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                                                                   EXHIBIT 10.1

                      FIRST AMENDED AND RESTATED AGREEMENT

         This First Amended and Restated Agreement (this "Agreement") dated as
of January 17, 2003 is entered into by and between Cal Dive International,
Inc., a corporation organized under the laws of Minnesota (together with its
successors, "Cal Dive"), and Fletcher International, Ltd., a company organized
under the laws of Bermuda (together with its successors, "Fletcher").

         Reference is made to that certain Agreement dated as of December 31,
2002 by and between Cal Dive and Fletcher (the "Original Agreement"). The
parties hereto agree that this First Amended and Restated Agreement hereby
amends, restates and supersedes in its entirety the Original Agreement;
provided, however, that (1) all references to the "date hereof," "date of this
Agreement," " date first above written" and other, similar references contained
herein or incorporated by reference into the Certificate of Rights and
Preferences or any Subsequent Certificate of Rights and Preferences shall be
deemed to refer to December 31, 2002; and (2) all references to the Original
Agreement (except as provided in (1) above) contained in any of the Annexes to
the Original Agreement shall be deemed to refer instead to this Agreement and,
as so amended, those Annexes shall be deemed to be Annexes to this Agreement.

         The parties hereto agree as follows:

     1. Purchase and Sale. In consideration of and upon the basis of the
representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:

          (a) Fletcher agrees to purchase from Cal Dive, and Cal Dive agrees to
     sell to Fletcher on the Initial Closing Date (as defined below), in
     accordance with Section 2 below, twenty-five thousand (25,000) shares (the
     "Initial Preferred Shares") of Cal Dive's Series A-1 Cumulative
     Convertible Preferred Stock (the "Series A-1 Preferred Stock"), having the
     terms and conditions set forth in the Certificate of Rights and
     Preferences attached hereto as Annex A (the "Certificate of Rights and
     Preferences"), at a price of one thousand dollars ($1,000) per share for
     an aggregate purchase price of twenty-five million dollars ($25,000,000).
     Fletcher shall have the rights with respect to such Initial Preferred
     Shares specified in this Agreement and in the Certificate of Rights and
     Preferences.

          (b) The closing (the "Initial Closing") of the sale of the Initial
     Preferred Shares occurred on January 8, 2003 (such date, the "Initial
     Closing Date").

          (c) Cal Dive grants Fletcher rights (the "Fletcher Rights") to
     require Cal Dive to issue to it from time to time, in whole or in part, up
     to an aggregate of thirty thousand (30,000) shares of additional series of
     Cal Dive preferred stock (e.g., Series A-2 Cumulative Convertible
     Preferred Stock, Series A-3 Cumulative Convertible Preferred Stock, etc.)
     having, except as set forth below, the terms, conditions, rights,
     preferences and privileges as the Series A-1 Preferred Stock (such shares
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     shall collectively be referred to as the "Additional Preferred Shares" and
     together with the Initial Preferred Shares, the "Series A Preferred
     Shares") at a price of one thousand dollars ($1,000) per share for an
     aggregate purchase price for all Additional Preferred Shares of thirty
     million dollars ($30,000,000), and together with the Initial Preferred
     Shares, fifty-five million dollars ($55,000,000) in the aggregate of
     Series A Preferred Shares. Fletcher shall have the rights with respect to
     such Additional Preferred Shares specified in this Agreement and in a
     certificate of rights and preferences for each such series of Additional
     Preferred Shares (each, a "Subsequent Certificate of Rights and
     Preferences" and collectively, the "Subsequent Certificates of Rights and
     Preferences"). Each Subsequent Certificate of Rights and Preferences shall
     have the same terms and conditions as the Certificate of Rights and
     Preferences, except that (A) the Conversion Price (as defined therein)
     shall equal one hundred twenty-five percent (125%) of the Prevailing
     Market Price (as defined therein) calculated as of the Business Day of the
     corresponding Fletcher Notice (as defined below) (except as otherwise
     provided in this sub-section 1(c)); and (B) the number of Additional
     Preferred Shares issued pursuant to each Subsequent Certificate of Rights
     and Preferences may differ from the number of shares of Series A-1
     Preferred Stock. To exercise any Fletcher Rights, Fletcher shall deliver
     one or more written notices substantially in the form attached hereto as
     Annex B (a "Fletcher Notice") to Cal Dive from time to time commencing
     from the date six (6) months after and excluding the date hereof (the
     "Fletcher Rights Commencement Date") and ending no later than twenty-four
     (24) months after and excluding the Fletcher Rights Commencement Date (the
     "Fletcher Rights Period"). Fletcher may not deliver a Fletcher Notice on
     any date on which the volume-weighted average price of Cal Dive common
     stock, no par value ("Common Stock") is less than twenty four dollars
     ($24.00), as adjusted pursuant to Sections 8 and 9(b) (the "Fletcher
     Rights Trigger Price"); provided, however, if Fletcher could exercise the
     Fletcher Rights but for the fact that the Fletcher Rights Trigger Price
     condition is not met, then Fletcher shall have the right to exercise the
     Fletcher Rights and receive Additional Preferred Shares which shall have
     the same Conversion Price as the Series A-1 Preferred Stock (x) assuming,
     solely for the purposes of determining the Conversion Price for such
     series of Additional Preferred Shares, that Series A-1 Preferred Stock is
     then outstanding and (y) making all appropriate adjustments to the
     Conversion Price, as set forth in this Agreement, the Certificate of
     Rights and Preferences and Subsequent Certificate of Rights and
     Preferences, until and including the date of the closing of the exercise
     of such Fletcher Rights. Upon satisfaction or, if applicable, waiver of
     the relevant conditions set forth in Sections 13 and 14 hereof, the
     closing of each exercise of Fletcher Rights (each, a "Subsequent Closing")
     shall take place on the date that is three (3) Business Days following and
     excluding the date of delivery of the Fletcher Notice or on such other
     date as Fletcher and Cal Dive shall mutually agree (such date and time
     being referred to herein as the "Subsequent Closing Date," and together
     with the Initial Closing Date, each a "Closing Date").

          (d) As used herein, the term "Common Shares" means the shares of
     Common Stock issuable upon conversion or redemption of or as dividends
     under the Series A Preferred Shares, and all other Common Stock issuable
     under the Certificate of Rights and Preferences, Subsequent Certificates
     of Rights and Preferences or this Agreement; the term "Investment
     Securities" means the Series A Preferred Shares issued hereunder, the
     Fletcher Rights and all Common Shares; the term "Business Day" means any

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     day on which the Common Stock may be traded on the Nasdaq or, if not
     admitted for trading on the Nasdaq, on any day other than a Saturday,
     Sunday or holiday on which banks in New York City are required or
     permitted to be closed; the term "Nasdaq NMS" means the Nasdaq National
     Market; and the term "Nasdaq" means the Nasdaq NMS, but if the Nasdaq NMS
     is not then the principal U.S. trading market for the Common Stock, then
     "Nasdaq" shall be deemed to mean the principal U.S. national securities
     exchange (as defined in the Securities Exchange Act of 1934, as amended
     (the "Exchange Act")) on which the Common Stock, or such other applicable
     common stock, is then traded, or if such Common Stock, or such other
     applicable common stock, is not then listed or admitted to trading on any
     national securities exchange but is designated as a Nasdaq SmallCap Market
     Security by the National Association of Securities Dealers, Inc. ("NASD"),
     then such market system, or if such Common Stock, or such other applicable
     common stock, is not listed or quoted on any of the foregoing, then the
     OTC Bulletin Board.

     2. Initial Closing. The Initial Closing shall take place initially via
facsimile on the Initial Closing Date in the manner set forth below; provided,
that, original certificates representing shares of Series A-1 Preferred Stock
shall be delivered via Federal Express or another reputable overnight carrier
to the address set forth in Annex AA.

          At the Initial Closing, the following deliveries shall be made:

               (a) Series A-1 Preferred Stock. Cal Dive shall deliver to
          Fletcher five (5) stock certificates, each representing five thousand
          (5,000) shares of Series A-1 Preferred Stock, duly executed by Cal
          Dive in definitive form, and shall register such shares in the
          shareholder register of Cal Dive in the name of Fletcher or as
          instructed by Fletcher in writing.

               (b) Purchase Price. Fletcher shall cause to be wire transferred
          to Cal Dive, in accordance with the instructions set forth in Section
          19, the aggregate purchase price of twenty-five million dollars
          ($25,000,000) in immediately available United States funds.

               (c) Closing Documents. The closing documents required by
          Sections 13 and 14 shall be delivered to Fletcher and Cal Dive,
          respectively.

               (d) Delivery Notice. An executed copy of the delivery notice in
          the form attached hereto as Annex C shall be delivered to Fletcher.

The deliveries specified in this Section 2 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.

