.1 million for 2002 from $33.5 million for 2001. The decrease in revenue was due to reduced vessel traffic in certain of our ports, reflecting the slowdown in international trade, as well as reduced demand for towing services in the offshore market.

        Operating Expenses.    Operating expenses decreased 8.4% to $182.6 million from $199.3 million for 2001 primarily due to the change from voyage charters to time charters for two tankers, the bareboat charter of a third tanker, and the sale of Sun State's marine transportation assets in the first quarter. Since two tankers were changed from voyage charters to time charters in 2002, fuel and port charges significantly decreased as these expenses are the responsibility of the charterer under time charters. Under a bareboat contract, the charterer is responsible for crewing and operating the vessel. Operating expenses for 2001 were also adversely affected by a $4.1 million charge reflecting current and anticipated investment losses sustained by our protection and indemnity marine insurance club.

        Overhead Expenses. Overhead expenses increased 4.5% to $38.7 million in 2002 as compared to $37.0 million for the same period in 2001. The increase was primarily due to an increase in insurance expenses as a result of purchasing a $1.2 million D&O policy for the departing Board members due to the recapitalization in September 2002. Other overhead also increased due to higher bad debt reserve in our West African operations. As a percentage of revenue, overhead expenses increased to 11.9% for 2002 compared to 10.8% for the same period in 2001.

        Depreciation, Amortization, Drydocking and Other Expenses.    Depreciation, amortization, drydocking and other expenses increased 8.3% to $66.4 million for 2002 from $61.3 million for 2001, primarily due to higher planned drydocking expenditures for offshore energy support vessels and tankers during the second half of 2001 and in 2002. As a result, drydock amortization expense is also higher as drydock costs are amortized on a straight-line basis over the period to the next drydocking (generally 30 months).

        Net Interest Expense.    Net interest expense decreased 20.5% to $44.2 million for 2002 from $55.7 million for the same period in 2001. The decrease was primarily due to the combination of lower interest rates on variable rate debt and lower outstanding debt balances under our term loans and revolving credit facility. Interest expense also decreased as a result of the recapitalization in September 2002 (see Note 3 to our consolidated financial statements). The interest rate on our credit facility was substantially less than the rate on our prior senior notes, which were redeemed on October 15, 2002. In November 2002, the interest rate under our credit facility was increased by 100 basis points (1%) in accordance with the terms of the commitment letter with the lending banks to syndicate our credit facility by November 13, 2002.

        Other Income, Net.    Other income, net increased to $1.4 million in 2002 compared to other expense of ($0.2) million in 2001. This increase in other income was primarily due to a gain on asset sales in 2002 of $1.4 million.

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Year Ended December 31, 2001 Compared with Year Ended December 31, 2000

        Revenue.    Revenue increased 8.2% to $346.7 million for 2001 from $320.5 million for 2000 primarily due to increased revenue from our offshore energy support segment offset in part by decreased revenue from our marine transportation segment.

        Offshore energy support revenue increased 26.3% to $191.2 million for 2001 from $151.4 million for 2000 primarily due to the significant increases in day rates for both supply and crew boats in the Gulf of Mexico and West Africa operating regions offset in part by decreased revenue from the Middle East region. Additionally, we purchased two crewboats in December 2000 and May 2001 and placed those vessels into service in the Gulf of Mexico. During the first eight months of 2001, day rates and utilization for all vessels working in the Gulf of Mexico rose due to increased exploration and production activities. During the last four months of 2001, day rates and utilization for our Gulf of Mexico-based vessels decreased as drilling activity fell sharply on the heels of lower natural gas prices and reduced energy demand. Nevertheless, the strong first half of fiscal 2001 resulted in a significant increase in full-year revenue for the Gulf of Mexico operating region. In the West Africa operating region, average day rates rose across all vessel classes and utilization remained strong throughout 2001 as the market continued to expand in what is primarily an oil-driven, deepwater business. We mobilized two of our Gulf of Mexico-based supply boats for redeployment to West Africa during the first quarter of 2002. The decline in Middle East revenue in 2001 is attributable to fewer vessels (average of 72 vessels in 2000 compared to 30 vessels in 2001) as we sold a significant number of underperforming vessels that were working in the Middle East region in 2000 and 1999. The reduction in the number of vessels working in the Middle East is a direct result of the lack of profitability stemming from production cutbacks by the Organization of Petroleum Exporting Countries. During 2001, a total of 25 offshore energy support vessels were sold, most of which were based in the Middle East.

        Marine transportation services revenue decreased $13.9 million, or 10.2%, to $122.1 million for 2001 from $136.0 million for 2000. This decrease was primarily due to the mandated retirement of one of our Jones Act tankers in the third quarter of 2000 and the termination of our chartering-in of one tanker in the first quarter of 2000 through October 2000. Total 2000 revenue relating to the two additional tankers amounted to $14.5 million. The decrease from the two tankers was offset in part by increased transportation activity with tankers working under various voyage contracts.

        Towing revenue increased 1.2% to $33.5 million in 2001 from $33.1 in 2000 primarily due to increased port activity during the fourth quarter of 2001.

        Operating Expenses.    Operating expenses decreased 2.9% to $199.3 million from $205.2 million for 2000 primarily due to the lease termination and retirement of two tankers and the change of three tankers from spot trading to time charters in our marine transportation services operations. This decrease was offset in part by higher crew salaries and benefits and consumables and supplies expenses in offshore energy support operations. Total 2000 operating expenses (primarily charter hire, fuel and port charges) relating to the two tankers noted above amounted to $13.6 million. Since three tankers were changed from spot trading to time charters in 2001, fuel and port charges significantly decreased as these expenses are the responsibility of the charterer under time charters. Operating expenses for 2001 were also adversely affected by a $4.1 million charge reflecting current and anticipated investment losses sustained by our protection and indemnity marine insurance club. The increase in offshore crew salaries and benefits was primarily due to additional maritime staff resulting from (1) purchase of two crewboats in December 2000 and May 2001, (2) termination of a bareboat-out contract for two crewboats and (3) increased utilization of vessels in the Gulf of Mexico and West Africa. Under a bareboat contract, the charterer is responsible for crewing and operating the vessel. Additionally, expenses for consumables and supplies increased in the West Africa operating region due to increased operating activity.

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        Overhead Expenses.    Overhead expenses decreased 6.6% to $37.0 million in 2001 from $39.6 million for 2000 primarily due to a decrease in professional fees and other overhead expenses offset in part by increases in salaries and benefits. Higher headcount and related salary expense for corporate activity resulted in savings on third-party consulting fees and services. The decrease in other overhead expenses is primarily due to lower charges for rent and other miscellaneous items as a result of the elimination of non-essential services and consolidation of administrative functions.

        Depreciation, Amortization, Drydocking and Other Expenses.    Depreciation, amortization, drydocking and other expenses increased 22.0% to $61.3 million in 2001 from $50.3 million in 2000 primarily due to higher planned drydocking expenditures for offshore energy support vessels and tankers and the write-down of the book value of vessels and equipment and deferred drydocking costs of Sun State Marine Services, Inc. Drydocking amortization expense increased 117.1% to $14.7 million in 2001 from $6.8 million in 2000. In response to increased activity in the offshore energy support segment in 2001, we increased the level of drydocking expenditures. Additionally, we had to drydock five tankers in 2001. Tanker drydocking expenditures are generally higher than expenditures for offshore vessels and tugs.

        During the fourth quarter of fiscal 2001, management decided to sell the fixed assets (mostly tug barges) of Sun State Marine Services, Inc. The sale of the tug and barge assets was consummated in March 2002. The shipyard assets were sold in July 2002. Upon reclassifying Sun State's assets to assets held for sale, management considered recent appraisals, offers and bids and its estimate of future cash flows related to the fixed assets. As a result, we recorded a write-down of $1.4 million.

        Income from Operations.    Income from operations increased 93.6% to $49.1 million in 2001 compared to $25.4 million in 2000 as a result of higher day rates in our offshore energy support business and lower operating and overhead expenses.

        Net Interest Expense.    Net interest expense decreased 10.2% to $55.7 million in 2001 from $62.0 million in 2000 primarily due to lower interest rates on variable rate debt and lower outstanding balances under our term loans and revolving credit facility. The Eurodollar Rate for the term loans and revolving line of credit decreased from 6.7% at December 31, 2000 to 1.9% at December 31, 2001. The decline in the Eurodollar Rate resulted from the series of interest rate cuts by the Federal Reserve and the general slowdown of the global economy during 2001. This decrease was offset in part by interest expense on additional borrowings in 2001 for the remaining 24.25% interest in the five double-hull tankers and the purchase of two crewboats (financed through borrowings under our revolving line of credit).

        Other Income (expense).    Other expense totaled $(0.2) million in 2001 compared to other income of $12.6 million in 2000. The decrease in other income was primarily due to a net loss of $(0.1) million on vessel sales in 2001 compared to a net gain of $3.9 million on vessel sales and a $7.0 million favorable settlement of a disputed liability in 2000.

        Net Loss.    Our net loss decreased 58.7% to $12.0 million in 2001 from $29.0 million for 2000 as a result of higher revenue and lower operating and interest expenses. The provision for income taxes increased from $4.8 million in 2000 to $5.2 million in 2001 primarily due to higher foreign revenue. As of December 31, 2001 and 2000, management believes that it was more likely than not that the deferred tax assets would not be realized. Therefore, a full valuation allowance was recorded reducing the net deferred tax assets to zero.

Seasonality

        We have experienced some slight seasonality in our operations. The first half of the year is generally not as strong on a seasonal basis as the second half due to lower activity in the offshore energy support segment and petroleum product transportation during the months of February, March and April.

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Liquidity and Capital Resources

Cash Flows

        Net cash provided by operating activities totaled $33.5 million for the six months ended June 30, 2003 compared to $34.8 million for the same period in 2002. Net income improved by $10.9 million for the six months ended June 30, 2003 over the same period in 2002 as a result of the factors discussed above under "—Results of Operations—Six months ended June 30, 2003 compared with the six months ended June 30, 2002." This was partially offset by a decrease of $7.6 million between the six months ended June 30, 2002 and the same period in 2003 in trade accounts and other receivables. The collections from our protection and indemnity insurance club for settlement of outstanding insurance claims were higher in the first half of 2002 versus the 2003 period. Net cash provided by operating activities totaled $61.1 million for the year ended December 31, 2002 compared to $66.8 million for the same period in 2001. The decrease in cash provided by operating activities was the result of an increase in net loss before extraordinary item of $1.4 million from 2001 to 2002, as well as a reduction in accounts payable in 2002.

        Net cash used in investing activities was $21.8 million for the six months ended June 30, 2003 compared to $3.4 million for the same period in 2002. The increase in cash used in investing activities was due to the cash purchase of the Seabulk Africa in January 2003 and Seabulk Ipanema in April 2003, and the initial down payment on the first Brazilian newbuild in April 2003. Net cash used in investing activities was $14.5 million for the year ended December 31, 2002 compared to $31.8 million for the same period in 2001. The reduction of cash used in investing activities was due primarily to a larger amount of proceeds from asset sales. In particular, in March 2002, we closed on the sale of the towboat/barge assets of Sun State for $3.9 million in cash. In addition, there were higher planned drydock expenditures in 2001 as compared to 2002.

        Net cash provided by financing activities for the six months ended June 30, 2003 was $0.2 million compared to net cash used in financing activities of $28.3 million for the same period in 2002. The decrease in cash used in financing activities is attributable to larger payments in 2002 on the previous term loans and from the proceeds of the sale leaseback of the Seabulk Africa in April 2003. Net cash used in financing activities for the year ended December 31, 2002 was $21.0 million compared to $37.6 million for the same period in 2001. The decrease in cash used in financing activities was attributable to excess cash generated from the recapitalization and refinancing completed in September 2002.

Recent Expenditures and Future Cash Requirements

        Our current and future capital needs relate primarily to debt service and maintenance and improvement of our fleet. Our expected 2003 capital requirements for debt service, vessel maintenance and fleet improvement total approximately $116 million. During the first six months of 2003, we incurred $29.6 million in capital expenditures for fleet improvements and drydocking costs of which approximately $21 million was for the purchase of the Seabulk Africa and the Seabulk Ipanema, as well as the down payment on the first Brazilian newbuild. For the remainder of 2003, maintenance capital expenditures are expected to aggregate approximately $22.7 million, and payments for the two Brazilian newbuilds and acquisition of a line handling vessel are expected to aggregate approximately $7.6 million. We received net proceeds of approximately $13.3 million from the sale-leaseback of the Seabulk Africa in April 2003. Total 2003 expenditures of approximately $60 million will substantially cover all of our drydocking requirements for 57 vessels during 2003.

        Excluding the five double-hull product and chemical tankers, our principal debt obligations for 2002 were $114.9 million (including debt retired as part of recapitalization) and cash interest obligations were $25.0 million. Excluding the five double-hull product and chemical tankers, our

31

principal debt obligations for 2003 are estimated to be approximately $19.2 million and cash interest obligations will be approximately $17.4 million.

        During 2002, we paid $4.4 million in principal and $15.1 million in interest on the five double-hull tankers. For 2003, an estimated $4.7 million of principal and $14.8 million in interest payments are due on the Title XI ship financing bonds associated with the five double-hull tankers.

        We are required to make deposits to a Title XI reserve fund based on a percentage of net income attributable to the operations of the five double-hull tankers, as defined by the Title XI bond reserve fund and financial agreement. Cash held in a Title XI reserve fund is invested by the trustee of the fund, and any income earned thereon is either paid to us or retained in the reserve fund. Withdrawals from the Title XI reserve fund may be made for limited purposes, subject to prior approval from MARAD. In the second quarter of 2003, the first deposits to the reserve fund were made, in the amount of $3.8 million. Additionally, according to the Title XI bond reserve fund and financial agreement, we are restricted from formally distributing excess cash from the operations of the five double-hull tankers until certain working capital ratios have been reached and maintained. Accordingly, at December 31, 2002, we had approximately $19.5 million in cash and cash equivalents that were restricted for use for the operations of the five double-hull tankers and could not be used to fund our general working capital requirements, of which $4.3 million was declared as a dividend in March 2003 by the Non-recourse Subsidiaries and was subsequently paid to Seabulk International, Inc. in May 2003.

Summary of Our Payment Obligations

        The following table summarizes our contractual obligations at December 31, 2002, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

	Payments Due by Period (in millions)
Contractual Obligations	Total		Less than 1 year		1 - 3 years		4 - 5 years		Over 5 years
Long-term debt	$	435.2	$	24.3	$	55.4	$	154.9	$	200.6
Capital lease obligations		43.1		5.1		9.8		7.9		20.3
Operating leases		18.6		3.7		7.0		4.5		3.4
Total contractual cash obligations	$	496.9	$	33.1	$	72.2	$	167.3	$	224.3

Our Indebtedness

        Long-term debt consisted of the following at June 30, 2003:

Facility	2003 Payments		Outstanding Balance as of June 30, 2003		Maturity	Interest Rate as of August 1, 2003
	(Dollars in millions)
Bank Tranche A revolver	$	5.0	$	93.7	2007	5.61%
Bank Tranche B term loan	$	0.0	$	80.0	2007	6.11%
Title XI Financing Bonds	$	3.7	$	230.8	2005 to 2024	5.86% to 10.10%
Other notes payable	$	3.3	$	25.2	2003 to 2011	5.81% to 8.50%

        Credit Facility.    As of June 30, 2003, our credit facility consisted of $80.0 million in a term loan and a $100.0 million revolving credit facility. The proceeds from the credit facility were used to repay outstanding borrowings under our prior bank debt, to redeem our previously outstanding senior notes and to pay administrative and other fees and expenses. In addition to the term loan and the revolver balance, there were $1.3 million in outstanding letters of credit as of June 30, 2003. As a result, there

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was no unused portion of the revolver at June 30, 2003. Our credit facility was amended in connection with the closing of the offering for our outstanding notes.

        The amended credit facility consists of an $80 million revolving credit facility and has a five-year maturity. The amended credit facility is subject to semi-annual reductions commencing six months after closing. It is secured by first liens on certain of our vessels (excluding vessels financed with Title XI financing and some of our other vessels) and stock of certain of our subsidiaries and is guaranteed by certain of our subsidiaries. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense, a minimum ratio of adjusted funded debt to adjusted EBITDA and a minimum net worth covenant. The rate is either a LIBOR or base rate plus a margin based upon certain of our financial ratios.

Industry Outlook

        At June 30, 2003, we had working capital of approximately $39.9 million. Day rates and utilization for offshore vessels working in the Gulf of Mexico continued to be weak, a trend that began in September 2001. The slowdown in the domestic offshore market was offset in part by continued strength in our international offshore operations, where day rates remained strong during the year and contributed to increased revenue in West Africa and the Middle East, and in part by the improved performance of the marine transportation segment. The increased revenue in the offshore business in West Africa and the Middle East was driven by exploration and production spending as major oil companies continued to proceed with oil exploration and development programs outside the United States. Since the September 11, 2001 attacks, the subsequent war on terrorism and the war in Iraq, the U.S. economy continues to be subject to pressure. The timing of a recovery in the domestic offshore segment is still not certain. However, the increases in oil and natural gas prices during the fourth quarter of 2002 and the first half of 2003 reinforce the potential for an upturn in domestic exploration and development activity in the latter part of 2003. On the other hand, some exploration and drilling companies have reduced expectations for energy prospects in the mature Gulf of Mexico market. We do expect our earnings in 2003 from the offshore segment to improve somewhat compared to 2002. We also expect to benefit in 2003 from higher earnings in our marine transportation business as a result of a full year of higher time charter rates for certain tankers.

Outlook for Liquidity and Capital Needs

        We have taken new initiatives to improve profitability and liquidity in 2002 and 2003. The benefits of the stock issuance in September 2002 have been realized through interest savings of $10 to $12 million and an improved financial condition that should enable us to improve our ability to support future growth opportunities. During 2002 and the first six months of 2003, due to the expanding market in West Africa, we mobilized three of our Gulf of Mexico supply boats and one Southeast Asia utility boat for redeployment to West Africa. We also reactivated one anchor-handling tug from "held-for-sale" status and placed the boat into service in West Africa. At the end of December 2001, low-rate voyage charters for three of our tankers expired and were replaced by two time charters and a ten-year bareboat charter at substantially higher rates. In March 2002, we closed on the sale of the marine transportation assets of Sun State, our inland tug and barge subsidiary, for $3.9 million in cash; in May 2002, we closed on the sale of our Port Arthur facility for $3 million consisting of $1.5 million in cash and $1.5 million in future ship repair credits or cash; and in July 2002, we closed on the sale of the shipyard assets of Sun State for $450,000. The proceeds from the sale of Sun State's assets were used for working capital purposes as permitted by our loan covenants. The proceeds from the sale of our Port Arthur facility were used to pay down a term loan under a prior credit facility. In January 2003, we took delivery of the Seabulk Africa, a newbuild, state-of-the-art, 236-foot, 5500 horsepower UT-755L platform supply vessel. The vessel has joined our West African fleet. The Seabulk Africa was acquired for cash of approximately $16 million and was financed in April 2003 by means of

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a sale leaseback arrangement with TransAmerica Capital for a lease term of 10 years, after which we will have an option to acquire the vessel.

        We also took delivery of two newbuild vessels as bareboat charterer in February and March 2003. The Seabulk Badamyar is a 3800-horsepower anchor handling tug/supply vessel and Seabulk Nilar is a 3800-horsepower platform supply vessel. We are bareboat chartering the vessels from the shipbuilder, the Labroy Group in Indonesia, for deployment under time charters with a major international oil company in the Southeast Asia market. The term of each bareboat charter is three years with an option to purchase at the end of the term.

        In March 2003, we formed a joint venture company in Nigeria, named Modant Seabulk Nigeria Limited, with CTC International, Inc., a company owned by Nigerian interests. We have a minority interest in the joint venture. In April 2003 we sold five of our crewboats operating in Nigeria to a related joint venture with CTC International for $2.0 million. Modant Seabulk Nigeria Limited operates the crewboats in Nigeria and we provide certain management and accounting services for the joint venture.

        In June 2003, we purchased a Brazilian-flag line handling vessel for operations in Brazil for $2.5 million. During the second quarter, we also executed, and made a down payment under, a vessel construction agreement, through our Brazilian subsidiary, with a Brazilian shipyard for the construction of a modern platform supply vessel for a purchase price of $16.7 million for offshore energy support operations in Brazil. In August 2003, we exercised an option to purchase a second identical vessel for $16.5 million. In anticipation of such operations, we have established a Brazilian subsidiary maritime company called Seabulk Offshore do Brazil S.A.

        In September 2003, we took delivery of a 10,850-horsepower anchor handling tug supply vessel, the Seabulk South Atlantic, as bareboat charterer under a five-year bareboat charter with a purchase option, for deployment in West Africa.

        In September 2003, we entered into a joint venture agreement and formed a joint venture company called Angobulk SARL with Angola Drilling Company. The venture was established to expand our offshore business in Angola. We intend to bareboat charter offshore vessels to the joint venture and provide certain ship management services.

        In October 2003, we bareboat chartered Seabulk Asia, a new 5500 horsepower UT-755L platform supply vessel similar to the Seabulk Africa. The charter term is five years with a purchase option. Seabulk Asia has joined our West African fleet.

        While we believe that these initiatives are sound and attainable, the possibility exists that unforeseen events or business or regulatory conditions, including deterioration in our markets, could prevent us from meeting targeted operating results. If unforeseen events or business or regulatory conditions prevent us from meeting targeted operating results, we will continue to pursue alternative plans including additional asset sales, additional reductions in operating expenses and deferral of capital expenditures, which should enable us to satisfy essential capital requirements. While we believe we could successfully complete alternative plans, if necessary, there can be no assurance that such alternatives would be available or that we would be successful in their implementation.

Effects of Inflation

        The rate of inflation has not had a material impact on our operations. Moreover, if inflation remains at its recent levels, we would not expect it to have a material impact on our operations in the foreseeable future.

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Prospective Accounting Changes

        In June 2001, the Accounting Executive Committee (the "Committee") of the American Institute of Certified Public Accountants issued an exposure draft of a proposed Statement of Position (SOP) entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, we would expense major maintenance costs as incurred and prohibit the use of the deferral of the entire cost of a planned major maintenance activity. Currently, the costs incurred to drydock our vessels are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 30 to 36 months. At its September 9, 2003 meeting, AcSEC voted to approve the SOP. The SOP is expected to be presented for FASB clearance late in the fourth quarter of 2003 and would be applicable for fiscal years beginning after December 15, 2004. Management has determined that this SOP will have a material effect on the consolidated financial statements. In the year of adoption, we would write off the net book value of the deferred drydocking costs and record the write-off as a change in accounting principle ($23.2 million as of June 30, 2003). Additionally, all drydock expenditures incurred after the adoption of the SOP would be expensed as incurred.

        In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 14, and Technical Corrections, which eliminates the requirement that gains and losses from the extinguishment of debt be aggregated and, if material, classified as an extraordinary item, net of the related income tax effect, and eliminates an inconsistency between the accounting for sale-leaseback transactions and certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Subsequent to the January 1, 2003 adoption date of the standard, we will be required to reclassify to continuing operations amounts previously reported as extinguishments of debt.

        In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which addresses the financial accounting and reporting for costs associated with exit or disposal activities. SFAS No. 146 is effective for fiscal years beginning after December 31, 2002. The adoption of the standard is not expected to have a significant impact on us.

        In November 2002, the FASB issued Interpretation No. 45 (FIN 45), Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 expands on the accounting guidance of Statements No. 5, 57, and 107 and incorporates without change the provisions of FASB Interpretation No. 34, which is being superseded. FIN 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee, it must recognize an initial liability for the fair value, or market value, of the obligations it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002, regardless of the guarantor's fiscal year-end. The disclosure requirements in the Interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45 is not expected to have a significant impact on us.

        On December 31, 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure. SFAS No. 148 amends SFAS 123 to provide alternative methods of transition to the fair value method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure provisions of SFAS 123 to require expanded disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements.

        In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51" (FIN 46). FIN 46 requires certain variable interest entities

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to be consolidated by the primary beneficiary of the variable interest entity. The primary beneficiary is defined as the party which, as a result of holding its variable interest, absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns, or both. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The Company has not yet determined the impact that the adoption of FIN 46 will have on its financial position, results of operations or cash flows.

Quantitative and Qualitative
Disclosures About Market Risk

        We are exposed to market risk from changes in interest rates, which may adversely affect our results of operations and financial condition. Our policy is not to use financial instruments for trading or other speculative purposes and we are not a party to any leveraged financial instruments. Except as set forth below, we manage market risk by restricting the use of derivative financial instruments to infrequent purchases of forward contracts for the purchase of fuel oil for our carrier fleet. These contracts were terminated as of December 31, 2001. A discussion of our credit risk and the fair value of financial instruments is included in Notes 2 and 13 of our consolidated financial statements for the year ended December 31, 2002.

        On October 20, 2003, we entered into a ten year interest rate swap agreement with Fortis Bank and other members of our bank group. Through the swap agreement covering a notional amount of $150 million, we effectively converted the interest rate on our outstanding 9.5% notes due August 2013 to a floating rate based on LIBOR. The current effective floating interest rate is 6.05%. The swap agreement is expected to be secured by a second lien on the assets that secure our credit facility.

        The Jones Act restricts the U.S. coastwise trade to vessels owned, operated and crewed substantially by U.S. citizens. The Jones Act continues to be in effect and supported by Congress and the Bush Administration. However, it is possible that our advantage as a U.S. citizen operator of Jones Act vessels could be somewhat eroded over time as there continue to be periodic efforts and attempts by foreign interests to circumvent certain aspects of the Jones Act.

        We have exposure to short-term interest rates. Short-term variable rate debt is comprised primarily of the $80 million revolver under our amended and restated credit agreement and the $150 million senior notes (pursuant to the September 2003 swap agreement). Interest on the senior notes and revolver as of August 31, 2003 was 9.5% and 5.11%, respectively. A hypothetical 2.0% increase in the interest rates on the short-term variable rate debt would cause our interest expense to increase on average approximately $3.6 million per year over the term of the revolver and notes, with a corresponding decrease in income before taxes.

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BUSINESS

Overview

        We are a leader in each of our three main businesses—offshore energy support, marine transportation and marine towing. Our offshore energy support fleet, numbering 118 vessels, is one of the world's largest and provides services to operators of offshore oil and gas exploration, development and production facilities in the Gulf of Mexico, the Arabian Gulf, offshore West Africa, South America and Southeast Asia. Our marine transportation fleet, numbering ten tankers, carries petroleum products, crude oil and specialty chemicals in the U.S. domestic trade and includes five double-hull petroleum product and chemical carriers delivered in 1998 and 1999. Our towing fleet numbers 28 vessels and is one of the largest and most modern in the United States. We are the sole provider of commercial tug services at Port Canaveral, Florida; and a leading provider of those services in Port Everglades, Florida; Tampa, Florida; Mobile, Alabama; Lake Charles, Louisiana; and Port Arthur, Texas. We also provide offshore towing services primarily in the Gulf of Mexico.

Fleet Overview

        The following table lists the types of vessels we owned, operated, or chartered as of August 31, 2003:

					Vessels in Fleet
Offshore Energy Support
	Domestic Offshore Energy Support:
		Anchor Handling Tug Supply/Supply Boats			21
		Crew/Utility Boats			24
		Geophysical Boats			2
			Total Domestic Offshore Energy Support		47
	International Offshore Energy Support:
		Anchor Handling Tug Supply/Supply Boats			46
		Anchor Handling Tugs/Tugs			10
		Crew/Utility Boats			8
		Other			7
			Total International Offshore Energy Support		71
			Total Offshore Energy Support		118
Marine Transportation
		Petroleum/Chemical Product Carriers			10
Marine Towing					28
				Total vessels	156

        The total vessels referred to above include 136 vessels that we own and operate; three vessels that we own but are operated by others; and 17 vessels owned by others but operated by us, under various chartering and operating arrangements.

        Since August 2003, we have taken delivery of the newbuilds Seabulk South Atlantic, an AHTS vessel, and Seabulk Asia, a platform supply vessel, and have deployed both in West Africa. We also purchased a small tender, which will provide support to one of the vessels operating offshore West Africa.

        In June 2003, we purchased a Brazilian-flag line handling vessel for operations in Brazil.

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        For financial information about our business segments and geographic areas of operation, see Note 12 to our consolidated financial statements.

Lines of Business

Offshore Energy Support (Seabulk Offshore)

        The offshore energy support business accounted for approximately 53% of our total revenue in 2002 and approximately 49% of our total revenue in the first half of 2003. Offshore energy support vessels are used primarily to transport materials, supplies, equipment and personnel to drilling rigs and to support the construction, positioning and ongoing operation of oil and gas production platforms. These vessels are hired, or "chartered," by oil companies and others engaged in offshore exploration and production activities.

        The market for these services is fundamentally driven by the offshore exploration, development and production activities of oil and gas companies worldwide. The level of these activities depends primarily on the capital expenditures of oil and gas producers, which has traditionally been a function of current and anticipated oil and gas prices. Oil and gas prices are influenced by a variety of factors, including worldwide demand, production levels, inventory levels, governmental policies regarding exploration and development of reserves and political and economic factors in producing countries.

        Offshore energy support services are provided primarily by the following types of vessels:

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Supply boats (also called workboats) are generally steel-hull vessels of at least 150 feet in length. They serve exploration and production facilities and support offshore construction and maintenance activities and are differentiated from other vessel types by cargo flexibility and capacity. In addition to transporting deck cargo, such as drill pipe and heavy equipment, supply boats transport liquid mud, potable and drilling water, diesel fuel, dry bulk cement and dry bulk mud. With their relatively large liquid mud and dry bulk cement capacity and large areas of open deck space, they are generally in greater demand than other types of support vessels for exploration and workover drilling activities.



•

Anchor handling vessels, which include anchor handling tug/supply vessels and some tugs, are more powerful than supply boats and are used to tow and position drilling rigs, production facilities and construction barges. Some of these vessels are specially equipped to assist tankers while they are loading from single-point buoy mooring systems and others are used in place of supply boats when not performing towing and positioning functions.



•

Crewboats (also called crew/supply boats) are faster and smaller than supply boats and are used primarily to transport personnel and light cargo, including food and supplies, to and among production platforms, rigs and other offshore installations. These vessels are chartered together with supply boats to support drilling or construction operations or, separately, to serve the various requirements of offshore production platforms. Crewboats are typically aluminum-hull vessels and generally have longer useful lives than steel-hull supply boats. Crewboats also provide a cost-effective alternative to helicopter transportation services and can operate reliably in all but the most severe weather conditions. However, our strategy is to focus on higher-value, higher-margin vessels and reduce the smaller, lower-margin crewboat business. As a result, we sold nine crewboats during 2002 and 11 from January 1, 2003 through June 30, 2003 and our strategy is to continue to de-emphasize our crewboat business in 2003.

        About 28% of our 2002 offshore revenue and approximately 25% of our offshore revenue for the first half of 2003 was derived from domestic operations under U.S.-flag vessel registration in the Gulf of Mexico, directed from offices in Lafayette, Louisiana. The balance was derived from international operations, including offshore West Africa, the Arabian Gulf and adjacent areas, and Southeast Asia. We also operate offshore energy support vessels in other regions, including Brazil. Operations in the

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Arabian Gulf, Southeast Asia and adjacent areas are directed from facilities in Dubai, United Arab Emirates; operations in offshore West Africa and certain other international areas are directed from facilities in Nyon, Switzerland; and operations in Mexico are directed from our Lafayette, Louisiana facilities. We also have sales offices and/or maintenance and other facilities in many of the countries where our vessels operate.

        The following table shows the deployment of our offshore energy support fleet at August 31, 2003.

Location				Vessels
Domestic Offshore Energy Support
	U.S. Gulf of Mexico			41
	Other			6
				47
International Offshore Energy Support
	West Africa			35
	Middle East			24
	Southeast Asia			10
	Other			2
		Total International Offshore Energy Support		71
			Total	118

        The average age of our U.S. offshore energy support vessels, based on the later of the date of construction or rebuilding, is approximately 17 years. Approximately 29% of our U.S. offshore fleet is 10 or less years old and approximately 50% is 20 or more years old. After a vessel has been in service for approximately 30 years, the costs of repair, vessel certification and maintenance may not be economically justifiable.

Marine Transportation (Seabulk Tankers)

        We provide marine transportation services, principally for petroleum products and specialty chemicals, in the U.S. domestic or "coastwise" trade, a market largely insulated from direct international competition under the Jones Act. Marine transportation consists of our ten tankers, five of which are double-hulled. This business accounted for approximately 37% of our total revenue in 2002 and for approximately 39% of our total revenue for the first half of 2003.

        Petroleum Product Transportation.    In the domestic energy transportation trade, oceangoing and inland-waterway vessels transport fuel and other petroleum products, primarily from refineries and storage facilities along the coast of the U.S. Gulf of Mexico to utilities, waterfront industrial facilities and distribution facilities along the U.S. Gulf of Mexico, the Atlantic and Pacific coasts and inland rivers, as well as transportation of petroleum crude and product between Alaska, the West Coast and Hawaii. The number of U.S.-flag oceangoing vessels eligible to participate in the U.S. domestic trade and capable of transporting fuel or petroleum products has steadily decreased since 1980, as vessels have reached the end of their useful lives and the cost of constructing vessels in the United States (a requirement for U.S. domestic trade participation) has substantially increased. The decline in the number of available vessels has tightened the supply/demand balance and put upward pressure on freight rates, thereby benefiting us and our fleet of relatively young tankers.

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        At August 31, 2003 we operated the following petroleum product carriers:

Name of Vessel	Capacity (in barrels)	Tonnage in dwt	OPA 90 retirement date
Seabulk Trader	360,000	49,900	2011
Seabulk Challenge	360,000	49,900	2011
S/R Bristol Bay (formerly known as Ambrose Channel)	341,000	45,000	none
Seabulk Arctic	340,000	46,000	none
Seabulk Mariner	340,000	46,000	none
Seabulk Pride	340,000	46,000	none
Defender	260,000	36,600	2008

        Since January 2002, the S/R Bristol Bay has been operated by a major oil company on a bareboat charter. It is expected to be converted into a transportation agreement during the fourth quarter of 2003.

        The S/R Bristol Bay, Seabulk Arctic, Seabulk Mariner and Seabulk Pride are four of our five double-hull carriers. These vessels are the newest and most technologically advanced product carriers in the Jones Act market. The fifth double-hull, Brenton Reef, is listed below under chemical tankers.

        We acquired the Defender in March 1998. Under OPA 90, this vessel cannot be used to transport petroleum and petroleum products in U.S. commerce after 2008. We acquired the Seabulk Challenge and Seabulk Trader in August 1996. Their OPA 90 retirement date is 2011. The four double-hulls have no retirement date under OPA 90.

        At August 31, 2003, six of our petroleum product carriers were operating under time charters and one under a bareboat charter.

        Chemical Transportation.    In the U.S. domestic chemical transportation trade, vessels carry chemicals, primarily from chemical manufacturing plants and storage tank facilities along the coast of the U.S. Gulf of Mexico to industrial users in and around Atlantic and Pacific coast ports. The chemicals transported consist primarily of caustic soda, alcohol, chlorinated solvents, paraxylene, alkylates, toluene, ethylene glycol, methyl tertiary butyl ether (MTBE) and lubricating oils. Some of the chemicals transported must be carried in vessels with specially coated or stainless steel cargo tanks; many of them are very sensitive to contamination and require special cargo-handling equipment.

        At August 31, 2003, we operated three vessels in the chemical trade:

Name of Vessel	Capacity (in barrels)	Tonnage in dwt	OPA 90 retirement date
Brenton Reef	341,000	45,000	none
Seabulk Magnachem	297,000	39,300	2007
Seabulk America	297,000	46,300	2015

        Delivered in 1999, the Brenton Reef is a double-hull carrier in which we have a 100% equity interest. We operate the Seabulk Magnachem under a bareboat charter expiring in February 2007, with a purchase option. We own a 67% equity interest in the Seabulk America; the remaining 33% interest is owned by Stolt Tankers (U.S.A.), Inc.

        The Seabulk Magnachem and Seabulk America have full double bottoms (as distinct from double-hulls). Double bottoms provide increased protection over single-hull vessels in the event of a grounding. Delivered in 1977, the Seabulk Magnachem is a CATUG (or catamaran tug) integrated tug and barge, or ITB, which has a higher level of dependability, propulsion efficiency and performance than an ordinary tug and barge. The Seabulk America's stainless steel tanks were constructed without

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internal structure, which greatly reduces cargo residue from transportation and results in less cargo degradation. Stainless steel tanks, unlike epoxy-coated tanks, also do not require periodic sandblasting and recoating, which we deem to be a competitive advantage.

        All three chemical carriers have from 13 to 24 cargo segregations which are configured, strengthened and coated to handle various sized parcels of a wide variety of industrial chemical and petroleum products, giving them the ability to handle a broader range of chemicals than chemical-capable product carriers. Many of the chemicals we transport are hazardous substances. Current voyages are generally conducted from the Houston and Corpus Christi (Texas) and Lake Charles (Louisiana) areas to such ports as New York, Philadelphia, Baltimore, Wilmington (North Carolina) Charleston (South Carolina) Los Angeles, San Francisco and Kalama (Washington). Our chemical carriers are also suitable for transporting other cargoes, including grain.

        Pursuant to OPA 90, the Seabulk America and Seabulk Magnachem cannot be used to transport petroleum and petroleum products in U.S. commerce after 2015 and 2007, respectively. The Brenton Reef has no retirement date under OPA 90.

        We believe that the total capacity of these carriers represents a substantial portion of the capacity of the domestic specialty chemical carrier fleet. The two chemical carriers, Seabulk America and Seabulk Magnachem, can also be used as petroleum tankers. They are among the last independently owned carriers scheduled to be retired under OPA 90.

        For vessels not operating under time charters, we book cargoes either on a spot (movement-by-movement) or contract of affreightment basis. Approximately 75.0% of contracts for cargo are committed on a 12- to 30-month basis, with minimum and maximum cargo tonnage specified over the period at fixed or escalating rates per ton.

Marine Towing (Seabulk Towing)

        Towing is the smallest of our three businesses, representing about 10% of our total revenue in 2002 and approximately 12% of our total revenue for the first half of 2003. Our harbor tugs serve seven ports in Florida, Alabama, Texas and Louisiana, where they assist petroleum product carriers, barges, container ships and other cargo vessels in docking and undocking and in proceeding within the port areas and harbors. We also operate four tugs with offshore towing capabilities that conduct a variety of offshore towing services in the Gulf of Mexico, Guayanilla, Puerto Rico and the Atlantic Ocean. Our tug fleet consists of 18 conventional tugs and 10 tractor tugs, including four Ship Docking Module™ tractor tugs, known as SDMs™. SDMs™ are innovative ship docking vessels, designed and patented by us, that are more maneuverable, efficient and flexible and require fewer crew members than conventional harbor tugs.

        In August 2002, we bareboat-chartered the tug Hollywood for a term of one year with four options to renew for a period of one year each to Signet for operations in the port of Brownsville, Texas. The name was subsequently changed to Signet Enterprise. In December 2002, we bareboat-chartered the tug Condor to Moran Towing for operations in New York harbor for a term of one year. The Signet Enterprise formerly operated in Tampa and the Condor formerly operated in Mobile.

        Harbor Tug Operations.    In most U.S. ports, competition is unregulated. However, a few ports grant non-exclusive franchises to harbor tug operators. These include Port Manatee (near Tampa), Florida, where we are currently the sole franchisee, and Port Everglades, Florida, where we are currently the leading provider of tug services and one of two franchise holders. Rates are unregulated in all ports that we serve, including the franchised ports. Generally, harbor tugs can be moved from port to port.

        Port Everglades.    Port Everglades is the second largest petroleum non-refining storage and distribution center in the United States, providing substantially all of the petroleum products for South

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Florida. Between 1958, when our tug operations commenced, and December 2001, we operated the franchise as the sole provider of docking services in the port. In August 2001, a second franchise was issued by the port to a competitor, who commenced operations in the port in December 2001. Seabulk Towing's franchise was amended in January 2002 to require Seabulk Towing to maintain a minimum of three tractor tugs in the port, rather than five tugs as previously required. The franchise is not exclusive and expires in 2007. While we are regarded as a high-standards operator, there is no assurance the franchise will be renewed. As of August 31, 2003, we operated five tugs in Port Everglades.

        Tampa.    We expanded our harbor towing services to Tampa through the October 1997 acquisition of an established operator in the port. Because the port is comprised of three "sub-ports" (including Port Manatee) and a distant sea buoy, a greater number of tugs is required to be a competitive operator in Tampa than in other ports of similar size. On August 31, 2003, we operated five tugs, including two tractor tugs and one SDM™ in the port (including Port Manatee).

        Port Canaveral.    In Port Canaveral, we had been the sole franchise holder to provide harbor-docking services until May 2003 when the Canaveral Port Authority terminated its franchise system. We provide docking and undocking services for commercial cargo vessels serving central Florida and Navy vessels and, on a very limited basis, for cruise ships. We are currently the sole provider of tug services at the Port. We operate four tugs in Port Canaveral.

        Mobile.    At this port, we provide docking and undocking services primarily to commercial cargo vessels, including vessels transporting coal and other bulk exports. We currently operate three tugs at this port. There is a competing provider.

        Port Arthur and Lake Charles.    At these ports we operate seven tugs. Currently, four of these tugs serve Port Arthur, Texas; two serve Lake Charles, Louisiana, and one serves both harbors. Each of these ports has a competing provider of harbor tug services.

        Offshore Towing Operations.    We currently have two tugs working in the offshore towing market that conduct a variety of offshore towing services in the Gulf of Mexico and the Atlantic Ocean. Demand for towing services depends on vessel traffic and oilfield activity, which is in turn generally dependent on local, national and international economic conditions, including the volume of world trade.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

        We are controlled by Nautilus GP, LLC, a general partnership comprised of unaffiliated U.S. citizen individuals and Credit Suisse First Boston Private Equity, Inc., and limited partnerships affiliated with Carlyle/Riverstone. Nautilus Acquisition, L.P. and the Carlyle/Riverstone limited partnerships own approximately 50% and 25%, respectively, of our common equity. Nautilus Acquisition, L.P. is controlled by Nautilus GP. The Carlyle/Riverstone limited partnerships, three of which are more than 75% owned by U.S. citizens, are controlled by C/R Marine GP Corp., owned by six individuals, all of whom are U.S. citizens. Nautilus Acquisition, L.P., acting though Nautilus GP, and the three U.S. owned Carlyle Riverstone partnerships, acting though Marine GP, have the power to elect six of our ten directors and thus, control the appointment of our management and other significant decisions. In addition, Nautilus GP and the Carlyle/Riverstone partnerships control mergers, sales of substantially all of our assets, and other extraordinary transactions. CSFB Private Equity is a wholly-owned subsidiary of Credit Suisse First Boston (USA), Inc., an affiliate of one of the initial purchasers, Credit Suisse First Boston LLC.

        Credit Suisse First Boston LLC (CSFB) acted as our financial advisor, an initial purchaser of the notes and joint-lead manager and sole lead book-running manager of the private offering of our outstanding notes that closed on August 5, 2003. CSFB received customary fees for these services. CSFB has advised us that, subject to applicable laws and regulations, CSFB currently intends to make a market in the new notes following the exchange offer. However, CSFB is under no obligation to do so, and any such market-making may be interrupted or discontinued at any time without notice.

        CSFB or its affiliates may in the future engage in investment banking and other services with us, for which CSFB or its affiliates will receive customary compensation. Affiliates of CSFB Private Equity may provide certain management services to us and, in return, receive compensation for these services.

        Seabulk International, Inc. provides management and technical services for the five double-hull tankers owned by our Non-recourse Subsidiaries. Fees are payable to us for such services by these subsidiaries under a Commercial Services Agreement and a Technical Services Agreement, approved by MARAD as part of the Title XI debt guaranteed by MARAD.

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EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

        In connection with the issuance of the outstanding notes, we entered into a registration rights agreement. Under the registration rights agreement, we agreed to:

•

within 90 days after the original issuance of the outstanding notes on August 5, 2003, file a registration statement with the SEC with respect to a registered offer to exchange each outstanding note for a new note having terms substantially identical in all material respects to such note except that the new note will not contain terms with respect to transfer restrictions;



•

use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act within 180 days after the original issuance of the outstanding notes;



•

promptly following the effectiveness of the registration statement, offer the new notes in exchange for surrender of the outstanding notes; and



•

keep the exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of the outstanding notes.

        We have fulfilled the agreements described in the first two of the preceding bullet points and are now offering eligible holders of the outstanding notes the opportunity to exchange their outstanding notes for new notes registered under the Securities Act. Holders are eligible if they are not prohibited by any law or policy of the SEC from participating in this exchange offer. The new notes will be substantially identical to the outstanding notes except that the new notes will not contain terms with respect to transfer restrictions, registration rights or additional interest.

        Under limited circumstances, we agreed to use our reasonable best efforts to cause the SEC to declare effective under the Securities Act a shelf registration statement for the resale of the outstanding notes. We also agreed to use our reasonable best efforts to keep the shelf registration statement effective for up to two years after its effective date. The circumstances include if:

•

changes in law or applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer; or



•

for any other reason we do not consummate the exchange offer within 210 days of the original issuance of the outstanding notes; or



•

any initial purchaser notifies us within 30 days following consummation of the exchange offer that notes held by it are not eligible to be exchanged for new notes in the exchange offer; or



•

certain holders are not eligible to participate in the exchange offer or do not receive freely tradeable new notes on the date of exchange.

        We will pay additional cash interest on the applicable outstanding notes, subject to certain exceptions:

        (1)   if by the 210th day after the original issuance of the outstanding notes, neither the exchange offer is consummated nor, if required in lieu thereof, if by the 180th day after the original issuance of the outstanding notes, the shelf registration statement is not declared effective by the SEC; or

        (2)   after any of the registration statements required by the registration rights agreement has been declared effective but thereafter ceases to be effective or usable (subject to certain exceptions) in connection with resales of the notes;

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from and including the date on which any such registration default shall occur to but excluding the date on which all registration defaults have been cured.

        The rate of the additional interest will be 0.25% per annum for the first 90-day period immediately following the occurrence of a registration default, and such rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all registration defaults have been cured, up to a maximum additional interest rate of 1.0% per annum. We will pay such additional interest on regular interest payment dates. This additional interest will be in addition to any other interest payable from time to time with respect to the outstanding notes and the new notes.

        To exchange your outstanding notes for new notes in the exchange offer, you will be required to make the following representations:

•

any new notes received by you will be acquired in the ordinary course of your business;



•

you have no arrangement or understanding with any person to participate in the distribution of the outstanding notes or the new notes;



•

you are not our "affiliate," as defined in Rule 405 of the Securities Act, or if you are our affiliate you will comply with any applicable registration and prospectus delivery requirements of the Securities Act;



•

if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the new notes; and



•

if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes, you acquired those notes as a result of market-making activities or other trading activities and you will deliver a prospectus, as required by law, in connection with any resale of such new notes.

        In addition, we may require you to provide information to be used in connection with the shelf registration statement to have your outstanding notes included in the shelf registration statement and benefit from the provisions regarding additional interest described in the preceding paragraphs. We may exclude you from such registration if you unreasonably fail to furnish the requested information to us within a reasonable time after receiving our request. A holder who sells outstanding notes under the shelf registration statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers. Such a holder will also be subject to the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement that are applicable to such a holder, including indemnification obligations.

        The description of the registration rights agreement contained in this section is a summary only. For more information, you should review the provisions of the registration rights agreement that we filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.

Resale of New Notes

        Based on no action letters of the SEC staff issued to third parties, we believe that new notes may be offered for resale, resold and otherwise transferred by you without further compliance with the registration and prospectus delivery provisions of the Securities Act if:

•

you are not our "affiliate" within the meaning of Rule 405 under the Securities Act;



•

such new notes are acquired in the ordinary course of your business; and



•

you have no arrangements with any person to participate in a distribution of the new notes.

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        The SEC, however, has not considered the exchange offer for the new notes in the context of a no action letter, and the SEC may not make a similar determination as in the no action letters issued to these third parties.

        If you tender your outstanding notes in the exchange offer with the intention of participating in any manner in a distribution of the new notes, you

•

cannot rely on such interpretations by the SEC staff; and



•

must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

        Unless an exemption from registration is otherwise available, any security holder intending to distribute new notes should be covered by an effective registration statement under the Securities Act. This registration statement should contain the selling security holder's information required by Item 507 of Regulation S-K under the Securities Act. This prospectus may be used for an offer to resell, resale or other retransfer of new notes only as specifically described in this prospectus. Only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives new notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge by way of the letter of transmittal that it will deliver a prospectus in connection with any resale of the new notes. Please read "Plan of Distribution" for more details regarding the transfer of new notes.

Terms of the Exchange Offer

        Subject to the terms and conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn prior to 5:00 p.m. New York City time on the expiration date. We will issue new notes in principal amount equal to the principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only for new notes and only in integral multiples of $1,000.

        The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

        As of the date of this prospectus, $150,000,000 in aggregate principal amount of the outstanding notes are outstanding. This prospectus is being sent to DTC, the sole registered holder of the outstanding notes, and to all persons that we can identify as beneficial owners of the outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer.

        We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC. Outstanding notes whose holders do not tender for exchange in the exchange offer will remain outstanding and continue to accrue interest. These outstanding notes will be entitled to the rights and benefits such holders have under the indenture relating to the notes and the registration rights agreement.

        We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given oral or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the new notes from us.

        If you tender outstanding notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes

46

described below, in connection with the exchange offer. It is important that you read "—Fees and Expenses" for more details regarding fees and expenses incurred in the exchange offer.

        We will return any outstanding notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

Expiration Date

        The exchange offer will expire at 5:00 p.m., New York City time on            2003, unless, in our sole discretion, we extend it.

Extensions, Delays in Acceptance, Termination or Amendment

        We expressly reserve the right, at any time or various times, to extend the period of time during which the exchange offer is open. We may delay acceptance of any outstanding notes by giving oral or written notice of such extension to their holders. During any such extension, all outstanding notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange.

        In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of outstanding notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

        If any of the conditions described below under "—Conditions to the Exchange Offer" have not been satisfied, we reserve the right, in our sole discretion, up to the expiration of the exchange offer:

•

to delay accepting for exchange any outstanding notes,



•

to extend the exchange offer, or



•

to terminate the exchange offer

by giving oral or written notice of such delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.

        Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of outstanding notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement. The supplement will be distributed to the registered holders of the outstanding notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer if the exchange offer would otherwise expire during such period.

Conditions to the Exchange Offer

        We will not be required to accept for exchange, or exchange any new notes for, any outstanding notes if the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any applicable interpretation of the staff of the SEC. Similarly, we may terminate the exchange offer as provided in this prospectus before accepting outstanding notes for exchange in the event of such a potential violation.

        In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us the representations described under "—Purpose and Effect of the Exchange Offer," "—Procedures for Tendering" and "Plan of Distribution" and such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to allow us to use an appropriate form to register the new notes under the Securities Act.

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        We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the outstanding notes as promptly as practicable.

        These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion up to the expiration of the exchange offer. If we fail at any time to exercise any of these rights, this failure will not mean that we have waived our rights. Each such right will be deemed an ongoing right that we may assert at any time or at various times.

        In addition, we will not accept for exchange any outstanding notes tendered, and will not issue new notes in exchange for any such outstanding notes, if at such time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture relating to the notes under the Trust Indenture Act of 1939.

Procedures for Tendering

        In order to participate in the exchange offer, you must properly tender your outstanding notes to the exchange agent as described below. It is your responsibility to properly tender your notes. We have the right to waive any defects. However, we are not required to waive defects and are not required to notify you of defects in your tender.

        If you have any questions or need help in exchanging your notes, please call the exchange agent whose address and phone number are set forth in "Prospectus Summary—The Exchange Offer—Exchange Agent."

        All of the outstanding notes were issued in book-entry form, and all of the outstanding notes are currently represented by global certificates held for the account of DTC. We have confirmed with DTC that the outstanding notes may be tendered using the Automated Tender Offer Program ("ATOP") instituted by DTC. The exchange agent will establish an account with DTC for purposes of the exchange offer promptly after the commencement of the exchange offer and DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer their outstanding notes to the exchange agent using the ATOP procedures. In connection with the transfer, DTC will send an "agent's message" to the exchange agent. The agent's message will state that DTC has received instructions from the participant to tender outstanding notes and that the participant agrees to be bound by the terms of the letter of transmittal.

        By using the ATOP procedures to exchange outstanding notes, you will not be required to deliver a letter of transmittal to the exchange agent. However, you will be bound by its terms just as if you had signed it.

        There is no procedure for guaranteed late delivery of the notes.

Determinations Under the Exchange Offer

        We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notes not properly tendered or any outstanding notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defect, irregularity or condition of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, all defects or irregularities in connection with tenders of outstanding notes must be

48

cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither the exchange agent, us nor any other person will incur any liability for failure to give such notification. Tenders of outstanding notes will not be deemed made until such defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder as soon as practicable following the expiration date.

When We Will Issue New Notes

        In all cases, we will issue new notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent receives, prior to 5:00 p.m., New York City time, on the expiration date:

•

a book-entry confirmation of such outstanding notes into the exchange agent's account at DTC; and



•

a properly transmitted agent's message.

Return of Outstanding Notes Not Accepted or Exchanged

        If we do not accept any tendered outstanding notes for exchange or if outstanding notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged outstanding notes will be returned without expense to their tendering holder. Such non-exchanged outstanding notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.

Your Representations to Us

        By agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:

•

any new notes that you receive will be acquired in the ordinary course of your business;



•

you have no arrangement or understanding with any person to participate in the distribution of the outstanding notes or the new notes;



•

you are not our "affiliate," as defined in Rule 405 of the Securities Act, or if you are our affiliate you will comply with any applicable registration and prospectus delivery requirements of the Securities Act;



•

if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the new notes; and



•

if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes, you acquired those notes as a result of market-making activities or other trading activities and you will deliver a prospectus, as required by law, in connection with any resale of such new notes.

Withdrawal of Tenders

        Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective you must comply with the appropriate procedures of DTC's ATOP system. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn outstanding notes and otherwise comply with the procedures of DTC.

49

        We will determine all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal. Our determination shall be final and binding on all parties. We will deem any outstanding notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

        Any outstanding notes that have been tendered for exchange but are not exchanged for any reason will be credited to an account maintained with DTC for the outstanding notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn outstanding notes by following the procedures described under "—Procedures for Tendering" above at any time prior to 5:00 p.m., New York City time, on the expiration date.

Fees and Expenses

        We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by telegraph, telephone or in person by our officers and regular employees and those of our affiliates.

        We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.

        We will pay the cash expenses to be incurred in connection with the exchange offer. They include:

•

SEC registration fees;



•

fees and expenses of the exchange agent and trustee;



•

accounting and legal fees and printing costs; and



•

related fees and expenses.

Transfer Taxes

        We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer.

Consequences of Failure to Exchange

        If you do not exchange your outstanding notes for new notes under the exchange offer, you will remain subject to the existing restrictions on transfer of the outstanding notes. In general, you may not offer or sell the outstanding notes unless they are registered under the Securities Act, or if the offer or sale is exempt from the registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

Accounting Treatment

        We will record the new notes in our accounting records at the same carrying value as the outstanding notes. This carrying value is the aggregate principal amount of the outstanding notes less any bond discount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer.

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Other

        Participation in the exchange offer is voluntary, and you should carefully consider whether to participate. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

        We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

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USE OF PROCEEDS

        The exchange offer is intended to satisfy our obligations under our registration rights agreement. We will not receive any cash proceeds from the issuance of the new notes in the exchange offer. In consideration for issuing the new notes as contemplated by this prospectus, we will receive outstanding notes in a like principal amount. The form and terms of the new notes are identical in all respects to the form and terms of the outstanding notes, except the new notes do not include certain transfer restrictions, registration rights or provisions for additional interest and contain different administrative terms. Outstanding notes surrendered in exchange for the new notes will be retired and cancelled and will not be reissued. Accordingly, the issuance of the new notes will not result in any change in our outstanding indebtedness.

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DESCRIPTION OF NEW NOTES

        The Company will issue the new notes, and the outstanding notes were issued, under the Indenture (the "Indenture") among itself, the Guarantors and Wachovia Bank, National Association, as trustee (the "Trustee"). References to the "notes" in this "Description of New Notes" include both the outstanding notes and the new notes. The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The notes are subject to all such terms, and you are referred to the Indenture and the Trust Indenture Act for a statement thereof. The aggregate principal amount of notes issuable under the Indenture is unlimited, although the initial issuance of new notes will be limited to $150.0 million. We may issue an unlimited principal amount of Additional Notes having identical terms and conditions as the outstanding notes and the new notes, subject to compliance with the covenant described below under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock." Any Additional Notes will be part of the same issue as the notes and will vote on all matters with the holders of such notes.

        The following description is a summary of the material provisions of the Indenture but does not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, defines your rights as holders of the notes. A copy of the Indenture is filed as an exhibit to the registration statement of which this prospectus forms a part. As used in this "Description of New Notes," the "Company" means Seabulk International, Inc., but not any of its subsidiaries. The definitions of certain capitalized terms used in this "Description of New Notes" are set forth below under "—Optional Redemption" and "—Certain Definitions." Certain defined terms used but not defined below have the meanings assigned to them in the Indenture.

        If the exchange offer contemplated by this prospectus (the "Exchange Offer") is consummated, holders of outstanding notes who do not exchange those notes for new notes in the Exchange Offer will vote together with holders of new notes for all relevant purposes under the Indenture. In that regard, the Indenture requires that certain actions by the holders thereunder (including acceleration following an Event of Default) must be taken, and certain rights must be exercised, by specified minimum percentages of the aggregate principal amount of the outstanding securities issued under the Indenture. In determining whether holders of the requisite percentage in principal amount have given any notice, consent or waiver or taken any other action permitted under the Indenture, any outstanding notes that remain outstanding after the Exchange Offer will be aggregated with the new notes, and the holders of such outstanding notes and the new notes will vote together as a single series for all such purposes. Accordingly, all references herein to specified percentages in aggregate principal amount of the notes outstanding shall be deemed to mean, at any time after the Exchange Offer is consummated, such percentages in aggregate principal amount of the outstanding notes and the new notes then outstanding.

Brief Description of the Notes and the Subsidiary Guarantees

The Notes and the Subsidiary Guarantees

        The notes:

•

are general unsecured, senior obligations of the Company;



•

are limited to an aggregate principal amount of $150.0 million, subject to our ability to issue Additional Notes;



•

mature on August 15, 2013;



•

rank equally in right of payment to any other senior indebtedness of the Company;



•

rank effectively junior in right of payment to any secured indebtedness of the Company;

53

•

rank senior in right of payment to any subordinated indebtedness of the Company; and



•

are unconditionally guaranteed on a senior basis by all of the Company's domestic Restricted Subsidiaries.

        The new notes will be issued, and the outstanding notes were issued, in denominations of $1,000 and integral multiples of $1,000, and are represented by one or more registered notes in global form, but in certain circumstances may be represented by notes in definitive form. Any outstanding notes that remain outstanding after the completion of the Exchange Offer, together with any new notes issued in connection with the Exchange Offer, will be treated as a single class of securities under the Indenture.

        The Subsidiary Guarantees:

•

are general unsecured, senior obligations of the Guarantors;



•

rank equally in right of payment to any other senior indebtedness of the Guarantors;



•

rank effectively junior in right of payment to any secured indebtedness of the Guarantors; and



•

will rank senior in right of payment to any future subordinated indebtedness of the Guarantors.

        Not all of our Subsidiaries guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to us. The Guarantors generated approximately 27.8% and 0.1% of our consolidated revenue and income from operations, respectively, for the twelve months ended June 30, 2003 and held approximately 42.0% of our consolidated assets as of June 30, 2003. As of June 30, 2003, on an as adjusted basis after giving effect to the original issuance of the outstanding notes and our use of proceeds therefrom, the notes and the Subsidiary Guarantees would have ranked effectively junior in right of payment to $254.3 million of Indebtedness and other liabilities, including trade payables, of our non-guarantor Subsidiaries.

        Each of the Company's Subsidiaries other than the Non-Recourse Subsidiaries are Restricted Subsidiaries. Under certain circumstances, the Company will be able to designate additional current or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to many of the restrictive covenants set forth in the Indenture.

Interest

        Interest on the new notes will:

•

accrue at the rate of 9¹/2% per annum;



•

accrue from the date of original issuance of the outstanding notes, which is August 5, 2003, or, if interest has already been paid, from the most recent interest payment date;



•

be payable in cash semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2004;



•

be payable to the holders of record on February 1 and August 1 immediately preceding the related interest payment dates; and



•

be computed on the basis of a 360-day year comprised of twelve 30-day months.

Payments on the New Notes; Paying Agent and Registrar

        We will pay principal of, and interest and premium, if any, on the new notes at the office or agency designated by the Company in the Borough of Manhattan, The City of New York, except that we may, at our option, pay interest on the notes by check mailed to holders of the notes at their

54

registered address as it appears in the Registrar's books. We have initially designated the corporate trust office or agency of the Trustee in New York, New York to act as our Paying Agent and Registrar. We may, however, change the Paying Agent or Registrar without prior notice to the holders of the notes, and the Company or any of its Restricted Subsidiaries may act as Paying Agent or Registrar.

        We will pay principal of, and interest and premium, if any, on each note in global form registered in the name of or held by The Depository Trust Company ("DTC") or its nominee in immediately available funds to DTC or its nominee, as the case may be, as the registered holder of such global note.

Transfer and Exchange

        A holder may transfer or exchange notes in accordance with the Indenture. The Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge will be imposed by the Company, the Trustee or the Registrar for any registration of transfer or exchange of notes, but the Company may require a holder to pay a sum sufficient to cover any transfer tax or other governmental taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any note selected for redemption. Also, the Company is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.

        The registered holder of a note will be treated as the owner of it for all purposes, and all references to "holders" in this "Description of New Notes" are to registered holders unless otherwise indicated.

Principal, Maturity and Interest

        On August 5, 2003, the Company issued the outstanding notes with a maximum aggregate principal amount of $150.0 million. The Company may issue Additional Notes from time to time after this offering. Any offering of Additional Notes is subject to the covenant described below under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock." The notes initially issued and any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The Company will issue new notes and Additional Notes in denominations of $1,000 and integral multiples of $1,000. The notes mature on August 15, 2013.

        Interest on the new notes will accrue at the rate of 9¹/2% per annum and will be payable semi-annually in arrears on February 15 and August 15, commencing on February 15, 2004 in the case of notes initially issued. The Company will make each interest payment to the holders of record on the immediately preceding February 1 and August 1.

        Interest on the notes will accrue from the date of original issuance of the outstanding notes or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Methods of Receiving Payments on the Notes

        If a holder of at least $1.0 million principal amount of notes has given wire transfer instructions to the Company, the Company will pay all principal, interest and premium on that holder's notes in accordance with those instructions. All other payments on notes will be made at the corporate trust office or agency of the Trustee within the City and State of New York unless the Company elects to make interest payments by check mailed at their address set forth in the register of holders.

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Subsidiary Guarantees

        The Company's payment obligations under the new notes will be jointly and severally guaranteed (the "Subsidiary Guarantees") by all of the Company's present domestic and certain future Restricted Subsidiaries (the "Guarantors").

        The obligations of each Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors—Risks Related to the Notes—A court could subordinate or void the obligations under our subsidiaries' guarantees."

        Each Guarantor that makes a payment under its Subsidiary Guarantee will be entitled upon payment in full of all guaranteed obligations under the Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor's pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

        In the circumstances described under "—Certain Covenants—Additional Subsidiary Guarantees," the Indenture will require certain of the Company's Restricted Subsidiaries to execute supplements to the Indenture providing for Subsidiary Guarantees. The obligations of each Guarantor under its Subsidiary Guarantee will be a general unsecured obligation of such Guarantor, ranking equally in right of payment with all other senior indebtedness of such Guarantor and senior in right of payment to any subordinated indebtedness of such Guarantor.

        No Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (other than the Company or another Guarantor), whether or not affiliated with such Guarantor, unless:

        (1)   subject to the provisions of the following paragraph, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) shall execute a supplement to the Indenture providing for a Guarantee and deliver an Opinion of Counsel in accordance with the terms of the Indenture;

        (2)   immediately after giving effect to such transaction, no Default or Event of Default exists; and

        (3)   no Default or Event of Default shall have occurred and be continuing.

        In the event of a sale or other disposition (including by way of merger or consolidation) of all or substantially all of the assets or all of the Capital Stock of any Guarantor, then such Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee; provided, however, that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture. See "—Certain Covenants—Limitation on Asset Sales." Upon Legal Defeasance or Covenant Defeasance, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee. In addition, in the event the Board of Directors designates a Guarantor to be an Unrestricted Subsidiary, then such Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee, provided that such designation is conducted in accordance with the applicable provisions of the Indenture.

Optional Redemption

        On and after August 15, 2008 the notes will be subject to redemption at any time at the option of the Company, in whole or in part, at the redemption prices (expressed as percentages of principal

56

amount) set forth below, plus accrued and unpaid interest to the applicable redemption date, if redeemed during the 12-month period beginning on August 15 of the years indicated below:

Year	Percentage
2008	104.750	%
2009	103.167	%
2010	101.583	%
2011 and thereafter	100.000	%

        On or prior to August 15, 2006, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of notes (including any Additional Notes) issued at a redemption price of 109.50% of the principal amount of the notes, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that:

        (1)   at least 65% of the aggregate principal amount of notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption; and

        (2)   each such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering.

        Prior to August 15, 2008, the Company may at its option redeem, in whole or in part, the notes at a redemption price equal to 100% of the principal amount of the notes plus the Applicable Premium as of, and accrued and unpaid interest to the redemption date.

"Applicable Premium" means, with respect to a note at any redemption date, the greater of (a) 1.00% of the principal amount of such note and (b) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on August 15, 2008 (such redemption price being described in the first paragraph of this "—Optional Redemption" section exclusive of any accrued and unpaid interest) plus (2) all required remaining scheduled interest payments due on such note through August 15, 2008 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such note on such redemption date.

"Adjusted Treasury Rate" means, with respect to any redemption date, (a) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after August 15, 2008, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, plus 0.50%.

"Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the notes from the redemption date to August 15, 2008, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to August 15, 2008.

57

"Comparable Treasury Price" means, with respect to any redemption date, if clause (b) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date.

"Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.

"Reference Treasury Dealer" means Credit Suisse First Boston LLC and its successors and assigns, and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.

        If the optional redemption date is on or after an interest payment record date and on or before the related interest payment date, the accrued and unpaid interest will be paid to the Person in whose name the note is registered at the close of business, on such record date, and no other interest will be payable to holders whose notes will be subject to redemption by the Company.

Selection and Notice

        If less than all of the notes are to be redeemed at any time, selection of notes for redemption will be made by the Trustee on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that no notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any note is to be redeemed in part only, the notice of redemption that relates to such note shall state the portion of the principal amount to be redeemed. Another note in principal amount equal to the unredeemed portion will be issued in the name of the holder upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.

Mandatory Redemption

        Except as set forth below under "—Repurchase at the Option of Holders," or "—Certain Covenants—Limitation on Asset Sales," the Company is not required to make mandatory redemption or sinking fund payments with respect to the notes or to repurchase the notes at the option of the holders.

Repurchase at the Option of Holders

        Upon the occurrence of a Change of Control, the Company will be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each holder's notes at an offer price in cash equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of repurchase (the "Change of Control Payment"). Within 30 days following a Change of Control, the Company will mail a notice to each holder of notes and the Trustee describing the transaction that constitutes the Change of Control and offering to repurchase notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice.

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The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in the Indenture by virtue of the conflict.

        On or before the Change of Control Payment Date, the Company will, to the extent lawful:

        (1)   accept for payment all notes or portions thereof (in integral multiples of $1,000) properly tendered pursuant to the Change of Control Offer;

        (2)   deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all notes or portions thereof so tendered; and

        (3)   deliver or cause to be delivered to the Trustee the notes so accepted together with an Officers' Certificate stating the aggregate principal amount of notes or portions of notes being purchased by the Company.

        The Paying Agent will promptly mail to each holder of notes so tendered the Change of Control Payment for such notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder another note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided, however, that each such other note will be in a principal amount of $1,000 or an integral multiple of $1,000. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

        If the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a note is registered at the close of business on such record date, and no other interest will be payable to holders who tender pursuant to the Change of Control Offer.

        Except as described above with respect to a Change of Control, the Indenture will not contain provisions that permit the holders of the notes to require that the Company repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction. In addition, the Company could enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that could affect the Company's capital structure or the value of the notes, but that would not constitute a Change of Control. The occurrence of a Change of Control may result in a default under the Credit Facilities or other Indebtedness of the Company and its Subsidiaries and give the lenders thereunder the right to require the Company to repay all outstanding obligations thereunder. The Company's ability to repurchase notes following a Change of Control may also be limited by the Company's then existing financial resources.

        The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

        The Change of Control provisions described above may deter certain mergers, tender offers and other takeover attempts involving the Company by increasing the capital required to effectuate such transactions. The definition of "Change of Control" includes a disposition of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries (determined on a consolidated basis). Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve

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a disposition of "all or substantially all" of the properties or assets of a Person. As a result, it may be unclear as to whether a Change of Control has occurred and whether a holder of notes may require the Company to make an offer to repurchase the notes as described above.

        A "Change of Control" means any of the following:

        (1)   the sale, lease, transfer, conveyance or other disposition (other than by merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries (determined on a consolidated basis) to any Person or Persons (other than to one or more Permitted Holders);

        (2)   the adoption of a plan relating to the liquidation or dissolution of the Company;

        (3)   any "person" (as such term is used in Section 13(d)(3) of the Exchange Act), other than a Permitted Holder or group of Permitted Holders, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding Voting Stock of the Company; or

        (4)   the first day on which more than a majority of the members of the Board of Directors are not Continuing Directors;

provided, however, that, with respect to clause (3) above, a transaction in which the Company becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if:

        (a)   the stockholders of the Company immediately prior to such transaction "beneficially own" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding Voting Stock of such other Person of whom the Company is then a Subsidiary immediately following the consummation of such transaction; and

        (b)   immediately following the consummation of such transaction, no "person" (as such term is defined above), other than such other Person (but including the holders of the Equity Interests of such other Person), or a Permitted Holder or group of Permitted Holders, "beneficially owns" (as such term is defined above), directly or indirectly through one or more intermediaries, more than 50% of the voting power of the outstanding Voting Stock of the Company.

        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the Initial Issuance Date or (b) was nominated for election to the Board of Directors with the approval of, or whose election to the Board of Directors was ratified by, (i) at least a majority of the Continuing Directors who were members of the Board of Directors at the time of such nomination or election or (ii) any of the Permitted Holders.

        "Permitted Holders" means Nautilus Acquisition, L.P., DLJ Merchant Banking III, Inc., Credit Suisse First Boston Private Equity, Inc., C/R Marine Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine Coinvestment, L.P., C/R Marine Coinvestment II, L.P., Riverstone Holdings L.L.C., The Carlyle Group, their respective Affiliates, and any Persons advised, sponsored, managed or owned directly or indirectly by any of the foregoing Persons or their Affiliates.

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Certain Covenants

Limitation on Restricted Payments

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

        (1)   declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any such payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or make any similar payment to the direct or indirect holders of the Company's Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company);

        (2)   purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company);

        (3)   make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated to the notes or any Subsidiary Guarantee, except a payment of interest at Stated Maturity or principal within six months of Stated Maturity; or

        (4)   make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment:

        (a)   no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

        (b)   the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock," and

        (c)   such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Initial Issuance Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8), but including, without duplication, Restricted Payments permitted by clauses (1), (5) and (9) of the next succeeding paragraph and clause (6)(b) of the definition of "Permitted Investment"), is less than the sum of:

        (A)  50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from October 1, 2003 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

        (B)  the sum of (x) 100% of the aggregate net cash proceeds received by the Company since the Initial Issuance Date from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than (1) any such Equity Interests, Disqualified Stock or convertible debt securities sold to a

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Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination and (2) Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), and (y) 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Initial Issuance Date; plus

        (C)  to the extent that any Restricted Investment that was made after the Initial Issuance Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (1) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (2) the initial amount of such Restricted Investment; plus

        (D)  in the event that any Unrestricted Subsidiary is designated as a Restricted Subsidiary, the lesser of (1) an amount equal to the Fair Market Value of the Company's Investments in such Restricted Subsidiary, if such Restricted Subsidiary was designated as an Unrestricted Subsidiary after the Initial Issuance Date, or the Fair Market Value of the Company's Investments made after the Initial Issuance Date with respect to an Unrestricted Subsidiary as of the Initial Issuance Date and (2) the amount of Restricted Investments previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary.

        The preceding provisions of this covenant will not prohibit any of the following:

        (1)   the payment of any dividend within 60 days after the date of declaration thereof if at the date of declaration such payment would have complied with the provisions of the Indenture;

        (2)   the redemption, repurchase, retirement, defeasance or other acquisition of any Indebtedness subordinated to the notes or the Subsidiary Guarantees or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock and other than Equity Interests issued or sold to a Subsidiary of the Company or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination), provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (4)(c)(B) of the preceding paragraph;

        (3)   the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness subordinated to the notes or the Subsidiary Guarantees with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;

        (4)   the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the Company or any of its Restricted Subsidiaries (and if such Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other holders of its Capital Stock on a pro rata basis);

        (5)   the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former employee or director of the Company's or any of its Restricted Subsidiaries, provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $2.0 million in any calendar year provided that any such amount not so utilized in a calendar year may be carried over to the subsequent calendar year, provided, however, that the aggregate amount utilized pursuant to this clause (5) shall not exceed $5.0 million in any calendar year;

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        (6)   the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;

        (7)   so long as no Default or Event of Default has occurred and is continuing, any purchase or redemption of Indebtedness subordinated to the notes or the Subsidiary Guarantees from Net Proceeds from an Asset Sale to the extent permitted by the covenant described under "—Limitation on Asset Sales" after the Company (or a Restricted Subsidiary, as the case may be) has made an offer to the holders of the notes to purchase the notes pursuant to such covenant;

        (8)   the pledge by the Company or any Restricted Subsidiary of the Capital Stock of an Unrestricted Subsidiary to secure Non-Recourse Debt of that Unrestricted Subsidiary; or

        (9)   other Restricted Payments since the Initial Issuance Date in an amount not to exceed $15.0 million.

        In addition to the Unrestricted Subsidiaries as of the Initial Issuance Date, the Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary after the Initial Issuance Date if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the Fair Market Value of such Investments at the time of such designation. Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

        The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any non-cash Restricted Payment shall be evidenced by an Officers' Certificate delivered to the Trustee. Not later than five business days following the date of making any Restricted Payment (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the second preceding paragraph), the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "—Certain Covenants—Limitation on Restricted Payments" were computed.

Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur" or an "incurrence") any Indebtedness, the Company will not, and will not permit any Guarantor to, issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries that are not Guarantors to issue any shares of Preferred Stock; provided, however, that so long as no Default or Event of Default has occurred and is continuing the Company and any Guarantor may incur Indebtedness and issue Disqualified Stock, if the Consolidated Interest Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred at the beginning of such four-quarter period.

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        The foregoing provisions will not apply to:

        (1)   the incurrence by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the sum of (A) $100.0 million plus (B) 25% of any increase in Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available plus (C) any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness;

        (2)   the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;

        (3)   the incurrence by the Company and its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculation;

        (4)   the incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the notes (other than Additional Notes), the Subsidiary Guarantees thereof and the Indenture;

        (5)   guarantees by the Guarantors of Indebtedness incurred in accordance with the provisions of the Indenture;

        (6)   the incurrence of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, provided that any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company, or any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company, shall be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be provided, however:

        (a)   if the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes;

        (b)   if a Guarantor is the obligor on such Indebtedness and the Company or a Guarantor is not the obligee, such Indebtedness is expressly subordinated in right of payment to the Subsidiary Guarantee of such Guarantor;

        (7)   Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary thereof in the ordinary course of business, including, without limitation, guarantees or obligations of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);

        (8)   the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by the Indenture to be incurred (other than pursuant to clause (1), (3), (5), (6), (7), (9), (11), (12), (13) and (14) of this covenant);

        (9)   the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations with respect to assets (other than Capital Stock or other Investments except in the case where the issuer thereof will become a Restricted Subsidiary of the Company in connection with the relevant transactions), in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvements of property used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount (together with Permitted Refinancing

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Indebtedness incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, such Indebtedness or any such Permitted Refinancing Indebtedness) not to exceed $20.0 million at any time outstanding;

        (10) Indebtedness of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the preceding paragraph after giving effect to the incurrence of such Indebtedness pursuant to this clause (10);

        (11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary;

        (12) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of incurrence;

        (13) Indebtedness of the Company or any Restricted Subsidiary incurred to finance the replacement (through construction or acquisition) of one or more Vessels, upon a total loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other involuntary taking of title to or use of such Vessel (provided that such loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other involuntary taking of title to or use of such Vessel was covered by insurance or resulted in the actual payment of compensation, indemnification or similar payments to such Person (collectively, a "Total Loss")) in an aggregate amount no greater than the Ready for Sea Cost for such replacement Vessel, in each case less all compensation, damages and other payments (including insurance proceeds other than in respect of business interruption insurance) actually received by the Company or any Restricted Subsidiary from any Person in connection with the Total Loss in excess of amounts actually used to repay Indebtedness secured by the Vessel subject to the Total Loss; and

        (14) in addition to the items referred to in clauses (1) through (13) above, Indebtedness of the Company and the Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness incurred pursuant to this clause (14) and then outstanding, will not exceed $25.0 million at any one time outstanding.

        The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the notes or the Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be.

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        For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with, this covenant:

        (1)   in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this covenant, the Company, in its sole discretion, will classify such item of Indebtedness on the date of incurrence (or later classify or reclassify such Indebtedness, in its sole discretion) and only be required to include the amount and type of such Indebtedness in one of such clauses;

        (2)   guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

        (3)   the principal amount of any Disqualified Stock of the Company or a Guarantor will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

        (4)   Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness; and

        (5)   the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

        Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness for purposes of this covenant. The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (b) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

        In addition, the Company will not permit any of its Unrestricted Subsidiaries to incur any Indebtedness (other than Non-Recourse Debt) or issue any shares of Disqualified Stock. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this covenant, the Company shall be in Default of this covenant).

        For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies.

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Limitation on Liens

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any property or asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except Permitted Liens, to secure (a) any Indebtedness of the Company unless prior to, or contemporaneously therewith, the notes are equally and ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary Guarantee of such Guarantor is equally and ratably secured; provided, however, that if such Indebtedness is expressly subordinated to the notes or a Subsidiary Guarantee, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the notes or such Subsidiary Guarantee, as the case may be, with the same relative priority as such Indebtedness has with respect to the notes or such Subsidiary Guarantee.

Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

        (1)   (a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or (b) pay any Indebtedness or other obligations owed to the Company or any of its Restricted Subsidiaries;

        (2)   make loans or advances to the Company or any of its Restricted Subsidiaries; or

        (3)   transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries,

except for such encumbrances or restrictions existing under or by reason of:

        (a)   the Credit Facilities or any instrument governing Existing Indebtedness, each as in effect on the Initial Issuance Date;

        (b)   the Indenture, the notes and the Subsidiary Guarantees;

        (c)   applicable law;

        (d)   any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

        (e)   by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;

        (f)    any mortgages, pledges or other security agreements permitted under the Indenture securing Indebtedness of the Company or a Restricted Subsidiary to the extent the encumbrances or restrictions they contain restrict the transfer of the properties or assets subject to such mortgages, pledges or other security agreements;

        (g)   purchase money obligations for properties or assets acquired in the ordinary course of business and Capital Lease Obligations permitted under the Indenture, in each case, that

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impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this covenant on the properties or assets so acquired;

        (h)   any encumbrance or restriction with respect to a Restricted Subsidiary (or any of its properties or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or substantially all the Capital Stock or properties or assets of such Restricted Subsidiary (or the properties or assets that are subject to such restriction) pending the closing of such sale or disposition;

        (i)    customary provisions in bona fide contracts for the sale of properties or assets;

        (j)    customary provisions in joint venture agreements and similar agreements that restrict the transfer of interests in the joint venture;

        (k)   any encumbrance or restriction applicable only to Vessel Financing Subsidiaries and/or Foreign Subsidiaries; or

        (l)    Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (a), (b) and (d) above, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced.

Limitation on Asset Sales

        The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale (excluding for this purpose an Asset Sale connected with a Total Loss) unless:

        (1)   the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (provided such Fair Market Value shall be determined on the date of contractually agreeing to such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; and

        (2)   at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of Qualified Proceeds, provided, however, that the amount of (a) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet) of the Company or such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability shall be deemed to be cash for purposes of this provision and (b) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) shall be deemed to be cash for purposes of this provision.

        Within 365 days after the receipt of any Net Proceeds from an Asset Sale (including, without limitation, an Asset Sale connected with a Total Loss), the Company or any such Restricted Subsidiary may apply such Net Proceeds to:

        (1)   permanently repay the principal of any Indebtedness of the Company or any Guarantor ranking in right of payment at least equally with the notes or the Subsidiary Guarantees, as the case may be;

        (2)   to the extent such Net Proceeds are derived from Asset Sales of properties or assets of a Restricted Subsidiary that is not a Guarantor, to repay the principal of any Indebtedness of such Restricted Subsidiary; or

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        (3)   to acquire (including by way of a purchase of assets or stock, merger, consolidation or otherwise) Productive Assets.

Pending the final application of any such Net Proceeds, the Company or any such Restricted Subsidiary may temporarily reduce outstanding revolving credit borrowings, including borrowings under the Credit Facilities, or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds."

