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