     3. Subsequent Closing. Each Subsequent Closing shall take place initially
via facsimile on the Subsequent Closing Date in the manner set forth below;
provided, that, original certificates representing Additional Preferred Shares
shall be delivered via Federal Express or another reputable overnight carrier
to Fletcher as Fletcher instructs in writing. Each Subsequent

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Closing shall be for an Additional Issuance Price (as hereinafter defined) of
not less than five million dollars ($5,000,000), unless the Additional Issuance
Price for all then remaining Fletcher Rights is less than five million dollars
($5,000,000), in which instance, such Subsequent Closing shall be for the
Additional Issuance Price for all such remaining Additional Preferred Shares.
At each Subsequent Closing, the following deliveries shall be made:

          (a) Additional Preferred Shares. Cal Dive shall issue and deliver to
     Fletcher stock certificates, each representing five thousand (5,000)
     Additional Preferred Shares (except that to the extent the number of
     Additional Preferred Shares to be delivered is not evenly divisible by
     five thousand (5,000), one (1) stock certificate shall represent the
     remaining shares), duly executed by Cal Dive, and shall register such
     shares in the shareholder register of Cal Dive in the name of Fletcher or
     as instructed by Fletcher in writing.

          (b) Purchase Price. Fletcher shall cause to be wire transferred to
     Cal Dive, in accordance with the instructions set forth in Section 19, one
     thousand dollars ($1,000) per Additional Preferred Share, as specified in
     the applicable Fletcher Notice (in the aggregate, the "Additional Issuance
     Price") payable on such Subsequent Closing Date, in immediately available
     United States funds.

          (c) Closing Documents. The closing documents required by Sections 13
     and 14 shall be delivered to Fletcher and Cal Dive, respectively.

          (d) Delivery Notice. An executed copy of the delivery notice in the
     form attached hereto as Annex C shall be delivered to Fletcher.

The deliveries specified in this Section 3 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.

     4. Representations and Warranties of Cal Dive. Cal Dive hereby represents
and warrants to Fletcher on each Closing Date, as follows:

          (a) Cal Dive has been duly incorporated and is validly existing in
     good standing under the laws of Minnesota or, after the Initial Closing
     Date, if another entity has succeeded Cal Dive in accordance with the
     terms hereof, under the laws of one of the states of the United States or
     the District of Columbia.

          (b) The execution, delivery and performance of this Agreement, the
     Certificate of Rights and Preferences and the Subsequent Certificates of
     Rights and Preferences (including the authorization, sale, issuance and
     delivery of the Investment Securities) have been duly authorized by all
     requisite corporate action and no further consent or authorization of Cal
     Dive, its Board of Directors or its shareholders is required, except as
     otherwise contemplated by this Agreement.

          (c) This Agreement has been duly executed and delivered by Cal Dive
     and, when this Agreement is duly authorized, executed and delivered by
     Fletcher, will be a valid and binding agreement enforceable against Cal
     Dive in accordance with its terms, subject to bankruptcy, insolvency,

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     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights generally and to general
     principles of equity. The issuance of the Investment Securities is not and
     will not be subject to any preemptive right or rights of first refusal
     that have not been properly waived or complied with.

          (d) Cal Dive has full corporate power and authority necessary to (i)
     own and operate its properties and assets, execute and deliver this
     Agreement, (ii) perform its obligations hereunder and under the
     Certificate of Rights and Preferences or Subsequent Certificates of Rights
     and Preferences (including, but not limited to, the issuance of the
     Investment Securities) and (iii) carry on its business as presently
     conducted and as presently proposed to be conducted. Cal Dive and its
     subsidiaries are duly qualified and are authorized to do business and are
     in good standing as foreign corporations in all jurisdictions in which the
     nature of their activities and of their properties (both owned and leased)
     makes such qualification necessary, except for those jurisdictions in
     which failure to do so would not, individually or in the aggregate, be
     reasonably expected to have a material adverse effect on (i) the business
     affairs, assets, results of operations or prospects of Cal Dive or any of
     its subsidiaries, or (ii) the transactions contemplated by, or Cal Dive's
     ability to perform under, this Agreement, the Certificate of Rights and
     Preferences or any Subsequent Certificate of Rights and Preferences.

          (e) No consent, approval, authorization or order of any court,
     governmental agency or other body is required for execution and delivery
     by Cal Dive of this Agreement or the performance by Cal Dive of any of its
     obligations hereunder and under the Certificate of Rights and Preferences
     or Subsequent Certificates of Rights and Preferences other than the
     approval of the SEC of the Registration Statement to be filed pursuant to
     the terms hereof.

          (f) Neither the execution and delivery by Cal Dive of this Agreement
     nor the performance by Cal Dive of any of its obligations hereunder and
     under the Certificate of Rights and Preferences or Subsequent Certificates
     of Rights and Preferences:

               (i) violates, conflicts with, results in a breach of, or
          constitutes a default (or an event which with the giving of notice or
          the lapse of time or both would be reasonably likely to constitute a
          default) or creates any rights in respect of any person under (A) the
          certificates of incorporation or by-laws of Cal Dive or any of its
          subsidiaries, (B) any decree, judgment, order, law, treaty, rule,
          regulation or determination of any court, governmental agency or
          body, or arbitrator having jurisdiction over Cal Dive or any of its
          subsidiaries or any of their respective properties or assets, (C) the
          terms of any bond, debenture, indenture, credit agreement, note or
          any other evidence of indebtedness, or any agreement, stock option or
          other similar plan, lease, mortgage, deed of trust or other
          instrument to which Cal Dive or any of its subsidiaries is a party,
          by which Cal Dive or any of its subsidiaries is bound, or to which
          any of the properties or assets of Cal Dive or any of its
          subsidiaries is subject, (D) the terms of any "lock-up" or similar

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          provision of any underwriting or similar agreement to which Cal Dive
          or any of its subsidiaries is a party, (E) any rule or regulation of
          the NASD or the Nasdaq NMS or any rule or regulation of the markets
          where Cal Dive's securities are publicly traded or quoted applicable
          to Cal Dive or the transactions contemplated hereby or (F) the Second
          Amended and Restated Loan and Security Agreement, dated as of
          February 22, 2002, by and among Fleet Capital Corporation, Southwest
          Bank of Texas, N.A. and Whitney National Bank, as lenders, and Cal
          Dive, Energy Resource Technology, Inc., Aquatica, Inc., and Canyon
          Offshore, Inc., as borrower, as amended; or

               (ii) results in the creation or imposition of any lien, charge
          or encumbrance upon any Investment Securities or upon any of the
          properties or assets of Cal Dive or any of its subsidiaries.

          (g) Cal Dive has validly reserved for issuance to Fletcher under this
     Agreement seven million, four hundred eighty-six thousand, nine hundred
     seven (7,486,907) shares of Common Stock. When issued to Fletcher against
     payment therefor, each Investment Security:

               (i) will have been duly and validly authorized, duly and validly
          issued, fully paid and non-assessable;

               (ii) will be free and clear of any security interests, liens,
          claims or other encumbrances; and

               (iii) will not have been issued or sold in violation of any
          preemptive or other similar rights of the holders of any securities
          of Cal Dive.

          (h) Cal Dive satisfies all maintenance criteria of the Nasdaq NMS. No
     present set of facts or circumstances will (with the passage of time or
     the giving of notice or both or neither) cause any of the Common Stock to
     be delisted from the Nasdaq NMS. All of the Common Shares will, when
     issued, be duly listed and admitted for trading on all of the markets
     where shares of Common Stock are traded, including the Nasdaq NMS.

          (i) There is no pending or, to the best knowledge of Cal Dive,
     threatened action, suit, proceeding or investigation before any court,
     governmental agency or body, or arbitrator having jurisdiction over Cal
     Dive or any of its affiliates that would affect the execution by Cal Dive
     of, or the performance by Cal Dive of its obligations under, this
     Agreement, the Certificate of Rights and Preferences or Subsequent
     Certificates of Rights and Preferences.

          (j) Since January 1, 2000, none of Cal Dive's filings with the United
     States Securities and Exchange Commission (the "SEC") under the Securities
     Act of 1933, as amended (the "Securities Act") or under Section 13(a) or
     15(d) of the Exchange Act (each an "SEC Filing"), including the financial
     statements and schedules of Cal Dive and results of Cal Dive's operations
     and cash flow contained therein, contained any untrue statement of a
     material fact or omitted to state any material fact necessary in order to
     make the statements, in the light of the circumstances under which they
     were made,

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     not misleading. Since January 1, 2002, there has not been any pending or,
     to the best knowledge of Cal Dive, threatened action, suit, proceeding or
     investigation before any court, governmental agency or body, or arbitrator
     having jurisdiction over Cal Dive or any of its subsidiaries or any of its
     affiliates that could cause a material adverse change in the condition,
     financial or otherwise, or in the business affairs, assets, results of
     operations or prospects of Cal Dive and its subsidiaries, whether or not
     arising in the ordinary course of business, except as disclosed in Cal
     Dive's SEC Filings on or before the date immediately prior to and
     excluding the date hereof. Since the date of Cal Dive's most recent SEC
     Filing, there has not been, and Cal Dive is not aware of, any development
     or condition that is reasonably likely to result in, any material change
     in the condition, financial or otherwise, or in the business affairs,
     assets, results of operations or prospects of Cal Dive and its
     subsidiaries, whether or not arising in the ordinary course of business.
     Cal Dive's SEC Filings made before and excluding the Closing Date fully
     disclose all material information concerning Cal Dive and its subsidiaries
     (other than the existence and terms of this Agreement).

