As filed with the Securities and Exchange Commission on May 8, 2000
Registration No. 333-30390
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
HVIDE MARINE INCORPORATED
Delaware 65-0966399
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 Eller Drive, P.O. Box 13038
Fort Lauderdale, Florida 33316
(954) 524-4200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Gerhard E. Kurz
Chief Executive Officer
2200 Eller Drive, P.O. Box 13038
Fort Lauderdale, Florida 33316
(954) 524-4200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies of communications to:
John F. Kearney
Dyer Ellis & Joseph, P.C.
600 New Hampshire Ave., N.W.
Washington, D.C. 20037
(202) 944-3000
---------------
Approximate Date of Commencement of Proposed Sale to the Public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) 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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<PAGE>
CALCULATION OF REGISTRATION FEE:
<TABLE>
<CAPTION>
========================================= ================= ============== =============== ===================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of each Amount to be price offering registration
class of securities registered per price(1) fee(2)
to be registered security(1)
- ----------------------------------------- ----------------- -------------- --------------- -------------------
<S> <C> <C> <C> <C>
Noteholder warrants 567,084 warrants (3) (3) (3)
- ----------------------------------------- ----------------- -------------- --------------- -------------------
Common Stock issuable upon exercise
of noteholder warrants 567,084 shares $0.01 $5,671 $100
- ----------------------------------------- ----------------- -------------- --------------- -------------------
Total $100
========================================= ================= ============== =============== ===================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457 of the Securities Act.
(2) A fee of $19,670 was previously paid with respect to other securities
covered by this registration statement when it was first filed on February
14, 2000.
(2) This registration statement also covers the shares of common stock issuable
upon exercise of the warrants. In accordance with Rule 457 (g), no separate
fee is payable for the warrants.
The Registrant hereby amends this Registration Statement on such date
or 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 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
May , 2000
Subject to Completion, Dated , 2000
Hvide Marine Incorporated
6,157,244 Shares of Common Stock
Class A warrants to Purchase 56,239 Shares of Common Stock
Noteholder warrants to Purchase 723,861 Shares of Common Stock
and
Shares Issued Upon Exercise of the Class A warrants and Noteholder warrants
The securities covered by this prospectus are being offered by selling
security holders.
Hvide Marine Incorporated ("Hvide Marine") emerged from Chapter 11
proceedings on December 15, 1999, and the selling security holders acquired
their common stock and warrants in connection with the consummation of our plan
of reorganization. We agreed to register these securities for resale by the
selling security holders.
The selling security holders will receive all of the net proceeds from
the sale of these securities and will pay any underwriting discounts and selling
commissions applicable to their sale.
The common stock and Class A warrants are traded on the
Over-the-Counter Bulletin Board under the symbols "HVDM" for the common stock
and "HVDMW" for the warrants. The noteholder warrants are not currently traded
on any market.
See "Risk Factors" beginning on page 3 for a discussion of risk factors to be
considered in connection with an investment in the common stock or warrants.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Item Page
<S> <C>
About this Prospectus.............................................................................................3
Hvide Marine Incorporated.........................................................................................3
Risk Factors......................................................................................................4
Our Recent Bankruptcy and Reorganization.........................................................................10
Description of Capital Stock.....................................................................................13
Description of Class A Warrants..................................................................................18
Description of Noteholder Warrants...............................................................................20
Selling Security Holders.........................................................................................22
Plan of Distribution.............................................................................................23
Experts..........................................................................................................26
Where You Can Find More Information..............................................................................26
Documents Incorporated by Reference..............................................................................26
</TABLE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement that we have
filed with the SEC using a "shelf registration" process. You should read both
this prospectus and any supplement, together with the additional information
described under "Where You Can Find More Information."
You should rely only on the information provided or incorporated by
reference in this prospectus or any supplement. We have not authorized anyone
else to provide you with additional or different information. The common stock
and warrants are not being offered in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date of such documents.
HVIDE MARINE INCORPORATED
We provide marine support and transportation services domestically and
internationally, primarily serving the energy and chemical industries. We have
been an active consolidator in each of the markets in which we operate,
increasing our fleet from 23 vessels in 1993 to 274 vessels at year-end 1999.
Our three principal markets are domestic and international offshore energy
support services, domestic offshore and harbor towing services, and
transportation of specialty chemicals and petroleum products in the U.S.
domestic trade. Our offshore energy support fleet 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 and Southeast Asia.
We are the sole provider of commercial tug services at Port Everglades and Port
Canaveral, Florida, and a leading provider of those services in Tampa, Florida,
Mobile, Alabama, Lake Charles, Louisiana, and Port Arthur, Texas. Our domestic
transportation fleet includes five new double-hull chemical and petroleum
product carriers delivered in 1998 and 1999. Our principal offices are located
at 2200 Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316, and our
telephone number is (954) 524-4200.
On September 9, 1999, we filed a petition under chapter 11 of the U.S.
Bankruptcy Code. We emerged from bankruptcy proceedings when our plan of
reorganization became effective on December 15, 1999. For more information on
our bankruptcy and other recent developments, see "Our Recent Bankruptcy and
Reorganization."
<PAGE>
RISK FACTORS
In addition to the other information contained and incorporated by
reference in this prospectus, you should carefully consider the following risk
factors. These are the risks that we believe are material to our company and an
investment in our shares and warrants at this time.
Depressed industry conditions and substantial cash requirements have adversely
affected our earnings and liquidity and may cause us to violate a covenant in
our bank credit agreement.
Beginning in mid-1998, there was a severe downturn in offshore oil and
gas exploration, development and production activities in all markets in which
our offshore energy support fleet operates. This downturn, which was primarily a
result of a worldwide decline in oil and gas prices, resulted in a substantial
decline in vessel rates and utilization throughout our industry and adversely
affected our operating results. As a result, we have experienced substantial
declines in revenue, earnings before interest, taxes and depreciation, or
EBITDA, and net losses. Our offshore energy support business is not expected to
fully recover unless recent oil and gas price increases are sustained, leading
to upturns in exploration, development and production activities. Through the
first quarter of 2000, recent price increases have not led to an upturn in these
activities. If there is no significant increase in those activities, our
liquidity will continue to be adversely affected, and our cash flow from
operations and cash on hand will not be sufficient to satisfy our short-term
working capital needs, capital expenditures, debt service requirements and lease
and other payment obligations.
The actual sale or possibility of the sale of substantial amounts of our common
stock by the selling security holder could negatively affect the market price of
our common stock.
The shares of common stock offered by this prospectus, including the
shares issuable upon the exercise of the warrants, constitute approximately
60.3% of our outstanding common stock and are beneficially owned by accounts
managed by the selling security holder. This prospectus has been prepared to
permit this holder to sell all of its common stock and warrants and the common
stock underlying the warrants from time to time, if it chooses to do so, without
any volume or other limitations. Sales of substantial amounts of our securities
by this holder, or the possibility that substantial sales may occur, could
negatively affect prevailing market prices for our securities.
Our recent bankruptcy has adversely affected our ability to compete and is
likely to continue to do so.
We emerged from bankruptcy on December 15, 1999, the effective date of
our plan of reorganization. While we were in bankruptcy, the resulting adverse
publicity harmed our ability to attract new customers and to maintain favorable
relationships with our existing customers and suppliers. For example, some of
our suppliers required cash payments rather than extend credit, which adversely
affected our liquidity. We also experienced attrition of employees in key
functions. These trends may continue even though we are no longer in bankruptcy.
The marine transportation industry is highly competitive, and these factors have
had and are likely to continue to have an adverse effect on our ability to
compete.
We are highly leveraged, and our business may be harmed if we cannot maintain
our operating cash flow.
Although our plan of reorganization significantly reduced our debt, we
still have substantial debt and debt service requirements, in absolute terms and
in relation to stockholders' equity. Our ability to meet our debt service
obligations will depend on a number of factors, including our ability to
maintain operating cash flow. We cannot assure you that we will achieve our
targeted levels of operating cash flow. Our ability to maintain or increase
operating cash flow will depend upon improvement in industry conditions
discussed elsewhere in these risk factors, prevailing economic conditions and
other factors, many of which are beyond our control. Our inability to maintain
or increase our operating cash flow may have a material adverse impact on our
business and the market price of our securities.
Our business is substantially dependent on the oil and gas industry, which is
cyclical and is currently operating at reduced levels.
Our business and operations are substantially dependent upon conditions
in the oil and gas industry, particularly expenditures by oil and gas companies
for offshore exploration, development and production activities. These
expenditures, and hence the demand for offshore energy support and
transportation services, are directly influenced by oil and gas prices,
expectations concerning future prices, the cost of producing and delivering oil
and gas and government regulation and policies regarding exploration and
development of oil and gas reserves, including the ability of OPEC to set and
maintain production levels and prices. Since mid-1998, there has been a severe
downturn in the level of offshore exploration and production activity, which has
adversely affected the rates we receive for and the level of utilization of our
offshore energy support vessels. Offshore exploration and production
expenditures may not increase in the near future, and our business will not
recover until there is a significant increase in these expenditures. While oil
and gas prices have recently increased, the increases are not yet generally
believed to be sufficiently sustained to lead to upturns in offshore
exploration, development and production activities to their previous levels. We
cannot predict whether or when vessel utilization and rates will improve or the
extent of any improvement.
Excess vessel supply and vessel newbuilds have depressed day rates and adversely
affected our operating results and have caused any recovery in the offshore
energy support market to lag increases in oil and gas prices.
Our offshore energy support business 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, the
industry supply of offshore energy support vessels significantly exceeds demand,
and this imbalance is expected to increase with the delivery of additional
vessels currently under construction or on order. Newbuilds generally have
substantially greater capability than older vessels, thereby exacerbating the
oversupply. In addition, because the supply of vessels currently exceeds demand,
we and other vessel operators have elected to defer drydocking and other
significant maintenance capital expenditures and have "cold stacked" vessels,
thereby creating an additional source of vessels if vessel demand increases.
Thus, before there is significant improvement in vessel day rates and
utilization, exploration and production activities will have to increase to
levels that will generate demand for the current excess supply, cold-stacked
vessels and the newbuilds that come into service.
We may be at a competitive disadvantage in responding to any improved demand in
the offshore energy support industry.
As a result of our need to reduce capital expenditures, we are
deferring required drydockings of a number of our offshore energy support
vessels that are laid up due to lack of demand. If and when increased demand
should provide employment opportunities for these vessels, we might not have the
capital resources with which to proceed with the required drydockings or to
proceed with them on as timely a basis as our competitors that have sufficient
resources. We also will be required to undertake the maintenance that has been
and will be deferred due to our program to reduce expenditures.
We conduct international operations, which involve additional risks.
We operate vessels worldwide. Operations outside the United States
involve additional risks, including the possibility of vessel seizure, foreign
taxation, political instability, foreign and domestic monetary and tax policies,
expropriation, nationalization, loss of contract rights, war and civil
disturbances or other risks that may limit or disrupt markets. Additionally, 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.
Our offshore energy support fleet includes many older vessels.
The average age of our offshore energy support vessels, based on the
later of the date of construction or rebuilding, is approximately 18 years, and
approximately 31% 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.
Our business is subject to environmental risk and regulations.
Our operations are subject to federal, state, local and foreign laws
and regulations relating to safety and health and environmental protection,
including the generation, storage, handling, emission, transportation and
discharge of hazardous and non-hazardous materials. The trend in environmental
legislation and regulation is generally toward stricter standards, and this
trend will likely continue. If we fail to comply with these regulations, we
could face substantial liability for damages, remediation costs and penalties
associated with oil or hazardous-substance spills or other discharges into the
environment involving our vessel operations. Damages under these regulations are
defined broadly to include:
o natural resource damages and the costs of assessment;
o damages for injury to or losses resulting from destruction of property;
o net loss of taxes, royalties, rents, fees and profits by the U.S. federal,
state, local and foreign governments;
o lost profits from property or natural resource damage;
o the net costs of providing increased or additional public services
necessitated by a spill response, including protection from fire, safety or
other hazards; and
o the loss of subsistence use of natural resources.
Our shoreside operations are also subject to federal, state, local and
foreign environmental laws and regulations. In addition, tanker owners and
operators are required to establish and maintain evidence of financial
responsibility with respect to potential oil spill liability. We currently
satisfy this requirement through self-insurance or third-party insurance.
Amendments to existing laws and regulations or new laws and regulations may be
adopted that could limit our ability to do business or increase our cost of
doing business.
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 the mechanical
failure of our vessels, collisions, vessel loss or damage, cargo loss or damage,
hostilities and labor strikes. 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. Although our
losses from such hazards have not historically exceeded our insurance coverage,
there can be no assurance that this will continue to be the case.
The Oil Pollution Act of 1990, known as OPA 90, imposes virtually
unlimited 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. While we maintain insurance, there can be no
assurance that all risks are adequately insured against, particularly in light
of the virtually unlimited liability imposed by OPA 90, and that any particular
claim will be paid. In addition, we may not be able to procure adequate
insurance coverage at commercially reasonable rates in the future. 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 could lose Jones Act protection, which would result in additional competition
in the markets we serve.
A substantial portion of our operations is conducted in the U.S.
domestic trade. Under the U.S. coastwise laws, known as 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 repeated attempts
to repeal the Jones Act, and these attempts are expected to continue in the
future. Repeal of the Jones Act would 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.
Over time, we will have to remove some of our vessels from petroleum product
transport service in U.S. waters.
OPA 90 establishes a phase-out schedule, depending upon vessel size and
age, for single-hull vessels carrying crude oil and petroleum products. The
phase-out dates for our single-hull carriers are as follows: HMI Trader -- 2000,
Seabulk Magnachem -- 2007, HMI Defender -- 2008, HMI Dynachem -- 2011, HMI
Petrochem -- 2011 and Seabulk America -- 2015. The phase-out date for some of
our fuel barges is 2015. As a result of this requirement, these vessels will be
prohibited from transporting petroleum products in U.S. waters after their
phase-out dates. However, these vessels may be taken out of service for other
reasons prior to their OPA 90 phase-out dates. Although our remaining vessels
are not subject to mandatory retirement, and we employ what we believe to be a
satisfactory maintenance program for all our vessels, we may not be able to
maintain our fleet by extending the economic lives of existing vessels or
acquiring new or used vessels.