        On the 366th day after the Asset Sale (or, at the Company's option, such earlier date), if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be required to make an offer (an "Asset Sale Offer") to all holders of notes and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal amount of notes and any such Pari Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the notes and Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture or the agreements governing the Pari Passu Notes, as applicable, in each case in integral multiples of $1,000. To the extent that the aggregate principal amount of notes tendered pursuant to an Asset Sale Offer is less than the amount that the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture. If the aggregate principal amount of notes surrendered by holders thereof and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount that the Company is required to repurchase, the notes and Pari Passu Notes shall be purchased pro rata on the basis of the aggregate principal amount of tendered notes and Pari Passu Notes. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.

        If the Asset Sale purchase date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a note is registered at the close of business on such record date, and no other interest will be payable to holders who tender notes pursuant to the Asset Sale Offer.

        The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to the Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of any conflict.

Limitation on Merger, Consolidation, or Sale of Assets

        The Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person, unless:

        (1)   the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state or the District of Columbia;

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        (2)   the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

        (3)   immediately after such transaction no Default or Event of Default exists;

        (4)   except in the case of a merger of the Company with or into a Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of the covenant described above under "—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock;" and

        (5)   the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

        For purposes of this covenant, the sale, assignment, transfer, lease, conveyance, or other disposition of all or substantially all of the properties or assets of one or more Subsidiaries of the Company, which properties or assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties or assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties or assets of the Company.

        Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve "all or substantially all" of the properties or assets of a Person.

Limitation on Transactions with Affiliates

        The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any properties or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:

        (1)   such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary in arm's-length dealings with an unrelated Person or, if there is no such comparable transaction, on terms that are fair and reasonable to the Company or such Restricted Subsidiary; and

        (2)   the Company delivers to the Trustee:

        (a)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $7.5 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

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        (b)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, a written opinion as to the fairness to the Company or the relevant Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm that is, in the judgment of the Board of Directors, qualified to render such opinion and is independent with respect to the Company,

provided, however, that the following shall be deemed not to be Affiliate Transactions:

        (A)  any employment agreement or other employee compensation plan or arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business of the Company or such Restricted Subsidiary;

        (B)  transactions between or among the Company and its Restricted Subsidiaries;

        (C)  Permitted Investments and Restricted Payments that are permitted by the provisions of the Indenture;

        (D)  loans or advances to officers, directors and employees of the Company or any Restricted Subsidiary made in the ordinary course of business and consistent with past practices of the Company and its Restricted Subsidiaries in an aggregate amount not to exceed $500,000 outstanding at any one time;

        (E)  indemnities of officers, directors and employees of the Company or any Restricted Subsidiary permitted by bylaw or statutory provisions;

        (F)  the payment of reasonable and customary regular fees to directors of the Company or any of its Restricted Subsidiaries who are not employees of the Company or any Subsidiary;

        (G)  the sale or issuance to any Affiliate of any Equity Interests in the Company other than Disqualified Stock; and

        (H)  the payment of reasonable and customary fees or commissions to the Permitted Holders for investment banking or other financial services.

Additional Subsidiary Guarantees

        The Indenture provides that:

        (1)   if the Company or any of its Restricted Subsidiaries shall, after the Initial Issuance Date, acquire or create another Restricted U.S. Subsidiary other than a Vessel Financing Subsidiary, or

        (2)   if, after such date, a Restricted Subsidiary shall provide a guarantee of any Indebtedness of the Company or a Guarantor (other than Indebtedness under Credit Facilities),

then such newly acquired or created Restricted U.S. Subsidiary, in the case of clause (1) above, or such Restricted Subsidiary described in clause (2) above, in the case of clause (2) above, shall execute a supplement to the Indenture providing for a Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with the terms of the Indenture.

        The Indenture provides that within 60 days of the Initial Issuance Date, the Company will cause its Restricted Subsidiary, Seabulk Towing, Inc. ("Towing") to either (1) remove or waive any restrictions imposed on Towing under the terms of any Indebtedness of Towing that would prevent Towing from becoming a Subsidiary Guarantor under the Indenture or (2) redeem or otherwise retire such Indebtedness. As soon as practicable following the earlier of the actions described in (1) or (2) but in any event on or prior to 60 days of the Initial Issuance Date, Towing will execute a supplement to the Indenture providing for a Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with

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the Indenture. Towing redeemed such Indebtedness as of September 23, 2003 and executed such supplement to the Indenture and delivered such Opinion of Counsel as of October 3, 2003.

Reports

        Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC (unless the SEC will not accept such a filing) within the time periods specified in the Exchange Act and, within 15 days of filing, or attempting to file, the same with the SEC, furnish to the Trustee and the holders of the notes:

        (1)   all quarterly and annual financial and other information with respect to the Company and its Subsidiaries that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants; and

        (2)   all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

In addition, the Company and the Guarantors will furnish to the holders of the notes, prospective purchasers of the notes and securities analysts, upon their request, the information, if any, required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

        The quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management's Discussion and Analysis of Results of Operations and Financial Condition, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of any Unrestricted Subsidiaries.

Events of Default and Remedies

        Each of the following constitutes an Event of Default:

        (1)   default for 30 days in the payment when due of interest on the notes;

        (2)   default in payment of the principal of or premium, if any, on the notes when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

        (3)   failure by the Company for 30 days after notice to comply with any of its obligations in the covenants described under "—Repurchase at the Option of Holders" or "—Certain Covenants—Limitation on Asset Sales" (other than a failure to repurchase notes when due), or failure by the Company to comply with its obligations described under "—Certain Covenants—Limitation on Merger, Consolidation, or Sale of Assets;"

        (4)   failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the notes;

        (5)   default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the

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Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the Initial Issuance Date, which default:

        (a)   is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a "Payment Default"); or

        (b)   results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million and provided, further, that if any such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;

        (6)   failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days;

        (7)   failure by any Guarantor to perform any covenant set forth in its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee against a Guarantor for any reason; and

        (8)   certain events of bankruptcy, insolvency or reorganization with respect to the Company, any Guarantor or any Significant Subsidiary.

        If any Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the notes then outstanding may declare all the notes to be due and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary, all notes then outstanding will become due and payable without further action or notice. The holders of a majority in principal amount of the notes then outstanding by written notice to the Trustee may on behalf of all of the holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except with respect to nonpayment of principal, interest or premium that have become due solely because of the acceleration) have been cured or waived. Holders of the notes may not enforce the Indenture or the notes except as provided in the Indenture. Subject to certain limitations, holders of a majority in principal amount of the notes then outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders of the notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, interest or premium) if it determines that withholding notice is in their interest.

        In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes.

        The holders of a majority in principal amount of the notes then outstanding by notice to the Trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default

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and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of or interest or premium on the notes.

        The Company will be required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company will be required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

        No director, officer, employee, incorporator, member, partner or stockholder or other owner of Capital Stock of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

        The Company may, at its option and at any time, elect to have all of the obligations of itself and the Guarantors discharged with respect to the notes then outstanding ("Legal Defeasance") except for:

        (1)   the rights of holders of notes then outstanding to receive payments in respect of the principal of and premium and interest on such notes when such payments are due from the trust referred to below;

        (2)   the Company's obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

        (3)   the rights, powers, trusts, duties and immunities of the Trustee, and the Company's obligations in connection therewith; and

        (4)   the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance"), and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain other events (not including non-payment, bankruptcy, insolvency and reorganization events) described under "—Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes. If the Company exercises either its Legal Defeasance or Covenant Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and any security for the notes (other than the trust) will be released.

        In order to exercise either Legal Defeasance or Covenant Defeasance,

        (1)   the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of and premium and interest on the outstanding notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the notes are being defeased to Stated Maturity or to a particular redemption date;

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        (2)   in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that:

        (a)   the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

        (b)   since the Initial Issuance Date, there has been a change in the applicable federal income tax law,

in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

        (3)   in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the holders of the notes then outstanding will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

        (4)   no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

        (5)   such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

        (6)   the Company must have delivered to the Trustee an opinion of counsel to the effect that the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;

        (7)   the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the holders of notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

        (8)   the Company must deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment and Waiver

        Except as provided below, the Indenture or the notes may be amended with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing default or compliance with any provision of the Indenture or the notes may be waived with the consent of the holders of a majority in principal amount of the notes then outstanding (including consents obtained in connection with a purchase of, tender offer or exchange offer for, notes). Without

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the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):

        (1)   reduce the principal amount of notes whose holders must consent to an amendment or waiver;

        (2)   reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption or repurchase of the notes (other than provisions relating to the covenants described above under "—Repurchase at the Option of Holders" or "—Certain Covenants—Limitation on Asset Sales");

        (3)   reduce the rate of or change the time for payment of interest on any note;

        (4)   waive a Default or Event of Default in the payment of principal of or premium and interest on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in principal amount of the notes and a waiver of the payment default that resulted from such acceleration);

        (5)   make any note payable in money other than that stated in the notes;

        (6)   make any change in the provisions of the Indenture relating to waivers of past defaults or the rights of holders of notes to receive payments of principal of or premium and interest on the notes (except as permitted in clause (7) hereof);

        (7)   waive a redemption or repurchase payment with respect to any note (other than a payment required by one of the covenants described above under "—Repurchase at the Option of Holders" or "—Certain Covenants—Limitation on Asset Sales");

        (8)   make any change in the ranking of the notes or the Subsidiary Guarantees relative to other Indebtedness of the Company or the Guarantors, respectively, in either case in a manner adverse to the holders;

        (9)   modify the Subsidiary Guarantees in any manner adverse to the holders of the notes; or

        (10) make any change in the preceding amendment and waiver provisions.

        Notwithstanding the preceding, without the consent of any holder of notes, the Company, the Guarantors and the Trustee may amend the Indenture or the notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated notes in addition to or in place of certificated notes, to provide for the assumption of the Company's obligations to holders of notes in the case of a merger or consolidation or sale of all or substantially all of the Company's properties or assets, to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the Indenture of any such holder, to secure the notes pursuant to the requirements of the "Liens" covenant, to add any additional Guarantor or to release any Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.

        Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any notes for or as an inducement to any consent, waiver or amendment of any terms or provisions of the Indenture or the notes, unless such consideration is offered to be paid or agreed to be paid to all holders of the notes which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

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        The consent of the holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. A consent to any amendment or waiver under the Indenture by any holder of notes given in connection with a purchase, tender or exchange of such holder's notes will not be rendered invalid by such purchase, tender or exchange.

Concerning the Trustee

        Wachovia Bank, National Association serves as Trustee under the Indenture.

        The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the Trust Indenture Act) after a Default has occurred and is continuing, it must eliminate such conflict within 90 days or apply to the SEC for permission to continue or resign.

        The holders of a majority in principal amount of the notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. If an Event of Default occurs (which is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of notes, unless such holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Governing Law

        The Indenture, the notes and the Subsidiary Guarantees are governed by, and construed in accordance with, the laws of the State of New York.

Book-Entry Delivery and Form

        The certificates representing the new notes will be issued in fully registered form without interest coupons. New notes will initially be represented by one or more permanent global notes in definitive, fully registered form without interest coupons (collectively, the "Global Notes") and will be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC.

        Ownership of beneficial interests in a Global Note will be limited to persons who have accounts with DTC ("participants") or persons who hold interests through participants. Ownership of beneficial interests in a Global Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Indirect access to the DTC system is available to organizations such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly ("indirect participants").

        So long as DTC, or its nominee, is the registered owner or holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such Global Note for all purposes under the Indenture and the notes. No beneficial owner of an interest in a Global Note will be able to transfer that interest except in accordance with DTC's applicable procedures, in addition to those provided for under the Indenture and any other applicable procedures.

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        All payments on a Global Note will be made to DTC or its nominee, as the case may be, as the registered owner thereof. Neither the Company, the Guarantors, the Trustee nor any Paying Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

        The Company expects that DTC or its nominee, upon receipt of any payment in respect of a Global Note, will credit participants' accounts on the applicable payment date with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note as shown on the records of DTC. The Company also expects that payments by participants to owners of beneficial interests in a Global Note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of the participants.

        Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds.

        The Company expects that DTC will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange as described below) only at the direction of one or more participants to whose account with DTC interests in a Global Note are credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the applicable Global Note for notes in certificated form ("Certificated Notes"), which it will distribute to its participants.

        The Company understands that DTC is a limited purpose trust company organized under the laws of the State of New York, a "banking organization" within the meaning of New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates.

        Although DTC is expected to follow the foregoing procedures described in this section of the prospectus to facilitate transfers of interests in a Global Note among its participants, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Company, the Guarantors, the Trustee nor any Paying Agent will have any responsibility for the performance by DTC or its participants or indirect participants of its obligations under the rules and procedures governing its operations.

Exchange of Global Notes for Certificated Notes

        A Global Note is exchangeable for Certificated Notes if:

        (1)   DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and in either event the Company fails to appoint a successor depositary within 90 days;

        (2)   the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or

        (3)   there has occurred and is continuing an Event of Default and DTC notifies the Trustee of its decision to exchange the Global Notes for Certificated Notes.

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        In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures).

Certain Definitions

        Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used in this description for which no definition is provided.

        "Additional Notes" means 9¹/2% Senior Notes due 2013 of the Company issued under the Indenture after the Initial Issuance Date and having identical terms (except as to the initial interest payment date) to the outstanding notes or the new notes issued in exchange for the outstanding notes.

        "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

        "Asset Sale" means

        (1)   the sale, lease, conveyance or other disposition (a "disposition") of any properties or assets (including, without limitation, by way of a sale and leaseback or a Total Loss), excluding dispositions in the ordinary course of business (provided that the disposition of all or substantially all of the properties or assets of the Company and its Subsidiaries (on a consolidated basis) will be governed by the provisions of the Indenture described above under "—Certain Covenants—Limitation on Merger, Consolidation, or Sale of Assets" and not by the provisions described under "—Certain Covenants—Limitation on Asset Sales,"

        (2)   the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Subsidiaries,

whether, in the case of clause (1) or (2), in a single transaction or a series of related transactions, provided that such transaction or series of transactions involves properties or assets having a Fair Market Value in excess of $2.5 million. Notwithstanding the preceding, the following transactions will be deemed not to be Asset Sales:

        (a)   a disposition of obsolete or excess equipment or other properties or assets;

        (b)   a disposition of properties or assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

        (c)   a disposition of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

        (d)   a disposition of cash or Cash Equivalents or a disposition of properties or assets that constitutes a Restricted Payment that is permitted by the Indenture or a Permitted Investment;

        (e)   a disposition of properties or assets in the ordinary course of business by the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary that is engaged in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or a business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors) provided that such transaction complies with the covenants described under "—Certain Covenants—Limitation on Transactions with Affiliates" and "—Certain Covenants—Limitation on Restricted Payments;"

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        (f)    any charter or lease of any equipment or other properties or assets entered into in the ordinary course of business and with respect to which the Company or any Restricted Subsidiary thereof is the lessor, except any such charter or lease that provides for the acquisition of such properties or assets by the lessee during or at the end of the term thereof for an amount that is less than their fair market value at the time the right to acquire such properties or assets occurs;

        (g)   any trade or exchange by the Company or any Restricted Subsidiary of equipment or other properties or assets for equipment or other properties or assets owned or held by another Person, provided that the Fair Market Value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary (together with any cash or Cash Equivalents) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash or Cash Equivalents) to be received by the Company or such Restricted Subsidiary; provided further that any cash or Cash Equivalents received must be applied in accordance with the provisions described under "—Certain Covenants—Limitation on Asset Sales;"

        (h)   a disposition in the ordinary course of business of inventory, receivables or other current assets; and

        (i)    the creation or perfection of a Lien (but not the sale or other disposition of the properties or assets subject to such Lien).

        The Fair Market Value of any non-cash proceeds of a disposition of properties or assets and of any properties or assets referred to in the foregoing clause (g) of this definition shall be set forth in an Officers' Certificate delivered to the Trustee.

        "Attributable Indebtedness" in respect of a Sale/Leaseback Transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). As used in the preceding sentence, the "net rental payments" under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

        "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof.

        "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP.

        "Capital Stock" means

        (1)   in the case of a corporation, corporate stock;

        (2)   in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

        (3)   in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

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        (4)   any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person but, in each case, excluding any debt securities convertible into such equity.

        "Cash Equivalents" means

        (1)   securities issued or directly and fully guaranteed or insured by the government of the United States or any other country whose sovereign debt has a rating of at least A3 from Moody's and at least A- from S&P or any agency or instrumentality thereof having maturities of not more than twelve months from the date of acquisition;

        (2)   certificates of deposit and Eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any commercial bank organized under the laws of any country that is a member of the Organization for Economic Cooperation and Development having capital and surplus in excess of $500 million;

        (3)   repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above entered into with any financial institution meeting the qualifications specified in clause (2) above;

        (4)   commercial paper having the highest rating obtainable from Moody's or S&P, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of investments, and in each case maturing within 270 days after the date of acquisition;

        (5)   deposits available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (2) above, provided all such deposits do not exceed $3.0 million in the aggregate at any one time; and

        (6)   money market mutual funds substantially all of the assets of which are of the type described in the foregoing clauses (1) through (4).

        "Common Stock" means the Common Stock of the Company, par value $.01 per share.

        "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, to the extent deducted or excluded in calculating Consolidated Net Income for such period,

        (1)   Consolidated Income Taxes of such Person and its Restricted Subsidiaries;

        (2)   Consolidated Interest Expense of such Person and its Restricted Subsidiaries;

        (3)   depreciation, amortization and drydocking (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries;

        (4)   expenses and charges of the Company related to this offering and the amendment of the Company's existing bank credit agreement;

        (5)   any transaction or issuance costs incurred in connection with actual, proposed or abandoned financings, acquisitions or divestitures; and

        (6)   all other non-cash charges and non-cash write offs of such Person and its Restricted Subsidiaries reducing Consolidated Net Income (excluding any such non-cash charge or write off to the extent that it represents an accrual of or reserve for cash expenditures in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation),

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in each case, on a consolidated basis and determined in accordance with GAAP. Notwithstanding the preceding sentence, amounts described in clauses (1)—(6) relating to a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated Cash Flow of such Person only to the extent (and in the same proportion) that such amounts could, at the date of calculation, be dividend or distributed, directly or indirectly, to the Company or a Guarantor.

        "Consolidated Income Taxes" means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such Person or such Person and its Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental authority.

        "Consolidated Interest Coverage Ratio" means with respect to any Person for any four fiscal quarter period, the ratio of the Consolidated Cash Flow of such Person for such period to the Consolidated Interest Expense of such Person for such period; provided, however, that the Consolidated Interest Coverage Ratio shall be calculated giving pro forma effect to each of the following transactions as if each such transaction had occurred at the beginning of the applicable fourth quarter reference period:

        (1)   any incurrence, assumption, guarantee, repayment, repurchase, defeasance or redemption by such Person or any of its Restricted Subsidiaries of any Indebtedness (other than revolving credit borrowings) subsequent to the commencement of the period for which the Consolidated Interest Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Consolidated Interest Coverage Ratio is made (the "Calculation Date");

        (2)   any acquisition that has been made by such Person or any of its Restricted Subsidiaries, including, through a merger or consolidation, and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date; and

        (3)   any other transaction that may be given pro forma effect in accordance with Article 11 of Regulation S-X as in effect from time to time;

provided further, however, that (A) the Consolidated Cash Flow attributable to operations or businesses disposed of prior to the Calculation Date, shall be excluded and (B) the Consolidated Interest Expense attributable to operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date.

        "Consolidated Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of:

        (1)   the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations but excluding amortization of debt issuance costs); and

        (2)   the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period.

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        "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP, provided that

        (1)   the Net Income (or loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be excluded except that Net Income may be included only to the extent of the amount of dividends or distributions paid in cash or declared (and subsequently paid in cash on or prior to the date of calculation) to the referent Person or its Restricted Subsidiaries;

        (2)   the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders; and

        (3)   the cumulative effect of a change in accounting principles shall be excluded, including, without limitation, any inclusion, charge or write off with respect to drydocking expenses resulting from any such change.

        "Consolidated Net Tangible Assets" means, as of any date of determination, the total assets, less goodwill and other intangibles (other than patents, trademarks, copyrights, licenses and other intellectual property), net of total liabilities, in each case, as shown on the balance sheet of the Company and its Restricted Subsidiaries for the most recently ended fiscal quarter for which financial statements are available, determined on a consolidated basis in accordance with GAAP.

        "Credit Facilities" means, with respect to any Person, one or more debt facilities or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or trade letters of credit, in each case as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

        "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default.

        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event:

        (1)   matures (excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

        (2)   is convertible or exchangeable for Indebtedness or other Disqualified Stock (excluding Capital Stock which is convertible or exchangeable solely at the option of the issuer thereof); or

        (3)   is redeemable at the option of the holder thereof, in whole or in part,

in each case, on or prior to the date that is 91 days after the date on which the notes mature or are redeemed or retired in full; provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof (or of any security into which it is convertible or for which it is exchangeable) have the right to require the issuer to repurchase such Capital Stock (or such security into which it is convertible or for which it is exchangeable) upon the occurrence of any of the events constituting an Asset Sale or a Change of Control shall not constitute Disqualified Stock if such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable) provides that the issuer thereof will not repurchase or redeem any such Capital Stock (or any such

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security into which it is convertible or for which it is exchangeable) pursuant to such provisions prior to compliance by the Company with the provisions of the Indenture described under "Repurchase at the Option of Holders" or "—Certain Covenants—Limitation on Asset Sales," as the case may be.

        "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

        "Existing Indebtedness" means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Facilities) in existence on the Initial Issuance Date, until such amounts are repaid.

        "Fair Market Value" means, with respect to any Asset Sale or Restricted Payment, the price that would be negotiated in an arm's-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction, as such price is determined in good faith by an officer of the Company (and evidenced by an Officers' Certificate delivered to the Trustee) if such value is less than $7.5 million; provided if the value of such Asset Sale or Restricted Payment is $7.5 million or greater, such determination shall be made in good faith by the Board of Directors of the Company and evidenced by a board resolution delivered to the Trustee in the form of an Officers' Certificate.

        "Foreign Subsidiary" means any Restricted Subsidiary that is not incorporated or otherwise organized in the United States or any state thereof or in the District of Columbia.

        "GAAP" means generally accepted accounting principles in the United States as in effect on the Initial Issuance Date.

        "Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

        (1)   interest rate swap agreements, interest rate cap agreements and interest rate collar agreements;

        (2)   other agreements or arrangements designed to protect such Person against fluctuations in interest rates; and

        (3)   any foreign currency futures contract, option or similar agreement or arrangement designed to protect such Person against fluctuations in foreign currency rates,

in each case to the extent such obligations are incurred in the ordinary course of business of such Person.

        "Indebtedness" means, with respect to any Person on any date of determination (without duplication):

        (1)   the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;

        (2)   the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

        (3)   the principal component of all obligations of such Person in respect of letters of credit, bankers' acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable and such obligation is satisfied within 90 days of incurrence);

        (4)   the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, the amount of such price being that which would be negotiated in an arm's-length transaction for cash

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between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction;

        (5)   Capital Lease Obligations and all Attributable Indebtedness of such Person;

        (6)   the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (but excluding, in each case, any accrued dividends);

        (7)   the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of

        (a)   the fair market value of such asset at such date of determination; and

        (b)   the amount of such Indebtedness of such other Persons;

        (8)   the principal component of Indebtedness of other Persons to the extent guaranteed by such Person; and

        (9)   to the extent not otherwise included in this definition, Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the termination value of the agreement or arrangement giving rise to such obligation that would be payable by such Person at such time).

        "Initial Issuance Date" means August 5, 2003.

        "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees by the referent Person of, and Liens on any assets of the referent Person securing, Indebtedness or other obligations of other Persons), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided, however, that the following shall not constitute Investments:

        (1)   extensions of trade credit or other advances to customers on commercially reasonable terms in accordance with normal trade practices or otherwise in the ordinary course of business;

        (2)   Hedging Obligations; and

        (3)   endorsements of negotiable instruments and documents in the ordinary course of business.

If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under "—Certain Covenants—Limitation on Restricted Payments."

        "Lien" means, with respect to any asset, mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent

85

statutes) of any jurisdiction other than a precautionary financing statement respecting a lease not intended as a security agreement).

        "Moody's" means Moody's Investors Service, Inc. and its successors.

        "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however:

        (1)   any gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to Sale/Leaseback Transactions) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and

        (2)   any extraordinary or nonrecurring gain (or loss), but only to the extent such loss relates to a non-cash charge, together with any related provision for taxes on such extraordinary or nonrecurring gain (or loss).

        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (without duplication):

        (1)   the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, sales commissions, recording fees, title transfer fees, title insurance premiums, appraiser fees and costs incurred in connection with preparing such asset for sale) and any relocation expenses incurred as a result of such Asset Sale;

        (2)   taxes paid or estimated to be payable as a result of the Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);

        (3)   amounts required to be applied to the repayment of Indebtedness secured by a Lien on the properties or assets that were the subject of such Asset Sale; and

        (4)   any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets, until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to the Company or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

        "Non-Recourse Debt" means Indebtedness:

        (1)   as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or otherwise) or (b) constitutes the lender;

        (2)   no default with respect to which (including any rights the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) the holders of Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on such Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and

        (3)   with respect to which there is no recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

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        "Non-Recourse Subsidiaries" means the following Subsidiaries of the Company and any of their Subsidiaries or any of their successors (other than resulting from a merger, consolidation or amalgamation with any Restricted Subsidiary): Kinsman Lines, Inc., Lightship Limited Partner Holdings, LLC, Lightship Tanker Holdings, LLC, Lightship Partners, L.P., Delaware Tanker Holding I Inc., Delaware Tanker Holding II Inc., Delaware Tanker Holding III Inc., Delaware Tanker Holding IV Inc., Delaware Tanker Holding V Inc., Lightship Tankers I LLC, Lightship Tankers II LLC, Lightship Tankers III LLC, Lightship Tankers IV LLC and Lightship Tankers V LLC.

        "Pari Passu Indebtedness" means, with respect to any Net Proceeds from Asset Sales, Indebtedness of the Company or a Guarantor that ranks equally in right of payment with the notes or such Guarantor's Subsidiary Guarantee, as the case may be, and the terms of which require the Company or such Guarantor to apply such Net Proceeds to offer to repurchase such Indebtedness.

        "Permitted Investments" means:

        (1)   any Investment in the Company or in a Restricted Subsidiary of the Company other than a Restricted Subsidiary that is restricted from making dividends or distributions with respect to its Capital Stock owned by the Company or another Restricted Subsidiary other than by operation of applicable law;

        (2)   any Investment in Cash Equivalents;

        (3)   any Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;

        (4)   any Investment made as a result of the receipt of non-cash consideration from (a) an Asset Sale that was made pursuant to and in compliance with the covenant described above under "—Certain Covenants—Limitation on Asset Sales" or (b) a disposition of properties or assets that does not constitute an Asset Sale;

        (5)   receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

        (6)   Investments in any Person (a) in exchange for an issue or sale by the Company of its Common Stock or (b) out of the net cash proceeds of an issue or sale by the Company of its Common Stock so long as such Investment pursuant to this clause (b) occurs within 90 days of the closing of such issuance or sale of Common Stock;

        (7)   loans or advances to employees (other than executive officers) made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary; and

        (8)   Investments in Vessel Financing Subsidiaries and/or in Persons engaged principally in the business of providing marine transportation, towing or support services to the oil, gas and/or chemicals industry or businesses reasonably complementary or related thereto, provided that the aggregate amount of such Investments pursuant to this clause (8) shall not exceed at any one time $25.0 million plus 10% of any increase in the Company's Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available.

        "Permitted Liens" means:

         (1)  Liens securing Indebtedness incurred by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the sum of (A) $100 million plus (B) 25% of any increase in

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Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available plus (C) any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness;

         (2)  Liens in favor of the Company and its Restricted Subsidiaries;

         (3)  Liens on any property, asset or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company, provided that such Liens were not created or incurred in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary and do not extend to any other property or asset owned by the Company or any of its Restricted Subsidiaries;

         (4)  Liens on any property or asset existing at the time of its acquisition by the Company or any Restricted Subsidiary of the Company, provided that such Liens were not created or incurred in connection with, or in contemplation of, such acquisition and do not extend to any other property or asset;

         (5)  Liens to secure the performance of statutory obligations, surety or appeal bonds, bid or performance bonds, insurance obligations or other obligations of a like nature incurred in the ordinary course of business;

         (6)  Liens securing Hedging Obligations;

         (7)  Liens existing on the Initial Issuance Date;

         (8)  any interest or title of a lessor under an operating lease;

         (9)  Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business;

       (10)  Liens on real or personal property or assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness incurred for the purpose of (a) financing all or any part of the purchase price of such property or assets incurred prior to, at the time of, or within 180 days after, the acquisition of such property or assets or (b) financing all or any part of the cost of construction of any such property or assets, provided that the amount of any such financing shall not exceed the amount expended in the acquisition of, or the construction of, such property or assets and such Liens shall not extend to any other property or assets of the Company or a Restricted Subsidiary (other than any associated accounts, contracts and insurance proceeds);

       (11)  Liens securing Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (3), (4), (7) and (10) above; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property or assets that are the security for a Permitted Lien hereunder; and

       (12)  Liens not otherwise permitted by clauses (1) through (11) above securing Indebtedness not in excess, at any one time outstanding, of the sum of $10.0 million plus 10% of the increase in the Company's Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available.

        "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend,

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refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that:

        (1)   the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus premium, if any, and accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith);

        (2)   (a) if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the notes, the Permitted Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of the notes, the Permitted Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the notes;

        (3)   the Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Permitted Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, deferred or refunded;

        (4)   if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes or a Subsidiary Guarantee, such Permitted Refinancing Indebtedness is subordinated in right of payment to the notes or such Subsidiary Guarantee on terms at least as favorable, taken as a whole, to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

        (5)   such Indebtedness is not incurred by a Restricted Subsidiary that is not a Guarantor if the Company or a Guarantor is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

        "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

        "Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such Person.

        "Productive Assets" means assets (other than assets that would be classified as current assets in accordance with GAAP) of the kind used or usable by the Company or its Restricted Subsidiaries in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or any business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors).

        "Qualified Equity Offering" means:

        (1)   any sale of Equity Interests (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act; or

        (2)   any sale of Equity Interests (other than Disqualified Stock) of the Company so long as, at the time of consummation of such sale, the Company has a class of common equity securities registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act,

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in each case, other than public offerings with respect to the Company's Common Stock, or options, warrants or rights, registered on Form S-4 or S-8.

        "Qualified Proceeds" means any of the following or any combination of the following:

        (1)   cash;

        (2)   Cash Equivalents;

        (3)   Productive Assets; and

        (4)   the Capital Stock of any Person engaged in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or any business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors) if, in connection with the receipt by the Company or any Restricted Subsidiary of the Company of that Capital Stock:

        (a)   that Person becomes a Restricted Subsidiary of the Company or any Restricted Subsidiary of the Company; or

        (b)   that Person is merged, consolidated or amalgamated with or into, or conveys or otherwise transfers substantially all of its assets to, or is liquidated into, the Company or any Restricted Subsidiary of the Company.

        "Ready for Sea Cost" means with respect to a Vessel or Vessels to be acquired or leased (pursuant to a Capital Lease Obligation) by the Company or any Restricted Subsidiary of the Company, the aggregate amount of all expenditures incurred to acquire or construct and bring such Vessel or Vessels to the condition and location necessary for its or their intended use, including any and all inspections, appraisals, repairs, modifications, additions, permits and licenses in connection with such acquisition or lease, which would be classified and accounted for as "property, plant and equipment" in accordance with GAAP.

        "Restricted Investment" means an Investment other than a Permitted Investment.

        "Restricted Subsidiary" of a Person means any Subsidiary of such Person that is not an Unrestricted Subsidiary.

        "Restricted U.S. Subsidiary" means any Restricted Subsidiary organized under the laws of the United States, any state thereof or the District of Columbia.

        "Sale/Leaseback Transaction" means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Initial Issuance Date or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person.

        "Significant Subsidiary" means any Restricted Subsidiary of the Company that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Initial Issuance Date.

        "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

        "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal is scheduled to be paid in the documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to such date.

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        "Subsidiary" means, with respect to any Person:

        (1)   any corporation, association or other business entity of which more than 50% of the total voting power of shares of its Voting Stock is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

        (2)   any partnership, joint venture, limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof).

        "Unrestricted Subsidiary" means (a) each Non-Recourse Subsidiary (until redesignated as a Restricted Subsidiary) and (b) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and any Subsidiary of an Unrestricted Subsidiary, but only to the extent that each of such Subsidiary and its Subsidiaries at the time of such designation:

        (1)   has no Indebtedness other than Non-Recourse Debt;

        (2)   is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless such agreement, contract, arrangement or understanding does not violate the terms of the Indenture described under "—Certain Covenants—Limitation on Transactions with Affiliates;"

        (3)   is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results, in each case, except to the extent otherwise permitted by the Indenture; and

        (4)   such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries.

        Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the board resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by the covenant described above under "—Certain Covenants—Limitation on Restricted Payments." The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if:

        (A)  such Indebtedness is permitted under the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and

        (B)  no Default or Event of Default would be in existence following such designation.

        "U.S. Dollar Equivalent" means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the

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"Exchange Rates" column under the heading "Currency Trading" on the date two Business Days prior to such determination. Except as described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock," whenever it is necessary to determine whether the Company has complied with any covenant in the Indenture or a Default has occurred and an amount is expressed in a currency other than U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially determined in such currency.

        "Vessel" means one or more shipping vessels whose primary purpose is the maritime transportation of cargo and/or passengers or which are otherwise engaged, used or useful in any business activities of the Company and its Restricted Subsidiaries and which are owned by and registered (or to be owned by and registered) in the name of the Company or any of its Restricted Subsidiaries or operated or to be operated by the Company or any of its Restricted Subsidiaries pursuant to a lease or other operating agreement constituting a Capital Lease Obligation, in each case together with all related spares, equipment and any additions or improvements.

        "Vessel Financing Subsidiary" means a Restricted Subsidiary whose primary purpose is to purchase Vessels and which has incurred Indebtedness to finance all or a portion of such assets, provided that neither the Company nor any Guarantor issues a guarantee of or is otherwise obligated with respect to any such Indebtedness of such Restricted Subsidiary.

        "Voting Stock" of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of such Person.

        "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing

        (1)   the sum of the products obtained by multiplying

        (a)   the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by

        (b)   the number of years (calculated to the nearest one twelfth) that will elapse between such date and the making of such payment, by

        (2)   the then outstanding principal amount of such Indebtedness.

        "Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary of such Person, all of the Capital Stock of which (other than directors' qualifying shares) is owned by the Company or another Wholly Owned Restricted Subsidiary.

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U.S. FEDERAL INCOME TAX CONSIDERATIONS

        The following discussion is a summary of certain federal income tax considerations relevant to the exchange of outstanding notes for new notes, but does not purport to be a complete analysis of all potential tax effects. The discussion is based upon the Internal Revenue Code of 1986, as amended, Treasury Regulations, Internal Revenue Service rulings and pronouncements and judicial decisions now in effect, all of which may be subject to change at any time by legislative, judicial or administrative action. These changes may be applied retroactively in a manner that could adversely affect a holder of new notes. The description does not consider the effect of any applicable foreign, state, local or other tax laws or estate or gift tax considerations.

        We believe that the exchange of outstanding notes for new notes should not be an exchange or otherwise a taxable event to a holder for United States federal income tax purposes. Accordingly, a holder should have the same adjusted issue price, adjusted basis and holding period in the new notes as it had in the outstanding notes immediately before the exchange.

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PLAN OF DISTRIBUTION

        Based on interpretations by the staff of the SEC in no action letters issued to third parties, we believe that you may transfer new notes issued under the exchange offer in exchange for the outstanding notes if:

•

you acquire the new notes in the ordinary course of your business; and



•

you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such new notes.

        You may not participate in the exchange offer if you are:

•

a broker-dealer that acquired outstanding notes directly from us.

        Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. To date, the staff of the SEC has taken the position that broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as this exchange offer, other than a resale of an unsold allotment from the original sale of the outstanding notes, with the prospectus contained in this registration statement. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days after the consummation of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until such date, all dealers effecting transactions in new notes may be required to deliver a prospectus.

        If you are an "affiliate," as defined in Rule 405 of the Securities Act, of ours, you must comply with any applicable registration and prospectus delivery requirements of the Securities Act in connection with any resale of the notes.

        If you wish to exchange your outstanding notes for new notes in the exchange offer, you will be required to make representations to us as described in "Exchange Offer—Purpose and Effect of the Exchange Offer" and "—Procedures for Tendering—Your Representations to Us" in this prospectus. As indicated in the letter of transmittal, you will be deemed to have made these representations by tendering your outstanding notes in the exchange offer. In addition, if you are a broker-dealer who receives new notes for your own account in exchange for outstanding notes that were acquired by you as a result of market-making activities or other trading activities, you will be required to acknowledge, in the same manner, that you will deliver a prospectus in connection with any resale by you of such new notes.

        We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, and at prices related to such prevailing market prices or negotiated prices.

        Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of new notes and any commission or concession received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of up to 180 days after the consummation of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any broker-dealers and will indemnify the holders of the outstanding notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

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LEGAL MATTERS

        The validity of the new notes offered in this exchange offer will be passed upon for us by Vinson & Elkins L.L.P., Houston, Texas.

EXPERTS

        The consolidated financial statements of Seabulk International, Inc. and subsidiaries, the financial statements of Seabulk Transmarine Partnership, Ltd., and the financial statements of Seabulk America Partnership, Ltd. at December 31, 2002 and 2001, and for each of the three years in the period ended December 31, 2002, appearing in this Prospectus and Registration Statement, and the consolidated financial statements of Seabulk International, Inc. and subsidiaries incorporated by reference in Seabulk International, Inc.'s Annual Report (Form 10-K) for the year ended December 31, 2002, have been audited by Ernst &Young LLP, independent auditors, as set forth in their reports thereon appearing elsewhere herein and incorporated herein by reference, and are included and incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

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GLOSSARY

        The following are abbreviations and definitions of certain terms commonly used in the shipping industry and this prospectus.

        Affreightment/voyage contract.    A contract to ship a specific volume of cargo between specific points.

        Anchor handling tug (AHT).    A vessel designed and used primarily to tow mobile offshore rigs from location to location and then run the multiple anchors of the rig to secure it to the ocean bottom. These vessels are also used in a construction support capacity, such as with a pipe laying barge. They are powerful vessels that typically range in horsepower from 6,000 BHP to 16,000 BHP or more.

        Bareboat charter.    Rental or lease of an empty ship, without crew, stores or provisions, which are costs borne by the charterer.

        Charter.    The hire of a vessel for a specified period of time or to carry a cargo for a fixed fee from a loading port to a discharging port. The contract for a charter is called a charterparty. A vessel is "chartered in" by a lessee or charterer and "chartered out" by a lessor.

        Coastwise trade.    Vessel trade between ports within the same governmental jurisdiction. In the United States, coastwise trade is governed by the Jones Act (as defined below).

        Crew boat.    A vessel designed and used to transfer rig personnel to and from the offshore rig location. These vessels are typically aluminum hulled, multi-screw, fast boats that can achieve on average 20-25 knots. Typically, they are capable of seating 60 to 70 passengers. They do, however, have useable deck space that allows them to carry containers, baskets, tanks, etc.

        Day rate.    Generally, total vessel revenues divided by the number of days worked by a vessel.

        Double-hull tanker.    A tanker vessel constructed with a void space on both sides and bottom, providing a separation between the cargo and environment. This feature helps to insure that in the event of a grounding, collision or other failure of the cargo containment system, the vessel's cargo will not escape into the environment. Many double-hull tankers are employed in the carriage of crude oil and petroleum products.

        Drydock.    Large basin where all the fresh/sea water is pumped out to allow a ship to dock in order to carry out cleaning and repairing of the parts of a vessel that are below the water line.

        Dwt.    Deadweight tonne. A unit of a vessel's capacity for cargo, fuel oil, stores and crew, measured in metric tonnes of 1,000 kilograms. A vessel's dwt or total deadweight is the total weight the vessel can carry when loaded to a particular load line.

        Hull.    Shell or body of a ship.

        IMO.    International Maritime Organization, a United Nations affiliated agency that issues international standards for shipping.

        Jones Act.    A common name for the U.S. Merchant Marine Act of 1920, as amended, which requires that vessels used to carry cargo between U.S. ports be constructed, owned and operated by U.S. citizens.

        Laid-up vessel.    Generally, a vessel that management has determined will be temporarily inactive to reduce expenses for marine operating supplies, crew payroll and maintenance during periods of decreased demand for vessels.

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        MARAD.    The Maritime Administration of the U.S. Department of Transportation.

        OPA 90.    The U.S. Oil Pollution Act of 1990 and the related extensive regulatory and liability regime for the protection of the environment from oil spills. OPA 90 affects owners and operators in U.S. waters and requires that all ships carrying petroleum products in U.S. coastal waters be of double-hull design by 2015.

        P&I insurance.    Third party insurance obtained through a mutual association (P&I Club) formed by shipowners to provide insurance protection from personal injury, death, pollution or liability claims incurred by members by means of premiums paid by all members.

        Product tanker.    Vessels designed to carry a variety of liquid products varying from crude oil to clean and dirty petroleum products, acids and other chemicals. In order to handle some of the products carried, the tanks of the ships are coated and the ships may have equipment designed for the loading and unloading of cargoes with a high viscosity.

        Single-hull tanker.    A tanker vessel with a single thickness side and bottom hull that provides the only barrier between the cargo and environment. These vessels often transport crude oil and refined petroleum products, chemicals and lubricating oils.

        Supply vessel.    A service vessel used to supply rigs with fuel, water, drilling fluids, barite, and cement in addition to carrying deck cargo such as casing or drill pipe. These vessels are typically 180 feet in length, however, they may range anywhere from 145 to 265 feet in length.

        Tanker.    A ship designed for the carriage of liquid cargoes in bulk with cargo space consisting of many tanks. Tankers carry a variety of products including crude oil, refined products, liquid chemicals and liquid gas. Tankers load their cargo by gravity from the shore or by shore pumps and discharge using their own pumps.

        Time charter.    The hire of a vessel for a specified period of time. The charter out party provides the ship with crew, stores and provisions, ready in all aspects to load cargo and proceed on a voyage and pays for insurance, repairs and maintenance. The charter in party or charterer pays for bunkering and all voyage related expenses including canal tolls and port charges.

        Title XI debt.    Private sector financing under a program established pursuant to Title XI of the Merchant Marine Act, 1936, as amended, and administered by MARAD, providing for a full faith and credit guarantee by the U.S. government of debt obligations issued by U.S. or foreign shipowners for the purpose of financing or refinancing either U.S. flag vessels or eligible export vessels constructed, reconstructed or reconditioned in U.S. shipyards.

        Utility boat.    A smaller supply boat capable of transporting drilling fluids and other supplies necessary for drilling or workover operations offshore. More commonly, however, they are employed to service production operations and construction activities.

        Utilization percentage.    Generally, percentages based upon the number of working days over a 365/366-day year and the number of vessels in the fleet on the last day of the quarter.

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INDEX TO FINANCIAL STATEMENTS

SEABULK INTERNATIONAL, INC.
Audited Consolidated Financial Statements
	Report of Independent Certified Public Accountants	F-2
	Consolidated Balance Sheets as of December 31, 2002 and 2001	F-3
	Consolidated Statements of Operations for the years ended December 31, 2002, 2001 and 2000	F-4
	Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000	F-5
	Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2000, 2001 and 2002	F-7
	Notes to Consolidated Financial Statements	F-9
Unaudited Condensed Consolidated Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002	F-41
	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002	F-42
	Unaudited Condensed Consolidated Statements of Cash Flows for six months ended June 30, 2003 and 2002	F-43
	Notes to Unaudited Condensed Consolidated Financial Statements	F-44
SEABULK AMERICA PARTNERSHIP, LTD.
Audited Financial Statements
	Report of Independent Certified Public Accountants	F-60
	Balance Sheets as of December 31, 2002 and 2001	F-61
	Statements of Operations for the years ended December 31, 2002, 2001 and 2000	F-62
	Statements of Partners' Capital for the years ended December 31, 2000, 2001 and 2002	F-63
	Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000	F-64
	Notes to Financial Statements	F-65
Unaudited Financial Statements
	Unaudited Balance Sheets as of June 30, 2003 and December 31, 2002	F-68
	Unaudited Statements of Operations for the three and six months ended June 30, 2003 and 2002	F-69
	Unaudited Statements of Cash Flows for six months ended June 30, 2003 and 2002	F-70
	Notes to Unaudited Financial Statements	F-71
SEABULK TRANSMARINE PARTNERSHIP, LTD.
Audited Financial Statements
	Report of Independent Certified Public Accountants	F-74
	Balance Sheets as of December 31, 2002 and 2001	F-75
	Statements of Operations for the years ended December 31, 2002, 2001 and 2000	F-76
	Statements of Partners' Capital for the years ended December 31, 2000, 2001 and 2002	F-77
	Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000	F-78
	Notes to Financial Statements	F-79
Unaudited Financial Statements
	Unaudited Balance Sheets as of June 30, 2003 and December 31, 2002	F-84
	Unaudited Statements of Operations for the three and six months ended June 30, 2003 and, 2002	F-85
	Unaudited Statements of Cash Flows for six months ended June 30, 2003 and 2002	F-86
	Notes to Unaudited Financial Statements	F-87

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Seabulk International, Inc. and Subsidiaries

        We have audited the accompanying consolidated balance sheets of Seabulk International, Inc. and Subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Seabulk International, Inc. and Subsidiaries at December 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

Ernst & Young LLP

Miami, Florida
February 25, 2003, except for the second and
third paragraphs of Note 17, as to which the
dates are March 7, 2003 and March 27, 2003,
respectively; and for Note 19, as to which the
date is August 5, 2003.

F-2

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value data)

			December 31,
			2002			2001
Assets
Current assets:
	Cash and cash equivalents		$	37,188		$	11,631
	Restricted cash			1,337			1,337
	Trade accounts receivables net of allowance for doubtful accounts of $5,243 in 2002 and $5,919 in 2001, respectively			45,987			50,088
	Other receivables			13,485			16,282
	Marine operating supplies			8,139			10,049
	Prepaid expenses and other			2,702			2,984
Total current assets				108,838			92,371
Vessels and equipment, net				545,169			589,371
Deferred costs, net				38,228			48,899
Other				10,860			14,124
		Total assets	$	703,095		$	744,765
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	11,343		$	18,171
	Current maturities of long-term debt			24,315			38,367
	Current obligations under capital leases			3,005			2,972
	Accrued interest			1,733			1,455
	Accrued liabilities and other			42,181			38,719
		Total current liabilities		82,577			99,684
Long-term debt				410,858			399,974
Obligations under capital leases				28,748			31,768
Senior notes				—			81,635
Other liabilities				3,489			6,175
		Total liabilities		525,672			619,236
Commitments and contingencies
Minority interest				623			842
Stockholders' equity:
	Preferred stock, no par value—authorized 5,000; issued and outstanding, none			—			—
	Common stock—$.01 par value, authorized 40,000 shares; 23,124 and 10,506 shares issued and outstanding in 2002 and 2001, respectively			231			105
	Additional paid-in capital			258,016			167,259
	Accumulated other comprehensive loss			—			(1	)
	Unearned compensation			(99	)		(198	)
	Accumulated deficit			(81,348	)		(42,478	)
	Total stockholders' equity			176,800			124,687
		Total liabilities and stockholders' equity	$	703,095		$	744,765

See notes to consolidated financial statements

F-3

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

			Year Ended December 31,
			2002			2001			2000
Revenue			$	323,997		$	346,730		$	320,483
Operating expenses:
	Crew payroll and benefits			88,473			96,431			90,370
	Charter hire			7,607			6,326			12,802
	Repairs and maintenance			30,345			25,810			24,522
	Insurance			11,385			15,809			12,645
	Fuel and consumables			28,365			34,955			40,605
	Port charges and other			16,383			19,996			24,282
		Total operating expenses		182,558			199,327			205,226
Overhead expenses:
	Salaries and benefits			22,237			21,531			22,083
	Office			5,123			5,993			6,113
	Professional fees			3,392			3,429			4,629
	Other			7,905			6,049			6,805
		Total overhead expenses		38,657			37,002			39,630
Depreciation, amortization and drydocking				66,376			59,913			50,271
Write-down of assets held for sale				—			1,400			—
Income from operations				36,406			49,088			25,356
Other (expense) income:
	Interest expense			(44,715	)		(55,907	)		(62,714	)
	Interest income			475			240			704
	Minority interest in losses (gains) of subsidiaries			219			35			1,639
	Gain (loss) on disposal of assets			1,364			(134	)		3,863
	Other			(154	)		(73	)		7,072
		Total other expense, net		(42,811	)		(55,839	)		(49,436	)
Loss before income taxes and extraordinary item				(6,405	)		(6,751	)		(24,080	)
Provision for income taxes				4,642			5,210			4,872
Loss before extraordinary item				(11,047	)		(11,961	)		(28,952	)
Extraordinary loss on early extinguishment of debt				(27,823	)		—			—
		Net Loss	$	(38,870	)	$	(11,961	)	$	(28,952	)
Net loss per common share—basic and diluted:
Loss before extraordinary item			$	(0.77	)	$	(1.16	)	$	(2.89	)
Extraordinary loss on early extinguishment of debt				(1.95	)		—			—
	Net loss per common share		$	(2.72	)	$	(1.16	)	$	(2.89	)
Weighted average common shares outstanding				14,277			10,277			10,034

See notes to consolidated financial statements.

F-4

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

					Year Ended December 31,
					2002			2001			2000
Operating activities:
	Net loss				$	(38,870	)	$	(11,961	)	$	(28,952	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Accrued reorganization expenses				—			—			(4,494	)
		Depreciation and amortization of vessels and equipment				43,711			45,212			43,498
		Amortization of drydocking costs				22,665			14,701			6,773
		Provision for bad debts				(93	)		228			1,021
		(Gain) loss on disposal of assets				(1,364	)		134			(3,863	)
		Loss on early extinguishment of debt				27,823			—			—
		Amortization of discount on long-term debt and financing costs				4,249			5,324			5,672
		Minority interest in (losses) gains of subsidiaries				(219	)		(35	)		(1,639	)
		Write-down of assets held for sale				—			1,400			—
		Senior and notes payable issued for payment of interest and fees				626			1,752			1,493
		Other non-cash items				650			459			(75	)
		Changes in operating assets and liabilities:
			Trade accounts and other receivables			8,790			3,210			(13,394	)
			Other current and long-term assets			(4,129	)		(5,485	)		20,349
			Accounts payable and other liabilities			(2,786	)		11,901			(113	)
				Net cash provided by operating activities		61,053			66,840			26,276
Investing activities:
	Expenditures for drydocking					(23,441	)		(29,449	)		(14,366	)
	Proceeds from disposals of assets					12,675			6,575			25,710
	Purchases of vessels and equipment					(3,753	)		(9,282	)		(12,047	)
	Acquisition of minority interest					—			(524	)		—
	Redemption of restricted investments					—			2,542			2,931
	Purchase of restricted investments					—			(1,677	)		—
		Net cash (used in) provided by investing activities				(14,519	)		(31,815	)		2,228

F-5

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

			Year Ended December 31,
			2002			2001			2000
Financing activities:
	Net payments of revolving credit facility			(9,000	)		(5,250	)		14,250
	Proceeds of New Credit Facility			178,800			—			—
	Payments of New Credit Facility			(125	)		—			—
	Payments of long-term debt			(165,817	)		(19,504	)		(33,390	)
	Payments of Senior Notes			(101,499	)		—			—
	Proceeds of Private Placement, net of issuance costs			90,901			—			—
	Payments of Title XI bonds			(7,166	)		(8,312	)		(9,282	)
	Redemption of restricted cash			—			(1,006	)		—
	Payments of other deferred financing costs			—			—			(596	)
	Payments of obligations under capital leases			(2,986	)		(3,558	)		(4,300	)
	Payment of deferred financing costs for New Credit Facility			(4,128	)		—			—
	Proceeds from exercise of warrants			1			3			1
	Proceeds from exercise of stock options			42			—			—
		Net cash used in financing activities		(20,977	)		(37,627	)		(33,317	)
	Change in cash and cash equivalents			25,557			(2,602	)		(4,813	)
	Cash and cash equivalents at beginning of period			11,631			14,233			19,046
	Cash and cash equivalents at end of period		$	37,188		$	11,631		$	14,233
Supplemental schedule of noncash investing and financing activities:
	Note payable issued for amendment fee to credit facility		$	—		$	—		$	4,500
	Vessels exchanged for drydock expenditures		$	900		$	—		$	—
	Capital lease obligations for the acquisition of vessels and equipment		$	—		$	—		$	5,332
	Senior and notes payable issued for payment of accrued interest and fees		$	626		$	1,752		$	1,493
	Notes payable issued for the acquisition of minority interest		$	—		$	10,500		$	—
Supplemental disclosures:
	Interest paid		$	40,085		$	47,279		$	56,219
	Income taxes paid		$	4,537		$	3,304		$	4,478

See notes to consolidated financial statements.

F-6

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(in thousands)

			Class A Common Stock
						Additional Paid-In Capital
			Shares	Amount
Balance at December 31, 1999			10,000	$	100	$	166,791
Comprehensive loss:
	Net loss		—		—		—
	Translation adjustment		—		—		—
		Total comprehensive loss
Common stock issued to employees			28		—		172
Common stock issued upon exercise of warrants			89		1		—
Balance at December 31, 2000			10,117		101		166,963
Comprehensive loss:
	Net loss		—		—		—
	Translation adjustment		—		—		—
		Total comprehensive loss
Common stock issued upon exercise of warrants			314		3		—
Restricted common stock issued to officer			75		1		296
Balance at December 31, 2001			10,506	$	105	$	167,259
Comprehensive loss:
	Net loss		—		—		—
	Translation adjustment		—		—		—
		Total comprehensive loss	—		—		—
Common stock issued upon Private Placement, net of issuance costs of $9,160			12,500		125		90,715
Common stock issued upon exercise of warrants			112		1		—
Common stock issued upon exercise of options			6		—		42
Amortization of unearned compensation			—		—		—
Balance at December 31, 2002			23,124	$	231	$	258,016

F-7

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(in thousands)

			Accumulated Other Comprehensive Loss			Unearned Compensation			Retained Earnings (Accumulated Deficit)			Total
Balance at December 31, 1999			$	—		$	—		$	(1,565	)	$	165,326
Comprehensive loss:
	Net loss			—			—			(28,952	)		(28,952	)
	Translation adjustment			(33	)		—			—			(33	)
		Total comprehensive loss		—			—			—			(28,985	)
Common stock issued to employees				—			—			—			172
Common stock issued upon exercise of warrants				—			—			—			1
Balance at December 31, 2000				(33	)		—			(30,517	)		136,514
Comprehensive loss:
	Net loss			—			—			(11,961	)		(11,961	)
	Translation adjustment			32			—			—			32
		Total comprehensive loss		—			—			—			(11,929	)
Common stock issued upon exercise of warrants				—			—			—			3
Restricted common stock issued to officer				—			(198	)		—			99
Balance at December 31, 2001			$	(1	)	$	(198	)	$	(42,478	)	$	124,687
Comprehensive loss:
	Net loss			—			—			(38,870	)		(38,870	)
	Translation adjustment			1			—			—			1
		Total comprehensive loss		—			—			—			(38,869	)
Common Stock issued upon Private Placement, net of issuance costs of $9,160				—			—			—			90,840
Common stock issued upon exercise of warrants				—			—			—			1
Common stock issued upon exercise of options				—			—			—			42
Amortization of unearned compensation				—			99			—			99
Balance at December 31, 2002			$	—		$	(99	)	$	(81,348	)	$	176,800

See notes to consolidated financial statements.

F-8

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Organization and Basis of Presentation

        Seabulk International, Inc. and subsidiaries (f/k/a Hvide Marine Incorporated) (collectively, the "Company") provides marine support and transportation services, serving primarily the energy and chemical industries. The Company operates offshore energy support vessels, principally in the U.S. Gulf of Mexico, the Arabian Gulf, offshore West Africa, and Southeast Asia. The Company's fleet of tankers transports petroleum products and specialty chemicals in the U.S. domestic trade. The Company also provides commercial tug services in several ports in the southeastern United States.

        The Company derives substantial revenue from international operations, primarily under U.S. dollar-denominated contracts with major international oil companies. Risks associated with operating in international markets include vessel seizure, foreign exchange restrictions, foreign taxation, political instability, nationalization, civil disturbances, and other risks that may limit or disrupt markets.

        The accompanying consolidated financial statements include the accounts of Seabulk International, Inc. and its subsidiaries, both majority and wholly-owned. All intercompany transactions and balances have been eliminated in the consolidated financial statements.

2.     Summary of Significant Accounting Policies

        Revenue.    Revenue is generally recorded when services are rendered, the Company has a signed charter agreement or other evidence of an arrangement, pricing is fixed or determinable and collection is reasonably assured. For the majority of the offshore energy and towing segments, revenues are recorded on a daily basis as services are rendered. For the marine transportation segment, revenue is earned under time charters or affreightment/voyage contracts. Revenue from time charters is earned and recognized on a daily basis. Certain time charters contain performance provisions, which provide for decreased fees based upon actual performance against established targets such as speed and fuel consumption. Recorded revenue is based on actual performance. Affreightment/voyage contracts are contracts for cargoes that are committed on a 12 to 30 month basis, with minimum and maximum cargo tonnages specified over the period at fixed or escalating rates per ton. Revenue and voyage expenses for these affreightment contracts are recognized based upon the percentage of voyage completion. The percentage of voyage completion is based on the number of voyage days worked at the balance sheet date divided by the total number of days expected on the voyage.

        Cash and Cash Equivalents.    The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist of money market instruments and overnight investments. The credit risk associated with cash and cash equivalents is considered low due to the high credit quality of the financial institutions.

        Restricted Cash.    At December 31, 2002 and 2001, restricted cash consisted of fixed deposits required in our foreign locations that allow our banks to issue short-term tender bonds. The bonds are issued during the process of securing contracts and have expiration dates ranging from three months to one year. Upon expiration of the bonds, the funds are returned to the Company.

        Accounts Receivable.    Substantially all of the Company's accounts receivable are due from entities that operate in the oilfield industry. The Company performs ongoing credit evaluations of its trade customers and generally does not require collateral. Expected credit losses are provided for in the consolidated financial statements and have been within management's expectations. Two customers each accounted for 7.0% and one customer accounted for 11.0% of the Company's total revenue for the years ended December 31, 2002 and 2001, respectively. During the years ended December 31, 2002,

F-9

2001, and 2000, the Company wrote off accounts receivable of approximately $0.6 million, $0.7 million and $0.6 million, respectively.

        Insurance Claims Receivable.    Insurance claims receivable represents costs incurred in connection with insurable incidents for which the Company expects are probable of being reimbursed by the insurance carrier(s), subject to applicable deductibles. Deductible amounts related to covered incidents are generally expensed in the period of occurrence of the incident. Expenses incurred for insurable incidents in excess of deductibles are recorded as receivables pending the completion of all repair work and administrative claims process. The credit risk associated with insurance claims receivable is considered low due to the high credit quality and funded status of the insurance clubs in which the Company participates. Insurance claims receivable approximated $4.1 million and $12.0 million at December 31, 2002 and 2001, respectively, and is included in Other Receivables.

        Marine Operating Supplies.    Such amounts consist of fuel and supplies that are recorded at cost and charged to operating expenses as consumed.

        Impairment of Long-Lived Assets.    The Company accounts for the impairment of long-lived assets under the provisions of Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting For the Impairment or Disposal of Long-Lived Asset, which requires impairment losses to be recorded on long-lived assets used in operations when indications of impairment are present and the estimated undiscounted cash flows to be generated by those assets are less than the assets' carrying value. It also establishes one accounting model to be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. If the carrying value of the assets will not be recoverable, as determined by the estimated undiscounted cash flows, the carrying value of the assets is reduced to fair value. Generally, fair value will be determined using valuation techniques such as expected discounted cash flows or appraisals, as appropriate.

        Assets Held for Sale.    It is Company policy to make available for sale vessels and equipment considered by management as excess and no longer necessary for the operations of the Company. In accordance with SFAS No. 144, these assets are valued at the lower of carrying value or fair value less costs to sell. Also, depreciation expense for these assets is terminated at the time of the reclassification. Total assets held for sale (primarily assets in the offshore energy segment) were approximately $2.2 million and $11.4 million at December 31, 2002 and 2001, respectively, and are included in other assets in the accompanying consolidated balance sheets.

        Vessels and Equipment.    Vessels and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. At the time property is disposed of, the assets and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to other income. Major renewals and betterments that extend the life of the vessels and equipment are capitalized. Maintenance and repairs are expensed as incurred except for drydocking expenditures.

        Vessels under capital leases are amortized over the lesser of the lease term or their estimated useful lives and included in depreciation expense. Included in vessels and equipment at December 31, 2002 and 2001 are vessels under capital leases of approximately $36.0 million and $45.4 million, net of accumulated amortization of approximately $3.7 million and $3.3 million, respectively.

F-10

        Listed below are the estimated remaining useful lives of vessels and equipment at December 31, 2002:

	Remaining Useful Lives
	(in years)
Supply boats	3-24
Crewboats	2-23
Anchor handling tug/supply vessels	1-13
Other	1-8
Tankers(1)	3-26
Tugboats	1-37
Furniture and equipment	1-8

⁽¹⁾

Range in years is determined by the Oil Pollution Act of 1990 and other factors.

        Deferred Costs.    Deferred costs primarily represent drydocking and financing costs. Substantially all of the Company's vessels must be periodically drydocked and pass certain inspections to maintain their operating classification, as mandated by certain maritime regulations. Costs incurred to drydock the vessels are deferred and amortized over the period to the next drydocking, generally 30 to 36 months. Drydocking costs are comprised of painting the vessel hull and sides, recoating cargo and fuel tanks, and performing other engine and equipment maintenance activities to bring the vessels into compliance with classification standards. Deferred financing costs are amortized over the term of the related borrowings using the effective interest method. At December 31, 2002 and 2001, deferred costs included unamortized drydocking costs of approximately $27.2 million and $29.4 million, respectively, and net deferred financing costs of $11.0 million and $19.6 million, respectively.

        Accrued Liabilities.    Accrued liabilities included in current liabilities consist of the following at December 31, (in thousands):

		2002		2001
Voyage operating expenses		$	10,320	$	9,892
Foreign taxes			14,966		10,626
Payroll and benefits			6,848		8,068
Deferred voyage revenue			933		1,451
Professional services			473		1,267
Litigation, claims and settlements			106		200
Insurance			4,703		3,667
Other			3,832		3,548
	Total	$	42,181	$	38,719

        Stock-Based Compensation.    As permitted by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), the Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25") and related interpretations in accounting for its employee stock-based transactions and has complied with the disclosure requirements of SFAS 123. Under APB 25, compensation expense is calculated at the time of option grant based upon the difference between the exercise prices of the option and the fair market value of the Company's common stock at the date of grant recognized over the vesting period.

F-11

        On December 31, 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure. SFAS No. 148 amends SFAS 123 to provide alternative methods of transition to the fair value method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure provisions of SFAS 123 to require expanded disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements.

        Had compensation expense for the stock option grants been determined based on the fair value at the grant date for awards consistent with the methods of SFAS No. 123, the Company's net loss would have increased to the pro forma amounts presented below for 2002, 2001 and 2000:

	2002			2001			2002
Net loss per common share—assuming dilution:
As reported	$	(2.72	)	$	(1.16	)	$	(2.89	)
Pro forma	$	(2.80	)	$	(1.27	)	$	(3.16	)

        Income Taxes.    The Company files a consolidated tax return with substantially all corporate subsidiaries; the other subsidiaries file separate income tax returns. Each partnership files a separate tax return. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

        Net Loss Per Share.    Net loss per common share is computed in accordance with SFAS No. 128, Earnings Per Share, which requires the reporting of both net loss per common share and diluted net loss per common share. The calculation of net loss per common share is based on the weighted average number of common shares outstanding and therefore excludes any dilutive effect of stock options and warrants while diluted net loss per common share includes the dilutive effect of stock options and warrants, unless the effects are antidilutive.

        Foreign Currency Translation.    In accordance with SFAS No. 52, Foreign Currency Translation, assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the rate of exchange at the balance sheet date, while revenue and expenses are translated at the weighted average rates prevailing during the respective years. Components of stockholders' equity are translated at historical rates. Translation adjustments are deferred in accumulated other comprehensive loss, which is a separate component of stockholders' equity. The Company's foreign subsidiaries use the U.S. dollar as their functional currency and substantially all external transactions are denominated in U.S. dollars. Gains and losses resulting from changes in exchange rates from year to year are insignificant for all years presented and are included in the accompanying consolidated statements of operations.

        Reorganization Items.    Upon emergence from Chapter 11 Bankruptcy Protection on December 15, 1999, the Company adopted Fresh Start Reporting pursuant to the provisions of SOP 90-7.

        Estimates.    The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods. Significant estimates have been made by management, including the allowance for doubtful accounts,

F-12

useful lives and valuation of vessels and equipment, realizability of deferred tax assets and certain accrued liabilities. Actual results will differ from those estimates.

        Comprehensive Loss.    SFAS No. 130, Reporting Comprehensive Income, establishes standards for reporting and the display of comprehensive loss, which is defined as the change in equity arising from non-owner sources. Comprehensive loss consists of net loss and foreign currency translation adjustments. Comprehensive loss is reflected in the consolidated statement of changes in stockholders' equity.

        Recent Pronouncements.    In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 14, and Technical Corrections, which eliminates the requirement that gains and losses from the extinguishment of debt be aggregated and, if material, classified as an extraordinary item, net of the related income tax effect, and eliminates an inconsistency between the accounting for sale-leaseback transactions and certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Subsequent to the January 1, 2003 adoption date of the standard, the Company will be required to reclassify to continuing operations amounts previously reported as extinguishments of debt.

        In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which addresses the financial accounting and reporting for costs associated with exit or disposal activities. SFAS No. 146 is effective for fiscal years beginning after December 31, 2002. The adoption of the standard is not expected to have a significant impact on the Company.

        In June 2001, the Accounting Executive Committee of the American Institute of Certified Public Accountants issued an exposure draft of a proposed Statement of Position ("SOP") entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, the Company would expense major maintenance costs as incurred and prohibit the use of the deferral of the entire cost of a planned major maintenance activity. Currently, the costs incurred to drydock the Company's vessels are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 30 to 36 months. The proposed SOP would be effective for fiscal years beginning after June 15, 2002. Management has determined that this SOP, if issued as proposed, would have a material effect on the consolidated financial statements. In the year of adoption, the Company would write-off the net book value of the deferred drydocking costs and record the write off as a change in accounting principle ($27.2 million as of December 31, 2002). Additionally, all drydock expenditures incurred after the adoption of the SOP would be expensed as incurred.

3.     Long-Term Debt

        Long-term debt consists of the following at December 31 (in thousands):

	2002			2001
New Credit Facility	$	178,675		$	—
Revolving line of credit		—			9,000
Term loan		—			154,996
Title XI debt		234,450			241,616
Notes payable		22,048			32,729
		435,173			438,341
Less:    current maturities		(24,315	)		(38,367	)
	$	410,858		$	399,974

F-13

        On September 13, 2002, the Company completed an agreement with Fortis Capital Corp. and NIB Capital Bank N.V., as arrangers, for a $180 million senior secured credit facility (the "New Credit Facility"), which replaced the Company's existing facility. The New Credit Facility consists of an $80 million term loan and a $100 million revolving credit facility and has a five-year maturity. The New Credit Facility replaced the Company's prior bank debt and Senior Notes.

        The revolving portion of the New Credit Facility is subject to semi-annual reductions commencing six months after closing. The principal reductions on the revolving loan are as follows: $10 million each in 2003 and 2004, $20 million in 2005, $25 million in 2006, and $33.7 million in 2007. The term loan portion is subject to semi-annual reductions commencing 36 months after closing. The principal reductions on the term loan are as follows: $2.5 million in 2005, $14.5 million in 2006, and $63 million in 2007. Interest on the loans is payable monthly, with a variable interest rate. The rate is either a LIBOR or base rate plus a margin based upon certain financial ratios of the Company (5.42% and 5.92% for the revolving loan and term loan, respectively, at December 31, 2002). In November 2002, the interest rate under the New Credit Facility was increased by 100 basis points (1%) in accordance with the terms of the commitment letter with the lending banks to syndicate the New Credit Facility by November 13, 2002.

        The New Credit Facility is secured by first ship mortgages on substantially all of the Company's vessels (excluding vessels financed with U.S. Maritime Administration Title XI financing) and is guaranteed by most of the subsidiaries of the Company. The New Credit Facility is also secured by second ship mortgages on two of the Company's tankers and three of the Company's tugs.

        The New Credit Facility is subject to various financial covenants, including minimum adjusted tangible net worth requirements, minimum ratios of adjusted EBITDA to adjusted interest expense, and a maximum ratio of adjusted funded debt to adjusted EBITDA. The Company is required to maintain a minimum fair market value of collateralized assets of at least 175% of outstanding borrowings under the New Credit Facility, based upon appraisals which may be requested not more than once during any 12-month period.

        The Company's five double-hull product and chemical tankers are financed through Title XI Government Guaranteed Ship Financing Bonds. There are a total of seven bonds with interest rates ranging from 6.50% to 7.54% that require principal amortization through June 2024. The aggregate outstanding principal balance of the bonds was $215.7 million and $220.1 million at December 31, 2002 and 2001, respectively. Principal payments during 2002 and 2001 were $4.4 million and $4.1 million, respectively, and interest payments were $15.1 million and $15.4 million, respectively.

        Covenants under the Title XI Bond agreements contain financial tests which, if not met, among other things (1) restrict the withdrawal of capital; (2) restrict certain payments, including dividends, increases in employee compensation and payments of other indebtedness; (3) limit the incurrence of additional indebtedness; and (4) prohibit the Company from making certain investments or acquiring additional fixed assets. Vessels with a net book value of $235.1 million, and all contract rights thereof, have been secured as collateral in consideration of the U.S. Government guarantee of the Title XI Bonds.

        The Company is required to make deposits to a Title XI reserve fund based on a percentage of net income attributable to the operations of the five double-hull tankers, as defined by the Title XI Bond agreement. Cash held in a Title XI reserve fund is invested by the trustee of the fund, and any income earned thereon is either paid to the Company or retained in the reserve fund. Withdrawals from the Title XI reserve fund may be made for limited purposes, subject to prior approval from MARAD. In the second quarter of 2003, the first deposits to the reserve fund are expected to be

F-14

made. Additionally, according to the Title XI Financial Agreement, the Company is restricted from formally distributing excess cash from the operations of the five double-hull tankers until certain working capital ratios have been reached and maintained. Accordingly, at December 31, 2002, the Company has approximately $19.5 million in cash and cash equivalents that are restricted for use for the operations of the five double-hull tankers and cannot be used to fund the Company's general working capital requirements, but has approximately $4.3 million which is available for distribution and is expected to be available for general working capital purposes of the consolidating Company during the second quarter of 2003.

        As of December 31, 2002 and 2001, other Title XI debt of approximately $18.8 million and $21.5 million, respectively, was collateralized by first preferred mortgages on certain vessels and bears interest at rates ranging from 5.4% to 10.1%. The debt is due in semi-annual principal and interest payments through June 2021. Under the terms of the Other Title XI debt, the Company is required to maintain a minimum level of working capital, as defined, and comply with certain other financial covenants. During 2002 and 2001, $2.8 million and $4.2 million, respectively, in principal and $1.7 million and $2.0 million, respectively, in interest were repaid on this debt.

        The Company has two promissory notes aggregating approximately $19.6 million relating to the purchase of equity interests in the double-hull product and chemical carriers. The notes bear interest at 8.5%. Semi-annual interest and principal payments are due through December 2003 on one note and quarterly principal and interest payments are due through January 2006 on the other. The promissory notes are collateralized by securities of certain subsidiaries. The outstanding balance of the notes was $10.2 million and $14.8 million as of December 31, 2002 and 2001, respectively.

        The Company has various promissory notes relating to the acquisitions of various vessels. The promissory notes are collateralized by mortgages on certain vessels and bear interest at rates ranging from 8.1% to 8.5%. The debt is due in monthly installments of principal and interest through November 2011. The outstanding balance of the notes was $11.9 million and $13.1 million as of December 31, 2002 and 2001, respectively.

        At December 31, 2002, the Company had letters of credit outstanding in the amount of approximately $1.3 million, which expire on various dates through December 2025.

        The aggregate annual future payments due on the long-term debt as of December 31, 2002 are as follows (in thousands):

Years ending December 31:
2003	$	24,315
2004		21,431
2005		33,967
2006		49,463
2007		105,425
Thereafter		200,572
	$	435,173

F-15

4.     Capital Leases

        The Company operates certain vessels and other equipment under leases that are classified as capital leases. The following is a schedule of future minimum lease payments under capital leases, including obligations under sale-leaseback transactions, together with the present value of the net minimum lease payments as of December 31, 2002 (in thousands):

Years ending December 31:
2003		5,103
2004		4,908
2005		4,891
2006		3,933
2007		3,933
Thereafter		20,292
Total minimum lease payments		43,060
Less: amount representing interest		(11,307	)
Present value of minimum lease payments (including current portion of $3,005)	$	31,753

5.     Commitments and Contingencies

Lease Commitments

        The Company leases its office facilities and certain vessels under operating lease agreements, which expire at various dates through 2013. Rent expense was approximately $4.5 million, $4.9 million and $4.4 million for the years ended December 31, 2002, 2001 and 2000, respectively. Aggregate annual future payments due under non-cancelable operating leases with remaining terms in excess of one year as of December 31, 2002 are as follows (in thousands):

Years ending December 31:
2003	$	3,714
2004		3,577
2005		3,451
2006		2,918
2007		1,565
Thereafter		3,368
	$	18,593

Bareboat Charter and Sublease

        During 2001, the Company entered into a ten-year non-cancelable bareboat charter agreement for a double-hull tanker with a third party (the "charterer"). Beginning in January 2002 (commencement of contract), the charterer has exclusive possession and control of the vessel. As a result, the charter party will incur and pay all operating costs during the charter period. The Company receives a fixed amount per day for the charter of the vessel. Also, the Company subleases certain office space in Houston, Texas and Tampa, Florida. The sublease in Houston is expected to terminate in January 2004 and the

F-16

Tampa sublease is expected to terminate in December 2006. There are no renewal or escalation clauses relating to the bareboat charter or subleases.

        Future minimum lease receipts under the bareboat charter and sublease as of December 31, 2002 (in thousands) are as follows:

Years ending December 31:
2003	$	7,132
2004		7,041
2005		7,033
2006		7,033
2007		6,935
Thereafter		28,291
	$	63,465

Contingencies

        Under U.S. law, "United States persons" are prohibited from business activities and contracts in certain countries, including Sudan and Iran. The Company has filed three reports with and submitted documents to the Office of Foreign Asset Control ("OFAC") of the U.S. Department of Treasury. One of the reports was also filed with the Bureau of Export Administration of the U.S. Department of Commerce. The reports and documents related to certain limited charters with third parties involving three of the Company's vessels which called in the Sudan for several months in 1999 and January 2000, and charters with third parties involving several of the Company's vessels which called in Iran in 1998. In March 2003, the Company received notification from OFAC that the case has been referred to its Civil Penalties Division. Should OFAC determine that these activities constituted violations of the laws or regulations, civil penalties, including fines, could be assessed against the Company and/or certain individuals who knowingly participated in such activities. The Company cannot predict the extent of such penalties; however, management does not believe the outcome of these matters will have a material impact on its financial position or results of operations.

        The Company was sued by Maritime Transportation Development Corporation in January 2002 in Florida state court in Broward County alleging broker commissions due since 1998 from charters on two of its vessels, the Seabulk Magnachem and Seabulk Challenger, under an alleged broker commission agreement. The claim allegedly continues to accrue. The amount alleged to be due is over $500,000, but is subject to offset claims and defenses by the Company. The Company is vigorously defending such charges and believes that it has good defenses, but the Company cannot predict the ultimate outcome.

        From time to time the Company is also party to personal injury and property damage claims litigation arising in the ordinary course of our business. Protection and Indemnity marine liability insurance covers large claims in excess of the deductibles and self insured retentions.

        At December 31, 2002, approximately 20% of the Company's employees were members of national maritime labor unions, or are subject to collective bargaining agreements. Management considers relations with employees to be satisfactory; however, the deterioration of these relations could have an adverse effect on the Company's operating results.

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6.     Vessels and Equipment

        Vessels and equipment are summarized below (in thousands):

	Year ended December 31,
	2002			2001
Vessels and improvements	$	678,617		$	681,599
Furniture and equipment		9,842			11,729
		688,459			693,328
Less: accumulated depreciation and amortization		(143,290	)		(103,957	)
Vessels and equipment, net	$	545,169		$	589,371

        The Company did not acquire any vessels in 2002. In 2001, the Company acquired one vessel for approximately $2.5 million in cash.

        The Company sold 17 offshore energy support vessels during 2002 for an aggregate total of $6.8 million and a gain of approximately $55,000. In 2001, the Company sold 25 vessels for proceeds of $6.6 million.

7.     Stock Option Plans

        In December 1999, the Company adopted the Hvide Marine Incorporated Stock Option Plan (the "1999 Plan"), a stock option plan which provided certain key employees of the Company the right to acquire shares of common stock. Pursuant to the plan, 500,000 shares of the Company's common stock were reserved for issuance to the participants in the form of nonqualified stock options. The options expire no later than 10 years from the date of the grant.

        On June 15, 2000, the Company adopted the Amended and Restated Equity Ownership Plan (the "Plan"). The Plan amends and restates in its entirety the 1999 Plan. Pursuant to the Plan, 800,000 shares of the Company's stock were reserved for issuance to participants in the form of nonqualified or incentive stock options, restricted stock grants and other stock related instruments, subject to adjustment to reflect stock dividends, recapitalizations, reorganizations and other changes in the capital structure. In December 2001, the Compensation Committee agreed to amend the Plan by authorizing and reserving for issuance an additional 500,000 shares to be eligible for grants under the Plan, bringing the total under the Plan to 1,300,000 shares. The Committee's action was approved by the shareholders at the Company's Annual Meeting of Shareholders held on May 14, 2002. The vesting period and certain other terms of stock options granted under the Plan are determined by the Compensation Committee. The Plan requires that the option price may not be less than 100% of the fair market value on the date of grant. The options expire no later than 10 years from the date of grant. There were no options granted under the Plan in 2002, and 283,000 options were granted in 2001. In addition, there were 75,000 shares of restricted stock granted in 2001 under the Plan.

        On June 15, 2000, the Company also adopted the Stock Option Plan for Directors (the "Directors Plan"). Pursuant to the Directors Plan, an aggregate of 175,000 shares of common stock are authorized and reserved for issuance, subject to adjustments to reflect stock dividends, recapitalizations, reorganizations, and other changes in the capital structure of the Company. Eligible directors as of the effective date of the Plan were granted options to purchase 10,000 shares of common stock on the first option date, and the Chairman of the Board received 20,000 options, for a total granted of 80,000. Eligible directors receive 4,000 and the Chairman receives 8,000 options to purchase shares of common

F-18

stock annually, effective as of each Annual Meeting of Shareholders of the Company commencing May 17, 2001. Under the Plan, the option price for each option granted is required to be 100% of the fair market value of common stock on the day after the date of grant. Options granted under the Director's Plan totaled 32,000 and 32,000 during 2002 and 2001, respectively.

        The following table of data is presented in connection with the stock option plans:

	Year Ended December 31,
	2002				2001				2000
	Number of options		Weighted average exercise price		Number of options		Weighted average exercise Price		Number of options		Weighted average exercise price
Options outstanding at beginning of period	822,000		$	6.91	604,000		$	8.27	200,000		$	12.47
Granted	32,000			6.19	315,000			5.61	495,000			7.16
Exercised	(6,667	)		6.31	—			—	—			—
Cancelled	(72,831	)		7.48	(97,000	)		10.80	(91,000	)		11.33
Options outstanding at end of period	774,502		$	6.84	822,000		$	6.91	604,000		$	8.27
Options exercisable at end of period	562,856		$	7.30	333,837		$	8.38	207,000		$	12.11
Options available for future grants at end of period	618,831			—	153,000			—	371,000			—

        Summarized information about stock options outstanding as of December 31, 2002 is as follows:

Exercise Price Range	Number of Options Outstanding	Remaining Life (In Years)	Weighted Average Exercise Price		Number of Options Exercisable	Weighted Average Exercise Price
Under $6.25	181,834	9.00	$	4.34	50,844	$	3.95
$6.25 to $6.31	366,334	7.49	$	6.26	346,338	$	6.25
$6.32 to $7.30	32,000	8.38	$	7.30	32,000	$	7.30
$7.31 to $7.75	94,334	8.24	$	7.75	33,674	$	7.75
Over $7.75	100,000	3.96	$	12.47	100,000	$	12.47

        The weighted average fair value of options granted under the Company's stock option plans during 2002, 2001 and 2000 was $4.91, $5.54 and $6.65, respectively. These values are based on the Black-Scholes option valuation model. Had compensation expense for the stock option grants been determined based on the fair value at the grant date for awards consistent with the methods of SFAS No. 123, the Company's net loss would have increased to the pro forma amounts presented below for 2002, 2001 and 2000 (in thousands, except per share amounts):

	2002			2001			2000
Net loss:
As reported	$	(38,870	)	$	(11,961	)	$	(28,952	)
Pro forma		(39,930	)		(13,067	)		(31,676	)
Net loss per common share—assuming dilution:
As reported	$	(2.72	)	$	(1.16	)	$	(2.89	)
Pro forma	$	(2.80	)		(1.27	)		(3.16	)

F-19

        The fair value of each option is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions applied to grants in 2002, 2001 and 2000.