          (k) The offer and sale of the Investment Securities to Fletcher
     pursuant to this Agreement will, subject to the accuracy of Fletcher's
     representations and warranties contained in Section 7 hereof and
     compliance by Fletcher with the applicable covenants and agreements
     contained in Section 11 hereof, be made in accordance with an exemption
     from the registration requirements of the Securities Act and any
     applicable state law. Neither Cal Dive nor any agent on its behalf has
     solicited or will solicit any offers to buy or has offered to sell or will
     offer to sell all or any part of the Investment Securities or any other
     securities to any person or persons so as to bring the sale of such
     Investment Securities by Cal Dive within the registration provisions of
     the Securities Act.

          (l) Immediately prior to the Initial Closing Date, the authorized
     capital stock of Cal Dive consists of one hundred twenty million
     (120,000,000) shares of Common Stock, no par value and five million
     (5,000,000) shares of preferred stock, par value $0.01 per share.
     Immediately prior to the Initial Closing Date, (A) thirty-seven million,
     four hundred eighty-four thousand, six hundred one (37,484,601) shares of
     Common Stock were issued and outstanding, and two million, nineteen
     thousand, three hundred thirty-nine (2,019,339) shares of Common Stock are
     currently reserved and subject to issuance upon the exercise of
     outstanding stock options, warrants or other convertible rights, (B)
     thirteen million, six hundred and two thousand, four hundred eighteen
     (13,602,418) shares of Common Stock are held in the treasury of Cal Dive,
     (C) no shares of preferred stock are issued and outstanding and (D) up to
     three million, seven hundred forty-eight thousand, four hundred sixty
     (3,748,460) additional shares of Common Stock may be issued under the 1995
     Long-Term Incentive Plan. All of the outstanding shares of Common Stock
     are, and all shares of capital stock which may be issued pursuant to stock
     options, warrants or other convertible rights will be, when issued and
     paid for in accordance with the respective terms thereof, duly authorized,
     validly issued, fully paid and non-assessable, free of any preemptive
     rights in respect thereof and issued in compliance with all applicable
     state and federal laws concerning issuance of securities. As of the date
     hereof, except as set forth above or as disclosed in writing in Schedule
     4(l) attached hereto, and except for shares of Common Stock or other
     securities issued upon conversion, exchange, exercise or purchase
     associated with the securities,

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     options, warrants, rights and other instruments referenced above, no
     shares of capital stock or other voting securities of Cal Dive were
     outstanding, no equity equivalents, interests in the ownership or earnings
     of Cal Dive or other similar rights were outstanding, and there were no
     existing options, warrants, calls, subscriptions or other rights or
     agreements or commitments relating to the capital stock of Cal Dive or any
     of its subsidiaries or obligating Cal Dive or any of its subsidiaries to
     issue, transfer, sell or redeem any shares of capital stock, or other
     equity interest in, Cal Dive or any of its subsidiaries or obligating Cal
     Dive or any of its subsidiaries to grant, extend or enter into any such
     option, warrant, call, subscription or other right, agreement or
     commitment.

          (m) Solvency. The sum of the assets of Cal Dive, both at a fair
     valuation and at present fair salable value, exceeds its liabilities,
     including contingent liabilities. Cal Dive has sufficient capital with
     which to conduct its business as presently conducted and as proposed to be
     conducted. Cal Dive has not incurred debt, and does not intend to incur
     debt, beyond its ability to pay such debt as it matures. For purposes of
     this paragraph, "debt" means any liability on a claim, and "claim" means
     (x) a right to payment, whether or not such right is reduced to judgment,
     liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
     undisputed, legal, equitable, secured, or unsecured, or (y) a right to an
     equitable remedy for breach of performance if such breach gives rise to a
     payment, whether or not such right to an equitable remedy is reduced to
     judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
     secured, or unsecured. With respect to any such contingent liabilities,
     such liabilities are computed at the amount which, in light of all the
     facts and circumstances existing at the time, represents the amount which
     can reasonably be expected to become an actual or matured liability.

          (n) Equivalent Value. As of the Initial Closing Date, the
     consideration that Cal Dive is receiving from Fletcher is equivalent in
     value to the consideration Fletcher is receiving from Cal Dive pursuant to
     this Agreement. As of the Initial Closing Date, under the terms of this
     Agreement, Cal Dive is receiving fair consideration from Fletcher for the
     agreements, covenants, representations and warranties made by Cal Dive to
     Fletcher.

          (o) No Non-Public Information. Fletcher has not requested from Cal
     Dive, and Cal Dive has not furnished to Fletcher, any material non-public
     information concerning Cal Dive or its subsidiaries.

          (p) Restatement Notices. As of each Subsequent Closing Date, Cal Dive
     has provided Fletcher with all Restatement Notices (as defined in the
     Certificate of Rights and Preferences or Subsequent Certificates of Rights
     and Preferences) required to be delivered following a Restatement (as
     defined in the Certificate of Rights and Preferences or Subsequent
     Certificates of Rights and Preferences).

          5. Registration Provisions.

          (a) Cal Dive shall, as soon as practicable and at its own expense,
     but in no event later than sixty (60) calendar days after, and including,
     the date hereof, file a

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     Registration Statement (as defined below) under the Securities Act
     covering the resale of all of the Common Shares and shall use its
     commercially reasonable efforts to cause such Registration Statement to be
     declared effective on or prior to one hundred and twenty-one (121)
     calendar days following, and including, the date hereof (the "Required
     Registration Date"). The obligations to have the Registration Statement
     declared effective and to maintain such effectiveness as provided in this
     Section 5 are referred to herein as the "Registration Requirement."
     Pursuant to the preceding sentence, Cal Dive shall register pursuant to
     such Registration Statement not less than the number of shares of Common
     Stock equal to seven million, four hundred eighty-six thousand, nine
     hundred seven (7,486,907) (the "Registrable Number"). Cal Dive shall
     promptly amend such Registration Statement (or, if necessary, file a new
     Registration Statement) at any time that the number of Common Shares
     issued and issuable under this Agreement, the Certificate of Rights and
     Preferences and Subsequent Certificates of Rights and Preferences exceeds
     the Registrable Number (as determined on such date) so that all such
     Common Shares shall be registered and freely tradable.

          (b) Each Common Share is a "Covered Security" and the registration
     statement filed or required to be filed under the Securities Act in
     accordance with Section 5(a) hereof, along with any amendments and
     additional registration statements, is referred to as the "Registration
     Statement". Cal Dive shall provide prompt written notice to Fletcher when
     the Registration Statement has been declared effective by the SEC.

          (c) Cal Dive will: (A) use its commercially reasonable efforts to
     keep the Registration Statement effective until the earlier of (x) the
     later of (i) the second anniversary of the issuance of the last Covered
     Security that may be issued, or (ii) such time as all of the Covered
     Securities issued or issuable hereunder can be sold by Fletcher or any of
     its affiliates immediately without compliance with the registration
     requirements of the Securities Act pursuant to Rule 144 under the
     Securities Act ("Rule 144") and (y) the date all of the Covered Securities
     issued or issuable shall have been sold by Fletcher and its affiliates
     (such later period, the "Registration Period"); (B) prepare and file with
     the SEC such amendments and supplements to the Registration Statement and
     the prospectus used in connection with the Registration Statement (as so
     amended and supplemented from time to time, the "Prospectus") as may be
     necessary to comply with the provisions of the Securities Act with respect
     to the disposition of all Covered Securities by Fletcher or any of its
     affiliates; (C) furnish such number of Prospectuses and other documents
     incident thereto, including any amendment of or supplement to the
     Prospectus, as Fletcher from time to time may reasonably request; (D)
     cause all Covered Securities to be listed on each securities exchange and
     quoted on each quotation service on which similar securities issued by Cal
     Dive are then listed or quoted; (E) provide a transfer agent and registrar
     for all Covered Securities and a CUSIP number for all Covered Securities;
     (F) otherwise comply with all applicable rules and regulations of the SEC,
     the Nasdaq NMS and any other exchange or quotation service on which the
     Covered Securities are obligated to be listed or quoted under this
     Agreement; and (G) file the documents required of Cal Dive and otherwise
     obtain and maintain requisite blue sky clearance in (x) New York and all
     other jurisdictions in which any of the shares of Common Stock were
     originally sold and (y) all other states specified in writing by Fletcher,
     provided, however, that as to this clause (y), Cal Dive shall not be

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     required to qualify to do business or consent to service of process in any
     state in which it is not now so qualified or has not so consented.
     Fletcher shall have the right to approve the description of the selling
     shareholder, plan of distribution and all other references to Fletcher and
     its affiliates contained in each Registration Statement and Prospectus.

          (d) Cal Dive shall furnish to Fletcher upon request a reasonable
     number of copies of a supplement to or an amendment of any Prospectus as
     may be necessary in order to facilitate the public sale or other
     disposition of all or any of the Covered Securities by Fletcher or any of
     its affiliates pursuant to the Registration Statement.

          (e) With a view to making available to Fletcher and its affiliates
     the benefits of Rule 144 and Form S-3 under the Securities Act, Cal Dive
     covenants and agrees to: (A) make and keep available adequate current
     public information (within the meaning of Rule 144(c)) concerning Cal
     Dive, until the earlier of (x) the second (2nd) anniversary of the
     issuance of the last Covered Security to be issued and (y) such date as
     all of the Covered Securities shall have been resold by Fletcher or any of
     its affiliates; and (B) furnish to Fletcher upon request, as long as
     Fletcher owns any Covered Securities, (x) a written statement by Cal Dive
     that it has complied with the reporting requirements of the Securities Act
     and the Exchange Act, (y) a copy of the most recent annual or quarterly
     report of Cal Dive, and (z) such other information as may be reasonably
     requested in order to avail Fletcher and its affiliates of Rule 144 or
     Form S-3 with respect to such Covered Securities.