There are restrictions on foreign ownership of our stock, which could require a
non-U.S.-citizen investor to sell its stock to us.
In order to maintain our eligibility to operate vessels in the U.S.
domestic trade, 75% of our outstanding common stock is required to be held by
U.S. citizens. Although our certificate of incorporation contains provisions
limiting non-U.S.-citizen ownership of our capital stock, we could lose our
ability to conduct operations in the domestic trade if these provisions prove
unsuccessful in maintaining the required level of citizen ownership. Loss of
this ability would harm our business.
As a result of this limitation upon the non-U.S.-citizen ownership of
our common stock, any non-U.S.-citizen holder of our common stock may, to the
extent such ownership would cause 25% or more of our outstanding common stock to
be held by non-U.S.-citizens, be required to sell its common stock to us.
There is no established trading market for our equity securities.
Although our common stock was previously traded on the Nasdaq National
Market, Nasdaq halted trading of our shares when we initiated our chapter 11
reorganization. Our new common stock and warrants were issued as of December 15,
1999, the effective date of our plan of reorganization, and do not have an
established trading market. As a result, there may be little liquidity in the
market for these securities, market prices may not reflect their true value, and
market prices may change substantially in response to changes in the supply of
and demand for the securities.
The Class A warrants may expire before the market price of the common stock
exceeds their exercise price.
The market price of the common stock may never exceed the Class A
warrant exercise price of $38.49 per share, or may exceed the exercise price
only after the Class A warrants expire on December 14, 2003. As a result, a
purchaser of the Class A warrants may never be able to obtain value through the
exercise of the warrants.
<PAGE>
We are authorized to issue preferred stock without stockholder approval, and the
preferential rights of preferred stock holders may be detrimental to the
interests of holders of common stock.
We are authorized to issue preferred stock without stockholder
approval. If we issue preferred stock, it may have dividend, liquidation and
voting rights senior to those of our common stock. As a result, the effects of
an issuance of preferred stock could include:
o reduction of the amount of cash otherwise available for payment of
dividends on our common stock,
o dilution of the voting power of our common stock if the preferred stock has
voting rights, and
o restriction of the rights of holders of our common stock to share in our
assets upon liquidation until satisfaction of any liquidation preference
granted to the holders of preferred stock.
In addition, so-called "blank check" preferred stock may be viewed as
having possible anti-takeover effects, if it were used to make a third party's
attempt to gain control of our company more difficult, time consuming or costly.
We have no current plans to issue preferred stock as an anti-takeover
device or otherwise, and our borrowing agreements restrict our ability to issue
preferred stock.
Our borrowing agreements contain covenants that restrict our activities.
Our borrowing agreements
o require us to meet various financial tests, including the maintenance
of minimum levels of earnings before interest, taxes, depreciation, and
amortization, or EBITDA, and of minimum ratios of leverage, debt
service and indebtedness to net worth,
o limit liens,
o limit additional borrowing,
o limit our ability to make investments,
o limit payments, including dividends on shares of any class of capital
stock, and
o limit our ability to do other things, such as entering into 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 or our
stockholders.
Forward-Looking Statements
This prospectus and the information it incorporates by reference
include forward-looking statements. These are statements that address
activities, events or developments that we expect, project, believe or
anticipate will or may occur in the future. Examples include statements about
future levels of day rates for offshore energy support vessels, future capital
expenditures and investments in the acquisition and refurbishment of vessels,
repayment of debt, business strategies, future acquisitions, expansion and
growth of operations and other similar matters. These statements are based on
assumptions and analyses made by our management in light of its experience and
its perception of historical trends, current conditions, expected future
developments, and other factors it believes are appropriate in the
circumstances. These statements are subject to a number of assumptions, risks
and uncertainties, including the risk factors discussed in this prospectus,
general economic and business conditions, oil and gas prices, foreign exchange
and currency fluctuations, the business opportunities (or lack thereof) that may
be presented to and pursued by us, changes in laws or regulations and other
factors, many of which are beyond our control. We caution you that these
forward-looking statements are not guarantees of future performance and that
actual results or developments may differ materially from those we project.
OUR RECENT BANKRUPTCY AND REORGANIZATION
The events leading to the bankruptcy
Between 1997 and early 1999, we completed a number of acquisitions and
built new vessels that substantially expanded our offshore energy support
operations into several new international markets, increased the deepwater
capability of our offshore energy support fleet, and increased our domestic
offshore and harbor towing and petroleum product transportation operations. Our
principal sources of cash to finance these acquisitions were bank borrowings,
cash provided by operations, proceeds from two public offerings of common stock,
proceeds from an offering of $119.0 million of trust preferred securities and
proceeds from an offering of $300.0 million principal amount of senior notes.
The significant increase in our indebtedness incurred to finance these
acquisitions and newbuilds placed great demands on our capital resources
beginning in late 1997, when market forces brought about a precipitous decline
in our revenues.
The revenues of our offshore energy support fleet are dependent upon
the level of offshore oil and gas exploration, development and production
activities, which are in turn heavily dependent upon the prevailing price of
crude oil and natural gas. Beginning in late 1997 and continuing through 1998
and the first half of 1999, crude oil prices declined substantially, which
resulted in a severe downturn in these offshore activities, and in turn, in the
revenues of our offshore energy support operations. As a result of this decline
in revenues, we experienced a liquidity crisis beginning in mid-1998 and were
unable to comply with some of the financial covenants in our bank loan
agreement. Although the lending banks agreed to modifications of these
covenants, the continuing decline in our revenues caused us to be unable to
comply with the modified financial covenants at the end of the first quarter of
1999. As a consequence, our independent auditors' report on our 1998 financial
statements (issued at the end of March 1999) included an explanatory paragraph
stating that the reduction in revenues and noncompliance with the loan agreement
covenants raised substantial doubt about our ability to continue as a going
concern.
Our lending banks agreed to further waivers of our noncompliance with
covenants, which were accompanied by substantial fees and increases in interest
rates. Despite these waivers, adoption of a cash management program and
reduction in operating and overhead expenses during 1999, we were unable to make
a $12.5 million interest payment due August 16, 1999 on our $300.0 million of
senior notes. Discussions with an informal committee of holders of the senior
notes and our trust preferred securities led to our filing of a petition under
chapter 11 of the U.S. Bankruptcy Code on September 9, 1999.
<PAGE>
The reorganization
Under our reorganization plan, which became effective on December 15,
1999:
o the holders of the $300.0 million of senior notes received 9,800,000 shares
of our common stock in exchange for their notes;
o the holders of the $115.0 million of trust preferred securities received
200,000 shares of our common stock, as well as Class A warrants to purchase
an additional 125,000 shares, in exchange for those securities;
o stockholders received Class A warrants to purchase a total of 125,000
shares of our common stock;
o noteholder warrants to purchase 6.75% of our common stock on a fully
diluted basis after giving effect to the exercise of these warrants,
exercisable at a nominal purchase price for seven and one-half years, were
issued to purchasers of our new senior secured second notes described
below;
o claims of general and trade creditors were unaffected; and
o we reincorporated from Florida to Delaware.
The 9,800,000 shares received by the holders of the senior notes
represent 98.0% of our currently outstanding common stock and 89.3% of our
common stock on a fully diluted basis after assuming exercise of all the Class A
warrants and the noteholder warrants. The 200,000 shares received by holders of
the trust preferred securities represent 2.0% of our currently outstanding
common stock and 1.8% of our common stock on a fully diluted basis.
We also obtained new credit facilities from a group of financial
institutions. The new facilities, totaling $320.0 million, consist of $200.0
million in term loans, a $25.0 million revolving credit facility, and $95.0
million in aggregate principal amount at maturity of new 12 1/2% senior secured
notes due 2007. A portion of the proceeds from these facilities was used to
repay all outstanding borrowings under our bank loans and to pay administrative
and other fees and expenses. The balance of the proceeds will be used for
working capital and general corporate purposes. As discussed under "--Recent
Developments," we are required to attain the consent of the lending banks to
borrow in excess of $17.5 million under the revolving credit facility.
The terms of the term loans and revolving credit facility are contained
in a credit agreement between us and the financial institutions. The credit
agreement provides for the following facilities:
Facility Amount Maturity
o A term loan $75 million 2004
o B term loan $30 million 2005
o C term loan $95 million 2006
o Revolving loan $25 million 2004
The interest rate for borrowings under the credit agreement is set from
time to time at our option, subject to certain conditions set forth in the
credit agreement, at either:
o the higher of the rate that the administrative agent announces from
time to time as its prime lending rate and 1/2 of 1% in excess of the
overnight federal funds rate, plus a margin ranging from 2.25% to 4.25%
or
o a rate based on a percentage of the administrative agent's quotation to
first-class banks in the New York interbank Eurodollar market for
dollar deposits, plus a margin ranging from 3.25% to 4.25%.
Borrowings under the credit agreement are secured by first priority
perfected security interests in substantially all of the equity of our
subsidiaries and by first priority perfected security interests in substantially
all of the vessels and other assets owned by us and our subsidiaries. In
addition, substantially all of our subsidiaries have guaranteed our obligations
under the credit agreement. The credit agreement contains customary covenants
that require us, among other things, to meet certain financial ratios and that
prohibit us from taking certain actions and entering into certain transactions.
The senior secured notes are our senior obligations and are secured by
a second priority lien on the assets that secure borrowings under the credit
agreement. The notes are unconditionally guaranteed by all of our subsidiaries
that have guaranteed borrowings under the credit agreement. The notes were
issued at 90.0% of their face value for gross proceeds of $85.5 million. The
notes were issued under an indenture among us, the subsidiary guarantors and
financial institutions serving as trustee and collateral agent. The indenture
contains customary covenants that, among other things, restrict our ability to
incur additional debt, sell assets, and engage in mergers and transactions with
affiliates. The indenture provides that if the notes have not been rated by
Moody's and Standard & Poor's prior to April 15, 2000 or have not received a
rating better than Caa1 from Moody's and a rating better than CCC+ from Standard
& Poor's by April 15, 2000, the interest rate on the notes will increase to
13.5% from the issue date, with the increase payable in additional notes. As of
April 15, 2000, the notes had not been rated by Moody's or Standard & Poor's
and, accordingly, the additional interest became payable. The interest rate will
be reduced to 12.5% when the notes are rated better than Caa1 and CCC+. Although
we are currently seeking to obtain ratings for the notes, we may be unable to
obtain ratings that will reduce the interest rate to 12.5%. As consideration for
the purchase of the notes and as compensation for certain financial services, we
issued to the purchasers of the notes noteholder warrants to purchase 723,861
shares of our common stock at an exercise price of $.01 per share for a term of
seven and one-half years.
Recent Developments
Due to continuing weakness in day rates and utilization in the offshore
energy support business, as well as adverse market conditions in our towing and
transportation businesses, we anticipated that earnings would be lower than
expected in the first quarter of 2000. As a result, we were not in compliance
with certain covenants in our bank credit agreement as of March 31, 2000. We
have entered into an amendment to our credit agreement with the lending banks
under which the relevant covenants have been modified through March 31, 2001 and
we are required to prepay principal under the term loans aggregating cumulative
amounts of $10 million before June 30, 2000, $35 million before August 31, 2000,
and $60 million before January 1, 2001. We intend to sell vessels and other
assets to obtain the funds with which to make these payments. Some of these
sales may be at less than book value. The amended credit agreement further
provides that, in the event we have not made the required principal payments as
scheduled or achieved certain target levels of EBITDA for the third and fourth
quarters of 2000, the lending banks may require us to sell additional vessels,
to be selected by the lending banks, with an aggregate fair market value of $35
million on a timetable specified by the lending banks. Additionally, we are
required to obtain the consent of the lending banks to borrow in excess of $17.5
million under the revolving loan portion of the credit facility. We are required
to pay a fee of $4.5 million to the lending banks in connection with the
amendment of the credit agreement, payable in the form of a promissory note,
accruing interest at 15% per annum, due the earlier of (i) April 2002 and (ii)
the date on which the ratio of funded indebtedness to EBITDA for any quarter is
less than four to one.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue 20,000,000 shares of common stock, par value
$0.01 per share, and 5,000,000 shares of preferred stock, without par value. As
of April 1, 2000, 10,000,000 shares of common stock were issued and outstanding.
We have not issued any preferred stock.
Common Stock
Holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders, including
the election of directors. They do not have cumulative voting rights. Subject to
preferences that may be applicable to any outstanding series of preferred stock,
holders of our common stock are entitled to share ratably in any dividends that
may be declared by our Board of Directors out of legally available funds. Upon
any liquidation, dissolution or winding up of Hvide Marine, the holders of
common stock will be entitled to share ratably in the net assets legally
available for distribution to shareholders, in each case after payment of all of
our liabilities and subject to preferences that may be applicable to any series
of preferred stock then outstanding. Holders of common stock have no preemptive
or conversion rights or other rights to subscribe for additional shares. There
are no sinking fund provisions applicable to the common stock. Subject to
applicable law, we may, at the discretion of our Board, redeem shares of our
common stock if the provisions described under "-Limitation on Stock Ownership
by Non-U.S. Citizens" are not met. The rights, preferences and privileges of
holders of common stock are subject to the rights of the holders of shares of
any series of preferred stock that we may designate and issue in the future.
Preferred Stock
Our Board has the authority, without further action by the
stockholders, to issue from time to time shares of preferred stock in one or
more series. The Board may fix the number of shares, designations, preferences,
powers and other special rights of the preferred stock. The preferences, powers,
rights and restrictions of different series of preferred stock may differ. The
issuance of preferred stock could decrease the amount of earnings and assets
available for distribution to holders of common stock or affect adversely the
rights and powers, including voting rights, of the holders of common stock. The
issuance may also have the effect of discouraging, delaying or preventing a
change in control of Hvide Marine, regardless of whether the transaction may be
beneficial to stockholders. We have no current plans to issue any shares of
preferred stock.