	2002		2001		2000
Dividend yield	0.0	%	0.0	%	0.0	%
Expected volatility factor	0.72		3.21		1.21
Approximate risk-free interest rate	4.25	%	5.0	%	5.0	%
Expected life (in years)	10		10		10

        The Black-Scholes options valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because changes in the subjective input assumptions can materially affect the fair value estimate, the existing models, in management's opinion, do not necessarily provide a reliable single measure of the fair value of the Company's stock options.

8.     Employee Benefit and Stock Plans

        The Company sponsors a retirement plan and trust (the "Plan") established pursuant to Section 401(k) of the Internal Revenue Code, which covers substantially all administrative and non-union employees. Subject to certain dollar limitations, employees may contribute a percentage of their salaries to this Plan, and the Company will match a portion of the employees' contributions. Profit sharing contributions by the Company to the Plan are discretionary. Additionally, the Company contributed to various union-sponsored, collectively bargained pension plans for certain crew members in the marine transportation and towing segments. The plans are not administered by the Company, and contributions are determined in accordance with provisions of negotiated labor contracts. The expense resulting from Company contributions to the Plan and various union-sponsored plans amounted to approximately $3.5 million, $2.9 million and $2.0 million for the years ended December 31, 2002, 2001 and 2000, respectively.

9.     Income Taxes

        The United States and foreign components of income (loss) before income taxes and extraordinary item are as follows (in thousands):

	Year Ended December 31,
	2002			2001			2000
United States	$	(7,755	)	$	(3,849	)	$	(1,502	)
Foreign		1,350			(2,902	)		(22,578	)
Total	$	(6,405	)	$	(6,751	)	$	(24,080	)

F-20

        The components of the provision for income tax expense (benefit) are as follows (in thousands):

			Year Ended December 31,
			2002			2001		2000
Current:
	Federal		$	(1,520	)	$	—	$	—
	Foreign			6,162			5,210		4,872
		Total current		4,642			5,210		4,872
Deferred				—			—		—
	Total income tax expense		$	4,642		$	5,210	$	4,872

        A reconciliation of income tax attributable to continuing operations computed at the U.S. federal statutory tax rates to income tax expense is:

	Year Ended December 31,
	2002		2001		2000
Income tax expense computed at the federal statutory rate	(35	)%	(35	)%	(35	)%
State income taxes, net of Federal benefit	(1	)	(1	)	(1	)
Foreign taxes in excess of credits recognized	96		77		20
Reduction of tax attributes	—		—		—
Change in valuation allowance	11		35		35
Permanent, non deductible items	1		1		1
	72	%	77	%	20	%

F-21

        The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in thousands):

		Year Ended December 31,
		2002			2001
Deferred income tax assets:
Allowances for doubtful accounts		$	1,606		$	828
Goodwill			14,785			17,882
Accrued compensation			627			733
Foreign tax credit carryforwards			17,809			16,548
Accrued supplemental insurance premiums			1,534			—
Net operating loss carryforwards			123,114			61,509
Other			1,783			1,351
	Total deferred income tax assets		161,258			98,851
	Less: valuation allowance		(75,177	)		(65,263	)
	Net deferred income tax assets		86,081			33,588
Deferred income tax liabilities:
Property differences			75,192			28,885
Deferred drydocking costs			9,489			3,768
Other			1,400			935
Total deferred income tax liabilities			86,081			33,588
Net deferred income tax assets		$	—		$	—

        SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management determined that a valuation allowance of approximately $75.2 million and $65.3 million was necessary at December 31, 2002, and 2001, respectively, to reduce the deferred tax assets to the amount that will more likely than not be realized. After application of the valuation allowance, the Company's net deferred tax assets and liabilities are zero at December 31, 2002 and 2001. The net change in the total valuation allowance was an increase of approximately $9.9 million and $7.9 million in 2002 and 2001, respectively.

        Subsequently, recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 31, 2002 will be allocated as follows (in thousands):

Income tax benefit that would be reported in the consolidated statement of operations	$	31,925
Additional paid-in capital		43,252
Total	$	75,177

        The Company has recognized a deferred tax asset of $1.5 million for a 2001 federal net operating loss carryback. On March 9, 2002, the Job Creation and Worker Assistance Act of 2002 was signed into law, which allows a 2001 federal net operating loss to be carried back five years instead of two years. This new law converted the 2001 federal net operating loss carryforward into a federal net operating loss that will be fully absorbed within the five-year carryback period.

F-22

        The stock issuance in September 2002 (see Note 10) resulted in an "ownership change" as broadly defined in Section 382 of the Internal Revenue Code. As the result of the ownership change, utilization of net operating loss carryforwards under federal income tax laws and certain other beneficial tax attributes will be subject to an annual limitation. The limitation of net operating losses that can be utilized annually will equal the product of applicable interest rate mandated under federal income tax laws and the value at the time of the ownership change.

        At December 31, 2002, the Company had a net operating loss carryforward of approximately $350.5 million, which is available to offset future federal taxable income through 2022. The Company also has foreign tax credit carryforwards, expiring in years 2003 through 2007, of approximately $17.7 million, which are available to reduce future federal income tax liabilities. The annual limitation under Section 382 would limit utilization of the Company's pre- September net operating losses to a maximum of approximately $4.2 million annually through their expiration date. A substantial portion of net operating loss carryforwards and tax credits may not be utilized due to this annual limitation.

        The Company has a tax basis in its assets in excess of its basis for financial reporting purposes that will generate tax deductions in future periods. As a result of a "change in ownership" in December 1999, under the Internal Revenue Code Section 382, the Company's ability to utilize depreciation, amortization and other tax attributes will be limited to approximately $9.5 million per year through 2004. This limitation is applied to all net built-in losses, which existed on the "change of ownership" date (December 15, 1999), including all items giving rise to a deferred tax asset.

10.   Stockholders' Equity

        In December 1999, all classes of the Predecessor Company's equity securities were canceled. Pursuant to a previous, pre-1999 Equity Ownership Plan, prior to December 1999, shares of the Predecessor Company's Class B common stock were converted to Class A common stock. Holders of Predecessor Company Class A common stock and holders of certain rights to obtain common stock under the Predecessor Company's compensation plans were issued 125,000 Class A warrants to purchase common stock of the Company on a pro rata basis. The warrants have a four-year term and an exercise price of $38.49 per share.

        Pursuant to the articles of incorporation of the Company, as amended in 2002, there are 40 million shares of common stock authorized for issuance.

        In December 1999, holders of the Predecessor Company's Preferred Securities received 200,000 shares of Company common stock and 125,000 Class A warrants. The warrants have a four-year term and an exercise price of $38.49 per share. There were no Class A warrant exercises during 2002 and 2001. The remaining weighted average contractual life is one year at December 31, 2002.

        In December 1999, as part of the Company's reorganization under Chapter 11 bankruptcy, the holders of the Predecessor Company's Senior Notes received 9.8 million shares of Company common stock. The holders of Senior Notes received 536,193 common stock purchase warrants ("the Noteholder Warrants"). The warrants have a seven and one-half year term and an exercise price of $0.01 per warrant.    Also in connection with the former Senior Notes, the Company issued an additional 187,668 Noteholder Warrants to an investment advisor. The warrants have a seven and one-half year term and an exercise price of $0.01 per warrant. During the years ended December 31, 2002 and 2001, 112,000 and 313,000 Noteholder Warrants were exercised, respectively. The amount of outstanding Noteholder Warrants amounted to approximately 210,000 at December 31, 2002. The weighted average contractual life is 4.5 years at December 31, 2002.

F-23

        All of the Company's outstanding warrants contain customary anti-dilution provisions for issuances of common stock, splits, combinations and certain other events, as defined. In addition, the outstanding warrants have certain registration rights, as defined.

        The Company is authorized to issue 5 million shares of preferred stock, no par value per share. The Company has no present plans to issue such shares.

        At December 31, 2002 approximately 619,000 shares of Common Stock were reserved for issuance under the Company's Amended and Restated Equity Ownership Plan and the Stock Option Plan for Directors.

        On September 13, 2002, the Company completed the private placement of 12.5 million shares of newly issued Seabulk common stock at a cash price of $8.00 per share (the "Private Placement") to a group of investors including an entity associated with DLJ Merchant Banking Partners III, L.P., an affiliate of CSFB Private Equity, and entities associated with Carlyle/Riverstone Global Energy and Power Fund I, L.P., an affiliate of The Carlyle Group of Washington, D.C. The stock issuance was previously approved by the Company's Shareholders at a Special Meeting held on September 5, 2002.

        The new investors also purchased, for $8.00 per share, 5.1 million of the Company's common stock and common stock purchase warrants beneficially owned by accounts managed by Loomis, Sayles & Co., L.P., an SEC-registered investment advisor. Taken together, the two transactions gave the new investors approximately 75% of the Company's outstanding common stock. Pursuant to the agreement with the investors, the Company's Board of Directors has been restructured to permit the new investors to hold a majority of seats on the Board and to give minority shareholders certain minority rights.

11.   Net Loss Per Share

        The following table sets forth the computation of basic and diluted net loss per share before extraordinary items (in thousands, except per share amounts):

	Year Ended December 31,
	2002			2001			2000
Numerator:
Numerator for basic and diluted loss per share—net loss before extraordinary item available to common shareholders	$	(38,870	)	$	(11,961	)	$	(28,952	)
Denominator:
Denominator for basic and diluted loss per share—weighted average shares		14,277			10,277			10,034
Net loss per common share before extraordinary item	$	(2.72	)	$	(1.16	)	$	(2.89	)
Net loss per common share before extraordinary item—assuming Dilution	$	(2.72	)	$	(1.16	)	$	(2.89	)

        The weighted average diluted common shares outstanding for fiscal 2002, 2001 and 2000 excludes 774,502, 822,000 and 604,000 stock options, respectively. Additionally, 460,000, 572,000 and 885,000 warrants in 2002, 2001 and 2000, respectively, are excluded from the weighted average diluted common shares outstanding. These common stock equivalents are antidilutive because the Company incurred net losses for 2002, 2001 and 2000.

F-24

12.   Segment and Geographic Data

        The Company organizes its business principally into three segments. The accounting policies of the reportable segments are the same as those described in Note 2. The Company does not have significant intersegment transactions.

        These segments and their respective operations are as follows:

Offshore Energy Support (Seabulk Offshore)—Offshore energy support includes vessels operating in U.S. and foreign locations used primarily to transport materials, supplies, equipment and personnel to drilling rigs and to support the construction, positioning and ongoing operations of oil and gas production platforms.

Marine Transportation Services (Seabulk Tankers)—Marine transportation services includes oceangoing vessels used to transport chemicals, fuel and other petroleum products, primarily from chemical manufacturing plants, refineries and storage facilities along the U.S. Gulf of Mexico coast to industrial users and distribution facilities in and around the Gulf of Mexico, Atlantic and Pacific coast ports. Certain of the vessels also transport crude oil within Alaska and among Alaska, Pacific coast and Hawaiian ports.

Towing (Seabulk Towing)—Harbor and offshore towing services are provided by tugs to vessels utilizing the ports in which the tugs operate, and to vessels at sea to the extent required by offshore commercial contract opportunities and by environmental regulations, casualty or other emergency.

        The Company evaluates performance by operating segment. Also, within the offshore energy support segment, the Company performs additional performance evaluation of vessels marketed in U.S. and foreign locations. Resources are allocated based on segment profit or loss from operations, before interest and taxes.

        Revenue by segment and geographic area consists only of services provided to external customers, as reported in the Statements of Operations. Income from operations by geographic area represents net revenue less applicable costs and expenses related to that revenue. Unallocated expenses are primarily comprised of general and administrative expenses of a corporate nature. Identifiable assets represent those assets used in the operations of each segment or geographic area, and unallocated assets include corporate assets.

F-25

        The following schedule presents information about the Company's operations in these segments (in thousands):

			Year Ended December 31,
			2002			2001			2000
Revenue
	Offshore energy support		$	171,479		$	191,178		$	151,395
	Marine transportation services			121,371			122,059			135,982
	Towing			31,147	*		33,493	*		33,106	*
		Total	$	323,997		$	346,730		$	320,483
Operating expenses
	Offshore energy support		$	99,572		$	98,549		$	94,331
	Marine transportation services			63,823	*		76,555	*		91,104	*
	Towing			18,909			20,130			19,791
	General corporate			254			4,093			—
	Total		$	182,558		$	199,327		$	205,226
Depreciation, amortization, drydocking and write-down of assets held for sale
	Offshore energy support		$	43,305		$	37,550		$	31,478
	Marine transportation services			18,159			19,311			14,417
	Towing			3,222			2,910			2,919
	General corporate			1,690			1,542			1,457
		Total	$	66,376		$	61,313		$	50,271
Income (loss) from operations
	Offshore energy support		$	10,156		$	39,151		$	10,389
	Marine transportation services			34,686			20,952			23,893
	Towing			4,519			6,169			5,096
	General corporate			(12,955	)		(17,184	)		(14,022	)
		Total	$	36,406		$	49,088		$	25,356
Net income (loss)
	Offshore energy support		$	(16,912	)	$	5,566		$	(30,920	)
	Marine transportation services			17,346			(278	)		7,200
	Towing			(151	)		396			2,906
	General corporate			(39,153	)**		(17,645	)		(8,138	)
		Total	$	(38,870	)	$	(11,961	)	$	(28,952	)

*

Net of elimination of intersegment towing revenue and intersegment marine transportation operating expenses of $0.3 million, $2.1 million and 2.6 million for the years ended December 31, 2002 and 2001 and 2000, respectively.

**

Includes loss on early extinguishment of debt of $27.8 million in the third quarter of 2002 (see Note 14).

F-26

				Consolidated Balance Sheet Information as of December 31,
				2002			2001
Identifiable assets
	Offshore energy support			$	286,609		$	326,608
	Marine transportation services				323,611			334,272
	Towing				64,511			64,931
	Unallocated				28,364			18,954
		Total		$	703,095		$	744,765
Vessels and equipment
	Offshore energy support			$	277,208		$	281,933
	Marine transportation services				341,069			341,087
	Towing				61,241			61,317
		Total			679,518			684,337
	Construction in progress				99			837
	General corporate				8,842			8,154
	Gross vessels and equipment				688,459			693,328
		Less accumulated depreciation			(143,290	)		(103,957	)
			Total	$	545,169		$	589,371
Capital expenditures and drydocking
	Offshore energy support			$	19,532		$	30,959
	Marine transportation services				6,313			6,597
	Towing				1,315			951
	Unallocated				34			224
		Total		$	27,194		$	38,731

        The Company is engaged in providing marine support and transportation services in the United States and foreign locations. The Company's foreign operations are conducted on a worldwide basis, primarily in West Africa, the Arabian Gulf, Southeast Asia and Mexico, with assets that are highly mobile. These operations are subject to risks inherent in operating in such locations.

        The vessels generating revenue from offshore and marine transportation services move regularly and routinely from one country to another, sometimes in different continents depending on the charter party. Because of this asset mobility, revenue and long-lived assets attributable to the Company's foreign operations in any one country are not material, as defined in SFAS No. 131.

        There were no customers from which the Company derived more than 10% of its total revenue for the year ended December 31, 2002. One customer, CITGO Petroleum, accounted for 11.0% and 12.0% of the Company's total revenue for the years ended December 31, 2001 and 2000. The revenue received from CITGO was approximately $38.0 million and $38.6 million in 2001 and 2000, respectively, which related to the marine transportation services segment.

F-27

        The following table presents selected financial information pertaining to the Company's geographic operations for 2002, 2001 and 2000 (in thousands):

			Year Ended December 31,
			2002		2001		2000
Revenue
	Domestic		$	200,008	$	239,238	$	223,579
	Foreign
		West Africa		84,576		69,305		48,268
		Middle East		23,683		22,450		34,242
		Southeast Asia		15,730		15,737		14,394
Consolidated revenue			$	323,997	$	346,730	$	320,483

			Consolidated Balance Sheet Information as of December 31,
			2002			2001
Identifiable assets
	Domestic		$	510,483		$	551,915
	Foreign
		West Africa		107,909			117,725
		Middle East		44,912			40,955
		Southeast Asia		11,427			15,216
	Other			28,364			18,954
		Total	$	703,095		$	744,765
Vessels and equipment
	Domestic		$	542,003		$	545,613
	Foreign
		West Africa		94,645			94,285
		Middle East		31,542			27,887
		Southeast Asia		11,427			16,771
				679,617			684,556
	General corporate			8,842			8,772
				688,459			693,328
	Less: accumulated depreciation			(143,290	)		(103,957	)
		Total	$	545,169		$	589,371

13.   Fair Value of Financial Instruments

        The following methods and assumptions were used to estimate the fair value of financial instruments included in the following categories:

        Cash, Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities.    The carrying amounts reported in the balance sheet approximate fair value due to the short-term nature of such instruments.

F-28

        New Credit Facility and Title XI.    The New Credit Facility and Title XI obligations provide for interest and principal payments at various rates and dates as discussed in Note 3. The Company estimates the fair value of such obligations using a discounted cash flow analysis at estimated market rates. The following table presents the carrying value and fair value of the financial instruments at December 31, 2002 and 2001 (in millions):

	December 31,
	2002				2001
Issue	Carrying Value		Fair Value		Carrying Value		Fair Value
New Credit Facility	$	178.7	$	178.7	$	—	$	—
Title XI	$	234.5		257.5		241.6		246.5

        Notes Payable and Capital Lease Obligations.    The carrying amounts reported in the balance sheet approximate fair value determined using a discounted cash flow analysis at estimated market rates.

14.   Extraordinary Items

        In connection with the closing of the new equity investment and New Credit Facility in September 2002, the Company redeemed all of its 12.5% Secured Notes due 2007 and repaid its then existing bank debt.

        The carrying value of the Senior Notes and bank debt at the time of the redemption and repayment was $225.2 million, net of unamortized discount and unamortized financing costs. The price paid to retire the Senior Notes and bank debt was $253.0 million. As a result, $27.8 million was recorded as a loss on early extinguishment of debt, consisting of the write-off of the unamortized financing costs on the Senior Notes and bank debt of $9.7 million, unamortized original issue discount on the Senior Notes of $14.1 million and contractual redemption premiums on the Senior Notes of $4.0 million. The tax benefit, net of the recorded valuation allowance, was zero.

15.   Sale of Assets of Sun State and Port Arthur

        On March 22, 2002, the Company closed on the sale of the marine transportation assets and trade name of Sun State for $3.9 million in cash. The assets consisted of tugs, barges and fuel inventory with a carrying value of $4.3 million. The name of this company was subsequently changed to Seabulk Marine Services, Inc. The Company recognized a loss on the disposal of these assets of approximately $440,000.

        On May 20, 2002, the Company closed on the sale of the marine terminal facility assets at Port Arthur, Texas for $3.0 million. Fifty percent of the proceeds ($1.5 million) were received at closing in cash and the remainder will be deferred and received over the next three years in the form of either cash or shipyard repair credits from the buyer. The assets consisted of land, an office building, docks and parking and warehouse storage facilities with a carrying value of $1.3 million. As a result, the Company recognized a gain of $1.7 million.

        On July 9, 2002, the Company closed on the sale of the drydock and related shipyard equipment assets of Seabulk Marine Services, Inc. (formerly Sun State Marine Services, Inc.) for $450,000. The Company has no remaining operations at the Sun State location.

F-29

16.   Liquidity

        At December 31, 2002, the Company had working capital of approximately $26.3 million. Day rates and utilization for offshore vessels working in the Gulf of Mexico continued to be weak, a trend that began in September 2001. The slowdown in the domestic offshore market was offset in part by continued strength in the Company's international offshore operations, where day rates remained strong during the year and contributed to increased revenue in West Africa and the Middle East, and in part by the improved performance of the marine transportation segment. The increased revenue in the offshore business in West Africa and the Middle East was driven by exploration and production spending as major oil companies continued to proceed with oil exploration and development programs outside the United States. Since the September 11, 2001 attacks, the subsequent war on terrorism and then commencement of the war in Iraq, the U.S. economy continues to be subject to pressure. As we enter 2003, the timing of a recovery in the domestic offshore segment is still not certain. However, the increases in oil and natural gas prices during the fourth quarter of 2002 and the early part of 2003 reinforce the potential for an upturn in domestic exploration and development activity in the latter half of 2003. We do expect earnings in 2003 from the offshore segment to improve compared to 2002. The Company also expects to benefit in 2003 from higher earnings in its marine transportation business as a result of a full year of higher time charter rates for certain tankers.

        The Company's capital requirements arise primarily from its need to service debt, fund working capital and maintain and improve its vessels. The Company anticipates capital requirements for debt service, vessel maintenance and fleet improvements in 2003 to total approximately $98 million and expects that cash flow from operations will continue to be a significant source of funds for its working capital and capital requirements.

        The Company's credit agreement contains certain restrictive financial covenants that, among other things, requires minimum levels of EBITDA and tangible net worth. The Company is in compliance with such covenants at December 31, 2002 and expects to be in compliance through the balance of 2003 based on current financial projections. However, the Company's financial projections contain assumptions with respect to economic recovery beginning in the second quarter of 2003 in the underperforming U.S. Gulf offshore market. If the economic recovery does not occur, or occurs later or to a lesser extent than the current forecasts, the Company will need to reduce operating expenses to maintain compliance.

        Management continues implementation of certain initiatives in an effort to improve profitability and liquidity. These initiatives include (1) selective acquisitions and charters of additional vessels, (2) repositioning certain vessels to take advantage of higher day rates, (3) selling unprofitable vessels, and (4) eliminating non-essential operating and overhead expenses. Management believes that its expense reduction initiatives will be sufficient to meet its financial covenants if the forecasted U.S. Gulf is other than expected.

        Management recognizes that unforeseen events or business conditions, including unexpected deterioration in its markets, could prevent the Company from having sufficient liquidity to fund its operations or meeting targeted financial covenants.

F-30

        If unforeseen events or business conditions prevent the Company from having sufficient liquidity to fund its operations, the Company has alternative sources including additional asset sales, and deferral of capital expenditures, which should enable it to satisfy essential capital requirements. If the Company does not meet its financial covenants, the Company would be required to seek an amendment or waiver to avoid default. While the Company believes it could successfully implement alternative plans, if necessary, there can be no assurance that such alternatives would be available or that the Company would be successful in their implementation.

17.   Subsequent Events

        In January 2003, the Company took delivery of the Seabulk Africa, a newbuild, state-of-the-art, 236-foot, 5500 horsepower UT-755L platform supply vessel. The vessel is expected to join the Company's West African fleet. The Seabulk Africa was acquired for cash of approximately $16 million and will be financed in April 2003 by means of a sale leaseback arrangement with TransAmerica Capital for a lease term of 10 years, after which the Company will have an option to acquire the vessel.

        On March 7, 2003, the Company formed a joint venture company in Nigeria, named Modant Seabulk Nigeria Limited, with CTC International, Inc., a company owned by Nigerian interests. The Company will sell five of its crewboats operating in Nigeria to a related joint venture with CTC International in April 2003. Modant Seabulk Nigeria Limited will operate crewboats in Nigeria. Seabulk Offshore will provide certain management services for the joint venture.

        On March 27, 2003, the Canaveral Port Authority served a sixty day notice of termination of the exclusive franchise to Port Canaveral Towing. Port Canaveral Towing intends to continue its operations on a non-exclusive basis at Port Canaveral.

18.   Selected Quarterly Financial Information (unaudited)

        The following information is presented as supplementary financial information for 2002 and 2001 (in thousands, except per share information):

Year Ended December 31, 2002		First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Revenue		$	83,199		$	81,639		$	80,369		$	78,790
Income from operations			11,968			8,540			10,025			5,873
Loss before extraordinary item			(2,286	)		(4,367	)		(2,757	)		(1,637	)
Net loss(a)			(2,286	)		(4,367	)		(30,580	)		(1,637	)
Net loss per common share—basic and Diluted(b):
	Loss before extraordinary item	$	(0.22	)	$	(0.41	)	$	(0.21	)	$	(0.07	)
	Net loss	$	(0.22	)	$	(0.41	)	$	(2.37	)	$	(0.07	)

Year Ended December 31, 2001	First Quarter			Second Quarter		Third Quarter		Fourth Quarter
Revenue	$	81,420		$	91,424	$	89,720	$	84,166
Income from operations		8,409			18,903		18,565		3,211
Net (loss) income		(7,233	)		2,750		2,907		(10,385	)
Net (loss) earnings per common share—basic(b)	$	(0.71	)	$	0.27	$	0.28	$	(0.99	)
Net (loss) earnings per common share—assuming dilution(b)	$	(0.71	)	$	0.27	$	0.28	$	(0.99	)

(a)

Includes loss on early extinguishment of debt of $27.8 million in the third quarter of 2002 (see Note 14).

F-31

(b)

The sum of the four quarters' (loss) earnings per share will not necessarily equal the annual earnings per share, as the computations for each quarter are independent of the annual computation.

19.   Supplemental Condensed Consolidating Financial Information

        On August 5, 2003, the Company completed the offering of $150 million of Senior Notes ("Notes") due 2013 through a private placement eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a portion of the Company's indebtedness under its existing $180 million credit facility. Interest on the Notes will be payable semi-annually in arrears, commencing on February 15, 2004. The interest rate on the Notes sold to private investors is 9.50%. The Notes are senior unsecured obligations guaranteed by certain of the Company's U.S. subsidiaries. The Notes are subject to certain covenants, including, among other things, limiting the Company's and certain U.S. subsidiaries' ability to incur additional indebtedness or issue preferred stock, pay dividends to stockholders, and make investments or sell assets.

        In connection with the Notes offering, the Company amended and restated its existing $180 million credit facility. The amended credit facility consists of an $80 million revolving credit facility and has a five-year maturity. The amended credit facility is subject to semi-annual reductions commencing February 5, 2004. It is secured by first liens on certain of the Company's vessels (excluding vessels financed with Title XI financing and certain other vessels) and the stock of certain subsidiaries and will be guaranteed by certain subsidiaries. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense and a minimum ratio of adjusted funded debt to adjusted EBITDA.

        The restricted subsidiaries presented below represent the Company's subsidiaries that will be subject to the terms and conditions outlined in the indenture governing the senior notes. Only certain of the restricted subsidiaries, representing the domestic restricted subsidiaries, will guarantee the notes, jointly and severally, on a senior unsecured basis. The non-guarantor unrestricted subsidiaries presented below represent the subsidiaries that own the five double-hull tankers which are financed by the Title XI debt with recourse to these tankers and the subsidiaries that own them. These subsidiaries are designated as unrestricted subsidiaries under the indenture governing the senior notes and will not guarantee the notes.

        Supplemental financial information for the Company and its guarantor restricted subsidiaries, non-guarantor restricted subsidiaries and non-guarantor unrestricted subsidiaries for the senior notes is presented below.

F-32

Condensed Consolidating Balance Sheet

(in thousands)

			As of December 31, 2002
			Parent		Wholly Owned Guarantor Restricted Subsidiaries		Non- Wholly Owned Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries		Non- Guarantor Unrestricted Subsidiaries		Eliminations			Consolidated Total
Assets
Current assets:
	Cash and temporary investments		$	12,316	$	413	$	13	$	4,802	$	19,644	$	—		$	37,188
	Trade accounts receivable			580		15,051		723		28,239		1,394		—			45,987
	Insurance claims receivable & other			797		3,415		2		8,890		381		—			13,485
	Restricted cash			—		—		—		1,337		—		—			1,337
	Marine operating supplies			121		1,673		586		3,504		2,255		—			8,139
	Due from affiliates			—		84,113		—		134,054		—		(218,167	)		—
	Prepaid & other			652		803		28		1,033		186		—			2,702
		Total current assets		14,466		105,468		1,352		181,859		23,860		(218,167	)		108,838
	Vessels and equipment, net			39,944		153,705		32,052		93,259		226,209		—			545,169
	Deferred costs, net			8,243		7,528		1,840		13,715		6,902		—			38,228
	Investments in affiliates			513,909		30,504		—		—		—		(544,413	)		—
	Due from affiliates			31,478		—		—		—		—		(31,478	)		—
	Other assets			1,931		3,165		—		5,345		419		—			10,860
	Total assets		$	609,971	$	300,370	$	35,244	$	294,178	$	257,390	$	(794,058	)	$	703,095
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	3,094	$	2,397	$	—	$	5,783	$	69	$	—		$	11,343
	Current maturities of debt			17,586		2,055		—		—		4,674		—			24,315
	Current lease obligations			—		3,005		—		—		—		—			3,005
	Accrued interest payable			671		393		—		—		669		—			1,733
	Due to affiliates			221,424		—		60		—		206		(221,690	)		—
	Other current liabilities			10,013		3,306		518		27,520		824		—			42,181
		Total current liabilities		252,788		11,156		578		33,303		6,442		(221,690	)		82,577
Long-Term Liabilities:
Long-term maturities of debt				178,500		21,337		—		—		211,021		—			410,858
Capital lease obligations				—		28,748		—		—		—		—			28,748
Senior notes				—		—		—		—		—		—			—
Due to affiliates				—		—		31,478		—		—		(31,478	)		—
Other long-term liabilities				1,883		616		—		944		46		—			3,489
	Total long-term liabilities			180,383		50,701		31,478		944		211,067		(31,478	)		443,095
Total liabilities				433,171		61,857		32,056		34,247		217,509		(253,168	)		525,672
Minority partners equity				—		—		—		—		—		623			623
Total stockholders' equity				176,800		238,513		3,188		259,931		39,881		(541,513	)		176,800
	Total liabilities and stockholders' equity		$	609,971	$	300,370	$	35,244	$	294,178	$	257,390	$	(794,058	)	$	703,095

F-33

Condensed Consolidating Balance Sheet

(in thousands)

			As of December 31, 2001
			Parent		Wholly Owned Guarantor Restricted Subsidiaries		Non- Wholly Owned Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries		Non- Guarantor Unrestricted Subsidiaries		Eliminations			Consolidated Total
Assets
Current assets:
	Cash and temporary investments		$	250	$	270	$	14	$	3,888	$	7,209	$	—		$	11,631
	Trade accounts receivable			1,089		18,629		852		27,098		2,420		—			50,088
	Insurance claims receivable & other			2,896		5,781		—		7,149		456		—			16,282
	Restricted cash			—		—		—		1,337		—		—			1,337
	Marine operating supplies			45		3,070		457		3,625		2,852		—			10,049
	Due from affiliates			—		74,349		—		123,866		—		(198,215	)		—
	Prepaid & other			864		844		30		988		258		—			2,984
		Total current assets		5,144		102,943		1,353		167,951		13,195		(198,215	)		92,371
	Vessels and equipment, net			44,548		166,678		33,617		109,451		235,077		—			589,371
	Deferred costs, net			16,107		10,067		370		14,187		8,168		—			48,899
	Investments in affiliates			522,763		24,837		—		—		—		(547,600	)		—
	Due from affiliates			31,121		—		—		—		—		(31,121	)		—
	Other assets			289		7,661		—		6,174		—		—			14,124
Total assets			$	619,972	$	312,186	$	35,340	$	297,763	$	256,440	$	(776,936	)	$	744,765
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	5,892	$	2,352	$	—	$	9,103	$	824	$	—		$	18,171
	Current maturities of debt			32,056		1,941		—		—		4,370		—			38,367
	Current lease obligations			—		2,972		—		—		—		—			2,972
	Accrued interest payable			341		420		—		—		694		—			1,455
	Due to affiliates			201,121		—		57		—		560		(201,738	)		—
	Other current liabilities			8,787		4,671		302		23,109		1,850		—			38,719
Total current liabilities				248,197		12,356		359		32,212		8,298		(201,738	)		99,684
Long-Term Liabilities:
Long-term maturities of debt				160,887		23,391		—		—		215,696		—			399,974
Capital lease obligations				—		31,768		—		—		—		—			31,768
Senior notes				81,635		—		—		—		—		—			81,635
Due to affiliates				—		—		31,121		—		—		(31,121	)		—
Other long-term liabilities				4,567		754		—		808		46		—			6,175
Total long-term liabilities				247,089		55,913		31,121		808		215,742		(31,121	)		519,552
Total liabilities				495,286		68,269		31,480		33,020		224,040		(232,859	)		619,236
Minority partners equity				—		—		—		—		—		842			842
Total stockholders' equity				124,686		243,917		3,860		264,743		32,400		(544,919	)		124,687
Total liabilities and stockholders' equity			$	619,972	$	312,186	$	35,340	$	297,763	$	256,440	$	(776,936	)	$	744,765

F-34

Condensed Consolidating Statement of Operations

(in thousands)

	Year Ended December 31, 2002
	Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue	$	43,604		$	82,881		$	12,352		$	123,989		$	61,284		$	(113	)	$	323,997
Operating expenses		26,398			54,329			7,783			67,546			26,615			(113	)		182,558
Overhead expenses		12,257			10,333			885			13,534			1,648			—			38,657
Depreciation, amortization, and drydocking		7,952			17,453			2,313			29,127			9,531			—			66,376
Income (loss) from operations		(3,003	)		766			1,371			13,782			23,490			—			36,406
Other expense, net		(2,753	)		(9,573	)		(2,043	)		(12,432	)		(16,010	)		—			(42,811	)
Income (loss) before income taxes		(5,756	)		(8,807	)		(672	)		1,350			7,480			—			(6,405	)
Provision (benefit) for income taxes		(1,520	)		—			—			6,162			—			—			4,642
Income (loss) before extraordinary item		(4,236	)		(8,807	)		(672	)		(4,812	)		7,480			—			(11,047	)
Extraordinary loss on extinguishment of debt		(27,823	)		—			—			—			—			—			(27,823	)
Net income (loss)	$	(32,059	)	$	(8,807	)	$	(672	)	$	(4,812	)	$	7,480		$	—		$	(38,870	)

F-35

Condensed Consolidating Statement of Operations

(in thousands)

	Year Ended December 31, 2001
	Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue	$	33,190		$	140,930		$	9,826		$	107,492		$	59,922		$	(4,630	)	$	346,730
Operating expenses		29,117			76,416			4,674			58,182			35,293			(4,355	)		199,327
Overhead expenses		12,486			11,521			919			11,526			825			(275	)		37,002
Depreciation, amortization and drydocking		6,889			19,138			2,292			22,621			8,973			—			59,913
Write-down of assets for held for sale		—			1,400			—			—			—			—			1,400
Income (loss) from operations		(15,302	)		32,455			1,941			15,163			14,831			—			49,088
Other expense, net		(4,527	)		(14,730	)		(2,004	)		(18,194	)		(16,384	)		—			(55,839	)
Income (loss) before income taxes		(19,829	)		17,725			(63	)		(3,031	)		(1,553	)		—			(6,751	)
Provision for income taxes		—			—			—			5,210			—			—			5,210
Net income (loss)	$	(19,829	)	$	17,725		$	(63	)	$	(8,241	)	$	(1,553	)	$	—		$	(11,961	)

F-36

Condensed Consolidating Statement of Operations

(in thousands)

	Year Ended December 31, 2000
	Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue	$	36,763		$	124,459		$	8,148		$	96,904		$	59,335		$	(5,126	)	$	320,483
Operating expenses		26,877			79,853			4,141			61,556			37,650			(4,851	)		205,226
Overhead expenses		14,120			12,378			977			11,471			959			(275	)		39,630
Depreciation, amortization and drydocking		3,667			15,972			2,211			19,817			8,604			—			50,271
Income (loss) from operations		(7,901	)		16,256			819			4,060			12,122			—			25,356
Other income (expense), net		9,826			(8,589	)		(2,382	)		(31,508	)		(16,783	)		—			(49,436	)
Income (loss) before income taxes		1,925			7,667			(1,563	)		(27,448	)		(4,661	)		—			(24,080	)
Provision for income taxes		4,872			—			—			—			—			—			4,872
Net income (loss)	$	(2,947	)	$	7,667		$	(1,563	)	$	(27,448	)	$	(4,661	)	$	—		$	(28,952	)

F-37

Condensed Consolidating Statement of Cash Flows

(in thousands)

		Year Ended December 31, 2002
		Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations		Consolidated Total
Operating activities:
Net cash provided by operating activities		$	27,448		$	3,070		$	2,247		$	11,396		$	16,892		$	—	$	61,053
Investing activities:
Expenditures for drydocking			(3,637	)		(5,214	)		(1,999	)		(12,504	)		(87	)		—		(23,441	)
Proceeds from disposals of assets			252			10,049			—			2,374			—			—		12,675
Purchases of vessels and equipment			(315	)		(2,837	)		(249	)		(352	)		—			—		(3,753	)
	Net cash provided by (used in) investing activities		(3,700	)		1,998			(2,248	)		(10,482	)		(87	)		—		(14,519	)
Financing activities:
Net payments of revolving credit facility			(9,000	)		—			—			—			—			—		(9,000	)
Proceeds of New Credit Facility			178,800			—			—			—			—			—		178,800
Payments of New Credit Facility			(125	)		—			—			—			—			—		(125	)
Payments of long-term debt			(164,524	)		(1,293	)		—			—			—			—		(165,817	)
Payments of Senior Notes			(101,499	)		—			—			—			—			—		(101,499	)
Proceeds of Private Placement, net of issuance costs			90,901			—			—			—			—			—		90,901
Payment of Title XI bonds			(2,150	)		(646	)		—			—			(4,370	)		—		(7,166	)
Payments of obligations under capital leases						(2,986	)		—			—			—			—		(2,986	)
Payment of deferred financing costs for New Credit Facility			(4,128	)		—			—			—			—			—		(4,128	)
Proceeds from exercise of warrants			1			—			—			—			—			—		1
Proceeds from exercise of stock options			42			—			—			—			—			—		42
Net cash used in financing activities			(11,682	)		(4,925	)		—			—			(4,370	)		—		(20,977	)
Increase (decrease) in cash and cash equivalents			12,066			143			(1	)		914			12,435			—		25,557
Cash and cash equivalents at beginning of period			250			270			14			3,888			7,209			—		11,631
Cash and cash equivalents at end of period		$	12,316		$	413		$	13		$	4,802		$	19,644		$	—	$	37,188

F-38

Condensed Consolidating Statement of Cash Flows

(in thousands)

		Year Ended December 31, 2001
		Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries		Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Operating activities:
Net cash provided by operating activities		$	21,759		$	19,822		$	—	$	12,356		$	4,961		$	7,942		$	66,840
Investing activities:
Expenditures for drydocking			(4,299	)		(8,638	)		—		(15,171	)		(1,341	)		—			(29,449	)
Proceeds from disposals of assets			—			1,738			—		4,837			—			—			6,575
Purchases of vessels and equipment			(278	)		(4,942	)		—		(3,198	)		(864	)		—			(9,282	)
Redemption of restricted investments			—			—			—		—			2,542			—			2,542
Purchases of restricted investments			—			—			—		—			(1,677	)		—			(1,677	)
Purchase of minority interests			8,354						—					(936	)		(7,942	)		(524	)
	Net cash (used in) provided by investing activities		3,777			(11,842	)		—		(13,532	)		(2,276	)		(7,942	)		(31,815	)
Financing activities:
Net payments of revolving credit facility			(5,250	)		—			—		—			—			—			(5,250	)
Payments of long-term borrowings			(18,189	)		(1,315	)		—		—						—			(19,504	)
Repayment of Title XI bonds			(3,583	)		(646	)		—		—			(4,083	)		—			(8,312	)
Increase in restricted cash			331			—			—		(1,337	)		—			—			(1,006	)
Proceeds exercise of warrants			3			—			—		—			—			—			3
Payments of obligations under capital leases			—			(3,558	)		—		—			—			—			(3,558	)
	Net cash used in financing activities		(26,688	)		(5,519	)		—		(1,337	)		(4,083	)		—			(37,627	)
Increase (decrease) in cash and cash equivalents			(1,152	)		2,461			—		(2,513	)		(1,398	)		—			(2,602	)
Cash and cash equivalents at beginning of period			1,402			(2,191	)		14		6,401			8,607			—			14,233
Cash and cash equivalents at end of period		$	250		$	270		$	14	$	3,888		$	7,209		$	—		$	11,631

F-39

Condensed Consolidating Statement of Cash Flows

(in thousands)

		Year Ended December 31, 2000
		Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations		Consolidated Total
Operating activities:
Net cash provided by (used in) operating activities		$	46,864		$	18,649		$	1,511		$	(55,365	)	$	14,617		$	—	$	26,276
Investing activities:
Purchases of vessels and equipment			(29,323	)		(34,559	)		(295	)		54,174			(2,044	)		—		(12,047	)
Expenditures for drydocking			(2,251	)		(6,111	)		(1,216	)		(4,788	)		—			—		(14,366	)
Redemption of restricted investments			—			—			—			—			2,931			—		2,931
Proceeds from disposals of assets						21,146			—			4,564			—			—		25,710
	Net cash provided by (used in) investing activities		(31,574	)		(19,524	)		(1,511	)		53,950			887			—		2,228
Financing activities:
Repayment of short-term borrowings			14,250			—			—			—			—			—		14,250
Repayment of long-term borrowings			(32,390	)					—						(1,000	)				(33,390	)
Repayment of Title XI bonds			—			—			—			—			(9,282	)		—		(9,282	)
Payment of financing costs			—			(596	)		—											(596	)
Payments of obligations under capital leases			(579	)		(3,721	)		—			—			—			—		(4,300	)
Proceeds from issuance of common stock			1			—			—			—			—			—		1
	Net cash used in financing activities		(18,718	)		(4,317	)		—			—			(10,282	)		—		(33,317	)
Increase (decrease) in cash and cash equivalents			(3,428	)		(5,192	)		—			(1,415	)		5,222			—		(4,813	)
Cash and cash equivalents at beginning of period			4,830			3,001			14			7,816			3,385			—		19,046
Cash and cash equivalents at end of period		$	1,402		$	(2,191	)	$	14		$	6,401		$	8,607		$	—	$	14,233

F-40

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except par value data)

				June 30, 2003			December 31, 2002
ASSETS
Current assets:
	Cash and cash equivalents			$	49,078		$	37,188
	Restricted cash				1,337			1,337
	Trade accounts receivable, net of allowance for doubtful accounts of $4,652 and $5,243 in 2003 and 2002, respectively				44,803			45,987
	Other receivables				16,639			13,485
	Marine operating supplies				7,662			8,139
	Prepaid expenses and other				3,683			2,702
		Total current assets			123,202			108,838
Vessels and equipment, net					540,637			545,169
Deferred costs, net					33,751			38,228
Other					11,253			10,860
		Total assets		$	708,843		$	703,095
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	8,939		$	11,343
	Current maturities of long-term debt				23,690			24,315
	Current obligations under capital leases				3,504			3,005
	Accrued interest				1,735			1,733
	Accrued liabilities and other				45,401			42,181
		Total current liabilities			83,269			82,577
Long-term debt					405,964			410,858
Obligations under capital leases					34,019			28,748
Other liabilities					3,463			3,489
		Total liabilities			526,715			525,672
Commitments and contingencies
Minority interest					848			623
Stockholders' equity:
	Preferred stock, no par value—authorized 5,000; none issued and outstanding				—			—
	Common stock—$.01 par value, authorized 40,000 shares; 23,318 and 23,124 shares issued and outstanding in 2003 and 2002, respectively				233			231
	Additional paid-in capital				258,981			258,016
	Unearned compensation				(832	)		(99	)
	Accumulated deficit				(77,102	)		(81,348	)
		Total stockholders' equity			181,280			176,800
			Total liabilities and stockholders' equity	$	708,843		$	703,095

See accompanying notes.

F-41

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data)

			Three Months Ended June 30,						Six Months Ended June 30,
			2003			2002			2003			2002
Revenue			$	79,924		$	81,639		$	157,153		$	164,838
Operating expenses:
	Crew payroll and benefits			20,939			21,854			42,319			44,630
	Charter hire			1,923			1,912			3,649			3,709
	Repairs and maintenance			6,464			8,041			12,197			14,805
	Insurance			2,739			2,603			4,943			5,376
	Fuel and consumables			6,106			7,586			12,245			14,915
	Port charges and other			4,410			4,744			8,600			9,046
		Total operating expenses		42,581			46,740			83,953			92,481
Overhead expenses:
	Salaries and benefits			6,023			5,727			11,890			11,554
	Office			1,198			1,309			2,417			2,593
	Professional fees			694			858			1,604			1,443
	Other			1,513			1,832			2,847			3,068
		Total overhead expenses		9,428			9,726			18,758			18,658
Depreciation, amortization and drydocking				15,923			16,633			32,417			33,191
Income from operations				11,992			8,540			22,025			20,508
Other (expense) income:
	Interest expense			(8,238	)		(12,365	)		(16,301	)		(25,078	)
	Interest income			123			75			209			137
	Minority interest in gains of subsidiaries			(199	)		(216	)		(227	)		(117	)
	Gain on disposal of assets, net			386			1,482			1,183			1,354
	Other			(88	)		(142	)		(65	)		(49	)
		Total other expense, net		(8,016	)		(11,166	)		(15,201	)		(23,753	)
Income (loss) before provision for income taxes				3,976			(2,626	)		6,824			(3,245	)
Provision for income taxes				1,316			1,741			2,578			3,408
		Net income (loss)	$	2,660		$	(4,367	)	$	4,246		$	(6,653	)
Net income (loss) per common share:
	Net income (loss) per common share—basic		$	0.11		$	(0.41	)	$	0.18		$	(0.63	)
	Net income (loss) per common share—diluted		$	0.11		$	(0.41	)	$	0.18		$	(0.63	)
	Weighted average common shares outstanding—basic			23,182			10,529			23,142			10,494
	Weighted average common shares outstanding—diluted			23,640			10,529			23,538			10,494

See accompanying notes.

F-42

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

					Six Months Ended June 30,
					2003			2002
Operating activities:
	Net income (loss)				$	4,246		$	(6,653	)
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Depreciation and amortization of vessels and equipment				21,391			22,139
		Amortization of drydocking costs				11,026			11,052
		Provision for (recovery of) bad debts				(351	)		147
		Gains on disposal of assets				(1,183	)		(1,354	)
		Amortization of discount on long-term debt and financing costs				748			2,378
		Minority interest in gains of subsidiaries				227			117
		Senior and notes payable issued for payment of accrued interest and fees				—			626
		Other non-cash items				105			146
		Changes in operating assets and liabilities:
			Trade accounts and other receivables			(1,968	)		5,661
			Other current and long-term assets			(1,317	)		2,557
			Accounts payable and other liabilities			588			(2,036	)
				Net cash provided by operating activities		33,512			34,780
Investing activities:
	Expenditures for drydocking					(7,103	)		(12,072	)
	Proceeds from disposals of assets					8,259			10,882
	Purchases of vessels and equipment					(22,535	)		(2,204	)
	Investment in Joint Venture					(400	)		—
		Net cash used in investing activities				(21,779	)		(3,394	)
Financing activities:
	Net payments of revolving credit facility					—			(4,281	)
	Payments of existing credit facility					(5,000	)		—
	Proceeds from long-term debt					6,525			—
	Payments of long-term debt					(3,349	)		(18,604	)
	Payments of Title XI bonds					(3,695	)		(3,547	)
	Payments of deferred financing costs					(61	)		—
	Net proceeds from sale leaseback					13,274			—
	Payments of obligations under capital leases					(7,666	)		(1,576	)
	Capitalized issue costs related to issuance of common stock					(27	)		(328	)
	Proceeds from exercise of stock options					155			—
	Proceeds from exercise of warrants					1			1
		Net cash provided by (used in) financing activities				157			(28,335	)
	Change in cash and cash equivalents					11,890			3,051
	Cash and cash equivalents at beginning of period					37,188			11,631
				Cash and cash equivalents at end of period	$	49,078		$	14,682
Supplemental schedule of noncash investing and financing activities:
	Senior and notes payable issued for payment of accrued interest and fees				$	—		$	626
	Vessels exchanged for drydock expenditures				$	—		$	900
	Reactivation of two vessels previously classified as assets held for sale				$	—		$	1,682

See accompanying notes.

F-43

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.     Organization and Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Article 10 of Regulation S-X. The consolidated balance sheet at December 31, 2002 has been derived from the audited financial statements at that date. The unaudited condensed consolidated financial statements and the consolidated balance sheet do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the unaudited condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these unaudited condensed consolidated financial statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. Except net income (loss), the Company has no material components of comprehensive income (loss).

        Certain financial statement reclassifications have been made to conform prior period data to the 2003 financial statement presentation.

2.     Senior Notes Offering

        On August 5, 2003, the Company completed the offering of $150 million of Senior Notes ("Notes") due 2013 through a private placement eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a portion of the Company's indebtedness under its $180 million credit facility. Interest on the Notes will be payable semi-annually in arrears, commencing on February 15, 2004. The average interest rate on the Notes sold to private institutional investors is 9.50%. The Notes are senior unsecured obligations guaranteed by certain of the Company's U.S. subsidiaries. The Notes are subject to certain covenants, including, among other things, limiting the Parent's and certain U.S. subsidiaries' ability to incur additional indebtedness or issue preferred stock, pay dividends to stockholders, and make investments or sell assets.

        In connection with the Notes offering, the Company amended and restated its credit facility. The amended credit facility consists of an $80 million revolving credit facility and has a five-year maturity. The amended credit facility is subject to semi-annual reductions commencing February 5, 2004. It is secured by first liens on certain of the Company's vessels (excluding vessels financed with Title XI financing and some of its other vessels) and stock of certain subsidiaries and will be guaranteed by certain subsidiaries. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense, a minimum ratio of adjusted funded debt to adjusted EBITDA, and a minimum net worth requirement.

3.     Vessel Acquisitions

        In January 2003, the Company took delivery of the Seabulk Africa, a newbuild, state-of-the art, 236-foot, 5,500 horsepower UT-755L platform supply vessel. The vessel has joined the Company's West African fleet. The Seabulk Africa and related improvements were acquired for cash of approximately $17.8 million and financed in April 2003 by means of a sale leaseback arrangement with TransAmerica

F-44

Capital for a lease term of 10 years, under which the Company will have an option to acquire the vessel after 8 years at a fixed price. The lease will be accounted for as a capital lease.

        The Company also took delivery of two newbuild vessels as bareboat charterer in February and March 2003. The Seabulk Badamyar is a 3800-horsepower anchor handling tug/supply vessel and Seabulk Nilar is a 3800-horsepower platform supply vessel. The Company is bareboat chartering the vessels from the shipbuilder, the Labroy Group in Indonesia, for deployment under time charters with a major international oil company in the Southeast Asia market. The term of each bareboat charter is three years with an option to purchase the vessel at fair market value at the end of the term. The leases will be accounted for as an operating leases.

        In April 2003, the Company terminated a capital lease with TA Marine Inc. for the Seabulk Arizona and acquired the vessel for $6.9 million. The Seabulk Arizona is a 1998 built, 205-foot, 4,200 horsepower supply vessel. Financing was in the form of a 5-year, $6.5 million term loan provided by Orix Financial Services, Inc. with an interest rate of 5.81%.

        In June 2003, the Company purchased a Brazilian-flag line handling vessel for operations in Brazil for $2.5 million. The Company also executed, and made a down payment under, a vessel construction agreement in April 2003, through its newly formed Brazilian subsidiary, with a Brazilian shipyard for the construction of a modern platform supply vessel for a purchase price of $16.7 million for offshore energy support operations in Brazil. This vessel is expected to be completed in the third quarter of 2004. As of June 30, 2003, the Company had spent approximately $835,000 on the construction of the vessel. In August 2003, the Company entered into a second construction agreement, and made a down payment of $825,000, with the same yard, Promar, for a second identical vessel, to be delivered in the fourth quarter of 2004, for $16.5 million. In anticipation of such operations, the Company has established a Brazilian maritime subsidiary called Seabulk Offshore do Brazil S.A.

        In September 2003, the Company entered into a 5 year bareboat charter with purchase option for a newly built anchor handler, the Seabulk South Atlantic, and in October 2003, entered into a 5 year bareboat charter with purchase option for a newly built platform supply vessel, the Seabulk Asia. We also purchased a small tender. All three vessels have been deployed in West Africa.

4.     Joint Venture Agreements

        In March 2003, the Company formed a joint venture company in Nigeria, named Modant Seabulk Nigeria Limited, with CTC International, Inc., a company owned by Nigerian interests. The Company has a 40% interest in Modant Seabulk Nigeria Limited. The Company also sold five of its crewboats operating in Nigeria to joint venture companies related to CTC International in April 2003 for $2 million. As a part of the proceeds of sale, the Company invested $400,000 and acquired a 20% interest in these joint venture companies. Modant Seabulk Nigeria Limited operates the crewboats. Seabulk Offshore provides certain management services for the joint venture. The Company has not guaranteed any debt of the joint venture, nor is the Company required to provide additional funding.

        In September 2003, the Company entered into a joint venture agreement and formed a joint venture company called Angobulk SARL with Angola Drilling Company. The Company intends to bareboat charter offshore vessels to this joint venture and provide certain ship management services for operations in Angola.

F-45

5.     Income Taxes

        For the three and six months ended June 30, 2003 and 2002, a gross deferred tax liability and benefit, respectively, was computed using an estimated annual effective tax rate of 36%. Management has recorded a valuation allowance at June 30, 2003 and 2002 to reduce the net deferred tax assets to an amount that will more likely than not be realized. After application of the valuation allowance, the net deferred tax assets are zero. The current provision for income taxes for the three and six-month periods ended June 30, 2003 and 2002 represents taxes withheld on foreign source revenue.

6.     Net Income (Loss) Per Common Share

        The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated:

	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003		2002
	(in thousands, except for per share data)
Numerator for basic and diluted net income (loss) per share—net income (loss) available to common shareholders	$	2,660	$	(4,367	)	$	4,246	$	(6,653	)
Denominator for basic net income per share-weighted average shares		23,182		10,529			23,142		10,494
Effects of dilutive securities:
Stock options		268		—			196		—
Warrants		164		—			186		—
Restricted shares		26		—			14		—
Dilutive potential common shares		458		—			396		—
Denominator for diluted net income per share-adjusted weighted average shares and assumed conversions		23,640		10,529			23,538		10,494
Net income (loss) per share—basic	$	0.11	$	(0.41	)	$	0.18	$	(0.63	)
Net income (loss) per share—diluted	$	0.11	$	(0.41	)	$	0.18	$	(0.63	)

        The weighted average diluted common shares outstanding for the three and six months ended June 30, 2003 and 2002 excludes 100,000 and 820,334 options, respectively. Additionally, 250,000 and 459,775 warrants are excluded from the weighted average diluted common shares outstanding for the three and six months ended June 30, 2003 and 2002, respectively. These common stock equivalents are excluded because they are antidilutive.

7.     Segment Information

        The Company organizes its business principally into three segments. The Company does not have significant intersegment transactions. These segments and their respective operations are as follows:

Offshore Energy Support (Seabulk Offshore)—Offshore energy support includes vessels operating in U.S. and foreign locations used primarily to transport materials, supplies, equipment and personnel to drilling rigs and to support the construction, positioning and ongoing operations of oil and gas production platforms.

F-46

Marine Transportation Services (Seabulk Tankers)—Marine transportation services includes oceangoing vessels used to transport chemicals, fuel and other petroleum products, primarily from chemical manufacturing plants, refineries and storage facilities along the U.S. Gulf of Mexico coast to industrial users and distribution facilities in and around the Gulf of Mexico, Atlantic and Pacific coast ports. Certain of the vessels also transport crude oil within Alaska and among Alaska, the Pacific coast and Hawaiian ports.

Towing (Seabulk Towing)—Harbor and offshore towing services are provided by tugs to vessels utilizing the ports in which the tugs operate, and to vessels at sea to the extent required by offshore commercial contract opportunities and by environmental regulations, casualties or other emergencies.

        The Company evaluates performance by operating segment. Also, within the offshore energy support segment, the Company performs additional performance evaluations of vessels marketed in U.S. and foreign locations. Resources are allocated based on segment profit or loss from operations, before interest and taxes.

        Revenue by segment and geographic area consists only of services provided to external customers, as reported in the Statements of Operations. Income from operations by geographic area represents net revenue less applicable costs and expenses related to that revenue. Unallocated expenses are primarily comprised of general and administrative expenses of a corporate nature.

        The following schedules present segment and geographic information about the Company's operations (in thousands):

			Three Months Ended June 30,						Six Months Ended June 30,
			2003			2002			2003			2002
Revenue
	Offshore energy support		$	39,230		$	44,061		$	77,068		$	87,372
	Marine transportation services			31,750			29,656			61,927			61,581
	Towing			9,012			7,983			18,301			16,043
	Eliminations(1)			(68	)		(61	)		(143	)		(158	)
		Total	$	79,924		$	81,639		$	157,153		$	164,838
Operating expenses
	Offshore energy support		$	23,015		$	25,092		$	46,217		$	48,682
	Marine transportation services			14,113			16,532			27,770			34,202
	Towing			5,521			4,879			10,109			9,446
	General Corporate			—			298			—			309
	Eliminations(1)			(68	)		(61	)		(143	)		(158	)
		Total	$	42,581		$	46,740		$	83,953		$	92,481

F-47

Depreciation, amortization and drydocking
	Offshore energy support		$	9,901		$	11,216		$	20,590		$	21,718
	Marine transportation services			4,604			4,514			9,158			9,062
	Towing			992			810			1,818			1,570
	General corporate			426			93			851			841
		Total	$	15,923		$	16,633		$	32,417		$	33,191
Income (loss) from operations
	Offshore energy support		$	1,724		$	3,320		$	962		$	8,437
	Marine transportation services			11,964			7,327			23,047			15,583
	Towing			1,242			1,181			3,895			2,763
	General corporate			(2,938	)		(3,288	)		(5,879	)		(6,275	)
		Total	$	11,992		$	8,540		$	22,025		$	20,508
Net income (loss)
	Offshore energy support		$	(2,160	)	$	(4,979	)	$	(6,264	)	$	(7,445	)
	Marine transportation services			7,343			3,571			14,014			6,258
	Towing			369			(128	)		2,334			151
	General Corporate			(2,892	)		(2,831	)		(5,838	)		(5,617	)
		Total	$	2,660		$	(4,367	)	$	4,246		$	(6,653	)
Geographic revenue
	Domestic		$	51,022		$	49,353		$	99,249		$	102,923
	Foreign
		West Africa		19,765			22,455			39,729			42,871
		Middle East		5,356			5,780			10,833			11,839
		Southeast Asia		3,781			4,051			7,342			7,205
Consolidated geographic revenue			$	79,924		$	81,639		$	157,153		$	164,838

(1)

Eliminations of intersegment towing revenue and intersegment marine transportation operating expense.

8.     Commitments and Contingencies

        Under United States law, "United States persons" are prohibited from business activities and contracts in certain countries, including Sudan and Iran. The Company has filed three reports with and submitted documents to the Office of Foreign Asset Control ("OFAC") of the U.S. Department of Treasury. One of the reports was also filed with the Bureau of Export Administration of the U.S. Department of Commerce. The reports and documents related to certain limited charters with third parties involving three of the Company's vessels which called in the Sudan for several months in 1999 and January 2000, and charters with third parties involving several of the Company's vessels which called in Iran in 1998. In March 2003, the Company received notification from OFAC that the case has been referred to its Civil Penalties Division. Should OFAC determine that these activities constituted violations of the laws or regulations, civil penalties, including fines, could be assessed against the

F-48

Company. The Company cannot predict the extent of such penalties; however, management does not believe the outcome of these matters will have a material impact on its financial position or results of operations.

        The Company was sued by Maritime Transportation Development Corporation (MTDC) in January 2002 in Florida state court in Broward County alleging broker commissions due since 1998 from charters on two of its vessels, the Seabulk Magnachem and Seabulk Challenger, under an alleged broker commission agreement. MTDC was controlled by the founders of the Company's predecessor company. The claim allegedly continues to accrue. The amount alleged to be due is over $500,000, but is subject to offset claims and defenses by the Company. The Company is vigorously defending such charges and believes that it has good defenses, but the Company cannot predict the ultimate outcome.

        Under the Company's mutual protection and indemnity marine insurance policy, the Company could be liable for additional premiums to cover investment losses and reserve shortfalls experienced by its marine insurance club (Steamship). The maximum potential amount of additional premiums that can be assessed by Steamship is substantial, however, additional premiums can only be assessed for open policy years. Steamship usually closes a policy year approximately three years after the policy year has ended. As of August 1, 2003, completed policy years 2000-2002 are still open, but there have been no additional premiums assessed for these policy years. The Company will record a liability for any such additional premiums when they are assessed and the amount can be reasonably estimated.

        From time to time, the Company is also party to personal injury and property damage claims litigation arising in the ordinary course of its business. Protection and Indemnity marine liability insurance covers large claims in excess of the Company's significant deductibles and self-insured retentions.

9.     Stock-Based Compensation

        As permitted by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), the Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25") and related interpretations in accounting for its employee stock-based transactions and has complied with the disclosure requirements of SFAS 123. Under APB 25, compensation expense is calculated at the time of option grant based upon the difference between the exercise prices of the option and the fair market value of the Company's common stock at the date of grant recognized over the vesting period.

        On December 31, 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure. SFAS No. 148 amends SFAS 123 to provide alternative methods of transition to the fair value method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure provisions of SFAS 123 to require expanded disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements.

        The Company uses the Black-Scholes option valuation model to determine the fair value of options granted under the Company's stock option plans. Had compensation expense for the stock option grants been determined based on the fair value at the grant date for awards consistent with the

F-49

methods of SFAS No. 123, the Company's net income (loss) would have changed the pro forma amounts presented below:

		Three Months Ended June 30,						Six Months Ended June 30,
		2003			2002			2003			2002
Net income (loss), as reported		$	2,660		$	(4,367	)	$	4,246		$	(6,653	)
Stock-based compensation expense determined under the fair value method		$	(473	)	$	(531	)	$	(697	)	$	(769	)
Pro forma net income (loss)		$	2,187		$	(4,898	)	$	3,549		$	(7,422	)
Net income (loss) per common share:
	Basic-as reported	$	0.11		$	(0.41	)	$	0.18		$	(0.63	)
	Basic-pro forma	$	0.09		$	(0.47	)	$	0.15		$	(0.71	)
	Diluted-as reported	$	0.11		$	(0.41	)	$	0.18		$	(0.63	)
	Diluted-pro forma	$	0.09		$	(0.47	)	$	0.15		$	(0.71	)

10.   Recent Accounting Pronouncements

        In June 2001, the Accounting Executive Committee of the American Institute of Certified Public Accountants issued an exposure draft of a proposed Statement of Position ("SOP") entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, the Company would expense major maintenance costs as incurred and prohibit the use of the deferral of the entire cost of a planned major maintenance activity. Currently, the costs incurred to drydock the Company's vessels are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 30 to 36 months. Management has determined that this SOP, if issued as proposed, would have a material effect on the consolidated financial statements. In the year of adoption, the Company would write-off the net book value of the deferred drydocking costs and record the write-off as a change in accounting principle ($23.2 million as of June 30, 2003). Additionally, all drydock expenditures incurred after the adoption of the SOP would be expensed as incurred.

        In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 14, and Technical Corrections, which eliminates the requirement that gains and losses from the extinguishment of debt be aggregated and, if material, classified as an extraordinary item, net of the related income tax effect, and eliminates an inconsistency between the accounting for sale-leaseback transactions and certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Subsequent to the January 1, 2003 adoption date of the standard, the Company will be required to reclassify to continuing operations amounts previously reported as extinguishments of debt.

        In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which addresses the financial accounting and reporting for costs associated with exit or disposal activities. SFAS No. 146 is effective for fiscal years beginning after December 31, 2002. The adoption of the standard is not expected to have a significant impact on the Company.

        In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45

F-50

expands on the accounting guidance of Statements No. 5, 57, and 107 and incorporates without change the provisions of FASB Interpretation No. 34, which is being superseded. FIN 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee, it must recognize an initial liability for the fair value, or market value, of the obligations it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002, regardless of the guarantor's fiscal year-end. The disclosure requirements in the Interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45 is not expected to have a significant impact on the Company.

        In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the variable interest entity. The primary beneficiary is defined as the party which, as a result of holding its variable interest, absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns, or both. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The Company has not yet determined the impact that the adoption of FIN 46 will have on its financial position, results of operations or cash flows.

11.   Supplemental Condensed Consolidated Financial Information

        On August 5, 2003, the Company completed the offering of $150 million of Senior Notes due 2013 through a private placement eligible for resale under Rule 144 A and Regulation S. The net proceeds of the offering were used to repay a portion of the Company's indebtedness under its $180 million credit facility.

        The restricted subsidiaries presented below represent the Company's subsidiaries that will be subject to the terms and conditions outlined in the indenture governing the Senior Notes. Only certain of the restricted subsidiaries, representing the domestic restricted subsidiaries, will guarantee the notes, jointly and severally, on a senior unsecured basis. The non-guarantor unrestricted subsidiaries presented below represent the subsidiaries that own the five double-hull tankers which are financed by the Title XI debt with recourse to these tankers and the subsidiaries that own them. These subsidiaries are designated as unrestricted subsidiaries under the indenture governing the Senior Notes and will not guarantee the notes.

        Supplemental financial information for the Company and its guarantor restricted subsidiaries, non-guarantor restricted subsidiaries and non-guarantor unrestricted subsidiaries for the senior notes is presented below.

F-51

Condensed Consolidating Balance Sheet

(in thousands)

			As of June 30, 2003
			Parent		Wholly Owned Guarantor Restricted Subsidiaries		Non-Wholly Owned Guarantor Restricted Subsidiaries		Non-Guarantor Restricted Subsidiaries		Non-Guarantor Unrestricted Subsidiaries		Eliminations			Consolidated Total
Assets
Current Assets:
	Cash and temporary investments		$	22,520	$	107	$	1,501	$	6,700	$	18,250	$	—		$	49,078
	Trade accounts receivable			851		12,262		796		29,299		1,595		—			44,803
	Insurance claims receivable & other			861		4,882		—		10,371		525		—			16,639
	Restricted cash			—		—		—		1,337		—		—			1,337
	Marine operating supplies			101		1,604		529		3,230		2,198		—			7,662
	Due from affiliates			—		90,078		—		124,554		12,541		(227,173	)		0
	Prepaid & other			448		449		29		2,267		490		—			3,683
		Total current assets		24,781		109,382		2,855		177,758		35,599		(227,173	)		123,202
	Vessels and equipment, net			37,501		143,166		31,116		107,079		221,775		—			540,637
	Deferred costs, net			6,586		7,313		1,431		12,126		6,295		—			33,751
	Investments in affiliates			515,777		—		—		—		—		(515,777	)		—
	Due from affiliates			31,145		—		—		—		—		(31,145	)		—
	Other assets			1,896		2,129		—		1,843		5,385		—			11,253
		Total assets	$	617,686	$	261,990	$	35,402	$	298,806	$	269,054	$	(774,095	)	$	708,843
Liabilities and Stockholders' Equity
Current Liabilities:
	Accounts payable		$	603	$	2,120		—	$	6,216		—		—		$	8,939
	Current maturities of debt			16,086		2,768		—		—		4,836		—			23,690
	Current lease obligations			1,007		2,497		—		—		—		—			3,504
	Accrued interest payable			758		308		—		—		669		—			1,735
	Due to affiliates			223,588		—		60		—		—		(223,648	)		—
	Other current liabilities			9,119		3,102		320		32,111		749		—			45,401
		Total current liabilities		251,161		10,795		380		38,327		6,254		(223,648	)		83,269
Long term liabilities:
	Long term maturities of debt			171,375		26,027		—		—		208,562		—			405,964
	Capital lease obligations			12,102		21,917		—		—		—		—			34,019
	Senior notes			—		—		—		—		—		—			—
	Due to affiliates			—		—		31,145		—		—		(31,145	)		—
	Other long term liabilities			1,768		565		—		1,082		48		—			3,463
		Total long term liabilities		185,245		48,509		31,145		1,082		208,610		(31,145	)		443,446
Total liabilities				436,406		59,304		31,525		39,409		214,864		(254,793	)		526,715
Minority partners equity				—		—		—		—		—		848			848
Total stockholders' equity				181,280		202,686		3,877		259,397		54,190		(520,150	)		181,280
Total liabilities and stockholders' equity			$	617,686	$	261,990	$	35,402	$	298,806	$	269,054	$	(774,095	)	$	708,843

F-52

Condensed Consolidating Balance Sheet

(in thousands)

			As of December 31, 2002
			Parent		Wholly Owned Guarantor Restricted Subsidiaries		Non- Wholly Owned Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries		Non- Guarantor Unrestricted Subsidiaries		Eliminations			Consolidated Total
Assets
Current assets:
	Cash and temporary investments		$	12,316	$	413	$	13	$	4,802	$	19,644	$	—		$	37,188
	Trade accounts receivable			580		15,051		723		28,239		1,394		—			45,987
	Insurance claims receivable & other			797		3,415		2		8,890		381		—			13,485
	Restricted cash			—		—		—		1,337		—		—			1,337
	Marine operating supplies			121		1,673		586		3,504		2,255		—			8,139
	Due from affiliates			—		84,113		—		134,054		—		(218,167	)		—
	Prepaid & other			652		803		28		1,033		186		—			2,702
		Total current assets		14,466		105,468		1,352		181,859		23,860		(218,167	)		108,838
	Vessels and equipment, net			39,944		153,705		32,052		93,259		226,209		—			545,169
	Deferred costs, net			8,243		7,528		1,840		13,715		6,902		—			38,228
	Investments in affiliates			513,909		30,504		—		—		—		(544,413	)		—
	Due from affiliates			31,478		—		—		—		—		(31,478	)		—
	Other assets			1,931		3,165		—		5,345		419		—			10,860
	Total assets		$	609,971	$	300,370	$	35,244	$	294,178	$	257,390	$	(794,058	)	$	703,095
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	3,094	$	2,397	$	—	$	5,783	$	69	$	—		$	11,343
	Current maturities of debt			17,586		2,055		—		—		4,674		—			24,315
	Current lease obligations			—		3,005		—		—		—		—			3,005
	Accrued interest payable			671		393		—		—		669		—			1,733
	Due to affiliates			221,424		—		60		—		206		(221,690	)		—
	Other current liabilities			10,013		3,306		518		27,520		824		—			42,181
		Total current liabilities		252,788		11,156		578		33,303		6,442		(221,690	)		82,577
Long-Term Liabilities:
Long-term maturities of debt				178,500		21,337		—		—		211,021		—			410,858
Capital lease obligations				—		28,748		—		—		—		—			28,748
Senior notes				—		—		—		—		—		—			—
Due to affiliates				—		—		31,478		—		—		(31,478	)		—
Other long-term liabilities				1,883		616		—		944		46		—			3,489
	Total long-term liabilities			180,383		50,701		31,478		944		211,067		(31,478	)		443,095
Total liabilities				433,171		61,857		32,056		34,247		217,509		(253,168	)		525,672
Minority partners equity				—		—		—		—		—		623			623
Total stockholders' equity				176,800		238,513		3,188		259,931		39,881		(541,513	)		176,800
	Total liabilities and stockholders' equity		$	609,971	$	300,370	$	35,244	$	294,178	$	257,390	$	(794,058	)	$	703,095

F-53

Condensed Consolidating Statement of Operations

(in thousands)

	Three Months Ended June 30, 2003
	Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue	$	11,872		$	19,340		$	3,909		$	28,902		$	15,920		$	(19	)	$	79,924
Operating expenses		5,720			12,736			2,064			15,751			6,329			(19	)		42,581
Overhead expenses		2,865			2,352			234			3,535			442			—			9,428
Depreciation, amortization and drydocking		1,929			3,828			702			7,082			2,382			—			15,923
Income from operations		1,358			424			909			2,534			6,767			—			11,992
Other expense, net		(121	)		(2,446	)		(306	)		(1,192	)		(3,951	)		—			(8,016	)
Income (loss) before income taxes		1,237			(2,022	)		603			1,342			2,816			—			3,976
Provision for income taxes		—			—			—			1,316			—			—			1,316
Income (loss) before extraordinary item		1,237			(2,022	)		603			26			2,816			—			2,660
Extraordinary loss on extinguishments of debt					—			—
Net income (loss)	$	1,237		$	(2,022	)	$	603		$	26		$	2,816		$	—		$	2,660

F-54

Condensed Consolidating Statement of Operations

(in thousands)

	Three Months Ended June 30, 2002
	Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue	$	9,770		$	20,237		$	3,954		$	32,287		$	15,405		$	(14	)	$	81,639
Operating expenses		7,302			12,495			2,004			17,863			7,090			(14	)		46,740
Overhead expenses		2,910			3,016			214			3,193			393			—			9,726
Depreciation, amortization and Drydocking		1,956			4,165			572			7,545			2,395			—			16,633
Income (loss) from operations		(2,398	)		561			1,164			3,686			5,527			—			8,540
Other expense, net		(321	)		(2,173	)		(505	)		(4,156	)		(4,011	)		—			(11,166	)
Income (loss) before income taxes		(2,719	)		(1,612	)		659			(470	)		1,516			—			(2,626	)
Provision for income taxes		—			—			—			1,741			—			—			1,741
Income (loss) before extraordinary item		(2,719	)		(1,612	)		659			(2,211	)		1,516			—			(4,367	)
Extraordinary loss on extinguishments of debt		—			—			—			—			—			—			—
Net income (loss)	$	(2,719	)	$	(1,612	)	$	659		$	(2,211	)	$	1,516		$	—		$	(4,367	)

F-55

Condensed Consolidating Statement of Operations

(in thousands)

	Six Months Ended June 30, 2003
	Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue	$	23,757		$	37,475		$	7,347		$	57,904		$	30,723		$	(53	)	$	157,153
Operating expenses		11,775			24,457			4,007			31,777			11,990			(53	)		83,953
Overhead expenses		5,709			4,885			455			6,907			802			—			18,758
Depreciation, amortization and drydocking		3,867			7,969			1,345			14,473			4,763			—			32,417
Income from operations		2,406			164			1,540			4,747			13,168			—			22,025
Other expense, net		(27	)		(3,735	)		(851	)		(2,701	)		(7,887	)		—			(15,201	)
Income (loss) before income taxes		2,379			(3,571	)		689			2,046			5,281			—			6,824
Provision for income taxes		—			—			—			2,578			—			—			2,578
Income (loss) before extraordinary item		2,379			(3,571	)		689			(532	)		5,281			—			4,246
Extraordinary loss on extinguishments of debt		—			—			—			—			—			—			—
Net income (loss)	$	2,379		$	(3,571	)	$	689		$	(532	)	$	5,281		$	—		$	4,246

F-56

Condensed Consolidating Statement of Operations

(in thousands)

		Six Months Ended June 30, 2002
		Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations			Consolidated Total
Revenue		$	20,133		$	45,216		$	6,909		$	61,915		$	30,711		$	(46	)	$	164,838
Operating expenses			13,481			27,940			3,955			33,121			14,030			(46	)		92,481
Overhead expenses			5,676			5,439			437			6,129			977			—			18,658
Depreciation, amortization and drydocking			3,935			9,005			1,143			14,310			4,798			—			33,191
Income (loss) from operations			(2,959	)		2,832			1,374			8,355			10,906			—			20,508
Other expense, net			(703	)		(6,333	)		(1,019	)		(7,640	)		(8,058	)		—			(23,753	)
Income (loss) before income taxes			(3,662	)		(3,501	)		355			715			2,848			—			(3,245	)
Provision for income taxes			—			—			—			3,408			—			—			3,408
Income (loss) before
	extraordinary item		(3,662	)		(3,501	)		355			(2,693	)		2,848			—			(6,653	)
Extraordinary loss on extinguishments of debt			—			—			—			—			—			—			—
Net income (loss)		$	(3,662	)	$	(3,501	)		355		$	(2,693	)	$	2,848		$	—		$	(6,653	)

F-57

Condensed Consolidating Statement of Cash Flows

(in thousands)

		Six Months Ended June 30, 2003
		Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries		Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations		Consolidated Total
Net cash provided by operating activities		$	6,939		$	2,193		$	1,488	$	21,989		$	903		$	—	$	33,512
Investing activities:
	Expenditures for drydocking		(65	)		(3,115	)		—		(3,923	)		—			—		(7,103	)
	Proceeds from disposals of assets		—			3,607			—		4,652			—			—		8,259
	Purchases of vessels and equipment		(1,059	)		(1,056	)		—		(20,420	)		—			—		(22,535	)
	Investment in Joint Venture		—			—			—		(400	)		—			—		(400	)
	Net cash used in financing activities		(1,124	)		(564	)		—		(20,091	)		—			—		(21,779	)
Financing activities:
	Payments of existing Credit Facility		(5,000	)		—			—		—			—			—		(5,000	)
	Proceeds from long-term debt		—			6,525			—		—			—			—		6,525
	Payments of long-term debt		(2,551	)		(798	)		—		—			—			—		(3,349	)
	Payments of Title XI bonds		(1,075	)		(323	)		—		—			(2,297	)		—		(3,695	)
	Payments of deferred financing costs		(61	)		—			—		—			—			—		(61	)
	Net proceeds from sale leaseback		13,274			—			—		—			—			—		13,274
	Payments of obligations under capital leases		(327	)		(7,339	)		—		—			—			—		(7,666	)
	Capitalized issue costs related to Issuance of common stock		(27	)		—			—		—			—			—		(27	)
	Proceeds from exercise of stock options		155			—			—		—			—			—		155
	Proceeds from exercise of warrants		1			—			—		—			—			—		1
	Net cash provided by (used in) financing activities		4,389			(1,935	)		—		—			(2,297	)		—		157
Increase (decrease) in cash and cash equivalents			10,204			(306	)		1,488		1,898			(1,394	)		—		11,890
Cash and cash equivalents at beginning of period			12,316			413			13		4,802			19,644			—		37,188
Cash and cash equivalents at end of period		$	22,520		$	107		$	1,501	$	6,700		$	18,250		$	—	$	49,078

F-58

Condensed Consolidating Statement of Cash Flows

(in thousands)

		Six Months Ended June 30, 2002
		Parent			Wholly Owned Guarantor Restricted Subsidiaries			Non-Wholly Owned Guarantor Restricted Subsidiaries			Non-Guarantor Restricted Subsidiaries			Non-Guarantor Unrestricted Subsidiaries			Eliminations		Condensed Consolidated Total
Net cash provided by (used in) operating activities		$	22,161		$	(341	)	$	5		$	6,691		$	6,264		$	—	$	34,780
Investing activities:
	Expenditures for drydocking		(1,375	)		(2,589	)		—			(8,021	)		(87	)		—		(12,072	)
	Proceeds from disposals of assets		—			7,213			—			2,165			1,504			—		10,882
	Purchases of vessels and equipment		(137	)		(1,752	)		(3	)		(312	)		—			—		(2,204	)
	Net cash provided by (used in) investing activities		(1,512	)		2,872			(3	)		(6,168	)		1,417			—		(3,394	)
Financing activities:
	Net repayment of revolving credit facility		(4,281	)		—			—			—			—			—		(4,281	)
	Payments of long-term borrowings		(17,970	)		(634	)		—			—			—			—		(18,604	)
	Payments of Title XI bonds		(1,075	)		(323	)		—			—			(2,149	)		—		(3,547	)
	Payments of obligations under capital leases		—			(1,576	)		—			—			—			—		(1,576	)
	Capitalization issue costs related to issuance of common stock		(328	)		—			—			—			—			—		(328	)
	Proceeds from exercise of warrants		1			—			—			—			—			—		1
	Net cash used in financing activities		(23,653	)		(2,533	)		—			—			(2,149	)		—		(28,335	)
Increase (decrease) in cash and cash equivalents			(3,004	)		(2	)		2			523			5,532			—		3,051
Cash and cash equivalents at beginning of period			250			270			14			3,888			7,209			—		11,631
Cash and cash equivalents at end of period		$	(2,754	)	$	268		$	16		$	4,411		$	12,741		$	—	$	14,682

F-59

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
Seabulk America Partnership, Ltd.

        We have audited the accompanying balance sheets of Seabulk America Partnership, Ltd. (a Florida limited partnership) as of December 31, 2002 and 2001, and the related statements of operations, partners' capital and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Seabulk America Partnership, Ltd. at December 31, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Miami, Florida
February 25, 2003, except for
Note 5, as to which the date is August 5, 2003.

F-60

SEABULK AMERICA PARTNERSHIP, LTD.

BALANCE SHEETS

(in thousands)

				December 31,
				2002		2001
Assets
	Investment in affiliate			$	2,636	$	2,915
		Total assets		$	2,636	$	2,915
Liabilities and partners' capital
Current liabilities:
	Due to affiliates			$	60	$	57
		Total current liabilities			60		57
Commitments
Partners' capital:
	General partner				631		861
	Limited partner				1,945		1,997
		Total partners' capital			2,576		2,858
			Total liabilities and partners' capital	$	2,636	$	2,915

See notes to financial statements

F-61

SEABULK AMERICA PARTNERSHIP, LTD.

STATEMENTS OF OPERATIONS

(in thousands)

				Year Ended December 31,
				2002			2001			2000
Operating expenses				$	3		$	4		$	6
Other expense:
	Equity in net losses of unconsolidated affiliates				(279	)		(24	)		(649	)
		Total other expense			(279	)		(24	)		(649	)
			Net loss	$	(282	)	$	(28	)	$	(655	)
Allocation of net loss:
	General partner			$	(230	)	$	(23	)	$	(534	)
	Limited partner				(52	)		(5	)		(121	)
			Net loss	$	(282	)	$	(28	)	$	(655	)

See notes to financial statements.

F-62

SEABULK AMERICA PARTNERSHIP, LTD.

STATEMENTS OF PARTNERS' CAPITAL

(in thousands)

		General Partner			Limited Partner			Total Partners' Capital
Balance, December 31, 1999		$	1,418		$	2,123		$	3,541
	Net loss		(534	)		(121	)		(655	)
Balance, December 31, 2000			884			2,002			2,886
	Net loss		(23	)		(5	)		(28	)
Balance, December 31, 2001			861			1,997			2,858
	Net loss		(230	)		(52	)		(282	)
Balance, December 31, 2002		$	631		$	1,945		$	2,576

See notes to financial statements

F-63

SEABULK AMERICA PARTNERSHIP, LTD.