          (f) Notwithstanding anything else in this Section 5, if, at any time
     during which a Prospectus is required to be delivered in connection with
     the sale of any Covered Security, Cal Dive determines in good faith and
     upon the advice of its outside counsel that a development has occurred or
     a condition exists as a result of which the Registration Statement or the
     Prospectus contains a material misstatement or omission, or that a
     material transaction in which Cal Dive is engaged or proposes to engage
     would require an immediate amendment to the Registration Statement, a
     supplement to the Prospectus, or a filing under the Exchange Act or other
     public disclosure of material information and the disclosure of such
     transaction would be premature or injurious to the consummation of the
     transaction, Cal Dive will immediately notify Fletcher thereof by
     telephone and in writing. Upon receipt of such notification, Fletcher and
     its affiliates will immediately suspend all offers and sales of any
     Covered Security pursuant to the Registration Statement. In such event,
     Cal Dive will amend or supplement the Registration Statement and the
     Prospectus or make such filings or public disclosures as promptly as
     practicable and will take such other steps as may be required to permit
     sales of the Covered Securities thereunder by Fletcher and its affiliates
     in accordance with applicable federal and state securities laws. Cal Dive
     will promptly notify Fletcher after it has determined in good faith that
     such sales have become permissible in such manner and will promptly
     deliver copies of the Registration Statement and the Prospectus (as so
     amended or supplemented, if applicable) to Fletcher in accordance with
     paragraphs (c) and (d) of this Section 5. Notwithstanding the foregoing,
     (A) under no circumstances shall Cal Dive be entitled to exercise its
     right to suspend sales of any Covered Securities as provided in this
     Section 5(f) and pursuant to the Registration Statement more than

                                      10
<PAGE>
     twice in any twelve (12) month period, (B) the period during which such
     sales may be suspended (each a "Blackout Period") at any time shall not
     exceed thirty (30) calendar days, and (C) no Blackout Period may commence
     less than thirty (30) calendar days after the end of the preceding
     Blackout Period.

          (g) Upon the commencement of a Blackout Period pursuant to this
     Section 5, Fletcher will notify Cal Dive of any contract to sell, assign,
     deliver or otherwise transfer any Covered Security (each a "Sales
     Contract") that Fletcher or any of its affiliates has entered into prior
     to the commencement of such Blackout Period and that would require
     delivery of such Covered Securities during such Blackout Period, which
     notice will contain the aggregate sale price and quantity of Covered
     Securities pursuant to such Sales Contract. If Fletcher or any of its
     affiliates are therefore unable to consummate the sale of Covered
     Securities pursuant to the Sales Contract, Cal Dive will promptly
     indemnify each Fletcher Indemnified Party (as such term is defined in
     Section 17(a) below) against any Proceeding (as such term is defined in
     Section 17(a) below) that each Fletcher Indemnified Party may incur
     arising out of or in connection with Fletcher's breach or alleged breach
     of any such Sales Contract, and Cal Dive shall reimburse each Fletcher
     Indemnified Party for any reasonable costs or expenses (including legal
     fees) incurred by such party in investigating or defending any such
     Proceeding.

          (h) In addition to any other remedies available to Fletcher under
     this Agreement or at law or equity, if the Registration Statement has not
     been declared effective by the Required Registration Date or such
     Registration Statement is not available with respect to all Covered
     Securities at any time on or after the Required Registration Date (except
     during a Blackout Period permitted under Section 5(f)) Cal Dive shall
     cause to be wire transferred to an account specified by Fletcher on the
     last Business Day of each month an amount, in immediately available United
     States funds, equal to:

                                1/15% x ND x SV

               Where:

               ND=  the number of days in such month that the Registration
                    Statement has not been declared effective by the Required
                    Registration Date or such Registration Statement is not
                    available with respect to shares of Covered Securities that
                    may not otherwise be sold by Fletcher or any of its
                    affiliates immediately pursuant to Rule 144 without
                    compliance with the registration requirements of the
                    Securities Act ("Non-Rule 144 Stock"); and

               SV=  the aggregate Stated Value (as defined in the Certificate
                    of Rights and Preferences and all Subsequent Certificates
                    of Rights and Preferences) of the average number of shares
                    of Non-Rule 144 Stock issued and outstanding on each of the
                    days included in "ND" above.

                                      11
<PAGE>
          (i) If the Registration Requirement is not satisfied at any point in
     time during the Registration Period then the Fletcher Rights Period shall
     be extended by one (1) day for each day (or portion thereof) that the
     Registration Requirement shall have not been satisfied.

          6. Conversion and Redemption of Preferred Shares.

          (a) Preferred Shares and Additional Preferred Shares are convertible
     and redeemable into Common Shares or cash in accordance with the terms and
     conditions set forth in Section 6 of the Certificate of Rights and
     Preferences and Subsequent Certificates of Rights and Preferences. Cal
     Dive grants Fletcher the right to convert all or part of each series of
     Series A Preferred Shares (including any accrued and unpaid dividends)
     pursuant to the terms and conditions set forth in the Certificate of
     Rights and Preferences or Subsequent Certificate of Rights and Preferences
     of each such series, upon delivery of a "Preferred Stock Conversion
     Notice" in the form attached hereto as Annex D. As set forth in the
     Certificate of Rights and Preferences or Subsequent Certificate of Rights
     and Preferences of each such series, Cal Dive may satisfy its conversion
     obligations by delivering shares of Common Stock or cash. The form of the
     "Preferred Stock Conversion Delivery Notice" to be executed and delivered
     by Cal Dive to Fletcher, as specified in the Certificate of Rights and
     Preferences or Subsequent Certificate of Rights or Preferences is attached
     hereto as Annex E. Cal Dive grants Fletcher the right to redeem all or
     part of each series of Series A Preferred Shares (including any accrued
     and unpaid dividends) commencing December 31, 2004 pursuant to the terms
     and conditions set forth in the Certificate of Rights and Preferences or
     Subsequent Certificate of Rights and Preferences of each such series (or
     sooner under certain circumstances set forth therein) (the "Redemption
     Rights"), upon delivery of a notice of redemption in the form attached
     hereto as Annex F (the "Redemption Notice"). As set forth in the
     Certificate of Rights and Preferences or Subsequent Certificate of Rights
     or Preferences of each such series, Cal Dive may satisfy its redemption
     obligations by delivering shares of Common Stock, cash or, subject to
     Section 6(b), resetting the Conversion Prices of the Series A-1 Preferred
     Stock and Additional Preferred Shares. The form of the "Preferred Stock
     Redemption Delivery Notice" to be executed and delivered by Cal Dive to
     Fletcher, as specified in the Certificate of Rights and Preferences or
     Subsequent Certificate of Rights and Preferences is attached hereto on
     Annex G.

          (b)

               (i) If the Daily Market Price (as defined in the Certificate of
          Rights and Preferences) is less than the Minimum Price (as defined
          below) on any date, then (A) Cal Dive shall provide Fletcher within
          two (2) Business Days with a written notice that either (1) (a) Cal
          Dive shall satisfy all its future redemption obligations in cash or
          in a combination of Common Stock and cash, provided that in no event
          shall the total number of shares of Common Stock issued or issuable
          hereunder exceed seven million, four hundred eighty-six thousand,
          nine hundred seven (7,486,907) shares, and (b) following such notice,
          notwithstanding anything herein to the contrary, if a Restatement (as
          defined in the Certificate of Rights and Preferences and Subsequent
          Certificates of Rights and Preferences) has occurred on or after

                                      12
<PAGE>
          December 31, 2002, then Fletcher shall have the right to cause the
          redemption of its Preferred Shares and Additional Preferred Shares,
          from time to time, thereafter, or (2) that the Conversion Prices on
          all Preferred Shares and Additional Preferred Shares shall be reset
          to equal the Minimum Price and all Conversion Prices of future
          Additional Preferred Shares to be issued shall equal the Minimum
          Price, and upon delivery of such notice such Conversion Prices shall
          be so reset and Fletcher shall have no further right to cause the
          redemption of its Preferred Shares or Additional Preferred Shares
          thereafter, and (B) Cal Dive shall no longer be permitted to pay
          dividends by the issuance of Common Stock (an "Issuance Blockage").

               (ii) The "Minimum Price" shall initially equal $7.3461. Upon the
          payment of dividends in, or the conversion or redemption of any
          Preferred Shares or Additional Preferred Shares for, Common Stock,
          the Minimum Price shall be reset to equal:

                             $55,000,0000 - FV - XR

                             ----------------------

                              7,486,907 - DS - CS

               Where:

               FV=  the aggregate face value of all Preferred Shares and
                    Additional Preferred Shares that have been converted or
                    redeemed for Common Stock;

               XR=  one thousand dollars ($1,000) times the number of
                    Additional Preferred Shares that had been potentially
                    issuable under expired and unexercised Fletcher Rights;

               DS=  the aggregate number of shares of Common Stock issued in
                    payment of dividends to and including such date; and

               CS=  the aggregate number of shares of Common Stock issued
                    upon conversion or redemption of Preferred Shares or
                    Additional Preferred Shares to and including such date.