Delaware Law and Certain Charter and By-law Provisions
Section 203 of the General Corporation Law of Delaware (the "GCL"), an
antitakeover law, prohibits a publicly held Delaware corporation from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
interested stockholder. There are several exceptions that permit an interested
stockholder to engage in a business combination, including if prior to the date
the stockholder became an interested stockholder the Board approves either the
business combination or the interested stockholder transaction, or if the
business combination is approved by our Board and authorized by a vote of at
least 66 2/3% of the outstanding voting stock of the corporation not owned by
the interested stockholder. A "business combination" includes mergers, asset
sales and other transactions resulting in a financial benefit to the interested
stockholder. Subject to some exceptions, an "interested stockholder" is a person
who, together with affiliates and associates, owns, or within three years did
own, 15% or more of the corporation's voting stock.
Our certificate of incorporation and by-laws provide for the division
of our Board into three classes as nearly equal in size as possible with
staggered three-year terms. Any vacancy on the Board, however occurring,
including a vacancy resulting from an enlargement of the Board, may be filled
only by vote of a majority of the directors then in office. The classification
of our Board and the limitation on the filling of vacancies could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, control of Hvide Marine.
Our certificate of incorporation prohibits the issuance of nonvoting
equity securities. However, preferred stock having the right, voting separately
as a class, to elect any directors if and when dividends payable on shares of
preferred stock have been in arrears and unpaid for a specified period of time
will not be deemed nonvoting equity securities.
Limitation of Liability
Our certificate of incorporation contains a provision eliminating, to
the fullest extent permitted by the GCL, directors' personal liability to Hvide
Marine and to its stockholders for monetary damages for breaches of fiduciary
duty. By virtue of this provision, under the GCL, a director will not be
personally liable for monetary damages for a breach of his or her fiduciary
duty, except for liability arising out of:
o a breach of duty of loyalty to Hvide Marine or to its stockholders,
o acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law,
o dividends or stock repurchases or redemptions that are unlawful under
Delaware law, or
o any transaction from which the director receives an improper personal
benefit.
This provision pertains only to breaches of duty by directors as directors and
not in any other corporate capacity, such as officers.
Our certificate of incorporation also provides that Hvide Marine shall,
to the fullest extent permitted by the GCL, indemnify each director, officer,
employee or agent against, and hold each director, officer, employee or agent
harmless from, certain expenses, liabilities, and losses, including attorneys'
fees. These expenses, liabilities, and losses are those reasonably incurred in
connection with a proceeding brought against the director or officer by reason
of the fact that he or she was a director, officer, employee or agent of Hvide
Marine or was serving at our request as a director, officer, employee or agent
of another entity. Under this provision, we are required to advance all
reasonable costs incurred in defending any such proceeding to the fullest extent
permitted by Delaware law.
Limitation on Stock Ownership by Non-U.S. Citizens
Our certificate of incorporation:
o contains provisions limiting the aggregate percentage ownership by non-U.S.
citizens (as defined below) of each class of our capital stock to 24.99% of
the outstanding shares of each class to ensure that such foreign ownership
will not exceed the maximum percentage of 25.0% permitted by federal law,
o requires a dual stock certificate system to help determine non-U.S.-citizen
ownership, and o permits the Board to make determinations reasonably
necessary to ascertain such ownership and implement the limitations.
These provisions are intended to protect our ability to operate our
vessels in the U.S. domestic trade governed by the Jones Act, and to assure
continuous compliance with the citizenship requirements of the Merchant Marine
Act, 1936, as amended, and the Shipping Act, 1916, as amended, and the
regulations promulgated thereunder.
Under our dual stock certificate system, certificates representing
shares of our common stock bear legends that designate the certificates as
either "citizen" or "non-citizen," depending on the citizenship of the owner. We
may also issue non-certificated shares through depositories if we determine that
the depositories have established procedures that allow us to monitor the
ownership of our common stock by non-U.S. citizens.
For purposes of the dual stock certificate system, a "non-citizen" is
defined as any person other than a citizen, and a "citizen" is defined as:
o any individual who is a citizen of the U.S. by birth, naturalization, or as
otherwise authorized by law;
o any corporation
o organized under the laws of the U.S., or a state, territory, district,
political subdivision or possession thereof (each, a "state"),
o of which title to not less than 75% of each class or series of its stock is
beneficially owned by and vested in citizens, free from any trust or
fiduciary obligation in favor of non-U.S. citizens,
o of which not less than 75% of the voting power is vested in citizens, free
from any contract or understanding through which voting power may be
exercised directly or indirectly on behalf of non-U.S. citizens,
o of which there are no other means by which control is conferred upon or
permitted to be exercised by non-U.S. citizens,
o whose president, chief executive officer, chairman of the board and all
officers authorized to act in their absence or disability, are citizens,
and
o of which more than 50% of the number of its directors necessary to
constitute a quorum are citizens;
o any partnership,
o organized under the laws of the U.S. or a state of the U.S.,
o all general partners of which are citizens, and
o of which not less than a 75% interest is beneficially owned and controlled
by, and vested in, citizens, free and clear of any trust or fiduciary
obligation in favor of non-U.S. citizens;
o any association
o organized under the laws of the U.S. or a state of the U.S.,
o of which 100% of the members are citizens,
o whose president, chief executive officer, or equivalent position, chairman
of the board, or equivalent committee or body, and all persons authorized
to act in their absence or disability, are citizens,
o of which not less than 75% of the voting power is beneficially owned by
citizens, free and clear of any trust or fiduciary obligation in favor of
non-U.S. citizens, and
o of which more than 50% of that number of its directors or equivalent
persons necessary to constitute a quorum are citizens;
o any limited liability company
o organized under the laws of the U.S. or a state of the U.S.,
o of which not less than 75% of the members are citizens, and the remaining
members are persons meeting the requirements of 46 U.S.C.ss.12102(a),
o of which not less than 75% of the voting power is vested in citizens, free
and clear of any trust or fiduciary obligation in favor of any non-U.S.
citizen,
o whose president or other chief executive officer or equivalent position,
chairman of the board or equivalent committee or body, managing members (or
equivalent), if any, and all persons authorized to act in their absence or
disability are citizens and
o of which more than 50% of the number of its directors or equivalent persons
necessary to constitute a quorum are citizens;
o any joint venture, if not an association, corporation, partnership, or
limited liability company,
o organized under the laws of the U.S. or a state of the U.S., and
o 100% of the members are, or of which 100% of the equity is beneficially
owned and vested in citizens, free and clear of any trust or fiduciary
obligation in favor of any non-U.S. citizens; and
o any trust
o domiciled in and existing under the laws of the U.S. or a state of the
U.S.,
o all of the trustees of which are citizens,
o of which not less than a 75% interest is held for the benefit of citizens,
free and clear of any trust or fiduciary obligation in favor or any
non-U.S. citizens and
o each beneficiary of which with an enforceable interest in the trust is a
citizen.
This definition is applicable at all tiers of ownership and in both form and
substance at each tier of ownership.
Shares of our common stock are transferable to citizens at any time and
are transferable to non-U.S. citizens if, at the time of the transfer, the
transfer would not increase the aggregate ownership by non-U.S. citizens of our
common stock above 24.99% of the total outstanding shares. Any purported
transfer to non-U.S. citizens of shares in excess of 24.99% of the outstanding
shares will be ineffective as against us for all purposes, including voting,
dividends, and other distributions. In addition, the shares may not be
transferred on our books and we may refuse to recognize the holder as a
stockholder, except to the extent necessary to effect any remedy available to
us. Subject to these limitations, upon surrender of any stock certificate for
transfer, the transferee will receive citizen (blue) certificates or non-U.S.
citizen (red) certificates.
Our certificate of incorporation establishes procedures for the
transfer of shares to enforce the limitations described above. Under the
procedures, before a stock certificate is issued or transferred, the recipient
or transferee of the shares must provide a certificate providing information
about their citizenship. If the recipient or transferee is acting as a fiduciary
or nominee for a beneficial owner, the beneficial owner must provide the
certificate. The issuance or transfer will be denied upon refusal to furnish the
citizenship certificate. Furthermore, as part of the dual stock certificate
system, depositories holding shares of our common stock will be required to
maintain separate accounts for citizen and non-U.S. citizen shares. When the
beneficial ownership of shares is transferred, the depositories' participants
will be required to advise the depositories as to the account in which the
transferred shares should be held. In addition, to the extent necessary to
enable us to determine the number of shares owned by non-U.S. citizens, we may
require record holders and beneficial owners of shares of common stock to
confirm their citizenship status and may temporarily withhold dividends payable
to, and deny voting rights to, any such record holder or beneficial owner until
confirmation of citizenship is received.
Should we become aware that the ownership by non-U.S. citizens of our
common stock at any time exceeds 24.99% of our outstanding shares we may
temporarily withhold dividends and other distributions on and to deny voting
rights with respect to the excess shares. We may withhold dividends and
distributions and deny voting rights pending the transfer of the excess shares
such shares to a citizen or the reduction in the percentage of shares owned by
non-U.S. citizens to below 25.0%. If we withhold dividends and distributions, we
will set them aside for the account of the excess shares. Once the excess shares
are transferred to a citizen or the aggregate ownership of shares by non-U.S.
citizens is less than 25.0%, we will pay the dividends to the then record
holders of the related shares. So long as the excess exists, excess shares will
not be deemed to be outstanding for purposes of determining the vote required on
any matter brought before the stockholders for a vote. Our Board has the power
to determine which shares of common stock constitute the excess shares. The
determination will be made by reference to the date or dates on which the shares
were purchased by non-U.S. citizens, starting with the most recent acquisitions
of shares by a non-U.S. citizen and including, in reverse chronological order,
all other acquisitions of shares by non-U.S. citizens from and after the
acquisition that first caused the percentage of shares owned by non-U.S.
citizens to exceed 24.99%. The excess shares resulting from a determination that
a record holder or beneficial owner is no longer a citizen will be deemed to
have been acquired as of the date of such determination.
We may redeem excess shares in order to reduce the aggregate ownership
by non-U.S. citizens to 24.99%. As long as our common stock is not authorized
for listing on a national securities exchange or for quotation on the Nasdaq
National Market, the redemption price will be the average of the bid and asked
prices furnished by any Nasdaq member firm that makes a market for the 30
trading days preceding the date of determination. If it is so listed, the
redemption price will be the average of the closing sale price of the shares
during the 30 trading days preceding the date of determination. The redemption
price for excess shares will be payable in cash.
In addition to implementing these procedures, our Board may take other
ministerial actions or interpret our foreign ownership policy as it deems
necessary in order to implement the policy.
---------
The above statements and descriptions concerning our certificate of
incorporation and by-laws summarize what we believe to be the material
information in those documents, which have been filed as exhibits to the
registration statement of which this prospectus is part. For information on
obtaining copies of those documents, see "Where You Can Find More Information."
DESCRIPTION OF CLASS A WARRANTS
The Class A warrants are subject to a warrant agreement between us and
State Street Bank and Trust Company as warrant agent. The following description
summarizes what we believe to be the material provisions of the Class A warrant
agreement. For more information, refer to the Class A warrant agreement, which
is an exhibit to the registration statement of which this prospectus is part.
For information on obtaining a copy of the Class A warrant agreement, see "Where
You Can Find More Information."
General
Each Class A warrant entitles the holder to purchase one share of our
common stock at an exercise price of $38.49. The exercise price and the number
of shares of common stock issuable upon the exercise of the Class A warrants are
both subject to adjustment in certain cases described below. The Class A
warrants are exercisable at any time on or after December 15, 1999. If they are
not exercised, the Class A warrants will automatically expire at 5:00 p.m. on
December 14, 2003.
The Class A warrants may be exercised by surrendering to the warrant
agent the warrant certificates, if any, with the accompanying form of election
to purchase and an application for purchase of common stock (or equivalent form
with citizenship information). No Class A warrant may be exercised if such
exercise causes ownership of our common stock by non-U.S. citizens to exceed the
limit set by applicable law or our certificate of incorporation. These must be
properly completed and executed and delivered with payment of the Class A
exercise price. Payment of the Class A exercise price may be made in the form of
cash or a certified or official bank check, payable to the order of Hvide Marine
Incorporated. Upon surrender of the warrant certificates and payment of the
Class A exercise price, the warrant agent will notify us, and we will deliver to
or upon the written order of the holder, stock certificates representing the
number of whole shares of common stock or other property to which the holder is
entitled, including any cash payment to adjust for fractional interests in
shares issuable upon exercise. If less than all of the Class A warrants
evidenced by a Class A warrant certificate are exercised, a new Class A warrant
certificate will be issued for the remaining number of Class A warrants.
We will not be required to, but may at our option, issue fractional
shares of common stock on the exercise of Class A warrants. If more than one
Class A warrant is presented for exercise in full at the same time by the same
holder, the number of full shares issuable upon such exercise will be computed
on the basis of the aggregate number of shares issuable on exercise of the Class
A warrants so presented. If any fraction of a share would be issuable on the
exercise of any Class A warrant, and we elect not to issue such fractional
shares, we will direct the transfer agent to pay cash equal to the then current
market price per share multiplied by the fraction computed to the nearest whole
cent.
Certificates for Class A warrants will be issued in registered form
only, and no service charge will be made for registration for transfer or
exchange upon surrender of any warrant certificate at the office of the warrant
agent maintained for that purpose. We may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection with
registration for transfer or exchange of warrant certificates.
The holders of the Class A warrants do not have the rights of
stockholders, including the right to vote on matters submitted to our
stockholders and the right to receive cash dividends. The holders of the Class A
warrants are not entitled to share in our assets in the event of the
liquidation, dissolution or winding up of our company's affairs.
Adjustments
The number of shares issuable upon the exercise of the Class A warrants
and the Class A exercise price both are subject to adjustment in certain events.
These events include if we
o subdivide our outstanding shares of common stock,
o combine our outstanding shares of common stock into a smaller number of
shares, or o issue by reclassification of our shares of common stock any
shares of our capital stock.
The Class A exercise price in effect and the number of shares issuable
upon exercise of each Class A warrant immediately prior to these actions will be
adjusted so that the holder of any Class A warrant will be entitled to receive
the number of shares of our capital stock it would have owned immediately
following the action had it exercised their Class A warrants immediately prior
to the action.