STATEMENTS OF CASH FLOWS

(in thousands)

			Year Ended December 31,
			2002			2001			2000
Operating activities
Net loss			$	(282	)	$	(28	)	$	(655	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Equity in net losses of unconsolidated affiliates			279			24			649
	Changes in operating assets and liabilities:
		Due to affiliates		3			4			6
Net cash provided by operating activities				—			—			—
Change in cash				—			—			—
Cash at beginning of period				—			—			—
Cash at end of period			$	—		$	—		$	—

See notes to financial statements

F-64

SEABULK AMERICA PARTNERSHIP, LTD.

NOTES TO FINANCIAL STATEMENTS

1.     Organization and Description of Business

        Seabulk America Partnership, Ltd. (SAPL or the Partnership), a Florida limited partnership, was formed on September 14, 1983 pursuant to a partnership agreement (the Agreement). SAPL holds a 41.67% limited partnership interest in Seabulk Transmarine Partnership, Ltd. (STPL).    STPL, a Florida limited partnership, owns and operates a chemical transportation carrier, the Seabulk America, within the United States domestic trade. The partners of the Partnership include Seabulk Tankers, Ltd. (STL), a Florida limited partnership (81.59%), as sole general partner, and Stolt Tankers (U.S.A.), Inc., as limited partner (18.41%). STL is a wholly owned subsidiary of Seabulk International, Inc. (SBI or the Parent), a Florida Corporation.

2.     Partnership Agreement

        The general partner is responsible for the management of the Partnership. Pursuant to the Agreement, the general partner and the limited partners (collectively referred to as the Partners) are required to make capital contributions at such times and in such amounts as the general partner requests by notice. No additional capital contributions were required for the years ended December 31, 2002, 2001 and 2000. The Partners are not entitled to withdraw any part of their capital accounts or to receive any distribution from the Partnership except as specifically provided in the Agreement. All net income or net losses of the Partnership are to be allocated to the Partner's capital accounts in proportion to their partnership interests. The Partnership terminates on September 13, 2008, unless sooner terminated, liquidated or dissolved by law or pursuant to the Agreement or unless extended by amendment to the Agreement.

3.     Summary of Significant Accounting Policies

        Investment.    The Partnership's investment in STPL is accounted for using the equity method, and recognizes its proportionate share of the earnings or losses of STPL in the accompanying statements of operations.

        Income Taxes.    No provision for income taxes has been recorded since SAPL is a partnership and taxable income or loss accrues to the Partners.

        Estimates.    The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results will differ from those estimates.

        Fair Value of Financial Instruments.    The carrying amounts for due to affiliates reported in the balance sheet approximate fair value due to its short-term nature.

        Recent Accounting Pronouncements.    In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the variable interest entity. The primary beneficiary is defined as the party which, as a result of holding its variable interest, absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns, or both. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15,

F-65

2003. The Partnership has not yet determined the impact that the adoption of FIN 46 will have on its financial position, results of operations or cash flows.

        Comprehensive Loss.    For all periods presented, comprehensive loss equals net loss.

4.     Transactions with Affiliates

	2002			2001
	(In Thousands)
Due to SBI	$	(58	)	$	(55	)
Due to STL		(2	)		(2	)
Total due to affiliates	$	(60	)	$	(57	)

        The amount payable to SBI represents the net balance as the result of various transactions between the Partnership and SBI. There are no terms of settlement associated with the account balance, but it is non-interest bearing and payable upon demand. The balance is primarily the result of the Partnership's participation in SBI's central cash management program, wherein substantially all the Partnership's cash receipts are remitted from SBI and substantially all cash disbursements are funded by SBI. Other transactions include miscellaneous other administrative expenses incurred by SBI on behalf of the Partnership. SBI provides various administrative services to the Partnership. It is SBI's policy to charge these expenses and all other central operating costs on the basis of direct usage. In the opinion of management, this method is reasonable.

        Transactions in the Due to SBI account for the years ended December 31, 2002, 2001 and 2000 are as follows:

		2002			2001			2000
		(In Thousands)
Balance at beginning of period		$	(55	)	$	(64	)	$	(58	)
	Operating expenses		(3	)		(4	)		(6	)
	Transfer STPL intercompany receivable to SBI		—			13			—
Balance at end of period		$	(58	)	$	(55	)	$	(64	)

5.     Subsequent Event

        On August 5, 2003, SBI completed the offering of $150 million of Senior Notes ("Notes") due 2013 through a private placement eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a portion of the Parent's indebtedness under its existing $180 million credit facility. Interest on the Notes will be payable semi-annually in arrears, commencing on February 15, 2004. The interest rate on the Notes sold to private investors is 9.50%. The Notes are senior unsecured obligations guaranteed by certain of the Parent's U.S. subsidiaries, including the Partnership. The Notes are subject to certain covenants, including, among other things, limiting the Parent's and certain U.S. subsidiaries' (including the Partnership) ability to incur additional indebtedness or issue preferred stock, pay dividends to stockholders, and make investments or sell assets.

        In connection with the Notes offering, SBI amended and restated its existing $180 million credit facility. The amended credit facility consists of an $80 million revolving credit facility and has a

F-66

five-year maturity. The amended credit facility is subject to semi-annual reductions commencing February 5, 2004. It is secured by first liens on certain of the Parent's vessels (excluding vessels financed with Title XI financing and certain other vessels) and the stock of certain subsidiaries and will be guaranteed by certain subsidiaries, including the Partnership. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense and a minimum ratio of adjusted funded debt to adjusted EBITDA.

F-67

SEABULK AMERICA PARTNERSHIP, LTD.

BALANCE SHEETS (Unaudited)

(in thousands)

				June 30, 2003		December 31, 2002
Assets
	Investment in affiliate			$	2,923	$	2,636
		Total assets		$	2,923	$	2,636
Liabilities and partners' capital
Current liabilities:
	Due to affiliates			$	60	$	60
		Total current liabilities			60		60
Commitments and contingencies
Partners' capital:
	General partner				865		631
	Limited partner				1,998		1,945
		Total partners' capital			2,863		2,576
			Total liabilities and partners' capital	$	2,923	$	2,636

See notes to financial statements

F-68

SEABULK AMERICA PARTNERSHIP, LTD.

STATEMENTS OF OPERATIONS (Unaudited)

(in thousands)

				Three Months Ended June 30,				Six Months Ended June 30,
				2003		2002		2003		2002
Operating expenses				$	—	$	2	$	—	$	3
Other income:
	Equity in net earnings of unconsolidated affiliates				251		276		287		149
		Total other income			251		276		287		149
			Net income	$	251	$	274	$	287	$	146
Allocation of net income:
	General partner			$	205	$	225	$	234	$	122
	Limited partner				46		49		53		24
			Net income	$	251	$	274	$	287	$	146

See notes to financial statements

F-69

SEABULK AMERICA PARTNERSHIP, LTD.

STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

			Six Months Ended June 30,
			2003			2002
Operating activities
Net income			$	287		$	146
Adjustments to reconcile net income to net cash provided by operating activities:
	Equity in net earnings of unconsolidated affiliates			(287	)		(149	)
	Changes in operating assets and liabilities:
		Due to affiliates		—			3
Net cash provided by operating activities				—			—
Change in cash				—			—
Cash at beginning of period				—			—
Cash at end of period			$	—		$	—

See notes to financial statements

F-70

SEABULK AMERICA PARTNERSHIP, LTD.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1.     Organization and Basis of Presentation

        Seabulk America Partnership, Ltd. (SAPL or the Partnership), a Florida limited partnership, was formed on September 14, 1983 pursuant to a partnership agreement (the Agreement). SAPL holds a 41.67% limited partnership interest in Seabulk Transmarine Partnership, Ltd. (STPL). STPL, a Florida limited partnership, owns and operates a chemical transportation carrier, the Seabulk America, within the United States domestic trade. The partners of the Partnership include Seabulk Tankers, Ltd. (STL), a Florida limited partnership (81.59%), as sole general partner, and Stolt Tankers (U.S.A.), Inc., as limited partner (18.41%). STL is a wholly owned subsidiary of Seabulk International, Inc. (SBI or the Parent), a Florida Corporation.

        The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the unaudited financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these unaudited financial statements should be read in conjunction with the financial statements and accompanying notes as of December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002 included in this registration statement. For all periods presented, comprehensive income equals net income.

2.     Partnership Agreement

        The general partner is responsible for the management of the Partnership. Pursuant to the Agreement, the general partner and the limited partners (collectively referred to as the Partners) are required to make capital contributions at such times and in such amounts as the general partner requests by notice. No additional capital contributions were required for the six months ended June 30, 2003 or 2002. The Partners are not entitled to withdraw any part of their capital accounts or to receive any distribution from the Partnership except as specifically provided in the Agreement. All net income or net losses of the Partnership are to be allocated to the Partners' capital accounts in proportion to their partnership interests. The Partnership terminates on September 13, 2008, unless sooner terminated, liquidated, or dissolved by law or pursuant to the Agreement or unless extended by amendment to the Agreement.

3.     Recent Accounting Pronouncements

        In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the variable interest entity. The primary beneficiary is defined as the party which, as a result of holding its variable interest, absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns, or both. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The Partnership has not yet determined the

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impact that the adoption of FIN 46 will have on its financial position, results of operations or cash flows.

4.     Transactions with Affiliates

	June 30, 2003			December 31, 2002
	(In Thousands)
Due to SBI	$	(58	)	$	(58	)
Due to STL		(2	)		(2	)
Total due to affiliates	$	60		$	60

        The amount payable to SBI represents the net balance as the result of various transactions between the Partnership and SBI. There are no terms of settlement associated with the account balance, but it is non-interest bearing and payable upon demand. The balance is primarily the result of the Partnership's participation in SBI's central cash management program, wherein substantially all the Partnership's cash receipts are remitted from SBI and substantially all cash disbursements are funded by SBI. Other transactions include miscellaneous other administrative expenses incurred by SBI on behalf of the Partnership. SBI provides various administrative services to the Partnership. It is SBI's policy to charge these expenses and all other central operating costs on the basis of direct usage. In the opinion of management, this method is reasonable.

        Transactions in the Due to SBI account for the six months ended June 30, 2003 and 2002 are as follows:

		June 30, 2003			June 30, 2002
		(In Thousands)
Balance at beginning of period		$	(58	)	$	(55	)
	Operating expenses		—			(3	)
Balance at end of period		$	(58	)	$	(58	)

5.     Subsequent Event

        On August 5, 2003, SBI completed the offering of $150 million of Senior Notes ("Notes") due 2013 through a private placement eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a portion of the Parent's indebtedness under its existing $180 million credit facility. Interest on the Notes will be payable semi-annually in arrears, commencing on February 15, 2004. The interest rate on the Notes sold to private investors is 9.50%. The Notes are senior unsecured obligations guaranteed by certain of the Parent's U.S. subsidiaries, including the Partnership. The Notes are subject to certain covenants, including, among other things, limiting the Parent's and certain U.S. subsidiaries' (including the Partnership) ability to incur additional indebtedness or issue preferred stock, pay dividends to stockholders, and make investments or sell assets.

        In connection with the Notes offering, SBI amended and restated its existing $180 million credit facility. The amended credit facility consists of an $80 million revolving credit facility and has a

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five-year maturity. The amended credit facility is subject to semi-annual reductions commencing February 5, 2004. It is secured by first liens on certain of the Parent's vessels (excluding vessels financed with Title XI financing and certain other vessels) and the stock of certain subsidiaries, including the Partnership, and will be guaranteed by certain subsidiaries, including the Partnership. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense and a minimum ratio of adjusted funded debt to adjusted EBITDA.

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
Seabulk Transmarine Partnership, Ltd.

        We have audited the accompanying balance sheets of Seabulk Transmarine Partnership, Ltd. (a Florida limited partnership) as of December 31, 2002 and 2001, and the related statements of operations, partners' capital and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Seabulk Transmarine Partnership, Ltd. at December 31, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

	/s/ Ernst & Young LLP
Miami, Florida February 25, 2003, except for the first paragraph of Note 8, as to which the date is June 1, 2003 and the second and third paragraphs of Note 8, as to which the date is August 5, 2003.

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

BALANCE SHEETS

(in thousands)

				December 31,
				2002			2001
Assets
Current assets:
	Cash			$	13		$	14
	Trade accounts receivable, net of allowance for doubtful accounts of $71 and $0 in 2002 and 2001, respectively				723			852
	Insurance claims receivables				2			—
	Marine operating supplies				586			457
	Prepaid expenses and other current assets				28			30
		Total current assets			1,352			1,353
Vessel and equipment					50,150			49,977
Less accumulated depreciation					(18,098	)		(16,360	)
	Vessel and equipment, net				32,052			33,617
Deferred drydocking costs					1,840			370
	Total assets			$	35,244		$	35,340
Liabilities and partners' capital
Current liabilities:
	Accrued liabilities and other			$	518		$	302
		Total current liabilities			518			302
Due to affiliates					31,478			31,121
Commitments and contingencies
Partners' capital:
	General partner				1,900			2,121
	Limited partners				1,348			1,796
		Total partners' capital			3,248			3,917
			Total liabilities and partners' capital	$	35,244		$	35,340

See notes to financial statements

F-75

SEABULK TRANSMARINE PARTNERSHIP, LTD.

STATEMENTS OF OPERATIONS

(in thousands)

			Year Ended December 31,
			2002			2001			2000
Revenue			$	12,352		$	9,826		$	8,148
Operating expenses:
	Crew payroll and benefits			3,319			3,119			3,007
	Repairs and maintenance			1,035			733			529
	Insurance			271			300			261
	Fuel and consumables			1,498			362			318
	Port charges and other			1,660			160			26
		Total operating expenses		7,783			4,674			4,141
Overhead expenses:
	Salaries and benefits			252			306			275
	Overhead allocated from affiliate			550			550			550
	Professional fees allocated from affiliate			24			25			93
	Other			56			34			53
		Total overhead expenses		882			915			971
Depreciation and amortization				2,313			2,292			2,211
Income from operations				1,374			1,945			825
Interest expense charged by affiliate				(2,043	)		(2,004	)		(2,382	)
		Net loss	$	(669	)	$	(59	)	$	(1,557	)
Allocation of net loss:
	General partner		$	(221	)	$	(19	)	$	(514	)
	Limited partners			(448	)		(40	)		(1,043	)
		Net loss	$	(669	)	$	(59	)	$	(1,557	)

See notes to financial statements

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

STATEMENTS OF PARTNERS' CAPITAL

(in thousands)

		General Partner			Limited Partners			Total Partners' Capital
Balance, December 31, 1999		$	2,654		$	2,879		$	5,533
	Net loss		(514	)		(1,043	)		(1,557	)
Balance, December 31, 2000			2,140			1,836			3,976
	Net loss		(19	)		(40	)		(59	)
Balance, December 31, 2001			2,121			1,796			3,917
	Net loss		(221	)		(448	)		(669	)
Balance, December 31, 2002		$	1,900		$	1,348		$	3,248

See notes to financial statements

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

STATEMENTS OF CASH FLOWS

(in thousands)

			Year Ended December 31,
			2002			2001			2000
Operating activities
Net loss			$	(669	)	$	(59	)	$	(1,557	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation of vessel and equipment			1,738			1,736			1,761
	Amortization of drydocking costs			575			556			450
	Other non-cash items			49			—			—
	Changes in operating assets and liabilities:
		Accounts receivables		129			(453	)		132
		Insurance claims receivables		(9	)		40			(40	)
		Marine operating supplies		(129	)		23			—
		Prepaid expenses and other current assets		(10	)		(3	)		9
		Accrued liabilities and other		216			60			(158	)
Net cash provided by operating activities				1,890			1,900			597
Investing activities
Purchases of equipment				(249	)		—			(295	)
Expenditures for drydocking				(1,999	)		—			(1,216	)
Net cash used in investing activities				(2,248	)		—			(1,511	)
Financing activity
Due to affiliates				357			(1,900	)		914
Net cash provided by (used in) financing activity				357			(1,900	)		914
Change in cash				(1	)		—			—
Cash at beginning of year				14			14			14
Cash at end of year			$	13		$	14		$	14

See notes to financial statements

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

NOTES TO FINANCIAL STATEMENTS

1.     Organization and Description of Business

        Seabulk Transmarine Partnership, Ltd. (STPL or the Partnership), a Florida limited partnership, was formed on August 30, 1985, pursuant to a partnership agreement (the Agreement), to own and operate a chemical transportation carrier, the Seabulk America. The general partner of the Partnership is Seabulk Tankers, Ltd. (STL), a Florida limited partnership (33%), and the limited partners are STL (0.33%), Seabulk America Partnership, Ltd. (SAPL), a Florida limited partnership (41.67%), and Stolt Tankers (U.S.A.) Inc. (25%).

        STL and SAPL are owned 100% and 81.59%, respectively, by Seabulk International, Inc. (SBI), a Delaware corporation.

        The Seabulk America is used to transport chemicals, primarily from chemical manufacturing plants and storage facilities along the U.S. Gulf of Mexico coast, to industrial users in and around Atlantic and Pacific coast ports. The Partnership operates pursuant to short-term contracts of affreightment.

        The Partnership derived 100% of its revenue from Seabulk Tankers, Inc. (STI), an affiliated entity, in 2001. Effective December 31, 2001, STI terminated the time charter agreement with the Partnership. As a result, effective January 1, 2002, the Partnership controlled the operations of the Seabulk America throughout 2002. As a result of the termination, the Partnership received operating revenues from voyage contracts and incurred certain direct voyage expenses in 2002 that were the responsibility of STI under the time charter agreement in 2001.

2.     Partnership Agreement

        The general partner is responsible for the management of the Partnership. Pursuant to the Agreement, the general partner and the limited partners (collectively referred to as the Partners) are required to make capital contributions at such times and in such amounts as the general partner requests by notice. No additional capital contributions were required for fiscal 2002, 2001 or 2000. The Partners are not entitled to withdraw any part of their capital accounts or to receive any distribution from the Partnership except as specifically provided in the Agreement. All net income or net losses of the Partnership are to be allocated to the Partners' capital accounts in proportion to their partnership interests. The Partnership terminates on August 30, 2010, unless sooner terminated, liquidated or dissolved by law or pursuant to the Agreement or unless extended by amendment to the Agreement.

3.     Summary of Accounting Policies

        Revenues.    Revenue earned on voyage contracts is recognized based upon the percentage of voyage completion. Demurrage revenue is recognized when earned.

        Marine Operating Supplies.    Marine operating supplies consist of vessel spare parts and supplies that are recorded at cost and charged to operating expenses as consumed.

        Insurance Claims Receivable.    Insurance claims receivable represent costs incurred in connection with insurable incidents for which the Partnership expects to be reimbursed by the insurance carrier(s), subject to applicable deductibles. Deductible amounts related to covered incidents are expensed in the period of occurrence of the incident. The credit risk associated with insurance claims receivable is considered low due to the credit quality and funded status of the insurance clubs in which the Partnership participates.

        Deferred Drydocking Costs.    Periodically, the Partnership's vessel is drydocked for major repairs and maintenance to pass inspections to maintain its operating classification, as mandated by maritime

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regulations. Costs incurred to drydock the vessel are deferred and amortized using the straight-line method over the period to the next drydocking, generally 30 to 36 months. Drydocking costs are comprised of painting the vessel hull and sides, recoating cargo and fuel tanks, and performing other maintenance activities to bring the vessel into compliance with classification standards and which can typically only be performed while the vessel is drydocked. See Note 8 for the change in the vessel's estimated useful life subsequent to December 31, 2002.

        Vessel and Equipment.    Vessel and equipment are stated at cost, less accumulated depreciation. Significant renewals and improvements that extend the useful lives of the assets are capitalized. Maintenance and repairs that do not improve or extend the lives of the assets are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging from 5 to 29 years, as determined by the Oil Pollution Act of 1990 and other factors. Pursuant to OPA 90, the Seabulk America cannot be used to transport petroleum or petroleum products in U.S. commerce after 2015. However, the Company anticipates continuing to utilize the vessel in international waters through its remaining estimated useful life.

        Long-Lived Assets.    The Partnership accounts for long-lived assets under the provisions of Statement of Financial Accounting Standards (SFAS) No. 144, Accounting For the Impairment or Disposal of Long-Lived Assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present, the undiscounted cash flows estimated to be generated by those assets and the assets' fair value are less than the assets' carrying value. The Partnership believes that there are no conditions present that would indicate impairment as of December 31, 2002.

        Income Taxes.    No provision for income taxes has been recorded since STPL is a partnership and taxable income or loss accrues to the Partners.

        Estimates.    The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results will differ from those estimates.

        Comprehensive Loss.    For all periods presented, comprehensive loss equals net loss.

        Recent Accounting Pronouncements.    In June 2001, the Accounting Executive Committee of the American Institute of Certified Public Accountants issued an exposure draft of a proposed Statement of Position ("SOP") entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, the Company would expense major maintenance costs as incurred and prohibit the use of the deferral of the entire cost of a planned major maintenance activity. Currently, the costs incurred to drydock the Seabulk America are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 30 to 36 months. At its September 9, 2003 meeting, AcSEC voted to approve the SOP. The SOP is expected to be presented for FASB clearance late in the fourth quarter of 2003 and would be applicable for fiscal years beginning after December 15, 2004. Management has determined that this SOP will have a material effect on the consolidated financial statements. In the year of adoption, the Company would write-off the net book value of the deferred drydocking costs and record the write-off as a change in accounting principle ($1.8 million as of December 31, 2002). Additionally, all drydock expenditures incurred after the adoption of the SOP will be expensed as incurred.

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4.     Transactions with Affiliates

        The amount payable to affiliates represents the net balance as a result of various transactions between the Partnership and SBI. There are no terms of settlement associated with the account balance. The balance is primarily the result of the Partnership's participation in SBI's central cash management program, wherein substantially all the Partnership's cash receipts are remitted from SBI and substantially all cash disbursements are funded by SBI. Other transactions include miscellaneous administrative expenses incurred by SBI on behalf of the Partnership.

        SBI provides various administrative services to the Partnership, including legal assistance and technical expertise on ship management and maintenance. It is SBI's policy to charge these expenses and all other central operating costs, first on the basis of direct usage when identifiable, with the remainder allocated pursuant to the terms of the Agreement. Amounts charged by SBI include interest on the outstanding amounts due to SBI and a monthly management fee (overhead allocated from SBI), as set forth in the Agreement, which can be adjusted annually based on changes in the Consumer Price Index. During the years ended December 31, 2002 and 2001, SBI charged interest at the rate of 7.0% based on the amount due to SBI. SBI also allocates 10% of its tanker administrative overhead cost to the Partnership. In the opinion of management, these allocation methodologies are reasonable.

        Transactions in the Due to SBI account for the years ended December 31, 2002, 2001 and 2000 are as follows:

		2002			2001			2000
		(In Thousands)
Balance at beginning of year		$	(31,121	)	$	(33,021	)	$	(32,108	)
	Net cash remitted to SBI		10,351			9,493			6,581
	Overhead allocated from SBI		(550	)		(550	)		(550	)
	Interest expense charged by SBI		(2,043	)		(2,004	)		(2,382	)
	Operating expenses		(7,783	)		(4,674	)		(4,141	)
	Professional fees allocated from SBI		(24	)		(25	)		(93	)
	Other items		(308	)		(340	)		(328	)
Balance at end of year		$	(31,478	)	$	(31,121	)	$	(33,021	)

5.     Employee Benefit Plans

        The Partnership participates in SBI's Section 401(k) retirement plan (the Plan) for substantially all of its non-union employees. Subject to certain dollar limitations, employees may contribute a percentage of their salaries to this Plan, and the Partnership will match a portion of the employees' contributions. Profit-sharing contributions by the Partnership to the Plan are discretionary. Additionally, the Partnership contributed to a union-sponsored, collectively bargained pension plan for officers. This plan is not administered by the Partnership and the contributions are determined in accordance with provisions of negotiated labor contracts. Contributions to the union sponsored plan and the SBI 401(k) plan amounted to approximately $120,000 and $128,000 for the years ended December 31, 2002 and 2001, respectively, and are included in salaries and benefits in the accompanying statements of operations.

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6.     Commitments and Contingencies

        Unions and Collective Bargaining Agreements.    Substantially all of the crew of the Seabulk America is subject to collective bargaining agreements. Management considers relations with the crewmembers to be satisfactory; however, if these relations were to deteriorate, it could have an adverse effect on the Partnership's operating results. The collective bargaining agreement with the officers (licensed crew) union, which represents approximately 53% of the total crew, will expire on December 31, 2003. The collective bargaining agreement for the non-union crew (unlicensed crew), which represents approximately 47% of the total crew, will expire on December 31, 2004.

        Litigation.    The Partnership is sometimes named as a defendant in litigation, usually relating to claims for bodily injuries or property damage. The Partnership maintains insurance coverage against such claims to the extent deemed prudent by management and applicable deductible amounts are accrued at the time of the incident. In the opinion of management, the Partnership is not currently a party to any legal proceeding, the adverse outcome of which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on its financial position, results of operations, or cash flows.

        From time to time, the Company is also party to personal injury and property damage claims litigation arising in the ordinary course of its business. Protection and indemnity marine liability insurance covers large claims in excess of the Company's significant deductibles and self-insured retentions.

7.     Concentration of Credit Risk

        Significant Customer.    Substantially all of the Company's accounts receivable are due from entities that operate in the oilfield industry. The Company performs ongoing credit evaluations of its trade customers and generally does not require collateral. For the year ended December 31, 2002, seven customers accounted for 91% of the Partnership's revenue. As of December 31, 2002, accounts receivables from these customers amounted to 99% of total accounts receivable. The Partnership provides for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Actual losses have historically been within management's expectations and estimates. Recoveries on accounts receivable are recorded against bad debt expense.

8.     Subsequent Events

        The Partnership continually monitors it operations and the useful lives of its operating assets. The Partnership is precluded from operating the Seabulk America to transport petroleum or petroleum products in U.S. commerce after 2015. However, as of December 31, 2002, management planned to operate the vessel in international waters subsequent to 2015. As a result of anticipated stricter regulations for single hull vessels operating in international waters, in June 2003, management determined that it is not likely that the vessel will be used beyond 2015. Accordingly, in June 2003, the Partnership reduced the remaining useful life of the Seabulk America by five years to 2015.

        On August 5, 2003, SBI completed the offering of $150 million of Senior Notes ("Notes") due 2013 through a private placement eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a portion of the Parent's indebtedness under its existing $180 million credit facility. Interest on the Notes will be payable semi-annually in arrears, commencing on February 15, 2004. The interest rate on the Notes sold to private investors is 9.50%. The Notes are

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senior unsecured obligations guaranteed by certain of the Parent's U.S. subsidiaries, including the Partnership. The Notes are subject to certain covenants, including, among other things, limiting the Parent's and certain U.S. subsidiaries' (including the Partnership) ability to incur additional indebtedness or issue preferred stock, pay dividends to stockholders, and make investments or sell assets.

        In connection with the Notes offering, SBI amended and restated its existing $180 million credit facility. The amended credit facility consists of an $80 million revolving credit facility and has a five-year maturity. The amended credit facility is subject to semi-annual reductions commencing February 5, 2004. It is secured by first liens on certain of the Parent's vessels (excluding vessels financed with Title XI financing and certain other vessels) and the stock of certain subsidiaries and will be guaranteed by certain subsidiaries, including the Partnership. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense and a minimum ratio of adjusted funded debt to adjusted EBITDA.

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

BALANCE SHEETS (Unaudited)

(in thousands)

				June 30, 2003			December 31, 2002
Assets
Current assets:
	Cash			$	1,501		$	13
	Trade accounts receivable, net of allowance for doubtful accounts of $67 and $71 in 2003 and 2002, respectively				796			723
	Insurance claims receivables				—			2
	Marine operating supplies				529			586
	Prepaid expenses and other current assets				29			28
		Total current assets			2,855			1,352
Vessel and equipment					50,150			50,150
Less accumulated depreciation					(19,034	)		(18,098	)
	Vessel and equipment, net				31,116			32,052
Deferred drydocking costs					1,431			1,840
		Total assets		$	35,402		$	35,244
Liabilities and partners' capital
Current liabilities:
	Accrued liabilities and other			$	320		$	518
		Total current liabilities			320			518
Due to affiliates					31,145			31,478
Commitments and contingencies
Partners' capital:
	General partner				2,127			1,900
	Limited partners				1,810			1,348
		Total partners' capital			3,937			3,248
			Total liabilities and partners' capital	$	35,402		$	35,244

See notes to financial statements

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

STATEMENTS OF OPERATIONS (Unaudited)

(in thousands)

			Three Months Ended June 30,				Six Months Ended June 30,
			2003		2002		2003		2002
Revenue			$	3,909	$	3,954	$	7,347	$	6,909
Operating expenses:
	Crew payroll and benefits			806		828		1,559		1,652
	Repairs and maintenance			283		148		353		342
	Insurance			134		91		219		146
	Fuel and consumables			386		407		885		791
	Port charges and other			455		530		991		1,024
		Total operating expenses		2,064		2,004		4,007		3,955
Overhead expenses:
	Salaries and benefits			68		61		130		131
	Overhead allocated from affiliate			138		138		275		275
	Professional fees allocated from affiliate			—		5		2		11
	Other			28		8		48		17
		Total overhead expenses		234		212		455		434
Depreciation and amortization				702		572		1,345		1,143
Income from operations				909		1,166		1,540		1,377
Interest expense charged by affiliate				306		505		851		1,019
		Net income	$	603	$	661	$	689	$	358
Allocation of net income:
	General partner		$	199	$	218	$	227	$	118
	Limited partners			404		443		462		240
		Net income	$	603	$	661	$	689	$	358

See notes to financial statements

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SEABULK TRANSMARINE PARTNERSHIP, LTD.

STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

			Six Months Ended June 30,
			2003			2002
Operating activities
Net income			$	689		$	358
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation of vessel and equipment			936			865
	Amortization of drydocking costs			409			278
	Changes in operating assets and liabilities:
		Accounts receivable		(73	)		(19	)
		Insurance claims and other receivables		2			(37	)
		Marine operating supplies		57			(70	)
		Other current and long-term assets		(1	)		6
		Accrued liabilities and other		(198	)		217
Net cash provided by operating activities				1,821			1,598
Investing activities
Purchases of equipment				—			(3	)
Net cash used in investing activities				—			(3	)
Financing activity
Due to affiliates				(333	)		(1,593	)
Net cash used in financing activity				(333	)		(1,593	)
Change in cash				1,488			2
Cash at beginning of period				13			14
Cash at end of period			$	1,501		$	16

See notes to financial statements

F-86

SEABULK TRANSMARINE PARTNERSHIP, LTD.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1.     Organization and Basis of Presentation

        Seabulk Transmarine Partnership, Ltd. (STPL or the Partnership), a Florida limited partnership, was formed on August 30, 1985, pursuant to a partnership agreement (the Agreement), to own and operate a chemical transportation carrier, the Seabulk America. The general partner of the Partnership is Seabulk Tankers, Ltd. (STL), a Florida limited partnership (33%), and the limited partners are STL (0.33%), Seabulk America Partnership Ltd. (SAPL), a Florida limited partnership (41.67%), and Stolt Tankers (U.S.A.) Inc. (25%). STPL and SAPL are owned 100% and 81.59%, respectively by Seabulk International Inc. (SBI), a Delaware Corporation.

        The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the unaudited financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these unaudited financial statements should be read in conjunction with the consolidated financial statements and accompanying notes as of December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002 included in this registration statement. For all periods presented, comprehensive income equals net income.

2.     Partnership Agreement

        The general partner is responsible for the management of the Partnership. Pursuant to the Agreement, the general partner and the limited partners (collectively referred to as the Partners) are required to make capital contributions at such times and in such amounts as the general partner requests by notice. No additional capital contributions were required for fiscal 2003 or 2002. The Partners are not entitled to withdraw any part of their capital accounts or to receive any distribution from the Partnership except as specifically provided in the Agreement. All net income or net losses of the Partnership are to be allocated to the Partners' capital accounts in proportion to their partnership interests. The Partnership terminates on August 30, 2010, unless sooner terminated, liquidated or dissolved by law or pursuant to the Agreement or unless extended by amendment to the Agreement.

3.     Vessel and Equipment

        Vessel and equipment are stated at cost, less accumulated depreciation. Significant renewals and improvements that extend the useful lives of the assets are capitalized. Maintenance and repairs that do not improve or extend the lives of the assets are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging from 5 to 29 years, as determined by the Oil Pollution Act of 1990 and other factors. Pursuant to OPA 90, the Seabulk America cannot be used to transport petroleum or petroleum products in U.S. commerce after 2015. In June 2003, the Partnership reduced the remaining useful life of the vessel by five years to 2015. The Partnership has determined that the vessel will likely not be working in foreign waters after its OPA 90

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life in the United States. This change in estimate increased depreciation by approximately $50,000 for the six months ended June 30, 2003.

4.     Transactions with Affiliates

        The amount payable to affiliates represents the net balance as a result of various transactions between the Partnership and SBI. There are no terms of settlement associated with the account balance. The balance is primarily the result of the Partnership's participation in SBI's central cash management program, wherein substantially all the Partnership's cash receipts are remitted from SBI and substantially all cash disbursements are funded by SBI. Other transactions include miscellaneous administrative expenses incurred by SBI on behalf of the Partnership.

        SBI provides various administrative services to the Partnership, including legal assistance and technical expertise on ship management and maintenance. It is SBI's policy to charge these expenses and all other central operating costs, first on the basis of direct usage when identifiable, with the remainder allocated pursuant to the terms of the Agreement. Amounts charged by SBI include interest on the outstanding amounts due to SBI and a monthly management fee (overhead allocated from SBI), as set forth in the Agreement, which can be adjusted annually based on changes in the Consumer Price Index. During the six months ended June 30, 2003, SBI charged interest at the weighted average rate of 5.43% based on the amount due to SBI. SBI also allocates 10% of its tanker administrative overhead cost to the Partnership. In the opinion of management, these allocation methodologies are reasonable.

        Transactions in the Due to Affiliates account for the six months ended June 30, 2003 and 2002 are as follows:

		June 30, 2003			June 30, 2002
		(In Thousands)
Balance at beginning of period		$	(31,478	)	$	(31,121	)
	Net cash remitted to SBI		5,646			7,047
	Overhead allocated from SBI		(275	)		(275	)
	Interest expense charged by SBI		(851	)		(1,019	)
	Operating expenses		(4,007	)		(3,955	)
	Professional fees allocated from SBI		(2	)		(11	)
	Other items		(178	)		(148	)
Balance at end of period		$	(31,145	)	$	(29,482	)

5.     Commitments and Contingencies

        Unions and Collective Bargaining Agreements.    Substantially all of the crew of the Seabulk America are subject to collective bargaining agreements. Management considers relations with the crewmembers to be satisfactory; however, if these relations were to deteriorate, it could have an adverse effect on the Partnership's operating results. The collective bargaining agreement with the officers (licensed crew) union, which represents approximately 53% of the total crew, will expire on December 31, 2003. The collective bargaining agreement for the non-union crew (unlicensed crew), which represents approximately 47% of the total crew, will expire on December 31, 2004.

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        Litigation.    The Partnership is sometimes named as a defendant in litigation, usually relating to claims for bodily injuries or property damage. The Partnership maintains insurance coverage against such claims to the extent deemed prudent by management and applicable deductible amounts are accrued at the time of the incident. In the opinion of management, the Partnership is not currently a party to any legal proceeding, the adverse outcome of which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on its financial position, results of operations, or cash flows.

6.     Recent Accounting Pronouncements

        In June 2001, the Accounting Executive Committee of the American Institute of Certified Public Accountants issued an exposure draft of a proposed Statement of Position ("SOP") entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, the Company would expense major maintenance costs as incurred and prohibit the use of the deferral of the entire cost of a planned major maintenance activity. Currently, the costs incurred to drydock the Seabulk America are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 30 to 36 months. At its September 9, 2003 meeting, AcSEC voted to approve the SOP. The SOP is expected to be presented for FASB clearance late in the fourth quarter of 2003 and would be applicable for fiscal years beginning after December 15, 2004. Management has determined that this SOP will have a material effect on the consolidated financial statements. In the year of adoption, the Company would write-off the net book value of the deferred drydocking costs and record the write-off as a change in accounting principle ($1.2 million as of June 30, 2003). Additionally, all drydock expenditures incurred after the adoption of the SOP will be expensed as incurred.

7.     Subsequent Event

        On August 5, 2003, SBI completed the offering of $150 million of Senior Notes ("Notes") due 2013 through a private placement eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a portion of the Parent's indebtedness under its existing $180 million credit facility. Interest on the Notes will be payable semi-annually in arrears, commencing on February 15, 2004. The interest rate on the Notes sold to private investors is 9.50%. The Notes are senior unsecured obligations guaranteed by certain of the Parent's U.S. subsidiaries, including the Partnership. The Notes are subject to certain covenants, including, among other things, limiting the Parent's and certain U.S. subsidiaries' (including the Partnership) ability to incur additional indebtedness or issue preferred stock, pay dividends to stockholders, and make investments or sell assets.

        In connection with the Notes offering, SBI amended and restated its existing $180 million credit facility. The amended credit facility consists of an $80 million revolving credit facility and has a five-year maturity. The amended credit facility is subject to semi-annual reductions commencing February 5, 2004. It is secured by first liens on certain of the Parent's vessels (excluding vessels financed with Title XI financing and certain other vessels) and the stock of certain subsidiaries, including the Partnership, and will be guaranteed by certain subsidiaries, including the Partnership. The amended credit facility is subject to various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest expense and a minimum ratio of adjusted funded debt to adjusted EBITDA.

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ANNEX A

LETTER OF TRANSMITTAL

TO TENDER

OUTSTANDING 9¹/2% SENIOR NOTES DUE 2013

OF

SEABULK INTERNATIONAL, INC.

PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS
DATED                             , 2003

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                        , 2003 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY.

The Exchange Agent for the Exchange Offer is:

Wachovia Bank, National Association
Corporate Actions-NC1153
1525 West W.T. Harris Blvd., 3C3
Charlotte, North Carolina 28288-1153
(use 28262 as zip code for overnight deliveries)

Attention: Tiffany Williams

IF YOU WISH TO EXCHANGE CURRENTLY OUTSTANDING 9¹/2% SENIOR NOTES DUE 2013 (THE "OUTSTANDING NOTES") FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT OF NEW 9¹/2% SENIOR NOTES DUE 2013 PURSUANT TO THE EXCHANGE OFFER, YOU MUST VALIDLY TENDER (AND NOT WITHDRAW) OUTSTANDING NOTES TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE BY CAUSING AN AGENT'S MESSAGE TO BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO SUCH TIME.

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The undersigned hereby acknowledges receipt and review of the Prospectus, dated            , 2003 (the "Prospectus"), of Seabulk International, Inc., a Delaware corporation (the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which together describe the Company's offer (the "Exchange Offer") to exchange its 9¹/2% Senior Notes due 2013 (the "New Notes") that have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9¹/2% Senior Notes due 2013 (the "Outstanding Notes"). Capitalized terms used but not defined herein have the respective meaning given to them in this Prospectus.

The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term "Expiration Date" shall mean the latest date to which the Exchange Offer is extended. The Company shall notify the Exchange Agent and each registered holder of the Outstanding Notes of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

This Letter of Transmittal is to be used by holders of the Outstanding Notes. Tender of Outstanding Notes is to be made according to the Automated Tender Offer Program ("ATOP") of the Depository Trust Company ("DTC") pursuant to the procedures set forth in the prospectus under the caption "The Exchange Offer—Procedures for Tendering." DTC participants that are accepting the Exchange Offer must transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent's DTC account. DTC will then send a computer generated message known as an "agent's message" to the exchange agent for its acceptance. For you to validly tender your Outstanding notes in the Exchange Offer, the Exchange Agent must receive prior to the Expiration Date, an agent's message under the ATOP procedures that confirms that:

—

DTC has received your instructions to tender your Outstanding Notes; and



—

You agree to be bound by the terms of this Letter of Transmittal.

BY USING THE ATOP PROCEDURES TO TENDER OUTSTANDING NOTES, YOU WILL NOT BE REQUIRED TO DELIVER THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST AS IF YOU HAD SIGNED IT.

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PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

        1.     By tendering Outstanding Notes in the Exchange Offer, you acknowledge receipt of the Prospectus and this Letter of Transmittal.

        2.     By tendering Outstanding Notes in the Exchange Offer, you represent and warrant that you have full authority to tender the Outstanding Notes described above and will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the tender of Outstanding Notes.

        3.     You understand that the tender of the Outstanding Notes pursuant to all of the procedures set forth in the Prospectus will constitute an agreement between you and the Company as to the terms and conditions set forth in the Prospectus.

        4.     By tendering Outstanding Notes in the Exchange Offer, you acknowledge that the Exchange Offer is being made in reliance upon interpretations contained in no-action letters issued to third parties by the staff of the Securities and Exchange Commission (the "SEC"), including Exxon Capital Holdings Corp., SEC No-Action Letter (available May 13, 1988), Morgan Stanley & Co., Incorporated, SEC No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993) that the New Notes issued in exchange for the Outstanding Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof without further compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, as amended (the "Securities Act") (other than a broker-dealer who purchased Outstanding Notes exchanged for such New Notes directly from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act and any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act), provided that such New Notes are acquired in the ordinary course of such holders' business and such holders are not participating in, and have no arrangement with any person to participate in, the distribution of such New Notes.

        5.     By tendering Outstanding Notes in the Exchange Offer, you represent and warrant that:

a.

the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of your business, whether or not you are the holder;



b.

neither you nor any such other person has any arrangement or understanding with any person to participate in the distribution of Outstanding Notes or New Notes within the meaning of the Securities Act;



c.

neither you nor any such other person is an "affiliate," as such term is defined under Rule 405 promulgated under the Securities Act, of the Company, or if you or any such other person is an affiliate, you and any such other person will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;



d.

if neither you nor any such other person is a broker-dealer, that you and any such other person is not engaged in, and does not intend to engage in, the distribution of the New Notes; and



e.

if either you or any such other person is a broker-dealer, that you and any such other person will receive the New Notes for your or such other person's own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities and that you and such other person acknowledge that you and/or any such other person will deliver a prospectus in connection with any resale of such New Notes.

        6.     You may, if you are unable to make all of the representations and warranties contained in Item 5 above and as otherwise permitted in the Registration Rights Agreement (as defined below),

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elect to have your Outstanding Notes registered in the shelf registration statement described in the Registration Rights Agreement, dated as of August 5, 2003 (the "Registration Rights Agreement"), by and among the Company, the Guarantors (as defined therein) and the Initial Purchasers (as defined therein). Such election may be made only by notifying the Company in writing at 2200 Eller Drive, Post Office Box 13038, Ft. Lauderdale, Florida 33316, Attention: General Counsel. By making such election, you agree, as a holder of Outstanding Notes participating in a shelf registration, to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who signs such shelf registration statement, each person who controls the Company within the meaning of either the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and each other holder of Outstanding Notes, from and against any and all losses, claims, damages or liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any shelf registration statement or prospectus, or in any supplement thereto or amendment thereof, or caused by the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; but only with respect to information relating to the undersigned furnished in writing by or on behalf of the undersigned expressly for use in a shelf registration statement, a prospectus or any amendments or supplements thereto. Any such indemnification shall be governed by the terms and subject to the conditions set forth in the Registration Rights Agreement, including, without limitation, the provisions regarding notice, retention of counsel, contribution and payment of expenses set forth therein. The above summary of the indemnification provision of the Registration Rights Agreement is not intended to be exhaustive and is qualified in its entirety by the Registration Rights Agreement.

        7.     If you are a broker-dealer that will receive New Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, you acknowledge, by tendering Outstanding Notes in the Exchange Offer, that you will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, you will not be deemed to admit that you are an "underwriter" within the meaning of the Securities Act. If you are a broker-dealer and Outstanding Notes held for your own account were not acquired as a result of market-making or other trading activities, such Outstanding Notes cannot be exchanged pursuant to the Exchange Offer.

        8.     Any of your obligations hereunder shall be binding upon your successors, assigns, executors, administrators, trustees in bankruptcy and legal and personal representatives of the undersigned.

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INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1.

Book-Entry confirmations.

Any confirmation of a book-entry transfer to the Exchange Agent's account at DTC of Outstanding Notes tendered by book-entry transfer (a "Book-Entry Confirmation"), as well as an agent's message, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 P.M., New York City time, on the Expiration Date.

2.

Partial Tenders.

Tenders of Outstanding Notes will be accepted only in integral multiples of $1,000. The entire principal amount of Outstanding Notes delivered to the exchange agent will be deemed to have been tendered unless otherwise communicated to the exchange agent. If the entire principal amount of all Outstanding Notes is not tendered, then Outstanding Notes for the principal amount of Outstanding Notes not tendered and notes issued in exchange for any Outstanding Notes accepted will be delivered to the holder via the facilities of DTC promptly after the Outstanding Notes are accepted for exchange.

3.

Validity of Tenders.

All questions as to the validity, form, eligibility (including time of receipt), acceptance, and withdrawal of tendered Outstanding Notes will be determined by the Company, in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of counsel for the Company, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Exchange Offer or any defect or irregularity in the tender of any Outstanding Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions on this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes must be cured within such time as the Company shall determine. Although the Company intends to notify holders of defects or irregularities with respect to tenders of Outstanding Notes, neither the Company, the Exchange Agent, nor any other person shall be under any duty to give such notification of any defects or irregularities in tenders or incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Outstanding Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders via the facilities of DTC, as soon as practicable following the Expiration Date.

4.

Waiver of Conditions.

The Company reserves the absolute right to waive, in whole or part, up to the expiration of the exchange offer any of the conditions of the Exchange Offer set forth in the Prospectus or in this Letter of Transmittal.

5.

No Conditional Tender.

No alternative, conditional, irregular or contingent tender of Outstanding Notes will be accepted.

6.

Request for Assistance or Additional Copies.

Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.

A-5

7.

Withdrawal.

        Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption "Exchange Offer—Withdrawal of Tenders."

8.

No Guarantee of Late Delivery.

There is no procedure for guarantee of late delivery in the Exchange Offer.

IMPORTANT: BY USING THE ATOP PROCEDURES TO TENDER OUTSTANDING NOTES, YOU WILL NOT BE REQUIRED TO DELIVER THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGEMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST AS IF YOU HAD SIGNED IT.

A-6

        Until [date that is 90 days following the effective date of the registration statement], all dealers that effect transactions in the new notes, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Seabulk International, Inc.

Offer to Exchange up to
$150,000,000 of 9¹/2% Senior Notes due 2013
For
$150,000,000 of 9¹/2% Senior Notes due 2013
that have been registered under the Securities Act of 1933

                         , 2003

[ALTERNATE FRONT COVER PAGE FOR MARKET-MAKER PROSPECTUS]

$150,000,000
Seabulk International, Inc.
9¹/2% Senior Notes Due 2013

        The 9¹/2% Senior Notes Due 2013 offered hereby were issued on                      , 2003 in exchange for the 9¹/2% Senior Notes Due 2013 originally issued on August 5, 2003.

        We will pay interest on the new notes on February 15 and August 15 of each year. The first interest payment will be made on February 15, 2004. We may redeem up to 35% of the notes using net proceeds from certain equity offerings on or prior to August 15, 2006. In addition, we may redeem some or all of the notes on or after August 15, 2008 at the redemption prices set forth in this prospectus and prior to that date pursuant to certain make-whole provisions.

        The notes are our senior unsecured obligations, rank equally in right of payment with our existing and future senior indebtedness and are senior in right of payment to all of our future subordinated indebtedness. The notes are guaranteed on a senior unsecured basis by certain of our U.S. subsidiaries. The notes and the subsidiary guarantees are effectively junior to all of our and the subsidiary guarantors' existing and future secured indebtedness and to all existing and future liabilities, including trade payables, of our non-guarantor subsidiaries.

        We do not intend to apply for listing of the notes on any securities exchange or automated quotation system.

        A private equity fund associated with Credit Suisse First Boston LLC, or CSFB, owns approximately 50% of the common equity of the issuer and has the right to appoint four of the issuer's directors.

        Investing in the notes involves risks. See "Risk Factors" beginning on page        .

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

        This prospectus has been prepared for and will be used by CSFB in connection with offers and sales of the exchange notes in market-making transactions. These transactions may occur in the open market or may be privately negotiated at prices related to prevailing market prices at the time of sale s or at negotiated prices. CSFB may act as principal or agent is these transactions. We will not receive any of the proceeds of such sales.

Credit Suisse First Boston

Prospectus dated                      , 2003.

[ALTERNATIVE PAGE FOR MARKET-MAKER PROSPECTUS]

USE OF PROCEEDS

        This prospectus is delivered in connection with the sale of notes by CSFB in market-making transactions. We will not receive any of the proceeds from such transactions.

ALT-52

[ALTERNATIVE PAGE FOR MARKET-MAKER PROSPECTUS]

PLAN OF DISTRIBUTION

        This prospectus is to be used by CSFB in connection with offers and sales of the new notes in market-making transactions effected from time to time. CSFB may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agent for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices.

        As of the date of this prospectus, a private equity fund associated with CSFB owned approximately 50% of the issuer's common equity and had the right to appoint four of the issuer's directors. See "Certain Relationships and Related Party Transactions."

        CSFB has informed us that it does not intend to confirm sales of the new notes to any accounts over which it exercises discretionary authority without the prior specific written approval of such transactions by the customer.

        We have been advised by CSFB that, subject to applicable laws and regulations, CSFB currently intends to make a market in the notes following the completion of the exchange offer. However, CSFB is not obligated to do so, and any such market-making will be subject to limits imposed by the Securities Act and the Exchange Act. There can be no assurance that an active trading market will develop or be sustained. See "Risk Factors—Risks Related to the Notes—An active trading market may not develop for the notes, which may limit your ability to resell them."

        CSFB acted as our financial advisor, an initial purchaser of the notes and joint-lead manager and sole lead book-running manager of the private offering of our outstanding notes that closed on August 5, 2003. CSFB received customary fees for these services. CSFB or its affiliates may in the future engage in investment banking and other services with us, for which CSFB or its affiliates will receive customary compensation. Affiliates of CSFB Private Equity may provide certain management services to us and, in return, receive compensation for these services.

        We and CSFB, among other parties, have entered into a registration rights agreement with respect to, among other things, the use by CSFB of this prospectus. Pursuant to such agreement, we agreed to indemnify CSFB against certain liabilities, including liabilities under the Securities Act.

ALT-94

[ALTERNATIVE BACK COVER FOR MARKET-MAKER PROSPECTUS]

        Until [date that is 90 days following the effective date of the registration statement], all dealers that effect transactions in the new notes, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Seabulk International, Inc.

9¹/2% Senior Notes due 2013

PROSPECTUS

                          , 2003

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.    INDEMNIFICATION OF OFFICERS AND DIRECTORS

        Seabulk International, Inc. (the "Company") and two of the Company's subsidiaries that are guarantors of the notes are Delaware corporations. The other subsidiaries of the Company that are guarantors of the notes are Florida Corporations or Florida limited partnerships.

Delaware corporations

        Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") authorizes a corporation, under certain circumstances, to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of that corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation. With respect to any criminal action or proceeding, such indemnification is available if he had no reasonable cause to believe his conduct was unlawful.

        With respect to actions by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. A director or officer who is successful, on the merits or otherwise, in defense of any proceeding subject to the DGCL's indemnification provisions shall be indemnified by the corporation for reasonable expenses incurred in connection therewith, including attorneys' fees.

        Section 145 of the DGCL authorizes a corporation to advance its officers and directors expenses, provided that an officer or director provide the corporation with an undertaking to repay the advanced expenses should it ultimately be determined that such officer or director is not entitled to indemnification.

        Article X of the Certificate of Incorporation of Seabulk International, Inc. (the "Company") provides that the Company shall indemnify each director and officer of the Company to the fullest extent permitted from time to time by the DGCL or any other applicable laws as presently or hereafter in effect.

        Article Tenth of the Articles of Incorporation of Seabulk Tankers, Inc. and Article XII of the Bylaws of Seabulk Towing, Inc. (the two guarantors that are Delaware corporations) each provide generally that the corporation shall indemnify each officer, director, employee and agent to the fullest extent permitted by the General Corporation Law of the state of Delaware.

        Section 145 of the DGCL also empowers a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of such corporation against liability asserted against or incurred by him in any such capacity, whether or not such corporation

II-1

would have the power to indemnify such officer or director against such liability under the provisions of Section 145.

        Section 6.7(G) of the Bylaws of the Company provides that the Company may maintain insurance, at its expense, to protect the corporation and any director, officer, employee or agent of the corporation or of another entity against any expense, liability, or loss, regardless of whether the corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

        The Company has purchased an insurance policy that provides for indemnification of the executive officers and directors of the Company and its subsidiaries for liability resulting from their negligence, error, omission or breach of duty while acting in their capacities as executive officers and directors on any matter claimed against them by reason of their being executive officers and directors.

Florida corporations

        Section 607.0850 of the Florida Business Corporation Act (the "FBCA") authorizes a corporation to indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation), by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of that corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against liability incurred in connection with such proceeding, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation. With respect to any criminal action or proceeding, such indemnification is available if he or she had no reasonable cause to believe that his or her conduct was unlawful.

        With respect to actions by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. A director, officer, employee, or agent of a corporation who has been successful on the merits or otherwise in defense of any proceeding subject to the FBCA's indemnification provisions shall be indemnified by the corporation for reasonable expenses actually and reasonably incurred in connection therewith. Further, any indemnification allowed under the FBCA's indemnification provisions, unless pursuant to a determination by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper under the circumstances because he or she has met the applicable standard of conduct. Notwithstanding the failure of a corporation to provide such indemnification, and despite any contrary determination by the corporation in a specific case, a director, officer, employee, or agent of the corporation who is or was a party to a proceeding may apply for indemnification to the court conducting the proceeding, to the circuit court, or to a court of competent jurisdiction and such court may order indemnification if it determines that such person is entitled to indemnification under the applicable standard.

        Section 607.0850 of the FBCA authorizes a corporation to advance its officers and directors expenses, provided that an officer and director provide the corporation with an undertaking to repay the advanced expenses if he or she is ultimately found not to be entitled to indemnification by the corporation.

        The articles of incorporation of the various subsidiaries of the Company that are guarantors of the notes and that are Florida corporations provide generally that each such guarantor shall indemnify each director and officer of the corporation to the fullest extent permitted by the FBCA or any other applicable law as presently or hereafter in effect.

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        Section 607.0850 of the FBCA also empowers a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against or incurred by him or her in any such capacity arising out of his or her status as such, whether or not the corporation would have the power to indemnify such officer or director under the provisions of Section 607.0850.

Florida limited partnerships

        Section 401 of the Florida Revised Uniform Partnership Act (the "FRUPA") provides that a partnership shall reimburse a partner for payments made and indemnify a partner for liabilities incurred by the partner in the ordinary course of the business of the partnership or for the preservation of its business or property.

        Article XVI of the Limited Partnership Agreement of Seabulk Tankers, Ltd. provides that the general partner shall not be subjected to any liability to the partnership or the limited partners provided that the general partner, its officers or employees acted on reliance of counsel employed by the general partner on behalf of the limited partnership.

        Article VIII, Section 8.04 in each of the Limited Partnership Agreements of Seabulk America Partnership, Ltd., Seabulk Offshore, Ltd., and Seabulk Transmarine Partnership, Ltd. provides that the general partner shall be indemnified by the partnership from any loss or damage incurred by the general partner by reason of any act performed or omitted by it if its conduct was consistent with sound business practices and it reasonably believed the act or omission to be in furtherance of the interest of the partnership. This provision, however, explicitly provides that it should not be construed to and does not, in any manner, increase the liability of a limited partner beyond its obligation to make its capital contribution, as otherwise provided for in the partnership agreement.

ITEM 21.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

Exhibits. Reference is made to the Index to Exhibits following the signature pages hereto, which Index to Exhibits is hereby incorporated into this Item.

(b)

Financial Statement Schedules. All schedules have been omitted because the information required is included in the financial statements or the notes thereto or because they are not applicable or not required.

ITEM 22.    UNDERTAKINGS

        Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by any registrant of expenses incurred or paid by a director, officer or controlling person of such registrant in connection with the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

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        Each registrant hereby undertakes:

        (1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (a)   To include any prospectus required by section 10(a) (3) of the Securities Act of 1933;

        (b)   To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

        (c)   To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

        (2)   That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (4)   To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10 (b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

        (5)   To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ft. Lauderdale, State of Florida, on October 31, 2003.

SEABULK INTERNATIONAL, INC.
By:	/s/  VINCENT J. DESOSTOA
Name:	Vincent J. deSostoa
Title:	Senior Vice President

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alan R. Twaits and Vincent J. deSostoa, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/  GERHARD E. KURZ Gerhard E. Kurz	Chairman, President and Chief Executive Officer (Principal Executive Officer)	October 31, 2003
/s/  VINCENT J. DESOSTOA Vincent J. deSostoa	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	October 31, 2003
/s/  MICHAEL J. PELLICCI Michael J. Pellicci	Vice President—Finance and Corporate Controller (Principal Accounting Officer)	October 31, 2003
/s/  ARI J. BENACERRAF Ari J. Benacerraf	Director	October 31, 2003

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/s/  PETER H. CRESSY Peter H. Cressy	Director	October 31, 2003
/s/  DAVID A. DURKIN David A. Durkin	Director	October 31, 2003
/s/  KENNETH V. HUSEMAN Kenneth V. Huseman	Director	October 31, 2003
/s/  ROBERT L. KEISER Robert L. Keiser	Director	October 31, 2003
/s/  PIERRE F. LAPEYRE, JR. Pierre F. Lapeyre, Jr.	Director	October 31, 2003
/s/  DAVID M. LEUSCHEN David M. Leuschen	Director	October 31, 2003
/s/  THOMAS P. MOORE, JR. Thomas P. Moore, Jr.	Director	October 31, 2003
/s/  STEVEN A. WEBSTER Steven A. Webster	Director	October 31, 2003

II-6

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, each Registrant named below has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ft. Lauderdale, State of Florida, on October 31, 2003.

LONE STAR MARINE SERVICES, INC. SEABULK ARIZONA USA, INC. SEABULK CHEMICAL CARRIERS, INC. SEABULK MARINE INTERNATIONAL, INC. SEABULK MARINE SERVICES, INC. SEABULK OCEAN SYSTEMS CORPORATION SEABULK OCEAN SYSTEMS HOLDINGS     CORPORATION SEABULK OFFSHORE ABU DHABI, INC. SEABULK OFFSHORE DUBAI, INC. SEABULK OFFSHORE INTERNATIONAL, INC. SEABULK OFFSHORE OPERATORS, INC. SEABULK OPERATORS, INC. SEABULK TOWING, INC. SEABULK TOWING SERVICES, INC. SEABULK TRANSMARINE II, INC. SEABULK TRANSPORT, INC.
By:	/s/  VINCENT J. DESOSTOA
Name:	Vincent J. deSostoa
Title:	Senior Vice President

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alan R. Twaits and Vincent J. deSostoa, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/  GERHARD E. KURZ Gerhard E. Kurz	Chairman and President (Principal Executive Officer)	October 31, 2003

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/s/  VINCENT J. DESOSTOA Vincent J. deSostoa	Senior Vice President, Treasurer and Director (Principal Financial and Principal Accounting Officer)	October 31, 2003
/s/  ALAN R. TWAITS Alan R. Twaits	Senior Vice President and Director	October 31, 2003
/s/  STEPHEN B. FINCH Stephen B. Finch	Vice President, Secretary and Director	October 31, 2003

II-8

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ft. Lauderdale, State of Florida, on October 31, 2003.

SEABULK TANKERS, INC.
By:	/s/  VINCENT J. DESOSTOA
Name:	Vincent J. deSostoa
Title:	Senior Vice President

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alan R. Twaits and Vincent J. deSostoa, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/  GERHARD E. KURZ Gerhard E. Kurz	Chief Executive Officer and Director (Principal Executive Officer)	October 31, 2003
/s/  L. STEPHEN WILLRICH L. Stephen Willrich	President and Director	October 31, 2003
/s/  VINCENT J. DESOSTOA Vincent J. deSostoa	Senior Vice President, Chief Financial Officer, Treasurer and Director (Principal Financial and Principal Accounting Officer)	October 31, 2003
/s/  ALAN R. TWAITS Alan R. Twaits	Senior Vice President and Director	October 31, 2003
/s/  STEPHEN B. FINCH Stephen B. Finch	Vice President, Secretary and Director	October 31, 2003

II-9

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ft. Lauderdale, State of Florida, on October 31, 2003.

SEABULK TANKERS, LTD.
By:	Seabulk Transport, Inc., General Partner
By:	/s/  VINCENT J. DESOSTOA
Name:	Vincent J. deSostoa
Title:	Senior Vice President

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alan R. Twaits and Vincent J. deSostoa, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

SEABULK TRANSPORT, INC.

Signature	Capacity	Date
/s/  GERHARD E. KURZ Gerhard E. Kurz	Chairman, President and Chief Executive Officer (Principal Executive Officer)	October 31, 2003
/s/  VINCENT J. DESOSTOA Vincent J. deSostoa	Senior Vice President, Chief Financial Officer, Treasurer and Director (Principal Financial and Principal Accounting Officer)	October 31, 2003
/s/  ALAN R. TWAITS Alan R. Twaits	Senior Vice President and Director	October 31, 2003
/s/  STEPHEN B. FINCH Stephen B. Finch	Vice President, Secretary and Director	October 31, 2003

II-10

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, each Registrant named below has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ft. Lauderdale, State of Florida, on October 31, 2003.

SEABULK AMERICA PARTNERSHIP, LTD. SEABULK OFFSHORE, LTD. SEABULK TRANSMARINE PARTNERSHIP, LTD.
By:	SEABULK TANKERS, LTD., General Partner
By:	SEABULK TRANSPORT, INC. General Partner
By:	/s/  VINCENT J, DESOSTOA
Name:	Vincent J. deSostoa
Title:	Senior Vice President

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alan R. Twaits and Vincent J. deSostoa, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

SEABULK TRANSPORT, INC.

Signature	Capacity	Date
/s/  GERHARD E. KURZ Gerhard E. Kurz	Chairman, President and Chief Executive Officer (Principal Executive Officer)	October 31, 2003
/s/  VINCENT J. DESOSTOA Vincent J. deSostoa	Senior Vice President, Chief Financial Officer, Treasurer and Director (Principal Financial and Principal Accounting Officer)	October 31, 2003
/s/  ALAN R. TWAITS Alan R. Twaits	Senior Vice President and Director	October 31, 2003
/s/  STEPHEN B. FINCH Stephen B. Finch	Vice President, Secretary and Director	October 31, 2003

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EXHIBIT INDEX

Exhibit No.	Description	Incorporated by Reference to Registration or File No.	Form or Report	File Date	Exhibit No.
2.1	Debtor's First Amended Joint Plan of Reorganization, dated November 1, 1999, and related Disclosure Statement filed with the U.S. Bankruptcy Court for the District of Delaware	000-28732	13D/A	Dec. 1999	1 and 2
4.1	Form of Common Stock Certificate of the Company
4.1(a)	Form of Common Stock Certificate reflecting new name of the Company	000-28732	10-K	March 2001	4.1(a)
4.2	Form of Class A Warrant Certificate of the Company	333-30390	S-3	Feb. 2000	4.2
4.2(a)	Form of Class A Warrant Certificate reflecting new name of the Company	000-28732	10-K	March 2001	4.2(a)
4.3	Warrant Agreement, dated December 15, 1999, between Hvide Marine Incorporated and State Street Bank and Trust Company as Warrant Agent	333-30390	S-3/A	May 2000	4.4
4.4	Class A Warrant Agreement, dated as of December 15, 1999, by and between Hvide Marine Incorporated and State Street Bank and Trust Company	333-30390	S-3	Feb. 2000	4.5
4.5	Amended and Restated Equity Ownership Plan	000-28732	14A	April 2003	App. A
4.6	Stock Option Plan for Directors	000-28732	14A	April 2003	App. B
4.7*	Indenture, dated as of August 5, 2003, among Seabulk International, Inc., the Guarantors named therein, and Wachovia Bank, National Association, as Trustee (including forms of notes)
4.8*	Registration Rights Agreement dated as of August 5, 2003 between Seabulk International, Inc. and Credit Suisse First Boston LLC, Banc of America Securities LLC, RBC Dominion Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated

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4.9*	Supplemental Indenture, dated as of October 3, 2003, among Seabulk International, Inc., the Guarantors named therein, and Wachovia Bank, National Association, as Trustee
5.1*	Opinion of Vinson & Elkins L.L.P.
5.2*	Opinion of Alan R. Twaits, Esq.
10.1	Common Stock Registration Rights Agreement, dated December 15, 1999, among Hvide Marine Incorporated, Bankers Trust Corporation and Great American Life Insurance Company, Great American Insurance Company, New Energy Corp., American Empire Surplus Lines Insurance Company, Worldwide Insurance Company and American National Fire Insurance Company as Purchasers	000-28732	8-K	Dec. 1999	10.2
10.2	Employment Agreement dated as of April 18, 2000 between the Company and Gerhard E. Kurz	000-28732	10-K	March 2001	10.9
10.3	Amendment to Employment Agreement dated July 16, 2001 between the Company and Gerhard E. Kurz	000-28732	10-K	March 2002	10.12
10.4	Stock Purchase Agreement by and among Seabulk International, Inc. and the Investors listed on Schedule 1 thereto, dated as of June 13, 2002	000-28732	8-K	June 2002	99.1
10.5	Stockholders' Agreement, dated as of September 13, 2002, among Seabulk International, Inc., Nautilus Acquisition, L.P., C/R Marine Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine Coinvestment, L.P., C/R Marine Coinvestment II, L.P. and Gerhard Kurz	000-28732	8-K	Sept. 2002	99.3
10.6	Amendment to Employment Agreement, dated as of September 13, 2002, between the Company and Gerhard E. Kurz	000-28732	8-K	Sept. 2002	99.4
10.7	Severance Agreement and Release between the Company and Andrew W. Brauninger	000-28732	10-Q	May 2003	10.18
10.8	Seabulk International, Inc. Executive Deferred Compensation Plan	000-28732	10-Q	May 2003	10.19

II-13

10.9	Summary Provisions of the Seabulk International, Inc. Management Annual Incentive Compensation Plan	000-28732	10-Q	May 2003	10.20
10.10*	Amended and Restated Credit Agreement, dated as of August 5, 2003, among Seabulk International, Inc., each Subsidiary Guarantor, Fortis Capital Corp., NIB Capital Bank N.V. and each other financial institution which may become a party to the Agreement as a Lender, Fortis Capital Corp., as administrative agent on behalf of the Lenders, and as book runner and as an arranger, and NIB Capital Bank N.V., as an arranger
12.1*	Computation of Ratio of Earning to Fixed Charges
23.1*	Consent of Ernst & Young LLP
23.2*	Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1)
23.3*	Consent of Alan R. Twaits, Esq. (included in Exhibit 5.2)
24.1*	Power of Attorney (included in the signature pages of this Registration Statement)
25.1*	Statement of Eligibility on Form T-1 of Wachovia Bank, National Association

*

Filed herewith

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QuickLinks

EXPLANATORY NOTE
TABLE OF CONTENTS
FORWARD-LOOKING INFORMATION
WHERE YOU CAN FIND MORE INFORMATION
PROSPECTUS SUMMARY
RISK FACTORS
SELECTED CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
EXCHANGE OFFER
USE OF PROCEEDS
DESCRIPTION OF NEW NOTES
U.S. FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
GLOSSARY
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par value data)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidating Balance Sheet (in thousands)
Condensed Consolidating Balance Sheet (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Cash Flows (in thousands)
Condensed Consolidating Statement of Cash Flows (in thousands)
Condensed Consolidating Statement of Cash Flows (in thousands)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except par value data)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Condensed Consolidating Balance Sheet (in thousands)
Condensed Consolidating Balance Sheet (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Operations (in thousands)
Condensed Consolidating Statement of Cash Flows (in thousands)
Condensed Consolidating Statement of Cash Flows (in thousands)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SEABULK AMERICA PARTNERSHIP, LTD. BALANCE SHEETS (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. STATEMENTS OF OPERATIONS (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. STATEMENTS OF PARTNERS' CAPITAL (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. STATEMENTS OF CASH FLOWS (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. NOTES TO FINANCIAL STATEMENTS
SEABULK AMERICA PARTNERSHIP, LTD. BALANCE SHEETS (Unaudited) (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. STATEMENTS OF OPERATIONS (Unaudited) (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
SEABULK AMERICA PARTNERSHIP, LTD. NOTES TO FINANCIAL STATEMENTS (Unaudited)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SEABULK TRANSMARINE PARTNERSHIP, LTD. BALANCE SHEETS (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. STATEMENTS OF OPERATIONS (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. STATEMENTS OF PARTNERS' CAPITAL (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. STATEMENTS OF CASH FLOWS (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. NOTES TO FINANCIAL STATEMENTS
SEABULK TRANSMARINE PARTNERSHIP, LTD. BALANCE SHEETS (Unaudited) (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. STATEMENTS OF OPERATIONS (Unaudited) (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
SEABULK TRANSMARINE PARTNERSHIP, LTD. NOTES TO FINANCIAL STATEMENTS (Unaudited)
INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
USE OF PROCEEDS
PLAN OF DISTRIBUTION
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
SIGNATURES
SIGNATURES
SIGNATURES
EXHIBIT INDEX

EX-4.7

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Exhibit 4.7

SEABULK INTERNATIONAL, INC.

AND

THE GUARANTORS NAMED ON THE SIGNATURE PAGE HERETO

9¹/2% SENIOR NOTES DUE 2013

INDENTURE

Dated as of August 5, 2003

WACHOVIA BANK, NATIONAL ASSOCIATION

As Trustee

CROSS-REFERENCE TABLE*

Trust Indenture Act Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N/A
(a)(4)	N/A
(a)(5)	7.10
(b)	7.10
(c)	N/A
311(a)	7.11
(b)	7.11
(c)	N/A
312(a)	2.05
(b)	11.03
(c)	11.03
313(a)	7.06
(b)(1)	7.06
(b)(2)	7.06, 7.07
(c)	7.06, 11.02
(d)	7.06
314(a)	4.03, 11.02
(b)	N/A
(c)(1)	11.04
(c)(2)	11.04
(c)(3)	N/A
(d)	N/A
(e)	11.05
(f)	N/A
315(a)	7.01
(b)	7.05, 11.02
(c)	7.01
(d)	7.01
(e)	6.11
316(a)(last sentence)	2.09
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N/A
(b)	6.07
(c)	2.12
317(a)(1)	6.08
(a)(2)	6.09
(b)	2.04
318(a)	11.01
(b)	N/A
(c)	11.01

N/A means not applicable.
* This Cross-Reference Table is not part of the Indenture.

TABLE OF CONTENTS

		Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01	Definitions	1
Section 1.02	Other Definitions	22
Section 1.03	Incorporation by Reference of Trust Indenture Act	22
Section 1.04	Rules of Construction	22
ARTICLE 2
THE NOTES
Section 2.01	Form and Dating	23
Section 2.02	Execution and Authentication	23
Section 2.03	Registrar and Paying Agent	24
Section 2.04	Paying Agent To Hold Money in Trust	24
Section 2.05	Noteholder Lists	24
Section 2.06	Transfer and Exchange	24
Section 2.07	Replacement Notes	25
Section 2.08	Outstanding Notes	25
Section 2.09	Temporary Notes	25
Section 2.10	Cancellation	26
Section 2.11	Defaulted Interest	26
Section 2.12	CUSIP Numbers	26
Section 2.13	Issuance of Additional Notes	26
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01	Notices to Trustee	27
Section 3.02	Selection of Notes To Be Redeemed	27
Section 3.03	Notice of Redemption	27
Section 3.04	Effect of Notice of Redemption	28
Section 3.05	Deposit of Redemption Price	28
Section 3.06	Notes Redeemed in Part	29
Section 3.07	Optional Redemption	29
Section 3.08	Mandatory Redemption	30
Section 3.09	Offer To Purchase by Application of Excess Proceeds	30

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		Page
ARTICLE 4
COVENANTS
Section 4.01	Payment of Notes	32
Section 4.02	Maintenance of Office or Agency	32
Section 4.03	Reports	33
Section 4.04	Compliance Certificate	33
Section 4.05	Taxes	34
Section 4.06	Stay, Extension and Usury Laws	34
Section 4.07	Limitation on Restricted Payments	34
Section 4.08	Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries	38
Section 4.09	Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock	39
Section 4.10	Limitation on Asset Sales	43
Section 4.11	Limitation on Transactions with Affiliates	44
Section 4.12	Limitation on Liens	45
Section 4.13	Additional Subsidiary Guarantees	46
Section 4.14	Corporate Existence	46
Section 4.15	Offer To Repurchase Upon Change of Control	46
Section 4.16	No Inducements	48
ARTICLE 5
SUCCESSORS
Section 5.01	Merger, Consolidation, or Sale of Assets	49
Section 5.02	Successor Corporation Substituted	49
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01	Events of Default	50
Section 6.02	Acceleration	52
Section 6.03	Other Remedies	52
Section 6.04	Waiver of Past Defaults	52
Section 6.05	Control by Majority	52
Section 6.06	Limitation on Suits	53
Section 6.07	Rights of Holders of Notes To Receive Payment	53
Section 6.08	Collection Suit by Trustee	53
Section 6.09	Trustee May File Proofs of Claim	53
Section 6.10	Priorities	54
Section 6.11	Undertaking for Costs	54

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		Page
ARTICLE 7
TRUSTEE
Section 7.01	Duties of Trustee	55
Section 7.02	Rights of Trustee	56
Section 7.03	Individual Rights of Trustee	56
Section 7.04	Trustee's Disclaimer	57
Section 7.05	Notice of Defaults	57
Section 7.06	Reports by Trustee to Holders of the Notes	57
Section 7.07	Compensation and Indemnity	57
Section 7.08	Replacement of Trustee	58
Section 7.09	Successor Trustee by Merger, etc.	59
Section 7.10	Eligibility; Disqualification	59
Section 7.11	Preferential Collection of Claims Against Company	60
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01	Option to Effect Legal Defeasance or Covenant Defeasance	60
Section 8.02	Legal Defeasance and Discharge	60
Section 8.03	Covenant Defeasance	61
Section 8.04	Conditions to Legal or Covenant Defeasance	61
Section 8.05	Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions	62
Section 8.06	Repayment to Company	63
Section 8.07	Reinstatement	63
Section 8.08	Discharge	63
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01	Without Consent of Holders of Notes	64
Section 9.02	With Consent of Holders of Notes	65
Section 9.03	Compliance with Trust Indenture Act	66
Section 9.04	Revocation and Effect of Consents	66
Section 9.05	Notation on or Exchange of Notes	67
Section 9.06	Trustee To Sign Amendments, etc.	67
ARTICLE 10
GUARANTEES OF NOTES
Section 10.01	Subsidiary Guarantees	67
Section 10.02	[Reserved]	68
Section 10.03	Guarantors May Consolidate, etc., on Certain Terms	68

iii

		Page
Section 10.04	Releases Following Sale of Assets	69
Section 10.05	Releases Following Designation as an Unrestricted Subsidiary	69
Section 10.06	Limitation on Guarantor Liability	69
Section 10.07	"Trustee" To Include Paying Agent	70
ARTICLE 11
MISCELLANEOUS
Section 11.01	Trust Indenture Act Controls	70
Section 11.02	Notices	70
Section 11.03	Communication by Holders of Notes with Other Holders of Notes	71
Section 11.04	Certificate and Opinion as to Conditions Precedent	72
Section 11.05	Statements Required in Certificate or Opinion	72
Section 11.06	Rules by Trustee and Agents	72
Section 11.07	No Personal Liability of Directors, Officers, Employees and Stockholders	72
Section 11.08	Governing Law	73
Section 11.09	No Adverse Interpretation of Other Agreements	73
Section 11.10	Successors	73
Section 11.11	Severability	73
Section 11.12	Table of Contents, Headings, etc.	73
Section 11.13	Counterparts	73

APPENDIX AND ANNEXES

RULE 144A/REGULATION S APPENDIX		App. - 1
	EXHIBIT 1 Form of Initial Note
	EXHIBIT A Form of Exchange Note or Private Exchange Note
	EXHIBIT B Form of Guarantee
ANNEX A	Form of Supplemental Indenture	A - 1

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        This Indenture, dated as of August 5, 2003, is among Seabulk International, Inc., a Delaware corporation (the "Company"), the guarantors listed on the signature page hereto (each, a "Guarantor" and, collectively, the "Guarantors") and Wachovia Bank, National Association, as trustee (the "Trustee").

        The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Company's Initial Notes, Exchange Notes, Private Exchange Notes and Additional Notes:

ARTICLE 1

DEFINITIONS AND INCORPORATION
BY REFERENCE

Section 1.01    Definitions.

        "Additional Interest" means all Additional Interest then owing pursuant to Section 6 of the Registration Rights Agreement referred to in clause (1) of the definition of "Registration Rights Agreement" in the Appendix.

        "Additional Notes" means, subject to the Company's compliance with Section 4.09, 9¹/2% Senior Notes due 2013 of the Company issued from time to time under the terms of this Indenture after the Initial Issuance Date (other than notes issued pursuant to Sections 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange Notes or Private Exchange Notes) and having identical terms (except as to the initial interest payment date) to the Initial Notes or the Exchange Notes or Private Exchange Notes issued in exchange for the Initial Notes.

        "Adjusted Treasury Rate" means, with respect to any redemption date, (a) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after August 15, 2008, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, plus 0.50%.

        "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

        "Agent" means any Registrar, Paying Agent or co-registrar.

        "Agent Members" has the meaning provided in the Appendix.

        "Applicable Law," except as the context may otherwise require, means all applicable laws, rules, regulations, ordinances, judgments, decrees, injunctions, writs and orders of any court or governmental or congressional agency or authority and rules, regulations, orders, licenses and permits of any United States federal, state, municipal, regional, or other governmental body, instrumentality, agency or authority.

        "Applicable Premium" means, with respect to a Note at any redemption date, the greater of (a) 1.00% of the principal amount of such Note and (b) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on August 15, 2008 (such redemption price as determined under Section 3.07(a) exclusive of any accrued and unpaid interest and Additional Interest, if any) plus (2) all required remaining scheduled interest payments due on such Note through August 15, 2008 (but excluding accrued and unpaid interest and Additional Interest, if any, to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on such redemption date.

        "Asset Sale" means

        (1)   the sale, lease, conveyance or other disposition (a "disposition") of any properties or assets (including, without limitation, by way of a sale and leaseback or a Total Loss), excluding dispositions in the ordinary course of business (provided that the disposition of all or substantially all of the properties or assets of the Company and its Subsidiaries (on a consolidated basis) will be governed by Section 5.01 of this Indenture and not by the provisions of Section 4.10 hereof), and

        (2)   the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Subsidiaries,

whether in the case of clause (1) or (2), in a single transaction or a series of related transactions, provided that such transaction or series of transactions involves properties or assets having a Fair Market Value in excess of $2.5 million. Notwithstanding the preceding, the following transactions will be deemed not to be Asset Sales:

        (a)   a disposition of obsolete or excess equipment or other properties or assets;

        (b)   a disposition of properties or assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

        (c)   a disposition of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

        (d)   a disposition of cash or Cash Equivalents or a disposition of properties or assets that constitutes a Restricted Payment that is permitted by this Indenture or a Permitted Investment;

        (e)   a disposition of properties or assets in the ordinary course of business by the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary that is engaged in the

2

business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or a business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors), provided that such transaction complies with Sections 4.07 and 4.11 hereof;

        (f)    any charter or lease of any equipment or other properties or assets entered into in the ordinary course of business and with respect to which the Company or any Restricted Subsidiary thereof is the lessor, except any such charter or lease that provides for the acquisition of such properties or assets by the lessee during or at the end of the term thereof for an amount that is less than their fair market value at the time the right to acquire such properties or assets occurs;

        (g)   any trade or exchange by the Company or any Restricted Subsidiary of equipment or other properties or assets for equipment or other properties or assets owned or held by another Person, provided that the Fair Market Value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary (together with any cash or Cash Equivalents) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash or Cash Equivalents) to be received by the Company or such Restricted Subsidiary; provided further that any cash or Cash Equivalents received must be applied in accordance with Section 4.10 hereof;

        (h)   a disposition in the ordinary course of business of inventory, receivables or other current assets; and

        (i)    the creation or perfection of a Lien (but not the sale or other disposition of the properties or assets subject to such Lien).

The Fair Market Value of any non-cash proceeds of a disposition of properties or assets and of any properties or assets referred to in the foregoing clause (g) of this definition shall be set forth in an Officers' Certificate delivered to the Trustee.

        "Attributable Indebtedness" in respect of a Sale/Leaseback Transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). As used in the preceding sentence, the "net rental payments" under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

        "Bankruptcy Law" means Title 11, United States Code, as may be amended from time to time, or any similar federal or state law for the relief of debtors.

        "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof.

3

        "Business Day" means any day other than a Legal Holiday.

        "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP.

        "Capital Stock" means

        (1)   in the case of a corporation, corporate stock;

        (2)   in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

        (3)   in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

        (4)   any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person but, in each case, excluding any debt securities convertible into such equity.

        "Cash Equivalents" means

        (1)   securities issued or directly and fully guaranteed or insured by the government of the United States or any other country whose sovereign debt has a rating of at least A3 from Moody's and at least A- from S&P or any agency or instrumentality thereof having maturities of not more than twelve months from the date of acquisition;

        (2)   certificates of deposit and Eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any commercial bank organized under the laws of any country that is a member of the Organization for Economic Cooperation and Development having capital and surplus in excess of $500 million (or the equivalent thereof in any other currency unit);

        (3)   repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above entered into with any financial institution meeting the qualifications specified in clause (2) above;

        (4)   commercial paper having the highest rating obtainable from Moody's or S&P, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of investments, and in each case maturing within 270 days after the date of acquisition;

        (5)   deposits available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (2) above, provided all such deposits do not exceed $3.0 million in the aggregate at any one time (or the equivalent thereof in any other currency unit); and

4

        (6)   money market mutual funds, substantially all of the assets of which are of the type described in the foregoing clauses (1) through (4).