          (c) The aggregate number of shares of Common Stock issued, as of a
     particular date, upon conversion or redemption of, or as dividends paid on
     the Series A Preferred Shares owned by Fletcher and issuable pursuant to
     this Agreement shall not exceed the Maximum Number as of that date. The
     "Maximum Number" shall initially equal three million, five hundred
     fifty-eight thousand, sixty (3,558,060) and may be increased upon
     expiration of a 65-day notice period (the "Notice Period") after Fletcher
     delivers a notice (a "65 Day Notice") to Cal Dive designating a greater
     Maximum Number. A 65 Day Notice may be given at any time. From time to
     time following the

                                      13
<PAGE>
     Notice Period, Common Stock may be issued to Fletcher for any quantity of
     Common Stock, such that the aggregate number of shares of Common Stock
     issued hereunder is less than or equal to the Maximum Number.

     7. Representations and Warranties of Fletcher. Fletcher hereby represents
and warrants to Cal Dive on each Closing Date:

          (a) Fletcher has been duly incorporated and is validly existing under
     the laws of Bermuda.

          (b) The execution, delivery and performance of this Agreement by
     Fletcher have been duly authorized by all requisite corporate action and
     no further consent or authorization of Fletcher, its Board of Directors or
     its shareholders is required. This Agreement has been duly executed and
     delivered by Fletcher and, when duly authorized, executed and delivered by
     Cal Dive, will be a valid and binding agreement enforceable against
     Fletcher in accordance with its terms, subject to bankruptcy, insolvency,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights generally and to general
     principles of equity.

          (c) Fletcher understands that no United States federal or state
     agency has passed on, reviewed or made any recommendation or endorsement
     of the Investment Securities.

          (d) Fletcher is an "accredited investor" as such term is defined in
     Regulation D promulgated under the Securities Act.

          (e) Fletcher is purchasing the Investment Securities for its own
     account for investment only and not with a view to, or for resale in
     connection with, the public sale or distribution thereof in the United
     States, except pursuant to sales registered under the Securities Act or an
     exemption therefrom.

          (f) Fletcher understands that the Investment Securities are being or
     will be offered and sold to it in reliance on specific exemptions from the
     registration requirements of United States federal and state securities
     laws and that Cal Dive is relying on the truth and accuracy of, and
     Fletcher's compliance with, the representations, warranties, agreements,
     acknowledgments and understandings of Fletcher set forth herein in order
     to determine the availability of such exemptions and the eligibility of
     Fletcher to acquire the Investment Securities.

     8. Future Equity Issuances. If, within twenty (20) Business Days following
the Initial Closing Date, there is (i) a public disclosure of Cal Dive's
intention or agreement to engage in, or (ii) a consummation of, any sale or
issuance to any Person or Persons (other than Fletcher or its affiliates) of
any shares of, or securities convertible into, exercisable or exchangeable for,
or whose value is derived in whole or in part from, any shares of any class of
Cal Dive's capital stock, then Cal Dive shall promptly notify Fletcher of such
disclosure or such consummation, which notice shall include a copy of such
disclosure or the terms and date of such consummation (the "Equity Issuance
Notice"). After the date of such disclosure or such consummation, Fletcher

                                      14
<PAGE>
shall have the right, at its sole discretion, to deliver a notice to Cal Dive
(a "Price Adjustment Notice") no later than five (5) Business Days after and
excluding the date the Equity Issuance Notice is delivered; provided, however,
if the closing of such transaction occurs at a later date, Fletcher shall have
the right, at its sole discretion, to deliver a new Price Adjustment Notice or
replace an existing Price Adjustment Notice no later than five (5) Business
Days after such closing date. If Fletcher delivers a Price Adjustment Notice to
Cal Dive, then (x) the Conversion Price (as defined in the Certificate of
Rights and Preferences) shall be reset to equal one hundred twenty-five percent
(125%) of the Daily Market Price (as defined therein) and (y) the Fletcher
Rights Trigger Price shall adjust to equal one hundred percent (100%) of the
Daily Market Price, in each case calculated as of the Business Day immediately
preceding the date of delivery of such Price Adjustment Notice.

     9. Covenants of Cal Dive. Cal Dive covenants and agrees with Fletcher as
follows:

          (a) For so long as Fletcher owns or has the right to purchase any
     Investment Securities, and for a period of one (1) year thereafter, Cal
     Dive will (i) maintain the eligibility of the Common Stock for listing on
     the Nasdaq NMS; (ii) regain the eligibility of the Common Stock for
     listing or quotation on all markets and exchanges including the Nasdaq NMS
     in the event that the Common Stock is delisted by the Nasdaq NMS or any
     other applicable market or exchange; and (iii) cause the representations
     and warranties contained in Section 4 to be and remain true and correct.

          (b) If a Restatement (as defined in the Certificate of Rights and
     Preferences and Subsequent Certificates of Rights and Preferences) occurs,
     Cal Dive shall deliver to Fletcher a Restatement Notice (as defined in the
     Certificate of Rights and Preferences and Subsequent Certificates of
     Rights and Preferences) within three (3) Business Days of such Restatement
     and the Fletcher Rights Trigger Price shall adjust to equal the lower of
     (i) the Fletcher Rights Trigger Price immediately before such Restatement
     and (ii) the Daily Market Price (as defined in the Certificate of Rights
     and Preferences) on the Business Day immediately preceding the date of
     delivery of the Restatement Adjustment Notice (as defined in the
     Certificate of Rights and Preferences and Subsequent Certificates of
     Rights and Preferences).

          (c) Cal Dive will provide Fletcher with a reasonable opportunity,
     which shall not be less than two (2) full Business Days, to review and
     comment on any public disclosure by Cal Dive of information regarding this
     Agreement and the transactions contemplated hereby, before such public
     disclosure.

          (d) Cal Dive will make all filings required by law with respect to
     the transactions contemplated hereby.

          (e) Cal Dive will comply with the terms and conditions of the Series
     A Preferred Shares as set forth in the Certificate of Rights and
     Preferences and Subsequent Certificates of Rights and Preferences, and
     will not amend the Certificate of Rights and

                                      15
<PAGE>
     Preferences or Subsequent Certificates of Rights and Preferences without
     the required consent of the holders of Series A Preferred Shares.

          (f) For so long as Fletcher holds any Investment Securities, prior to
     the filing of each of its quarterly reports on Form 10-Q with the SEC, Cal
     Dive shall deliver to Fletcher a review report relating to the final
     consolidated unaudited financial statements contained therein, prepared by
     Ernst & Young LLP, or another nationally recognized accounting firm in
     accordance with Statement on Auditing Standards No. 71.

          (g) Cal Dive shall use its commercially reasonable efforts to cause
     the Common Shares to be eligible for book-entry transfer through The
     Depository Trust Company (or any successor thereto) as soon as practicable
     after the date of this Agreement and thereafter to use its commercially
     reasonable efforts to maintain such eligibility.

          (h) Cal Dive shall at all times reserve for issuance such number of
     its shares of Common Stock as shall from time to time be sufficient to
     effect the conversion of all such Series A Preferred Shares and to satisfy
     its delivery obligation upon such conversion, to effect the redemption of
     the Series A Preferred Shares and to satisfy its delivery obligation with
     respect to dividends.

          (i) Cal Dive shall, (i) when the number of shares of Common Stock
     outstanding is two hundred and fifty thousand (250,000) shares greater
     than the number of shares of Common Stock outstanding as designated in the
     previous Increase Notice (as hereinafter defined), or (ii) in the event
     that Cal Dive has not delivered an Increase Notice, when the number of
     shares of Common Stock outstanding is two hundred and fifty thousand
     (250,000) shares greater than the number of shares of Common Stock
     specified in Section 4(l), deliver a notice (an "Increase Notice") stating
     (x) the increase, if any, in the aggregate number of shares of Common
     Stock outstanding as of the last day of the preceding month over the
     number outstanding as of the last day of the month of the preceding
     Increase Notice, or (y) in the event that Cal Dive has not delivered a
     prior Increase Notice, the increase, if any, in the aggregate number of
     shares of Common Stock outstanding as of the last day of the preceding
     month over number of shares outstanding specified in Section 4(l). Unless
     expressly waived by Fletcher, Cal Dive shall deliver an Increase Notice to
     Fletcher on or before the tenth (10th) day of any calendar month for which
     an Increase Notice is required to be delivered pursuant to this
     sub-section.

          (j) Cal Dive shall, within one (1) Business Day after and excluding
     each Closing Date, publicly distribute a press release disclosing the
     material terms of such Initial Closing or Subsequent Closing and shall,
     within three (3) Business Days after and excluding each Closing Date file
     a report with the SEC on Form 8-K with respect to the same.

          (k) As soon as practicable after filing with the SEC, Cal Dive shall
     furnish to Fletcher (i) a true, correct and complete copy of a report of
     Ernst & Young LLP together with accompanying consolidated financial
     statements and schedules of Cal Dive at December 31, 2002 and the results
     of Cal Dive's operations and cash flows for

                                      16
<PAGE>
     the one (1) year period ended December 31, 2002, certified by Ernst &
     Young LLP, and (ii) the written consent of Ernst & Young LLP to furnishing
     such report as described in clause (i) above.