In case of certain consolidations or mergers of our company, or the
sale of all or substantially all of its assets, each Class A warrant will be
exercisable for the right to receive the kind and amount of shares of stock or
other securities or property to which the holder would have been entitled as a
result of the consolidation, merger or sale had it exercised their Class A
warrants immediately prior to the transaction.
Reservation of Shares
We have authorized and reserved for issuance the number of shares of
our common stock that will be issuable upon the exercise of all outstanding
Class A warrants. These shares of common stock, when paid for and issued, will
be duly and validly issued, fully paid and non-assessable, free of preemptive
rights and free from all taxes, liens, charges and security interests.
Amendment
We and the warrant agent may amend or supplement the warrant agreement
for various purposes without consent of the holders of the Class A warrants.
These include curing defects or inconsistencies or making changes that do not
materially adversely affect the rights of any holder. Any amendment or
supplement to the warrant agreement that has a material adverse effect on the
interests of the holders of the Class A warrants requires the written consent of
the holders of a majority of the then outstanding Class A warrants. The consent
of each holder of the Class A warrants affected is required for any amendment
increasing the Class A exercise price or decreasing the number of shares
issuable upon exercise of the Class A warrants, except for adjustments provided
for in the warrant agreement as described above.
DESCRIPTION OF NOTEHOLDER WARRANTS
The noteholder warrants are subject to a warrant agreement between us
and State Street Bank and Trust Company as warrant agent, pursuant to which we
issued 723,861 common stock warrants. The following description summarizes what
we believe to be the material provisions of the noteholder warrant agreement.
For more information, refer to the noteholder warrant agreement, which is an
exhibit to the registration statement of which this prospectus is part. For
information on obtaining a copy of the noteholder warrant agreement, see "Where
You Can Find More Information."
General
Each noteholder warrant entitles the holder to purchase one share of
our common stock at an exercise price of $.01 or pursuant to the cashless
exercise provision in the noteholder warrant agreement. The exercise price and
the number of shares of common stock issuable upon the exercise of the
noteholder warrants are both subject to adjustment in certain cases described
below. The noteholder warrants are exercisable at any time on or after December
15, 1999. If they are not exercised, the noteholder warrants will automatically
expire at 5:00 p.m. on June 30, 2007. Holders of the noteholder warrants are
entitled to purchase in the aggregate approximately 6.75% of our common stock
outstanding on a fully diluted basis.
The noteholder warrants may be exercised by surrendering to the warrant
agent the warrant certificates, if any, with the accompanying form of election
to purchase and Application for Purchase of Common Stock (or equivalent form
with citizenship information). These must be properly completed and executed and
delivered with payment of the noteholder exercise price. Payment of the
noteholder exercise price may be made in the form of cash or a certified or
official bank check, payable to the order of Hvide Marine Incorporated. Upon
surrender of the warrant certificates and payment of the noteholder exercise
price, the warrant agent will deliver to or upon the written order of the holder
stock certificates representing the number of whole shares of common stock or
other property to which the holder is entitled, including any cash payment to
adjust for fractional interests in shares issuable upon exercise. If less than
all of the noteholder warrants evidenced by a noteholder warrant certificate are
exercised, a new noteholder warrant certificate will be issued for the remaining
number of noteholder warrants.
We will not issue fractional shares on the exercise of noteholder
warrants. If more than one noteholder warrant is presented for exercise in full
at the same time by the same holder, the number of full shares issuable upon
such exercise will be computed on the basis of the aggregate number of shares
issuable on exercise of the noteholder warrants so presented. If any fraction of
a share would be issuable on the exercise of any noteholder warrant, we will
direct the transfer agent to pay cash equal to the excess of the value (as
determined by our Board in good faith) of a warrant share over the exercise
price on the day before the warrant is exercised, multiplied by the fraction.
Certificates for noteholder warrants will be issued in registered form
only, and no service charge will be made for registration for transfer or
exchange upon surrender of any warrant certificate at the office of the warrant
agent maintained for that purpose. We may require payment of a sum sufficient to
cover any tax imposed in connection with registration for transfer or exchange
of warrant certificates.
The holders of the noteholder warrants do not have the rights of
stockholders, including the right to vote on matters submitted to our
stockholders and the right to receive cash dividends. The holders of the
noteholder warants are not entitled to share in our assets in the event of the
liquidation, dissolution or winding up of our company's affairs.
Adjustments
The number of shares issuable upon the exercise of the noteholder
warrants and the exercise price both are subject to adjustment in certain
events. These events include if we
o pay a dividend or make a distribution on our common stock in shares of any
class of our capital stock, o subdivide our outstanding shares of common stock,
o combine our outstanding shares of common stock into a smaller number of
shares, or o issue by reclassification of our shares of common stock any shares
of our capital stock.
The noteholder exercise price in effect and the number of shares
issuable upon exercise of each noteholder warrant immediately prior to these
actions will be adjusted so that the holder of any noteholder warrant will be
entitled to receive the number of shares of our capital stock it would have
owned immediately following the action had it exercised their noteholder
warrants immediately prior to the action.
In addition, we will adjust the number of shares issuable upon the
exercise of the noteholder warrants and/or the exercise price if we issue or
sell common stock or certain rights, options or warrants for the purchase of
common stock or if we make certain distributions (including any evidence of
indebtedness or assets).
In case of certain consolidations or mergers of our company, or the
sale of all or substantially all of its assets, each noteholder warrant will be
exercisable for the right to receive the kind and amount of shares of stock or
other securities or property to which the holder would have been entitled as a
result of the consolidation, merger or sale had it exercised their noteholder
warrants immediately prior to the transaction.
Reservation of Shares
We have authorized and reserved for issuance the number of shares of
our common stock that will be issuable upon the exercise of all outstanding
noteholder warrants. These shares of common stock, when paid for and issued,
will be duly and validly issued, fully paid and non-assessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests.
Amendment
We and the warrant agent may amend or supplement the warrant agreement
for certain purposes without consent of the holders of the noteholder warrants.
These include curing defects or inconsistencies or making changes that do not
materially adversely affect the rights of any holder. Any amendment or
supplement to the warrant agreement that has a material adverse effect on the
interests of the holders of the noteholder warrants requires the written consent
of the holders of a majority of the then outstanding noteholder warrants. The
consent of each holder of the noteholder warrants affected is required for any
amendment increasing theexercise Price or decreasing the number of shares
issuable upon exercise of the noteholder warrants, except for adjustments
provided for in the noteholder warrant agreement as described above.
Registration Rights
We have granted holders of our noteholder warrants various registration
rights. If at any time we propose or are required to register common equity
securities under the Securities Act, holders of our noteholder warrants have the
right to cause us to use our reasonable best efforts, following a customary
notice and response period, to register the common stock underlying their
warrants with our registration statement. In addition, we have agreed to effect
a registration statement on up to two occasions upon demand by warrant holders
owning at least 20% of the noteholder warrants.
SELLING SECURITY HOLDERS
The following table sets forth information with respect to the selling
security holders whose shares and warrants are covered by this prospectus. The
share information provided in the table below is based in part on information
provided to us by the selling security holders as of April 28, 2000. We
calculated beneficial ownership according to Rule 13d-3 of the Exchange Act as
of this date. We may update, amend or supplement this prospectus from time to
time to update the disclosure in this section.
The securities included in this table do not represent all of the
securities covered by the registration statement of which this prospectus is
part. Additional selling security holders will be added to the table by
amendment or prospectus supplement before they sell their securities.
The selling security holders may from time to time offer and sell any
or all of their equity securities that are registered under this prospectus.
Because the selling security holders are not obligated to sell its equity
securities, and because the selling security holder may also acquire our
publicly traded equity securities, we cannot estimate how many equity securities
the selling security holders will beneficially own after this offering. If the
selling security holders sell all of the securities registered under this
prospectus and does not acquire any other of our securities, they will no longer
own any of our equity securities.
Shares of Common Stock
Beneficially Owned Before Offering
Name Number Percent
Entities affiliated with 6,157,244 2 60.3% 3
Loomis, Sayles &
Company, L.P. 1
One Financial Center
Boston, MA 02111
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(1) A Loomis, Sayles & Company, L.P. ("Loomis") officer was appointed to the
creditors' committee that represented creditors of the Company in
conjunction with the development of the Company's plan of reorganization
under chapter 11 of the U.S. bankruptcy code. The effective date of the
plan was December 15, 1999. As of the effective date, Loomis is no longer a
member of any creditors' committee relating to the Company and disclaims
any present intent to change or influence control of the Company's
management.
(2) Based on the Schedule 13D/A filed jointly on March 15, 2000 by Loomis and
its general partner, Loomis, Sayles & Company, Inc. and on clerical
adjustments and account terminations between March 15, 2000 and April 28,
2000, Loomis holds these securities on behalf of a number of managed
accounts, two of which beneficially own more than 5% of the issued and
outstanding common stock of the Company. Loomis has full discretion to
manage each of these accounts through advisory agreements. Includes 56,239
shares issuable upon the exercise of Loomis' Class A warrants and 155,366
shares issuable upon exercise of Loomis' noteholder warrants, assuming that
no anti-dilution or other adjustments are required on or before the date of
exercise, that were exercisable within 60 days of the date hereof.
(3) The percentages are calculated on the basis of the amount of outstanding
shares of common stock as of April 1, 2000, which is 10,000,000, plus
shares of common stock underlying each holder's options and warrants which
have been issued and are exercisable within 60 days hereof.
The selling security holders received the shares of common stock and
the Class A warrants in connection with our plan of reorganization in respect of
securities held before the reorganization. In addition, the selling security
holders obtained warrants to purchase 723,861 shares of common stock in
connection with the acquisition of our 12 1/2% senior secured notes due 2007.
In connection with our plan of reorganization, we entered into a
registration rights agreement where we agreed to file a registration statement
on an appropriate form under the Securities Act with respect to the equity
securities offered hereby and any debt securities held by the selling security
holders. We further agreed that we will use our best efforts to cause this
registration statement to be declared effective and to keep it continuously
effective, subject to customary limitations, so as to permit or facilitate the
sale or distribution of these securities. In addition, the selling security
holders may make unlimited demands on us for registration under the Securities
Act and have customary "piggyback" registration rights to include their equity
securities in other registration statements we file. Pursuant to this
registration rights agreement, we have agreed to pay expenses in connection with
the performance of the obligations to effect the shelf, demand and piggyback
registrations other than underwriting fees, discounts, commissions or other
similar selling expenses. We have also agreed to indemnify the selling security
holders against certain liabilities, including liabilities under the Securities
Act.
PLAN OF DISTRIBUTION
Who may sell and applicable restrictions
We will not receive any of the proceeds from the sale of securities
offered hereby. The selling security holders will be offering and selling all
securities offered and sold under this prospectus. Alternatively, the selling
security holders may from time to time offer the securities through brokers,
dealers or agents that may receive compensation in the form of discounts,
concessions or commissions from the selling security holders and/or the
purchasers of the securities for whom they may act as agent. In effecting sales,
broker-dealers that are engaged by the selling security holders may arrange for
other broker-dealers to participate. The selling security holders and any
brokers, dealers or agents who participate in the distribution of the securities
may be deemed to be underwriters, and any profits on the sale of the securities
by them and any discounts, commissions or concessions received by any broker,
dealer or agent may be deemed to be underwriting discounts and commissions under
the Securities Act. To the extent the selling security holders may be deemed to
be underwriters, they may be subject to statutory liabilities, including, but
not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
Manner of sales
The selling security holders will act independently of us in making
decisions with respect to the timing, manner and size of each sale. Sales of our
equity securities may be made over the over-the-counter market. The securities
may be sold at then prevailing market prices, at prices related to prevailing
market prices or at negotiated prices. The selling security holders may also
resell all or a portion of the securities in open market transactions in
reliance upon Rule 144 under the Securities Act, provided that the securities
meet the criteria and conform to the requirements of this rule. The selling
security holders may decide not to sell any of the securities offered under this
prospectus, and they may transfer, devise or gift these securities by other
means.
The securities may be sold according to one or more of the following
methods:
o a block trade in which the broker or dealer so engaged will attempt to sell
the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the broker or
dealer for its account;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o an exchange distribution under the rules of the exchange;
o transactions in the over-the-counter market;
o face-to-face transactions between sellers and purchasers without a
broker-dealer;
o by writing options;
o through underwriters or dealers who may receive compensation in the form of
underwriting discounts, concessions or commissions;
o the pledge of the securities as security for any loan or obligation; and
o a combination of any of the above transactions.
Some persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the securities,
including the entry of stabilizing bids or syndicate covering transactions or
the imposition of penalty bids. The selling security holders and any other
person participating in a distribution will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder including
Regulation M. This regulation may limit the timing of purchases and sales of any
of the securities by the selling security holder and any other person. The
anti-manipulation rules under the Exchange Act may apply to sales of securities
in the market and to the activities of the selling security holders and their
affiliates. Furthermore, Regulation M of the Exchange Act may restrict the
ability of any person engaged in the distribution of the securities to engage in
market-making activities with respect to the particular securities being
distributed for a period of up to five business days before the distribution.
All of the foregoing may affect the marketability of the securities and the
ability of any person or entity to engage in market-making activities with
respect to the securities.
Hedging and other transactions with broker-dealers
In connection with distributions of the securities, the selling
security holder may enter into hedging transactions with broker-dealers. In
connection with these transactions, broker-dealers may engage in short sales of
the registered securities in the course of hedging the positions they assume
with selling security holders. A "short sale" or "selling short" involves the
sale of a security that the selling security holder has borrowed. The selling
security holders may purchase identical securities in the market at a later date
for redelivery to the lender. The selling security holders may also enter into
option or other transactions with broker-dealers which require the delivery to
the broker-dealer of the registered securities. The broker-dealer may then
resell or transfer these securities under this prospectus. The selling security
holders may also loan or pledge the registered securities to a broker-dealer and
the broker-dealer may sell the securities so loaned or, upon a default, the
broker-dealer may effect sales of the pledged securities under this prospectus.