        "Change of Control" means the occurrence of any of the following:

        (1)   the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries (determined on a consolidated basis) to any Person or Persons (other than to one or more Permitted Holders);

        (2)   the adoption of a plan relating to the liquidation or dissolution of the Company;

        (3)   any "person" (as such term is used in Section 13(d)(3) of the Exchange Act), other than a Permitted Holder or group of Permitted Holders, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding Voting Stock of the Company; or

        (4)   the first day on which more than a majority of the members of the Board of Directors are not Continuing Directors;

provided, however, that, with respect to clause (3) above a transaction in which the Company becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if:

        (a)   the stockholders of the Company immediately prior to such transaction "beneficially own" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding Voting Stock of such other Person of whom the Company is then a Subsidiary immediately following the consummation of such transaction; and

        (b)   immediately following the consummation of such transaction, no "person" (as such term is defined above), other than such other Person (but including the holders of the Equity Interests of such other Person), or a Permitted Holder or group of Permitted Holders, "beneficially owns" (as such term is defined above), directly or indirectly through one or more intermediaries, more than 50% of the voting power of the outstanding Voting Stock of the Company.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Common Stock" means the common stock of the Company, par value $0.01 per share.

        "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes from the redemption date to August 15, 2008, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to August 15, 2008.

5

        "Comparable Treasury Price" means, with respect to any redemption date, if clause (b) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date.

        "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, to the extent deducted or excluded in calculating Consolidated Net Income for such period,

        (1)   Consolidated Income Taxes of such Person and its Restricted Subsidiaries;

        (2)   Consolidated Interest Expense of such Person and its Restricted Subsidiaries,

        (3)   depreciation, amortization and drydocking (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries;

        (4)   expenses and charges of the Company related to the offering of the Company's 9¹/2% Senior Notes due 2013 and the amendment and restatement of the Credit Facilities of the Company on the Initial Issuance Date;

        (5)   any transaction or issuance costs incurred in connection with actual, proposed or abandoned financings, acquisitions or divestitures; and

        (6)   all other non-cash charges and non-cash write offs of such Person and its Restricted Subsidiaries reducing Consolidated Net Income (excluding any such non-cash charge or write off to the extent that it represents an accrual of or reserve for cash expenditures in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation),

in each case, on a consolidated basis and determined in accordance with GAAP. Notwithstanding the preceding sentence, amounts described in clauses (1), (2), (3), (4), (5) and (6) relating to a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated Cash Flow of such Person only to the extent (and in the same proportion) that such amounts could, at the date of calculation, be dividended or distributed, directly or indirectly, to the Company or a Guarantor.

        "Consolidated Income Taxes" means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such Person or such Person and its Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental authority.

        "Consolidated Interest Coverage Ratio" means with respect to any Person for any four fiscal quarter period, the ratio of the Consolidated Cash Flow of such Person for such period to the Consolidated Interest Expense of such Person for such period; provided, however, that the Consolidated Interest Coverage Ratio shall be calculated giving pro forma effect to each of the following transactions as if each such transaction had occurred at the beginning of the applicable four-quarter reference period:

6

        (1)   any incurrence, assumption, guarantee, repayment, repurchase, defeasance or redemption by such Person or any of its Restricted Subsidiaries of any Indebtedness (other than revolving credit borrowings) subsequent to the commencement of the period for which the Consolidated Interest Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Consolidated Interest Coverage Ratio is made (the "Calculation Date");

        (2)   any acquisition that has been made by such Person or any of its Restricted Subsidiaries, including, through a merger or consolidation, and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date; and

        (3)   any other transaction that may be given pro forma effect in accordance with Article 11 of Regulation S-X as in effect from time to time;

provided further, however, that (A) the Consolidated Cash Flow attributable to operations or businesses disposed of prior to the Calculation Date, shall be excluded and (B) the Consolidated Interest Expense attributable to operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date.

        "Consolidated Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of

        (1)   the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations but excluding amortization of debt issuance costs); and

        (2)   the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period.

        "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP, provided that:

        (1)   the Net Income (or loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be excluded except that Net Income may be included only to the extent of the amount of dividends or distributions paid in cash or declared (and subsequently paid in cash on or prior to the date of calculation) to the referent Person or its Restricted Subsidiaries;

        (2)   the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental ap-

7

proval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders; and

        (3)   the cumulative effect of a change in accounting principles shall be excluded, including, without limitation, any inclusion, charge or write-off with respect to drydocking expenses resulting from any such change.

        "Consolidated Net Tangible Assets" means, as of any date of determination, the total assets, less goodwill and other intangibles (other than patents, trademarks, copyrights, licenses and other intellectual property), net of total liabilities, in each case, as shown on the balance sheet of the Company and its Restricted Subsidiaries for the most recently ended fiscal quarter for which financial statements are available, determined on a consolidated basis in accordance with GAAP.

        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the Initial Issuance Date or (b) was nominated for election to the Board of Directors with the approval of, or whose election to the Board of Directors was ratified by, (i) at least a majority of the Continuing Directors who were members of the Board of Directors at the time of such nomination or election or (ii) any of the Permitted Holders.

        "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 11.02 hereof or such other address as to which the Trustee may give notice to the Company.

        "Credit Facilities" means, with respect to any Person, one or more debt facilities or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or trade letters of credit, in each case as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

        "Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

        "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default.

        "Depository" has the meaning provided in the Appendix.

        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event:

        (1)   matures (excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

        (2)   is convertible or exchangeable for Indebtedness or other Disqualified Stock (excluding Capital Stock which is convertible or exchange solely at the option of the issuer thereof); or

8

        (3)   is redeemable at the option of the holder thereof, in whole or in part,

in each case, on or prior to the date that is 91 days after the date on which the Notes mature or are redeemed or retired in full; provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof (or of any security into which it is convertible or for which it is exchangeable) have the right to require the issuer to repurchase such Capital Stock (or such security into which it is convertible or for which it is exchangeable) upon the occurrence of any of the events constituting an Asset Sale or a Change of Control shall not constitute Disqualified Stock if such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable) provides that the issuer thereof will not repurchase or redeem any such Capital Stock (or any such security into which it is convertible or for which it is exchangeable) pursuant to such provisions prior to compliance by the Company with Section 4.10 or 4.15 of this Indenture, as the case may be.

        "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Exchange Notes" means any substantially identical issue of notes (other than with respect to transfer restrictions) issued in an exchange offer for the Initial Notes or any Additional Notes.

        "Existing Indebtedness" means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Facilities) in existence on the Initial Issuance Date, until such amounts are repaid.

        "Fair Market Value" means, with respect to any Asset Sale or Restricted Payment, the price that would be negotiated in an arm's-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction, as such price is determined in good faith by an officer of the Company (and evidenced by an Officers' Certificate delivered to the Trustee) if such value is less than $7.5 million; provided if the value of such Asset Sale or Restricted Payment is $7.5 million or greater, such determination shall be made in good faith by the Board of Directors of the Company and evidenced by a board resolution delivered to the Trustee in the form of an Officers' Certificate.

        "GAAP" means generally accepted accounting principles in the United States as in effect on the Initial Issuance Date.

        "Global Note" has the meaning provided in the Appendix.

        "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.

        "Guarantor" means (a) each Restricted Subsidiary of the Company named on the signature page hereto, (b) any other Restricted Subsidiary of the Company that executes a supplement to this Indenture in accordance with Section 4.13 or 10.03 hereof and (c) the respective successors and assigns of such Restricted Subsidiaries, as required under Article 10 hereof, in each case until such time as any such

9

Restricted Subsidiary shall be released and relieved of its obligations pursuant to Section 8.02, 8.03, 10.04 or 10.05 hereof.

        "Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

        (1)   interest rate swap agreements, interest rate cap agreements and interest rate collar agreements;

        (2)   other agreements or arrangements designed to protect such Person against fluctuations in interest rates; and

        (3)   any foreign currency futures contract, option or similar agreement or arrangement designed to protect such Person against fluctuations in foreign currency rates,

in each case to the extent such obligations are incurred in the ordinary course of business of such Person.

        "Holder," "Noteholder" or "holder" means a Person in whose name a Note is registered.

        "Indebtedness" means, with respect to any Person, on any date of determination (without duplication),

        (1)   the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;

        (2)   the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

        (3)   the principal component of all obligations of such Person in respect of letters of credit, bankers' acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable and such obligation is satisfied within 90 days of incurrence);

        (4)   the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, the amount of such price being that which would be negotiated in an arm's-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction;

        (5)   Capital Lease Obligations and all Attributable Indebtedness of such Person;

        (6)   the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (but excluding, in each case, any accrued dividends);

10

        (7)   the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of

        (a)   the fair market value of such asset at such date of determination; and

        (b)   the amount of such Indebtedness of such other Persons;

        (8)   the principal component of Indebtedness of other Persons to the extent guaranteed by such Person; and

        (9)   to the extent not otherwise included in this definition, Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the termination value of the agreement or arrangement giving rise to such obligation that would be payable by such Person at such time).

        "Indenture" means this Indenture, as amended or supplemented from time to time.

        "Initial Issuance Date" means August 5, 2003.

        "Initial Notes" means the $150.0 million aggregate principal amount of 9¹/2% Senior Notes Due 2013 issued by the Company on the Initial Issuance Date.

        "Initial Purchasers" has the meaning provided in the Appendix.

        "Institutional Accredited Investor" means an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

        "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees by the referent Person of, and Liens on any assets of the referent Person securing, Indebtedness or other obligations of other Persons), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided, however, that the following shall not constitute Investments:

        (1)   extensions of trade credit or other advances to customers on commercially reasonable terms in accordance with normal trade practices or otherwise in the ordinary course of business;

        (2)   Hedging Obligations; and

        (3)   endorsements of negotiable instruments and documents in the ordinary course of business.

If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to

11

any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in Section 4.07 of this Indenture.

        "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

        "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other than a precautionary financing statement respecting a lease not intended as a security agreement).

        "Moody's" means Moody's Investors Service, Inc. and its successors.

        "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however:

        (1)   any gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to Sale/Leaseback Transactions) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and

        (2)   any extraordinary or nonrecurring gain (or loss), but only to the extent such loss relates to a non-cash charge, together with any related provision for taxes on such extraordinary or nonrecurring gain (or loss).

        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (without duplication):

        (1)   the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, sales commissions, recording fees, title transfer fees, title insurance premiums, appraiser fees and costs incurred in connection with preparing such asset for sale) and any relocation expenses incurred as a result of such Asset Sale;

        (2)   taxes paid or estimated to be payable as a result of the Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);

12

        (3)   amounts required to be applied to the repayment of Indebtedness secured by a Lien on the properties or assets that were the subject of such Asset Sale; and

        (4)   any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets, until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reserved or the amount returned to the Company or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

        "Non-Recourse Debt" means Indebtedness:

        (1)   as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or otherwise) or (b) constitutes the lender;

        (2)   no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) the holders of Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on such Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and

        (3)   with respect to which there is no recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

"Non-Recourse Subsidiaries" means the following Subsidiaries of the Company and any of their Subsidiaries or any of their successors (other than resulting from a merger, consolidation or amalgamation with any Restricted Subsidiary): Kinsman Lines, Inc., Lightship Limited Partner Holdings, LLC, Lightship Tanker Holdings, LLC, Lightship Partners, L.P., Delaware Tanker Holding I Inc., Delaware Tanker Holding II Inc., Delaware Tanker Holding III Inc., Delaware Tanker Holding IV Inc., Delaware Tanker Holding V Inc., Lightship Tankers I LLC, Lightship Tankers II LLC, Lightship Tankers III LLC, Lightship Tankers IV LLC and Lightship Tankers V LLC.

        "Notes" means the Initial Notes, the Exchange Notes, the Private Exchange Notes and the Additional Notes issued under this Indenture.

        "Notes Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

        "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

        "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, any President, the Chief Financial Officer, the Treasurer, the Controller, the Secretary or any Vice-President of such Person.

        "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer,

13

the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 11.05 hereof.

        "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 11.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

        "Pari Passu Indebtedness" means, with respect to any Net Proceeds from Asset Sales, Indebtedness of the Company or a Guarantor that ranks equally in right of payment with the Notes or such Guarantor's Subsidiary Guarantee, as the case may be, and the terms of which require the Company or such Guarantor to apply such Net Proceeds to offer to repurchase such Indebtedness.

        "Permitted Holders" means Nautilus Acquisition, L.P., DLJ Merchant Banking III, Inc., Credit Suisse First Boston Private Equity, Inc., C/R Marine Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine Coinvestment, L.P., C/R Marine Coinvestment II, L.P., Riverstone Holdings L.L.C., The Carlyle Group, their respective Affiliates, and any Persons advised, sponsored, managed or owned directly or indirectly by any of the foregoing Persons or their Affiliates.

        "Permitted Investments" means:

        (1)   any Investment in the Company or in a Restricted Subsidiary of the Company other than a Restricted Subsidiary that is restricted from making dividends or distributions with respect to its Capital Stock owned by the Company or another Restricted Subsidiary other than by operation of applicable law;

        (2)   any Investment in Cash Equivalents;

        (3)   any Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;

        (4)   any Investment made as a result of the receipt of non-cash consideration from (a) an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof or (b) a disposition of properties or assets that does not constitute an Asset Sale;

        (5)   receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

        (6)   Investments in any Person (a) in exchange for an issue or sale by the Company of its Common Stock or (b) out of the net cash proceeds of an issue or sale by the Company of its Common Stock so long as such Investment pursuant to this clause (b) occurs within 90 days of the closing of such issuance or sale of Common Stock;

14

        (7)   loans or advances to employees (other than executive officers) made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary; and

        (8)   Investments in Vessel Financing Subsidiaries and/or in Persons engaged principally in the business of providing marine transportation, towing or support services to the oil, gas and/or chemicals industry or businesses reasonably complementary or related thereto, provided that the aggregate amount of such Investments pursuant to this clause (8) shall not exceed at any one time $25.0 million plus 10% of any increase in the Company's Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available.

        "Permitted Liens" means:

        (1)   Liens securing Indebtedness incurred by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the sum of (A) $100 million plus (B) 25% of any increase in Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available plus (C) any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness;

        (2)   Liens in favor of the Company and its Restricted Subsidiaries;

        (3)   Liens on any property, asset or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company, provided that such Liens were not created or incurred in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary and do not extend to any other property or asset owned by the Company or any of its Restricted Subsidiaries;

        (4)   Liens on any property or asset existing at the time of its acquisition by the Company or any Restricted Subsidiary of the Company, provided that such Liens were not created or incurred in connection with, or in contemplation of, such acquisition and do not extend to any other property or asset;

        (5)   Liens to secure the performance of statutory obligations, surety or appeal bonds, bid or performance bonds, insurance obligations or other obligations of a like nature incurred in the ordinary course of business;

        (6)   Liens securing Hedging Obligations;

        (7)   Liens existing on the Initial Issuance Date;

        (8)   any interest or title of a lessor under an operating lease;

        (9)   Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business;

15

        (10) Liens on real or personal property or assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness incurred for the purpose of (a) financing all or any part of the purchase price of such property or assets incurred prior to, at the time of, or within 180 days after, the acquisition of such property or assets or (b) financing all or any part of the cost of construction of any such property or assets, provided that the amount of any such financing shall not exceed the amount expended in the acquisition of, or the construction of, such property or assets and such Liens shall not extend to any other property or assets of the Company or a Restricted Subsidiary (other than any associated accounts, contracts and insurance proceeds);

        (11) Liens securing Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (3), (4), (7) and (10) above; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property or assets that are the security for a Permitted Lien hereunder; and

        (12) Liens not otherwise permitted by clauses (1) through (11) above securing Indebtedness not in excess, at any one time outstanding, of the sum of $10.0 million plus 10% of the increase in the Company's Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available.

        "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that:

        (1)   the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus premium, if any, and accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith);

        (2)   (a) if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the Notes, the Permitted Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of the Notes, the Permitted Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the Notes;

        (3)   the Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Permitted Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

        (4)   if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes or a Subsidiary Guarantee, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or such Subsidiary Guarantee on terms at least as favorable, taken as a whole, to the holders of Notes as those con-

16

tained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

        (5)   such Indebtedness is not incurred by a Restricted Subsidiary that is not a Guarantor if the Company or a Guarantor is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

        "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

        "Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such Person.

        "Private Exchange Notes" has the meaning provided in the Appendix.

        "Productive Assets" means assets (other than assets that would be classified as current assets in accordance with GAAP) of the kind used or usable by the Company or its Restricted Subsidiaries in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or any business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors).

        "Purchase Agreement" has the meaning provided in the Appendix.

        "QIB" means a "qualified institutional buyer" as defined in Rule 144A under the Securities Act.

        "Qualified Equity Offering" means:

        (1)   any sale of Equity Interests (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act; or

        (2)   any sale of Equity Interests (other than Disqualified Stock) of the Company so long as, at the time of consummation of such sale, the Company has a class of common equity securities registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act,

in each case, other than public offerings with respect to the Company's Common Stock, or options, warrants or rights, registered on Form S-4 or S-8.

"Qualified Proceeds" means any of the following or any combination of the following:

        (1)   cash;

        (2)   Cash Equivalents;

        (3)   Productive Assets; and

17

        (4)   the Capital Stock of any Person engaged in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or any business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors) if, in connection with the receipt by the Company or any Restricted Subsidiary of the Company of that Capital Stock:

        (a)   that Person becomes a Restricted Subsidiary of the Company or any Restricted Subsidiary of the Company; or

        (b)   that Person is merged, consolidated or amalgamated with or into, or conveys or otherwise transfers substantially all of its assets to, or is liquidated into, the Company or any Restricted Subsidiary of the Company.

        "Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.

"Ready for Sea Cost" means with respect to a Vessel or Vessels to be acquired or leased (pursuant to a Capital Lease Obligation) by the Company or any Restricted Subsidiary of the Company, the aggregate amount of all expenditures incurred to acquire or construct and bring such Vessel or Vessels to the condition and location necessary for its or their intended use, including any and all inspections, appraisals, repairs, modifications, additions, permits and licenses in connection with such acquisition or lease, which would be classified and accounted for as "property, plant and equipment" in accordance with GAAP.

        "Reference Treasury Dealer" means Credit Suisse First Boston LLC and its successors and assigns, and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers.

        "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.

        "Registered Exchange Offer" has the meaning provided in the Appendix.

        "Registration Rights Agreement" has the meaning provided in the Appendix.

        "Regulation S" has the meaning provided in the Appendix.

        "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Department of the Trustee (or any successor department of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

        "Restricted Global Note" has the meaning provided in the Appendix.

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        "Restricted Investment" means an Investment other than a Permitted Investment.

        "Restricted Subsidiary" of a Person means any Subsidiary of such Person that is not an Unrestricted Subsidiary.

"Restricted U.S. Subsidiary" means any Restricted Subsidiary organized under the laws of the United States, any state thereof or the District of Columbia.

        "Rule 144A" has the meaning provided in the Appendix.

        "Sale/Leaseback Transaction" means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Initial Issuance Date or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person.

        "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

        "SEC" means the Securities and Exchange Commission.

        "Securities Act" means the Securities Act of 1933, as amended.

        "Shelf Registration Statement" has the meaning provided in the Appendix.

        "Significant Subsidiary" means any Restricted Subsidiary of the Company that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Initial Issuance Date.

        "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal is scheduled to be paid in the documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to such date.

        "Subsidiary" means, with respect to any Person:

        (1)   any corporation, association or other business entity of which more than 50% of the total voting power of its Voting Stock is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

        (2)   any partnership, joint venture, limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof).

        "Subsidiary Guarantees" means the joint and several guarantees issued by all of the Guarantors pursuant to Article 10 hereof.

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        "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules and regulations thereunder, as in effect on the date on which this Indenture is qualified under the TIA (except as provided in Section 9.01(i) and 9.03 hereof).

        "Transfer Restricted Securities" has the meaning provided in the Appendix.

        "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

        "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time.

        "Unrestricted Subsidiary" means (a) each Non-Recourse Subsidiary (until redesignated as a Restricted Subsidiary) and (b) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and any Subsidiary of an Unrestricted Subsidiary, but only to the extent that each of such Subsidiary and its Subsidiaries at the time of such designation:

        (1)   has no Indebtedness other than Non-Recourse Debt;

        (2)   is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless such agreement, contract, arrangement or understanding does not violate the terms of this Indenture described in Section 4.11 hereof;

        (3)   is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results, in each case, except to the extent otherwise permitted by this Indenture; and

        (4)   such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries.

Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the board resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by Section 4.07 hereof. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if:

        (A)  such Indebtedness is permitted by Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and

        (B)  no Default or Event of Default would be in existence following such designation.

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        "U.S. Dollar Equivalent" means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the "Exchange Rates" column under the heading "Currency Trading" on the date two Business Days prior to such determination. Except as described in Section 4.09 herein, whenever it is necessary to determine whether the Company has complied with any covenant in this Indenture or a Default has occurred and an amount is expressed in a currency other than U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially determined in such currency.

"Vessel" means one or more shipping vessels whose primary purpose is the maritime transportation of cargo and/or passengers or which are otherwise engaged, used or useful in any business activities of the Company and its Restricted Subsidiaries and which are owned by and registered (or to be owned by and registered) in the name of the Company or any of its Restricted Subsidiaries or operated or to be operated by the Company or any of its Restricted Subsidiaries pursuant to a lease or other operating agreement constituting a Capital Lease Obligation, in each case together with all related spares, equipment and any additions or improvements.

"Vessel Financing Subsidiary" means a Restricted Subsidiary whose primary purpose is to purchase Vessels and which has incurred Indebtedness to finance all or a portion of such assets, provided that neither the Company nor any Guarantor issues a guarantee of or is otherwise obligated with respect to any such Indebtedness of such Restricted Subsidiary.

        "Voting Stock" of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of such Person.

        "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing

        (1)   the sum of the products obtained by multiplying

        (a)   the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by

        (b)   the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by

        (2)   the then outstanding principal amount of such Indebtedness.

        "Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary of such Person, all of the Capital Stock of which (other than directors' qualifying shares) is owned by the Company or another Wholly Owned Restricted Subsidiary.

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Section 1.02    Other Definitions.

Term	Defined in Section
"Affiliate Transaction"	4.11
"Appendix"	2.01
"Asset Sale Offer"	3.09
"Change of Control Offer"	4.15
"Change of Control Payment"	4.15
"Change of Control Payment Date"	4.15
"Covenant Defeasance"	8.03
"Discharge"	8.08
"Event of Default"	6.01
"Excess Proceeds"	4.10
"incur" or "incurrence"	4.09
"Legal Defeasance"	8.02
"Offer Amount"	3.09
"Offer Period"	3.09
"Pari Passu Notes"	4.10
"Paying Agent"	2.03
"Payment Default"	6.01
"Purchase Date"	3.09
"Registrar"	2.03
"Restricted Payments"	4.07
"Total Loss"	4.09

Section 1.03    Incorporation by Reference of Trust Indenture Act.

        Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. Any terms incorporated in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.04    Rules of Construction.

        Unless the context otherwise requires:

        (1)   a term has the meaning assigned to it;

        (2)   an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

        (3)   "or" is not exclusive;

        (4)   words in the singular include the plural, and in the plural include the singular;

        (5)   provisions apply to successive events and transactions;

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        (6)   references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time; and

        (7)   "herein," "hereof" and other words of similar import refer to this Indenture as a whole (as amended or supplemented from time to time) and not to any particular Article, Section or other subdivision.

ARTICLE 2

THE NOTES

Section 2.01    Form and Dating.

        Provisions relating to the Initial Notes, the Private Exchange Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix") which is hereby incorporated in and expressly made part of this Indenture. The Initial Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Notes, the Private Exchange Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A to the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its authentication. The terms of the Notes set forth in the Appendix are part of the terms of this Indenture.

Section 2.02    Execution and Authentication.

        An Officer shall sign the Notes for the Company by manual or facsimile signature.

        If the Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

        A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

        On the Initial Issuance Date, the Trustee shall authenticate and deliver $150.0 million of 9¹/2% Senior Notes due 2013 and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Notes for original issue in an aggregate principal amount specified in such order, in each case upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of an issuance of Additional Notes pursuant to Section 2.13 after the Initial Issuance Date, shall certify that such issuance is in compliance with Section 4.09.

        The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Notes. Unless limited by the terms of such appointment, an authenticating agent may

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authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

Section 2.03    Registrar and Paying Agent.

        The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Notes may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent.

        The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any Wholly Owned Subsidiary incorporated or organized within The United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent.

        The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Notes.

Section 2.04    Paying Agent To Hold Money in Trust.

        Prior to 11:00 a.m. New York City time, on each due date of the principal and interest on any Note, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Noteholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.

Section 2.05    Noteholder Lists.

        The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Noteholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Noteholders.

Section 2.06    Transfer and Exchange.

        The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer. When a Note is presented to the Registrar or a co-registrar

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with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform Commercial Code are met. When Notes are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. The Company may require payment of a sum sufficient to cover any taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Section 3.06, 4.10, 4.15 or 9.05).

Section 2.07    Replacement Notes.

        If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Note.

        Every replacement Note is an additional obligation of the Company.

Section 2.08    Outstanding Notes.

        Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

        If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser.

        If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m. New York time, on a redemption date or other maturity date money sufficient to pay all principal, premium, if any, interest and Additional Interest, if any, payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest and Additional Interest, if any, on them cease to accrue.

Section 2.09    Temporary Notes.

        Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay upon surrender for cancellation of any one or more temporary Notes, the Company shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.

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Section 2.10    Cancellation.

        The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Notes surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver canceled Notes to the Company. The Company may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation.

Section 2.11    Defaulted Interest.

        If the Company defaults in a payment of interest on the Notes, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Noteholders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Noteholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

Section 2.12    CUSIP Numbers.

        The Company in issuing the Notes may use "CUSIP" numbers and corresponding "ISINs" (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers and corresponding "ISINs" in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers.

Section 2.13    Issuance of Additional Notes.

        The Company shall be entitled, subject to its compliance with Section 4.09, to issue Additional Notes under this Indenture which shall have identical terms as the Initial Notes issued on the Initial Issuance Date, other than with respect to the date of issuance and issue price; provided, however, that such Officers' Certificate shall state that no Additional Notes may be issued at a price that would cause such Additional Notes to have "original issue discount" within the meaning of Section 1273 of the Code. The Initial Notes issued on the Initial Issuance Date, any Additional Notes and all Exchange Notes or Private Exchange Notes issued in exchange therefor shall be treated as a single class for all purposes under this Indenture.

        With respect to any Additional Notes, the Company shall set forth in a resolution of the Board of Directors and an Officers' Certificate, a copy of each which shall be delivered to the Trustee, the following information:

        (1)   the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;

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        (2)   the issue price, the issue date and the CUSIP number and corresponding ISIN of such Additional Notes; and

        (3)   whether such Additional Notes shall be Transfer Restricted Securities and issued in the form of Initial Notes as set forth in Exhibit 1 to the Appendix to this Indenture or shall be issued in the form of Exchange Notes as set forth in Exhibit A to the Appendix.

ARTICLE 3

REDEMPTION AND PREPAYMENT

Section 3.01    Notices to Trustee.

        If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of Section 3.07 pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price, and (v) whether it requests the Trustee to give notice of such redemption. Any such notice may be cancelled at any time prior to the mailing of notice of such redemption to any Holder and shall thereby be void and of no effect.

Section 3.02    Selection of Notes To Be Redeemed.

        If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that no Notes of $1,000 or less shall be redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 days nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.

        The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

        The provisions of the two preceding paragraphs of this Section 3.02 shall not apply with respect to any redemption affecting only a Global Note, whether such Global Note is to be redeemed in whole or in part. In case of any such redemption in part, the unredeemed portion of the principal amount of the Global Note shall be in an authorized denomination.

Section 3.03    Notice of Redemption.

        Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.

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        The notice shall identify the Notes to be redeemed and shall state:

        (a)   the redemption date;

        (b)   the redemption price;

        (c)   if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in a principal amount equal to the unredeemed portion shall be issued in the name of the Holder upon cancellation of the original Note;

        (d)   the name and address of the Paying Agent;

        (e)   that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

        (f)    that, unless the Company defaults in making such redemption payment, interest and Additional Interest, if any, on Notes called for redemption cease to accrue on and after the redemption date and the only remaining right of the Holders of such Notes is to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed;

        (g)   the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and

        (h)   that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

        If any of the Notes to be redeemed is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to redemption.

        At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days (unless the Company and the Trustee agree to a shorter period) prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the second preceding paragraph.

Section 3.04    Effect of Notice of Redemption.

        Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional.

Section 3.05    Deposit of Redemption Price.

        Prior to 11:00 a.m. New York time on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.04 hereof) money sufficient in same day funds to pay the redemption price of

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and accrued interest and Additional Interest, if any, on all Notes to be redeemed on that date. The Paying Agent shall promptly return to the Company any money deposited with the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of and accrued interest and Additional Interest, if any, on all Notes to be redeemed.

        If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest and Additional Interest, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption whether or not such Notes are presented for payment, and the only remaining right of the Holders of such Notes shall be to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest and Additional Interest, if any, shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful, on any interest and Additional Interest, if any, not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06    Notes Redeemed in Part.

        Upon surrender of a Note that is redeemed in part, the Company shall issue in the name of the Holder and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

Section 3.07    Optional Redemption.

        (a)   Except as set forth in clauses (b) and (c) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to August 15, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on August 15 of the years indicated below:

Year	Percentage
2008	104.750%
2009	103.167%
2010	101.583%
2011 and thereafter	100.00%

        (b)   Notwithstanding the provisions of clause (a) of this Section 3.07, at any time on or prior to August 15, 2006, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 109.5% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that:

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        (1)   at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption; and

        (2)   each such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering.

        (c)   Prior to August 15, 2008, the Company may at its option redeem, in whole or in part, the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date.

        (d)   Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through Section 3.06 hereof.

        (e)   If the optional redemption date is on or after an interest payment record date and on or before the related interest payment date, the accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name the Note is registered at the close of business, on such record date, and no other interest will be payable to holders whose Notes will be subject to redemption by the Company.

Section 3.08    Mandatory Redemption.

        Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes at the option of the holders.

Section 3.09    Offer To Purchase by Application of Excess Proceeds.

        In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"), it shall follow the procedures specified below.

        The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Notes validly tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

        If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest or Additional Interest, if any, shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

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        Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

        (a)   that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

        (b)   the Offer Amount, the purchase price and the Purchase Date;

        (c)   that any Note not tendered or accepted for payment shall continue to accrue interest and Additional Interest, if any;

        (d)   that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest and Additional Interest, if any, after the Purchase Date;

        (e)   that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;

        (f)    that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Company or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

        (g)   that Holders shall be entitled to withdraw their election if the Company or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

        (h)   that, if the aggregate principal amount of Notes surrendered by Holders, and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and

        (i)    that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

        If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to repurchases.

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        On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment Notes or portions thereof tendered pursuant to the Asset Sale Offer in the aggregate principal amount required by Section 4.10 hereof, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09 and Section 4.10. The Company or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date.

        Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Section 3.01 through Section 3.06 hereof.

ARTICLE 4

COVENANTS

Section 4.01    Payment of Notes.

        The Company shall pay or cause to be paid the principal of, premium, if any, interest and Additional Interest, if any, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, interest and Additional Interest, if any, shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m. New York time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, interest and Additional Interest, if any, then due.

        The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest, if any (without regard to any applicable grace period), at the same rate to the extent lawful.

Section 4.02    Maintenance of Office or Agency.

        The Company shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

        The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time

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rescind such designations. Further, if at any time there shall be no such office or agency in the City of New York where the Notes may be presented or surrendered for payment, the Company shall forthwith designate and maintain such an office or agency in the City of New York, in order that the Notes shall at all times be payable in the City of New York. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

        The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03.

Section 4.03    Reports.

        (a)   Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC (unless the SEC will not accept such a filing) within the time periods specified in the Exchange Act and, within 15 days of filing, or attempting to file, the same with the SEC, furnish to the Trustee and the holders of the Notes:

        (1)   all quarterly and annual financial and other information with respect to the Company and its Subsidiaries that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants; and

        (2)   all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. The Company shall at all times comply with TIA Section 314(a).

        (b)   The Company and the Guarantors shall furnish to the holders of the Notes, prospective purchasers of the Notes and securities analysts, upon their request, the information, if any, required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

        (c)   The quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management's Discussion and Analysis of Results of Operations and Financial Condition, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of any Unrestricted Subsidiaries.

Section 4.04    Compliance Certificate.

        (a)   The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the

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terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

        (b)   So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation.

        (c)   The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

Section 4.05    Taxes.

        The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06    Stay, Extension and Usury Laws.

        Each of the Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07    Limitation on Restricted Payments.

        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

        (1)   declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company

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or any of its Restricted Subsidiaries) or make any similar payment to the direct or indirect holders of the Company's Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company);

        (2)   purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company);

        (3)   make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated to the Notes or any Subsidiary Guarantee, except a payment of interest at Stated Maturity or principal within six months of Stated Maturity; or

        (4)   make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment:

        (a)   no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

        (b)   the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and

        (c)   such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Initial Issuance Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8), but including, without duplication, Restricted Payments permitted by clauses (1), (5) and (9), of the next succeeding paragraph and clause (6)(b) of the definition of "Permitted Investment"), is less than the sum of:

        (A)  50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from October 1, 2003 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

        (B)  the sum of (x) 100% of the aggregate net cash proceeds received by the Company since the Initial Issuance Date from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than (1) any such Equity Interests, Disqualified Stock or convertible debt securities sold to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the

35

Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination and (2) Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock) and (y) 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Initial Issuance Date; plus

        (C)  to the extent that any Restricted Investment that was made after the Initial Issuance Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (1) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (2) the initial amount of such Restricted Investment; plus

        (D)  in the event that any Unrestricted Subsidiary is designated as a Restricted Subsidiary, the lesser of (1) an amount equal to the Fair Market Value of the Company's Investments in such Restricted Subsidiary if such Restricted Subsidiary was designated as an Unrestricted Subsidiary after the Initial Issuance Date, or the Fair Market Value of the Company's Investments made after the Initial Issuance Date with respect to an Unrestricted Subsidiary as of the Initial Issuance Date and (2) the amount of Restricted Investments previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary.

        The preceding provisions of this Section 4.07 will not prohibit any of the following:

        (5)   the payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

        (6)   the redemption, repurchase, retirement, defeasance or other acquisition of any Indebtedness subordinated to the Notes or a Subsidiary Guarantee or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock and other than Equity Interests issued or sold to a Subsidiary of the Company or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination), provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (4)(c)(B) of the preceding paragraph;

        (7)   the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness subordinated to the Notes or the Subsidiary Guarantees with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;

        (8)   the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the Company or any of its Restricted Subsidiaries (and if such Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other holders of its Capital Stock on a pro rata basis);

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        (9)   the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former employee or director of the Company or any of its Restricted Subsidiaries, provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $2.0 million in any calendar year provided that any such amount not so utilized in a calendar year may be carried over to the subsequent calendar year, provided, however, that the aggregate amount utilized pursuant to this clause (5) shall not exceed $5.0 million in any calendar year;

        (10) the acquisition of Equity Interests of the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;

        (11) so long as no Default or Event of Default has occurred and is continuing, any purchase or redemption of Indebtedness subordinated to the Notes or the Subsidiary Guarantees from Net Proceeds from an Asset Sale to the extent permitted by Section 4.10 hereof after the Company (or a Restricted Subsidiary, as the case may be) has made an offer to the holders of the Notes to purchase the Notes pursuant to such covenant;

        (12) the pledge by the Company or any Restricted Subsidiary of the Capital Stock of an Unrestricted Subsidiary to secure Non-Recourse Debt of that Unrestricted Subsidiary; or

        (13) other Restricted Payments since the Initial Issuance Date in an amount not to exceed $15.0 million.

        In addition to the Unrestricted Subsidiaries as of the Initial Issuance Date, the Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary after the Initial Issuance Date if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated shall be deemed to be Restricted Payments at the time of such designation. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the Fair Market Value of such Investments at the time of such designation. Such designation shall only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

        The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any non-cash Restricted Payment shall be evidenced by an Officers' Certificate delivered to the Trustee. Not later than five Business Days following the date of making any Restricted Payment (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the second preceding paragraph), the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed.

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Section 4.08    Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.

        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

        (1)   (a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or (b) pay any Indebtedness or other obligations owed to the Company or any of its Restricted Subsidiaries;

        (2)   make loans or advances to the Company or any of its Restricted Subsidiaries; or

        (3)   transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries,

except for such encumbrances or restrictions existing under or by reason of:

        (a)   the Credit Facilities or any instrument governing Existing Indebtedness, each as in effect on the Initial Issuance Date;

        (b)   this Indenture, the Notes and the Subsidiary Guarantees;

        (c)   applicable law;

        (d)   any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

        (e)   by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;

        (f)    any mortgages, pledges or other security agreements permitted under the Indenture securing Indebtedness of the Company or a Restricted Subsidiary to the extent the encumbrances or restrictions they contain restrict the transfer of the properties or assets subject to such mortgages, pledges or other security agreements;

        (g)   purchase money obligations for properties or assets acquired in the ordinary course of business and Capital Lease Obligations permitted under this Indenture, in each case, that impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this Section 4.08 on the properties or assets so acquired;

        (h)   any encumbrance or restriction with respect to a Restricted Subsidiary (or any of its properties or assets) imposed pursuant to an agreement entered into for the direct or indirect

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sale or disposition of all or substantially all the Capital Stock or properties or assets of such Restricted Subsidiary (or the properties or assets that are subject to such restriction) pending the closing of such sale or disposition;

        (i)    customary provisions in bona fide contracts for the sale of properties or assets;

        (j)    customary provisions in joint venture agreements and similar agreements that restrict the transfer of interests in the joint venture;

        (k)   any encumbrance or restriction applicable only to Vessel Financing Subsidiaries and/or Foreign Subsidiaries; or

        (l)    Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (a), (b) and (d) above, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced.

Section 4.09    Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.

        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur" or an "incurrence") any Indebtedness, and the Company will not, and will not permit any Guarantor to, issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries that are not Guarantors to issue any shares of Preferred Stock; provided, however, that so long as no Default or Event of Default has occurred and is continuing the Company and any Guarantor may incur Indebtedness and issue Disqualified Stock, if the Consolidated Interest Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred at the beginning of such four-quarter period.

        The foregoing provisions shall not apply to:

        (1)   the incurrence by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the sum of (A) $100.0 million plus (B) 25% of any increase in Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are available plus (C) any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness;

        (2)   the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;

        (3)   the incurrence by the Company and its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculation;

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        (4)   the incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes (other than Additional Notes), the Subsidiary Guarantees thereof and this Indenture;

        (5)   guarantees by the Guarantors of Indebtedness incurred in accordance with the provisions of the Indenture;

        (6)   the incurrence of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, provided that any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company, or any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company, shall be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be; provided, however:

        (a)   if the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes;

        (b)   if a Guarantor is the obligor on such Indebtedness and the Company or a Guarantor is not the obligee, such Indebtedness is expressly subordinated in right of payment to the Subsidiary Guarantee of such Guarantor;

        (7)   Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary thereof in the ordinary course of business, including, without limitation, guarantees or obligations of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);

        (8)   the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by this Indenture to be incurred (other than pursuant to clause (1), (3), (5), (6), (7), (9), (11), (12), (13) and (14) of this Section 4.09);

        (9)   the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations with respect to assets (other than Capital Stock or other Investments except in the case where the issuer thereof will become a Restricted Subsidiary of the Company in connection with the relevant transactions), in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvements of property used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount (together with Permitted Refinancing Indebtedness incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, such Indebtedness or any such Permitted Refinancing Indebtedness) not to exceed $20.0 million at any time outstanding;

        (10) Indebtedness of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness in-

40

curred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the preceding paragraph after giving effect to the incurrence of such Indebtedness pursuant to this clause (10);

        (11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary;

        (12) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of incurrence;

        (13) Indebtedness of the Company or any Restricted Subsidiary incurred to finance the replacement (through construction or acquisition) of one or more Vessels, upon a total loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other involuntary taking of title to or use of such Vessel (provided that such loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other involuntary taking of title to or use of such Vessel was covered by insurance or resulted in the actual payment of compensation, indemnification or similar payments to such Person (collectively, a "Total Loss")) in an aggregate amount no greater than the Ready for Sea Cost for such replacement Vessel, in each case less all compensation, damages and other payments (including insurance proceeds other than in respect of business interruption insurance) actually received by the Company or any Restricted Subsidiary from any Person in connection with the Total Loss in excess of amounts actually used to repay Indebtedness secured by the Vessel subject to the Total Loss; and

        (14) in addition to the items referred to in clauses (1) through (13) above, Indebtedness of the Company and the Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness incurred pursuant to this clause (14) and then outstanding, will not exceed $25.0 million at any one time outstanding.

        The Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be.

        For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with this Section 4.09:

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        (15) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this Section 4.09, the Company, in its sole discretion, will classify such item of Indebtedness on the date of incurrence (or later classify or reclassify such Indebtedness, in its sole discretion) and only be required to include the amount and type of such Indebtedness in one of such clauses;

        (16) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

        (17) the principal amount of any Disqualified Stock of the Company or a Guarantor will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

        (18) Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and

        (19) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

        Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (b) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

        In addition, the Company will not permit any of its Unrestricted Subsidiaries to incur any Indebtedness (other than Non-Recourse Debt) or issue any shares of Disqualified Stock. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in Default of this Section 4.09).

        For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal

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amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies.

Section 4.10    Limitation on Asset Sales.

        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale (excluding for this purpose an Asset Sale connected with a Total Loss) unless:

        (a)   the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (provided such Fair Market Value shall be determined on the date of contractually agreeing to such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; and

        (b)   at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of Qualified Proceeds; provided, however, that the amount of (a) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet) of the Company or such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability shall be deemed to be cash for purposes of this Section 4.10 and (b) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) shall be deemed to be cash for purposes of this Section 4.10.

        Within 365 days after the receipt of any Net Proceeds from an Asset Sale (including, without limitation, an Asset Sale connected with a Total Loss), the Company or any such Restricted Subsidiary may apply such Net Proceeds to:

        (1)   permanently repay the principal of any Indebtedness of the Company or any Guarantor ranking in right of payment at least equally with the Notes or the Subsidiary Guarantees, as the case may be;

        (2)   to the extent such Net Proceeds are derived from Asset Sales of properties or assets of a Restricted Subsidiary that is not a Guarantor, to repay the principal of any Indebtedness of such Restricted Subsidiary; or

        (3)   to acquire (including by way of a purchase of assets or stock, merger, consolidation or otherwise) Productive Assets.

Pending the final application of any such Net Proceeds, the Company or any such Restricted Subsidiary may temporarily reduce outstanding revolving credit borrowings, including borrowings under the Credit Facilities, or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph shall be deemed to constitute "Excess Proceeds."

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        On the 366th day after the Asset Sale (or, at the Company's option, such earlier date), if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be required to make an offer (an "Asset Sale Offer") pursuant to Section 3.09 hereof to all holders of Notes and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, in accordance with the procedures set forth in Section 3.09 hereof or the agreements governing the Pari Passu Notes, as applicable, in each case in integral multiples of $1,000. To the extent that the aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount that the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by holders thereof and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount that the Company is required to repurchase, the Notes and Pari Passu Notes shall be purchased pro rata on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.

        If the Asset Sale purchase date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no other interest will be payable to holders who tender Notes pursuant to the Asset Sale Offer.

        The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of any conflict.

Section 4.11    Limitation on Transactions with Affiliates.

        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any properties or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:

        (1)   such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary in arm's-length dealings with an unrelated Person or, if there is no such comparable transaction, on terms that are fair and reasonable to the Company or such Restricted Subsidiary; and

        (2)   the Company delivers to the Trustee:

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        (a)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $7.5 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

        (b)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, a written opinion as to the fairness to the Company or the relevant Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm that is, in the judgment of the Board of Directors, qualified to render such opinion and is independent with respect to the Company,

provided, however, that the following shall be deemed not to be Affiliate Transactions:

        (A)  any employment agreement or other employee compensation plan or arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business of the Company or such Restricted Subsidiary;

        (B)  transactions between or among the Company and its Restricted Subsidiaries;

        (C)  Permitted Investments and Restricted Payments that are permitted by the provisions of this Indenture;

        (D)  loans or advances to officers, directors and employees of the Company or any Restricted Subsidiary made in the ordinary course of business and consistent with past practices of the Company and its Restricted Subsidiaries in an aggregate amount not to exceed $500,000 outstanding at any one time;

        (E)  indemnities of officers, directors and employees of the Company or any Restricted Subsidiary permitted by bylaw or statutory provisions;

        (F)  the payment of reasonable and customary regular fees to directors of the Company or any of its Restricted Subsidiaries who are not employees of the Company or any Subsidiary; and

        (G)  the sale or issuance to any Affiliate of any Equity Interests in the Company other than Disqualified Stock; and

        (H)  the payment of reasonable and customary fees or commissions to the Permitted Holders for investment banking or other financial services.

Section 4.12    Limitation on Liens.

        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any property or asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except Permitted Liens, to secure (a) any Indebtedness of the Company, unless prior to, or con-

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temporaneously therewith, the Notes are equally and ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary Guarantee of such Guarantor is equally and ratably secured; provided, however, that if such Indebtedness is expressly subordinated to the Notes or a Subsidiary Guarantee, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the Notes or such Subsidiary Guarantee, as the case may be, with the same relative priority as such Indebtedness has with respect to the Notes or such Subsidiary Guarantee.

Section 4.13    Additional Subsidiary Guarantees.

        (a)   If, after the Initial Issuance Date:

        (1)   the Company or any of its Restricted Subsidiaries shall acquire or create another Restricted U.S. Subsidiary other than a Vessel Financing Subsidiary, or

        (2)   a Restricted Subsidiary shall provide a guarantee of any Indebtedness of the Company or a Guarantor (other than Indebtedness under Credit Facilities), then such newly acquired or created Restricted U.S. Subsidiary, in the case of clause (1) above, or such Restricted Subsidiary described in clause (2) above, in the case of clause (2) above, shall execute a supplement to this Indenture substantially in the form of Annex A hereto providing for a Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with the terms of Section 9.06 of this Indenture.

        (b)   Within 60 days of the Initial Issuance Date, the Company shall cause its Restricted Subsidiary, Seabulk Towing, Inc., a Delaware corporation ("Towing") to either (1) remove or waive any restrictions imposed on Towing under the terms of any Indebtedness of Towing that would prevent Towing from becoming a Subsidiary Guarantor under this Indenture or (2) redeem or otherwise retire such Indebtedness. As soon as practicable following the earlier of the actions described in (1) or (2) but in any event on or prior to 60 days of the Initial Issuance Date, Towing shall execute a supplement to this Indenture substantially in the form of Annex A hereto providing for its Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with the terms of Section 9.06 of this Indenture.

Section 4.14    Corporate Existence.

        Except as otherwise permitted pursuant to the terms hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with its respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; provided, however, that the Company shall not be required to preserve the existence of any of its Restricted Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole and that the loss thereof is not adverse in any material respect to the Holders of the Notes.

Section 4.15    Offer To Repurchase Upon Change of Control.

        (a)   Upon the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at an offer price in cash equal to 101% of the aggregate principal amount, plus

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accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (the "Change of Control Payment"). Within 30 days following a Change of Control, the Company shall mail a notice to each Holder and the Trustee describing the transaction that constitutes the Change of Control and stating:

        (1)   that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes validly tendered and not withdrawn will be accepted for payment;

        (2)   the purchase price and the purchase date, which shall be no earlier than 30 days but no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date");

        (3)   that any Note not tendered will continue to accrue interest and Additional Interest, if any;

        (4)   that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest and Additional Interest, if any, after the Change of Control Payment Date;

        (5)   that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, properly endorsed for transfer, together with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed and such customary documents as the Company may reasonably request, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

        (6)   that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased;

        (7)   that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof, and

        (8)   if the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no other interest will be payable to holders who tender pursuant to the Change of Control Offer.

If any of the Notes subject to a Change of Control Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to repurchases. Further, the Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change of Control.

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        (b)   On or before 11:00 a.m. New York time on the Change of Control Payment Date, the Company shall, to the extent lawful:

        (1)   accept for payment all Notes or portions thereof (in integral multiples of $1,000) properly tendered pursuant to the Change of Control Offer;

        (2)   deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

        (3)   deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

The Paying Agent shall promptly mail to each holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, however, that each such new Note will be in a principal amount of $1,000 or an integral multiple of $1,000. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

        (c)   The Change of Control provisions described above shall be applicable whether or nor any other provisions of this Indenture are applicable.

        (d)   The Company shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the time and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

        (e)   To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in this Indenture by virtue of the conflict.

Section 4.16    No Inducements.

        The Company shall not, and the Company shall not permit any of its Subsidiaries, either directly or indirectly, to pay (or cause to be paid) any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver, amendment or supplement of any terms or provisions of this Indenture or the Notes, unless such consideration is offered to be paid (or agreed to be paid) to all Holders which so consent, waive or agree to amend or supplement in the time frame set forth on solicitation documents relating to such consent, waiver or agreement.

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ARTICLE 5

SUCCESSORS

Section 5.01    Merger, Consolidation, or Sale of Assets.

        The Company shall not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person, unless:

        (a)   the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state or the District of Columbia;

        (b)   the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

        (c)   immediately after such transaction no Default or Event of Default exists;

        (d)   except in the case of a merger of the Company with or into a Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and

        (e)   the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.

        For purposes of this covenant, the sale, assignment, transfer, lease, conveyance, or other disposition of all or substantially all of the properties or assets of one or more Subsidiaries of the Company, which properties or assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties or assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties or assets of the Company.

Section 5.02    Successor Corporation Substituted.

        Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole in accordance with Section 5.01 hereof, the successor corporation formed

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by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein; and thereafter, if the Company is dissolved following a transfer of all or substantially all of its assets in accordance with this Indenture, the Company shall be discharged and released from all obligations and covenants under this Indenture and the Notes. The Trustee shall enter into a supplemental indenture to evidence the succession and substitution of such successor Person and such discharge and release of the Company.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01    Events of Default.

        An "Event of Default" occurs if one of the following shall have occurred and be continuing:

        (a)   the Company defaults in the payment when due of interest or Additional Interest, if any, with respect to, the Notes, and such default continues for a period of 30 days;

        (b)   the Company defaults in the payment of the principal of or premium, if any, on the Notes when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

        (c)   the Company fails for 30 days after notice to comply with the provisions of Section 4.10 (other than a failure to repurchase Notes when due), 4.15 or 5.01 hereof;

        (d)   the Company fails to comply with any other covenant or other agreement in this Indenture or the Notes for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding of such failure;

        (e)   a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the Initial Issuance Date, which default:

        (1)   is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a "Payment Default"); or

        (2)   results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment

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Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million; and provided, further, that if such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;

        (f)    the Company or any of its Restricted Subsidiaries fails to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days;

        (g)   any Guarantor fails to perform any covenant set forth in its Subsidiary Guarantee or repudiates its obligations under its Subsidiary Guarantee, or any Subsidiary Guarantee becomes unenforceable against a Guarantor for any reason; and

        (h)   the Company, any Guarantor or any Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

        (i)    commences a voluntary case,

        (ii)   consents to the entry of an order for relief against it in an involuntary case,

        (iii)  consents to the appointment of a Custodian of it or for all or substantially all of its property,

        (iv)  makes a general assignment for the benefit of its creditors, or

        (v)   admits in writing it generally is not paying its debts as they become due; or

        (i)    a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

        (i)    is for relief against the Company, any Guarantor or any Significant Subsidiary in an involuntary case;

        (ii)   appoints a Custodian of the Company, any Guarantor or any Significant Subsidiary or for all or substantially all of the property of the Company, or any Significant Subsidiary; or

        (iii)  orders the liquidation of the Company, any Guarantor or any Significant Subsidiary;

        and the order or decree remains unstayed and in effect for 60 consecutive days.

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Section 6.02    Acceleration.

        If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the preceding, if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the Company or any Significant Subsidiary, all outstanding Notes shall become due and payable without further action or notice. The Holders of a majority in principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except with respect to nonpayment of principal, interest, premium or Additional Interest, if any, that have become due solely because of the acceleration) have been cured or waived.

        If an Event of Default occurs by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

Section 6.03    Other Remedies.

        If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of and premium, interest and Additional Interest, if any, on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

        The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04    Waiver of Past Defaults.

        Holders of a majority in principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of or premium, interest or Additional Interest, if any, on the Notes (including in connection with an offer to purchase). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05    Control by Majority.

        Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may subject the Trustee to personal liability.

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Section 6.06    Limitation on Suits.

        A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:

        (a)   the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;

        (b)   the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

        (c)   such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;

        (d)   the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and

        (e)   during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07    Rights of Holders of Notes To Receive Payment.

        Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of and premium, interest and Additional Interest, if any, on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08    Collection Suit by Trustee.

        If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, interest and Additional Interest, if any, remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and Additional Interest, if any, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09    Trustee May File Proofs of Claim.

        The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive

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and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents, counsel and advisors and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents, counsel and advisors and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10    Priorities.

        If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order:

        First: to the Trustee, its agents, attorneys and advisors for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the Trustee's costs and expenses of collection;

        Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, interest and Additional Interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, interest and Additional Interest, if any, respectively; and

        Third: to the Company or to such party as a court of competent jurisdiction shall direct.

        The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11    Undertaking for Costs.

        In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

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ARTICLE 7

TRUSTEE

Section 7.01    Duties of Trustee.

        (a)   If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

        (b)   Except during the continuance of an Event of Default:

        (i)    the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

        (ii)   in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

        (c)   The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

        (i)    this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

        (ii)   the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

        (iii)  the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

        (d)   Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

        (e)   No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it in its sole discretion (which discretion shall be exercised in good faith) against any loss, liability or expense.

        (f)    The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

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Section 7.02    Rights of Trustee.

        (a)   The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

        (b)   Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

        (c)   The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

        (d)   The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

        (e)   Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

        (f)    The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holder shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

        (g)   The Trustee shall have no duty to inquire as to the performance of the Company's covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except: (1) any Event of Default occurring pursuant to Section 6.01(a) or 6.01(b) hereof; or (2) any Default or Event of Default of which is Responsible Officer shall have received written notification or obtained actual knowledge.

        (h)   The permissive right of the Trustee to act hereunder shall not be construed as a duty.

Section 7.03    Individual Rights of Trustee.

        The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company, any Guarantor or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) after a Default has occurred and is continuing, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

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Section 7.04    Trustee's Disclaimer.

        The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05    Notice of Defaults.

        If a Default or Event of Default occurs and is continuing and if it is known to the Trustee as provided in Section 7.02(g) hereof, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of or premium, if any, interest or Additional Interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

Section 7.06    Reports by Trustee to Holders of the Notes.

        Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2) and Section 313(b)(1). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

        A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange.

Section 7.07    Compensation and Indemnity.

        The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents, counsel and advisors.

        The Company and the Guarantors shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, any Guarantor or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or ex-

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pense may be attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or the Guarantors of their obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel; provided that the Company will not be required to pay such fees and expenses if it assumes the Trustee's defense with counsel acceptable to and approved by the Trustee (such approval not to be unreasonably withheld) and there is no conflict of interest between the Company and the Trustee in connection with such defense. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Company need not reimburse the Trustee for any expense or indemnity against any liability or loss of the Trustee to the extent such expense, liability or loss is attributable to the negligence, bad faith or willful misconduct of the Trustee.

        The obligations of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.

        To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

        When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents, counsel and advisors) are intended to constitute expenses of administration under any Bankruptcy Law.

        The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable.

Section 7.08    Replacement of Trustee.

        A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section.

        The Trustee may resign in writing upon 60 days notice at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor trustee with the consent of the Company. The Company may remove the Trustee if:

        (a)   the Trustee fails to comply with Section 7.10 hereof;

        (b)   the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

        (c)   a receiver, Custodian or public officer takes charge of the Trustee or its property; or

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        (d)   the Trustee becomes incapable of acting.

        If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

        If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

        If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10 hereof, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

        A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09    Successor Trustee by Merger, etc.

        If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. As soon as practicable, the successor Trustee shall mail a notice of its succession to the Company and the Holders of the Notes.

Section 7.10    Eligibility; Disqualification.

        There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition.

        This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b).

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Section 7.11    Preferential Collection of Claims Against Company.

        The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01    Option to Effect Legal Defeasance or Covenant Defeasance.

        The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, exercise its rights under either Section 8.02 or 8.03 hereof with respect to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02    Legal Defeasance and Discharge.

        Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have discharged its obligations with respect to all outstanding Notes, and each Guarantor shall be deemed to have discharged its obligations with respect to its Subsidiary Guarantee, on the date the conditions set forth in Section 8.04 below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, and each Guarantor shall be deemed to have paid and discharged its Subsidiary Guarantee (which in each case shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below) and to have satisfied all its other obligations under such Notes or Subsidiary Guarantee and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of and premium, if any, interest and Additional Interest, if any, on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes under Sections 2.03, 2.04, 2.07, 2.09 and 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) the Legal Defeasance provisions of this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

        If the Company exercises its Legal Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other than the trust) will be released.

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Section 8.03    Covenant Defeasance.

        Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Article 4 (other than those in Sections 4.01, 4.02, 4.06 and 4.14) and in clause (c) of Section 5.01 hereof on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and any Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(e) through 6.01(g) hereof shall not constitute Events of Default.

        If the Company exercises its Covenant Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other than the trust) will be released.

Section 8.04    Conditions to Legal or Covenant Defeasance.

        In order to exercise either Legal Defeasance or Covenant Defeasance:

        (1)   the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of and premium, interest and Additional Interest, if any, on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to Stated Maturity or to a particular redemption date;

        (2)   in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that:

        (a)   the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

        (b)   since the Initial Issuance Date, there has been a change in the applicable federal income tax law,

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in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

        (3)   in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

        (4)   no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or the grant of Liens securing such Indebtedness, all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently with such incurrence or within 30 days thereof);

        (5)   such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

        (6)   the Company shall have delivered to the Trustee an Opinion of Counsel (which may be based on such solvency certificates or solvency opinions as counsel deems necessary or appropriate) to the effect that the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;

        (7)   the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

        (8)   the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Section 8.05    Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions.

        Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

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        The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

        Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06    Repayment to Company.

        Subject to applicable escheat and abandoned property laws, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or premium, interest or Additional Interest, if any, on any Note and remaining unclaimed for two years after such principal, premium, interest or Additional Interest, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 8.07    Reinstatement.

        If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.05 hereof, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.05 hereof; provided, however, that, if the Company makes any payment of principal of or premium, interest, Additional Interest, if any, on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

Section 8.08    Discharge.

        If (i) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated and delivered (other than any Notes which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore cancelled, or (ii) all Notes not theretofore surrendered or delivered to the Trustee for cancellation

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shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee, and the Company shall irrevocably deposit with the Trustee, as trust funds solely for the benefit of the Holders for that purpose, an amount sufficient to pay at maturity or upon redemption all of the Notes (other than any Notes which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore surrendered or delivered to the Trustee for cancellation, including principal, premium, if any, interest, Additional Interest, if any, due or to become due to such date of maturity or redemption date, as the case may be, then this Indenture shall cease to be of further force or effect (except as to rights of registration of transfer or exchange of the Notes provided in this Indenture) and, at the written request of the Company, accompanied by an Officers' Certificate and Opinion of Counsel, each stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with, and upon payment of the costs, charges and expenses incurred or to be incurred by the Trustee in relation thereto or in carrying out the provisions of this Indenture, the Trustee shall satisfy and discharge this Indenture ("Discharge").

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01    Without Consent of Holders of Notes.

        Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note:

        (a)   to cure any ambiguity, defect or inconsistency;

        (b)   to provide for uncertificated Notes in addition to or in place of certificated Notes;

        (c)   to provide for the assumption of the Company's obligations to the Holders of Notes pursuant to Article 5 hereof;

        (d)   to secure the Notes pursuant to the requirements of Section 4.12 or otherwise;

        (e)   to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder;

        (f)    to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture;

        (g)   to add additional Guarantors with respect to the Notes or to release any Guarantor from its Subsidiary Guarantee in accordance with Section 4.13 or Article 10 hereof; or

        (h)   to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA.

        Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trus-

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tee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02    With Consent of Holders of Notes.

        Except as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a purchase of, tender offer or exchange offer for Notes).

        Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

        It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

        After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):

        (a)   reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

        (b)   reduce the principal of or change the fixed maturity of any Note or alter any of the provisions with respect to the redemption or repurchase of the Notes (except as provided in Sections 4.10 and 4.15 hereof);

        (c)   reduce the rate of or change the time for payment of interest on any Note;

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        (d)   waive a Default or Event of Default in the payment of principal of or premium, interest or Additional Interest, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

        (e)   make any Note payable in money other than that stated in the Notes;

        (f)    make any change in the provisions of this Indenture relating to waivers of past Defaults or Events of Default or the rights of Holders of Notes to receive payments of principal of or premium, interest or Additional Interest, if any, on the Notes (except as permitted in clause (g) below);

        (g)   waive a redemption or repurchase payment with respect to any Note (other than a payment required by Sections 4.10 and 4.15 hereof);

        (h)   make any change in the ranking of the Notes or the Subsidiary Guarantees relative to other Indebtedness of the Company or the Guarantors, respectively, in either case in a manner adverse to the Holders of Notes;

        (i)    modify the Subsidiary Guarantees in any manner adverse to the Holders of the Notes; or

        (j)    make any change in the preceding amendment, supplement and waiver provisions.

Section 9.03    Compliance with Trust Indenture Act.

        Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.

        A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a purchase, tender or exchange of such Holder's Notes shall not be rendered invalid by such purchase, tender or exchange.

Section 9.04    Revocation and Effect of Consents.

        Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

        The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be enti-

66

tled to consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date except to the extent that the requisite number of consents to the amendment, supplement or waiver have been obtained within such 90-day period or as set forth in the next paragraph of this Section 9.04.

        After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (a) through (j) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holder's Note.

Section 9.05    Notation on or Exchange of Notes.

        The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.

        Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06    Trustee To Sign Amendments, etc.

        The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

ARTICLE 10

GUARANTEES OF NOTES

Section 10.01    Subsidiary Guarantees.

        Subject to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantee, on a senior unsecured basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes held thereby and the Obligations of the Company hereunder and thereunder, that: (a) the principal of and premium, interest and Additional Interest, if any, on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and premium, (to the extent permitted by law) interest and Additional Interest, if any, on the Notes, and all other payment Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly paid in full

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when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise. Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the Obligations of the Company.

        The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance (other than complete performance) which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to the extent permitted by law, hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Subsidiary Guarantee will not be discharged except by complete performance of the Obligations contained in the Notes and this Indenture.

        If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee or other similar official acting in relation to either the Company or the Guarantors, any amount paid by the Company or any Guarantor to the Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to, and hereby waives, any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby.

        Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (a) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed thereby, and (b) in the event of any declaration of acceleration of such Obligations as provided in Article 6 hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of its Subsidiary Guarantee. Each Guarantor that makes a payment under its Subsidiary Guarantee shall have the right, upon payment in full of all guaranteed obligations under this Indenture, to seek a contribution from each other Guarantor in an amount equal to such other Guarantor's pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

Section 10.02    [Reserved]

Section 10.03    Guarantors May Consolidate, etc., on Certain Terms.

        (a)   Except as set forth in Articles 4 and 5 hereof, nothing contained in this Indenture shall prohibit a merger between a Guarantor and another Guarantor or a merger between a Guarantor and the Company.

        (b)   No Guarantor shall consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person (other than the Company or another Guarantor),

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whether or not affiliated with such Guarantor, unless, (i) subject to the provisions of Section 10.04 hereof, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor pursuant to a supplemental indenture, substantially in the form of Annex A hereto, under the Notes, this Indenture and the Registration Rights Agreement and delivers an Opinion of Counsel in accordance with the terms of this Indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists and (iii) no Default or Event of Default shall have occurred and be continuing.

        (c)   In the case of any such consolidation or merger and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and substantially in the form of Annex A hereto, of the Subsidiary Guarantee and the due and punctual performance of all of the covenants of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor.

Section 10.04    Releases Following Sale of Assets.

        In the event of a sale or other disposition (including by way of merger or consolidation) of all or substantially all of the assets or all of the Capital Stock of any Guarantor, then such Guarantor shall be released and relieved of any obligations under its Subsidiary Guarantee; provided, however, that in the event such transaction constitutes an Asset Sale, the Net Proceeds from such sale or other disposition are treated in accordance with the provisions of Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate to the effect of the foregoing, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and premium, interest and Additional Interest, if any, on the Notes and for the other Obligations of such Guarantor under this Indenture as provided in this Article 10.

Section 10.05    Releases Following Designation as an Unrestricted Subsidiary.

        In the event that the Company designates a Guarantor to be an Unrestricted Subsidiary, then such Guarantor shall be released and relieved of any obligations under its Subsidiary Guarantee; provided, however, that such designation is conducted in accordance with this Indenture.

Section 10.06    Limitation on Guarantor Liability.

        The obligations of each Guarantor under its Subsidiary Guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.

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Section 10.07    "Trustee" To Include Paying Agent.

        In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article 10 shall in each case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 10 in place of the Trustee.

ARTICLE 11

MISCELLANEOUS

Section 11.01    Trust Indenture Act Controls.

        If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), such TIA-imposed duties shall control.

Section 11.02    Notices.

        Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing (in the English language) and delivered in person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address:

        If to the Company or the Guarantors:

Seabulk International, Inc.
2200 Eller Drive
Post Office Box 13038
Ft. Lauderdale, Florida 33316
Attention: Chief Financial Officer
Fax No.: (954) 462-1459

        with a copy to:

Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77022-6760
Fax No.: (713) 615-5962
Attention: James M. Prince, Esq.

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        and

Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin
Houston, TX 77002
Fax No.: (713) 615-5306
Attention: C. Michael Harrington, Esq.

        If to the Trustee:

Wachovia Bank, National Association
225 Water Street
Jacksonville, Florida 32202
Fax No.: (904) 489-5410
Attention: Corporate Trust Administration

        The Company, any of the Guarantors or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

        All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery in each case to the address shown above.

        Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

        If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

        If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

Section 11.03    Communication by Holders of Notes with Other Holders of Notes.

        Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

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Section 11.04    Certificate and Opinion as to Conditions Precedent.

        Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

        (a)   an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

        (b)   an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 11.05    Statements Required in Certificate or Opinion.

        Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

        (a)   a statement that the Person making such certificate or opinion has read such covenant or condition;

        (b)   a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

        (c)   a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

        (d)   a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

Section 11.06    Rules by Trustee and Agents.

        The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 11.07    No Personal Liability of Directors, Officers, Employees and Stockholders.

        No past, present or future director, officer, employee, incorporator, member, partner or stockholder or other owner of Capital Stock of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

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Section 11.08    Governing Law.

        THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 11.09    No Adverse Interpretation of Other Agreements.

        This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 11.10    Successors.

        All agreements of the Company and the Guarantors in this Indenture and the Notes shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors.

Section 11.11    Severability.

        In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.12    Table of Contents, Headings, etc.

        The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 11.13    Counterparts.

        This Indenture may be signed in counterparts and by the different parties hereto in separate counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signatures on following page]

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SIGNATURES
SEABULK INTERNATIONAL, INC.
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President, General Counsel and           Secretary
LONE STAR MARINE SERVICES, INC. SEABULK ARIZONA USA, INC. SEABULK CHEMICAL CARRIERS, INC. SEABULK MARINE INTERNATIONAL, INC. SEABULK MARINE SERVICES, INC. SEABULK OCEAN SYSTEMS CORPORATION SEABULK OCEAN SYSTEMS HOLDINGS CORPORATION SEABULK OFFSHORE ABU DHABI, INC. SEABULK OFFSHORE DUBAI, INC. SEABULK OFFSHORE INTERNATIONAL, INC. SEABULK OFFSHORE OPERATORS, INC. SEABULK OPERATORS, INC. SEABULK TANKERS, INC. SEABULK TOWING SERVICES, INC. SEABULK TRANSMARINE II, INC. SEABULK TRANSPORT, INC.
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President
SEABULK TANKERS, LTD.
By:	SEABULK TRANSPORT, INC., General Partner
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President

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SEABULK AMERICA PARTNERSHIP, LTD. SEABULK OFFSHORE, LTD. SEABULK TRANSMARINE PARTNERSHIP, LTD.
By:	SEABULK TANKERS, LTD., General Partner
By:	SEABULK TRANSPORT, INC., General Partner
By:	/s/ALAN R. TWAITS Name: Alan R. Twaits Title: Senior Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as TRUSTEE
By:	/s/ TERENCE RAWLINS Name: Terence Rawlins Title: Vice President

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RULE 144A/REGULATION S APPENDIX

PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES
AND EXCHANGE NOTES

1.    Definitions

        1.1    Definitions.    

        For the purposes of this Appendix the following terms shall have the meanings indicated below:

        "Clearstream" means Clearstream Banking, société anonyme, or any successor securities clearing agency.

        "Depository" means The Depository Trust Company, its nominees and their respective successors.

        "Euroclear" means Euroclear Bank S.A./N.V. or any successor securities clearing agency.

        "Exchange Notes" means (1) the 9¹/2% Senior Notes due 2013 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the Notes Act.

        "Initial Purchasers" means (1) with respect to the Initial Notes issued on the Initial Issuance Date, Credit Suisse First Boston LLC, Banc of America Securities LLC, RBC Dominion Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related Purchase Agreement.

        "Initial Notes" means (1) $150 million aggregate principal amount of 9¹/2% Senior Notes due 2013 issued on the Initial Issuance Date and (2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act.

        "Notes" means the Initial Notes, the Additional Notes, the Exchange Notes and the Private Exchange Notes, treated as a single class.

        "Notes Custodian" means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.

        "Private Exchange" means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Notes.

App. - 1

        "Private Exchange Notes" means any 9¹/2% Senior Notes due 2013 issued in connection with a Private Exchange.

        "Purchase Agreement" means (1) with respect to the Initial Notes issued on the Initial Issuance Date, the Purchase Agreement dated July 29, 2003 among the Company, the Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and the Persons purchasing such Additional Notes.

        "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

        "Registered Exchange Offer" means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.

        "Registration Rights Agreement" means (1) with respect to the Initial Notes issued on the Initial Issuance Date, the Registration Rights Agreement dated as of August 5, 2003 among the Company, the Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related Purchase Agreement.

        "Securities Act" means the Securities Act of 1933.

        "Shelf Registration Statement" means the registration statement issued by the Company in connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a Registration Rights Agreement.

        "Transfer Restricted Securities" means Notes that bear or are required to bear the legend set forth in Section 2.3(b) hereof.

        1.2    Other Definitions.    

Term	Defined in Section:
"Agent Members"	2.1(b	)
"Global Note"	2.1(a	)
"Regulation D"	2.1(a	)
Regulation S"	2.1(a	)
Restricted Global Note"	2.1(a	)
"Rule 144A"	2.1(a	)

2.    The Notes.

        2.1(a)    Form and Dating.    Initial Notes offered and sold to a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A"), Rule 144 under the Securities Act ("Rule 144"), Regulation S under the Securities Act ("Regulation S"), or in reliance on Regulation D under the Securities Act ("Regulation D"), in each case as provided in a Purchase Agreement, and Private Exchange Notes, as

App. - 2

provided in a Registration Rights Agreement, shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form without interest coupons with the global Notes legend and restricted Notes legend set forth in Exhibit 1 hereto (each, a "Restricted Global Note"), which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Trustee, as custodian for the Depository (or with such other custodian as the Depository may direct), and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided. Prior to the 40th day after the Initial Issuance Date, beneficial interests in the Restricted Global Note representing Initial Notes sold in reliance on Regulation S may only be held through Euroclear, Clearstream or such other procedures as acceptable by DTC, and any resale or transfer of such interests to U.S. persons (as defined in Regulation S) shall not be permitted during such period unless such resale or transfer is made pursuant to Rule 144, Rule 144A, Regulation D or Regulation S. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided. Exchange Notes shall be issued in global form (with the global Notes legend set forth in Exhibit 1 hereto) or in certificated form as provided in Section 2.4 of this Appendix. Exchange Notes issued in global form and Restricted Global Notes are sometimes referred to in this Appendix as "Global Notes".

        (b)    Book-Entry Provisions.    This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.

        The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository's instructions or held by the Trustee as custodian for the Depository.

        Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

        (c)    Certificated Notes.    Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global Notes shall not be entitled to receive physical delivery of certificated Notes.

        2.2    Authentication.    The Trustee shall authenticate and deliver: (1) on the Initial Issuance Date, an aggregate principal amount of $150 million 9¹/2% Senior Notes due 2013, (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Company pursuant to Section 2.02 of the Indenture and (3) Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes, in each case upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant

App. - 3

Secretary of the Company. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance of Additional Notes pursuant to Section 2.13 of the Indenture, shall certify that such issuance is in compliance with Section 4.03 of the Indenture.

        2.3    Transfer and Exchange.    

        (a)    Transfer and Exchange of Global Notes.    (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depository's procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.

         (ii)  Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

        (iii)  In the event that a Restricted Global Note is exchanged for Notes in certificated registered form pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Rule 144, Regulation D or Regulation S, as the case may be) and such other procedures as may from time to time be adopted by the Company.

        (b)    Legend.    

          (i)  Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Restricted Global Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

App. - 4

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (V) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A MINIMUM PURCHASE PRICE OF $250,000 FOR SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

         (ii)  Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Restricted Global Note) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Security for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Security, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).

        (iii)  After a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note will cease to apply, the requirements requiring any such Initial Note or such Private Exchange Note issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Note or Private Exchange Note or an Initial Note or Private Exchange Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Notes or Private Exchange Notes upon exchange of such transferring Holder's certificated Initial Note or Private Exchange Note or directions to transfer such Holder's interest in the Global Note, as applicable.

        (iv)  Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form will be available to Holders that exchange such Initial Notes in such Registered Exchange Offer.

App. - 5

         (v)  Upon the consummation of a Private Exchange with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Private Exchange Notes in global form with the global Notes legend and the Restricted Notes legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Notes in such Private Exchange.

        (c)    Cancellation or Adjustment of Global Note.    At such time as all beneficial interests in a Global Note have either been exchanged for certificated Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.

        (d)    Obligations with Respect to Transfers and Exchanges of Notes.    

          (i)  To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate certificated Notes and Global Notes at the Registrar's or co-registrar's request.

         (ii)  No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.10, 4.15 and 9.05 and of the Indenture).

        (iii)  The Registrar or co-registrar shall not be required to register the transfer of or exchange of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding interest payment date.

        (iv)  Prior to the due presentation for registration of transfer of any Note, the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, premium, if any, interest and Additional Interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary.

         (v)  All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

App. - 6

        (e)    No Obligation of the Trustee.    

          (i)  The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

         (ii)  The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

        2.4    Certificated Notes.    

        (a)   A Global Note deposited with the Depository or with the Trustee as custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of certificated Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Note or if at any time such Depository ceases to be a "clearing agency" registered under the Exchange Act and in either event a successor depositary is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing and DTC notifies the Trustee of its decision to exchange the Global Notes, or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under this Indenture.

        (b)   Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section shall be surrendered by the Depository or the Notes Custodian to the Trustee located at its Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of certificated Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple thereof and registered in such names as the Depository shall direct. Any certificated Note or Private Exchange Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(b), bear the restricted Notes legend set forth in Exhibit 1 hereto.

App. - 7

        (c)   Subject to the provisions of Section 2.4(b), the Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

        (d)   In the event of the occurrence of any of the events specified in Section 2.4(a), the Company shall promptly make available to the Trustee a reasonable supply of certificated Notes in definitive, fully registered form without interest coupons.

App. - 8

EXHIBIT 1 TO RULE 144A/REGULATION S APPENDIX

[FORM OF FACE OF INITIAL NOTE]

[Global Notes Legend]

        UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

        TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

        THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

        THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (V) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE MEANING OF SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A MINIMUM PURCHASE PRICE OF $250,000 FOR SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH

Ex. 1 to App. - 1

ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

Ex. 1 to App. - 2

No.	$
	CUSIP No. ISIN No.

9¹/2% Senior Note due 2013

        Seabulk International, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of            Dollars on August 15, 2013 [or such greater or lesser amount as may be indicated on Schedule A hereto].¹

Interest Payment Dates: February 15 and August 15

Record Dates: February 1 and August 1.

Additional provisions of this Note are set forth on the other side of this Note.

Dated:
 

SEABULK INTERNATIONAL, INC.
By:
	Name: Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

WACHOVIA BANK, NATIONAL ASSOCIATION,
    as Trustee, certifies that this is one of
    the Notes referred to in the Indenture.

By
	Authorized Signatory

¹

If this Note is a Global Note, add this provision.

Ex. 1 to App. - 3

[FORM OF REVERSE SIDE OF INITIAL NOTE]
9¹/2% Senior Note due 2013

        Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

        (A)    Interest.    Seabulk International, Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at 9¹/2% per annum from August 5, 2003 until maturity and shall pay the Additional Interest payable pursuant to Section 6 of the Registration Rights Agreement referred to below. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on February 15 and August 15 of each year, commencing February 15, 2004, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default or Event of Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

        (B)    Method of Payment.    The Company will pay interest on the Notes (except defaulted interest) and Additional Interest to the Persons who are registered Holders of Notes at the close of business on the February 1 or August 1 next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.11 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

        (C)    Paying Agent and Registrar.    Initially, Wachovia Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

        (D)    Indenture.    The Company issued the Notes under an Indenture dated as of August 5, 2003 ("Indenture") among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference

Ex. 1 to App. - 4

to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Notes are senior unsecured obligations of the Company limited to $150,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).

        (E)    Optional Redemption.

        (i)    Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to August 15, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on June 15 of the years indicated below:

Year	Percentage
2008	104.750%
2009	103.167%
2010	101.583%
2011 and thereafter	100.000%

        (ii)   Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time on or prior to August 15, 2006, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 109.50% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided that (i) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption and (ii) each such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering.

        (iii)  Prior to August 15, 2008, the Company may at its option redeem all, in whole or in part, of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date.

        (F)    Mandatory Redemption.    Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or repurchase the Notes at the option of the Holder.

        (G)    Repurchase at Option of Holder.

        (i)    Upon the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the "Change of Control Payment"). Within 30 days follow-

Ex. 1 to App. - 5

ing a Change of Control, the Company shall mail a notice to each Holder describing the transaction that constitutes the Change of Control and setting forth the procedures governing the Change of Control Offer as required by Section 4.15 of the Indenture.

        (ii)   On the 366th day after an Asset Sale, if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall commence an offer to all Holders of Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and other Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Notes and Pari Passu Notes shall be purchased pro rata (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes.

        (H)    Notice of Redemption.    Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest and Additional Interest, if any, cease to accrue on Notes or portions thereof called for redemption.

        (I)    Denominations, Transfer, Exchange.    The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

Ex. 1 to App. - 6

        (J)    Persons Deemed Owners.    The registered Holder of a Note shall be treated as its owner for all purposes.

        (K)    Amendment, Supplement and Waiver.    Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's obligations to Holders of the Notes pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or otherwise, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes or to release any Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.

        (L)    Defaults and Remedies.    Events of Default include: (i) default for 30 days in the payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment when due of the principal of or premium, if any, on the Notes when due at Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the Company to comply for 30 days after notice with Section 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes; (v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the Initial Issuance Date, which default (a) is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million, and provided, further, that if such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, an Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as said rescission does not conflict with any judgment or decree; (vi) failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (vii) failure by any Guarantor to perform any covenant set forth in its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee against a Guarantor for any reason; and (viii) certain events of bankruptcy, insolvency or reorganization with respect to the Company, any Guarantor or any Signifi-

Ex. 1 to App. - 7

cant Subsidiary as specified in Section 6.01(h) or 6.01(i) of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, interest, premium or Additional Interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of or premium, interest or Additional Interest, if any, on the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

        (M)    Defeasance and Discharge.    The Notes are subject to defeasance and discharge upon the terms and conditions specified in the Indenture.

        (N)    Trustee Dealings with Company.    The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

        (O)    No Recourse Against Others.    No past, present or future director, officer, employee, incorporator, member, partner or stockholder or other owner of Capital Stock of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

        (P)    Authentication.    This Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee or an authenticating agent.

        (Q)    Abbreviations.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

        (R)    Additional Rights of Holders of Transfer Restricted Securities.    In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Securities shall have all the rights set forth in the Registration Rights Agreement dated as of August 5, 2003, among the Company, the Guarantors and the Initial Purchasers named on the signature page thereof (the "Registration Rights Agreement").

Ex. 1 to App. - 8

        (S)    CUSIP Numbers.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers and corresponding ISIN numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

        (T)    Governing Law.    THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        (U)    Successor Corporation.    In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.

        The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

Seabulk International, Inc.
2200 Eller Drive
Post Office Box 13038
Ft. Lauderdale, Florida 33316
Attention: Chief Financial Officer
Fax No: (954) 462-1459

Ex. 1 to App. - 9

ASSIGNMENT FORM

                        To assign this Note, fill in the form below:

                        I or we assign and transfer this Note to

                                                                                                                                                                                               
Print or type assignee's name, address and zip code)

                                                                                                                                                                                               
(Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                                  agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.

Date:	Your Signature:
		Sign exactly as your name appears on the other side of this Note.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Notes Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW
(1)	o	to the Company; or
(2)	o	pursuant to an effective registration statement under the Securities Act of 1933; or
(3)	o	inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
(4)	o	outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933;
(5)	o	to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933), that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter appears in Exhibit 1 to App. to the Indenture); or
(6)	o	pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933.

Ex. 1 to App. - 10

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4), (5) or (6) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.