     10. Change of Control. (B) If Cal Dive is a party to any transaction which
results in a Change of Control, Fletcher and its assigns shall have the rights
set forth in the Certificate of Rights and Preferences and Subsequent
Certificates of Rights and Preferences regarding Changes of Control in addition
to the rights contained in this Agreement. Cal Dive agrees that it will not
enter into an agreement with an Acquiring Person resulting in a Change of
Control unless such agreement expressly obligates the Acquiring Person to
assume all of Cal Dive's obligations under this Agreement, the Certificate of
Rights and Preferences and the Subsequent Certificates of Rights and
Preferences including, but not limited to, the dividend, liquidation,
conversion, redemption, voting and other provisions regarding the Series A
Preferred Shares and the Fletcher Rights contained herein and therein. Without
limiting the foregoing, all unexercised and unexpired Fletcher Rights shall
automatically be converted into equivalent rights with respect to the Acquiring
Person including, but not limited to, the right to receive the equivalent of
the Additional Preferred Shares issuable upon the exercise of such rights and
to receive the consideration for such Additional Preferred Shares set forth in
Section 6(F) of the Subsequent Certificate of Rights and Preferences governing
such series of Additional Preferred Shares.

(C) The Fletcher Rights shall become exercisable immediately on and after the
date a public announcement is made of Cal Dive's or any other Person's
intention or agreement to engage in a transaction or series of transactions
that may result in a Change of Control.

(D) On or before the date an agreement is entered into with an Acquiring Person
resulting in a Change of Control, Cal Dive shall deliver to Fletcher written
notice that the Acquirer has assumed such obligations. Cal Dive shall provide
Fletcher with written notice of any proposed transaction resulting in a Change
of Control as soon as the existence of such proposed transaction is made public
by any person. Thereafter, Cal Dive shall notify Fletcher promptly of any
material developments with respect to such transaction, including advance
notice at least ten (10) Business Days before the date such transaction is
expected to become effective.

(E) "Change of Control" means (a) acquisition of the Company by means of merger
or other form of corporate reorganization in which outstanding shares of the
Company are exchanged for securities or other consideration issued, or caused
to be issued, by the Acquiring Person (as hereinafter defined) or its Parent,
Subsidiary or affiliate, other than a restructuring by the Company where
outstanding shares of the Company are exchanged for shares of the Acquiring
Person on a one-for-one basis and, immediately following the exchange, former
shareholders of the Company own all of the outstanding shares of the Acquiring
Person on the same pro rata basis as prior to the exchange, (b) a sale of all
or substantially all of the assets of the Company (on a consolidated basis) in
a single transaction or series of related transactions, (c) any other
transaction or series of related transactions by the Company in which the power
to cast the majority of the eligible votes at a meeting of the Company's
stockholders at which directors are elected is transferred to a single entity

                                      17
<PAGE>
or group acting in concert, or (d) a capital reorganization or reclassification
of the Common Stock or Other Securities (as defined in the Certificate of
Rights and Preferences and Subsequent Certificates of Rights and Preferences)
(other than a reorganization or reclassification in which the Common Stock or
Other Securities are not converted into or exchanged for cash or other
property, and, immediately after consummation of such transaction, the
stockholders of the Company immediately prior to such transaction own the
Common Stock, Other Securities or other voting stock of the Company in
substantially the same proportions relative to each other as such stockholders
owned immediately prior to such transaction). Notwithstanding anything
contained herein to the contrary, the change in the state of incorporation of
the Company shall not in and of itself constitute a Change of Control.

(F) "Acquiring Person" means, in connection with any Change of Control, (a) the
continuing or surviving corporation of a consolidation or merger with the
Company (if other than the Company), (b) the transferee of all or substantially
all of the properties or assets of the Company, (c) the corporation
consolidating with or merging into the Company in a consolidation or merger in
connection with which the Common Stock is changed into or exchanged for stock
or other securities of any other Person or cash or any other property, (d) the
entity or group acting in concert acquiring or possessing the power to cast the
majority of the eligible votes at a meeting of the Company's shareholders at
which directors are elected, or, (e) in the case of a capital reorganization or
reclassification, the Company, or (f) at Fletcher's election, any Person that
(i) controls the Acquiring Person directly or indirectly through one or more
intermediaries, (ii) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent's Annual Report on
Form 10-K (if such Person is required to file such a report) or would be
required to so include the Acquiring Person in such Person's consolidated
financial statements if they were prepared in accordance with U.S. GAAP and
(iii) is not itself included in the consolidated financial statements of any
other Person (other than its consolidated subsidiaries).

     11. Covenants of Fletcher. Fletcher hereby covenants and agrees with Cal
Dive that:

          (a) Neither Fletcher, nor any of its affiliates, will at any time
     offer or sell any Investment Securities other than pursuant to an
     effective registration statement under the Securities Act or pursuant to
     an available exemption therefrom.

          (b) Neither Fletcher, nor any of its affiliates, shall engage in
     "short sales" (as such term is defined by Exchange Act Rule 3b-3) of
     Common Stock, it being understood that nothing in this Agreement shall
     prohibit Fletcher or any of its affiliates from engaging in any
     transaction in any stock index, portfolio or derivative of which Common
     Stock is a component. The provisions of this Section 11(b) shall not be
     deemed to extend to any non-affiliated third party, including but not
     limited to, any assignee, pledgee, transferee or derivative or financing
     counterparty of Fletcher or any of its affiliates.

                                      18
<PAGE>
     12. Legend. Subject to Section 5, Fletcher understands that the
certificates or other instruments representing the Investment Securities shall
bear a restrictive legend composed of exactly the following words (and a stop
transfer order may be placed against transfer of such certificates or other
instruments):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
         HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
         SOLD, TRANSFERRED OR ASSIGNED UNLESS (1) THERE IS AN EFFECTIVE
         REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, OR (2)
         THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR ANOTHER APPLICABLE
         EXEMPTION UNDER THE SECURITIES ACT. THE RELATIVE RIGHTS AND
         PREFERENCES OF SERIES A-1 CUMULATIVE PREFERRED STOCK OF THE COMPANY
         ARE DESCRIBED IN A CERTIFICATE THEREOF FILED WITH THE SECRETARY OF
         STATE OF THE STATE OF MINNESOTA, A COPY OF WHICH IS AVAILABLE FROM THE
         COMPANY BY CONTACTING THE GENERAL COUNSEL OF THE COMPANY.

         The legend set forth above shall be removed and Cal Dive shall issue a
certificate without such legend to any holder of Investment Securities if,
unless otherwise required by state securities laws, such shares are sold
pursuant to an effective Registration Statement under the Securities Act, Rule
144 or another applicable exemption from registration.

     13. Conditions Precedent to Fletcher's Obligations. The obligations of
Fletcher hereunder are subject to the performance by Cal Dive of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent, unless expressly waived in writing by Fletcher:

          (a) On each Closing Date, (i) the representations and warranties made
     by Cal Dive in this Agreement shall be true and correct, except those
     representations and warranties which address matters only as of a
     particular date, which shall be true and correct as of such date; (ii) Cal
     Dive shall have complied fully with all of the covenants and agreements in
     this Agreement; and (iii) Fletcher shall have received (A) on the Initial
     Closing Date a certificate of the Chief Executive Officer and the Chief
     Financial Officer of Cal Dive dated such date and to such effect and (B)
     on each Subsequent Closing Date a certificate of the Chief Executive
     Officer and the Chief Financial Officer of Cal Dive dated such date and to
     such effect.

          (b) On each Closing Date, Cal Dive shall have delivered to Fletcher
     an opinion of Fulbright & Jaworski L.L.P. reasonably satisfactory to
     Fletcher, dated the date of delivery, confirming in substance the matters
     regarding enforceability covered in paragraph (c), and matters covered in
     the first grammatical sentence of paragraph (k), of Section 4 hereof. On
     each Closing Date, Cal Dive shall have delivered to Fletcher an opinion of
     Andrew C. Becher, Special Counsel to Cal Dive, reasonably satisfactory to
     Fletcher, dated the date of delivery, confirming in substance the matters
     covered in paragraphs (a), (b), (c) with respect to matters other than
     enforceability, (d) to the extent

                                      19
<PAGE>
     not opined on by the General Counsel of Cal Dive, (e), (g) and (l), of
     Section 4 hereof. On each Closing Date, Cal Dive shall have delivered to
     Fletcher an opinion of James Lewis Connor, III, General Counsel of Cal
     Dive, reasonably satisfactory to Fletcher, dated the date of delivery,
     confirming in substance the matters covered in paragraphs (d) in part, and
     (f) of Section 4 hereof.

          (c) On each Subsequent Closing Date, Fletcher shall receive a report
     of Ernst & Young LLP, or another nationally-recognized accounting firm,
     together with the accompanying consolidated financial statement and
     schedules of Cal Dive and results of Cal Dive's operations and cash flows,
     as such report appears in the most recent Form 10-K filed by Cal Dive with
     the SEC.