Prospectus delivery
Because the selling security holders may be deemed to be an underwriter
within the meaning of Section 2(11) of the Securities Act, it will be subject to
the prospectus delivery requirements of the Securities Act. At any time a
particular offer of the securities is made, a revised prospectus or prospectus
supplement, if required, will be distributed which will set forth:
o the name of the selling security holders and of any participating
underwriters, broker-dealers or agents;
o the aggregate amount and type of securities being offered;
o the price at which the securities were sold and other material terms of the
offering;
o any discounts, commissions, concessions and other items constituting
compensation from the selling security holders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers; and
o that the participating broker-dealers did not conduct any investigation to
verify the information in this prospectus or incorporated in this
prospectus by reference.
The prospectus supplement or a post-effective amendment will be filed with the
SEC to reflect the disclosure of additional information with respect to the
distribution of the securities.
Expenses associated with registration
We have agreed to pay the expenses of registering the securities under
the Securities Act, including registration and filing fees, printing and
duplication expenses, administrative expenses and legal and accounting fees. The
selling security holders will pay their own brokerage fees, if any.
Suspension of this offering
We may suspend the use of this prospectus if we learn of any event that
causes this prospectus to include an untrue statement of a material fact or omit
to state a material fact required to be stated in the prospectus or necessary to
make the statements in the prospectus not misleading in the light of the
circumstances then existing. If this type of event occurs, a prospectus
supplement or post-effective amendment, if required, will be distributed to the
selling security holders.
Indemnification
Pursuant to a registration rights agreement we entered into with the
selling security holders in connection with the initial offer and sale of the
securities by the selling security holders, we have agreed to indemnify the
selling security holders against certain liabilities, including liabilities
under the Securities Act.
EXPERTS
Ernst & Young LLP, independent certified public accountants, have
audited our consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 1999, as amended on Form 10-K/A, as
set forth in their report, which is incorporated by reference in this prospectus
and elsewhere in the registration statement. Our financial statements are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file with the SEC annual, quarterly and current reports, proxy
statements and other information required by the Securities Exchange Act of
1934, as amended. You may read and copy any document we file at the SEC's public
reference rooms located at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and at Seven World Trade Center, Suite 1300, New York,
New York 10048. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms. Copies of such material can be obtained by mail from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 at prescribed rates. Our filings with the SEC are
also available to the public on the SEC's Internet web site at
http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file with the
SEC later will automatically update and supersede this information. The
following documents filed by us are incorporated by reference in this
prospectus:
o our annual report on Form 10-K, including any amendments thereto, for the
latest fiscal year for which such a report has been filed,
o our quarterly reports on Form 10-Q and current reports on Form 8-K filed
since the end of the latest fiscal year for which we have filed an annual
report on Form 10-K, and
o any future filings or amendments to filings incorporated by reference in
this prospectus made by us with the SEC under sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act prior to the termination of the
offering
You may request a copy of these and any future filings, at no cost, by
writing or telephoning us at:
Hvide Marine Incorporated
2200 Eller Drive
P.O. Box 13038
Ft. Lauderdale, Florida 33316
(954) 524-4200
Attention: Investor Relations
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other expenses of issuance and distribution.
The following table sets forth an estimate of the expenses that will be
incurred by the Registrant in connection with the distribution of the securities
being registered hereby:
SEC registration fee..........................................$ 19,670
Legal fees and expenses.......................................$ 30,000
Accounting fees and expenses..................................$ 15,000
State "Bluesky" filing fees and Legal fees....................$ 50,000
Miscellaneous.................................................$ 10,000
Total.........................................................$ 124,670
=================
Item 15. Indemnification of directors and officers.
Generally, Section 145 of the GCL permits a corporation to indemnify
certain persons made a party to an action, by reason of the fact that such
person 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 or enterprise if the person 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. In the case of an action by or in the
right of the corporation, no indemnification may be made in respect of any
matter as to which such person is adjudged liable to the corporation unless the
Delaware Court of Chancery or the court in which such action was brought
determines that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses. To the extent such person
has been successful in the defense of any matter, such person shall be
indemnified against expenses actually and reasonably incurred by him or her. The
registrant's certificate of incorporation provides that it shall, to the fullest
extent permitted by the GCL, indemnify each officer, director, employee, or
agent.
Section 102(b)(7) of the GCL enables a Delaware corporation to include
a provision in its certificate of incorporation limiting a director's liability
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty as a director. The registrant's certificate of incorporation
provides that its directors shall not be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty, except for
liability for breach of duty of loyalty, for acts or omissions not in good faith
involving intentional misconduct or a knowing violation of law, for liability
under Section 174 of the GCL, or for any transaction from which the director
derived an improper personal benefit.
<PAGE>
Item 16. Exhibits.
Exhibit
No. ......... Description
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 (incorporated by reference to
Exhibits 1 and 2 to the Schedule 13D/A filed with the Commission on
December 29, 1999 by Loomis, Sayles & Company, L.P. (Commission File
No. 000-28732)).
3.1(a)+ Certificate of Incorporation of the Registrant
3.2+ By-laws of the Registrant
4.2+ Form of warrant Certificate of the Registrant
4.3* Indenture for the 12 1/2% Senior Secured Notes due 2007, dated December
15, 1999 among Hvide Marine Incorporated as the Issuer, the Subsidiary
Guarantors named therein, State Street Bank and Trust Company as the
Trustee and Bankers Trust Company as the Collateral agent (incorporated
by reference to Exhibit 4.1 to the Registrant's Form 8-K filed with the
Commission on December 27, 1999 (Commission File No. 000-28732)).
4.4 Warrant agreement, dated December 15, 1999, between Hvide Marine
Incorporated and State Street Bank and Trust Company as warrant agent.
4.5+ Class A warrant agreement, dated as of December 15, 1999 by and between
Hvide Marine Incorporated and State Street Bank and Trust Company.
5.1 Opinion of Dyer Ellis & Joseph.
10.1* Credit agreement, dated December 15, 1999, among Hvide Marine
Incorporated, Bankers Trust Company as Administrative Agent, Deutsche
Bank Securities Inc. as Lead Arranger and Book Manager, Meespierson
Capital Corp. as Syndication Agent and Co-Arranger and the various
persons from time to time parties to the agreement as Lenders
(incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K
filed with the Commission on December 27, 1999 (Commission File No.
000-28732)).
10.2* 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 (incorporated by reference to Exhibit 10.2 to the
Registrant's Form 8-K filed with the Commission on December 27, 1999
(Commission File No. 000-28732)).
10.3* Registration Rights Agreement for the 12 1/2% Senior Secured Notes due
2007, 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 (incorporated by
reference to Exhibit 10.3 to the Registrant's Form 8-K filed with the
Commission on December 27, 1999 (Commission File No. 000-28732)).
10.4*Registration Rights Agreement by and between Loomis, Sayles & Company,
L.P. and Hvide Marine Incorporated, dated as of December 15, 1999
(incorporated by reference to Exhibit 4 to the Schedule 13D/A filed with
the Commission on December 29, 1999 by Loomis, Sayles & Company, L.P.
(Commission File No. 000-28732)).
10.5*First Amendment to Credit Agreement dated as of April 13, 2000
(incorporated by reference to exhibit 10.5 to the Registrant's Form 10-K
for the year ended December 31, 1999.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Dyer Ellis & Joseph (included in their opinion filed as Exhibit
5.1).
24 Power of Attorney (Power of attorney with respect to certain officers and
directors).
27* Financial Data Schedule.
99.1*Order, dated December 9, 1999, of the United States Bankruptcy Court for
the District of Delaware, confirming the First Amended Joint Plan of
Reorganization in In re: Hvide Marine Incorporated, et al., Case No.
99-3024 (PJW), including the Supplement to such Plan (incorporated by
reference to Exhibit 99.1 to the Registrant's Form 8-K filed with the
Commission on December 27, 1999 (Commission File No. 000-28732)).
- -----------------
* Incorporated herein by reference.
+ Previously filed.
Item 17. 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 provisions in Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in such act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director or officer or controlling person of the registrant in 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, the 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 of whether such indemnification by it is against
public policy as expressed in such act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
The undersigned 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 Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent 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; provided,
however, that paragraphs (1)(a) and (1)(b) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Act,
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on form S-3 and 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 May 8,
2000.
HVIDE MARINE INCORPORATED
By: *
Gerhard E. Kurz
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
* Chief Executive Officer May 8, 2000
Gerhard E. Kurz
* President, Chief Operating May 8, 2000
Eugene F. Sweeney Officer and Director
* Executive Vice President, May 8, 2000
Walter S. Zorkers Chief Financial Officer,
and Director
(principal financial officer)
* Controller (principal accounting May 8, 2000
John J. Krumenacker officer)
* Director May 8, 2000
James J. Gaffney
* Director May 8, 2000
John F. McGovern
Director May 8, 2000
Thomas P. Moore, Jr.
* Director May 8, 2000
Donald R. Shepherd
* By John Kearney
Attorney-in-Fact
</TABLE>
WARRANT AGREEMENT (the "Agreement"), dated as of December 15, 1999, between
Hvide Marine Incorporated, a Delaware corporation (together with any successors
and assigns, the "Company"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts chartered trust company, as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue and sell pursuant to a Purchase
Agreement, dated as of December 15, 1999, among the Company, the Guarantors
named therein (the "Guarantors") and the Purchasers named therein (the
"Purchasers"), $95,000,000 in aggregate principal amount at maturity of the
Company's 12 1/2% Senior Secured Notes due 2007, issued under an Indenture dated
as of the date hereof among the Company, the Guarantors and STATE STREET BANK
AND TRUST COMPANY, as Trustee (the "Indenture"), along with 536,193 Warrants
(each, including any additional Warrants as described below, a "Warrant," and
collectively, the "Warrants") for the purchase of an aggregate of 536,193 shares
of the Company's Common Stock, par value $.01 per share (the "Common Stock," and
the shares of Common Stock issuable upon exercise of the Warrants, including any
additional warrants as described below, being referred to herein as the "Warrant
Shares"); and the Company has also delivered on the date hereof an additional
187,668 Warrant to purchase 187,668 Warrant Shares to the Purchasers as
compensation for certain advisory fees; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company
and the Warrant Agent is willing to act in connection with the issuance,
transfer, exchange and exercise of Warrants as provided herein; and
WHEREAS, the holders of Warrants and Warrant Shares shall, from time to time,
have certain rights and obligations with respect thereto as set forth in the
Common Stock Registration Rights Agreement, dated as of December 15, 1999, among
the Company and the Purchasers;
NOW, THEREFORE, in consideration of the premises and mutual agreements herein,
the Company and the Warrant Agent hereby agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions
hereinafter set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment.
SECTION 2. Warrant Certificates. The Warrants will initially be issued either in
global form (the "Global Warrants"), substantially in the form of Exhibit A
hereto (including footnote 1 thereto) or in registered form as definitive
Warrant certificates (the "Definitive Warrants"), substantially in the form of
Exhibit A hereto (excluding footnote 1 thereto). Such Global Warrants shall
represent such of the outstanding Warrants as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Warrants from time to time endorsed thereon and that the aggregate amount of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate. Any endorsement of a Global Warrant to reflect the
amount of any increase or decrease in the amount of outstanding Warrants
represented thereby shall be made by the Warrant Agent and Depository (as
defined below) in accordance with instructions given by the holder thereof. The
Depository Trust Company (the "Depository") shall act as the Depository with
respect to the Global Warrants until a successor shall be appointed by the
Company. Upon written request, a Warrant holder may receive from the Depository
and Warrant Agent Definitive Warrants as set forth in Section 6 below.
SECTION 3. Execution of Warrant Certificates. Certificates ("Warrant
Certificates") evidencing the Global Warrants or the Definitive Warrants to be
delivered pursuant to this Agreement shall be signed on behalf of the Company by
its Chairman of the Board or its President, Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer or a Vice President and by its
Secretary or an Assistant Secretary. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President, Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer, a Vice President, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer, Chief Operating Officer,
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be countersigned and delivered or
disposed of such person shall have ceased to hold such office. In case any
officer of the Company who shall have signed any of the Warrant Certificates
shall cease to be such officer before the Warrant Certificates so signed shall
have been countersigned by the Warrant Agent, or disposed of by the Company,
such Warrant Certificates nevertheless may be countersigned and delivered or
disposed of as though such person had not ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Company to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any such person
was not such officer. Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
SECTION 4. Registration and Countersignature. The Warrants shall be numbered and
shall be registered on the books of the Company maintained at the principal
office of the Warrant Agent in the Borough of Manhattan, City of New York (the
"Warrant Register") as they are issued. Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. The Warrant Agent shall, upon written instructions of the
Chairman of the Board, the President, Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, a Vice President, the Secretary or an
Assistant Secretary of the Company, initially countersign and deliver Warrants
entitling the holders thereof to purchase not more than the number of Warrant
Shares referred to above in the first recital hereof and shall thereafter
countersign and deliver Warrants as otherwise provided in this Agreement. The
Company and the Warrant Agent may deem and treat the registered holders,(the
"Holders", as listed on Schedule 1) of the Warrant Certificates as the absolute
owners thereof (notwithstanding any notation of ownership or other writing
thereon made by anyone) for all purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
SECTION 5. Transfer and Exchange of Warrants. The Warrant Agent shall from time
to time, subject to the limitations of Section 6, register the transfer of any
outstanding Warrants upon the records to be maintained by it for that purpose,
upon surrender thereof duly endorsed or accompanied (if so required by it) by a
written instrument or instruments of transfer in form reasonably satisfactory to
the Warrant Agent, duly executed by the registered Holder or Holders thereof or
by the duly appointed legal representative thereof or by a duly authorized
attorney. Subject to the terms of this Agreement, each Warrant Certificate may
be exchanged for another certificate or certificates entitling the Holder
thereof to purchase a like aggregate number of Warrant Shares as the certificate
or certificates surrendered then entitle each Holder to purchase. Any Holder
desiring to exchange a Warrant Certificate or Certificates shall make such
request in writing delivered to the Warrant Agent, and shall surrender, duly
endorsed or accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
the Warrant Certificate or Certificates to be so exchanged. Upon registration of
transfer, the Warrant Agent shall countersign and deliver by certified or first
class mail a new Warrant Certificate or Certificates to the persons entitled
thereto. The Warrant Certificates may be exchanged at the option of the Holder
thereof, when surrendered at the office or agency of the Company maintained for
such purpose, which initially will be the corporate trust office of the Warrant
Agent in New York, New York for another Warrant Certificate, or other Warrant
Certificates of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares. No service
charge shall be made for any exchange or registration of transfer of Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that is imposed in
connection with any such exchange or registration of transfer. The Warrant Agent
shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Agreement or
under applicable law with respect to any transfer of any interest in any Warrant
(including any transfers between or among Depository participants or beneficial
owners of interests in any Global Warrant) 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 Agreement
and to examine the same to determine substantial compliance as to form with the
express requirements thereof.