	Signature
Signature Guarantee:
Signature must be guaranteed	Signature

Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Ex. 1 to App. - 11

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
Notice: To be executed by an executive officer

Ex. 1 to App. - 12

TO BE COMPLETED BY PURCHASER IF (5) ABOVE IS CHECKED.

FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Seabulk International, Inc.
2200 Eller Drive
Post Office Box 13038
Ft. Lauderdale, Florida 33316

Wachovia Bank, National Association
225 Water Street
Jacksonville, Florida 32202
Attention: Corporate Trust Administration

Re:

9¹/2% Senior Notes due 2013

        Reference is hereby made to the Indenture, dated as of August 5, 2003 (the "Indenture"), among Seabulk International, Inc., as issuer (the "Company"), the Guarantors named on the signature pages thereto and Wachovia Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

        In connection with our proposed purchase of $                         aggregate principal amount of:

        (a)   o    a beneficial interest in a Global Note, or

        (b)   o    a Definitive Note,

we confirm that:

        1.     We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "Securities Act").

        2.     We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (I) to the Company, (II) in the United States to a person whom the seller reasonably believes is a Qualified Institutional Buyer (as defined in rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (III) outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act, (IV) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), (V) to an Institutional "Accredited Investor" ("IAI") within the meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act that is purchasing for its own account or for the account of such an IAI, in each case, in a transaction involving a

Ex. 1 to App. - 13

minimum purchase price of $250,000 for such securities, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act, or (VI) pursuant to an effective registration statement under the Securities Act, in each of cases (I) through (VI) in accordance with any applicable securities laws of any state of the United States, and (b) the Holder will, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (I) through (VI) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

        3.     We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

        4.     We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

        5.     We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion.

        You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

	[Insert Name of Accredited Investor]
By:
	Name: Title:

Dated:

Ex. 1 to App. - 14

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:

o Section 4.10 o Section 4.15

        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000 or integral multiples thereof) you elect to have purchased: $                             

Date:	Your Signature:
		(Sign exactly as your name appears on the Note)

Soc. Sec. or Tax Identification No.:

Signature Guarantee:

Ex. 1 to App. - 15

SCHEDULE A

[TO BE ATTACHED TO GLOBAL NOTE]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

        The following increases or decreases in this Global Note have been made:

Date
Amount of
decrease in
Principal Amount
of this Global
Note Amount of
increase in
Principal Amount
of this Global
Note Principal Amount
of this Global
Note following
such decrease or
increase Signature of
authorized officer
of Trustee or
Notes Custodian

Ex. 1 to App. - 16

EXHIBIT A TO RULE 144A/REGULATION S APPENDIX

[FORM OF FACE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]*/**/

*/

If the Note is to be issued in global form add the Global Notes Legend from Exhibit 1 to Rule 144A/Regulation S Appendix and the attachment from such Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL NOTES]—SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE".

**/

If the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1 to Rule 144A/Regulation S Appendix and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1.

All references to "Additional Interest" in the note shall be deleted unless if at the date of issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration Default (as defined in the Registration Rights Agreement) has occurred with respect to the related Initial Notes during the interest period in which such date of issuance occurs.

Ex. A to App. - 1

[FORM OF FACE OF EXCHANGE NOTE OR
PRIVATE EXCHANGE NOTE]

No.	$
	CUSIP No. ISIN No.

9¹/2% Senior Note due 2013

        Seabulk International, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of            Dollars on August 15, 2013 [or such greater or lesser amount as may be indicated on Schedule A hereto].²

Interest Payment Dates: February 15 and August 15.

Record Dates: February 1 and August 1.

Additional provisions of this Note are set forth on the other side of this Note.

Dated:
	SEABULK INTERNATIONAL, INC.
	By:
		Name: Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the Notes referred to in the Indenture.
By:
	Authorized Signatory

²

If this Note is a Global Note, add this provision.

Ex. A to App. - 2

[FORM OF REVERSE SIDE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]

9¹/2% Senior Note due 2013

        Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

        1.    Interest.    Seabulk International, Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at 9¹/2% per annum from August 5, 2003 until maturity and shall pay the Additional Interest payable pursuant to Section 6 of the Registration Rights Agreement referred to below. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on February 15 and August 15 of each year, commencing February 15, 2004, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default or Event of Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

        2.    Method of Payment.    The Company will pay interest on the Notes (except defaulted interest) and Additional Interest to the Persons who are registered Holders of Notes at the close of business on the February 1 or August 1 next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.11 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

        3.    Paying Agent and Registrar.    Initially, Wachovia Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

        4.    Indenture.    The Company issued the Notes under an Indenture dated as of August 5, 2003 ("Indenture") among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Notes are sen-

Ex. A to App. - 3

ior unsecured obligations of the Company limited to $150,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).

        5.    Optional Redemption.

        (a)   Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to August 5, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on June 15 of the years indicated below:

YEAR	PERCENTAGE
2008	104.750%
2009	103.167%
2010	101.583%
2011 and thereafter	100.000%

        (b)   Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time on or prior to August 15, 2006, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 109.50% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided that (i) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption and (ii) each such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering.

        (c)   Prior to August 15, 2008, the Company may at its option redeem all, in whole or in part, of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date.

        6.    Mandatory Redemption.    Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or repurchase the Notes at the option of the Holder.

        7.    Repurchase at Option of Holder.

        (a)   Upon the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the "Change of Control Payment"). Within 30 days following a Change of Control, the Company shall mail a notice to each Holder describing the transaction that constitutes the Change of Control and setting forth the procedures governing the Change of Control Offer as required by Section 4.15 of the Indenture.

        (b)   On the 366th day after an Asset Sale, if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall commence an offer to all Holders of Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring

Ex. A to App. - 4

the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal amount of Notes and any such Pair Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and other Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Notes and Pari Passu Notes shall be purchased pro rata (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes.

        8.    Notice of Redemption.    Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest and Additional Interest, if any, cease to accrue on Notes or portions thereof called for redemption.

        9.    Denominations, Transfer, Exchange.    The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

        10.    Persons Deemed Owners.    The registered Holder of a Note shall be treated as its owner for all purposes.

        11.    Amendment, Supplement and Waiver.    Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's obligations to Holders of the Notes pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or otherwise, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes or to re-

Ex. A to App. - 5

lease any Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.

        12.    Defaults and Remedies.    Events of Default include: (i) default for 30 days in the payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment when due of the principal of or premium, if any, on the Notes when due at Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the Company to comply for 30 days after notice with Section 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes; (v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the Initial Issuance Date, which default (a) is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million, and provided, further, that if such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, an Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as said rescission does not conflict with any judgment or decree; (vi) failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (vii) failure by any Guarantor to perform any covenant set forth in its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee against a Guarantor for any reason; and (viii) certain events of bankruptcy, insolvency or reorganization with respect to the Company, any Guarantor or any Significant Subsidiary as specified in Section 6.01(h) or 6.01(i) of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization respecting the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, interest, premium or Additional Interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of or premium, interest or Additional Interest, if any, on the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

Ex. A to App. - 6

        13.    Defeasance and Discharge.    The Notes are subject to defeasance and discharge upon the terms and conditions specified in the Indenture.

        14.    Trustee Dealings with Company.    The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

        15.    No Recourse Against Others.    No past, present or future director, officer, employee, incorporator, member, partner or stockholder or other owner of Capital Stock of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

        16.    Authentication.    This Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee or an authenticating agent.

        17.    Abbreviations.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

        18.    [Additional Rights of Holders of Transfer Restricted Securities.    In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Securities shall have all the rights set forth in the Registration Rights Agreement dated as of August 5, 2003, among the Company, the Guarantors and the Initial Purchasers named on the signature page thereof (the "Registration Rights Agreement").]³

        19.    CUSIP Numbers.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers and corresponding ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

        20.    Governing Law.    THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        21.    Successor Corporation.    In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.

³

Delete if this Note is not being issued in exchange for an Initial Note.

Ex. A to App. - 7

        The Company will furnish to any Holder upon written request and without charge a copy of the Indenture [and/or the Registration Rights Agreement]⁴. Requests may be made to:

Seabulk International, Inc.
2200 Eller Drive
Post Office Box 13038
Ft. Lauderdale, Florida 33316
Attention: Chief Financial Officer
Fax No: (954) 462-1459

⁴

Delete if this Note is not being issued in exchange for an Initial Note.

Ex. A to App. - 8

ASSIGNMENT FORM

                        To assign this Note, fill in the form below:

                        I or we assign and transfer this Note to

                                                                                                                                                                                               
Print or type assignee's name, address and zip code)

                                                                                                                                                                                               
(Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                                  agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:	Your Signature:
		Sign exactly as your name appears on the other side of this Note.

Ex. A to App. - 9

SCHEDULE A

[TO BE ATTACHED TO GLOBAL NOTE]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:

Date
Amount of
decrease in
Principal Amount
of this Global
Note Amount of
increase in
Principal Amount
of this Global
Note Principal Amount
of this Global
Note following
such decrease or
increase Signature of
authorized officer
of Trustee or
Notes Custodian

Ex. A to App. - 10

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:

o

        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000 or integral multiples thereof) you elected to have purchased: $                             

Date:	Your Signature:
		(Sign exactly as your name appears on the Note)

Soc. Sec. or Tax Identification No.:

Signature Guarantee:
	(Signature must be Guaranteed)

        Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Ex. A to App. - 11

EXHIBIT B TO RULE 144A/REGULATION S APPENDIX

FORM OF NOTATION OF GUARANTEE

        For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of August 5, 2003 (the "Indenture") among Seabulk International, Inc. ("Company"), the Guarantors thereto and Wachovia Bank, National Association, as trustee (the "Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest and Additional Interest, if any, on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee.

[NAME OF GUARANTORS]
By:
	Name: Title:

Ex. B to App. - 1

ANNEX A

SEABULK INTERNATIONAL, INC.

And

the Guarantors named herein

9¹/2% SENIOR NOTES DUE 2013

FORM OF SUPPLEMENTAL
INDENTURE AND AMENDMENT—SUBSIDIARY GUARANTEE

DATED AS OF                         ,         

WACHOVIA BANK, NATIONAL ASSOCIATION

Trustee

A-1

        This SUPPLEMENTAL INDENTURE, dated as of                                   ,              is among Seabulk International, Inc., a Delaware corporation (the "Company"), each of the parties identified under the caption "Guarantors" on the signature page hereto (the "Guarantors") and Wachovia Bank, National Association, as Trustee.

RECITALS

        WHEREAS, the Company, the initial Guarantors and the Trustee entered into an Indenture, dated as of August 5, 2003 (the "Indenture"), pursuant to which the Company has issued $150,000,000 in principal amount of 9¹/2% Senior Notes due 2013 (the "Notes"); and

        WHEREAS, Section 9.01(g) of the Indenture provides that the Company, the Guarantors and the Trustee may amend or supplement the Indenture in order to comply with Section 4.13 or 10.02 thereof, without the consent of the Holders of the Notes; and

        WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company, of the Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Guarantors and the Trustee, in accordance with its terms, have been duly done and performed;

        NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Company, the Guarantors and the Trustee covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes as follows:

ARTICLE 1

        Section 1.01. This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

        Section 1.02. This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Company, the Guarantors and the Trustee.

ARTICLE 2

        From this date, in accordance with Section 4.13 or 10.02 and by executing this Supplemental Indenture, the Guarantors whose signatures appear below are subject to the provisions of the Indenture to the extent provided for in Article 10 thereunder.

ARTICLE 3

        Section 3.01. Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture.

        Section 3.02. Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supple-

A-2

mental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

        Section 3.03. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        Section 3.04. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement.

[NEXT PAGE IS SIGNATURE PAGE]

A-3

        IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.

SEABULK INTERNATIONAL, INC.
By
	Name: Title:

GUARANTORS
[	]

By
	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee
By
	Name: Title:

A-4

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EX-4.8

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Exhibit 4.8

$150,000,000

SEABULK INTERNATIONAL, INC.

9¹/2% Senior Notes Due 2013

REGISTRATION RIGHTS AGREEMENT

August 5, 2003

Credit Suisse First Boston LLC
Banc Of America Securities LLC
RBC Dominion Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
c/o Credit Suisse First Boston LLC
     Eleven Madison Avenue
     New York, New York 10010-3629

Dear Sirs:

        Seabulk International, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to Credit Suisse First Boston LLC, Banc Of America Securities LLC, RBC Dominion Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Initial Purchasers"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), $150,000,000 aggregate principal amount of its 9¹/2% Senior Notes Due 2013 (the "Initial Securities") to be unconditionally guaranteed (the "Guaranties") by substantially all of the domestic subsidiaries of the Company who are made a party to this Agreement (the "Guarantors"). The Initial Securities will be issued pursuant to an Indenture, dated as of August 5, 2003 (the "Indenture") among the Company, the Guarantors named therein and Wachovia Bank, National Association, (the "Trustee"). As an inducement to the Initial Purchasers, the Company agrees with the Initial Purchasers, for the benefit of the holders of the Initial Securities (including, without limitation, the Initial Purchasers), the Exchange Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively the "Holders"), as follows:

        1.    Registered Exchange Offer.    The Company shall, at its own cost, prepare and, not later than 90 days after (or if the 90th day is not a business day, the first business day thereafter, such date being a "Filing Deadline") the date of original issue of the Initial Securities (the "Issue Date"), file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Exchange Offer Registration Statement") on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities (the "Exchange Securities") of the Company issued under the Indenture and identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to

the matters described in Section 6 hereof) that would be registered under the Securities Act. The Company shall use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective under the Securities Act within 180 days (or if the 180th day is not a business day, the first business day thereafter, such day being an "Effectiveness Deadline") after the Issue Date of the Initial Securities and shall keep the Exchange Offer Registration Statement effective for not less than 20 business days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period").

        If the Company commences the Registered Exchange Offer, the Company will be entitled to close the Registered Exchange Offer 20 business days after the commencement thereof provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer.

        Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities (as defined in Section 6 hereof) electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States, subject to any requirement that Exchanging Dealers (as defined below) deliver a prospectus in connection with resales of Exchange Securities.

        The Company acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder which is a broker-dealer electing to exchange Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Exchange Securities acquired in exchange for Securities constituting any portion of an unsold allotment is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale.

        Subject to the next paragraph, for so long as any of the Securities (as defined below) are outstanding (but in no event later than 120 days after the Exchange Offer Registration Statement is declared effective), and if, in the reasonable judgment of the Purchasers or Cahill Gordon & Reindel llp, the Purchasers or any of their affiliates (as defined in the rules and regulations under the Securities Act) are required to deliver a prospectus (any such prospectus, a "Market Making Prospectus") in connection with sales of the Offered Securities, the Company will (i) provide the Purchasers and their affiliates, without charge, as many copies of the Market Making Prospectus

2

as they may reasonably request, (ii) periodically amend the Market Making Prospectus and the Exchange Offer Registration Statement so that the information contained therein complies with the requirements of section 10(a) of the Securities Act, (iii) amend the Exchange Offer Registration Statement or the Market Making Prospectus when necessary to reflect any material changes in the information provided therein in order that the Exchange Offer Registration Statement or the Market Making Prospectus does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and promptly file such amendment or supplement with the Commission, (iv) provide the Purchasers and their affiliates with copies of each amendment or supplement so filed and cause its counsel to deliver opinions and cause its independent public accountants to deliver "comfort" letters, in each case as are customary in connection with the filing of a registration statement or prospectus with the Commission, and (v) indemnify such Purchasers and their affiliates with respect to the Market Making Prospectus and, if applicable, contribute to any amount paid or payable by such Purchasers and their affiliates in a manner substantially identical to that specified in Section 7 hereof (with appropriate modifications). The Company and each of the Guarantors consent to the use by such Purchasers and their affiliates, subject to the provisions of this Agreement, the Registration Rights Agreement and applicable provisions of the Securities Act and state securities or Blue Sky laws of the jurisdictions in which the Offered Securities are offered by the Purchasers, of each Market Making Prospectus.

        The Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto, available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after the consummation of the Registered Exchange Offer.

        If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects (including the existence of restrictions on transfer under the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the Initial Securities (the "Private Exchange Securities"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the "Securities".

3

        In connection with the Registered Exchange Offer, the Company shall:

        (a)    mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

        (b)    keep the Registered Exchange Offer open for not less than 20 days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders;

        (c)    utilize the services of a depositary for the Registered Exchange Offer, which may be the Trustee or an affiliate of the Trustee;

        (d)    permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and

        (e)    otherwise comply with all applicable laws.

        As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall:

        (x)    accept for exchange all the Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange;

        (y)    take any and all actions necessary to cancel all the Initial Securities so accepted for exchange; and

        (z)    deliver promptly to each Holder of the Initial Securities, duly issued Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange.

        The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter.

        Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities.

        Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery

4

requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.

        Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto comply in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto do not, when they become effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, do not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

        2.    Shelf Registration.    If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated by the 210th day after the Issue Date (the "Consummation Deadline"), (iii) within 30 days following consummation of the Registered Exchange Offer, any Initial Purchaser so requests with respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible to participate in the Registered Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive freely tradeable Exchange Securities on the date of the exchange, the Company shall take the following actions:

        (a)    The Company shall, at its cost, as promptly as practicable (but in no event more than 30 days after so required or requested pursuant to this Section 2, such date being a "Filing Deadline") file with the Commission and thereafter shall use its reasonable best efforts to cause to be declared effective a registration statement (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 6 hereof) by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf Registration"); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder.

        (b)    The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of

5

two years (or for such longer period if extended pursuant to Section 3(j) below) from the date of its effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are no longer restricted securities (as defined in Rule 144 under the Securities Act, or any successor rule thereof). The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by applicable law.

        (c)    Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

        3.    Registration Procedures.    In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply:

        (a)    The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser within a reasonable time after receipt of any such document, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the

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prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders, who propose to sell Securities pursuant to the Shelf Registration Statement, as selling security holders; provided, however, that each such Holder shall have furnished to the Company on a timely basis such information regarding the Holder as the Company may require pursuant to Section 3(n) hereof.

        (b)    The Company shall give written notice to the Initial Purchasers, the Holders of the Securities proposed to be sold under the Shelf Registration Statement and any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):

        (i)    when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

        (ii)    of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information;

        (iii)    of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

        (iv)    of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

        (v)    of the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.

        (c)    The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement.

        (d)    The Company shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).

        (e)    The Company shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto,

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including financial statements and schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference).

        (f)    The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

        (g)    The Company shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement.

        (h)    Prior to any public offering of the Securities, pursuant to any Registration Statement, the Company shall register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject.

        (i)    The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement.

        (j)    Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated

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therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchasers, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j) or the Company shall have notified such Holders that disposition of such Transfer Restricted Securities may resume under the existing prospectus.

        (k)    Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and provide the applicable trustee with certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company.

        (l)    The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period.

        (m)    The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

        (n)    The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request.

        (o)    The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as the Holders of not less than a majority of the aggregate principal amount of the Securities to be included in the Shelf Registration Statement shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration.

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        (p)    In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof and shall be subject to any confidentiality procedures reasonably instituted by the Company.

        (q)    In the case of any Shelf Registration, the Company, if requested by the Holders of at least a majority of the Securities covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement, it being agreed that the matters to be covered by such opinion shall include, without limitation but subject to reasonable qualifications and exceptions, the due incorporation and good standing of the Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the due authorization, execution and delivery of the relevant agreement of the type referred to in Section 3(o) hereof; the due authorization, execution, authentication and issuance, and the validity and enforceability, of the applicable Securities; the absence of material legal or governmental proceedings involving the Company and its subsidiaries; the absence of governmental approvals required to be obtained in connection with the Shelf Registration Statement, the offering and sale of the applicable Securities, or any agreement of the type referred to in Section 3(o) hereof; the compliance as to form of such Shelf Registration Statement and any documents incorporated by reference therein and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and, as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf Registration Statement and the prospectus included therein, as then amended or supplemented, and from any documents incorporated by reference therein of an untrue statement of a material fact or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any such documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent public accountants to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

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        (r)    In the case of the Registered Exchange Offer, if requested by any Initial Purchaser or any known Participating Broker-Dealer, the Company shall cause (i) its counsel to deliver to such Initial Purchaser or such Participating Broker-Dealer a signed opinion in the form set forth in Section 6(c) and Annex A of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants to deliver to such Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Section 6(a)of the Purchase Agreement, with appropriate date changes.

        (s)    If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or cause to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied.

        (t)    The Company will use its reasonable best efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, but in each case only if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any.

        (u)    In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules.

        (v)    The Company shall use its best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby.

        4.    Registration Expenses.    The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 through 3 hereof (includ-

11

ing the reasonable fees and expenses, if any, of Cahill Gordon & Reindel LLP, counsel for the Initial Purchasers, incurred in connection with the Registered Exchange Offer), whether or not the Exchange Offer, Registration Statement or a Shelf Registration Statement is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of one firm of counsel designated by the Holders of a majority in principal amount of the Initial Securities covered thereby to act as counsel for the Holders of the Initial Securities in connection therewith.

        5.    Indemnification.    (a) The Company agrees to indemnify and hold harmless each Holder of the Securities, any Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the person asserting any such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered by such Holder or Participating Broker-Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Securities to such person, a copy of the final prospectus if the Company had previously furnished copies thereof to such Holder or Participating Broker-Dealer; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders.

        (b)    Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of

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the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons.

        (c)    Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

        (d)    If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation

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provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company.

        (e)    The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

        6.    Additional Interest Under Certain Circumstances.    (a) Additional interest (the "Additional Interest") with respect to the Initial Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iii) below a "Registration Default"):

        (i)    If by the applicable Filing Deadline, neither the Exchange Offer Registration Statement nor a Shelf Registration Statement has been filed with the Commission;

        (ii)    If by the Consummation Deadline, neither the Registered Exchange Offer is consummated nor, if required in lieu thereof, if by the Effectiveness Deadline, the Shelf Registration Statement is not declared effective by the Commission;

        (iii)    If the Exchange Offer Registration Statement is not declared effective by the Commission on or prior to the applicable Effectiveness Deadline; or

        (iv)    If after either the Exchange Offer Registration Statement or the Shelf Registration Statement is declared effective (A) such Registration Statement thereafter ceases to be effective during the periods specified herein during which it is required to be effective; or (B) such Registration Statement or the related prospectus ceases to be usable

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(except as permitted in paragraph (b)) in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder.

Additional Interest shall accrue on the Initial Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum for the first 90-day period (the "Additional Interest Rate") immediately following the occurrence of a Registration Default, and such Additional Interest Rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum Additional Interest Rate of 1.0% per annum. Following the cure of all Registration Defaults, the accrual of Additional Interest will cease and the interest rate will revert to the original rate. The Company shall not be required to pay Additional Interest for more than one Registration Default at any given time.

        (b)    A Registration Default referred to in Section 6(a)(iv)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 60 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default would have been deemed to occur, but for this Section 6(b) until such Registration Default is cured.

        (c)    Any amounts of Additional Interest due pursuant to clause (i), (ii), (iii) or (iv) of Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Initial Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest Rate by the principal amount of the Initial Securities, multiplied by a fraction, the numerator of which is the number of days such Additional Interest Rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360.

        (d)    "Transfer Restricted Securities" means each Security until (i) the date on which such Transfer Restricted Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of a Initial Security for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Security has been effectively registered

15

under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.

        7.    Rules 144 and 144A.    The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Initial Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchasers upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.

        8.    Underwritten Registrations.    If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering.

        No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. Except as provided in Section 4, the Holders participating in any underwritten offering shall be responsible for any expenses customarily borne by selling securityholders, including underwriting discounts and commissions and fees and expenses of counsel to selling securityholders.

        9.    Miscellaneous.

        (a)    Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents.

        (b)    Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery:

        (1)    if to a Holder of the Securities, at the most current address given by such Holder to the Company.

16

        (2)    if to the Initial Purchasers:

Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group

        with a copy to:

Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
Fax No.: (212) 269-5420
Attention: Richard E. Farley

        (3)    if to the Company, at its address as follows:

Seabulk International, Inc.
2200 Eller Drive
P.O. Box 13038
Ft. Lauderdale, FL 33316
Fax No.: (954) 462-1459
Attention: Alan R. Twaits, General Counsel

        with a copy to:

Vinson & Elkins L.L.P.
2300 First City Tower
Houston, Texas 77002-6760
Fax No.: (713) 615-5962
Attention: James M. Prince

        All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.

        (c)    No Inconsistent Agreements.    The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.

        (d)    Successors and Assigns.    This Agreement shall be binding upon the Company and its successors and assigns.

        (e)    Counterparts.    This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be

17

deemed to be an original and all of which taken together shall constitute one and the same agreement.

        (f)    Headings.    The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

        (g)    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

        (h)    Severability.    If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

        (i)    Securities Held by the Company.    Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

        If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers and the Company, and the Guarantors in accordance with its terms.

18

Very truly yours,
SEABULK INTERNATIONAL, INC.
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President,           General Counsel and Secretary
LONE STAR MARINE SERVICES, INC. SEABULK ARIZONA USA, INC. SEABULK CHEMICAL CARRIERS, INC. SEABULK MARINE INTERNATIONAL, INC. SEABULK MARINE SERVICES, INC. SEABULK OCEAN SYSTEMS CORPORATION SEABULK OCEAN SYSTEMS HOLDINGS CORPORATION SEABULK OFFSHORE ABU DHABI, INC. SEABULK OFFSHORE INTERNATIONAL, INC. SEABULK OFFSHORE DUBAI, INC. SEABULK OFFSHORE OPERATORS, INC. SEABULK OPERATORS, INC. SEABULK TANKERS, INC. SEABULK TOWING SERVICES, INC. SEABULK TRANSMARINE II, INC. SEABULK TRANSPORT, INC.
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President

SEABULK TANKERS, LTD.
By:	SEABULK TRANSPORT, INC.,            General Partner
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President
SEABULK AMERICA PARTNERSHIP, LTD. SEABULK OFFSHORE, LTD. SEABULK TRANSMARINE PARTNERSHIP, LTD. By: SEABULK TANKERS, LTD.,                 General Partner
By: SEABULK TRANSPORT, INC.                 General Partner
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC BANK OF AMERICA SECURITIES LLC RBC DOMINION SECURITIES CORPORATION MERRILL LYNCH, PIERCE, FENNER & PRICE
	INCORPORATED
by:	CREDIT SUISSE FIRST BOSTON LLC
	By:	/s/ MARC WARMMarc Warm Director

ANNEX A

        Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

ANNEX B

        Each broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution."

ANNEX C

PLAN OF DISTRIBUTION

        Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until [                        ], 2003, all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.¹

        The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

¹

In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus.

ANNEX D

        If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

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EX-4.9

Exhibit 4.9

SEABULK INTERNATIONAL, INC.

and

the Guarantors named herein

9¹/2% SENIOR NOTES DUE 2013

SUPPLEMENTAL INDENTURE
AND AMENDMENT—SUBSIDIARY GUARANTEE

DATED AS OF OCTOBER 3, 2003

WACHOVIA BANK, NATIONAL ASSOCIATION

Trustee

        This SUPPLEMENTAL INDENTURE, dated as of October 3, 2003, is among Seabulk International, Inc., a Delaware corporation (the "Company"), each of the parties identified under the caption "Guarantors" on the signature page hereto (the "Guarantors") and Wachovia Bank, National Association, as Trustee.

RECITALS

        WHEREAS, the Company, the initial Guarantors and the Trustee entered into an Indenture, dated as of August 5, 2003 (the "Indenture"), pursuant to which the Company has issued $150,000,000 in principal amount of 9¹/2% Senior Notes due 2013 (the "Notes"); and

        WHEREAS, Section 9.01(g) of the Indenture provides that the Company, the Guarantors and the Trustee may amend or supplement the Indenture in order to comply with Section 4.13 or Article 10 thereof, without the consent of the Holders of the Notes;

        WHEREAS, Seabulk Towing, Inc. was not an initial Guarantor and, pursuant to Section 4.13(b) of the Indenture, Seabulk Towing, Inc. is executing this Supplemental Indenture to provide for its Subsidiary Guarantee (as defined in the Indenture); and

        WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company, of the Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Guarantors and the Trustee, in accordance with its terms, have been duly done and performed;

        NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Company, the Guarantors and the Trustee covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes as follows:

ARTICLE I

        Section 1.01. This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

        Section 1.02. This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Company, the Guarantors and the Trustee.

ARTICLE II

        From this date, in accordance with Section 4.13 and by executing this Supplemental Indenture, the Guarantors whose signatures appear below are subject to the provisions of the Indenture to the extent provided for in Article 10 thereunder.

ARTICLE III

        Section 3.01. Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in

accordance with their terms with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture.

        Section 3.02. Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

        Section 3.03. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        Section 3.04. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement.

[NEXT PAGE IS SIGNATURE PAGE]

2

        IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.

SEABULK INTERNATIONAL, INC.
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President
GUARANTORS
LONE STAR MARINE SERVICES, INC. SEABULK ARIZONA USA, INC. SEABULK CHEMICAL CARRIERS, INC. SEABULK MARINE INTERNATIONAL, INC. SEABULK MARINE SERVICES, INC. SEABULK OCEAN SYSTEMS CORPORATION SEABULK OCEAN SYSTEMS HOLDINGS         CORPORATION SEABULK OFFSHORE ABU DHABI, INC. SEABULK OFFSHORE DUBAI, INC. SEABULK OFFSHORE INTERNATIONAL, INC. SEABULK OFFSHORE OPERATORS, INC. SEABULK OPERATORS, INC. SEABULK TANKERS, INC. SEABULK TOWING, INC. SEABULK TOWING SERVICES, INC. SEABULK TRANSMARINE II, INC. SEABULK TRANSPORT, INC.
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President

3

SEABULK TANKERS, LTD.
By:	SEABULK TRANSPORT, INC., General Partner
By:	/s/ ALAN R. TWAITSName: Alan R. Twaits Title: Senior Vice President
SEABULK AMERICA PARTNERSHIP, LTD. SEABULK OFFSHORE, LTD. SEABULK TRANSMARINE PARTNERSHIP, LTD.
By:	SEABULK TANKERS, LTD., General Partner
By:	SEABULK TRANSPORT, INC., General Partner
By:	/s/ALAN R. TWAITS Name: Alan R. Twaits Title: Senior Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as TRUSTEE
By:	/s/ TERENCE RAWLINS Name: Terence Rawlins Title: Vice President

4

EX-5.1

Exhibit 5.1

VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN STREET
HOUSTON, TEXAS 77002-6760
TELEPHONE (713) 758-2222
FAX (713) 758-2346
www.velaw.com

September 19, 2003

Seabulk International, Inc.
2200 Eller Drive
Ft. Lauderdale, Florida 33316

Ladies and Gentlemen:

        We have acted as counsel for Seabulk International, Inc., a Delaware corporation (the "Company") and certain of its subsidiaries with respect to the preparation of the Registration Statement on Form S-4 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") in connection with the registration by the Company under the Securities Act of 1933, as amended (the "Securities Act") of (i) the offer and exchange by the Company (the "Exchange Offer") of $150,000,000 aggregate principal amount of its 9¹/2% Senior Notes due 2013 (the "Initial Notes"), for a new series of notes bearing substantially identical terms and in like principal amount (the "Exchange Notes") and (ii) the guarantees (the "Guarantees") of certain subsidiaries of the Company listed in the Registration Statement as guarantors (the "Subsidiary Guarantors") of the Initial Notes and the Exchange Notes. The Initial Notes and the Exchange Notes are collectively referred to herein as the "Notes." The Initial Notes were issued, and the Exchange Notes will be issued, under an Indenture dated as of August 5, 2003 among the Company, the Subsidiary Guarantors and Wachovia Bank, National Association, as Trustee (the "Indenture"). The Exchange Offer will be conducted on such terms and conditions as are set forth in the prospectus contained in the Registration Statement to which this opinion is an exhibit.

        We have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the Indenture and (iii) such other certificates, statutes and other instruments and documents as we considered appropriate for purposes of the opinions hereafter expressed. In connection with this opinion, we have assumed that the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and the Exchange Notes will be issued and sold in compliance with applicable federal and state securities laws and in the manner described in the Registration Statement.

        Based on the foregoing, we are of the opinion that when the Exchange Notes have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture, (i) such Exchange Notes will be legally issued and will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, and (ii) the Guarantees of the Subsidiary Guarantors remain valid and binding obligations of such subsidiaries, enforceable against each such Subsidiary Guarantor in accordance with their terms, except in each case as such enforcement is subject to any applicable bankruptcy, insolvency, reorganization or other law relating to or affecting creditors' rights generally and general principles of equity.

Seabulk International, Inc.
Page 2
September 19, 2003

        We express no opinions concerning (a) the validity or enforceability of any provisions contained in the Indenture that purport to waive or not give effect to rights to notices, defenses, subrogation or other rights or benefits that cannot be effectively waived under applicable law; or (b) the enforceability of indemnification provisions to the extent they purport to relate to liabilities resulting from or based upon negligence or any violation of federal or state securities or blue sky laws.

        We are members of the bar of the State of Texas. We have relied as to matters of Florida law on the opinion of Alan R. Twaits, which opinion is also filed as an exhibit to the Registration Statement. The opinions expressed herein are limited exclusively to the federal laws of the United States of America, the laws of the State of New York, the laws of the State of Delaware and, in reliance on the opinion of Alan R. Twaits, the laws of the State of Florida, and we are expressing no opinion as to the effect of the laws of any other jurisdiction, domestic or foreign.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm name in the prospectus forming a part of the Registration Statement under the caption "Legal Matters." By giving such consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission issued thereunder.

Very truly yours,

/s/  VINSON & ELKINS L.L.P. Vinson & Elkins L.L.P.

EX-5.2

Exhibit 5.2

Seabulk International, Inc. • 2200 Eller Drive • P.O. Box 13038 • Fort Lauderdale, FL 33316
www.seabulkinternational.com

Alan R. Twaits
Sr. Vice President
and General Counsel Phone: (954) 524-4200 Ext. 801
Fax: (954) 527-1772
E-mail: alan.twaits@sbulk.com

September 19, 2003

Seabulk International, Inc.
2200 Eller Drive
Fort Lauderdale, Florida 33316

Ladies and Gentlemen:

        I am the Senior Vice President and General Counsel of Seabulk International, Inc., a Delaware corporation (the "Company") and have acted in such capacity with respect to the preparation of the Registration Statement on Form S-4 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") in connection with the registration by the Company under the Securities Act of 1933, as amended (the "Securities Act") of (i) the offer and exchange by the Company (the "Exchange Offer") of $150,000,000 aggregate principal amount of its 9¹/2% Senior Notes due 2013 (the "Initial Notes"), for a new series of notes bearing substantially identical terms and in like principal amount (the "Exchange Notes") and (ii) the guarantees (the "Guarantees") of certain subsidiaries of the Company listed in the Registration Statement as guarantors (the "Subsidiary Guarantors") of the Initial Notes and the Exchange Notes. The Initial Notes were issued, and the Exchange Notes will be issued, under an Indenture dated as of August 5, 2003 among the Company, the Subsidiary Guarantors and Wachovia Bank, National Association, as Trustee (the "Indenture"). The Exchange Offer will be conducted on such terms and conditions as are set forth in the prospectus contained in the Registration Statement to which this opinion is an exhibit.

        I have examined originals or copies, certified or otherwise identified to my satisfaction, of (i) the Certificate of Incorporation, as amended, and the Amended and Restated By-Laws of the Company or such documents or similar organizational documents of each of the Subsidiary Guarantors, (ii) the Indenture, (iii) the Initial Notes and (iv) such other certificates, statutes and other instruments and documents as I considered appropriate for purposes of the opinions hereafter expressed. In connection with this opinion, I have assumed that the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and the Exchange Notes will be issued and sold in compliance with applicable federal and state securities laws and in the manner described in the Registration Statement.

        Based on the foregoing, I am of the opinion that the Subsidiary Guarantors that are incorporated or organized, as the case may be, under the laws of the State of Florida have duly authorized, executed and delivered the Indenture, the Guarantees and the Initial Notes.

        I am a member of the bar of the State of Florida. The opinions expressed herein are limited exclusively to the laws of the State of Florida, and I am expressing no opinion as to the effect of the laws of any other jurisdiction, domestic or foreign. I also authorize Vinson & Elkins L.L.P. to rely on this opinion in delivering its opinion.

        I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of my name in the prospectus forming a part of the Registration Statement under the caption "Legal Matters." By giving such consent, I do not admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission issued thereunder.

Very truly yours,

/s/  ALAN R. TWAITS Alan R. Twaits
Senior Vice President and General Counsel

EX-10.10

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Exhibit 10.10

EXECUTION VERSION

FORTIS CAPITAL CORP.,
AS AGENT FOR THE LENDERS

FORTIS CAPITAL CORP.,
AS ARRANGER AND BOOK RUNNER

NIB CAPITAL BANK N.V.,
AS ARRANGER

THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND,
AS LENDER

SEABULK INTERNATIONAL, INC.,
AS BORROWER

THE LENDERS FROM TIME TO TIME A PARTY HERETO,

THE SUBSIDIARY GUARANTORS NAMED HEREIN

and

THE RELEASED SUBSIDIARY GUARANTORS NAMED HEREIN

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of August 5, 2003

THACHER PROFFITT & WOOD

EXECUTION VERSION

TABLE OF CONTENTS

PRELIMINARY STATEMENT			1
Article I DEFINITIONS			1
	Section 1.01	Definitions.	1
	Section 1.02	Interpretation.	1
	Section 1.03	Accounting Terms.	1
Article II REVOLVING LOANS			1
	Section 2.01	Revolving Loans.	1
	Section 2.02	Reserved.	2
	Section 2.03	Interest on the Revolving Loans.	2
	Section 2.04	Maximum Interest Rate.	3
	Section 2.05	Repayment.	3
	Section 2.06	Mandatory Permanent Reduction of Tranches.	4
	Section 2.07	Optional Permanent Reduction of Aggregate Tranche A Loan Commitment	4
	Section 2.08	Application of Payments.	4
	Section 2.09	Manner of Payments.	5
	Section 2.10	Register of Revolving Loan Notes; Lost and Mutilated Revolving Loan Notes	5
	Section 2.11	Change in Circumstances.	7
	Section 2.12	Illegality.	8
	Section 2.13	Taxes.	8
	Section 2.14	Break Funding Payments.	9
	Section 2.15	Alternate Rate of Interest.	10
	Section 2.16	Fees.	10
Article III LETTERS OF CREDIT			10
	Section 3.01	Issuing the Letters of Credit.	10
	Section 3.02	Drawings under Letters of Credit.	11
	Section 3.03	Reimbursement on Demand.	11
	Section 3.04	Obligations Absolute.	11
	Section 3.05	Action in Respect of the Letters of Credit.	12
	Section 3.06	Indemnification.	12
	Section 3.07	Deemed Disbursements.	12
	Section 3.08	L/C Participations.	13
	Section 3.09	Lenders Not Required to Make Revolving Loans or Issue Letters of Credit.	14
Article IV REPRESENTATIONS, WARRANTIES AND AGREEMENTS			14
	Section 4.01	Company Status.	14
	Section 4.02	Company Power and Authority.	14
	Section 4.03	No Violation.	14
	Section 4.04	Governmental Approvals.	14

i

	Section 4.05	Financial Statement; Financial Condition; Undisclosed Liabilities; etc.	15
	Section 4.06	Litigation.	15
	Section 4.07	No Default.	15
	Section 4.08	Use of Proceeds; Margin Regulations.	15
	Section 4.09	Tax Returns and Payments.	15
	Section 4.10	Compliance with ERISA.	16
	Section 4.11	Ownership; Subsidiaries.	17
	Section 4.12	Compliance with Statutes, etc.	17
	Section 4.13	Investment Company Act.	18
	Section 4.14	Environmental Matters.	18
	Section 4.15	Labor Relations.	18
	Section 4.16	Patents, Licenses, Franchises and Formulas.	18
	Section 4.17	Security Interests.	19
	Section 4.18	Indebtedness.	19
	Section 4.19	Capitalization of Borrower.	19
	Section 4.20	Concerning the Vessels.	19
	Section 4.21	Citizenship.	19
	Section 4.22	Vessel Classification.	19
	Section 4.23	Reserved	19
	Section 4.24	Insurance.	19
Article V CONDITIONS OF LENDING			20
	Section 5.01	Conditions Precedent to Drawdown of the Initial Loan.	20
	Section 5.02	Further Conditions Precedent.	22
	Section 5.03	Release.	23
Article VI AFFIRMATIVE COVENANTS			23
	Section 6.01	Existence.	23
	Section 6.02	Payment of Debts.	23
	Section 6.03	Accounts and Records.	23
	Section 6.04	Payment of Taxes and Claims.	23
	Section 6.05	Financing Statements.	23
	Section 6.06	Compliance with Law.	24
	Section 6.07	Financial Statements.	24
	Section 6.08	Access to Books and Records.	25
	Section 6.09	Notifications.	25
	Section 6.10	Performance of Obligations.	25
	Section 6.11	Environmental Matters.	25
	Section 6.12	Transaction Document Obligations.	26
	Section 6.13	ERISA.	26
	Section 6.14	Minimum Adjusted EBITDA to Adjusted Interest Expense.	26
	Section 6.15	Minimum Adjusted Tangible Net Worth	26
	Section 6.16	Maximum Adjusted Funded Debt Ratio.	27
	Section 6.17	Minimum Fair Market Value of the Vessels.	27
	Section 6.18	Ownership of Subsidiary Guarantors.	27
	Section 6.19	Additional Vessels; Further Assurances.	27
	Section 6.20	Vessel Operations and Management.	27

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	Section 6.21	Appraisals.	28
	Section 6.22	Reimbursement for Expenses.	28
	Section 6.23	Remittance of Insurance Proceeds.	29
Article VII NEGATIVE COVENANTS			29
	Section 7.01	Reserved.	29
	Section 7.02	Liens.	29
	Section 7.03	Asset Sales.	29
	Section 7.04	Assignment of Insurances.	29
	Section 7.05	Sale of Notes or Accounts Receivable.	29
	Section 7.06	Sale and Leaseback.	30
	Section 7.07	Restricted Payments.	30
	Section 7.08	Investments.	30
	Section 7.09	Restriction on Payment Restrictions Affecting Subsidiary Guarantors.	30
	Section 7.10	Change in Business	30
	Section 7.11	Reserved	30
	Section 7.12	Transactions with Affiliates.	30
	Section 7.13	Changes in Offices or Names.	31
	Section 7.14	Changes in Fiscal Year.	31
	Section 7.15	Reserved.	31
	Section 7.16	Consolidation, Merger and Sale of Assets.	31
Article VIII AGREEMENT TO GUARANTEE			32
	Section 8.01	Obligations Guaranteed.	32
	Section 8.02	Subsidiary Guarantee Obligations of Subsidiary Guarantors Unconditional.	33
	Section 8.03	Waiver of Notice; Expenses.	35
	Section 8.04	Other Security.	35
	Section 8.05	No Set-off by the Subsidiary Guarantors.	35
	Section 8.06	Joint and Several Obligation.	35
	Section 8.07	Limitation on Liability.	37
	Section 8.08	Release of Subsidiary Guarantor.	37
Article IX EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS			37
	Section 9.01	Events of Default.	37
	Section 9.02	Waiver of Default.	38
	Section 9.03	Remedies.	39
	Section 9.04	Rights of Set-Off.	39
	Section 9.05	Rights and Remedies Cumulative.	39
	Section 9.06	Specific Remedies.	40
	Section 9.07	Restoration of Rights and Remedies.	41
	Section 9.08	Cure of Defaults.	41
Article X RELATIONSHIP AMONG THE LENDERS			41
	Section 10.01	Appointment and Authorization.	41
	Section 10.02	Delegation of Duties.	41
	Section 10.03	Liability of Agent.	41
	Section 10.04	Reliance by the Agent.	42

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	Section 10.05	Notice of Default.	42
	Section 10.06	Credit Decision.	42
	Section 10.07	Indemnification.	43
	Section 10.08	Agent in Individual Capacity.	43
	Section 10.09	Successor Agent.	43
	Section 10.10	Collateral Matters.	44
	Section 10.11	Assignments, Participations, Etc.	44
Article XI MISCELLANEOUS			46
	Section 11.01	Notices.	46
	Section 11.02	Survival of Agreement.	47
	Section 11.03	Governing Law.	47
	Section 11.04	Modification of Agreement.	47
	Section 11.05	Costs and Expenses.	47
	Section 11.06	Waivers.	48
	Section 11.07	Indemnification.	48
	Section 11.08	Separability of Provisions; Obligations Several.	48
	Section 11.09	Counterparts.	49
	Section 11.10	Entire Agreement.	49
	Section 11.11	Headings.	49
	Section 11.12	Successors and Assigns.	49
	Section 11.13	Gender and Number.	49
	Section 11.14	Exhibits.	49
	Section 11.15	Notification of Addresses, Lending Offices, Etc.	49
	Section 11.16	No Third Parties Benefitted.	49
	Section 11.17	Equitable Relief.	50
	Section 11.18	Notice of Claims; Claims Bar.	50
	Section 11.19	Waiver of Punitive Damages.	50
	Section 11.20	Consent to Jurisdiction.	50
	Section 11.21	Waiver of Jury Trial.	51
	Section 11.22	Currency Indemnity.	51
	Section 11.23	Release of Lien.	51

EXHIBITS
EXHIBIT A	Revolving Loan Note
EXHIBIT B	Drawdown Request
EXHIBIT C	Issuance Request
EXHIBIT D-I	First Registered Ship Mortgage
EXHIBIT D-II	Second Registered Ship Mortgage
EXHIBIT E	Pledge Agreement
EXHIBIT F	Subsidiary Guarantee Agreement
EXHIBIT G	Assignment and Acceptance
SCHEDULES
SCHEDULE I	Tranche A Loan Commitment
SCHEDULE 4.06	Litigation
SCHEDULE 4.10	ERISA
SCHEDULE 4.11	Ownership/Equity Interests

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SCHEDULE 4.14	Environmental Matters
SCHEDULE 4.20	Vessel Information/Noncompliance with Maritime Rules and Regulations

v

        AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of August 5, 2003, among Seabulk International, Inc., a corporation existing under the laws of Delaware, as borrower (the "Borrower"), each Subsidiary Guarantor, each Released Subsidiary Guarantor, Fortis Capital Corp. ("Fortis"), NIB Capital Bank N.V. ("NIB"), The Governor & Company of the Bank of Scotland and each other financial institution which may hereafter execute and deliver an Assignment and Acceptance with respect to this Agreement pursuant to Section 10.11 (any one individually, a "Lender", and collectively, the "Lenders"), Fortis, as administrative agent on behalf of the Lenders (when acting in its capacity as administrative agent under this Agreement or under any other Transaction Document, herein referred to, together with any successor administrative agent, as the "Agent"), and as book runner and as an arranger (when acting in such capacity, an "Arranger") and NIB, as an arranger (when acting in such capacity, an "Arranger", and together with Fortis, the "Arrangers").

PRELIMINARY STATEMENT

        Pursuant to the Existing Credit Agreement, the Borrower incurred the Existing Indebtedness. The Borrower desires to repay the Term Loans in full from the proceeds of the issuance of the New Notes pursuant to the New Indenture. The Lenders are willing to (a) allow the Borrower to issue the New Notes and incur the Indebtedness pursuant to the New Indenture and (b) continue making the Revolving Loans and issue Letters of Credit on behalf of the Borrower in an amount, together with all Reimbursement Obligations, up to the Aggregate Tranche A Loan Commitment pursuant to this Agreement and upon the terms and subject to the conditions set forth herein and in reliance on the representations and warranties set forth herein. The parties hereto wish to amend and restate the Existing Credit Agreement in order to (i) reflect that as of the Effective Date all of the Term Loans will be repaid in full and no further Term Loans will be made available to the Borrower, (ii) set forth the terms and conditions pursuant to which Revolving Loans will be made and Letters of Credit will be issued on and after the Effective Date, (iii) release on the Effective Date the Released Subsidiary Guarantors from their respective Subsidiary Guarantor Obligations and (iv) make certain other changes thereto.

        NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

        Section 1.01    Definitions.    Capitalized terms used herein, but not otherwise defined herein shall have the meanings assigned to such terms in Appendix A hereto.

        Section 1.02    Interpretation.    Words importing the singular number only shall include the plural and vice versa. Words importing persons shall include companies, firms, corporations, partnerships, unincorporated associations and their respective successors and assigns.

        Section 1.03    Accounting Terms.    All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all financial statements submitted pursuant to this Agreement shall be prepared in accordance with, and all financial data submitted pursuant hereto shall be derived from financial statements prepared in accordance with, GAAP.

ARTICLE II
REVOLVING LOANS

        Section 2.01    Revolving Loans.

        (a)    The Lenders shall (i) make the Revolving Loans available to the Borrower for the purpose of refinancing the Existing Indebtedness of the Borrower and for general corporate purposes and (ii) issue Letters of Credit as collateral for vessels to be acquired by the Borrower or one of its Subsidiaries and for general corporate purposes.

        (b)    Each of the Lenders, relying upon each of the representations and warranties of the Borrower set forth herein, hereby severally and not jointly agrees with the Borrower that, upon satisfaction of the conditions precedent set forth in Article V and subject to and upon the terms of this Agreement, it will on each Drawdown Date, make the Revolving Loans available to the Borrower through the Agent in an aggregate amount not to exceed its Tranche A Loan Commitment ratably with the other Lenders according to their respective Tranche A Loan Commitments. The maximum aggregate amount of all Revolving Loans, together with all L/C Obligations, which may be outstanding at any time under this Agreement is the Aggregate Tranche A Loan Commitment, as may be reduced pursuant to Sections 2.06 and 2.07. Each Revolving Loan shall be drawn in a Minimum Borrowing Amount.

        (c)    The maximum number of Revolving Loans that may be outstanding at any time under this Agreement shall be eight (8). Subject to the remaining provisions of this Section 2.01, the Borrower may obtain Revolving Loans, repay or prepay such Revolving Loans, and reborrow such Revolving Loans.

        (d)    The Borrower shall, at least five (5) Business Days prior to a Drawdown Date, deliver a Drawdown Request to the Agent in writing addressed to the Agent. Each Drawdown Request shall be effective on receipt by the Agent and shall be irrevocable.

        (e)    Each Drawdown Request shall be deemed to constitute a warranty by the Borrower (i) that the representations and warranties stated in Article IV are true and correct on and as of the date of such Drawdown Request and will be true and correct on and as of the relevant Drawdown Date as if made on such date (unless, in each case, such representation and warranty is expressly limited to an earlier date or is no longer true and correct solely as a result of transactions not prohibited by the Transaction Documents), (ii) that after giving effect to the borrowing made pursuant to such Drawdown Request, the sum of the outstanding L/C Obligations and the aggregate principal amount of all outstanding Revolving Loans will not exceed the Aggregate Tranche A Loan Commitment and (iii) that no Default or Event of Default has occurred and is continuing. (f) Each Revolving Loan made by the Lenders to the Borrower shall be evidenced by one or more promissory notes in the form of Exhibit A attached hereto (each, as the same from time to time may be amended, restated, modified, supplemented or renewed, a "Revolving Loan Note"), duly executed by the Borrower, dated as of the applicable Drawdown Date. Each Lender (or the Agent if

2

only one Revolving Loan Note shall be issued to the Agent for the benefit of the Lenders) shall, and is hereby authorized by the Borrower to, record on the schedule attached to its Revolving Loan Note (or on a continuation of such schedule attached to such Revolving Loan Note) and make a part thereof, an appropriate notation evidencing the date and amount of each such Lender's Proportionate Share of such Revolving Loan, which notation, absent manifest error, shall be prima facie evidence of the amount of the relevant Revolving Loan.

        Section 2.02    Reserved.

        Section 2.03    Interest on the Revolving Loans.

        (a)    Interest on the outstanding principal amount of each (i) LIBOR Loan shall be payable on each Interest Payment Date, unless the Interest Period exceeds three months in which case it shall be paid quarterly, at a rate per annum equal to the Interest Rate for the related Interest Period from the date when made and continued until paid in full and (ii) Base Rate Loan shall be payable on each Commitment Fee Payment Date at a rate per annum equal to the daily average Interest Rate for the period from the date when made and continued until paid in full.

        (b)    The duration of each Interest Period for each LIBOR Loan shall be one month; provided, however, that (i) the Borrower may direct that the duration of an Interest Period for a LIBOR Loan be three or six months (or any other period agreed to by the Agent and all of the Lenders) by giving the Agent written notice thereof at least three Business Days before the first day of such Interest Period. The Agent shall deliver a copy of such notice on the same day to the Lenders.

        (c)    Each Revolving Loan will bear interest at the Overdue Rate on any part of the principal amount, interest and other amounts due thereunder not paid when due (whether at stated maturity, by acceleration or otherwise), for any period during which the same will be overdue.

        (d)    The Borrower may elect to continue all or any part of any borrowing of any LIBOR Loan beyond the expiration of the then current Interest Period relating thereto by giving a Drawdown Request (which shall be irrevocable) to the Agent of such election, specifying the LIBOR Loan or LIBOR Loans or portion thereof to be continued and the Interest Period therefor. In the absence of such a timely and proper election with regard to LIBOR Loans, the Borrower shall be deemed to have elected to convert such LIBOR Loans to Base Rate Loans pursuant to Subsection 2.03(f).

        (e)    All or part of any LIBOR Loans may be continued as provided herein, provided that any continuation of such LIBOR Loans shall not be (as to each borrowing of such LIBOR Loans as continued for an applicable Interest Period) less than $1,000,000 and shall be in an integral multiple of $100,000.

        (f)    The Borrower may elect to convert any LIBOR Loan on the last day of the then current Interest Period relating thereto to a Base Rate Loan by giving a Drawdown Request to the Agent regarding such election.

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        (g)    The Borrower may elect to convert any Base Rate Loan at any time or from time to time to a LIBOR Loan by giving a Drawdown Request (which shall be irrevocable) to the Agent of such election, specifying each Interest Period therefor.

        (h)    All or any part of the outstanding Revolving Loans may be converted as provided herein, provided that any conversion of such Revolving Loans shall not result in a borrowing of Revolving Loans in an amount less than $1,000,000 and in integral multiples of $100,000.

        Section 2.04    Maximum Interest Rate.    In no event shall the interest charged with respect to a Revolving Loan exceed the maximum amount permitted by applicable law. If at any time the Interest Rate exceeds the maximum rate permitted by applicable law, the rate of interest to accrue pursuant to this Agreement and such Revolving Loan shall be limited to the maximum rate permitted by applicable law, but any subsequent reductions in the Base Rate or LIBOR shall not reduce the interest to accrue on such Revolving Loan below the maximum amount permitted by applicable law until the total amount of interest accrued on such Revolving Loan equals the amount of interest that would have accrued if a varying rate per annum equal to the Interest Rate had at all times been in effect. If the total amount of interest paid or accrued on a Revolving Loan under the foregoing provisions is less than the total amount of interest that would have accrued if the Interest Rate had at all times been in effect, the Borrower, agrees to pay to the Lenders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by applicable law had at all times been in effect or (ii) the amount of interest that would have accrued if the Interest Rate had at all times been in effect, and (b) the amount of interest accrued in accordance with the other provisions of this Agreement.

        Section 2.05    Repayment.    The Borrower shall repay all outstanding Revolving Loans (subject to such reduction and prepayments as hereinafter set forth) on the Maturity Date.

        Section 2.06    Mandatory Permanent Reduction of Tranches.

        (a)    The Aggregate Tranche A Loan Commitment shall be permanently reduced on each Tranche A Reduction Date pursuant to the following schedule:

Tranche A Reduction Date	Tranche A Loan Commitment Reduction Amount
February 5, 2004	$  4,000,000
August 5, 2004	$  4,000,000
February 5, 2005	$  4,000,000
August 5, 2005	$  4,000,000
February 5, 2006	$  4,000,000
August 5, 2006	$  4,000,000
February 5, 2007	$  4,000,000
August 5, 2007	$  4,000,000
February 5, 2008	$  4,000,000
Maturity Date	$44,000,000

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        (b)    If, on any Tranche A Reduction Date, the outstanding principal amount of the Revolving Loans plus all L/C Obligations as of such date exceed the Aggregate Tranche A Loan Commitment (as reduced on such Tranche A Reduction Date), then the Borrower shall, on such Tranche A Reduction Date, make a mandatory repayment of the Revolving Loans (or pay over to the Agent to be applied to or held as cash collateral for the L/C Obligations) of the amount (the "Tranche A Reduction Amount") of such excess.

        Section 2.07    Optional Permanent Reduction of Aggregate Tranche A Loan Commitment.

        (a)    The Borrower shall have the right, at any time and from time to time, to request, without penalty, a permanent reduction of the Aggregate Tranche A Loan Commitment so long as the Agent receives five (5) Business Days prior written notice of such request. Each such partial permanent reduction shall be in an amount at least equal to Five Million Dollars ($5,000,000) and multiples of One Million Dollars ($1,000,000) thereafter. To the extent that the outstanding principal amount of Revolving Loans and L/C Obligations exceeds the Aggregate Tranche A Loan Commitment, the Borrower shall pay the Tranche A Reduction Amount.

        (b)    Any prepayment of any Revolving Loan made hereunder shall be subject to the condition that on the date of prepayment all accrued interest to the date of such prepayment shall be paid in full with respect to such Revolving Loans or portions thereof being prepaid, together with any and all actual costs or expenses incurred by any Lender in connection with any breaking of funding (as certified by such Lender, which certification shall, absent any manifest error, be conclusive and binding on the Borrower).

        (c)    Prepayments made under this Section 2.07 shall, at the option of the Borrower, be applied either (i) pro rata to any mandatory repayments due under Section 2.06(a) during the next six (6) months or (ii) to mandatory repayments due under Section 2.06(b) in inverse order of maturity.

        Section 2.08    Application of Payments.    Unless otherwise expressly provided herein, each payment made on a Revolving Loan will be applied, first to the payment of all fees and expenses due to the Agent or the Lenders under this Agreement, second, to the payment of interest on overdue interest at the Overdue Rate on such Revolving Loan to the date of such payment, third, to the payment of interest on any overdue Tranche A Reduction Amount at the Overdue Rate on such Revolving Loan to the date of such payment, fourth, to the payment of accrued interest on such Revolving Loan to the date of such payment, fifth, to the payment of any overdue Tranche A Reduction Amount past due on such Revolving Loan and sixth, to the payment of the Tranche A Reduction Amount of such Revolving Loan then due.

        Section 2.09    Manner of Payments.

        (a)    All payments made pursuant to this Agreement shall be made without set-off or counterclaim but subject to deduction for, and net of, applicable Excluded Taxes and shall be made in immediately available funds by the Borrower to the Agent

5

for the account of the Lenders in accordance with their Proportionate Share. All such payments shall be made to the Agent, prior to 11:00 a.m., New York City time, on the date due to the Agent's account at JPMorgan Chase Bank, ABA#: 021000021, Account of Fortis Capital Corp., Account # 001-1-624418, Reference: Seabulk, or at such other place in New York as may be designated by the Agent to the Borrower in writing. Any payments received after 11:00 a.m., New York City time, shall be deemed received on the next Business Day. The Agent shall promptly remit to each Lender, in the same type of funds as payment was received, each Lender's Proportionate Share according to its respective interest of all such payments received by the Agent for the account of such Lender. Subject to the definition of "Interest Period", whenever any payment to be made hereunder shall be stated to be due on a date other than a Business Day, such payment may be made on the next succeeding Business Day with the same effect as if made on the due date but interest shall continue to accrue until the date of payment.

        (b)    If any Lender or other holder of a Revolving Loan Note shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset, set-off, banker's lien, counterclaim or otherwise) on account of principal of or interest on any Revolving Loan Note or Reimbursement Obligation in excess of its Proportionate Share of payments and other recoveries obtained by all Lenders or other holders, such Lender or other holder shall purchase from the other Lenders or holders such participation in the Revolving Loan Notes and Reimbursement Obligations held by them as shall be necessary to cause such purchasing Lender or other holder to share the excess payment or other recovery with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing holder, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. The Borrower agrees that the Lender so purchasing a participation from the other Lenders under this Section 2.09(b) may exercise all its rights of payment, including the right of set-off, with respect to such participation as fully as if such Lender were the direct creditor of such Borrower in the amount of the participation.

        Section 2.10    Register of Revolving Loan Notes; Lost and Mutilated Revolving Loan Notes.

        (a)    The Agent will maintain at its principal office a register (the "Register") for the purpose of registering the Revolving Loan Notes and registering transfers and exchanges of Revolving Loan Notes. The Person in whose name a Revolving Loan Note is registered in accordance with this Section 2.10(a) shall for all purposes hereof be deemed a Lender. Upon surrender for transfer or exchange of any Revolving Loan Note at the principal office of the Agent, the Borrower will execute and deliver (in the case of any such transfer, in the name of the designated transferee or transferees or, in the case of an exchange, in the name of the holder thereof), one or more new Revolving Loan Notes of the same series of a like aggregate principal amount. The Agent will not be required to register or exchange any surrendered Revolving Loan Note as above provided during the 15-day period preceding any Interest Payment Date. Every Revolving Loan Note presented or surrendered for transfer or exchange will be duly endorsed (or be accompanied by a written

6

instrument of transfer in form satisfactory to the Agent) duly executed by the holder thereof or his attorney duly authorized in writing. Any Revolving Loan Note issued in a registration of transfer or exchange will carry the same rights to interest (unpaid and to accrue) carried by the Revolving Loan Note so transferred or exchanged so that there will not be any loss or gain of interest on such Revolving Loan Note. The Agent shall mark on each new Revolving Loan Note (i) the dates to which principal and interest have been paid on the old Revolving Loan Note and (ii) all payments and prepayments of principal previously made on such old Revolving Loan Note which are allocable to such new Revolving Loan Note.

        (b)    If any Revolving Loan Note has been mutilated, lost, stolen or destroyed, the Borrower will execute and deliver a new Revolving Loan Note of like date and tenor in exchange and substitution for, and upon cancellation of, such mutilated Revolving Loan Note or in lieu of and in substitution for such lost, stolen or destroyed Revolving Loan Note; provided, however, that the Borrower will so execute and deliver such new Revolving Loan Note only if the applicable holder has paid the reasonable expenses and charges of the Borrower in connection therewith and, in the case of a lost, stolen or destroyed Revolving Loan Note, (i) has filed with the Borrower evidence satisfactory to it that such Revolving Loan Note was lost, stolen or destroyed, and (ii) has furnished to the Borrower indemnity satisfactory to it. Neither the Borrower nor the Agent shall have any obligation to indemnify or reimburse such holder for any losses, expenses or charges that it may suffer or incur in connection with the previous sentence, such costs to be borne entirely by such holder. If any such Revolving Loan Note has matured or is otherwise subject to payment, instead of issuing a new Revolving Loan Note the Borrower may pay the same without surrender thereof. Any Revolving Loan Note issued in exchange for a lost, stolen, destroyed or mutilated Revolving Loan Note will carry the same rights to interest (unpaid and to accrue) carried by the Revolving Loan Note lost, stolen, destroyed or mutilated so that there will not be any loss or gain of interest on such Revolving Loan Note. The Agent shall mark on each new Revolving Loan Note (A) the dates to which interest has been paid on the old Revolving Loan Note and (B) all payments and prepayments of principal previously made on such old Revolving Loan Note which are allocable to such new Revolving Loan Note.

        (c)    Upon the issuance of a new Revolving Loan Note or Revolving Loan Notes pursuant to Section 2.10(a) or 2.10(b) hereof, each of the Borrower and the Agent may require from the party requesting such new Revolving Loan Note or Revolving Loan Notes payment of a sum to reimburse the Borrower for, or to provide funds for, the payment of any tax or other governmental charge in connection therewith or any charges and expenses connected with such tax or other governmental charge paid or payable by the Borrower.

7

        Section 2.11    Change in Circumstances.

        (a)   If after the date of this Agreement, there shall have occurred the adoption 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 Governmental Authority, central bank or comparable agency, that a Lender has reasonably determined has or would have the effect of reducing the rate of return on the Lender's capital or the capital of its direct or indirect holding company as a consequence of its obligations hereunder to a level below that which such Lender or its holding company would have achieved but for such adoption, change or compliance (taking into consideration such Lender's or its holding company's policies with respect to capital adequacy) by an amount which such Lender, in its reasonable judgment, shall deem material, then from time to time, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or its holding company for such reduction. A certificate as to such amounts submitted to the Borrower by such Lender shall be conclusive and binding for such purposes, absent manifest error; provided, however, that the determination of such additional amount or amounts shall be made in good faith in a manner generally consistent with such Lender's standard practice.

        (b)   If after the date of this Agreement, there shall have occurred the adoption of any applicable law, rule or regulation regarding the maintenance of reserves, special deposits, compulsory loans or similar requirements against assets held by, deposits or liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Interest Rate hereunder, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency, that a Lender has reasonably determined has or would have the effect of increasing the cost to such Lender or such Lender's direct or indirect holding company, by an amount which such Lender deems to be material, with respect to issuing the Letters of Credit or making, continuing or maintaining the LIBOR Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amount or amounts as will compensate such Lender or holding company for such increased cost or reduced amount receivable. A certificate as to such amounts submitted to the Borrower by such Lender shall be conclusive and binding for such purposes, absent manifest error; provided, however, that the determination of such additional amount or amounts shall be made in good faith in a manner generally consistent with such Lender's standard practice.

        (c)   Upon the occurrence of any event giving rise to the operation of this Section 2.11, the affected Lender shall use reasonable efforts to designate or cause its direct or indirect holding company to designate a different lending office for funding or booking its obligations hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender such designation or assignment (i) would eliminate or reduce amounts payable pursuant to this Section 2.11 in the future, (ii) would not subject such Lender to any economic,

8

legal or regulatory disadvantage or to any unreimbursed cost or expense and (iii) would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by such Lender in connection with such designation or assignment. If the affected Lender does not so designate or cause its direct or indirect holding company to designate a different lending office, then the Borrower shall have the right to require such lender to assign its interest to an Eligible Assignee pursuant to Section 10.11 hereof.

        (d)   The Borrower shall not be required to compensate a Lender pursuant to this Section 2.11 for any amounts pursuant to the immediately preceding clauses (a) and/or (b) of this Section 2.11 to the extent that such amounts were incurred more than 180 days prior to the date that such Lender notifies the Borrower of the circumstances giving rise to such amounts and of such Lender's intention to claim compensation therefor; provided, however, that, if the circumstances giving rise to such amounts are retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

        Section 2.12    Illegality.    Notwithstanding any other provision herein, if any Change in Law shall make it unlawful for any Lender to make or maintain any portion of a Loan as a LIBOR Loan, such Lender shall so notify the Borrower and the Agent in writing and interest on such portion of such Loan shall thereafter be calculated by reference to the Base Rate. If any such change in the method of calculating interest is required, pursuant to such change in law, to be made on a day which is not the last day of an Interest Period, the Borrower shall pay to such Lender the amounts, if any, as may be required pursuant to Section 2.14.

        Section 2.13    Taxes.

        (a)   Any and all payments on account of any Obligations shall be made free and clear of and without deduction for any Taxes (other than, and excluding, Excluded Taxes); provided, however, that if the Borrower shall be required to withhold or deduct any Indemnified Taxes from any such payment, the amount of such payment shall be increased as necessary so that after making all required withholdings or deductions (including withholdings or deductions applicable to additional sums payable under this Section 2.13) the Lenders receive an amount equal to the sum that they would have received had no such deductions been made. The Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable law.

        (b)   The Borrower shall indemnify each Indemnified Party (provided, however, that for purposes of this Section 2.13, Indemnified Party shall mean the Agent, any Issuing Lender, each Arranger, each Lender, and any Affiliate of any of the foregoing) within twenty (20) days after written demand therefor for the full amount of any Indemnified Taxes payable with respect to or on account of any Obligation (including Taxes imposed on or attributable to amounts payable under this Section 2.13) and any penalties, interest, and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. In the case of Indemnified Taxes paid by an Indemnified Party, a certificate as to the amount of

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such payment or liability delivered to the Borrower by such Indemnified Party shall be conclusive absent manifest error. The agreements in this Section shall survive the termination of this Agreement and the Transaction Documents and the payment of all amounts payable hereunder and thereunder.

        (c)   As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to such Indemnified Party the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory, to such Indemnified Party.

        (d)   Each Indemnified Party not incorporated or organized under the laws of the United States of America or a state thereof shall deliver to the Borrower and Agent prior to the first date on which any payment is due such entity hereunder two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, or successor applicable form, as the case may be, certifying in each case that such entity is entitled to receive payments under the Revolving Loan without withholding or deduction of any United States federal income tax. Each entity required to deliver Forms W-8BEN or W-8ECI, or successor applicable form pursuant to the preceding sentence, further undertakes to deliver to the Borrower and the Agent two further copies of W-8BEN or W-8ECI, or successor applicable forms, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms previously delivered by it to the Borrower and the Agent, unless in any such case an event (including, without limitation, any change in treaty, law or regulation or in the interpretation thereof) has occurred prior to the date on which any such delivery otherwise would be required which renders all such forms inapplicable or which would prevent such entity from duly completing and delivering any such form. The Borrower shall not be obligated to pay any Indemnified Party any amounts pursuant to this Section 2.13 in respect of Indemnified Taxes that would not have been imposed but for failure of the Indemnified Party to comply with this Section 2.13(d).

        (e)   Notwithstanding the foregoing, if the Borrower incurs any liability pursuant to this Section 2.13, to make a payment (or pay an increased amount) to a Lender with respect to a Revolving Loan or otherwise, the Lender in respect of whose Proportionate Share of such Revolving Loan such liability arises shall use reasonable efforts to designate a different lending office for funding or booking its obligations hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender such designation or assignment (i) would eliminate or reduce amounts payable pursuant to this Section 2.13 in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by such Lender in connection with such designation or assignment.

        (f)    The Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

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        (g)   If a Lender, the Issuing Lender, the Agent or any Arranger shall become aware that it is entitled to claim a refund from a Governmental Authority in respect of Taxes or Other Taxes as to which it has been indemnified by the Borrower, or with respect to which the Borrower has paid additional amounts, pursuant to this Section 2.13, it shall promptly notify the Borrower of the availability of such claim and shall, within thirty (30) days after receipt of a request by the Borrower, make a claim to such Governmental Authority for such refund at the Borrower's expense. If a Lender, the Issuing Lender, the Agent or any Arranger receives a refund in respect of any Taxes or Other Taxes with respect to which the Borrower has paid additional amounts pursuant to this Section 2.13, it shall within thirty (30) days from the date of such receipt pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.13 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Lender, the Issuing Lender, the Agent or such Arranger and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that the Borrower, upon the request of such Lender, the Issuing Lender, the Agent or any Arranger, agrees to repay the amount paid over to the Borrower (plus penalties, interest or other charges payable to the relevant Governmental Authority) to such Lender, the Issuing Lender, the Agent or any Arranger in the event such Lender, the Issuing Lender, the Agent or any Arranger is required to repay such refund to such Governmental Authority.

        Section 2.14    Break Funding Payments.    The Borrower agree to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of a LIBOR Loan after the Borrower has given irrevocable notice requesting such borrowing in accordance with Section 2.01(d) or 3.01 or (b) a prepayment of a LIBOR Loan on any day other than the last day of the Interest Period applicable to such LIBOR Loan. The provisions of this Section 2.14 shall survive the termination of the Transaction Documents and the payment of all amounts payable hereunder and thereunder. A certificate as to any additional amounts payable pursuant to this Section 2.14 submitted by such Lender to the Borrower shall (i) set forth the basis for requesting such amounts and (ii) be conclusive absent manifest error.

        Section 2.15    Alternate Rate of Interest.    If prior to the commencement of any Interest Period: (a) the Agent determines (which determination shall be reasonably made and shall be conclusive absent manifest error) that, by reason of changes arising after the date of this Agreement affecting the interbank LIBOR market, or any Lender's position in such market, adequate and reasonable means do not exist for ascertaining Adjusted LIBOR, for such Interest Period, or (b) the Agent is advised by any Lender that, by reason of changes arising after the date of this Agreement affecting the interbank LIBOR market, or any Lender's position in such market, Adjusted LIBOR for such Interest Period will not adequately and fairly reflect the cost to such Lender of making or maintaining such Lender's Proportionate Share of the Revolving Loans during such Interest Period, then the Agent shall promptly give notice thereof to the Borrower, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such notice no longer exist, the Revolving Loans shall not be LIBOR Loans and interest on the Revolving Loans shall be calculated by reference to the Base Rate (in the case of clause (a) above) or such Lender's Proportionate Share of the Revolving Loan (in the case of clause (b)

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above) shall not be a LIBOR Loan and interest on such portion of the Revolving Loans shall be calculated by reference to the Base Rate.

        Section 2.16    Fees.

        (a)   The Borrower shall pay the Commitment Fee to the Agent on each Commitment Fee Payment Date.

        (b)   The Borrower shall pay (i) to the Agent for pro rata distribution to each L/C Participant (based upon each L/C Participant's Proportionate Share) a fee in respect of each Letter of Credit (the "Letter of Credit Fee") for the period from and including the date of issuance of such Letter of Credit through the Termination Date of such Letter of Credit, computed at a rate equal to the Applicable Margin for Revolving Loans maintained as LIBOR Loans per annum on the average daily Stated Amount of such Letter of Credit and (ii) to the Issuing Lender in respect of each Letter of Credit issued by it, a fee (the "Facing Fee"), for the period from and including the date of issuance of such Letter of Credit through the Termination Date of such Letter of Credit, computed at a rate equal to 0.25% per annum on the daily Stated Amount of such Letter of Credit; provided that in no event shall the annual Facing Fee with respect to any Letter of Credit be less than $500. Accrued Letter of Credit and Facing Fees shall be due and payable quarterly in arrears on each Commitment Fee Payment Date and on the first date on and after the Maturity Date on which no Letters of Credit remain outstanding. In addition, the Borrower shall pay, upon each payment under, issuance of, or amendment to, any Letter of Credit, such amount as shall at the time of such event be the administrative charge which the Issuing Lender is generally imposing in connection with such occurrence with respect to letters of credit.

        (c)   The Borrower shall pay the Restatement Fee on the Effective Date.

ARTICLE III
LETTERS OF CREDIT

        Section 3.01    Issuing the Letters of Credit.    The Borrower shall, at least five (5) Business Days prior to an Issuance Date, deliver an Issuance Request to the Agent in writing addressed to the Agent. Each Issuance Request shall be effective on receipt by the Agent and shall be irrevocable. On the Issuance Date and upon fulfillment of the applicable conditions set forth in Article V, the Letter of Credit shall be issued. Notwithstanding anything to the contrary contained herein, the Issuing Lender shall have no obligation to issue a Letter of Credit if (a) a Default or Event of Default has occurred and is continuing, (b), after giving effect to such issuance, the L/C Obligations would exceed the L/C Commitment or (c) after giving effect to the issuance of such Letter of Credit, the sum of the outstanding L/C Obligations and the aggregate principal amount of all outstanding Revolving Loans would exceed the Aggregate Tranche A Loan Commitment. Each Letter of Credit shall be in a Minimum Borrowing Amount and no Letter of Credit shall have a Termination Date later than thirty (30) days prior to the Maturity Date.

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        Section 3.02    Drawings under Letters of Credit.    In the event that there occurs one or more drawings under any Letter of Credit, and such drawing(s) are made in accordance with the terms and conditions thereof, the Issuing Lender shall, on the Business Day on which such drawing is required to be honored pursuant to such Letter of Credit (the "Disbursement Date"), make available to the beneficiary under such Letter of Credit, in same day funds, the amount of such drawing.

        Section 3.03    Reimbursement on Demand.    On (or promptly after) each Disbursement Date, the Issuing Lender shall notify the Borrower of a drawing under a Letter of Credit, and the Issuing Lender will promptly thereafter furnish to the Borrower copies of (i) each draft drawn under such Letter of Credit and (ii) each certificate and each other document (if any) accompanying any such draft. The Borrower will, as reimbursement for such payment by the Issuing Lender either (i) immediately and unconditionally repay the amount drawn under a Letter of Credit to the Issuing Lender, or (ii) if the Borrower does not effect such repayment by 5:00 p.m., New York time, on the Disbursement Date, the amount drawn under such Letter of Credit shall automatically convert into a Revolving Loan (without regard to the minimum prior notice provisions of Section 2.01(d) and the Minimum Borrowing Amount) on the following day, provided that no Default or Event of Default shall have occurred and be continuing as of the Disbursement Date. If, however, a Default or an Event of Default shall have occurred and be continuing as of the Disbursement Date, the amount drawn under such Letter of Credit shall not convert into a Revolving Loan and, instead, shall be immediately due and payable hereunder, as of the Disbursement Date.

        Section 3.04    Obligations Absolute.    The obligation of the Borrower to reimburse the Issuing Lender with respect to each payment under each Letter of Credit (its "Reimbursement Obligation") shall, to the extent permitted by applicable New York law, be unconditional and irrevocable, and shall to such extent be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, to the extent permitted by applicable New York Law, the following circumstances:

        (a)   any lack of validity or enforceability of any Letter of Credit or any related contract, instrument or other agreement in support of which the Letter of Credit has been issued (collectively referred to as a "Contract");

        (b)   any amendment or waiver of or any consent to departure from all or any of the Letters of Credit or any Contract in each case agreed to by the Borrower;

        (c)   the existence of any claim, set-off, defense or other right which the Borrower may have at any time against any beneficiary of any Letter of Credit (or any Person for whom any such beneficiary may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or in such Letter of Credit or any Contract or any unrelated transaction;

        (d)   any certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent or insufficient in any respect or any statement therein being untrue or inaccurate in any respect due to circumstances not known to the Issuing Lender; or

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        (e) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing;

provided, however, that such circumstances do not result directly from the gross negligence, willful misconduct or bad faith of the Issuing Lender.

        Section 3.05    Action in Respect of the Letters of Credit.    To the extent permitted by applicable New York law, the Borrower assumes all risks of the acts or omissions of the beneficiaries under the Letters of Credit with respect to their use of the Letters of Credit. Neither the Issuing Lender nor any of their officers, employees, agents or directors shall be liable or responsible for:

        (a) the use which may be made of any Letter of Credit;

        (b) the form, sufficiency, accuracy or genuineness of certificates or other documents delivered under or in connection with any Letter of Credit, even if such certificates or other documents should prove to be insufficient, fraudulent or forged;

        (c) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, email, cable, telex, telecopy, telegraph, wireless or otherwise; or

        (d) errors in translation or for errors in interpretation of technical terms;

provided, however, that such circumstances do not result directly from the gross negligence, willful misconduct or bad faith of the Issuing Lender. The Issuing Lender may accept certificates or other documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. In furtherance and not in limitation of the foregoing provisions, the Borrower agrees that, except for the Issuing Lender's gross negligence, willful misconduct or bad faith, and except as otherwise required by applicable New York law, any action, inaction or omission taken or suffered by the Issuing Lender in good faith in connection with any Letter of Credit, or the relative drafts, certificates or other documents, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower.

        Section 3.06    Indemnification.    The Borrower hereby agrees to protect, indemnify, defend and hold harmless the Issuing Lender and each of its directors, officers, employees and agents and any person who controls any of them within the meaning of the federal, state and foreign securities laws from and against any and all liabilities, losses, obligations, damages, penalties, expenses or costs of any kind or nature and from any suits, judgments, claims or demands (including in respect of or for attorney costs and other fees and other disbursements of counsel for and consultants of such party in connection with any investigative, administrative or judicial proceeding, whether or not such party shall be designated a party thereto) (collectively, the "Indemnified Liabilities") incurred by reason of or in connection with the execution and delivery of, or payment or failure to make payment under, any Letter of Credit; provided, however, that the Borrower shall not be required to indemnify pursuant to this Section for any Indemnified Liabilities to the extent caused by (i) the Issuing Lender's gross negligence or willful misconduct in determining whether documents presented under any Letter of Credit comply with the terms of such Letter of Credit or (ii) the Issuing Lender's gross negligence or

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willful misconduct in failing to make lawful payment under any Letter of Credit after presentation to it by a beneficiary of a draft and certificate strictly complying with the terms and conditions of such Letter of Credit. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

        Section 3.07    Deemed Disbursements.    Upon the occurrence and during the continuation of an Event of Default and upon notification by the Issuing Lender to the Borrower of its obligations under this Section 3.07, the Borrower shall be immediately obligated to deliver to the Issuing Lender cash collateral for the Issuing Lender's unfunded obligations under all issued and outstanding Letters of Credit in an amount equal to the then aggregate amount of each Letter of Credit which is undrawn and available under all issued and outstanding Letters of Credit. Any amounts so payable by the Borrower pursuant to this Section shall be deposited in immediately available funds in an interest bearing collateral account maintained with the Issuing Lender, and held as collateral security for the Reimbursement Obligations. At such time when all Events of Default shall have been cured or waived, the Issuing Lender shall return to the Borrower all amounts then on deposit with the Issuing Lender pursuant to this Section 3.07 which have not been applied towards satisfaction of all amounts owing to the Issuing Lender.

        Section 3.08    L/C Participations.

        (a)   The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Proportionate Share in the Issuing Lender's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand, at the Issuing Lender's address for notices specified herein, an amount equal to such L/C Participant's Proportionate Share of the amount of such draft, or any part thereof, which is not so reimbursed and whether or not such amount is converted into a Revolving Loan pursuant to Section 3.03.

        (b)   Upon becoming aware of any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.08(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each L/C Participant in writing of the amount and due date of such required payment and such L/C Participant shall pay to the Issuing Lender the amount specified on the applicable due date. If any such amount is paid to the Issuing Lender after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the

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Issuing Lender during the period from and including the date such payment is due to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapsed during such period and the denominator of which is 360. A certificate of the Issuing Lender with respect to any amounts owing under this Section 3.08(b) shall be conclusive in the absence of manifest error. With respect to payment to the Issuing Lender of the unreimbursed amounts described in this Section 3.08(b), if the L/C Participants receive written notice that any such payment is due (A) prior to 1:00 p.m. (New York time) on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. (New York time) on any Business Day, such payment shall be due on the following Business Day.