          (d) On the Initial Closing Date, the Registrable Number shall be duly
     listed and admitted for trading on the Nasdaq NMS, subject to notice of
     issuance

          (e) On or before the Initial Closing Date, Cal Dive shall have filed
     with the Minnesota Secretary of State the Certificate of Rights and
     Preferences. On or before each Subsequent Closing Date, Cal Dive shall
     have filed with the Minnesota Secretary of State a Subsequent Certificate
     of Rights and Preferences, with terms and conditions of the applicable
     series of Additional Preferred Shares as required by this Agreement.

     14. Conditions Precedent to Cal Dive's Obligations. The obligations of Cal
Dive hereunder are subject to the performance by Fletcher of its obligations
hereunder and to the satisfaction (unless expressly waived in writing by Cal
Dive) of the additional conditions precedent that, on each Closing Date: (i)
the representations and warranties made by Fletcher in this Agreement shall be
true and correct; (ii) Fletcher shall have complied fully with all the
covenants and agreements in this Agreement; and (iii) Cal Dive shall have
received on each such date a certificate of an appropriate officer of Fletcher
dated such date and to such effect.

     15. Fees and Expenses. Each of Fletcher and Cal Dive agrees to pay its own
expenses incident to the performance of its obligations hereunder, including,
but not limited to the fees, expenses and disbursements of such party's
counsel, except as is otherwise expressly provided in this Agreement.

     16. Non-Performance.

          (a) If Cal Dive, at any time, shall fail to deliver the Investment
     Securities to Fletcher required to be delivered pursuant to this
     Agreement, in accordance with the terms and conditions of this Agreement,
     the Certificate of Rights and Preferences and the Subsequent Certificates
     of Rights and Preferences, for any reason other than the failure of any
     condition precedent to Cal Dive's obligations hereunder or the failure by
     Fletcher to comply with its obligations hereunder, then Cal Dive shall
     (without limitation to Fletcher's other remedies at law or in equity):

               (i) indemnify and hold Fletcher harmless against any loss, claim
          or damage (including without limitation, incidental and consequential
          damages) arising from or as a result of such failure by Cal Dive; and

                                      20
<PAGE>
               (ii) reimburse Fletcher for all of its reasonable out-of-pocket
          expenses, including fees and disbursements of its counsel, incurred
          by Fletcher in connection with this Agreement and the transactions
          contemplated herein and therein.

     17. Indemnification.

          (a) Indemnification of Fletcher. Cal Dive hereby agrees to indemnify
     Fletcher and each of its officers, directors, employees, consultants,
     agents, attorneys, accountants and affiliates and each person that
     controls (within the meaning of Section 20 of the Exchange Act) any of the
     foregoing persons (each a "Fletcher Indemnified Party") against any claim,
     demand, action, liability, damages, loss, cost or expense (including,
     without limitation, reasonable legal fees and expenses incurred by such
     Fletcher Indemnified Party in investigating or defending any such
     proceeding) (all of the foregoing, including associated costs and expenses
     being referred to herein as a "Proceeding"), that it may incur in
     connection with any of the transactions contemplated hereby arising out of
     or based upon:

               (i) any untrue or alleged untrue statement of a material fact in
          a SEC Filing by Cal Dive or any of its affiliates or any person
          acting on its or their behalf or omission or alleged omission to
          state therein any material fact necessary in order to make the
          statements, in the light of the circumstances under which they were
          made, not misleading by Cal Dive or any of its affiliates or any
          person acting on its or their behalf;

               (ii) any of the representations or warranties made by Cal Dive
          herein being untrue or incorrect at the time such representation or
          warranty was made; and

               (iii) any breach or non-performance by Cal Dive of any of its
          covenants, agreements or obligations under this Agreement, the
          Certificate of Rights and Preferences and the Subsequent Certificates
          of Rights and Preferences;

provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of, or is based upon, the gross
negligence or willful misconduct of Fletcher in connection therewith.

          (b) Indemnification of Cal Dive. Fletcher hereby agrees to indemnify
     Cal Dive and each of its officers, directors, employees, consultants,
     agents, attorneys, accountants and affiliates and each person that
     controls (within the meaning of Section 20 of the Exchange Act) any of the
     foregoing persons against any Proceeding, that it may incur in connection
     with any of the transactions contemplated hereby arising out of or based
     upon:

               (i) any untrue or alleged untrue statement of a material fact
          included in an SEC filing by Cal Dive with the express written
          consent of Fletcher therefor by Fletcher or any of its affiliates or
          any person acting on its or their

                                      21
<PAGE>
          behalf or omission or alleged omission to state any such material
          fact necessary in order to make the statements, in the light of the
          circumstances under which they were made, not misleading by Fletcher
          or any of its affiliates or any person acting on its or their behalf;

               (ii) any of the representations or warranties made by Fletcher
          herein being untrue or incorrect at the time such representation or
          warranty was made; and

               (iii) any breach or non-performance by Fletcher of any of its
          covenants, agreements or obligations under this Agreement;

provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of, or is based upon, the gross
negligence or willful misconduct of Cal Dive in connection therewith.

          (c) Conduct of Claims.

               (i) Whenever a claim for indemnification shall arise under this
          Section 17, the party seeking indemnification (the "Indemnified
          Party"), shall notify the party from whom such indemnification is
          sought (the "Indemnifying Party") in writing of the Proceeding and
          the facts constituting the basis for such claim in reasonable detail;

               (ii) Such Indemnifying Party shall have the right to retain the
          counsel of its choice in connection with such Proceeding and to
          participate at its own expense in the defense of any such Proceeding;
          provided, however, that counsel to the Indemnifying Party
          shall not (except with the consent of the relevant Indemnified Party)
          also be counsel to such Indemnified Party. In no event shall the
          Indemnifying Party be liable for fees and expenses of more than one
          counsel (in addition to any local counsel) separate from its own
          counsel for all Indemnified Parties in connection with any one action
          or separate but similar or related actions in the same jurisdiction
          arising out of the same general allegations or circumstances; and

               (iii) No Indemnifying Party shall, without the prior written
          consent of the Indemnified Parties (which consent shall not be
          unreasonably withheld), settle or compromise or consent to the entry
          of any judgment with respect to any litigation, or any investigation
          or proceeding by any governmental agency or body, commenced or
          threatened, or any claim whatsoever in respect of which
          indemnification could be sought under this Section 17 unless such
          settlement, compromise or consent (A) includes an unconditional
          release of each Indemnified Party from all liability arising out of
          such litigation, investigation, proceeding or claim and (B) does not
          include a statement as to or an admission of fault, culpability or a
          failure to act by or on behalf of any Indemnified Party.

                                      22
<PAGE>
     18. Survival of the Representations, Warranties, etc. The respective
representations, warranties, and agreements made herein by or on behalf of the
parties hereto shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling or under common control
with, such party and will survive delivery of and payment for any Investment
Securities issuable hereunder.

     19. Notices. All communications hereunder shall be in writing and
delivered as set forth below.

          (a) If sent to Fletcher, all communications will be deemed delivered:
     if delivered by hand, on the day received by Fletcher; if sent by
     reputable overnight courier, on the next Business Day; and if transmitted
     by facsimile to Fletcher, on the date transmitted (provided such facsimile
     is later confirmed), in each case to the following address (unless
     otherwise notified in writing of a substitute address):

                      Fletcher International, Ltd.
                      c/o A. S. & K. Services Ltd.
                      Cedar House, 41 Cedar Avenue
                      Hamilton HM EX
                      Bermuda
                      Attention:  Felicity Holmes, Corporate Administrator
                      Telephone:       441-295-2244
                      Facsimile:       441-292-8666

                      with a copy to:

                      Fletcher Asset Management, Inc.
                      22 East 67th Street
                      New York, NY  10021
                      Attention:       Peter Zayfert
                      Telephone:       (212) 284-4800
                      Facsimile:       (212) 284-4801

                      with a copy to (which copy shall not constitute notice):

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      1440 New York Avenue, N.W.
                      Washington, D.C. 20005
                      Attention:  Stephen W. Hamilton, Esq.
                      Telephone:       (202) 371-7010
                      Facsimile:       (202) 393-5760

          (b) If sent to Cal Dive, all communications will be deemed delivered:
     if delivered by hand, on the day received by Cal Dive; if sent by
     reputable overnight

                                      23
<PAGE>
     courier, on the next Business Day; and if transmitted by facsimile to Cal
     Dive, on the date transmitted (provided such facsimile is later
     confirmed), in each case to the following address (unless otherwise
     notified in writing of a substitute address):

                      Cal Dive International, Inc.
                      400 N. Sam Houston Parkway E., Suite 400
                      Houston, Texas 77060
                      Attention:       A. Wade Pursell
                      Telephone:       (281) 618-0431
                      Facsimile:       (281) 618-0505

                      with a copy to:

                      Cal Dive International, Inc.
                      400 N. Sam Houston Parkway E., Suite 400
                      Houston, Texas 77060
                      Attention:       James Lewis Connor, III, Esq.
                      Telephone:       (281) 618-0538
                      Facsimile:       (281) 618-0505

                      with a copy to (which copy shall not constitute notice):

                      Fulbright & Jaworski L.L.P.
                      1301 McKinney Street, Suite 5100
                      Houston, Texas 77010
                      Attention:       Arthur H. Rogers, Esq.
                      Telephone:       (713) 651-5421
                      Facsimile:       (713) 651-5246

To the extent that any funds shall be delivered to Cal Dive by wire transfer,
unless otherwise instructed by Cal Dive, such funds should be delivered in
accordance with the wire instructions set forth in Annex BB.