SECTION 6. Registration of Transfers and Exchanges. (a) Transfer and Exchange of
Definitive Warrants. When Definitive Warrants are presented to the Warrant Agent
with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations, the Warrant Agent shall
register the transfer or make the exchange as requested if its requirements
under this Agreement are met; provided, however, that the Definitive Warrants
presented or surrendered for registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written
instruction of transfer in form reasonably satisfactory to the Warrant
Agent, duly executed by the Holder thereof or by such Holder's
attorney, duly authorized in writing; and
(y) in the case of Warrants (the "Restricted Warrants") that
constitute Restricted Securities (as such term is defined in Rule
144(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act")), such Warrants shall be accompanied, in the sole discretion of
the Company, by the following additional information and documents, as
applicable; it being understood, however, that the Warrant Agent need
not determine whether any Warrants are Restricted Warrants and, if so,
which clause (A) through (C) below is applicable:
(A) if such Restricted Warrant is being delivered to the Warrant Agent by a
Holder for registration in the name of such Holder, without transfer, a
certification from such holder to that effect (in substantially the form of
Exhibit B hereto); or
(B) if such Restricted Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act, a
"QIB") in accordance with Rule 144A under the Securities Act or pursuant to
an exemption from registration in accordance with Rule 144 under the
Securities Act or Regulation S under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a certification
to that effect (in substantially the form of Exhibit B hereto) and, with
respect to transfers pursuant to Rule 144 or Regulation S, an opinion of
counsel reasonably acceptable to the Company and the Warrant Agent to the
effect that such transfer does not require registration under the
Securities Act; or
(C) if such Restricted Warrant is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a
certification to that effect (in substantially the form of Exhibit B
hereto) and an opinion of counsel reasonably acceptable to the Company and
to the Warrant Agent to the effect that such transfer does not require
registration under the Securities Act. (b) Restrictions on Transfer of a
Definitive Warrant for a Beneficial Interest in a Global Warrant. A
Definitive Warrant may not be exchanged for a beneficial interest in a
Global Warrant except upon satisfaction of the requirements set forth
below. Upon receipt by the Warrant Agent of a Definitive Warrant, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Warrant Agent, together with:
(A) if such Definitive Warrant constitutes Restricted Warrants, certification,
substantially in the form of Exhibit B hereto, that such Definitive Warrant
is being transferred to a QIB in accordance with Rule 144A under the
Securities Act; and
(B) written instructions directing the Warrant Agent to make, or to direct the
Depository to make, an endorsement on the Global Warrant to reflect an
increase in the aggregate amount of the Warrants represented by the Global
Warrant, then the Warrant Agent shall cancel such Definitive Warrant and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Warrant
Agent, the number of Warrant Shares represented by the Global Warrant to be
increased accordingly, or, if no Global Warrant is then outstanding, the
Company shall issue and the Warrant Agent shall countersign a new Global
Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants. The transfer and exchange of
Global Warrants or beneficial interests therein shall be effected through
the Depository, in accordance with this Agreement (including the
restrictions on transfer set forth herein) and the procedures of the
Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Warrant for a Definitive
Warrant.
(i) Any person having a beneficial interest in a Global Warrant may
upon request exchange such beneficial interest for a Definitive Warrant. Upon
receipt by the Warrant Agent of written instructions or such other form of
instructions as is customary for the Depository from the Depository or its
nominee on behalf of any person having a beneficial interest in a Global Warrant
and upon receipt by the Warrant Agent of a written order or such other form of
instructions as is customary for the Depository or the person designated by the
Depository as having such a beneficial interest containing registration
instructions and, in the case of a beneficial interest in Restricted Warrants,
the following additional information and documents; it being understood,
however, that the Warrant Agent need not determine which clause (A) through (C)
below is applicable:
(A) If such beneficial interest is being transferred to the person designated
by the Depository as being the beneficial owner, a certification from such
person to that effect (in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a QIB in accordance
with Rule 144A under the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Regulation S under the
Securities Act or pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the transferee and/or
transferor (in substantially the form of Exhibit B hereto), as requested by
the Company and the Warrant Agent, and, with respect to transfers pursuant
to Rule 144 or Regulation S, an opinion of counsel reasonably acceptable to
the Company and the Warrant Agent to the effect that such transfer does not
require registration under the Securities Act; or
(C) if such beneficial interest is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a
certification to that effect from the transferee and/or transferor, as
requested by the Company and the Warrant Agent (in substantially the form
of Exhibit B hereto), and an opinion of counsel from the transferee or
transferor reasonably acceptable to the Company and to the Warrant Agent to
the effect that such transfer does not require registration under the
Securities Act, then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Warrant Agent, the aggregate amount of the Global Warrant to be reduced
and, following such reduction, the Company will execute and, upon receipt
of appropriate instructions in the form of an Officers' Certificate (as
defined in the Indenture), the Warrant Agent will countersign and deliver
to the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial interest
in a Global Warrant pursuant to this Section 6(d) shall be registered in such
names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent in writing, provided such designation is in
accordance with this Section 6(d). The Warrant Agent shall deliver such
Definitive Warrants to the persons in whose names such Definitive Warrants are
registered. (e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 6), a Global Warrant 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.
(f) Authentication of Definitive Warrants in Absence of Depository. If at any
time:
(i) the Depository for the Global Warrants notifies the Company that
the Depository is unwilling or unable to continue as depository for the Global
Warrant and a successor depository for the Global Warrant is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants under this
Warrant Agreement, then the Company will execute, and the Warrant Agent, upon
receipt of an Officers' Certificate (as defined in the Indenture) requesting the
countersignature and delivery of Definitive Warrants, will countersign and
deliver Definitive Warrants, in an aggregate number equal to the aggregate
number of Warrants represented by the Global Warrant, in exchange for such
Global Warrant.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each Warrant
Certificate evidencing the Global Warrants and the Definitive Warrants (and all
Warrants issued in exchange therefor or substitution thereof) shall bear a
legend substantially as set forth in Exhibit C.
(ii) Upon any sale or transfer of a Warrant pursuant to Rule 144 under
the Securities Act or an effective registration statement under the Securities
Act:
(A) in the case of any Warrant that is a Definitive Warrant, the Warrant Agent
shall permit the Holder thereof to exchange such Restricted Warrant for a
Definitive Warrant that does not bear the legend set forthin Exhibit C and
rescind any related restriction on the transfer of such Warrant (i) in the
case of a sale or transfer pursuant to Rule 144, after delivery by the
Holder thereof of a certificate to that effect (substantially in the form
of Exhibit B hereto) and accompanied by an opinion of counsel, reasonably
satisfactory to the Company and the Warrant Agent, to the effect that such
transfer does not require registration under the Securities Act or (ii) in
the case of a sale or transfer pursuant to an effective registration
statement, after delivery of evidence of such effective registration
statement; and
(B) any such Warrant represented by a Global Warrant shall not be subject to
the provisions set forth in (i) above (such sales or transfers being
subject only to the provisions of Section 6(c) hereof); provided, however,
that with respect to any request for an exchange of a Warrant that is
represented by a Global Warrant for a Definitive Warrant that does not bear
the legend set forth in Exhibit C, which request is made in reliance upon
Rule 144, the Holder thereof shall certify in writing to the Warrant Agent
that such request is being made pursuant to Rule 144 (such certification to
be substantially in the form of Exhibit B hereto) and shall obtain an
opinion of counsel, reasonably acceptable to the Company and the Warrant
Agent, to the effect that such transfer does not require registration under
the Securities Act.
(h) Cancellation and/or Adjustment of a Global Warrant. At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction. (i) Obligations with Respect to Transfers and Exchanges
of Definitive Warrants.
(i) To permit registrations of transfers and exchanges in accordance
with the terms of this Agreement, the Company shall execute, and the Warrant
Agent, upon receipt of appropriate instructions in the form of an Officers'
Certificate, shall countersign, Definitive Warrants and Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or Global Warrants
shall be the valid obligations of the Company, entitled to the same benefits
under this Warrant Agreement as the Definitive Warrants or Global Warrants
surrendered upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such Warrant, and
neither the Warrant Agent nor the Company shall be affected by notice to the
contrary. SECTION 7. Terms of Warrants; Exercise of Warrants Subject to the
terms of this Agreement, each Warrant Holder shall have the right, which may be
exercised commencing on or after the original date of issue of the Warrants (the
"Issue Date") and until 5:00 p.m., New York City time, on June 30, 2007 (the
"Expiration Date"), to receive from the Company the number of fully paid and
nonassessable Warrant Shares that the Holder may at the time be entitled to
receive on exercise of such Warrants and payment of the Exercise Price (as
defined below) then in effect for such Warrant Shares. Subject to the next
paragraph of this Section, each Warrant not exercised prior to the Expiration
Date shall become void and all rights thereunder and all rights in respect
thereof under this Agreement and otherwise shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants. The
initial price per share at which Warrant Shares shall be purchasable upon
exercise of Warrants (the "Exercise Price") shall be $.01. The number of Warrant
Shares for which a Warrant may be exercised is subject to adjustment as provided
in Section 12 hereof. A Warrant may be exercised upon surrender at the office or
agency of the Company maintained for such purpose, which initially will be the
corporate trust office of the Warrant Agent in New York, New York, of the
certificate or certificates evidencing the Warrants to be exercised with the
form of election to purchase on the reverse thereof duly filled in and signed,
which signature shall be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, as adjusted as herein provided,
for the number of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the Exercise Price may be made, in the sole discretion of
the Holder, in the form of any of the following: (a) cash or a check or bank
draft in New York Clearing House funds, (b) by the surrender to the Company for
cancellation of a portion of the Warrants held by a Holder representing that
number of unissued Warrant Shares having a Current Market Value equal to the
aggregate Exercise Price of the Warrant Shares being obtained or (c) by the
surrender of the applicable Warrant and without the payment of the Exercise
Price in cash, for such number of Warrant Shares equal to the product of (1) the
number of Warrant Shares for which such Warrants are exercisable with payment in
cash of the Exercise Price as of the date of exercise and (2) the Cashless
Exercise Ratio or (d) by any combination of (a), (b) and (c) above. For purposes
of this Agreement, the "Cashless Exercise Ratio" shall equal a fraction, the
numerator of which is the excess of the Current Market Value of the Common Stock
on the date of exercise over the Exercise Price Per Share as of the date of
exercise and the denominator of which is the Current Market Value of the Common
Stock on the date of exercise. An exercise of a Warrant in accordance with the
immediately preceding sentences through the surrender of Warrants and not with
cash is herein called a "Cashless Exercise." Upon surrender of a Warrant
Certificate representing more than one Warrant in connection with the Holder's
option to elect a Cashless Exercise, the number of Warrant Shares deliverable
upon a Cashless Exercise shall be equal to the number of Warrants that the
holder specifies is to be exercised pursuant to a Cashless Exercise multiplied
by the Cashless Exercise Ratio. All provisions of this Agreement shall be
applicable with respect to an exercise of a Warrant Certificate pursuant to a
Cashless Exercise for less than the full number of Warrants represented thereby.
"Exercise Price Per Share" means the Exercise Price divided by the number of
Warrant Shares for which a Warrant is then exercisable (without giving effect to
the Cashless Exercise option).
Subject to the provisions of Section 6 hereof, upon such surrender of Warrants
and payment of the Exercise Price, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Holder and in such name or names as the Warrant Holder may designate a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash as provided in Section 13;
provided, however, that if any consolidation, merger or lease or sale of assets
and subsequent liquidation of the Company is proposed to be effected by the
Company as described in subsection (k) of Section 12 hereof, or a tender offer
or an exchange offer for shares of Common Stock of the Company shall have been
made and not terminated, upon such surrender of Warrants and payment of the
Exercise Price as aforesaid, the Company shall, as soon as possible, but in any
event not later than three days, other than a Saturday or Sunday or a day on
which banking institutions in the State of New York are not open for business
("Business Day") thereafter, issue and cause to be delivered the full number of
Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence together with cash as provided in Section 13. Such
certificate or certificates shall be deemed to have been issued and any person
so named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment of
the Exercise Price.
The Warrants shall be exercisable, at the election of the Holders thereof,
either in full or from time to time in part and, in the event that a certificate
evidencing Warrants is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration of
the Warrants, a new certificate evidencing the remaining Warrant or Warrants
will be issued, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrant Certificate or Certificates
pursuant to the provisions of this Section 7 and of Section 3 hereof, and the
Company, whenever required by the Warrant Agent, will promptly supply the
Warrant Agent with Warrant Certificates duly executed on behalf of the Company
for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall be
cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall then
be disposed of by the Warrant Agent in a manner consistent with the Warrant
Agent's customary procedure for such disposal and in a manner reasonably
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the Company
all monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement available for inspection
by the Holders during normal business hours at its office. The Company shall
supply the Warrant Agent from time to time with such numbers of copies of this
Agreement as the Warrant Agent may request.
SECTION 8. Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes that may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered Holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In case any of the Warrant
Certificates shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue and the Warrant Agent upon written instructions from the
Company in the form of an Officers' Certificate, may countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant Certificate,
or in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and a bond or indemnity, if requested, also satisfactory to
them. Applicants for such substitute Warrant Certificates shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
SECTION 10. Reservation of Warrant Shares. The Company will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in its treasury, for the purpose of enabling it to satisfy any obligation
to issue Warrant Shares upon exercise of Warrants, the maximum number of shares
of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common Stock and every
subsequent transfer agent for any shares of the Company's capital stock issuable
upon the exercise of any of the rights of purchase aforesaid (the "Transfer
Agent") will be authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from
such Transfer Agent the stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company will supply such Transfer Agent with duly executed certificates for
such purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 13. The Company will furnish such Transfer Agent
a copy of all notices of adjustments and certificates related thereto
transmitted to each Holder pursuant to Section 14 hereof.