        (c)   Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant such L/C Participant's Proportionate Share of such payment in accordance with this Section 3.08, the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise), or any payment of interest on account thereof, the Issuing Lender will promptly distribute to such L/C Participant its Proportionate Share thereof; provided, however, that in the event any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

        Section 3.09    Lenders Not Required to Make Revolving Loans or Issue Letters of Credit.    Notwithstanding anything to the contrary contained in this Agreement, neither the Lenders nor the Issuing Lender shall be obligated in any manner to make any Revolving Loan or issue any Letter of Credit in a principal amount which, together with the aggregate principal amount of all Revolving Loans outstanding and all L/C Obligations outstanding on the proposed date of making such Revolving Loan or issuance of a Letter of Credit, would exceed the Aggregate Tranche A Loan Commitment.

ARTICLE IV
REPRESENTATIONS, WARRANTIES AND AGREEMENTS

        In order to induce the Agent, the Arrangers and the Lenders to enter into this Agreement and to induce the Lenders to make the Facility available, each Transaction Party hereby represents and warrants as of the date hereof and as of the Effective Date to the Agent, the Arrangers and the Lenders (which representations and warranties shall survive the execution and delivery of this Agreement, the Revolving Loan Notes and the other Transaction Documents and the drawdown of the Revolving Loans and the issuances of any Letters of Credit hereunder) that:

        Section 4.01    Company Status.    Each Transaction Party (i) is a duly organized and validly existing in good standing under the laws of the jurisdiction of its incorporation or formation, (ii) has the organizational power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business requires such qualifications, except where the failure to be so qualified is not reasonably expected to result in a Material Adverse Change.

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        Section 4.02    Company Power and Authority.    Each Transaction Party has the requisite power and authority to execute, deliver and perform the terms and provisions of each of the Transaction Documents to which it is party and has taken all necessary action to authorize the execution, delivery and performance by it of each of such Transaction Documents. Each Transaction Party has duly executed and delivered each of the Transaction Documents to which it is party, and each of such Transaction Documents constitutes the legal, valid and binding obligation of such Transaction Party enforceable in accordance with its terms, except to the extent that such enforceability may be limited by any applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditor's rights and by general principles of equity.

        Section 4.03    No Violation.    Neither the execution, delivery or performance by any Transaction Party of the Transaction Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any provision of any applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality, other than any such contravention that could not reasonably be expected to result in a Material Adverse Change, (ii) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the material properties or assets of the Borrower or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the Certificate of Incorporation or other documents of the Borrower or any of its Subsidiaries.

        Section 4.04    Governmental Approvals.    Except (a) as otherwise disclosed in writing to the Lenders on or prior to the date hereof, (b) for filings and recordings in connection with the Security Documents (which filings shall be made on or before the Effective Date with respect to the Collateral delivered as of the Effective Date) and (c) as have been obtained and are in effect, no order, consent, approval, license, authorization or validation of, or filing, recording or registration with or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the consummation and performance by any Transaction Party of any Transaction Document to which it is a party or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which it is a party.

        Section 4.05    Financial Statement; Financial Condition; Undisclosed Liabilities; etc.    Except as otherwise disclosed in writing to the Lenders on or prior to the date hereof, the financial information regarding the Borrower and its Subsidiaries for the year ended December 31, 2002 and for the quarter ended March 31, 2003 contained in the Borrower's Form 10-K/A, and Form 10-Q, respectively, are complete and correct, have been prepared in accordance with GAAP and accurately and fairly present the financial condition of the parties covered thereby as of the respective dates thereof and the results of the operations thereof for the period or respective periods covered by such financial statements and since the date of the most recent of such statements, there has been no Material Adverse Change and there are no contingent obligations, liabilities for Taxes or other outstanding financial obligations which are material in

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the aggregate except as disclosed in such statements. No written information, exhibit, schedule or report prepared by or on behalf of the Borrower and furnished to the Agent or the Lenders by or at the direction of the Borrower or any of its Subsidiaries in connection with the negotiation of this Agreement contained any material misstatement of fact or, when such statement is considered with all other written statements furnished to the Agent or the Lenders in that connection, omitted to state a material fact or any fact necessary to make the statement contained therein not misleading; provided, that, the financial information with respect to the Borrower's projections, copies of which have been furnished to the Agent and each Lender prior to the Effective Date, were prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed by the Borrower to be reasonable in all material respects at the time made.

        Section 4.06    Litigation.    Except as disclosed in Schedule 4.06 hereto, there is no action, suit, proceeding or investigation pending or, to the best knowledge of each Transaction Party, threatened, before any court or administrative agency that might: (i) adversely affect its ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party, (ii) reasonably be expected to result in any judgment or liability which would result in a Material Adverse Change or (iii) adversely affect the enforceability of this Agreement, any Revolving Loan Note or any other Transaction Document.

        Section 4.07    No Default.    No Transaction Party is in default (in any respect that could reasonably be expected to result in a Material Adverse Change) under any agreement by which it is bound, or is in default in respect of any financial commitment or obligation.

        Section 4.08    Use of Proceeds; Margin Regulations.

        (a)   The proceeds received with respect to the Revolving Loans shall be used by the Borrower for (i) general corporate purposes and (ii) to refinance and repay the Existing Indebtedness.

        (b)   No part of the proceeds of any Revolving Loan will be used by the Borrower to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Revolving Loan nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

        Section 4.09    Tax Returns and Payments.    The Borrower and each of its Subsidiaries has filed or caused to be filed, with the appropriate taxing authority, all federal, state, provincial and other returns, statements, forms and reports for Taxes (the "Returns") required to be filed by or with respect to the income, properties or operations of the Borrower and/or its Subsidiaries except where the failure to so file or cause to be filed could not reasonably be expected to result in a Material Adverse Change. The Borrower and its Subsidiaries have paid all Taxes payable by them other than (a) Taxes which are not delinquent, (b) Taxes contested in good faith for which adequate reserves have been established in accordance with GAAP and (c) foreign Taxes as to which the failure to pay such foreign Taxes could not reasonably be expected to result in a Material Adverse Change.

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        Section 4.10    Compliance with ERISA.

        (a)   Except, in each case, as could not reasonably be expected to result in a Material Adverse Change or except as disclosed on Schedule 4.10 hereto, (i) each Plan (and each related trust, insurance contract or fund) is in compliance in all material respects with its terms and with all applicable laws, including without limitation ERISA and the Code; (ii) each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service to the effect that it is qualified and meets the requirements of Sections 401(a) and 501(a) of the Code and nothing has occurred since the date of such determination letter that could adversely affect the qualification of such Plan; (iii) the most recent annual report (Form 5500 Series) with respect to each Plan, including Schedule B (Actuarial Information) thereto, copies of which have been filed with the Internal Revenue Service, is complete and correct and fairly presents the funding status of each such Plan, and since the date of such report there has been no Material Adverse Change in such funding status; (iv) no Reportable Event has occurred or is reasonably likely to occur; (v) no Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization; (vi) no Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an accumulated funding deficiency, within the meaning of such sections of the Code or ERISA, or has applied for or received a waiver of a funding deficiency or an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA; (vii) all contributions required to be made with respect to a Plan have been or will be timely made; (viii) neither the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has committed any violation or incurred any liability (including any indirect, contingent or secondary liability) pursuant to Section 406, 409, 502(i), 502(l), 515 or Title IV of ERISA (other than the payment of premiums, none of which are overdue) or Section 401(a)(29), 4971 or 4975 of the Code or reasonably expects to incur any such liability under any of the foregoing sections; (ix) no condition exists which presents a risk to the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code; (x) no proceedings have been instituted to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA; (xi) neither the Borrower, any Subsidiary Guarantor nor any ERISA Affiliate has incurred any liability under the Worker Adjustment and Retraining Notification Act (29 U.S.C. §§ 201-2109) (which remains unpaid); (xii) no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, expected or threatened; (xiii) the Borrower has not received notice that indicates the existence of potential withdrawal liability under a Multiemployer Plan (as defined In Section 4001(a)(3) of ERISA); (xiv) each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate has at all times been operated in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; (xv) no lien or security interest encumbrance on the assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate that is imposed under the Code or ERISA or is likely to arise in

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connection with any Plan; (xvi) the Borrower and its Subsidiaries do not maintain or contribute to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) which provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan; (xvii) no Plan has an Unfunded Current Liability in excess of $1,000,000; (xviii) the accumulated post retirement benefit obligation (as determined in accordance with Financial Accounting Standard 106 of the Borrower, any Subsidiary Guarantor and any ERISA Affiliate, to the extent it could subject the Borrower to liability, shall not as of the end of the fiscal year preceding the Effective Date exceed $1,000,000, and there is no other post-termination benefit obligation for which the Borrower could reasonably be expected to incur liability or be obligated in excess of $1,000,000, and the Borrower shall not take any action not required by applicable law that could reasonably be expected to cause such obligation to increase above $1,000,000; and (xix) using actuarial assumptions and computation methods consistent with Part 1 of Subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and its Subsidiaries and their ERISA Affiliates to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of such Plan ended prior to the date of the most recent Credit Event, would not exceed $100,000.

        (b)   Except, in each case, as could not reasonably be expected to result in a Material Adverse Change, (i) each Foreign Pension Plan has been maintained in compliance in all material respects with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; (ii) all contributions required to be made with respect to a Foreign Pension Plan have been timely made; (iii) neither the Borrower nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign Pension Plan; and (iv) the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower's most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.

        Section 4.11    Ownership; Subsidiaries.    Schedule 4.11 correctly (a) lists each of the Borrower's direct and indirect Subsidiaries as of the Effective Date and (b) describes the Equity Interests owned by the Borrower (directly or indirectly) in each of the Subsidiary Guarantors as of the Effective Date.

        Section 4.12    Compliance with Statutes, etc.    The Borrower and each of its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its businesses and the ownership of its property, except such noncompliances as could not (in the event such noncompliance were asserted by any Person through appropriate action), individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

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        Section 4.13    Investment Company Act.    Neither the Borrower nor any of its Subsidiaries is an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

        Section 4.14    Environmental Matters.

        (a)   To the actual knowledge of each Responsible Officer of each Transaction Party who executes any Transaction Document on behalf of any Transaction Party and without independent investigation: (i) except as disclosed in Schedule 4.14, the Borrower and each of its Subsidiaries have complied with, and on the date of each Credit Event will be in compliance with, all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws, (ii) there are no pending or threatened Environmental Claims against the Borrower or any of its Subsidiaries or any Real Property owned or operated by the Borrower or any of its Subsidiaries in excess of $150,000, (iii) there are no facts, circumstances, conditions or occurrences with respect to the business or operations of the Borrower or any Real Property at any time owned or operated by the Borrower or any of its Subsidiaries that could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Real Property in excess of $150,000, or to cause any such currently owned Real Property to be subject to any restrictions on the ownership, occupancy, use or transferability of such Real Property by the Borrower or any of its Subsidiaries under any applicable Environmental Law.

        (b)   To the actual knowledge of each Responsible Officer of each Transaction Party who executes any Transaction Document on behalf of any Transaction Party and without independent investigation: (i) except as disclosed in Schedule 4.14, Hazardous Materials have not at any time been generated, used, treated or stored on, or transported to or from, any Real Property owned or operated by the Borrower or any of its Subsidiaries where such generation, use, treatment or storage has violated or could reasonably be expected to violate any Environmental Law in such a manner so as to cause this representation to be untrue; or (ii) Hazardous Materials have not at any time been Released on or from any Real Property owned or operated by the Borrower or any of its Subsidiaries where such Release has violated or could reasonably be expected to violate any applicable Environmental Law in such a manner so as to cause this representation to be untrue.

        Section 4.15    Labor Relations.    (a) Except as could not reasonably be expected to result in a Material Adverse Change, neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor practice; (b) except (in each case) as could not reasonably be expected to result in a Material Adverse Change, there is (i) no unfair labor practice complaint pending against the Borrower or any of its Subsidiaries, or, to the knowledge of the Borrower, threatened against any of them, before the National Labor Relations Board, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or any of its Subsidiaries or threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of its Subsidiaries or threatened against the Borrower or any of its Subsidiaries and (iii) no union representation proceeding pending with respect to the employees of the Borrower or any of its Subsidiaries; and

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(c) except (in each case) as could not reasonably be expected to result in a Material Adverse Change, hours worked by and payments made to any employee of the Borrower, any Subsidiary or any ERISA Affiliate have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters.

        Section 4.16    Patents, Licenses, Franchises and Formulas.    The Borrower and each of its Subsidiaries owns or is licensed to use all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, or rights with respect to the foregoing, and has obtained assignments of all material leases and other rights of whatever nature, reasonably necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to obtain or so own which, as the case may be, has had, or could reasonably be expected to result in, a Material Adverse Change.

        Section 4.17    Security Interests.    On and after the Effective Date, each of the Security Documents creates (or after the execution and delivery thereof, will create), as security for the Obligations purported to be secured thereby, a valid and enforceable security interest in and Lien on all of the Collateral subject thereto, which shall be perfected upon the taking of possession thereof or completion of filings with respect thereto, in each case as required by this Agreement or the other Transaction Documents, superior to and prior to the rights of all third Persons and subject to no other Liens (except for Permitted Encumbrances with respect to the Vessels, first mortgages with respect to the Second Lien Vessels and Customary Permitted Liens with respect to other assets). No filings or recordings are required in order to perfect the security interests created under any Security Document except for filings or recordings required in connection with any such Security Document which shall have been made substantially contemporaneously with the execution and delivery thereof.

        Section 4.18    Indebtedness.    Schedule 4.18 sets forth a true and complete list of all (i) Indebtedness for borrowed money of the Borrower and each of its Subsidiaries outstanding as of the Effective Date and (ii) agreements existing on the Effective Date pursuant to which the Borrower or any of its Subsidiaries are entitled to incur Indebtedness, in each case showing the aggregate principal amount thereof and the name of the borrower and any other entity which directly or indirectly guaranteed such debt.

        Section 4.19    Capitalization of Borrower.    On and as of the Effective Date, the authorized capital stock of the Borrower shall consist of 40,000,000 shares of common stock, 27,317,735 shares of which shall be issued and outstanding and 5,000,000 shares of preferred stock, none of which shall be issued or outstanding. All such outstanding shares of common stock are duly and validly issued and fully paid and non-assessable.

        Section 4.20    Concerning the Vessels.    The name, official number, registered owner, and jurisdiction of registration of each Vessel is set forth on Schedule 4.20 hereto. Except as set forth on Schedule 4.20 (which includes a list of vessels designated as laid-up), each Vessel is operated in material compliance with all applicable maritime rules and regulations, including, without limitation, with respect to each Vessel operated in the coastwise trade of the United States of America, the Shipping Act of 1916, as amended and in effect, and the regulations promulgated thereunder. Each Vessel not designated as laid-up on Schedule 4.20 is maintained and operated in material compliance with all applicable Environmental Laws.

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        Section 4.21    Citizenship.    The Borrower and each Subsidiary Guarantor which owns or operates one or more Vessels is qualified to own and operate such Vessels under the laws of the Approved Jurisdiction.

        Section 4.22    Vessel Classification.    Except (a) as permitted by the laws and/or regulations of the relevant flag state or (b) with respect to a Vessel that has been laid-up in accordance with Section 6.20(c) of this Agreement, each Vessel is classified in the highest classification and rating for vessels of the same age and type with the respective classification society set forth in Schedule 4.20, without any conditions or recommendations affecting class other than those for which the time prescribed for curing the condition or recommendation has not passed.

        Section 4.23    Reserved

        Section 4.24    Insurance.    Each of the Credit Parties has insured its properties and assets against such risks and in such amounts as are customary for companies engaged in similar businesses.

ARTICLE V
CONDITIONS OF LENDING

        Section 5.01    Conditions Precedent to Drawdown of the Initial Loan.    The obligation of the Lenders to make the Initial Revolving Loan available to the Borrower and/or issue a Letter of Credit (if the Initial Revolving Loan has not yet been made) under this Agreement shall be expressly subject to the following conditions precedent:

        (a)   The Agent shall have received the following documents in form and substance satisfactory to the Arrangers and their legal advisor:

(i)

copies, certified as true and complete by an officer of each Transaction Party, of the resolutions of such Transaction Party evidencing approval of this Agreement, the Revolving Loan Notes and the other Transaction Documents to which it is a party and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf, or other evidence of such approvals and authorizations;



(ii)

copies, certified as true and complete by an officer of each Transaction Party, of all documents evidencing any other necessary action (including actions by such parties thereto other than the Transaction Parties as may be required by the Arrangers), approvals or consents with respect to the Transaction Documents;



(iii)

copies, certified as true and complete by an officer of each Credit Party of the certificate of incorporation and bylaws or the certificate of formation and operating agreement (or equivalent instruments) thereof;



(iv)

certificate of the Secretary of each Released Subsidiary Guarantor stating that since September 13, 2002 the certificate of incorporation and by-laws or the certificate of formation and operating agreement (or equivalent

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instruments) thereof have not been amended, annulled, rescinded or revoked and are in full force and effect as of the Effective Date.

(v)

certificate of the Secretary of the Borrower certifying that it legally and beneficially owns, directly or indirectly, all of the issued and outstanding Equity Interests of each of the Subsidiary Guarantors and that, except as disclosed in a schedule hereto, such Equity Interests are free and clear of any liens, claims, pledges or other encumbrances whatsoever;



(vi)

certificate of the Secretary of each Subsidiary Guarantor certifying as to the record ownership of all of its issued and outstanding Equity Interests; and



(vii)

certificates of the jurisdiction of formation of each Transaction Party as to the good standing thereof.

        (b)   The Agent shall have received evidence satisfactory to the Arrangers and their legal advisor that:

(i)

the Vessels (except as disclosed in schedule 4.20) are in the sole and absolute ownership of the relevant Subsidiary Guarantor as set forth in Schedule 4.20 and duly registered in such Subsidiary Guarantor's name under the flag of an Approved Jurisdiction, unencumbered, save and except for the Mortgage recorded against it and Permitted Encumbrances and with respect to Second Lien Vessels the first mortgages thereon as of the Initial Closing Date;



(ii)

the Amended and Restated Mortgage on each Vessel has been properly recorded under the laws of the jurisdiction of registration and constitutes a first priority mortgage (or, in the case of the Second Lien Vessels, a second priority mortgage), subject only to Permitted Encumbrances;



(iii)

except as otherwise disclosed to the Agent in writing, the Vessels are classed in the highest classification and rating for vessels of the same age and type with the respective classification society as set forth in Schedule 4.22 without any outstanding conditions or recommendations affecting class other than those for which the time prescribed for curing the condition or recommendation has not passed;



(iv)

except as otherwise disclosed to the Agent in writing, each Vessel is operationally seaworthy and in every way fit for its intended service;



(v)

all necessary governmental or regulatory approvals, licenses and authorities which are necessary to the operation of each Vessel have been obtained from each applicable Governmental Authority; and



(vi)

each Vessel is insured in accordance with the provisions of the related Mortgage and the requirements thereof in respect of such insurances have been complied with.

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        (c)   The Borrower shall have duly executed and delivered this Agreement, the Revolving Loan Notes, the Amended and Restated Pledge Agreement, the Amended and Restated Assignment of Earnings and Insurances and the other Transaction Documents to which it is a Party and each other Transaction Party shall have duly executed and delivered this Agreement, the Security Documents and the other Transaction Documents to which it is a party. Notwithstanding any provision in this Agreement to the contrary, so long as MARAD is the first mortgagee on any vessel owned by Seabulk Towing, Inc., Seabulk Towing, Inc. shall be under no obligation to enter into or execute any security agreement, Assignment of Earnings and Insurances, or any other agreement granting a security interest in its assets, except for first priority Mortgages and Assignments of Insurances with respect to its Vessels.

        (d)   The Borrower and the Subsidiary Guarantors shall have delivered the Equity Interests in each Subsidiary Guarantor subject to the Pledge Agreement to the Agent, together with executed and undated stock powers with respect thereto, and all other documents required to be delivered pursuant to the Pledge Agreement.

        (e)   The Borrower and the Subsidiary Guarantors shall each have duly executed and delivered the following documents:

(i)

the Amended and Restated Mortgage with respect to its Vessel(s);



(ii)

an Amended and Restated Assignment of Earnings and Insurances with respect to its Vessel(s), other than its Second Lien Vessels, or, with respect to the Vessels owned by Seabulk Towing, Inc., an Amended and Restated Assignment of Insurances;



(iii)

Uniform Commercial Code Financing Statements for filing with the appropriate jurisdictions necessary to perfect the security interest of the Agent for the benefit of the Lenders in and to its Collateral; and



(iv)

such other documents as may be required to perfect the security interest of the Agent, on behalf of the Lenders, in the Collateral.

        (f)    The Agent shall have received a certificate from the Borrower to the effect that the Borrower is in compliance with the conditions precedent set forth in this Article V.

        (g)   The Agent shall have received evidence that neither the Borrower nor any of its Subsidiaries is subject to any Environmental Claim which could reasonably be expected to result in a Material Adverse Change.

        (h)   The Agent shall have received payment in full of all fees and expenses due on or before the Effective Date to the Agents, the Arrangers and the Lenders under Section 2.16;

        (i)    The Agent shall have received evidence satisfactory to the Arrangers and to their legal advisor that, save for the liens created by the Mortgages and the

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Assignments of Earnings and Insurances, there are no liens, charges or encumbrances of any kind whatsoever on any of the Vessels or on their respective earnings except for Permitted Encumbrances and, with respect to the Second Lien Vessels, the first mortgages thereon as of the Initial Closing Date.

        (j)    The Agent shall have received the favorable written opinions of counsel to the Borrower and the Subsidiary Guarantors, dated the Effective Date and in form and substance satisfactory to the Agent and its legal advisors.

        (k)   The Agent shall have received a favorable written opinion of counsel to the Borrower to the effect that any existing indebtedness of the Lightship Tanker Entities is non-recourse to the Borrower and the Subsidiary Guarantors.

        (l)    The Borrower shall have completed the successful offering of the New Notes, the gross proceeds of which shall at least equal $125,000,000.

        (m)  There shall have occurred no event that could result in a Material Adverse Change since the date hereof.

        (n)   The Borrower shall have repaid the Term Loans together with all interest accrued and unpaid thereon and any and all actual costs and expenses incurred by any Lender in connection with any breaking of funding.

        (o)   The Agent shall have received an appraisal of each Vessel from an Appraiser dated no earlier than May 31, 2003; provided however, that the appraisals for at least six of the Vessels must be (i) from an Appraiser; (ii) dated no earlier than May 31, 2003 and (iii) the result of a physical inspection made by such Appraiser. The Agent shall have received evidence that the Aggregate Fair Market Value of the Vessels (excluding laid-up Vessels and Vessels held for sale) is in an amount equal to or greater than US $160,000,000.

        (p)   The Agent shall have received updated corporate projections that include pro forma financial statements that give effect to the repayment of the Term Loans and the issuance of the New Notes.

        (q)   The Agent shall have received any additional documents, affidavits or certificates of the Borrower, the Subsidiary Guarantors or any other Person as it may reasonably require.

        Section 5.02    Further Conditions Precedent.    The obligation of the Lenders to make any Revolving Loan available to the Borrower under this Agreement or to issue any Letter of Credit shall be expressly and separately subject to the following further conditions precedent on the relevant Drawdown Date or Issuance Date, as the case may be:

        (a)   The Agent shall have received a Drawdown Request or Issuance Request, as the case may be, in accordance with the terms of Section 2.01(d) or Section 3.01, as the case may be.

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        (b)    The representations and warranties with respect to the Borrower and each Subsidiary Guarantor set forth in Article IV hereof shall be true and correct in all material respects with the same effect as though each such representation and warranty had been made on and as of such date, except to the extent that any of such representations and warranties expressly relate to earlier dates, or are no longer true as a result of transactions not prohibited by the Transaction Documents.

        (c)    No Default or Event of Default shall have occurred and be continuing.

        (d)    No change in any applicable laws, regulations, rules or in the interpretation thereof shall have occurred which make it unlawful for any Credit Party to make any payment as required under the terms of the Transaction Documents.

        Section 5.03    Release.    Upon satisfaction of the conditions precedent in Section 5.01, (a) the Agent, on behalf of the Lenders, shall release the Released Collateral, (b) the Released Subsidiary Guarantors shall be released from their respective Subsidiary Guarantee Agreements and thereafter shall no longer be deemed to be parties to this Agreement or any other Transaction Documents, (c) the Lenders shall cancel the Term Notes and deliver them to the Borrower and (d) the Lenders shall cancel the Existing Revolving Notes and deliver them to the Borrower.

ARTICLE VI
AFFIRMATIVE COVENANTS

        The Borrower covenants and agrees that, so long as this Agreement shall remain in effect or any of the Obligations shall be outstanding, it shall, and shall cause each of the Subsidiary Guarantors to unless the Borrower shall have received the prior written consent of the Requisite Lenders:

        Section 6.01    Existence.    Do or cause to be done all things necessary to preserve and keep in full force and effect its existence (except as permitted by Section 7.16), rights and franchises and comply with all laws applicable to it and at all times be qualified to do business in the jurisdictions where failure to qualify could reasonably be expected to result in a Material Adverse Change.

        Section 6.02    Payment of Debts.    Pay its debts, liabilities and obligations when due, except (a) any such debts, liabilities and obligations that are being contested in good faith by appropriate proceedings, (b) any single debt, liability or obligation, which does not exceed $2,500,000 and (c) any debts, liabilities and obligations, which in the aggregate do not exceed $5,000,000.

        Section 6.03    Accounts and Records.    Keep and maintain full and accurate accounts and records in accordance with GAAP consistently applied.

        Section 6.04    Payment of Taxes and Claims.    Prepare and timely file all tax returns required to be filed by it and pay and discharge all Taxes imposed upon it or in respect of any of its property and assets before the same shall become in default, as well as all lawful claims (including, without limitation, claims for labor, materials and supplies) which, if unpaid, might become a lien or charge upon the Collateral or any part thereof, except (a) in each case, for any

27

such Taxes as are being contested in good faith by appropriate proceedings or (b) with respect to foreign Taxes, the failure of which to pay or discharge could not reasonably be expected to result in a Material Adverse Change.

        Section 6.05    Financing Statements.    In the case of the Collateral, execute, financing statements or other documents deemed necessary or desirable by the Agent to perfect, maintain or preserve any security interest granted pursuant to the Transaction Documents and pay the filing costs pursuant to law. Without limiting the generality of the foregoing, each of the Credit Parties will execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be reasonably necessary or desirable, or that the Agent may reasonably request, to protect and preserve the Liens granted or purported to be granted hereby and by the other Transaction Documents. Each of the Credit Parties hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of such Credit Party, where permitted by law.

        Section 6.06    Compliance with Law.    Comply in all material respects with all applicable federal, state, local and foreign laws, ordinances, rules, orders and regulations now in force or hereafter enacted, including, without limitation all laws and regulations relating to environmental laws and employee benefit plans, failure to comply with which could reasonably be expected to result in a Material Adverse Change.

        Section 6.07    Financial Statements.    Furnish to the Agent the following financial statements:

        (a)    as soon as available but not later than ninety (90) days after the end of each fiscal year of the Borrower, complete copies of the consolidated financial reports of the Borrower and its Subsidiaries, all in reasonable detail, which shall include at least the consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such year and the related consolidated statements of income and sources and uses of funds for such year, which shall be audited reports prepared by independent chartered accountants of international standing;

        (b)    as soon as available but not later than ninety (90) days after the end of each fiscal year of the Borrower, complete copies of the consolidated financial reports of the Borrower and its Subsidiaries excluding the Lightship Tanker Entities, all in reasonable detail, which shall include at least the consolidated balance sheet of the Borrower and its Subsidiaries, excluding the Lightship Tanker Entities, as of the end of such year and the related consolidated statements of income and sources and uses of funds for such year, which shall be unaudited, but certified to be true and complete by the chief financial officer of the Borrower;

        (c)    as soon as available but not less than forty-five (45) days after the end of each of the first three quarters of each fiscal year of the Borrower, a quarterly interim consolidated balance sheet of the Borrower and its Subsidiaries and the related consolidated profit and loss statements and

28

sources and uses of funds, all in reasonable detail, unaudited, but certified to be true and complete by the chief financial officer of the Borrower;

        (d)    within ten (10) days of the filing thereof, copies of all registration statements and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and other material filings which the Borrower shall have filed with the SEC or any similar governmental authority; and

        (e)    promptly upon the mailing thereof to the shareholders of the Borrower, copies of all financial statements, reports, proxy statements, notices and other communications transmitted to all of the Borrower's shareholders;

        (f)    at such time as the financial statements described in Sections 6.07(a), 6.07(b) and 6.07(c) are delivered, a certificate of the Borrower's Chief Financial Officer (i) certifying the Borrower's compliance with each of its covenants contained herein and showing the calculations thereof (with respect to the covenants in Sections 6.14, 6.15, 6.16 and 6.17 hereof) in reasonable detail and (ii) stating that the financial statements delivered in accordance with Sections 6.07(a), 6.07(b) and 6.07(c) are complete and correct in all material respects and present fairly the financial condition and results of operations of the Borrower and its Subsidiaries as of the dates and for the periods indicated, in accordance with generally accepted accounting principles consistently applied (subject as to interim statements to normal year-end adjustments); and

        (g)    any other information regarding the Borrower that is material to the Transaction Documents or, the Revolving Loans or the Letters of Credit as any Lender, through the Agent, may reasonably request.

        Upon receipt the Agent shall promptly deliver the above referenced financial statements to the Lenders.

        Section 6.08    Access to Books and Records.    Permit the Agent and each Lender, and their respective duly authorized agents and officers, during normal business hours and upon reasonable notice to (a) examine the books and records of the Borrower and to make copies and extracts therefrom, and (b) discuss the affairs, finances and accounts of the Borrower, and be advised as to the same by, the officers of the Borrower as shall be relevant to the performance or observance of the terms, covenants or conditions of this Agreement, the other Transaction Documents or the financial condition of the Borrower.

        Section 6.09    Notifications.    Give prompt written notice to the Agent of (a) any Default of which the Borrower has actual knowledge or an Event of Default specifying the same and the steps being taken to remedy the same, (b) any litigation or governmental proceeding pending or, to the best knowledge of the Borrower, threatened against the Borrower or against any of the Subsidiaries which could reasonably be expected to result in a Material Adverse Change, (c) the withdrawal of any Vessel's rating by its classification society or the issuance by such classification society of any material recommendation or notation affecting class and (d) any other event or condition which could reasonably be expected to result in a Material Adverse Change.

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        Section 6.10    Performance of Obligations.    Not take, or fail to take, any action, or fail to use commercially reasonable efforts to prevent any action to be taken by others, (a) which would release any Person from any of such Person's covenants or obligations under any agreement or instrument included in the Security Documents, or (b) which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such agreement or instrument in a manner materially adverse to the Agent or the Lenders.

        Section 6.11    Environmental Matters.    Promptly, and in any event within five (5) Business Days after an officer of the Borrower or any of its Subsidiaries obtains actual knowledge thereof, give written notice to the Agent of one or more of the following environmental matters, unless, in each case, such environmental matters could not, individually or when aggregated with all other such environmental matters, be reasonably expected to result in a Material Adverse Change:

        (a)    any pending or threatened in writing Environmental Claim against the Borrower or any of its Subsidiaries or any Real Property owned or operated by the Borrower or any of its Subsidiaries;

        (b)    any condition or occurrence on or arising from any Real Property owned or operated by the Borrower or any of its Subsidiaries that (i) results in noncompliance by the Borrower or any of its Subsidiaries with any applicable Environmental Law or (ii) could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Real Property;

        (c)    any condition or occurrence on any Real Property owned or operated by the Borrower or any of its Subsidiaries that could reasonably be expected to cause such Real Property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Borrower or any of its Subsidiaries of such Real Property under any Environmental Law; and

        (d)    the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Real Property owned or operated by the Borrower or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Borrower shall deliver to each Lender all material notices received after the date hereof by them or any of its Subsidiaries from any Governmental Authority under, or pursuant to, CERCLA.

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower or such Subsidiary's response thereto. In addition, upon the request of the Agent, the Borrower will provide the Lenders with copies of all material communications with any Governmental Authority relating to Environmental Laws, all material communications with any Person (other than their attorneys) relating to any Environmental Claim of which notice is required to be given pursuant to this

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Section 6.11(e), and such detailed reports of any such Environmental Claim as may reasonably be requested by the Agent on behalf of the Lenders.

        Section 6.12    Transaction Document Obligations.    Pay the Revolving Loan Notes according to the reading, tenor and effect thereof, and do and perform every act and discharge all of the obligations provided to be performed by the Borrower under the Transaction Documents, including this Agreement, at the time or times and in the manner specified, and cause the Subsidiary Guarantors to take such action with respect to their obligations to be performed and discharged under the Transaction Documents to which they respectively are parties.

        Section 6.13    ERISA.    Promptly upon learning of the occurrence or the expected occurrence of (i) any material liability of any Credit Party or any ERISA Affiliate pursuant to ERISA in connection with the termination of any Plan or withdrawal or partial withdrawal of any multi-employer plan (as defined in ERISA), (ii) a failure to satisfy the minimum funding standards of Section 412 of the Code or Part 3 of Title I of ERISA by any Plan for which any Credit Party or any ERISA Affiliate is plan administrator (as defined in ERISA) other than to the extent such failure could not reasonably be expected to result in a Material Adverse Change, (iii) a plant closing or mass layoff (as defined in the Worker Adjustment and Retraining Notification Act) of the Borrower, any Subsidiary Guarantor or any ERISA Affiliate; (iv) the Borrower, any Subsidiary Guarantor or any ERISA Affiliate becoming liable for material increases in retiree medical, life insurance or other death benefits (contingent or otherwise) (other than as a result of a continuation of medical coverage required under section 4980B of the Code or the insurance coverage continuation provisions of applicable state law); or (v) a failure to satisfy the conditions represented, warranted and agreed to in Section 4.10 of this Agreement other than to the extent such failure could not reasonably be expected to result in a Material Adverse Change, furnish or cause to be furnished to the Agent written notice thereof.

        Section 6.14    Minimum Adjusted EBITDA to Adjusted Interest Expense.    With respect to the Borrower, maintain a ratio determined as of the last day of each of the Borrower's fiscal quarters commencing March 31, 2003 of Adjusted EBITDA to Adjusted Interest Expense as follows:

        (a)    through the fiscal quarter ending December 31, 2003, not less than 2.50 to 1.00;

        (b)    thereafter, until the fiscal quarter ending December 31, 2004, not less than 2.75 to 1.00;

        (c)    thereafter, until the fiscal quarter ending December 31, 2005, not less than 3.00 to 1.00; and

        (d)    thereafter, not less than 3.25 to 1.00.

        Section 6.15    Minimum Adjusted Tangible Net Worth.    With respect to the Borrower, maintain an Adjusted Tangible Net Worth of not less than One Hundred Million Dollars ($100,000,000) plus fifty percent (50%) of the Borrower's cumulative positive annual net income (on a consolidated basis) for each fiscal quarter from March 31, 2003 onwards, plus

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seventy-five percent (75%) of the net proceeds received by the Borrower (or any of the Borrower's Subsidiaries) from the issuance of Equity Interests issued after the Effective Date.

        Section 6.16    Maximum Adjusted Funded Debt Ratio.    With respect to the Borrower, maintain an Adjusted Funded Debt Ratio determined as of the last day of each of the Borrower's fiscal quarters commencing March 31, 2003 as follows:

        (a)    through the fiscal quarter ending March 31, 2004, not more than 4.00 to 1.00; and

        (b)    thereafter, not more than 3.50 to 1.00.

        Section 6.17    Minimum Fair Market Value of the Vessels.    Maintain an Asset Coverage Ratio at all times equal to or greater than 1.75 to 1.00.

        Section 6.18    Ownership of Subsidiary Guarantors.    With respect to the Borrower, own, directly or indirectly, the percentage of the Equity Interests of each Subsidiary Guarantor shown on Schedule 4.11 hereto.

        Section 6.19    Additional Vessels; Further Assurances.    If either (a) the Borrower is not in compliance with Section 6.17 hereof or (b) the Borrower or a Subsidiary Guarantor sells, leases, transfers, assigns or otherwise disposes of a Vessel to the Borrower or another Subsidiary Guarantor, then the Borrower shall or shall cause its Subsidiary within 30 days of such acquisition to:

        (a)    Execute and deliver a Mortgage, deliver related information and reports, and otherwise take such actions with respect to such Vessel and Mortgage as would have been required to satisfy the conditions of Section 5.01 if such new Vessel were a Vessel on the Effective Date;

        (b)    Execute and deliver a Subsidiary Guarantee Agreement (to the extent not previously delivered);

        (c)    Pledge and deliver, or cause to be pledged and delivered, all of the Equity Interest of such Subsidiary (to the extent not previously delivered) to the Agent for the benefit of the Lenders pursuant to the Pledge Agreement;

        (d)    Execute and deliver an Assignment of Earnings and Insurances; and

        (e)    Deliver an updated Schedule 4.20.

provided, however, that if, pursuant to Section 7.03, the Borrower or a Subsidiary Guarantor mortgages a vessel in order to remain in compliance with Section 6.17, such vessel must be a Qualified Substitute Vessel.

        Section 6.20    Vessel Operations and Management.    (a) Procure that each of the Vessels not laid-up in accordance with Section 6.20(c) hereof, shall at all times be (i) managed by the technical and commercial managers managing the Vessels as of the Effective Date, or by Seabulk Tankers, Inc., or by a technical and commercial manager that was a Subsidiary

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Guarantor as of the Effective Date, or such other managers acceptable to the Requisite Lenders in accordance with vessel management agreements acceptable to the Requisite Lenders, (ii) flagged under the laws of an Approved Jurisdiction and (iii) classed in the highest classification and rating for vessels of the same age and type without any outstanding conditions or recommendations affecting class (other than those for which the time prescribed for curing the condition or recommendation has not passed) with Lloyds Registry of Shipping, Det norske Veritas, Bureau Veritas, American Bureau of Shipping or such other classification society classing the Vessels as of the Effective Date or with such other classification society acceptable to the Agent; provided, however, if a Vessel is reflagged under the laws of an Approved Jurisdiction, it shall be a condition to such reflagging that the Subsidiary Guarantors deliver to the Agent (A) evidence (including an opinion of counsel) that such Vessel has been registered in the name of the related Subsidiary Guarantor under the laws of such jurisdiction; (B) evidence (including an opinion of counsel) that the related Mortgage has been properly recorded under the laws of such jurisdiction and constitutes a first priority mortgage (or, in the case of the Second Lien Vessels, a second priority mortgage) subject only to Permitted Encumbrances; (C) evidence that all necessary governmental or regulatory approvals, licenses and authorities which are necessary to the operation of the Vessel have been obtained; (D) evidence that insurances in compliance with the requirements of the Mortgage have been obtained; and (E) such other items as the Agent may reasonably require.

        (b)    Except with respect to any Vessel that has been laid-up in accordance with Section 6.20(c) hereof, comply in all material respects or to procure that the operator of each of the Vessels will comply in all material respects within the requisite applicable time limits for vessels of the same type, size, age and flag of the Vessels with the International Management Code for the Safe Operation of Ships and for Pollution Prevention (as the same may be amended from time to time, the "ISM Code") adopted by the International Maritime Organization or any replacement of the ISM Code and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all times thereafter, (i) to hold or to procure that the operator of each of the Vessels holds, a valid Document of Compliance (being a document issued to a vessel operator as evidence of its compliance with the requirements of the ISM Code) duly issued to the Subsidiary Guarantor or the operator (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate (being a document issued to a vessel as evidence that the vessel operator and its shipboard management operate in accordance with an approved structured and documented system enabling the personnel of that vessel operator to implement effectively the safety and environmental protection policy of that vessel operator) duly issued to each of the Vessels pursuant to the ISM Code, (ii) to provide the Agent with copies of any such Document of Compliance and Safety Management Certificate promptly following the issue thereof and after every renewal and (iii) to keep or to procure that there is kept, on board each of the Vessels a copy of any such Document of Compliance and the original of any such Safety Management Certificate

        (c)    Ensure that the laying-up of any Vessel is commercially reasonable; that each laid-up Vessel is maintained in accordance with ordinary and reasonable commercial standards for laid-up vessels, and that the Agent is notified of each lay-up within thirty (30) days after the commencement thereof.

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        Section 6.21    Appraisals.    Upon the request of the Agent and at the Borrower's expense, furnish the Agent with appraisals from an Appraiser for each of the Vessels; provided, however, such request shall not be made more than once in any twelve-month period.

        Section 6.22    Reimbursement for Expenses.    Reimburse the Agent, or cause the Subsidiary Guarantors to reimburse the Agent, promptly, with interest at the interest rate applicable to the Revolving Loan Notes, for any and all expenditures which the Agent may from time to time make in providing protection in respect of insurance, discharge or purchase of liens, taxes, dues, assessments, governmental charges, fines and penalties lawfully imposed, repairs, attorneys' fees, necessary translation fees for documents made in a language other than English and other matters, in each case in respect of which the Borrower has Defaulted in its obligation hereunder with respect to such matters, or the Subsidiary Guarantors have Defaulted in their Subsidiary Guarantee Obligation hereunder with respect to such matters or under a Subsidiary Guarantee Agreement with respect to such matters, to provide. Such obligation of the Borrower and the Subsidiary Guarantors to reimburse the Agent shall be an additional indebtedness due from the Borrower and the Subsidiary Guarantors, secured by the Collateral and the Transaction Documents, and shall be payable by the Borrower and the Subsidiary Guarantors on demand. The Agent, though privileged to do so, shall be under no obligation to the Borrower or the Subsidiary Guarantors to make any such expenditures, nor shall the making thereof relieve the Borrower or the Subsidiary Guarantors of any default in that respect.

        Section 6.23    Remittance of Insurance Proceeds.    (a) Immediately upon the receipt of any and all insurance proceeds in respect of a Second Lien Vessel that are not used to repair or replace the relevant Second Lien Vessel in accordance with the provisions of the MARAD first mortgage, promptly pay to the Agent, or cause the applicable Subsidiary Guarantor to pay to the Agent, any insurance proceeds received by the Borrower or a Subsidiary Guarantor after payment of such insurance proceeds to MARAD, as first mortgagee thereon, to the extent of the outstanding amount of the indebtedness owing to MARAD with respect to such Second Lien Vessel. Such proceeds shall be used to repay the Revolving Loans outstanding at such time; provided however, if the Borrower delivers to the Agent appraisals, from an Appraiser selected by the Agent for all of the Vessels, dated no earlier than ten (10) days prior to the date such proceeds are received by and paid to the Agent, that demonstrate compliance with Section 6.17, then such proceeds, or portion thereof not required to cause the Borrower to be in compliance with Section 6.17, shall be remitted by the Agent back to the Borrower.

        (b)   Upon the discharge of the first mortgage in favor of the United States of America, represented by the Secretary of Transportation, acting by and through the Maritime Administrator on any Second Lien Vessel owned by the Borrower and upon the discharge of the first mortgages in favor of the United States of America, represented by the Secretary of Transportation, acting by and through the Maritime Administrator on the vessels Condor, Eagle II and Hawk owned by Seabulk Towing, Inc., the Borrower or Seabulk Towing, Inc., as the case may be, shall deliver to the Agent an Assignment of Earnings and Insurances with respect to such Second Lien Vessels or Vessels owned by Seabulk Towing, Inc., as the case may be, together with such other documents as may be required to perfect the security interest of the Agent, on behalf of the Lenders, in such Collateral.

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ARTICLE VII
NEGATIVE COVENANTS

        The Borrower covenants and agrees that, so long as this Agreement shall remain in effect or any of the Obligations shall be outstanding, it shall not, and shall not permit any of the Subsidiary Guarantors to, without the prior written consent of the Requisite Lenders:

        Section 7.01    Reserved.

        Section 7.02    Liens.    Create, assume, permit or suffer to exist any mortgage, pledge, encumbrance, security interest or other Lien securing an obligation on all or any part of the Collateral, except Permitted Encumbrances with respect to the Vessels and Customary Permitted Liens with respect to the Collateral other than the Vessels.

        Section 7.03    Asset Sales.    Sell, lease, transfer, assign or otherwise dispose of any Vessel unless (a) after giving effect to such sale, lease, transfer, assignment or disposition, the Borrower is in compliance with Section 6.17 hereof or (b) the Borrower delivers to the Agent a Qualified Substitute Vessel and the documents described in Section 6.19 with respect thereto in order to remain in compliance with Section 6.17.

        Section 7.04    Assignment of Insurances.    Grant an assignment or permit or suffer to exist any mortgage, pledge, encumbrance, security interest or other Lien on the Insurances relating to a Second Lien Vessel other than Liens in favor of MARAD.

        Section 7.05    Sale of Notes or Accounts Receivable.    Sell, lease, transfer, assign or otherwise dispose of any notes, accounts receivable or other obligations owed to by any Person, except (a) for the purpose of collection in the ordinary course of its business and (b) to the extent that, both before and after giving effect to any such sale, lease, transfer, assignment or disposition (taking into account any prepayment to be made to the Lenders under this Agreement from the net proceeds of any such sale, lease, transfer, assignment or disposition), no Default or Event of Default would exist hereunder.

        Section 7.06    Sale and Leaseback.    Enter into any arrangements, directly or indirectly, with any Person whereby it shall sell or transfer any property, whether real or personal, and used and useful in its business, whether now owned or hereafter acquired, if it, at the time of such sale or disposition, intends to lease or otherwise acquire the right to use or possess (except by purchase) such property or like property for a substantially similar purpose.

        Section 7.07    Restricted Payments.    With respect to the Borrower, declare or pay any dividend or make any distribution on its capital stock or purchase, redeem, acquire or otherwise retire any capital stock for value (in each case, a "Restricted Payment"); provided, however, that the Borrower may make a Restricted Payment so long as, at the time of, and after giving effect to, the proposed Restricted Payment: (a) no Default or Event of Default shall have occurred and be continuing and (b) the aggregate amount expended for all Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors) would not exceed fifty percent (50%) of the aggregate amount of the consolidated net income of the Borrower and its consolidated Subsidiaries excluding the Lightship Tanker Entities for the fiscal year ended immediately prior to the fiscal year in which such proposed Restricted Payment is to

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be made determined in accordance with GAAP. Notwithstanding the preceding sentence, (w) the Borrower may make Restricted Payments with the proceeds of substantially concurrent capital contributions made by its stock holders so long as no Default or Event of Default shall have occurred and be continuing prior to or after giving effect thereto, (x) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock, (y) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their Equity Interests, and (z) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management, directors or employees of the Borrower and its Subsidiaries.

        Section 7.08    Investments.    Make any Investment unless at the time of, and after giving effect to, the making of any proposed Investment, no Default or Event of Default has occurred and is continuing or would occur as a consequence of the making of such Investment. Notwithstanding the foregoing sentence, the Borrower and the Subsidiary Guarantors may make the following Investments at any time: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof, and (b) investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000.

        Section 7.09    Restriction on Payment Restrictions Affecting Subsidiary Guarantors.    Create or otherwise cause or suffer to exist or become effective any encumbrance or restriction (other than pursuant to this Agreement) on the ability of the Subsidiary Guarantors to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits or pay any Indebtedness owed to the Borrower, (b) make advances or loans to the Borrower or (c) transfer any of its properties or assets to the Borrower, except for such encumbrances or restrictions existing under or by reason of applicable law.

        Section 7.10    Change in Business.    Engage (directly or indirectly) in any business other than the business of the Borrower and its Subsidiaries as of the Effective Date and other businesses reasonably related thereto.

        Section 7.11    Reserved.

        Section 7.12    Transactions with Affiliates.    Enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate, other than on terms and conditions substantially as favorable to such Person as would be obtainable by such Person at the time in a comparable arm's-length transaction with a Person other than an Affiliate. Notwithstanding the foregoing, the restrictions set forth in this Section 7.12 shall not apply to (a) the payment of reasonable and customary fees to directors of the Borrower who are not employees of the Borrower, (b) any other transaction with any employee, officer or director of the Borrower or any of its Subsidiaries pursuant to employee benefit plans and compensation arrangements in amounts customary for corporations similarly situated to the Borrower or any such Subsidiary and entered into the ordinary course of business and approved by the Board of

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Directors of the Borrower or any committee thereof or the Board of Directors of such Subsidiary, (c) transactions between or among the Borrower and its Subsidiaries who are Subsidiary Guarantors and not involving any other Affiliate, (d) the Stock Purchase Agreement and the Stock Holders Agreement, and (e) any Restricted Payment permitted by Section 7.07.

        Section 7.13    Changes in Offices or Names.    Change the location of the chief executive office of any Credit Party, the office of the chief place of business any such parties, the office of the Credit Parties in which the records relating to the earnings or insurances of the Vessels are kept unless the Agent shall have received thirty (30) days prior written notice of such change.

        Section 7.14    Changes in Fiscal Year.    Change its fiscal year.

        Section 7.15    Reserved.

        Section 7.16    Consolidation, Merger and Sale of Assets.    Consolidate with, or merge with or into, any other Person or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or substantially all of its property or assets, unless each of the following conditions is satisfied:

        (a)   The entity formed by such consolidation or into which such Credit Party is merged or the Person which acquires by conveyance or transfer substantially all of the assets of such Credit Party as an entirety shall expressly assume all of the obligations of such Credit Party under this Agreement and the other Transaction Documents pursuant to a written supplement to this Agreement executed in accordance with Article XI.

        (b)   Immediately prior to and after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing and the Agent shall have received a certificate from an Executive Officer to such effect.

        (c)   The Agent shall have received an opinion of counsel regarding the merged or consolidated entity, the legality, validity and enforceability of this Agreement and the other Transaction Documents, the title to the related Vessels and the priority of the Mortgages, as applicable.

        (d)   Upon any consolidation or merger, or any conveyance or transfer of substantially all of the assets of such Credit Party as an entirety in accordance with this Section 7.16, the successor entity formed by such consolidation or into which such Credit Party is merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, such Credit Party under this Agreement and the other Transaction Documents with the same effect as if such successor entity had been named as a Credit Party herein. No such conveyance or transfer of substantially all of the assets of such Credit Party as an entirety shall have the effect of releasing such Credit Party or any successor entity which shall theretofore have become such in the manner prescribed in this Section 7.16 from its liability hereunder. Nothing in this Section 7.16 shall restrict the Subsidiary Guarantors from chartering the Vessels so long as such charters are not bareboat charters for a period in excess of ten (10) years, except with respect to

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bareboat charters of the Second Lien Vessels so long as MARAD is the first mortgagee thereon and all Vessels owned now or in the future by Seabulk Towing, Inc. so long as MARAD is the first mortgagee on a Second Lien Vessel owned by Seabulk Towing, Inc., which shall not be subject to any such restriction.

ARTICLE VIII
AGREEMENT TO GUARANTEE

        Section 8.01    Obligations Guaranteed.

        (a)   The Subsidiary Guarantors, jointly and severally, hereby unconditionally guarantee to each of the Agent and the Lenders (i) the full and prompt payment of the principal of the Revolving Loan Notes and the indebtedness represented thereby and the L/C Obligations when and as the same shall become due and payable, whether at the stated maturity thereof, by acceleration, call for redemption or otherwise; (ii) the full and prompt payment of interest on the Revolving Loan Notes and the L/C Obligations when and as the same shall become due and payable (including interest at the Overdue Rate on any part of the principal amount, interest amount or other amount due under this Agreement and not paid when due); (iii) the full and prompt payment of an amount equal to each and all of the payments and other sums when and as the same shall become due, required to be paid by the Borrower under the terms of this Agreement and under each of the other Transaction Documents to which it is a party and (iv) the full and prompt performance and observance by the Borrower of the obligations, covenants and agreements required to be performed and observed by the Borrower under the terms of this Agreement and under each of the other Transaction Documents to which it is a party (items (i) through (iv), the "Subsidiary Guarantee Obligations"). The Subsidiary Guarantors hereby irrevocably and unconditionally agree that upon any default by the Borrower in the payment, when due, of any principal of, interest on or other amounts (including amounts in respect of fees and indemnification owing to the Agent or the Lenders) due under the Revolving Loan Notes, this Agreement or any other Transaction Document, the Subsidiary Guarantors will promptly pay the same within ten (10) days after receipt of written demand therefor from the Agent or any Lender. The Subsidiary Guarantors further hereby irrevocably and unconditionally agree that upon any default by the Borrower in any of its obligations, covenants and agreements required to be performed and observed by the Borrower under this Agreement and under each of the other Transaction Documents to which it is a party, the Subsidiary Guarantors will effect the observance of such obligations, covenants and agreements within ten (10) days after receipt of written demand therefor from the Agent or any Lender.

        (b)   All payments by the Subsidiary Guarantors shall be paid in the lawful currency of the United States of America. Each and every default (i) in the payment of the principal of, premium, if any, interest on or other amounts due under the Revolving Loan Notes or L/C Obligations, (ii) in the payment of any sum required to be paid by the Borrower under the terms of this Agreement or the other Transaction Documents, or (iii) in the prompt performance and observance by the Borrower of all of the obligations, covenants and agreements required to be performed and observed

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by the Borrower under the terms of the Transaction Documents, shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises.

        (c)   The Subsidiary Guarantors further agree that the Subsidiary Guarantee Obligations constitute an absolute, unconditional, present and continuing guarantee of performance and payment and not of collection, and waives any right to require that any resort be had by the Agent and the Lenders to (i) any security held by or for the benefit of the Agent and the Lenders for payment of the principal of, premium, if any, interest on or other amounts due under the Revolving Loan Notes, this Agreement or the Transaction Documents, (ii) the Agent's and Lenders' right against any other Person, or (iii) any other right or remedy available to the Agent and the Lenders by contract, applicable law or otherwise. The Subsidiary Guarantee Obligations are direct, unconditional and completely independent of the obligations of any other Person or entity, and a separate cause of action or separate causes of action may be brought and prosecuted against the Subsidiary Guarantors without the necessity of any other party or previous proceeding with or exhausting any other remedy against any other Person who might have become liable for the indebtedness or of realizing upon any security held by or for the benefit of the Agent and the Lenders.

        (d)   The Subsidiary Guarantors shall pay to the Agent and the Lenders all reasonable costs and expenses (including, without limitation, reasonable attorneys' fees) incurred by the Agent and the Lenders upon the occurrence of an Event of Default under any or all of the Transaction Documents.

        Section 8.02    Subsidiary Guarantee Obligations of Subsidiary Guarantors Unconditional.    The Subsidiary Guarantee Obligations shall be absolute and unconditional and shall remain in full force and effect until (1) the entire principal of, premium, if any, interest on and other amounts due under the Revolving Loan Notes and the L/C Obligations shall have been paid and (2) all other sums payable by the Borrower and the Subsidiary Guarantors under this Agreement and the other Transaction Documents have been paid in full (including, without limitation, Section 8.01 hereof) have been paid in full, and, to the extent permitted by law, such Subsidiary Guarantee Obligations shall not be affected, modified, released or impaired by any state of facts or the happening from time to time of any event, including, without limitation, any of the following, whether or not with notice to or the consent of the Subsidiary Guarantors:

        (a)   the invalidity, irregularity, illegality, frustration or unenforceability of, or any defect in, (i) any Transaction Document or (ii) any collateral security given in connection therewith;

        (b)   any present or future law or order of any government (de jure or de facto) or of any agency thereof purporting to reduce, amend or otherwise affect the Revolving Loan Notes, the L/C Obligations or any other obligation of the Borrower or any other obligor or to vary any terms of payment;

        (c)   any claim of immunity on behalf of the Borrower or any other obligor or with respect to any property of the Borrower or any other obligor;

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        (d)    the waiver, compromise, settlement, release, extension, change, modification or termination of any or all of the obligations, covenants or agreements of (i) the Borrower under this Agreement or any other Transaction Document (except by payment in full of all its Obligations under this Agreement) or (ii) the Subsidiary Guarantors with respect to the Subsidiary Guarantee Obligations (except by payment in full of all the Subsidiary Guarantee Obligations hereunder);

        (e)    the failure to give notice to the Subsidiary Guarantors of the occurrence of a Default or an Event of Default hereunder or under any other Transaction Document;

        (f)    the transfer, assignment, sublease or mortgaging, or the purported or attempted transfer, assignment, sublease or mortgaging, of all or any part of the interest of the Borrower in any of its properties, or any failure of or defect in the title with respect to the Borrower's interest in any of its properties;

        (g)    the release, sale, exchange, surrender or other change in any collateral security for payment of the Borrower's Obligations;

        (h)    the extension of the time for payment of any amounts payable on the Revolving Loan Notes, the L/C Obligations or any part thereof or of the time for performance of any other obligations, covenants or agreements under or arising out of this Agreement, any other Transaction Document or the extension or the renewal of any thereof;

        (i)    the modification or amendment (whether material or otherwise) of any Subsidiary Guarantee Obligation, covenant or agreement set forth in any Transaction Document;

        (j)    the taking of, or the omission to take, any of the actions referred to in this Agreement or any Transaction Document;

        (k)    any failure, omission, delay, or lack on the part of the Agent or the Lenders or any other Person to enforce, assert or exercise any right, power or remedy conferred on the Agent and the Lenders or such other Person in this Agreement or any other Transaction Document;

        (l)    the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement or composition with creditors or readjustment of, or other similar proceedings affecting the Subsidiary Guarantors or any of their assets, or any allegation or contest of the validity of this Agreement, or any other Transaction Document, or the disaffirmance or attempted disaffirmance of this Agreement or any other Transaction Document, in any such proceedings;

        (m)    any event or action that would, in the absence of this Section, result in the release or discharge of the Subsidiary Guarantors from the performance or

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observance of any Subsidiary Guarantee Obligation, covenant or agreement contained in this Guarantee, other than the performance thereof;

        (n)    the default or failure of any Subsidiary Guarantor to fully perform any of its Subsidiary Guarantee Obligations;

        (o)    any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or a guarantor;

        (p)    the actual or purported assignment of any of the Subsidiary Guarantee Obligations;

        (q)    the receipt and acceptance by the Agent or the Lenders of notes, checks or other instruments for the payment of money made by the Subsidiary Guarantors and any extensions and renewals thereof (other than the payment in full of the entire principal of, premium, if any, interest on and other amounts due under the Revolving Loan Notes and the L/C Obligations and all other sums payable by the Borrower and the Subsidiary Guarantors under this Agreement and the other Transaction Documents);

        (r)    to the extent permitted by law, the release or discharge of the Subsidiary Guarantors from the performance or observance of any guaranteed obligation, covenant or agreement contained herein by operation of law;

        (s)    any release or impairment of the Collateral pledged under this Agreement or any other Transaction Document;

        (t)    the release, substitution or replacement in accordance with the terms of any Transaction Document of any property subject thereto or any redelivery, repossession, surrender or destruction of any such property, in whole or in part;

        (u)    any limitation on the liability or obligations of the Borrower under this Agreement or any other Transaction Document or any termination, cancellation, frustration, invalidity or unenforceability, in whole or in part, of this Agreement or any other Transaction Document, or any term thereof;

        (v)    the merger or consolidation or any sale, lease or transfer of any or all of the assets of the Borrower or any Subsidiary Guarantor to any Person; or

        (w)    any other occurrence whatsoever, whether similar or dissimilar to the foregoing.

        Section 8.03    Waiver of Notice; Expenses.    The Subsidiary Guarantors each hereby expressly waive notice from the Agent and the Lenders of its acceptance and reliance on the Subsidiary Guarantor's Guarantee or of any action taken or omitted in reliance hereon. The Subsidiary Guarantors further expressly waive diligence, presentment, demand for payment, protest, any requirement that any right or power be exhausted or any action be taken against the Borrower or against any other obligor under any of the Transaction Documents or against the Collateral or any other collateral security for the Obligations. The Subsidiary Guarantors jointly

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and severally agree to pay all costs, fees, commissions and expenses (including, without limitation, all court costs and reasonable attorneys' fees) which may be incurred by the Agent or the Lenders in enforcing or attempting to enforce the Subsidiary Guarantee Obligations following any default on the part of any or all of the Subsidiary Guarantors hereunder, whether the same shall be enforced by suit or otherwise.

        Section 8.04    Other Security.    The Agent and Lenders may pursue their rights and remedies against the Subsidiary Guarantors notwithstanding (a) any other Guarantee of or security for the Obligations and (b) any action taken or omitted to be taken by the Agent, the Lenders or any other Person to enforce any of the rights or remedies under such other guarantee or with respect to any other security.

        Section 8.05    No Set-off by the Subsidiary Guarantors.    No set-off, abatement, recoupment, counterclaim, reduction or diminution of an obligation, or any defense of any kind or nature (other than performance by the Subsidiary Guarantors of the Subsidiary Guarantee Obligations hereunder) which the Subsidiary Guarantors have or may have with respect to a claim hereunder, shall be available hereunder to the Subsidiary Guarantors against the Agent or the Lenders.

        Section 8.06    Joint and Several Obligation.    Each of the Subsidiary Guarantors hereby agrees that it is jointly and severally liable for each of the Subsidiary Guarantee Obligations hereunder and under each of the other Transaction Documents. Each of the Subsidiary Guarantors accepts joint and several liability for all Subsidiary Guarantee Obligations hereunder in consideration of the financial accommodation to be provided by the Lenders to the Borrower under this Agreement, and in turn, the Borrower to the Subsidiary Guarantors, for the mutual benefit, directly and indirectly, of each of the Subsidiary Guarantors and in consideration of the undertakings by each of the Subsidiary Guarantors to accept joint and several liability for each of their Subsidiary Guarantee Obligations.

        Each of the Subsidiary Guarantors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Subsidiary Guarantors with respect to the payment and performance of all of the Subsidiary Guarantee Obligations, it being the intention of the parties hereto that all the Subsidiary Guarantee Obligations shall be the joint and several obligations of each of the Subsidiary Guarantors without preferences or distinction among them.

        If and to the extent that any Subsidiary Guarantor shall fail to make any payment with respect to any of the Subsidiary Guarantee Obligations as and when due or to perform any of the Subsidiary Guarantee Obligations in accordance with the terms thereof, then in each such event, the other Subsidiary Guarantor will make such payment with respect to, or perform, such Subsidiary Guarantee Obligations.

        The obligations of each Subsidiary Guarantor under the provisions of this Section 8.06 constitute full recourse obligations of such Subsidiary Guarantor, enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other Transaction Document against another Subsidiary Guarantor or any other circumstances whatsoever that under applicable law might constitute a defense to the joint and several Subsidiary Guarantee Obligations of such other Subsidiary Guarantor.

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        Except as otherwise expressly provided herein, each Subsidiary Guarantor hereby waives notice of acceptance of its joint and several liability, notice of any and all Subsidiary Guarantee Obligations incurred hereunder or under any other Transaction Document, notice of the occurrence of any Default or Event of Default, or of any demand for any payment hereunder or any other Transaction Document, notice of any action at any time taken or omitted by the Agent or any Lender under or in respect of any of the Subsidiary Guarantee Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with the Subsidiary Guarantee Obligations, this Agreement or any other Transaction Document. Each Subsidiary Guarantor hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Subsidiary Guarantee Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Agent or any Lender at any time or times in respect of any default by any Subsidiary Guarantor in the performance or satisfaction of any term, covenant, condition or provision hereunder or under this Agreement or any other Transaction Document, any and all other indulgences whatsoever by the Agent or any Lender in respect of any of the Subsidiary Guarantee Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Subsidiary Guarantee Obligations or the addition, substitution or release, in whole or in part, of any Subsidiary Guarantor. Without limiting the generality of the foregoing, each Subsidiary Guarantor assents to any other action or delay in acting or failure to act on the part of the Agent or any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder which might, but for the provisions of this Section 8.06, afford grounds for terminating, discharging or relieving such Subsidiary Guarantor, in whole or in part, from any of its obligations under this Section 8.06, it being the intention of each Subsidiary Guarantor that, so long as any of the Subsidiary Guarantee Obligations remain unsatisfied, the obligations of such Subsidiary Guarantor shall not be discharged except by performance and then only to the extent of such performance. The Subsidiary Guarantee Obligations of each Subsidiary Guarantor shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to the Borrower or the other Subsidiary Guarantors or any Lender. The joint and several liability of the Subsidiary Guarantors hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of the Borrower, any Subsidiary Guarantor or any Lender.

        The provisions of this Section 8.06 are made for the benefit of the Agent and each Lender and their successors and assigns, and may be enforced by such party from time to time against any of the Subsidiary Guarantors as often as occasion therefore may arise and without requirement on the part of the Agent or any Lender first to marshal any of its claims or to exercise any of its rights against the other Subsidiary Guarantor or to exhaust any remedies available to it against the other Subsidiary Guarantor or to resort to any other source or means of obtaining payment of any of the Subsidiary Guarantee Obligations or to elect any other remedy. The provisions of this Section 8.06 shall remain in effect until all the Subsidiary Guarantee Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Subsidiary Guarantee Obligations, is rescinded or must otherwise be restored or returned by the Agent or any Lender upon the insolvency, bankruptcy or reorganization of either of the Subsidiary Guarantors, or otherwise, the provisions

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of this Section 8.06 will forthwith be reinstated in effect, as though such payment had not been made.

        Section 8.07    Limitation on Liability.    Any term or provision of this Agreement or any other Transaction Document to the contrary notwithstanding, the maximum, aggregate amount of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Agreement or any other Transaction Document, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

        Section 8.08    Release of Subsidiary Guarantor.    So long as no Default or Event of Default has occurred and is continuing, upon the sale or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of such Subsidiary Guarantor in compliance with the terms of this Agreement, such Subsidiary Guarantor shall be deemed released from all obligations under this Article VIII without any further action required on the part of the Agent or any Lender. At the request and sole cost and expense of the Borrower, the Agent shall execute and deliver an appropriate instrument evidencing such release.

ARTICLE IX
EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS

        Section 9.01    Events of Default.    Any one or more of the following events shall constitute an Event of Default:

        (a)    if any payment of any Reduction Amount, interest, fees, charge or any other amounts due to the Agent or the Lenders under the Revolving Loan Notes, this Agreement, the Mortgages, or any Transaction Document, whether at the stated maturity thereof or at any date fixed for payment by acceleration, by notice of prepayment or otherwise, shall not be made on the due date thereof and if such failure to pay shall remain unremedied for two (2) Business Days;

        (b)    if the Borrower shall default in the performance or observance of any covenant contained in Sections 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.23 or in Article VII of this Agreement, Sections 4.01 and 4.02 of the Assignment(s) of Earnings and Insurances, Sections 4.01 and 4.02 of the Assignment(s) of Insurances, the second sentence of Section 5 and Section 7(a) of the Pledge Agreement(s) and Article I, Sections 4, 5(a)(ii), 7, 9, 10, 12(a), 13(b), 14 and 19 of the Mortgages and Deeds of Covenant;

        (c)    if the Borrower shall default in any material respect in the performance or observance of any covenant contained in Article VI of this Agreement or any other covenant, agreement or condition (other than those set forth in (a) or (b) above) contained in this Agreement or in any other Transaction Document and such default shall not be cured by the earlier of (i) twenty (20) days after an Executive Officer of the Borrower had actual knowledge of such default and (ii) twenty (20) days after receipt by the Borrower of notice thereof from the Agent;

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        (d)    if any representation or warranty made by a Credit Party herein or in any other Transaction Document shall prove to have been false, incorrect or misleading in any material respect on the date as of which made and uncured at the time discovered and shall not have been cured by the earlier of (i) 30 days after an Executive Officer of a Credit Party obtains actual knowledge thereof and (ii) 30 days after receipt by the Borrower of notice thereof from the Agent;

        (e)    if a Credit Party shall (i) generally not be paying its debts as they come due, (ii) file a petition in bankruptcy or a petition to take advantage of any insolvency act, (iii) become insolvent or make an assignment for the benefit of its creditors, (iv) consent to the appointment of a custodian or receiver of itself or of the whole or any substantial part of its property, (v) on a petition in bankruptcy filed against it, have an order for relief entered against it or (vi) file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law;

        (f)    if a petition in bankruptcy shall be filed against a Credit Party or any of their respective subsidiaries and not dismissed within 60 days from the date of the filing;

        (g)    if a court of competent jurisdiction shall enter an order, judgment or decree appointing, without the consent of an affected entity, a custodian or receiver of a Credit Party, or of the whole or any substantial part of its property, or approving a petition filed against such entity seeking reorganization or arrangement of such entity under applicable law, and such order, judgment or decree shall not be set aside or stayed within 60 days from the date of its entry;

        (h)    if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of a Credit Party or of the whole or any substantial part of such entity's property and such custody or control shall not be terminated or stayed within 60 days from the date of assumption of custody or control;

        (i)    if a final judgment, a fine or other order for the payment of money in excess of $2,000,000 or the equivalent thereof in another currency shall be rendered by a court or administrative agency against a Credit Party and such entity shall not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within 30 days from the date of its entry and within the 30-day period, or any longer period during which execution of such judgment, fine or other order shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during the appeal;

        (j)    if a Credit Party shall default (as principal or guarantor or other surety) in any payment of principal or interest on any obligation for money borrowed beyond any period of grace provided with respect thereto, or if any other default under any agreement under which any such obligation is created or under any instrument securing or evidencing such obligation, shall have occurred, if the effect of such other default is to cause, or permit the holder of such obligation to cause, such obligation to become due prior to its stated maturity; provided, however, in the case of any such

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obligation for money borrowed as to which any such default in any payment of principal or interest or any such other default has occurred, it shall not constitute an Event of Default under this clause (j) unless (i) with respect to any such obligation for borrowed money evidenced by common loan documents (such as a single credit agreement or a single series of notes), the principal amount of such obligation exceeds $2,500,000, or (ii) the principal amount of all such obligations for money borrowed (including, without limitation, any such obligations described in the immediately preceding clause (i)) as to which any such default then exists exceeds $5,000,000 in aggregate;

        (k)    if an Event of Default has occurred and is continuing under a Security Document or if any of the Transaction Documents shall for any reason other than the satisfaction in full of the Obligations cease to be, or be asserted by a Credit Party not to be, a legal, valid and binding obligation of such Credit Party, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by any applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditor's rights or by general principles of equity;

        (l)    if a Borrower shall breach or default under any interest rate or currency hedging agreement in any material respect and such breach or default shall not have been cured within 30 days; or

        (m)    if a Subsidiary Guarantor ceases to be a direct or indirect wholly-owned subsidiary of the Borrower without the written consent of the Requisite Lenders which consent shall not be unreasonably withheld.

        Section 9.02    Waiver of Default.    Any Event of Default may be waived only with the written consent of the Requisite Lenders. Any Event of Default so waived shall be deemed to have been cured and not to be continuing, but no such waiver shall be deemed a continuing waiver or shall extend to or affect any subsequent like default or impair any rights arising therefrom.

        Section 9.03    Remedies.    Upon the occurrence and continuance of any Default or Event of Default, the Lenders shall have no further obligation to advance money or extend any additional credit to or for the benefit of the Borrower, whether in the form of Revolving Loans, Letters of Credit or otherwise. In addition, upon the occurrence and during the continuance of an Event of Default, the Requisite Lenders or the Agent, on behalf and for the ratable benefit of the Lenders, may, at the direction of the Requisite Lenders, do any one or more of the following, all of which are hereby authorized by the Borrower:

        (a)    declare (i) all or any of the Revolving Loan Notes, the L/C Obligations, the Obligations of the Borrower under this Agreement, the other Transaction Documents and any other instrument executed by the Borrower pursuant to the Transaction Documents to be immediately due and payable and, upon such declaration, such obligations so declared due and payable shall immediately become due and payable; provided, however, that if such Event of Default is under either Sections 9.01(e), (f), (g) or (h), then all of the Obligations shall become immediately

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due and payable forthwith without the requirement of any notice or other action by the Lenders or the Agent;

        (b)    declare the Tranche A Loan Commitments and other lending obligations under the Transaction Documents, if any, terminated, whereupon the Tranche A Loan Commitments and such other lending obligations, if any, of each Lender shall immediately terminate;

        (c)    exercise any or all of the rights and powers and pursue any and all of the remedies pursuant to this Article and any of the other Transaction Documents, to the extent permitted by applicable law; and

        (d)    bring suit at law or in equity, to collect the payments due under each of the Transaction Documents and to recover judgment for the Obligations hereby secured, and collect the same out of any and all of the Collateral.

        Section 9.04    Rights of Set-Off.    Regardless of the adequacy of any Collateral, during the continuance of an Event of Default, any deposits or other sums credited by or due from any Lender to the Borrower may be set-off against the Obligations and any and all other liabilities, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of the Borrower to the Lenders. Any Lender that exercises any such set-off right shall use reasonable diligence to notify the Borrower of any such exercise, provided that the failure of such Lender to provide any such notice shall not affect the validity of such Lender's exercise of such set-off right.

        Section 9.05    Rights and Remedies Cumulative.    The Lenders' and the Agent's rights and remedies under this Agreement shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in admiralty, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Agent or the Lenders, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. The Lenders and the Agent shall have all other rights and remedies not inconsistent herewith as provided by law or in equity. No exercise by any Lender or the Agent of one right or remedy shall be deemed an election. No delay or omission by any Lender or the Agent shall constitute a waiver, election or acquiescence by such party.

        Section 9.06    Specific Remedies.    Upon the occurrence and during the continuance of an Event of Default:

        (a)    At the request of the Agent, each Credit Party shall promptly execute and deliver such instruments and other documents as the Agent may deem necessary or advisable to enable the Agent to obtain possession of all or any part of the Collateral to which possession the Lenders shall at the time be entitled hereunder. If a Credit Party shall for any reason fail to execute and deliver such instruments and documents after such request by the Agent, the Agent may obtain a judgment conferring on the Agent the right to such possession on behalf of the Lenders

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immediately and requiring such Credit Party to deliver such instruments and documents to the Agent, to the entry of which judgment such Credit Party hereby specifically consents.

        (b)    The Agent, on behalf of the Lenders, may proceed to enforce the rights of the Lenders by directing payment to it of all monies payable under any agreement or undertaking constituting a part of the Collateral, by proceedings in any court of competent jurisdiction for the appointment of a receiver or for sale of all or any part of the Collateral possession to which the Lenders shall at the time be entitled hereunder or for foreclosure of such Collateral, and by any other action, suit, remedy or proceeding authorized or permitted by this Agreement or by law or by equity, and may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Lenders asserted or upheld in any bankruptcy, receivership or other judicial proceedings.

        (c)    The Agent shall be entitled to set-off against and withdraw all amounts constituting a part of the Collateral and to apply the same as follows:

First: To the payment of all reasonable expenses and charges, including the expenses of any taking, operating, attorney's fees, court costs and other expenses or advances made or incurred by the Agent in connection with the ascertainment or protection of its rights and the pursuance of its remedies hereunder or under any of the Transaction Documents (including, without limitation, the reasonable fees and disbursements of counsel);

Second: To the payment of interest on the Revolving Loan Notes and L/C Obligations;

Third: To the payment of principal on the Revolving Loan Notes and the L/C Obligations;

Fourth: To the payment of all amounts due to the Agent and the Lenders in respect of taxes, indemnities, fees, expenses, premiums, purchase of liens or otherwise under the provisions hereof or under any of the Transaction Documents;

Fifth: To the payment of the Obligations, other than those referred to in First through Fourth above; and

Sixth: To the payment of any surplus thereafter remaining to the Borrower or whomever may be lawfully entitled thereto.

        (d)    Without limiting the foregoing, the Agent and the Lenders, their respective assigns and legal representatives shall have all the remedies of a secured party under applicable law and such further remedies as from time to time may hereafter be provided pursuant to such law for a secured party. In exercising its power of sale, the Agent shall be entitled to add to the Revolving Loans any and all of the Agent's or Lenders' expenses incurred in connection therewith.

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        Section 9.07    Restoration of Rights and Remedies.    In case the Agent or a Lender shall have proceeded to enforce any right, power or remedy under this Agreement or any other Transaction Document by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Agent or such Lender, then and in every such case the Borrower, the Agent and the Lenders shall be restored to their former positions and rights hereunder with respect to this Agreement, the Transaction Documents, the Collateral, and all rights, remedies and powers of the Agent and the Lenders shall continue as if no such proceedings had been taken.

        Section 9.08    Cure of Defaults.    Subject to the terms of this Agreement, if at any time after an Event of Default, the Borrower offers completely to cure all Events of Default and to pay all expenses, advances and damages to the Agent and the Lenders related to such Events of Default, with interest with respect to such Borrower's obligations as provided herein, then the Agent may, but shall not be required to, accept such offer and payment and restore the Borrower to its former position, but such action, if taken, shall not affect any subsequent Event of Default or impair any rights consequent thereon.

ARTICLE X
RELATIONSHIP AMONG THE LENDERS

        Section 10.01    Appointment and Authorization.    Each Lender hereby irrevocably appoints, designates and authorizes Fortis as the Agent under this Agreement and under each of the other Transaction Documents and irrevocably authorizes the Agent to take such action on its behalf under the provisions of this Agreement and each other Transaction Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Transaction Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Agent.

        Section 10.02    Delegation of Duties.    The Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the gross negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care or for any action it takes on the advice of counsel.

        Section 10.03    Liability of Agent.    None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Transaction Document (except for its own gross negligence or willful misconduct), (b) be liable as a consequence of any failure or delay in performance by, or any breach by, any other Lender or any other Person, of its obligations under this Agreement or any other Transaction Document or (c) be responsible in any manner to any Lender for any recital, statement, representation or warranty made by a Transaction Party, or any officer thereof, contained in this Agreement or in any other Transaction Document, or in any certificate, report,

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statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Transaction Document, or for the value of any Collateral or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of a Transaction Party or any other party to this Agreement or any other Transaction Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of any Transaction Party.

        Section 10.04    Reliance by the Agent.

        (a)   The Agent shall be entitled to rely, and shall be fully protected in relying, upon (i) any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and (ii) any advice or statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Requisite Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Requisite Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

        (b)   For purposes of determining compliance with the conditions precedent specified in Article V, each Lender that has executed this Agreement or shall hereafter execute and deliver an Assignment and Acceptance in accordance with Section 10.11 shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by the Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender, unless an officer of the Agent responsible for the transactions contemplated by the Transaction Documents shall have received notice from the Lender prior to the borrowing specifying its objection thereto and either such objection shall not have been withdrawn by notice to the Agent to that effect or the Lender shall not have made available to the Agent the Lender's Proportionate Share of such borrowing.

        Section 10.05    Notice of Default.    The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of any Reduction Amount, interest and fees required to be paid to the Agent on behalf and for the benefit of the Lenders, unless the Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Agent receives such a

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notice, the Agent shall give notice thereof to the Lenders. The Agent shall take such action with respect to such Default or Event of Default as shall be requested by the Requisite Lenders in accordance with this Agreement; provided, however, that unless and until the Agent shall have received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best commercial interest of the Lenders.

        Section 10.06    Credit Decision.    Each Lender expressly acknowledges that none of the Agent-Related Persons has made any representation or warranty to it and that no act by the Agent hereinafter taken, including any review of the affairs of a Transaction Party, shall be deemed to constitute any representation or warranty by the Agent to any Lender. Each Lender represents to the Agent that it has, independently and without reliance upon the Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Transaction Parties, and all applicable Lender regulatory laws relating to the transactions contemplated thereby, and made its own decision to enter into this Agreement and extend credit to the Borrower under and pursuant to this Agreement. Each Lender also represents that it will, independently and without reliance upon the Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower, which may come into the possession of any of the Agent-Related Persons.

        Section 10.07    Indemnification.    Whether or not the transactions contemplated hereby shall be consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower to do so), ratably from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind whatsoever which may at any time (including at any time following the repayment of the Revolving Loan Notes and the L/C Obligations and the termination or resignation of the related Agent) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement, the Transaction Documents or any document contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any such Person under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent-Related Person's gross negligence or willful misconduct. Without limiting the foregoing, each Lender shall reimburse the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including reasonable attorney fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under this Agreement, any other Transaction Document, or any document contemplated by or referred to

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herein to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrower. The obligation of the Lenders in this Section 10.07 shall survive the payment of the Obligations.

        Section 10.08    Agent in Individual Capacity.    Fortis and its affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory or other business with the Borrower and any of its affiliates as though Fortis were not the Agent hereunder and without notice to or consent of the Lenders. With respect to its Proportionate Share, Fortis shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent, and the terms "Lender" and "Lenders" shall include Fortis in its individual capacity.

        Section 10.09    Successor Agent.    The Agent may resign as Agent upon thirty (30) days' notice to the Lenders. If the Agent shall resign as Agent under this Agreement, the Requisite Lenders shall appoint from among the Lenders a successor agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Lenders and the Borrower, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term "Agent" shall mean such successor agent and the retiring Agent's appointment, powers and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Requisite Lenders appoint a successor agent as provided for above. Any successor Agent appointed under this Section 10.09 shall be reasonably acceptable to Borrower.

        Section 10.10    Collateral Matters.

        (a)   The Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to the Collateral which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant thereto.

        (b)   The Lenders irrevocably authorize the Agent, at its option and in its discretion, to release any Lien granted to or held by the Agent upon any Collateral (i) upon payment in full of all of the Revolving Loan Notes, the L/C Obligations and all other Obligations then payable under this Agreement and under any other Transaction Document; (ii) consisting of an instrument evidencing Indebtedness or other debt instrument, if the indebtedness evidenced thereby has been paid in full; (iii) if approved, authorized or ratified in writing by all of the Lenders or (iv) upon any sale, transfer, assignment or other disposition of any Collateral, to the extent that the same is expressly permitted by the terms of this Agreement and the other Transaction Documents. Upon request by the Agent at any time, the Lenders will confirm in

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writing the Agent's authority to release particular types or items of Collateral pursuant to this Section 10.10(b).

        Section 10.11    Assignments, Participations, Etc.