The Company covenants that all Warrant Shares which may be issued upon exercise
of Warrants will, upon payment of the Exercise Price therefor and issue, be
validly authorized and issued, fully paid, nonassessable, free of preemptive
rights and free from all taxes, liens, charges and security interests with
respect to the issuance thereof. The Company will take no action to increase the
par value of the Common Stock to an amount in excess of the Exercise Price, and
the Company will not enter into any agreements inconsistent in any material
respect with the rights of Holders hereunder. The Company will use its
reasonable best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Agreement.
SECTION 11. Public Equity Offering of Common Stock; PORTAL. In the event that,
at any time during the period in which the Warrants are exercisable, the Common
Stock is not listed on any principal securities or exchanges or markets within
the United States of America, the Company will use its reasonable best efforts
to permit the Warrant Shares to be designated PORTAL securities in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the Private Offerings, Resales and Trading
through Automated Linkages market.
SECTION 12. Adjustment of Exercise Price and Number of Warrant Shares Issuable.
The Exercise Price and the number of shares of Common Stock issuable upon the
exercise of each Warrant (the "Exercise Rate") is subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 12.
(a) Adjustment for Change in Capital Stock. If the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock or other capital stock of the Company; or
(2) subdivides, combines or reclassifies its outstanding shares of
Common Stock,
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company that such Holder would have owned immediately following such action if
such Warrant had been exercised immediately prior to such action or immediately
prior to the record date applicable thereto, if any (regardless of whether the
Warrants are then exercisable and without giving effect to the Cashless Exercise
Option). The Exercise Price in effect immediately prior to such action shall be
adjusted to a price determined by multiplying the Exercise Price in effect
immediately prior to such action by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding before giving effect to such
action and the denominator of which shall be the number of shares of Common
Stock and/or such other capital stock outstanding referred to in the foregoing
clause (a)(1) after giving effect to such action.
The adjustment shall become effective immediately after the record date in the
case of a dividend or distribution and immediately after the effective date in
the case of a subdivision, combination or reclassification. If after an
adjustment a Holder of a Warrant upon exercise of it may receive shares of two
or more classes of capital stock of the Company, the board of directors of the
Company shall determine the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 12.
Such adjustment shall be made successively whenever any event listed above shall
occur. (b) Adjustment for Certain Issuances of Common Stock. If the Company
issues or sells to any holder of its Common Stock or any Affiliate of such
holder or distributes to any holder or any Affiliate of such holder any rights,
options or warrants entitling them to purchase shares of Common Stock, or
securities convertible into or exchangeable for Common Stock, in each case, at a
price per share less than the Current Market Value on the record date for
determining entitlements of any such holder of Common Stock to participate in
such issuance, sale or distribution (the "Time of Determination"), the Exercise
Rate shall be adjusted in accordance with the formula:
and the Exercise Price shall be adjusted in accordance with the following
formula:
where:
E' = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time
of Determination for any such issuance, sale or
distribution.
EP' = the adjusted Exercise Price.
EP = the Exercise Price immediately prior to the Time
of Determination for any such issuance, sale or
distribution.
O = the number of Fully Diluted Shares (as defined
below) outstanding immediately prior to the Time of
Determination for any such issuance, sale or
distribution.
N = the number of additional shares of Common Stock
issued, sold or issuable upon exercise of such
rights, options or warrants.
P = the offering price per share received in the case
of any issuance or sale of Common Stock or rights,
options or warrants inclusive of the exercise price
per share of Common Stock payable upon exercise of
such rights, options or warrants.
M = the Current Market Value per share of Common
Stock on the Time of Determination for any such
issuance, sale or distribution.
For purposes of this Section 12 the term "Fully Diluted Shares" shall mean (i)
the shares of Common Stock outstanding as of a specified date, and (ii) the
shares of Common Stock into or for which rights, options, warrants or other
securities outstanding as of such date are exercisable or convertible (other
than the Warrants). The adjustments shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the relevant Time of Determination. Notwithstanding the foregoing, the
Exercise Rate and the Exercise Price shall not be subject to adjustment in
connection with (i) the issuance of any shares of Common Stock upon exercise of
any such rights, options or warrants which (x) have previously been the subject
of an adjustment under this Agreement for which the required adjustment has been
made or (y) are outstanding on the date hereof and have already been included in
the number of Fully Diluted Shares and (ii) the exercise of the Warrants. If at
the end of the period during which any such rights, options or warrants are
exercisable, not all rights, options or warrants shall have been exercised, the
Warrant shall be immediately readjusted to what it would have been if "N" in
each of the above formulas had been the number of shares actually issued.
No adjustment shall be made under this paragraph (b) if the application of the
formula stated above in this paragraph (b) would result in a value of E' that is
lower than the value of E. (c) Adjustment for Other Distribution. If the Company
distributes to any holder of its Common Stock or any Affiliate of such holder
(i) any evidences of indebtedness of the Company or any of its subsidiaries,
(ii) any assets of the Company or any of its subsidiaries (other than cash
dividends or other cash distributions that do not constitute an Extraordinary
Cash Dividend), or (iii) any rights, options or warrants to acquire any of the
foregoing or to acquire any other securities of the Company, the Exercise Rate
shall be adjusted in accordance with the formula:
E' = E x M
M - F
and the Exercise Price shall be decreased (but not increased) in accordance with
the following formula:
EP' = EP x E
E'
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate on the record date referred to
in this paragraph (c) below.
EP' = the adjusted Exercise Price.
EP = the current Exercise Price on the record date
referred to in this paragraph (c) below.
M = the Current Market Value per share of Common
Stock on the record date referred to in this
paragraph (c) below.
F = the fair market value on the record date referred
to in this paragraph (c) below of the indebtedness,
assets, rights, options or warrants distributable
in respect of one share of Common Stock.
The adjustments shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. If any
adjustment is made pursuant to clause (iii) above of this subsection (c) as a
result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable, not
all such rights, options or warrants shall have been exercised, the Warrant
shall be immediately readjusted as if "F" in the above formula was the fair
market value on the record date of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by the
number of shares of Common Stock outstanding on the record date.
This subsection does not apply to rights, options or warrants referred to in
subsection (b) of this Section 12. (d) Current Market Value. "Current Market
Value" per share of Common Stock or of any other security (herein collectively
referred to as a "Security") at any date shall be:
(1) if the Security is not registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (i) the value of the Security
determined in good faith by the board of directors of the Company and
certified in a board resolution, based on the most recently completed
arm's length transaction between the Company and a person other than an
Affiliate of the Company and the closing of which occurs on such date
or shall have occurred within the six months preceding such date or
(ii) if no such transaction shall have occurred on such date or within
such six-month period, the value of the Security preceding such date
determined by the disinterested members of the board of directors of
the Company and certified in a board resolution adopted by the
disinterested members of the Company's board of directors delivered to
the Holders unless the Holders of at least 33 1/3 percent of the
outstanding Warrants shall object to such determination in which case
the value shall be determined by an Independent Financial Expert (as
defined below) in all other instances, or (2) if the Security is
registered under the Exchange Act, the average of the daily closing bid
prices for each Business Day during the period commencing 15 Business
Days before such date and ending on the date one day prior to such date
or, if the Security has been registered under the Exchange Act for less
than 15 consecutive Business Days before such date, then the average of
the daily closing bid prices (as defined below) for all of the Business
Days before such date for which daily closing bid prices are available.
If the closing bid price is not determinable for at least 10 Business
Days in such period, the Current Market Value of the Security shall be
determined as if the Security was not registered under the Exchange
Act.
The "closing bid price" for any Security on each Business Day means: (A) if such
Security is listed or admitted to trading on any securities exchange, the
closing price, regular way, on such day on the principal exchange on which such
Security is traded, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, (B) if such Security is not then
listed or admitted to trading on any securities exchange, the last reported sale
price on such day, or if there is no such last reported sale price on such day,
the average of the closing bid and the asked prices on such day, as reported by
a reputable quotation source designated by the Company or (C) if neither clause
(A) nor (B) is applicable, the average of the reported high bid and low asked
prices on such day, as reported by a reputable quotation service, or a newspaper
of general circulation in the Borough of Manhattan, City of New York,
customarily published on each Business Day, designated by the Company. If there
are no such prices on a Business Day, then the market price shall not be
determinable for such Business Day.
"Independent Financial Expert" shall mean any nationally recognized investment
banking firm reasonably acceptable to the Warrant Agent (i) that does not (and
whose directors, officers, employees and Affiliates do not) have a direct or
indirect material financial interest in the Company, (ii) that has not been,
and, at the time it is called upon to serve as an Independent Financial Expert
under this Agreement is not (and none of whose directors, officers, employees or
Affiliates is) a promoter, director or officer of the Company, (iii) that has
not been retained by the Company for any purpose, other than to perform an
equity valuation, within the preceding twelve months and (iv) that, in the
reasonable judgment of the board of directors of the Company (certified by a
board resolution), is otherwise qualified to serve as an independent financial
advisor. Any such person may receive customary compensation and indemnification
by the Company for opinions or services it provides as an Independent Financial
Expert.
"Affiliate" of any specified person means any other person which directly or
indirectly through one or more intermediaries controls or is controlled by, or
is under common control with, such specified person. For the purposes of this
definition, "control" (including with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") as used with
respect to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities, by agreement or
otherwise.
"Extraordinary Cash Dividend" means any cash dividends with respect to the
Common Stock the aggregate amount of which in any fiscal year exceeds the
greater of (i) 5.0% of the net income of the Company and its subsidiaries for
the fiscal year immediately preceding the payment of such dividend and (ii)
$100,000. (e) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate or Exercise Price need be made unless the adjustment would require
an increase or decrease of at least 1% in the Exercise Rate or Exercise Price,
as the case may be. Notwithstanding the foregoing, any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment, provided that no such adjustment shall be deferred beyond the date
on which a Warrant is exercised.
All calculations under this Section 12 shall be made to the nearest cent
(one-half a cent being rounded up) or to the nearest 1/100th (5/1000 of a share
being rounded up) of a share, as the case may be. (f) When No Adjustment
Required. If an adjustment is made upon the establishment of a record date for a
distribution subject to subsections (a), (b) or (c) hereof and such distribution
is subsequently cancelled, the Exercise Rate and Exercise Price then in effect
shall be readjusted, effective as of the date when the board of directors
determines to cancel such distribution, to that which would have been in effect
if such record date had not been fixed. If the Company includes the Warrant
Holders in any distribution subject to subsection (a), (b) or (c) hereof and
such inclusion results in the Warrant Holders maintaining their ownership
percentage of the Company on a fully diluted basis, then no adjustment shall be
necessary. If an adjustment would be required under two or more of paragraphs
(a), (b) and (c), such adjustments will be determined without duplication. To
the extent the Warrants become convertible into cash, no adjustment need be made
thereafter as to the amount of cash into which such Warrants are exercisable.
Interest will not accrue on the cash. (g) Notice of Adjustment. Whenever the
Exercise Rate or Exercise Price is adjusted, the Company shall provide the
notices required by Section 14 hereof.
(h) Voluntary Reduction. The Company from time to time may increase the Exercise
Rate or reduce the Exercise Price by any amount for any period of time
(including, without limitation, permanently) if the period is at least 20
Business Days.
An increase of the Exercise Rate or reduction of the Exercise Price under this
subsection (h) (other than a permanent increase or reduction) does not change or
adjust the Exercise Rate or Exercise Price otherwise in effect for purposes of
subsections (a), (b) or (c) of this Section 12.
(i) Minimum Exercise Price. Notwithstanding anything to the contrary contained
in this Agreement, if the Exercise Price, as adjusted pursuant to this Agreement
(other than this Section 12(i)), shall be less than the aggregate par values of
the related Warrant Shares, then such Exercise Price, as so adjusted, for all
purposes of this Agreement, shall be an amount equal to the aggregate par value
of such related Warrant Shares. (j) When Issuance or Payment May Be Deferred. In
any case in which this Section 12 shall require that an adjustment in the
Exercise Rate or Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the Holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Rate
prior to such adjustment, and (ii) paying to such Holder any amount in cash in
lieu of a fractional share pursuant to Section 13; provided, however, that the
Company shall deliver to the Warrant Agent and shall cause the Warrant Agent, on
behalf of and at the expense of the Company, to deliver to such Holder a due
bill or other appropriate instrument evidencing such Holder's right to receive
such additional Warrant Shares, other capital stock and cash upon the occurrence
of the event requiring such adjustment.
(k) Reorganizations. In case of any capital reorganization, other than in the
cases referred to in Sections 12(a), (b) or (c) hereof, or the consolidation or
merger of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock
into shares of other stock or other securities or property) (collectively such
actions being hereinafter referred to as "Reorganizations"), or the sale of the
property of the Company as an entirety or substantially as an entirety, there
shall thereafter be deliverable upon exercise of any Warrant (in lieu of the
number of shares of Common Stock theretofore deliverable) the number of shares
of stock or other securities or property, if any, to which a holder of the
number of shares of Common Stock that would otherwise have been deliverable upon
the exercise of such Warrant would have been entitled upon such Reorganization
or sale if such Warrant had been exercised in full immediately prior to such
Reorganization. In case of any Reorganization or sale, appropriate adjustment,
as determined in good faith by the board of directors of the Company, whose
determination shall be described in a duly adopted resolution certified by the
Company's Secretary or Assistant Secretary, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of
Holders so that the provisions set forth herein shall thereafter be applicable,
as nearly as possible, in relation to any such shares or other securities or
property thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Reorganization or the corporation or other
appropriate corporation or entity purchasing such assets shall (i) expressly
assume, by a supplemental warrant agreement or other acknowledgment executed and
delivered to the Warrant Agent the obligation to deliver to the Warrant Agent
and to cause the Warrant Agent to deliver to each such Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to purchase, and the due and punctual performance
and observance of each and every covenant, condition, obligation and liability
under this Agreement to be performed and observed by the Company in the manner
prescribed herein and (ii) enter into an agreement providing to the Holders
rights and benefits substantially similar to those enjoyed by the Holders under
the Common Stock Registration Rights Agreement of even date herewith. The
foregoing provisions of this Section 12(k) shall apply to successive
Reorganization transactions. (l) Form of Warrants. Irrespective of any
adjustments in the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement. (m) Warrant Agent's Disclaimer. The Warrant
Agent has no duty to determine when an adjustment under this Section 12 should
be made, how it should be made or what it should be. The Warrant Agent has no
duty to determine whether any provisions of a supplemental warrant agreement
under subsection (k) of this Section 12 are correct. The Warrant Agent makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Section 12.