        (a)   Any Lender may, with the written consent of the Borrower (other than during the existence of a Default or Event of Default in which event the Borrower's consent shall not be required) and the Agent, which consent, in each case, shall not be unreasonably withheld (which consent of the Borrower and the Agent shall not be required if the Eligible Assignee is an Affiliate of such Lender or is another Lender), provided that such assignment shall not result in increased costs to the Borrower pursuant to Section 2.11, at any time assign and delegate to one or more Eligible Lender (each an "Assignee") all, or any ratable part of all, of the Revolving Loan Notes, L/C Obligations and the other rights and obligations of such Lender hereunder. In the event of a partial assignment (other than to another Lender or an Affiliate of a Lender), such assignment shall be in a minimum amount of not less than $5,000,000 and, after giving effect to such assignment, the assigning Lender's or selling Lender's Proportionate Share of the Revolving Loan Notes and L/C Obligations shall equal an amount that it not less than $10,000,000, in each case, unless otherwise agreed in writing by the Borrower and the Agent; provided, however, that the Borrower and the Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to the Borrower and the Agent by such Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered to the Borrower and the Agent an Assignment and Acceptance in the form of Exhibit G ("Assignment and Acceptance") together with any Revolving Loan Note subject to such assignment; and (iii) the assignor Lender or the Assignee has paid to the Agent a processing fee in the amount of $4,000.

        (b)   From and after the date that the Agent notifies the assigning Lender that it has received an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Transaction Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Transaction Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Transaction Documents.

        (c)   Within five (5) Business Days after its receipt of notice by the Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, the Borrower shall execute and deliver to the Agent, a new Revolving Loan Note evidencing such Assignee's assigned Proportionate Share of the related Loans and, if the assignor Lender has retained a portion thereof, a replacement Revolving Loan Note in the principal amount of the Proportionate Share of the Revolving Loans retained by the assignor Lender (such Revolving Loan Note to be in

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exchange for, but not in payment of, the Revolving Loan Note held by such Lender). Immediately upon each Assignee's making its processing fee payment under the Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the adjustment of the Proportionate Share of the Revolving Loans.

        (d)   Any Lender may at any time sell to one or more commercial banks or other Persons not affiliates of the Borrower (a "Participant") participating interests in the Revolving Loans, the L/C Obligations and the other interests of that Lender (the "Originating Lender") hereunder and under the other Transaction Documents; provided, however, that (i) the Originating Lender's obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Borrower and the Agent shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender's rights and obligations under this Agreement and the other Transaction Documents and (iv) no Lender shall transfer or grant any participating interest under which the Participant shall have rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Transaction Documents other than those that pursuant to the terms of this Agreement require the consent of the affected Lender; and provided further that, and it is hereby agreed that, the Borrower shall not be obligated to make any greater payment or otherwise incur any greater cost or liability under Section 2.11 than had no such sale of a participating interest occurred.

        (e)   Each Lender agrees to maintain the confidentiality of all information identified as "confidential" by the Borrower and provided to it by the Borrower, or by the Agent on the Borrower's behalf, in connection with this Agreement or any other Transaction Document, and neither it nor any of its Affiliates shall use any such information for any purpose or in any manner other than pursuant to the terms contemplated by this Agreement; except to the extent such information (i) was or becomes generally available to the public other than as a result of a disclosure by the Lender, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or one of its affiliates; provided, however, that any Lender may disclose such information (A) at the request or pursuant to any requirement of any Governmental Authority to which the Lender is subject or in connection with an examination of such Lender by any such authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable law or requirement of law; and (D) to such Lender's independent auditors and other professional advisors. If the Agent or any Lender discloses any such confidential information pursuant to the provisions of the immediately proceeding proviso, the Agent or such Lender shall seek to obtain assurance that confidential treatment will be accorded to such confidential information; provided, however, that neither the Agent nor any Lender shall have any liability for the failure to obtain such confidential treatment. Notwithstanding the foregoing, the Borrower authorizes each Lender to disclose to any Participant or Assignee and to any prospective Participant or Assignee, such financial and other information in such Lender's possession concerning a Borrower or a Subsidiary Guarantor which has been delivered to the

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Agent or the Lenders pursuant to this Agreement or which has been delivered to the Agent or the Lenders by the Borrower or a Subsidiary Guarantor in connection with the Lenders' credit evaluation of the Borrower and the Subsidiary Guarantors prior to entering into this Agreement, provided that such participant or assignee (or prospective participant or assignee) agrees in writing to be bound by a confidentiality agreement similar to the provisions of this Section 10.11(e).

        (f)    Notwithstanding any other provision contained in this Agreement or any other Transaction Document to the contrary, any Lender may assign all or any portion of its Proportionate Share of the Revolving Loan Notes and the L/C Obligations held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank.

ARTICLE XI
MISCELLANEOUS

        Section 11.01    Notices.

        (a)   All notices, requests, approvals and other communications provided for hereunder shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Borrower or a Subsidiary Guarantor by facsimile (i) shall be immediately confirmed by a telephone call to the recipient at the number specified on the applicable signature page hereof, and (ii) shall be followed promptly by a hard copy original thereof) and faxed, sent for overnight (next day) delivery or delivered, to the address or facsimile number specified for notices on the applicable signature page hereof or, as directed to the Borrower or the Agent, to such other address as shall be designated by such party in a written notice to the other parties, and as directed to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Agent.

        (b)   All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next day) delivery, or transmitted by facsimile machine, respectively, or if delivered, upon delivery, except that notices pursuant to Articles II, V, VI and IX shall not be effective until actually received by the Agent.

        (c)   The Borrower acknowledges and agrees that any agreement of the Agent and the Lenders to receive certain notices by telephone and facsimile is solely for the convenience and at the request of the Borrower. The Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by such Borrower to give such notice and the Agent and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Agent or the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Borrower and the Subsidiary Guarantors to repay the Obligations shall not be affected in any way or to any extent by any failure by the Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Agent and the Lenders of a confirmation which is at

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variance with the terms understood by the Agent and the Lenders to be contained in the telephonic or facsimile notice.

        Section 11.02    Survival of Agreement.    All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making of the Revolving Loans and the issuance of the Letters of Credit and the execution and delivery of the Revolving Loan Notes and shall continue in full force and effect so long as the Obligations remain outstanding.

        Section 11.03    Governing Law.    This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law.

        Section 11.04    Modification of Agreement.

        (a)   No amendment, modification or waiver of any provision of this Agreement or any other Transaction Document, and no consent with respect to any departure by a Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Requisite Lenders and acknowledged by the Agent, and then such waiver shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by each Lender affected thereby and acknowledged by the Agent, do any of the following:

(i)

increase or extend the Tranche A Loan Commitment or Proportionate Share of any Lender, decrease the Applicable Margin, change the Tranche A Loan Commitment (other than as provided in Article II) or subject any Lender to any additional obligations;



(ii)

postpone or delay any date fixed for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any Transaction Document;



(iii)

reduce the principal of, or the rate of interest specified herein on any Loan or L/C Obligation, or of any fees or other amounts payable hereunder or under any Transaction Document;



(iv)

amend this Section 11.04; or;



(v)

amend Section 2.09 or any other provision with respect to pro rata payments or sharing of recoveries among the Lenders;

and, provided further that no amendment, modification, waiver or consent shall, unless in writing and signed by the Agent in addition to the Requisite Lenders or all the Lenders, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Transaction Document.

        (b)   Notwithstanding the provisions of Section 11.04(a), in order for a Subsidiary of the Borrower to become a Subsidiary Guarantor pursuant to Section 6.19, this Agreement may be supplemented for the purpose of adding such Subsidiary

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as a party hereto with the consent of the Borrower and the Agent but without the consent of the other Subsidiary Guarantors or the Lenders.

        Section 11.05    Costs and Expenses.    The Borrower agrees whether or not the transactions contemplated hereby shall be consummated, to:

        (a)   pay or reimburse each Arranger and the Agent within five (5) Business Days after demand for all costs and expenses incurred by the Agent or such Arranger in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any other Transaction Document and any other documents prepared in connection herewith (including any commitment letter and related documents preceding this Agreement) or therewith, and the consummation of the transactions contemplated hereby and thereby, including the attorney costs incurred by each Arranger and the Agent with respect hereto and thereto;

        (b)   pay or reimburse the Agent and each Lender within five (5) Business Days after demand for all costs and expenses incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies (including in connection with any "workout" or restructuring regarding the Revolving Loans and/or the L/C Obligations, and including in any insolvency proceedings or appellate proceeding) under this Agreement, any other Transaction Document, and any such other documents, including attorney costs incurred by the Agent and any Lender; and

        (c)   pay or reimburse each Arranger and the Agent within five (5) Business Days after demand for all reasonable audit, environmental inspection and review, search and filing, registration and recording costs, fees and expenses, incurred or sustained in connection with the matters referred to under Section 11.05(a) and Section 11.05(b).

        Section 11.06    Waivers.    No waiver of any of the provisions of this Agreement (a) shall be valid unless evidenced by a writing executed by each party to be bound thereby, (b) shall be deemed or shall constitute a waiver of any other provision of this Agreement or any other provisions hereof (whether or not similar), or (c) shall constitute a continuing waiver unless otherwise expressly provided. No delay on the part of the Agent or any Lender in exercising any right or remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any power or right or remedy preclude other or further exercise thereof or the exercise of any other right or remedy. No notice to or demand on the Borrower or a Subsidiary Guarantor in any case shall entitle it to any other or further notice or demand in the same or similar circumstances.

        Section 11.07    Indemnification.    To the fullest extent permitted by law, the Borrower agrees to protect, indemnify, defend and hold harmless each Indemnified Party from and against any and all liabilities, losses, obligations, damages, penalties, expenses or costs of any kind or nature and from any suits, judgments, claims or demands (including in respect of or for attorney costs and other fees and other disbursements of counsel for and consultants of any Indemnified Party in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnified Party shall be designated a party thereto) based on any federal, state, local or foreign law or other statutory regulation, including securities, environmental and commercial law

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or other statutory regulation, which arises under common law or at equitable cause or on contract or otherwise on account of or in connection with any matter or thing or any action or failure to act by the Indemnified Parties, or any of them, arising out of or relating to the Transaction Documents or any agreement or instrument contemplated by the Transaction Documents, but excluding those arising (x) with respect to an Indemnified Party, by reason of gross negligence or willful misconduct of such Indemnified Party or (y) in respect of Taxes (as to which indemnification shall be applicable only as and to the extent set forth in Section 2.13). Upon receiving knowledge of any suit, claim or demand asserted by any Person that an Indemnified Party believes is covered by this indemnity, such Indemnified Party shall give the Borrower notice thereof and an opportunity to defend it, at the Borrower's sole cost and expense, with legal counsel satisfactory to such Indemnified Party. Such Indemnified Party may also require the Borrower to defend the matter. The obligations of the Borrower under this Section 11.07 shall survive the payment and performance of the Obligations and the termination of this Agreement. To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 11.07 may be unenforceable because it violates any law or public policy, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law to the payment and satisfaction of its obligations set forth in this Section 11.07.

        Section 11.08    Separability of Provisions; Obligations Several.

        (a)   If any provision of this Agreement or other Transaction Document should be deemed invalid under any applicable law, such provision shall be void and of no effect and shall cease to be a part of this Agreement or other Transaction Document without affecting the remaining provisions, which shall remain in full force and effect.

        (b)   In the event that this Agreement, the Revolving Loan Notes, any Transaction Document or any of the documents or instruments which may from time to time be delivered hereunder or thereunder or any provision hereof or thereof shall be deemed invalidated by present or future law of any nation or by decision of any court, or if any third party shall fail or refuse to recognize any of the powers granted to the Agent hereunder when it is sought to exercise them, this shall not affect the validity and/or enforceability of all or any other parts of this Agreement, the Revolving Loan Notes, any Transaction Document or such documents or instruments and, in any such case, the Borrower covenants and agrees that, on demand, they will execute and deliver such other and further agreements and/or documents and/or instruments and do such things as the Agent in its sole discretion may deem to be necessary to carry out the true intent of this Agreement and of the obligations secured hereby.

        Section 11.09    Counterparts.    This Agreement and any amendment, waivers, consents or supplements hereto may be executed in two or more counterparts, any by different parties hereto in different counterparts, each of which when so executed shall constitute an original, but all of which, when taken together, shall constitute but one Agreement.

        Section 11.10    Entire Agreement.    This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or

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written, of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth or incorporated herein.

        Section 11.11    Headings.    Section and paragraph headings and the table of contents are not to be considered part of this Agreement, are included solely for convenience and are not intended to be full or accurate descriptions of the contents thereof. Sections and paragraphs mentioned by number only are the respective sections and paragraphs of this Agreement. The use of the terms "herein", "hereunder", "hereof", and like terms shall be deemed to refer to this entire Agreement and not merely to the particular provision in which the term is contained, unless the context clearly indicates otherwise.

        Section 11.12    Successors and Assigns.    All Persons shall be deemed to include the successors or assigns thereof. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective transferees, legal representatives, heirs, successors and assigns; provided, however, that (a) the Borrower may not assign its rights or obligations hereunder without the prior written consent of the Agent and each Lender and (b) the Lenders may assign their respective rights and obligations hereunder only in accordance with Section 10.11 hereof.

        Section 11.13    Gender and Number.    Words importing a particular gender mean and include every other gender and words importing the singular number mean and include the plural number and vice-versa.

        Section 11.14    Exhibits.    Exhibits to this Agreement are an integral part of this Agreement.

        Section 11.15    Notification of Addresses, Lending Offices, Etc.    Each Lender shall notify the Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of its Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request.

        Section 11.16    No Third Parties Benefitted.    This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Subsidiary Guarantors, the Lenders, the Arrangers and the Agent, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Transaction Documents. None of the Agent, the Arrangers nor any Lenders shall have any obligation to any Person not a party to this Agreement or other Transaction Documents.

        Section 11.17    Equitable Relief.    The Borrower recognizes that, in the event it fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, the Revolving Loan Notes or any of the other Transaction Documents, any remedy at law may prove to be inadequate relief to the Lenders or the Agent; therefore, the Borrower agrees that the Lenders or the Agent, if the Lenders so request, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

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        Section 11.18    Notice of Claims; Claims Bar.    THE BORROWER, EACH SUBSIDIARY GUARANTOR AND EACH RELEASED SUBSIDIARY GUARANTOR HEREBY AGREES THAT IT SHALL GIVE PROMPT NOTICE OF ANY CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST ANY LENDER, EITHER ARRANGER OR THE AGENT, WHICH SUCH CLAIM IS BASED IN LAW OR EQUITY OR ADMIRALTY, ARISING UNDER OR RELATED TO THIS AGREEMENT, THE REVOLVING LOAN NOTES OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR TO THE REVOLVING LOANS, THE L/C OBLIGATIONS OR SUBSIDIARY GUARANTOR OBLIGATIONS (OR THE COLLATERAL THEREFOR) CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR OMISSION TO ACT BY ANY LENDER, EITHER ARRANGER OR THE AGENT WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO GIVE SUCH PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.

        Section 11.19    Waiver of Punitive Damages.    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EACH PARTY HERETO HEREBY AGREES THAT IT SHALL NOT SEEK FROM ANY OTHER PARTY HERETO, UNDER ANY THEORY OF LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

        Section 11.20    Consent to Jurisdiction.    (a) Any legal suit, action or proceeding against a Credit Party arising out of or relating to this Agreement or any other Transaction Document, or any transaction contemplated hereby or thereby, may be instituted in any federal or state court of competent jurisdiction in The City of New York, State of New York, and each Credit Party hereby irrevocably submits to the jurisdiction of any such court in any such suit, action or proceeding. Each Credit Party hereby waives, to the fullest extent permitted by applicable law, any defense which it may now or hereafter have based upon lack of personal jurisdiction or venue or forum non conveniens. Each Credit Party hereby irrevocably appoints and designates Corporate Creations Network, Inc., having an address at 277 Broadway, Suite 510, New York, New York 10007, as its true and lawful attorney-in-fact and duly authorized agent for the limited purpose of accepting service of legal process and each Credit Party agrees that service of process upon such party shall constitute personal service of such process such Credit Party. Each Credit Party shall maintain the designation and appointment of such authorized agent until all Obligations shall have been paid in full. If such agent shall cease to so act, the Credit Parties shall immediately designate and appoint another such agent satisfactory to the Agent and shall promptly deliver to the Agent evidence in writing of such other agent's acceptance of such appointment.

        Section 11.21    Waiver of Jury Trial.    THE BORROWER, EACH SUBSIDIARY GUARANTOR, EACH ARRANGER, EACH LENDER AND THE AGENT HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER

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TRANSACTION DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

        Section 11.22    Currency Indemnity.    Any payment or payments made to or for the account of the Agent, either Arranger or any Lender in a currency other than the currency in which such payment is required to be made hereunder or under any other Transaction Document (the "Required Currency") for any reason (pursuant to a judgment or order of a court or tribunal of any jurisdiction) shall only constitute a discharge to the Borrower to the extent of the amount of the Required Currency which the Agent, such Arranger or such Lender is, acting in good faith and exercising reasonable and customary diligence, able to purchase in New York City with the amount or amounts so received on the date or dates of receipt by the Agent, such Arranger or such Lender of such payment or payments (or if such date is not a Business Day on the next succeeding Business Day). If the amount of the Required Currency which the Agent, such Arranger or such Lender is so able to purchase falls short of the amount of the Required Currency due to the Agent, such Arranger or such Lender, the Borrower shall indemnify and hold the Agent, such Arranger or such Lender harmless against any loss or damage arising as a result. This indemnity shall constitute a separate and independent obligation from the other obligations contained in this Agreement, shall give rise to an independent cause or causes of action, shall apply irrespective of any indulgence granted by the Agent, such Arranger or such Lender from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum or sums in respect of the amount due hereunder or under any such judgment or order.

        Section 11.23    Release of Lien.    In the event that the Borrower or a Subsidiary Guarantor sells, leases, transfers, assigns or otherwise disposes of a Vessel in accordance with Section 7.03, the Agent shall execute and file such instruments and take such actions, at the expense of Borrower, as may be reasonably requested to release such Vessel and the related collateral from the Lien securing the Obligations.

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

FORTIS CAPITAL CORP. as Agent, Arranger, Bookrunner and Lender
By:
By:	Address:    Three Stamford Plaza                    301 Tresser Boulevard                    Stamford, CT 06901-3239 Phone: (203) 705-5787 Fax: (203) 705-5896
NIB CAPITAL BANK N.V., as Arranger and Lender
By:
By:	Address: Phone: Fax:
THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND, as Lender
By:	Address:    2nd Floor, New Uberior House                    11 Earl Grey Street                    Edinburgh, EH3 9BN                    United Kindom Phone: +44-131-659-0320 Fax: +44-131-659-0387
SEABULK INTERNATIONAL, INC., the Borrower,
By:	Address:    2200 Eller Dr.                    Fort Lauderdale, FL 33316 Phone: (954) 524-4200 Fax: (954) 527-1772

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SEABULK ARIES II, INC. SEABULK BETSY, INC. SEABULK CAROL, INC. SEABULK CORMORANT, INC. SEABULK DEFENDER, INC. SEABULK EMERALD, INC. SEABULK HORIZON, INC. SEABULK KESTREL, INC. SEABULK MERLIN, INC. SEABULK OSPREY, INC. SEABULK OFFSHORE, LTD.
By its general partner Seabulk Tankers, Ltd By its general partner Seabulk Transport, Inc. SEABULK RAVEN, INC. SEABULK TOUCAN, INC. SEABULK TOWING, INC. SEABULK ALKATAR, INC. SEABULK SAPPHIRE, INC. SEABULK TOWING SERVICES, INC. OFFSHORE MARINE MANAGEMENT INTERNATIONAL, INC., SEABULK TANKERS, LTD.,
By its general partner Seabulk Transport, Inc. SEABULK OFFSHORE GLOBAL HOLDINGS, INC. SEABULK OFFSHORE HOLDINGS, INC. SEABULK OFFSHORE OPERATORS, INC. SEABULK MARINE INTERNATIONAL, INC. SEABULK TRANSPORT, INC.
each a Subsidiary Guarantor
By:	Address:    2200 Eller Dr.                    Fort Lauderdale, FL 33316 Phone: (954) 524-4200 Fax: (954) 527-1772
SEABULK CAPRICORN, INC. SEABULK CHAMP, INC. SEABULK COOT I, INC. SEABULK COOT II, INC. SEABULK CYGNET I, INC. SEABULK CYGNET II, INC. SEABULK DANAH, INC. SEABULK DUKE, INC. SEABULK EAGLE II, INC. SEABULK EXPLORER, INC. SEABULK FALCON II, INC. SEABULK FREEDOM, INC. SEABULK GANNET II, INC. SEABULK GIANT, INC. SEABULK GREBE, INC. SEABULK HAWAII, INC. SEABULK HAWK, INC. SEABULK HERCULES, INC. SEABULK LAKE EXPRESS, INC. SEABULK MARLENE, INC. SEABULK MARTIN I, INC. SEABULK MARTIN II, INC.

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SEABULK MASTER, INC. SEABULK NEPTUNE, INC. SEABULK PENGUIN I, INC. SEABULK PENGUIN II, INC. SEABULK PENNY, INC. SEABULK PERSISTENCE, INC. SEABULK PETREL, INC. SEABULK SERVICE, INC. SEABULK TENDER, INC. SEABULK TITAN, INC. SEABULK TOOTA, INC. SEABULK VERITAS, INC. SEABULK CLIPPER, INC. SEABULK CONSTRUCTOR, INC. SEABULK HABARA, INC. SEABULK JEBEL ALI, INC. SEABULK MAINTAINER, INC. SEABULK SARA, INC. SEABULK TREASURE ISLAND, INC. SEABULK HERON, INC. SEABULK JASPER, INC. SEABULK LINCOLN, INC. SEABULK MALLARD, INC. SEABULK PLOVER, INC. SEABULK SWIFT, INC.
SEABULK OFFSHORE U.K. LIMITED SEABULK OCEAN SYSTEMS HOLDING CORPORATION SEABULK OFFSHORE INTERNATIONAL, INC. SEABULK OFFSHORE OPERATORS TRINIDAD LIMITED,
each a Released Subsidiary Guarantor
By:	Address:    2200 Eller Dr.                    Fort Lauderdale, FL 33316 Phone: (954) 524-4200 Fax: (954) 527-1772

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APPENDIX A DEFINITIONS

        "Adjusted EBITDA" means, with respect to the Borrower for any period, an amount equal to EBITDA for each of the Borrower's most recently ended four fiscal quarters, as reported in the financial statements most recently delivered to the Agent, minus that portion of EBITDA attributable to the Lightship Tanker Entities plus an amount equal to the dividends received during such period from the Lightship Tanker Entities.

        "Adjusted Funded Debt" means, with respect to the Borrower for any period, the average of the Borrower's Consolidated Funded Debt less any Indebtedness relating to the Lightship Tanker Entities for each of the Borrower's most recently ended four fiscal quarters, as reported in the financial statements most recently delivered to the Agent; provided, however, until the financial statements for the quarter ended September 30, 2003 have been delivered to the Agent, the Consolidated Funded Debt shall be an amount equal to the product of (a) the Consolidated Funded Debt for fiscal quarters ended December 31, 2002, March 31, 2003 and June 30, 2003 and (b) 1.33.

        "Adjusted Funded Debt Ratio" means as of any date of determination the ratio of (x) the Adjusted Funded Debt to (y) the Adjusted EBITDA.

        "Adjusted Interest Expense" means, with respect to the Borrower for any period, the Consolidated Interest Expense less any such Consolidated Interest Expense relating to the Lightship Tanker Entities for each of the Borrower's most recently ended four fiscal quarters, as reported in the financial statements most recently delivered to the Agent; provided, however, until the financial statements for the quarter ended September 30, 2003 have been delivered to the Agent, the Consolidated Interest Expense shall be an amount equal to the product of (a) the Consolidated Interest Expense for fiscal quarters ended December 31, 2002, March 31, 2003 and June 30, 2003 and (b) 1.33.

        "Adjusted LIBOR" means, for each Interest Period in respect of a LIBOR Loan, an interest rate per annum (rounded upward to the nearest 1/16th of one percent (0.0625%)) determined pursuant to the following formula:

	LIBOR
Adjusted LIBOR =
	1.00 - Reserve Percentage

The Adjusted LIBOR shall be adjusted automatically as of the effective date of any change in the Reserve Percentage.

        "Adjusted Tangible Net Worth" means with respect to the Borrower, as of any date of determination, the Consolidated Tangible Net Worth of the Borrower less any Consolidated Tangible Net Worth relating to the Lightship Tanker Entities.

        "Affiliate" means, with respect to any Person, any other Person (i) directly or indirectly controlling (including, but not limited to, all directors and officers of such Person), controlled by, or under direct or indirect common control with, such Person, or (ii) that directly or indirectly owns more than 10% of the voting securities of such Person. A Person shall be deemed to

control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have correlative meanings.

        "Agent" has the meaning set forth in the initial paragraph of the Agreement.

        "Agent-Related Persons" means the Agent, together with its Affiliates and the officers, directors, employees, agents and attorneys-in-fact of the Agent and its Affiliates.

        "Aggregate Tranche A Loan Commitment" means the aggregate of the Tranche A Loan Commitments for the Lenders, which on the Closing Date shall equal $80,000,000.00, subject to adjustment as set forth in Sections 2.06 and 2.07 of the Agreement.

        "Aggregate Tranche A Loan Commitment Reduction Amount" shall have the meaning set forth in Section 2.06(a) of the Agreement.

        "Agreement" or "Credit Agreement" means the Amended Restated Credit Agreement, dated as of August 5, 2003, among the Borrower, the Subsidiary Guarantors, the Released Subsidiary Guarantors, the Lenders, the Agent and the Arrangers, as modified, supplemented or amended from time to time.

        "Amended and Restated Assignment of Earnings and Insurances" means the amended and restated assignment, dated as of the Effective Date, between the Borrower and the Subsidiary Guarantors (other than Seabulk Towing, Inc.) and the Agent, on behalf of the Lenders, pursuant to which the Borrower and such Subsidiary Guarantors assign to the Agent, on behalf of the Lenders, all of its right, title and interest in, to and under the Earnings and Insurances with respect to their Vessels.

        "Amended and Restated Assignment of Insurances" means the amended and restated assignment, dated as of the Effective Date, between Seabulk Towing, Inc. and the Agent, on behalf of the Lenders, pursuant to which Seabulk Towing, Inc. assigns to the Agent, on behalf of the Lenders, all of its right, title and interest in, to and under the Insurances with respect to its Vessels.

        "Amended and Restated Mortgage" means, with respect to a Vessel, the amended and restated first registered ship mortgage (or, in the case of the Second Lien Vessels, an amended and restated second registered ship mortgage) on such Vessel substantially in the form of Exhibit D-I (or, in the case of the Second Lien Vessels, Exhibit D-II) to the Agreement, granted by the related Subsidiary Guarantor to the Agent, on behalf of the Lenders.

        "Amended and Restated Pledge Agreement" means the amended and restated pledge agreement from the Borrower to the Agent on behalf of the Lenders, pursuant to which the Borrower pledges all of the issued and outstanding Equity Interests in the Subsidiary Guarantors to the Agent, on behalf of the Lenders.

2

        "Applicable Margin" means, with respect to each Revolving Loan, the margin set forth below if the Adjusted Funded Debt Ratio determined as of the most recent fiscal quarter is:

Adjusted Funded Debt Ratio	LIBOR Margin		Base Rate Margin
equal to or greater than 3.50	4.00	%	3.00	%
equal to or greater than 3.00, but less than 3.50%	3.50	%	2.50
equal to or greater than 2.00, but less than 3.00%	2.50	%	1.00
less than 2.00	1.75	%	0.75	%

Notwithstanding the above, the Applicable Margin shall be subject to adjustment as set forth in Section 2.03(d) of the Agreement.

        "Appraiser" means any of Fearnleys A.S., R.S. Platou Shipbrokers A.S., Bassoe Offshore A.S., H. Clarkson Ltd., Simpson Spence Young Ltd., Mallory Jones Lynch & Flynn, Inc., Compass Maritime Services LLC, Lorentzen Stemoco Shipbrokers A.S., Braemar Shipbrokers Ltd., Barry Rogliano Salles, Poten & Partners, Inc., Jaques Pierot & Sons, DuFour Laskay & Strouse, Inc. and Nobel Denton Marine, together with any other Person not affiliated with the Borrower and acceptable to the Agent engaged in the business of appraising vessels, including tug and supply service vessels.

        "Approved Jurisdiction" means United States of America, Republic of Liberia, Marshall Islands, Commonwealth of Dominica, United Kingdom, St. Vincent and the Grenadines, Panama or such other jurisdiction as may be acceptable to the Requisite Lenders.

        "Arranger" and "Arrangers" have the meaning set forth in the initial paragraph of the Agreement.

        "Asset Coverage Ratio" means, at any time, the ratio of (x) the aggregate Fair Market Value of the Vessels (excluding laid-up Vessels and Vessels held for sale) at such time to (y) the aggregate outstanding principal amount of the Revolving Loans and Stated Amount of the Letters of Credit then outstanding.

        "Assignee" shall have the meaning provided in Section 10.11(a) of the Agreement.

        "Assignment and Acceptance" shall have the meaning provided in Section 10.11(a) of the Agreement.

        "Assignment of Earnings and Insurances" means the Amended and Restated Assignment of Earnings and Insurances or any other assignment substantially in the form of the Amended and Restated Assignment of Earnings and Insurances between the Borrower or a Subsidiary

3

Guarantor and the Agent, on behalf of the Lenders, as the same from time to time may be amended, restated, modified, supplemented or renewed, in each case in accordance with the terms thereof, pursuant to which the Borrower or such Subsidiary Guarantor assigns to the Agent, on behalf of the Lenders, all of its right, title and interest in, to and under the Earnings and Insurances with respect to its Vessel.

        "Assignment of Insurances" means the Amended and Restated Assignment of Insurances or any other assignment substantially in the form of the Amended and Restated Assignment of Insurances between Seabulk Towing, Inc. and the Agent, on behalf of the Lenders, as the same from time to time may be amended, restated, modified, supplemented or renewed, in each case in accordance with the terms thereof, pursuant to which Seabulk Towing, Inc. assigns to the Agent, on behalf of the Lenders, all of its right, title and interest in, to and under the Insurances with respect to such Vessels.

        "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

        "Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy", as in effect from time to time.

        "Base Rate" means for any day, a rate per annum equal to the greater of (a) the Prime Rate and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

        "Base Rate Loan" means any Loan designated as such by the Borrower in the related Drawdown Request at the time of the incurrence thereof, conversion or continuation thereto, which Revolving Loan shall bear interest based on the Base Rate.

        "Borrower" has the meaning set forth in the initial paragraph of this Agreement.

        "Business Day" means any day which is not a Saturday, Sunday or legal holiday or any other day on which banking institutions in New York, The Netherlands, Norway or Germany are authorized by law or executive order to close.

        "Capital Lease Obligation" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

        "CERCLA" means the Comprehensive Environmental Response Compensation and Liability Act of 1980, as same may be amended from time to time.

4

        "Change in Law" means (a) the adoption of any law, rule or regulation after the Initial Closing Date, (b) any change in law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Initial Closing Date or (c) compliance by any Lender with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Initial Closing Date.

        "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of the Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.

        "Collateral" means the Vessels, the Earnings on the Vessels (other than the Second Lien Vessels so long as MARAD is the first mortgagee and the Vessels owned by Seabulk Towing, Inc. so long as MARAD is the first mortgagee on a Vessel owned by Seabulk Towing, Inc.), the Insurances on the Vessels (other than the Second Lien Vessels), the Mortgages, the Equity Interests from time to time subject to the Pledge Agreement and any other property in which a security interest is created in favor of the Agent for the benefit of the Lenders to secure the payment and performance of the Obligations of the Borrower and the Subsidiary Guarantors under the Agreement.

        "Commitment Fee" means, for the time period commencing on the Closing Date to and including the Maturity Date (or such earlier date as the Aggregate Tranche A Loan Commitments shall have been terminated entirely), a commitment fee computed at the rate per annum equal to the Commitment Fee Percentage on the average daily excess amount of (a) the Aggregate Tranche A Loan Commitments on such date over (b) the sum of, without duplication, (i) the aggregate principal amount of the Revolving Loans outstanding on such date, (ii) the aggregate amount available for drawings under the Letters of Credit, and (iii) the aggregate unpaid amount of all Reimbursement Obligations due and payable as of such date in respect of previous drawings made under the Letters of Credit. The Commitment Fee shall be calculated on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) in the period for which such Commitment Fee is payable.

        "Commitment Fee Payment Date" means the last Business Day of each December, March, June and September, commencing on the Effective Date and ending on the Maturity Date.

5

        "Commitment Fee Percentage" means the percentage set forth below if the Adjusted Funded Debt Ratio (expressed as a percentage) is determined as of the most recent fiscal quarter:

Adjusted Funded Debt Ratio	Commitment Fee Percentage
equal to or greater than 3.75	0.875	%
equal to or greater than 3.00, but less than 3.75	0.750	%
equal to or greater than 2.00, but less than 3.00	0.625	%
less than 2.00	0.500	%

        "Company" means any corporation, limited liability company, partnership or other business entity.

        "Compulsory Acquisition" means, with respect to a Vessel, the requisition for title or other compulsory acquisition of such Vessel (otherwise than by requisition for hire), capture, seizure, detention or confiscation of such Vessel by any government or by Persons acting or purporting to act on behalf of any government or Governmental Authority.

        "Consolidated Funded Debt" means, with respect to any Person as of any date of determination, the sum, without duplication, of (i) the total amount of Indebtedness of such Person and its Subsidiaries, plus (ii) the total amount of Indebtedness of any other Person, to the extent that such Indebtedness has been Guaranteed by such Person or one or more of its Subsidiaries, plus (iii) the aggregate value of all Disqualified Shares of such Person, in each case, determined on a consolidated basis in accordance with GAAP.

        "Consolidated Interest Expense" means, for any period, the sum of:

(A)

the total interest expense of the Borrower and its Subsidiaries plus, to the extent not otherwise included in such interest expense (without duplication), and to the extent incurred by the Borrower or any of its Subsidiaries:



(1)

interest expense attributable to Capital Lease Obligations, the interest expense attributable to leases constituting part of a sale and leaseback transaction and the interest portion of rent expense associated with Attributable Debt in respect of the relevant lease giving rise thereto, determined as if such lease were a capitalized lease in accordance with GAAP and the interest component of any deferred payment obligations;



(2)

amortization of debt discount but not debt issuance costs;



(3)

non-cash interest expense;

6

(4)

amortization of commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing;



(5)

interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Borrower or any Subsidiary;



(6)

net costs associated with Hedging Obligations (excluding amortization of fees paid at the time or entering into such Hedging Obligations); plus



(B)

all dividends, whether paid or accrued and whether or not in cash, on any series of Preferred Shares of a Person or any of its Subsidiaries payable to a Person other than the Borrower or a Subsidiary Guarantor; plus



(C)

cash contributions to any employee stock ownership plan or other trust for the benefit of employees to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Borrower and the Subsidiary Guarantors) in connection with Indebtedness incurred by such plan or trust to purchase share capital of the Borrower.

        "Consolidated Net Income" means, for any period for any Person, the net income (loss) of such Person and its consolidated Subsidiaries determined in accordance with GAAP; provided, however, that there shall not be included in determining such Consolidated Net Income:

(A)

any net income (or loss) of any Subsidiary if at the date of determination the making of distributions or the payment of dividends by such Subsidiary are not permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or other organizational document or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders except:



(i)

subject to the limitations contained in Clause (2) and (3) below, the Borrower's equity in the net income of any such Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash distributed by such Subsidiary during such period to the Borrower or a Subsidiary as a dividend or other distribution (subject, in the case of a dividend to a Subsidiary, to the limitation contained in this clause); and



(ii)

the Borrower's equity in a net loss of any such Subsidiary for such period shall be included in determining such Consolidated Net Income;

7

(B)

any gain or loss, together with any related provision for taxes on such gain or loss, realized upon (i) a sale or other disposition of any assets of the Borrower, its consolidated Subsidiaries or any other Person (including pursuant to any sale and leaseback transaction) which is not sold or otherwise disposed of in the ordinary course of business, (ii) the sale or other disposition of any securities of any Person not sold or otherwise disposed of in the ordinary course of business or (iii) the extinguishment of any Indebtedness of any Person;



(C)

any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss.

        "Consolidated Tangible Net Worth" of any Person, as of any date of determination, means the consolidated shareholders' equity of such Person as determined in accordance with GAAP less (to the extent included) amounts attributable to Disqualified Shares of such Person.

        "Contract" shall have the meaning provided in Section 3.04(a) of the Agreement.

        "Credit Event" means the making of any Revolving Loan or the issuance of any Letter of Credit.

        "Credit Party" means either of and "Credit Parties" means both the Borrower and each Subsidiary Guarantor.

        "Customary Permitted Liens" means

(A)

Liens for taxes, assessments or charges of any government authority or claims not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with the provisions of GAAP;



(B)

statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law created in the ordinary course of business for amounts which are not past due for more than 30 days or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP or which in the aggregate do not detract from the value of the Borrower or any Subsidiary's property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Subsidiary;



(C)

licenses, leases or subleases granted to other Persons in the ordinary course of business not materially interfering with the conduct of the business of the Borrower and its Subsidiaries taken as a whole;



(D)

easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions and other similar charges or encumbrances,

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and minor title deficiencies, in each case whether now or hereafter in existence, not securing obligations for the payment of borrowed money and not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries;

(E)

rights of tenants, subtenants, franchisees or parties in possession (other than a debtor in possession, trustee in bankruptcy or receiver of the Borrower), or options or rights of first refusal, whether pursuant to leases, subleases, franchise agreements, other occupancy agreements or otherwise, if such rights were vested on the Closing Date or created thereafter in the ordinary course of business in transactions permitted under the Agreement;



(F)

any interest or title of a lessor, sublessor, licensee or licensor under any lease or license agreement permitted by the Agreement;



(G)

Liens in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business and which are within the general parameters customary in the banking industry;



(H)

Liens in favor of customs and revenue authorities arising as a matter of law to secure the payment of customs duties in connection with the importation of goods;



(I)

Liens arising out of conditional sale, title retention, consignment or similar arrangements for the purchase or sale of goods entered into by the Borrower or any of its Subsidiaries in the ordinary course of business in accordance with the past practices of the Borrower and its Subsidiaries;



(J)

deposits made to secure statutory obligations in the form of excise taxes;.



(K)

Liens incurred or deposits or pledges made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, old age or other similar obligations, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); and



(L)

Liens resulting from operation of law with respect to any judgments or orders not constituting a Default.

        "Default" shall mean an Event of Default or any condition or event which, with notice or lapse of time or both, would constitute an Event of Default.

        "Disbursement Date" shall have the meaning provided in Section 3.02 of the Agreement.

9

        "Disqualified Shares" means any Share Capital that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Share Capital), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Share Capital, in whole or in part, on or prior to the date that is 91 days after the Maturity Date.

        "Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States (expressed in dollars).

        "Drawdown Date" means each Business Day designated by the Borrower in a Drawdown Request, as the day on which a Revolving Loan, subject to the terms and conditions of the Agreement, is requested to be made by the Lenders to the Borrower; provided, however, a Drawdown Date with respect to a Revolving Loan shall not occur later than the day immediately preceding the Maturity Date.

        "Drawdown Request" means, with respect to any borrowing, conversion or continuation of a Revolving Loan, a written request, substantially in the form of Exhibit B to the Agreement executed by an Executive Officer of the Borrower wherein the Borrower indicates, among other things, (a) the proposed Drawdown Date, (b) the amount of such Revolving Loan, (c) the initial Interest Period for such Revolving Loan, (d) whether such Revolving Loan is a Base Rate Loan or a LIBOR Loan and (f) in the case of a borrowing, the disbursement instructions therefor.

        "Earnings" means and includes all present and future moneys and claims which are earned by or become payable to or for the account of the Borrower or the Subsidiary Guarantors in connection with the operation or ownership of the Vessels, including but not limited to freights, passage and hire moneys, remuneration for salvage and towage services, demurrage and detention moneys, all present and future moneys and claims payable to the Borrower or the Subsidiary Guarantors in respect of any breach or variation of any charterparty or contract of affreightment in respect of the Vessels, and all moneys and claims payable to the Borrower or the Subsidiary Guarantors in respect of the requisition for hire of the Vessels; provided, however, that the use of this term shall create no security interests with respect to the earnings of the Second Lien Vessels owned by the Borrower so long as MARAD is the first mortgagee thereon or on any vessels now or in the future owned by Seabulk Towing, Inc. so long as MARAD is the first mortgagee on any vessel owned by Seabulk Towing, Inc.

        "EBITDA" means, with respect to the Borrower and its Subsidiaries for any period, the Consolidated Net Income of such Person for such period plus the following to the extent deducted in calculating such Consolidated Net Income:

(A)

all Federal, state and local and all foreign income tax expense;



(B)

Consolidated Interest Expense;



(C)

depreciation expense and amortization expense;

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(D)

the sum of any non-cash costs, charges or expenses attributable to the accrual of or reserve for cash charges in any future period for pension liabilities of the Borrower and its Subsidiaries;



(E)

an amount equal to any non-cash loss or gain realized in connection with an asset sale;



(F)

an amount equal to the fees, expenses and other costs incurred by the Transaction Parties in connection with the transactions contemplated in conjunction with the Facility; and



(G)

to the extent the Borrower's accounting policy with respect to the capitalization of dry-docking costs is changed, an amount equal to any expensed dry-docking cost.

Notwithstanding the foregoing, amounts relating to a Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income (or loss) of such Subsidiary was included in calculating Consolidated Net Income.

        "Effective Date" means the date on which (a) all of the Term Loans together with all interest accrued and unpaid thereon and any and all fees and actual costs incurred by any Lender in connection with any breaking of funding are paid in full, (b) the New Notes are issued pursuant to the New Indenture and (c) all of the conditions precedent set forth in Section 5.01 of the Agreement have been satisfied or waived.

        "Eligible Lender" means and include a commercial bank, financial institution or other institutional "accredited investor" (as defined in Regulation D of the Securities Act).

        "Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, "Claims"), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

        "Environmental Law" means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy or rule of common law now or hereafter in effect and in each case as amended, or any binding judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Borrower or any of its Subsidiaries, relating to the environment, employee health and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC. § 1251 et seq.; the Toxic Substances Control Act, 15 USC. § 2601 et seq.; the Clean Air Act, 42 USC. § 7401 et seq.; the Safe Drinking Water Act, 42 USC. § 3803 et seq.; the

11

Oil Pollution Act of 1990, 33 USC. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC. § 11001 et seq.; the Hazardous Material Transportation Act, 49 USC. § 1801 et seq.; and the Occupational Safety and Health Act, 29 USC. § 651 et seq. (to the extent it regulates occupational exposure to Hazardous Materials); any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

        "Equity Interests" means Share Capital and all warrants, options or other rights to acquire Share Capital (but excluding any debt security that is convertible into, or exchangeable for, Share Capital).

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the date of the Agreement, and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

        "ERISA Affiliate" means each person (as defined in Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the Borrower would be deemed to be a "single employer" (i) within the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of the Borrower being or having been a general partner of such person.

        "Event of Default" means any of the events described in Article IX of the Agreement.

        "Excluded Taxes" any tax imposed on or measured by the net income or profits of a Lender, or any franchise tax based on the net income or net profits of a Lender, in either case pursuant to the laws of (a) the United States of America, (b) any jurisdiction (or political subdivision thereof) of which the Agent, any Arranger, the Issuing Lender or any other Lender, as the case may be, is a citizen or is resident or in which such Lender has a permanent establishment (or is otherwise engaged in the active conduct of its banking business through an office or a branch) which is such Lender's applicable Lending Office, (c) the jurisdiction (or any political subdivision thereof) in which the Agent, any Arranger, the Issuing Lender or any other Lender is organized, and (d) any jurisdiction (or political subdivision thereof) in which the Agent, any Arranger, the Issuing Lender or any other Lender is presently doing business which taxes are imposed solely as a result of doing business in such jurisdiction.

        "Executive Officer" means, with respect to a Person, any officer having the authority to bind such Person pursuant to the terms of the constitutive documents of such Person.

        "Existing Credit Agreement" means the Credit Agreement, dated as of September 13, 2002 as amended by Amendment Number 1 to the Credit Agreement, dated November 22, 2002, among Seabulk International, Inc., a corporation existing under the laws of Delaware, as borrower, Fortis Capital Corp., as agent for the lenders from time to time parties thereto, Fortis Capital Corp., as arranger and book runner, and NIB Capital Bank N.V., as arranger, the lenders from time to time a party thereto.

        "Existing Indebtedness" means the Indebtedness incurred under the Existing Credit Agreement.

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        "Existing Revolving Note" means the notes issued pursuant to Section 2.01(e) of the Existing Agreement.

        "Facility" means the $80,000,000 senior secured credit facility created pursuant to the Agreement consisting of the Revolving Loans and the Letters of Credit.

        "Facing Fee" shall have the meaning provided in Section 2.16(b) of the Agreement.

        "Fair Market Value" means, with respect to a Vessel, the fair market sale value as of a specified date of such Vessel determined on a standalone basis free and clear of any Liens and charters and with no value given to pooling arrangements that would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined by an Appraiser selected by the Agent at the expense of the Borrower; provided, however, that the Borrower shall have the option to select an additional Appraiser to make such determination and, in such case, the "Fair Market Value" shall be the average of the fair market sale value determined by the Agent's Appraiser and the fair market sale value determined by the Borrower's Appraiser. The Fair Market Value of the Seabulk Trader and the Seabulk Challenge shall be an amount equal to the excess of (a) 50% of the fair market value determined as described in the immediately preceding sentence over (b) the discharge amount of the first priority mortgages thereon.

        "Federal Funds Effective Rate" means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day of such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.

        "Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any successor thereto.

        "Foreign Pension Plan" means any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

        "Fortis" has the meaning set forth in the initial paragraph of the Agreement.

        "GAAP" means generally accepted accounting principles as in effect from time to time in the United States of America consistently applied, except as disclosed in the financial statements of the Borrower.

        "Governmental Authority" means any government, parliament, legislature, regulatory authority, agency, commission, tribunal, department, commission, board, instrumentality, court,

13

arbitration board or arbitrator or other law, regulation or rule making entity (including a Minister of the Crown) having or purporting to have jurisdiction on behalf of, or pursuant to the laws of, any country in which any Credit Party is organized, continued, amalgamated, merged or otherwise created or established or in which any Credit Party carries on business or holds property, or any province, territory, state, municipality, district or political subdivision of any such country or of any such state, province or territory of such country.

        "Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

        "Hazardous Materials" means (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of "hazardous substances," "hazardous waste," "hazardous materials," "extremely hazardous substances," "restricted hazardous waste," "toxic substances," "toxic pollutants," "contaminants," "dangerous goods," or "pollutants," or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority under Environmental Laws.

        "Hedging Obligations" means, with respect to any specified Person, the net amount of the obligations of such Person under interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, foreign currency exchange agreements, commodity price protection agreements and other agreements or arrangements designed to protect such Person against fluctuations in interest rates, foreign currency exchange rates and commodity prices.

        "Indebtedness" means, with respect to a Person, any indebtedness of such Person, whether or not contingent:

(A)

in respect of borrowed money;



(B)

evidenced by bonds, notes, debentures, promissory notes, loan agreements or similar instruments or letters of credit (other than obligations with respect to letters of credit securing obligations entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit)(or reimbursement agreements in respect thereof);



(C)

in respect of bankers' acceptances;



(D)

representing Capital Lease Obligations;

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(E)

representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable;



(F)

representing any Hedging Obligations; or



(G)

representing the maximum fixed repurchase price of Disqualified Shares;

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person.

        The amount of any Indebtedness outstanding as of any date shall be:

(A)

in the case of any Indebtedness issued with original issue discount, the accreted value of the Indebtedness; and



(B)

in the case of any other Indebtedness, the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due.

        "Indemnified Liabilities" shall have the meaning provided in Section 3.06 of the Agreement.

        "Indemnified Party" means each of and "Indemnified Parties" means collectively the Agent, each Arranger and each Lender and each of their respective directors, officers, employees and agents and any Person who controls any of them within the meaning of the federal, state and foreign securities laws.

        "Indemnified Taxes" means any Taxes (including, without limitation, income taxes withheld at source) other than Excluded Taxes.

        "Initial Closing Date" means September 13, 2002.

        "Initial Revolving Loan" means the first Revolving Loan made pursuant to Article II of the Agreement.

        "Insurances" includes all policies and contracts of insurance whatsoever (which expression includes all entries of the Vessels in a protection and indemnity or war risks association) which are from time to time taken out or entered into in respect of the Vessels and their Earnings or otherwise in connection with the Vessels; provided, however, that the use of this term shall create no security interests with respect to the insurances relating to the Second Lien Vessels so long as MARAD is the first mortgagee thereon.

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        "Interest Payment Date" means the last day of each Interest Period; provided, however, that if any Interest Period exceeds three (3) months, interest shall also be paid on the last day of each three (3) month period during such Interest Period.

        "Interest Period" means (a) with respect to any Revolving Loan, the one, three or six-month period (or, if agreed to by all of the Lenders, any other period), selected by the Borrower pursuant to Article II of the Agreement, commencing on the Drawdown Date, with respect to the first Interest Period for such Revolving Loan, and on the termination of the prior Interest Period, with respect to all other Interest Periods; provided, however, that notwithstanding Article II of the Agreement, the Borrower shall not select an Interest Period for any Revolving Loan, which includes and extends beyond the Maturity Date; and provided further, that any Interest Period which would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day unless such next succeeding Business Day is in the following calendar month, in which case such Interest Period shall end on the immediately preceding Business Day.

        "Interest Rate" means either (a) a rate per annum equal to the Base Rate for the relevant Interest Period plus the Applicable Margin effective as of the first day after the end of the most recent fiscal quarter (computed on the basis of a year of 365 days for the actual number of days—including the first day but excluding the last day—occurring in the period for which such interest is payable) or (b) a rate per annum equal to the Adjusted LIBOR for the relevant Interest Period plus the Applicable Margin effective as of the first day after the end of the most recent fiscal quarter (computed on the basis of a year of 360 days for the actual number of days—including the first day but excluding the last day—occurring in the period for which such interest is payable).

        "Investment" means any direct or indirect advance, loan or other extension of credit (including by way of guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of capital stock (or other equity interest), Indebtedness or other similar instruments.

        "ISM Code" shall have the meaning provided in Section 6.20(b) of the Agreement.

        "Issuance Date" means a Business Day designated by the Borrower in an Issuance Request as the day on which a Letter of Credit, subject to the terms and conditions of the Agreement, is requested to be issued by the Issuing Lender or an existing Letter of Credit is requested to be extended; provided, however, an Issuance Date shall not occur later than thirty (30) days immediately preceding the Maturity Date.

        "Issuing Lender" means Fortis Capital Corp. or one of its Affiliates, in its capacity as issuer of any Letter of Credit, or any successors thereto.

        "Issuance Request" means, with respect to a Letter of Credit, a written request, substantially in the form of Exhibit C to the Agreement executed by an Executive Officer of the Borrower wherein the Borrower indicates, among other things, (i) the Issuance Date, (ii) the Stated Amount of the Letter of Credit, (iii) the Stated Expiration Date, it being expressly agreed that unless the Issuing Lender otherwise agrees no Letter of Credit shall contain a provision for

16

the automatic renewal or extension thereof, (iv) the beneficiary of such Letter of Credit, (v) whether such Letter of Credit is a Standby Letter of Credit or Trade Letter of Credit and (vi) the terms and conditions, if any, required for draws thereunder.

        "L/C Commitment" means the Issuing Lender's obligation to issue Letters of Credit for the account of the Borrower in an aggregate amount not to exceed $30,000,000.

        "L/C Obligations" means on any date, an amount equal to the sum of (i) the aggregate Stated Amount of all issued and outstanding Letters of Credit, plus (ii) the then aggregate amount of all unpaid Reimbursement Obligations.

        "L/C Participant" means all Lenders other than the Issuing Lender.

        "Lender and Lenders" have the meanings set forth in the initial paragraph of the Agreement.

        "Lending Office" means, with respect to any Lender, the office or offices of the Lender specified opposite its name on the applicable signature page to the Agreement, or such other office or offices of the Lender as it may from time to time notify the Borrower and the Agent.

        "Letter of Credit" means a Standby Letter of Credit or Trade Letter of Credit issued pursuant to an Issuance Request; provided, that the aggregate amount available to be drawn under all such Letters of Credit shall not exceed the L/C Commitment.

        "Letter of Credit Fee" shall have the meaning provided in Section 2.16(b) of the Agreement.

        "LIBOR" means, with respect to an Interest Period and any Revolving Loan to be made, continued as or converted into a LIBOR Loan, the rate for a period of time comparable to the numbers of days in such Interest Period which appears on the Telerate Page 3750 (or such other page as may replace the page on that service for the purpose of displaying London inter-bank market rates) at or about 11:00 a.m., London time, on the date that is two London Banking Days preceding the date of calculation. If, at any time of determination, two such offered rates appear on the Telerate Page 3750, LIBOR will be the arithmetic mean of such offered rates (rounded to the nearest.0001 percentage point). If, at any time of determination, the Telerate Page 3750 or any replacement page is not available, LIBOR will be calculated as the average (rounded upward, if necessary to the next higher ¹/16 of 1%) of the respective rates per annum at which deposits in United States dollars are offered to each of three reference banks of internationally recognized standing selected by the Agent in the London interbank market for Dollar deposits of amounts comparable to the principal amount of the LIBOR Loan to which such LIBOR rate is to be applicable with maturities comparable to the Interest Period for which such LIBOR rate will apply at approximately 11:00 a.m., London time, on the date that is two London (US$) Banking Days preceding the date of calculation. The determination of LIBOR by the Agent shall be conclusive in the absence of manifest error.

        "LIBOR Loan" means a Revolving Loan that bears interest based on Adjusted LIBOR.

17

        "Lien" means mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other applicable personal property security legislation in any jurisdiction or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

        "Lightship Tanker Entities" means Lightship Tanker Holdings, L.L.C., Lightship Partners, L.P., Lightship Tankers I, L.L.C., Lightship Tankers II, L.L.C., Lightship Tankers III, L.L.C., Lightship Tankers IV, L.L.C., Lightship Tankers V, L.L.C., Delaware Tanker Holdings I, Inc., Delaware Tanker Holdings II, Inc., Delaware Tanker Holdings III, Inc., Delaware Tanker Holdings IV, Inc. and Delaware Tanker Holdings V, Inc.

        "London Banking Day" means any day on which dealings in deposits in United States dollars are carried on in the London interbank market and on which commercial banks are open for domestic and international business (including dealings in United States dollar deposits) in London and New York.

        "Loss Date" means with respect to a Vessel and a Total Loss, the Business Day following the earlier of (a) receipt by the related Subsidiary Guarantor of insurance, condemnation or other proceeds with respect to such Total Loss and (b) 180 days after the occurrence of such Total Loss.

        "Margin Stock" shall have the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System.

        "MARAD" means the United States Maritime Administration.

        "Material Adverse Change" means any circumstance or event or any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Transaction Document, (b) is or could reasonably be expected to be material and adverse to the condition (financial or otherwise) or business operations of the Borrower or any Subsidiary Guarantor, each individually or taken together as a whole, (c) materially impairs or could reasonably be expected to materially impair the ability of the Borrower or any of the Subsidiary Guarantors to perform their respective obligations under the Transaction Documents, or (d) materially impairs or could reasonably be expected to materially impair the ability of the Agent to enforce any of the Transaction Documents or any Lender to enforce its Revolving Loan Note.

        "Maturity Date" means the fifth (5th) anniversary of the Effective Date or if such date is not a Business Day, the Business Day immediately preceding such date.

        "Minimum Borrowing Amount" means (a) for Revolving Loans, $1,000,000 and integral multiples of $100,000 thereafter and (b) for Letters of Credit, $50,000.

        "Mortgage" means, with respect to a Vessel, the Amended and Restated Mortgage or any other first registered ship mortgage (or, in the case of the Second Lien Vessels, a second

18

registered ship mortgage) on such Vessel substantially in the form of an Amended and Restated Mortgage granted by the related Subsidiary Guarantor to the Agent, on behalf of the Lenders, as such Mortgage from time to time may be amended, restated, modified, supplemented or renewed in accordance with the terms of such Mortgage.

        "New Indenture" means the Indenture, dated as of August 5, 2003, between Seabulk International, Inc. and Wachovia Bank, National Association, as trustee, as the same may be modified, amended, restated, supplemented or renewed from time to time in accordance with the terms hereof and thereof.

        "New Notes" means the Borrower's senior unsecured notes in an aggregate amount not to exceed US$150,000,000, issued pursuant to the New Indenture, as the same may be modified, supplemented, restated, amended or renewed from time to time pursuant to the terms hereof and thereof.

        "NIB" has the meaning set forth in the initial paragraph of the Agreement.

        "Obligations" means any and all of the obligations of the Borrower and each of the Subsidiary Guarantors, whether due or to become due, matured or unmatured, liquidated or unliquidated, contingent or non-contingent, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, in each case arising under the Agreement or under any Revolving Loan Note, under any of the Transaction Documents or under any currency hedging agreement arranged by a Lender or an Affiliate of a Lender. This term includes, without limitation, all principal, interest (including interest that accrues after the commencement by or against the Borrower or any Subsidiary Guarantor of any action under the Bankruptcy Code), L/C Obligations, fees, including, without limitation, any and all arrangement fees, loan fees, agent fees and any and all other fees, expenses, costs or other sums (including attorney costs) payable by the Borrower or the Subsidiary Guarantors under any of the Transaction Documents.

        "Originating Lender" shall have the meaning provided in Section 10.11(d) of the Agreement.

        "Other Taxes" means any and all current or future stamp or documentary taxes or other excise or property taxes, charges or similar levies arising from any payment made hereunder or under the Revolving Loan Notes or from the execution, delivery, registration, enforcement, of or otherwise with respect to, any Transaction Document.

        "Overdue Rate" means, with respect to a Revolving Loan Note, a rate per annum for each day from the date of a default in any payment hereunder until such payment shall be paid in full equal to (a) in the case of any LIBOR Loan, the rate that would be applicable under Section 2.06(a) to such LIBOR Loan plus 2% per annum, and (b) in the case of any other overdue amount, the rate that would be applicable under Section 2.06(a) to a Base Rate Loan, plus 2% per annum.

        "Participant" shall have the meaning provided in Section 10.11(d) of the Agreement.

        "PBGC" means, the Pension Benefit Guaranty Corporation.

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        "Permitted Encumbrances" means: (a) liens or rights in rem for current crew's wages, for general average or salvage (including contract salvage) or for wages of stevedores employed by the charterer, the operator, agent or master of a Vessel which in each case (i) are unclaimed or (ii) shall not have been due and payable for ten (10) days after termination of a voyage; (b) liens or rights in rem for repairs or incident to current operations of a Vessel (other than those referred to in clause (a) above) or with respect to any change, alteration or addition made to such Vessel, but only to the extent in each case that such liens are based on claims not yet delinquent and do not involve any risk of a sale, forfeiture, hindrance to operation or loss of such Vessel; (c) liens for amounts that are not delinquent or that are due and unpaid for not more than thirty (30) days after such amounts shall become due that do not involve any risk of a sale, forfeiture, hindrance to operation or loss of a Vessel; (d) liens for amounts being contested by the applicable Subsidiary Guarantor in good faith by appropriate procedures, diligently prosecuted or appealed which do not involve any risk of a sale, forfeiture, hindrance to operation or loss of a Vessel; (e) liens covered by valid policies of insurance held with respect to a Vessel and meeting the requirements of the related Mortgage; (f) the lien of the Mortgages and the other Transaction Documents; (g) any other liens expressly permitted by any of the Transaction Documents; and (h) liens and security interests in existence as of the Closing Date granted in favor of the United States of America, represented by the Secretary of Transportation, acting by and through the Maritime Administrator, pursuant to the first priority mortgages, security agreements and other documents so long as such liens and security interests relate solely to the Second Lien Vessels.

        "Permitted Pledge Liens" means:

(A)

Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action or proceedings and with respect to which adequate reserves are being maintained;



(B)

Liens resulting from operation of law with respect to any judgments or orders not constituting a Default; and



(C)

Liens created by the Pledge Agreement and the other Transaction Documents.

        "Person" means an individual, a corporation, a partnership, an association, a trust, a limited liability company or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

        "Plan" means any pension plan, as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of), the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which the Borrower, a Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed or had an obligation to contribute to such plan.

        "Pledge Agreement" means the Amended and Restated Pledge Agreement or any other pledge agreement substantially in the form of the Amended and Restated Pledge Agreement

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from the Borrower to the Agent on behalf of the Lenders as may be amended, restated, modified, supplemented or renewed from time to time in accordance with the terms thereof pursuant to which the Borrower pledges all of the issued and outstanding Equity Interests in the Subsidiary Guarantors to the Agent on behalf of the Lenders.

        "Preferred Shares" of any Person means any Equity Interests of such Person that have any rights which are preferential to the rights of any other Equity Interests of such Person with respect to dividends or redemptions or upon liquidation.

        "Prime Rate" means the rate of interest per annum publicly announced from time to time by Fortis Financial Services LLC as its prime rate in effect at its principal office in New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

        "Proportionate Share" means with respect to the Tranche A and a Lender, a fraction expressed as a percentage, the numerator of which shall be the amount of such Lender's Tranche A Loan Commitment and the denominator of which shall be the Aggregate Tranche A Loan Commitment or, if the Aggregate Tranche A Loan Commitment is terminated, a fraction expressed as a percentage the numerator of which is such Lender's outstanding Tranche A Loan Commitment and the denominator of which is the amount of the then outstanding Revolving Loans and Stated Amount of the then outstanding Letters of Credit.

        "Qualified Substitute Vessel" means a vessel which (a) has a Fair Market Value which is equal to or greater than that of the Vessel for which it is being substituted and (b) is of a similar type and classification as the Vessel for which it is being substituted.

        "Real Property" means all of the right, title and interest of any Person in and to land, improvements and fixtures, including leaseholds.

        "Register" shall have the meaning provided in Section 2.10(a) of the Agreement.

        "Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

        "Reimbursement Obligation" shall have the meaning provided in Section 3.04 of the Agreement.

        "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migration into the environment.

        "Released Collateral" means the Released Vessels, the Earnings on the Released Vessels, the Insurances on the Released Vessels and the Released Equity Interests.

        "Released Equity Interests" means Equity Interests in the Released Subsidiaries.

        "Released Subsidiary Guarantors" means each of the Borrower's Subsidiaries identified as such on the signature pages of the Agreement.

21

        "Released Vessels" means any vessel that was a part of the Collateral for the Existing Indebtedness that will not be subject to a Mortgage after the Effective Date.

        "Reportable Event" means an event described in Section 4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA other than those events as to which the 30-day notice period is waived under subsection .22, .23, .25, .27, or .28 of Section 4043 of the Pension Benefit Guaranty Corporation Regulations.

        "Required Currency" shall have the meaning provided in Section 11.22 of the Credit Agreement.

        "Restricted Payment" shall have the meaning provided in Section 7.07 of the Credit Agreement.

        "Requisite Lenders" means any combination of Lenders whose combined Proportionate Share (and voting interest with respect thereto) of all amounts outstanding under the Agreement is greater than 50% of all such amounts outstanding.

        "Reserve Percentage" means with respect to Adjusted LIBOR and an Interest Period, the maximum reserve percentage (expressed as a decimal, rounded upward to the nearest 1/100th of one percent (0.01%)) in effect on the date LIBOR for such Interest Period is determined (whether or not applicable to any Lender) under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding having a term comparable to such Interest Period.

        "Responsible Officer" means, with respect to a Credit Party, the Chief Financial Officer, the Chief Executive Officer (or any person having a similar capacity), any senior vice-president, director of treasury and finance and any other officer designated by the Chief Financial Officer of such Credit Party acceptable to the Agent.

        "Restatement Fee" means US$160,000.00.

        "Returns" shall have the meaning provided in Section 4.09 of the Credit Agreement.

        "Revolving Loan" means an extension of credit pursuant to Section 2.01(b) of the Credit Agreement. The Revolving Loans shall not include any L/C Obligations.

        "Revolving Loan Note" shall have the meaning provided in Section 2.01(f) of the Credit Agreement.

        "SEC" means the Securities and Exchange Commission or any successor thereto.

        "Second Lien Vessels" means the Seabulk Challenge and the Seabulk Trader.

        "Security Documents" means all contracts, instruments and other documents now or hereafter executed and delivered in connection with the Agreement, pursuant to which liens and security interests are granted to the Agent for the benefit of the Lenders, including without

22

limitation, each Mortgage, each Assignment of Earnings and Insurances, each Assignment of Insurances and each Pledge Agreement.

        "Share Capital" means:

(A)

in the case of a corporation or a company, any and all shares, interest, participations, or other equivalent (however designated and whether or not voting) of share capital or corporate stock;



(B)

in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of share capital or corporate stock;



(C)

in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and



(D)

any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuer of such share capital.

        "Shareholder Agreements" means all agreements entered into by the Borrower or any of its Subsidiaries governing the terms and relative rights of their capital stock.

        "Standby Letter of Credit" means any irrevocable standby letter of credit for the account of the Borrower issued by the Issuing Lender in a form customarily used by such Issuing Lender or in such other form as has been approved by such Issuing Lender.

        "Stated Amount" of each Letter of Credit means the maximum amount available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met, as such amount may be reduced from time to time in accordance with the terms of such Letter of Credit (determined without regard to whether any conditions to drawing could then be met).

        "Stated Expiration Date" means, with respect to a Letter of Credit, the stated expiration date thereof which shall not exceed one year; provided, however, the Stated Expiration Date shall in no event be later than the Maturity Date.

        "Stock Holders Agreement" means that certain Stockholders' Agreement, dated as of the date hereof, among Seabulk International, Inc., Nautilus Acquisition, L.P., C/R Marine Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine Coinvestment, L.P., C/R Marine Coinvestment II, L.P. and Gerhard Kurz.

        "Stock Purchase Agreement" means that certain Sock Purchase Agreement, dated as of June 13, 2002, by and among Seabulk International, Inc. and each of the investors listed on Schedule 1 thereto.

        "Subsidiary" means any corporation, partnership, limited liability company or other entity, the majority of the voting interests (including interests arising out of securities or other

23

interests convertible, at the option of the holder, into interests of voting stock) of which is owned by a Person either directly or through Subsidiaries.

        "Subsidiary Guarantee Agreement" means the Guarantee by each of the Subsidiary Guarantors set forth in the Agreement or a supplement to the Agreement substantially in the form of Exhibit F to the Agreement pursuant to which a Subsidiary Guarantor becomes subject to the applicable terms and conditions of the Agreement, in each case as such supplement to the Agreement from time to time may be amended, restated, modified, supplemented or renewed.

        "Subsidiary Guarantee Obligation" shall have the meaning provided in Section 8.01(a) of the Agreement.

        "Subsidiary Guarantor" means each of the Borrower's Subsidiaries identified as such on the signature pages of the Agreement or to a Subsidiary Guarantee Agreement.

        "Tax Sharing Agreements" means all tax sharing, tax allocation and other similar agreements entered into by the Borrower and/or any of its Subsidiaries.

        "Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, withholdings, fees, assessments or other charges of whatever nature, together with any and all assessments, penalties, fines, additions thereto and interest thereon, in each case, now or hereafter imposed by any governmental jurisdiction or other taxing authority.

        "Term Loan" means the extension of credit made pursuant to Section 2.02(b) of the Existing Agreement.

        "Term Loan Note" means the notes issued pursuant to Section 2.02(d) of the Existing Agreement.

        "Termination Date" means with respect to each Letter of Credit (x) if no drawing is made thereunder, the final expiration date thereof or such earlier date on which such Letter of Credit was cancelled and returned to the respective Issuing Lender or (y) if a drawing or drawings are made thereunder, the date of payment of the final drawing thereunder as provided by the terms thereof.

        "Total Loss" means, with respect to a Vessel, (a) an actual or constructive or compromised or arranged total loss of such Vessel, (b) a Compulsory Acquisition of such Vessel or (c) a requisition for hire of such Vessel for a period in excess of 180 days.

        "Total Loss Proceeds" means all compensation, damages and other payments (including insurance proceeds other than certain liability insurance proceeds) received by the Agent, on behalf of the Lenders, from any Person, including any governmental authority, with respect to or in connection with a Total Loss.

        "Trade Letter of Credit" means any irrevocable letter of credit for the account of the Borrower and for the benefit of the sellers of goods and services to the Borrower or any of the Subsidiary Guarantors issued by the Issuing Lender in a form customarily used by such Issuing Lender or in such other form as has been approved by such Issuing Lender.

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        "Tranche" means the respective facility and commitments utilized in making Revolving Loans and issuing Letters of Credit hereunder.

        "Tranche A Loan" means a Revolving Loan or Letter of Credit.

        "Tranche A Loan Commitment" or "Commitment" means, for each Lender, the amount set for the opposite such lender's name in Schedule I hereto directly below the column entitled "Tranche A Loan Commitment", as same may be reduced from the time pursuant to Sections 2.06 and/or 2.07 of the Agreement or adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 10.11(a) of the Agreement.

        "Tranche A Reduction Amount" shall have the meaning provided in Section 2.06(c) of the Agreement.

        "Tranche A Reduction Date" means each of the dates contained in the table set forth in Section 2.06(a) of the Agreement.

        "Transaction Document" when used in the singular and "Transaction Documents" when used in the plural means any and all of the Agreement, the Revolving Loan Notes, the Subsidiary Guarantee Agreements and the Security Documents, as the same may from time to time be amended and restated, modified, supplemented or renewed.

        "Transaction Party" means any of and "Transaction Parties" means all of the Borrower, each Subsidiary Guarantor and each Released Subsidiary Guarantor.

        "UCC" means the Uniform Commercial Code as from time to time in effect the State of New York, or if the Uniform Commercial Code in any other State of the United States is mandatorily applicable with respect to any particular matter, the Uniform Commercial Code as from time to time in effect in such other State of the United States.

        "Unfunded Current Liability" of any Plan means the amount, if any, by which the value of the accumulated plan benefits under the Plan determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions).

        "United States" and "US" shall each mean the United States of America.

        "Vessel" means any of, and "Vessels" means all of the vessels owned by the Subsidiary Guarantors that are subject to a Mortgage.

        "Wholly-Owned Subsidiary" means, as to any Person, (i) any corporation, 100% of whose capital stock (other than directors' qualifying shares) is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any limited liability company, partnership, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time.

25

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FORTIS CAPITAL CORP., AS AGENT FOR THE LENDERS
FORTIS CAPITAL CORP., AS ARRANGER AND BOOK RUNNER
NIB CAPITAL BANK N.V., AS ARRANGER
THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND, AS LENDER
SEABULK INTERNATIONAL, INC., AS BORROWER
THE LENDERS FROM TIME TO TIME A PARTY HERETO,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
THE RELEASED SUBSIDIARY GUARANTORS NAMED HEREIN
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 5, 2003
THACHER PROFFITT & WOOD
TABLE OF CONTENTS
PRELIMINARY STATEMENT
ARTICLE I DEFINITIONS
ARTICLE II REVOLVING LOANS
ARTICLE III LETTERS OF CREDIT
ARTICLE IV REPRESENTATIONS, WARRANTIES AND AGREEMENTS
ARTICLE V CONDITIONS OF LENDING
ARTICLE VI AFFIRMATIVE COVENANTS
ARTICLE VII NEGATIVE COVENANTS
ARTICLE VIII AGREEMENT TO GUARANTEE
ARTICLE IX EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS
ARTICLE X RELATIONSHIP AMONG THE LENDERS
ARTICLE XI MISCELLANEOUS
APPENDIX A DEFINITIONS

EX-12.1

SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands except ratios)

Exhibit 12.1

	Year Ended December 31,			Period From January 1 to December 15			Period From December 16 to December 31,			Year Ended December 31,									Six Months Ended June 30,
	1998			1999			1999			2000			2001			2002			2002			2003
EARNINGS:
Income (loss) before extraordinary item and income taxes	$	36,839		$	(547,002	)	$	(1,565	)	$	(24,080	)	$	(6,751	)	$	(6,405	)	$	(3,245	)	$	6,824
Add: Fixed charges		51,198			72,557			2,814			63,814			57,132			45,840			25,654			16,778
Total earnings (loss)	$	88,037		$	(474,445	)	$	1,249		$	39,734		$	50,381		$	39,435		$	22,409		$	23,602
FIXED CHARGES:
Interest expense	$	49,723		$	71,215		$	2,756		$	62,714		$	55,907		$	44,715		$	25,078		$	16,301
Interest portion of rental expense		1,475			1,342			58			1,100			1,225			1,125			576			477
Total fixed charges	$	51,198		$	72,557		$	2,814		$	63,814		$	57,132		$	45,840		$	25,654		$	16,778
Ratio of earnings (loss) to fixed charges		1.7	×		(6.5)	×		0.4	×		0.6	×		0.9	×		0.9	×		0.9	×		1.4

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

        We consent to the reference to our firm under the caption "Experts" in this Registration Statement on Form S-4 and related Prospectus of Seabulk International, Inc. for the registration of $150,000,000 of its 9¹/2% Senior Notes due 2013 and to the inclusion and the incorporation by reference therein of our reports (a) dated February 25, 2003 (except for the second and third paragraphs of Note 17, as to which the dates are March 7, 2003 and March 27, 2003, respectively, and for Note 19, as to which the date is August 5, 2003), with respect to the consolidated financial statements of Seabulk International, Inc. and subsidiaries included in its Annual Report (Form 10-K) for the year ended December 31, 2002, filed with the Securities and Exchange Commission, (b) dated February 25, 2003 (except for Note 5, as to which the date is August 5, 2003) with respect to the financial statements of Seabulk America Partnership, Ltd. and (c) dated February 25, 2003 (except for the first paragraph of Note 8, as to which the date is June 1, 2003, and for the second and third paragraphs of Note 8, as to which the date is August 5, 2003) with respect to the financial statements of Seabulk Transmarine Partnership, Ltd.

/s/ Ernst & Young LLP            

Fort Lauderdale, Florida
October 30, 2003

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CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

EX-25.1

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)

WACHOVIA BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)

22-1147033
(I.R.S. Employer Identification No.)

301 S. COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)

28288-0630
(Zip Code)

WACHOVIA BANK, NATIONAL ASSOCIATION
225 Water Street
Jacksonville, FL 32202
ATTENTION: CORPORATE TRUST ADMINISTRATION
(904) 489-3113
(Name, address and telephone number of Agent for Service)

Seabulk International, Inc.
(Exact Name of Obligor as Specified in its Charter)

DELAWARE
State or other jurisdiction of Incorporation or Organization)

65-0966399
(I.R.S. Employer Identification No.)

2200 Eller Drive
P.O. BOX 13038
Ft. Lauderdale, Florida
(Address of Principal Executive Offices)

33316
(Zip Code)

9¹/2% Senior Notes Due 2013
(Title of Indenture Securities)

1. General information.

Furnish the following information as to the trustee:

a) Name and address of each examining or supervisory authority to which it is subject:

Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219

Federal Reserve Bank
Richmond, Virginia 23219

Federal Deposit Insurance Corporation
Washington, D.C. 20429

b) Whether it is authorized to exercise corporate trust powers.

        Yes.

2. Affiliations with obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

        None.

3. Voting securities of the trustee.

Furnish the following information as to each class of voting securities of the trustee:

        Not applicable—see answer to Item 13.

4. Trusteeships under other indentures.

If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information:

        Not applicable—see answer to Item 13.

5. Interlocking directorates and similar relationships with the obligor or underwriters.

If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection.

        Not applicable—see answer to Item 13.

6. Voting securities of the trustee owned by the obligor or its officials.

Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner, and executive officer of the obligor:

        Not applicable—see answer to Item 13.

7. Voting securities of the trustee owned by underwriters or their officials.

Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner, and executive officer of each such underwriter:

        Not applicable—see answer to Item 13.

8. Securities of the obligor owned or held by the trustee.

Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee:

        Not applicable—see answer to Item 13.

9. Securities of underwriters owned or held by the trustee.

If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee:

        Not applicable—see answer to Item 13.

10. Ownership or holdings by the trustee of voting securities of certain affiliates or security holders of the obligor.

If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting stock of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person:

        Not applicable—see answer to Item 13.

11. Ownership or holdings by the trustee of any securities of a person owning 50 percent or more of the voting securities of the obligor.

If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such person any of which are so owned or held by the trustee:

        Not applicable—see answer to Item 13.

12. Indebtedness of the obligor to the trustee.

Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information:

        Not applicable—see answer to Item 13.

13. Defaults by the obligor.

(a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default.

        None.

(b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one

outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default.

        None

14. Affiliations with the underwriters.

If any underwriter is an affiliate of the trustee, describe each such affiliation.

        Not applicable—see answer to Item 13.

15. Foreign trustee.

Identify the order or rule pursuant to which the trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act.

        Not applicable—trustee is a national banking association organized under the laws of the United States.

16. List of Exhibits.

List below all exhibits filed as part of this statement of eligibility.

1.	Copy of Articles of Association of the trustee as now in effect*
2.	Copy of the Certificate of the Comptroller of the Currency dated March 27, 2002, evidencing the authority of the trustee to transact business*
3.	Copy of the Certification of Fiduciary Powers of the trustee by the Office of the Comptroller of the Currency dated March 27,2002*
4.	Copy of existing by-laws of the trustee**
5.	Copy of each indenture referred to in Item 4, if the obligor is in default.   -Not Applicable.
X 6.	Consent of the trustee required by Section 321(b) of the Act.
X7.	Copy of report of condition of the trustee published pursuant to the requirements of its supervising authority
8.	Copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act.   —Not Applicable
9.	Consent to service of process required of foreign trustees pursuant to Rule 10a-4 under the Act.   —Not Applicable

*Previously filed with the Securities and Exchange Commission on April 11, 2002 as an Exhibit to Form T-1 in connection with Registration Statement Number 333-86036.

**Previously filed with the Securities and Exchange Commission on May 13, 2003 as an Exhibit to Form T-1 (in connection with Registration Statement File No. 333-105207) and is incorporated by reference herein.

NOTE

        The trustee disclaims responsibility for the accuracy or completeness of information contained in this Statement of Eligibility and Qualification not known to the trustee and not obtainable by it through reasonable investigation and as to which information it has obtained from the obligor and has had to rely or will obtain from the principal underwriters and will have to rely.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939,the trustee, Wachovia Bank, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility and Qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Jacksonville and the State of Florida, on the 19th day of September, 2003.

Wachovia Bank, National Association

By: /s/John H. Speichert
John H. Speichert
Vice President

Exhibit T-6

CONSENT OF THE TRUSTEE

        Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Seabulk Internatioal, Inc. 9¹/2% Senior Notes Due 2013, Wachovia Bank, National Association, hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefore.

WACHOVIA BANK, NATIONAL ASSOCIATION

By: /s/ John H. Speichert
John H. Speichert
Vice President

Jacksonville, Florida

September 19, 2003

EXHIBIT T-7

REPORT OF CONDITION

Consolidating domestic and foreign subsidiaries of Wachovia Bank, N.A., at the close of business on June 30, 2003, published in response to call made by Comptroller of the Currency, under title 12, United States Code, Section 161. Charter Number 1 Comptroller of the Currency.

Statement of Resources and Liabilities

ASSETS
Thousand of Dollars
Cash and balance due from depository institutions:
	Non-interest-bearing balances and currency and coin			14,108,000
	Interest-bearing balances			4,283,000
Securities				////////
	Held-to-maturity securities (from Schedule RC-B, column A)			0
	Available-for-sale securities (from schedule RC-B, column D)			70,107,000
Federal funds sold and securities purchased under agreements to resell				0
Federal funds sold in domestic offices				2,060,000
Securities purchased under agreements to resell				4,782,000
Loans and lease financing receivables (from Schedule RC-C):
	Loan and leases held for sale			10,391,000
	Loan and leases, net of unearned income			160,238,000
	LESS: Allowance for loan and lease losses			2,655,000
	LESS: Allocated transfer risk reserve			0
	Loans and leases, net of unearned income and allowance (item.4.b minus 4.c)			157,583,000
Trading assets (from Schedule RC-D)				26,931,000
Premises and fixed assets (including capitalized leases)				3,823,000
Other real estate owned (from Schedule RC-M)				163,000
Investment in unconsolidated subsidiaries and associated companies (from Schedule RC-M)				689,000
Customer's liability to this bank on acceptances outstanding				1,074,000
Intangible assets
	Goodwill			9,519,000
Other intangible assets (from Schedule RC-M)				1,608,000
Other assets (from Schedule RC-F)				24,500,000
			Total assets	331,621,000
LIABILITIES
Deposits:
	In domestic offices			195,313,000
		Non-interest-bearing		29,821,000
		Interest-bearing		165,492,000
	In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, partII)			11,457,000
		Non-interest-bearing		21,000
		Interest-bearing		11,436,000
Federal funds purchased in domestic offices(2)				3,871,000
Securities sold under agreements to repurchase(3)				25,005,000
Trading liabilities(from Schedule RC-D)				20,648,000
Other borrowed money (includes mortgage indebtedness and obligations under Capitalized leases)(from Schedule RC-M)				19,665,000
Bank's liability on acceptances executed and outstanding				1,078,000
Subordinated notes and debentures.				8,049,000
Other liabilities				13,250,000
Total liabilities				298,336,000
Minority Interest in consolidated subsidiaries				1,658,000
EQUITY CAPITAL
Perpetual preferred stock and related surplus				0
Common Stock				455,000
Surplus				24,184,000
Retained Earnings				4,879,000
Accumulated other comprehensive income				2,109,000
Other Equity Capital components				0
Total equity capital (sum of item 23 through 27)				31,627,000
Total liabilities and equity capital (sum of items 21,22, and 28				331,621,000

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SIGNATURE
CONSENT OF THE TRUSTEE
REPORT OF CONDITION