(n) Miscellaneous. (i) For purpose of this Section 12 the term "shares of Common
Stock" shall mean (a) the Company's Common Stock, par value $.01 per share, as
of the date of this Agreement, and (b) shares of any other class of stock
resulting from successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. In the event that at any time, as a result of an
adjustment made pursuant to this Section 12, the Holders of Warrants shall
become entitled to purchase any securities of the Company other than, or in
addition to, shares of Common Stock, thereafter the number or amount of such
other securities so purchasable upon exercise of each Warrant shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
subsections (a) through (m) of this Section 12, inclusive, and the provisions of
Sections 7, 8, 10 and 13 with respect to the Warrant Shares or the Common Stock
shall apply on like terms to any such other securities generally.
(ii) The Company shall provide Holders, within 15 days after it files them with
the SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) that the Company is required to file with the
SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. Notwithstanding that
the Company may not be required to remain subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall continue to file
such annual reports and information, documents and other reports with the SEC
and to provide the Holders with such annual reports and such information,
documents and other reports as the Company provides to the holders of its Common
Stock or other securities.
SECTION 13. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 13, be issuable
on the exercise of any Warrants (or specified portion thereof), the Company
shall pay an amount in cash equal to the excess of the value (as determined by
the Board of Directors in good faith) of a Warrant Share over the Exercise Price
on the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
SECTION 14. Notices to Warrant Holders. Upon any adjustment pursuant to Section
12 hereof, the Company shall give prompt written notice of such adjustment to
the Warrant Agent and shall cause the Warrant Agent, on behalf of and at the
expense of the Company, within 10 days after notification is received by the
Warrant Agent of such adjustment, to mail by first class mail, postage prepaid,
to each Holder a notice of such adjustment(s) and shall deliver to the Warrant
Agent a certificate of the Chief Financial Officer of the Company setting forth
in reasonable detail (i) the number of Warrant Shares purchasable upon the
exercise of each Warrant and the Exercise Price of such Warrant after such
adjustment(s), (ii) a brief statement of the facts requiring such adjustment(s)
and (iii) the computation by which such adjustment(s) was made. Where
appropriate, such notice may be given in advance and included as a part of the
notice required under the other provisions of this Section 14. In case:
(a) the Company shall authorize the issuance to all holders of shares of Common
Stock of rights, options or warrants to subscribe for or purchase shares of
capital stock of the Company; or
(b) the Company shall authorize the distribution to all holders of shares of
Common Stock of evidences of its indebtedness or assets; or
(c) of any consolidation or merger to which the Company is a party and for
which approval of any shareholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or a tender offer
or exchange offer for shares of capital stock of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of
the Company; or
(e) the Company proposes to take any action that would require an adjustment to
the Exercise Rate and/or Exercise Price pursuant to Section 12;
then the Company shall give prompt written notice to the Warrant Agent at least
ten days prior to the date the Warrant Agent should give notice to the holders
of the Warrant Certificate, and shall cause the Warrant Agent, on behalf of and
at the expense of the Company, to give to each of the registered holders of the
Warrant Certificates at his or its address appearing on the Warrant Register, at
least 20 days prior to the applicable record date hereinafter specified, or the
date of the event in the case of events for which there is no record date, by
first-class mail, postage prepaid, a written notice stating (i) the date as of
which the holders of record of shares of Common Stock to be entitled to receive
any such rights, options, warrants or distribution are to be determined, or (ii)
the initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure by the Company or the Warrant Agent to
give such notice or any defect therein shall not affect the legality or validity
of any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
The Company shall give prompt written notice to the Warrant Agent, at least ten
days prior to the date the Warrant Agent should give notice to the holders of
the Warrant Certificate and shall cause the Warrant Agent, on behalf of and at
the expense of the Company, to give to each Holder written notice of any
determination to make a distribution or dividend to the holders of any class of
its Common Stock of any assets (including cash), debt securities, preferred
stock, or any rights or warrants to purchase debt securities, preferred stock,
assets or other securities (other than Common Stock, or rights, options, or
warrants to purchase Common Stock) of the Company, which notice shall state the
nature and amount of such planned dividend or distribution and the record date
therefor, and shall be sent to the Holders at least 20 days prior to such record
date therefor. Nothing contained in this Agreement or in any Warrant Certificate
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of directors of the Company or any other matter, or
any rights whatsoever as shareholders of the Company.
In all cases, the text of any notice to Holders provided pursuant to this
Section shall be prepared by the Company and the Warrant Agent shall have no
responsibility with regard to such notice being accurate. SECTION 15. Notices to
the Company and Warrant Agent. Any notice or demand authorized by this Agreement
to be given or made by the Warrant Agent or by any Holder to or on the Company
shall be sufficiently given or made when received at the office of the Company
expressly designated by the Company as its office for purposes of this Agreement
(until the Warrant Agent is otherwise notified in accordance with this Section
15 by the Company), as follows:
Hvide Marine Incorporated
2200 Eller Drive
P.O. Box 13038
Fort Lauderdale, Florida 33316
Attention: Robert B. Lamm
Fax Number: (954) 527-1772
with a copy to:
Kronish Lieb Weiner & Hellman LLP
1114 Avenue of the Americas
New York, New York 10036-7798
Attention: Robert J. Feinstein, Esq.
Fax Number: (212) 479-6275
and to:
Dyer Ellis & Joseph
Watergate, Eleventh Floor
600 New Hampshire Ave., N.W.
Washington, D.C. 20034
Attention: James B. Ellis, Esq.
Fax Number: 202-944-3068
Any notice pursuant to this Agreement to be given by the Company or by any
Holder(s) to the Warrant Agent shall be sufficiently given when received by the
Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this Section by the Warrant Agent).
STATE STREET BANK AND TRUST COMPANY
Goodwin Square
225 Asylum Street, 23rd Floor
Hartford, CT 06103
Attention: Cauna Silva
Fax Number: (860) 244-1881
SECTION 16. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Warrants in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and all other supplements or amendments, except those
that have a material adverse effect on the interests of any holder of Warrants.
Any amendment or supplement to this Agreement that has a material adverse effect
on the interests of holders shall require the written consent of registered
holders of a majority of the then outstanding Warrants. Notwithstanding the
foregoing, the consent of each holder of a Warrant affected shall be required
for any amendment pursuant to which the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased (not including adjustments contemplated hereunder). The Warrant Agent
shall be entitled to receive and shall be fully protected in relying upon an
Officers' Certificate and opinion of counsel as conclusive evidence that any
such amendment or supplement is authorized or permitted hereunder, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.
SECTION 17. Concerning the Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders, by their acceptance of
Warrants, shall be bound:
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of
the same except such as describe the Warrant Agent or any action taken
by it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrants except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with the covenants contained in this Agreement
or in the Warrants to be complied with by the Company.
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself (through its employees) or by or through its attorneys or
agents (which shall not include its employees) and shall not be
responsible for the misconduct of any agent appointed with due care.
(d) The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for the Company), and
the Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
such evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, Chief Executive Officer, the
President, Chief Financial Officer, Chief Operating Officer, one of the
Vice Presidents, the Treasurer, the Secretary or an Assistant Secretary
of the Company and delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(f) The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
performance of its duties under this Agreement, to reimburse the
Warrant Agent for all expenses and governmental charges and other
charges of any kind and nature incurred by the Warrant Agent (including
reasonable fees and expenses of the Warrant Agent's counsel and agents)
in the performance of its duties under this Agreement, and to indemnify
the Warrant Agent and its officers, directors, employees and agents and
save them harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the performance of its duties under this Agreement,
except as a result of the Warrant Agent's gross negligence or bad
faith.
(g) The Warrant Agent and any stockholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transactions in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Warrant Agent under this Agreement or
such stockholder, director, officer or employee. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity including, without limitation,
acting as Transfer Agent, Trustee under the Indenture or as a lender to
the Company or an affiliate thereof.
(h) The Warrant Agent shall act hereunder solely as agent, and
its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
gross negligence or bad faith.
(i) The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder for any action taken in
reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument reasonably believed
by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(j) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant (except its
countersignature thereof); nor shall the Warrant Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares (or other stock) to
be issued pursuant to this Agreement or any Warrant, or as to whether
any Warrant Shares (or other stock) will, when issued, be validly
issued, fully paid and nonassessable, or as to the Exercise Price or
the number or amount of Warrant Shares or other securities or other
property issuable upon exercise of any Warrant.
(k) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, Chief Executive Officer, the
President, Chief Financial Officer, Chief Operating Officer, one of the
Vice Presidents, the Treasurer, the Secretary or Assistant Secretary of
the Company, and to apply to such officers for advice or instructions
in connection with its duties, and shall not be liable for any action
taken or suffered to be taken by it in good faith and without gross
negligence in accordance with instructions of any such officer or
officers.
The provisions of this Section 17 shall survive the
termination of this Agreement and any resignation or removal of the
Warrant Agent.
SECTION 18. Change of Warrant Agent. The Warrant Agent may resign at any time
and be discharged from its duties under this Agreement by giving to the Company
30 days' notice in writing. The Warrant Agent may be removed by like notice to
the Warrant Agent from the Company. If the Warrant Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 60 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then the Warrant Agent or any Holder
may apply to any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Pending appointment of a successor warrant
agent, either by the Company or by such court, the duties of the Warrant Agent
shall be carried out by the Company. Any successor warrant agent, whether
appointed by the Company or such a court, shall be a bank or trust company in
good standing, incorporated under the laws of the United States of America or
any State thereof or the District of Columbia and having at the time of its
appointment as warrant agent a combined capital and surplus of at least
$10,000,000. After appointment, the successor warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but the former
Warrant Agent shall deliver and transfer to the successor warrant agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for such purpose. Failure to file
any notice provided for in this Section 18, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be. In the event of such resignation or removal, the Company or the successor
warrant agent shall mail by first class mail, postage prepaid, to each Holder,
written notice of such removal or resignation and the name and address of such
successor warrant agent.
SECTION 19. Identity of Transfer Agent. Forthwith upon the appointment of any
Transfer Agent for the Common Stock, or any other shares of the Company's
capital stock issuable upon the exercise of the Warrants, the Company shall
promptly file with the Warrant Agent a statement setting forth the name and
address of such Transfer Agent.
SECTION 20. Registration Rights. The Holders shall be entitled to all of the
benefits under that certain Common Stock Registration Rights Agreement among the
Company and the parties named therein dated as of December 15, 1999.
SECTION 21. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company, the Warrant Agent or any holder of Warrants
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 22. Termination. This Agreement shall terminate at 5:00 p.m. New York
City time on June 30, 2007. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised or redeemed
pursuant to this Agreement.
SECTION 23. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
SECTION 24. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered Holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered Holders of the Warrant Certificates.
SECTION 25. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 26. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
HVIDE MARINE INCORPORATED
By:______________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Warrant Agent
By:______________________________
Name:
Title:
May 8, 2000
Hvide Marine Incorporated
2200 Eller Drive
Fort Lauderdale, Florida 33316
Ladies and Gentlemen:
We have acted as counsel for Hvide Marine Incorporated, a Delaware corporation
(the"Company"), in connection with the sale by certain of its stockholders,
pursuant to the Company's registration statement on Form S-3, File No.
333-30390, of the securities being registered thereby (the "Securities"). Based
upon our examination of such corporate records and other documents and such
questions of law as we have deemed necessary and appropriate, we are of the
opinion that the Securities have been duly authorized and are validly issued,
fully paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Dyer Ellis & Joseph PC
Consent of Independent Certified Public Accountants
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3 No. 333-30390) and related
prospectus of Hvide Marine Incorporated of our report dated February 25, 2000
(except for Note 2, as to which the date is April 13, 2000 and Note 24, as to
which the date is April 14, 2000), included in its Annual Report (Form 10-K) for
the year ended December 31, 1999, with respect to its consolidated financial
statements, as amended on Form 10-K/A, filed with the Securities and Exchange
Commission.
Miami, Florida
May 8, 2000
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Hvide Marine Incorporated, a
corporation organized under the laws of the State of Delaware (the
"Corporation"), and the undersigned officer and director of the Corporation,
individually and in his capacities indicated below, hereby make, constitute and
appoint Michael Joseph and John F. Kearney its and their true and lawful
attorney, their separate or joint signatures sufficient to bind, with power of
substitution, to execute, deliver and file in its or their behalf, and in each
person's respective capacity or capacities as shown below, a registration
statement on Form S-3 under the Securities Act of 1933, any and all amendments
to and documents in support of or supplemental to said registration statement by
the Corporation; and the Corporation and each said person hereby grant to said
attorney full power and authority to do and perform each and every act and thing
whatsoever as said attorney may deem necessary or advisable to carry out the
full intent of this Power of Attorney to the same extent and with the same
effect as the Corporation or the undersigned officers and directors of the
Corporation might or could do personally in its or their capacity or capacities
as aforesaid; and the Corporation and each of said persons hereby ratify,
confirm and approve all acts and things that any one of said attorneys may do or
cause to be done by virtue of this Power of Attorney and its signature or their
signatures as the same may be signed by any one of said attorneys to said
registration statement and any and all documents in support of or supplemental
to said registration statement and any and all amendments thereto.
HVIDE MARINE INCORPORATED
By: ______________________________
Gerhard E. Kurz
Chief Executive Officer
and Director