     20. Miscellaneous.

          (a) The parties may execute and deliver this Agreement as a single
     document or in any number of counterparts, manually, by facsimile or by
     other electronic means, including contemporaneous xerographic or
     electronic reproduction by each party's respective attorneys. Each
     counterpart shall be an original, but a single document or all
     counterparts together shall constitute one instrument that shall be the
     agreement.

          (b) This Agreement will inure to the benefit of and be binding upon
     the parties hereto, their respective successors and assigns and, with
     respect to Section 17 hereof, will inure to the benefit of their
     respective officers, directors, employees, consultants, agents, attorneys,
     accountants and affiliates and each person that controls (within the
     meaning of Section 20 of the Exchange Act) any of the foregoing persons,

                                      24
<PAGE>
     and no other person will have any right or obligation hereunder. Cal Dive
     may not assign this Agreement. Notwithstanding anything to the contrary in
     this Agreement, Fletcher may assign, pledge, hypothecate or transfer any
     of the rights and associated obligations contemplated by this Agreement
     (including, but not limited to, the Investment Securities), in whole or in
     part, at its sole discretion (including, but not limited to, assignments,
     pledges, hypothecations and transfers in connection with financing,
     derivative or hedging transactions with respect to this Agreement and the
     Investment Securities), provided, that, any such assignment, pledge,
     hypothecation or transfer must comply with applicable federal and state
     securities laws. No person acquiring Common Stock from Fletcher pursuant
     to a public market purchase will thereby obtain any of the rights
     contained in this Agreement. This Agreement constitutes the entire
     agreement and supersedes all prior agreements and understandings, both
     written and oral, between the parties hereto with respect to the subject
     matter of this Agreement. Except as provided in this Section 18(b), this
     Agreement is not intended to confer upon any person other than the parties
     hereto any rights or remedies hereunder.

          (c) This Agreement shall be governed by, and construed in accordance
     with, the internal laws of the State of New York, and each of the parties
     hereto hereby submits to the non-exclusive jurisdiction of any state or
     federal court in the Southern District of New York and any court hearing
     any appeal therefrom, over any suit, action or proceeding against it
     arising out of or based upon this Agreement (a "Related Proceeding"). Each
     of the parties hereto hereby waives any objection to any Related
     Proceeding in such courts whether on the grounds of venue, residence or
     domicile or on the ground that the Related Proceeding has been brought in
     an inconvenient forum.

          (d) Each party represents and acknowledges that, in the negotiation
     and drafting of this Agreement and the other instruments and documents
     required or contemplated hereby, it has been represented by and relied
     upon the advice of counsel of its choice. Each party hereby affirms that
     its counsel has had a substantial role in the drafting and negotiation of
     this Agreement and such other instruments and documents. Therefore, each
     party agrees that no rule of construction to the effect that any
     ambiguities are to be resolved against the drafter shall be employed in
     the interpretation of this Agreement and such other instruments and
     documents.

          (e) Without prejudice to other rights or remedies hereunder
     (including any specified interest rate), and except as otherwise expressly
     set forth herein, interest shall be due on any amount that is due pursuant
     to this Agreement and has not been paid when due, calculated for the
     period from and including the due date to but excluding the date on which
     such amount is paid at the prime rate of U.S. money center banks as
     published in The Wall Street Journal (or if The Wall Street Journal does
     not exist or publish such information, then the average of the prime rates
     of three U.S. money center banks agreed to by the parties) plus two
     percent (2%).

          (f) Fletcher and Cal Dive stipulate that the remedies at law of the
     parties hereto in the event of any default or threatened default by either
     party in the performance of or compliance with any of the terms of this
     Agreement, the Certificate of Rights and Preferences and the Subsequent
     Certificates of Rights and Preferences are not

                                      25
<PAGE>
     and will not be adequate and that, to the fullest extent permitted by law,
     such terms may be specifically enforced by a decree for the specific
     performance of any agreement contained herein or by an injunction against
     a violation of any of the terms hereof or otherwise.

          (g) Any and all remedies set forth in this Agreement, the Certificate
     of Rights and Preferences and Subsequent Certificates of Rights and
     Preferences: (i) shall be in addition to any and all other remedies
     Fletcher or Cal Dive may have at law or in equity, (ii) shall be
     cumulative, and (iii) may be pursued successively or concurrently as each
     of Fletcher and Cal Dive may elect. The exercise of any remedy by Fletcher
     or Cal Dive shall not be deemed an election of remedies or preclude
     Fletcher or Cal Dive, respectively, from exercising any other remedies in
     the future.

          (h) Cal Dive agrees that the parties have negotiated in good faith
     and at arms' length concerning the transactions contemplated herein, and
     that Fletcher would not have agreed to the terms of this Agreement without
     each and every of the terms, conditions, protections and remedies provided
     herein and the Certificate of Rights and Preferences. Except as
     specifically provided otherwise in this Agreement, the Certificate of
     Rights and Preferences and the Subsequent Certificates of Rights and
     Preferences, Cal Dive's obligations to indemnify and hold Fletcher
     harmless in accordance with Section 18 of this Agreement are obligations
     of Cal Dive that Cal Dive promises to pay to Fletcher when and if they
     become due. Cal Dive shall record any such obligations on its books and
     records in accordance with U.S. generally accepted accounting principles.

          (i) This Agreement may be amended, modified or supplemented in any
     and all respects, but only by a written instrument signed by Fletcher and
     Cal Dive expressly stating that such instrument is intended to amend,
     modify or supplement this Agreement.

          (j) Each of the parties will cooperate with the others and use its
     best efforts to prepare all necessary documentation, to effect all
     necessary filings, and to obtain all necessary permits, consents,
     approvals and authorizations of all governmental bodies and other
     third-parties necessary to consummate the transactions contemplated by
     this Agreement.

          (k) For purposes of this Agreement, except as otherwise expressly
     provided or unless the context otherwise requires: (i) the terms defined
     in this Agreement have the meanings assigned to them in this Agreement and
     include the plural as well as the singular, and the use of any gender
     herein shall be deemed to include the other gender and neuter gender of
     such term; (ii) accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with U.S. generally accepted
     accounting principles; (iii) references herein to "Articles", "Sections",
     "Subsections", "Paragraphs" and other subdivisions without reference to a
     document are to designated Articles, Sections, Subsections, Paragraphs and
     other subdivisions of this Agreement, unless the context shall otherwise
     require; (iv) a reference to a Subsection without further reference to a
     Section is a reference to such Subsection as contained in the same Section
     in which the reference appears, and this rule shall also apply to
     Paragraphs and other subdivisions;

                                      26
<PAGE>
     (v) the words "herein", "hereof", "hereunder" and other words of similar
     import refer to this Agreement as a whole and not to any particular
     provision; (vi) the term "include" or "including" shall mean without
     limitation; (vii) the table of contents to this Agreement and all section
     titles or captions contained in this Agreement or in any Schedule or Annex
     hereto or referred to herein are for convenience only and shall not be
     deemed a part of this Agreement and shall not affect the meaning or
     interpretation of this Agreement; (viii) any agreement, instrument or
     statute defined or referred to herein means such agreement, instrument or
     statute as from time to time amended, modified or supplemented, including
     (in the case of agreements or instruments) by waiver or consent and (in
     the case of statutes) by succession of comparable successor statues and
     references to all attachments thereto and instruments incorporated
     therein; and (ix) references to a person are also to its permitted
     successors and assigns and, in the case of an individual, to his or her
     heirs and estate, as applicable.

          (l) If any term or other provision of this Agreement is invalid,
     illegal or incapable of being enforced by any rule of law or public policy
     all other conditions and provisions of this Agreement shall nevertheless
     remain in full force and effect. If the final judgment of a court of
     competent jurisdiction or other authority declares that any term or
     provision hereof is invalid, void or unenforceable, the parties agree that
     the court making such determination shall have the power to reduce the
     scope, duration, area or applicability of the term or provision, to delete
     specific words or phrases, or to replace any invalid, void or
     unenforceable term or provision with a term or provision that is valid and
     enforceable and that comes closest to expressing the intention of the
     invalid or unenforceable term or provision. Upon such determination that
     any term or other provision is invalid, illegal or incapable of being
     enforced, the parties hereto shall negotiate in good faith to modify this
     Agreement so as to effect the original intent of the parties as closely as
     possible in a mutually acceptable manner in order that the transactions
     contemplated hereby be consummated as originally contemplated to the
     fullest extent possible.

          (m) Time shall be of the essence in this Agreement.

          (n) All dollar ($) amounts set forth herein, in the Certificate of
     Rights and Preferences and Subsequent Certificates of Rights and
     Preferences refer to United States dollars. All payments hereunder and
     thereunder will be made in lawful currency of the United States of
     America.

          (o) Notwithstanding anything herein to the contrary, all measurements
     and references related to share prices and share numbers herein will be,
     in each instance, appropriately adjusted for stock splits, recombinations,
     stock dividends and the like.

                            [SIGNATURE PAGE FOLLOWS]

                                      27
<PAGE>

                     IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this First Amended and
Restated Agreement, all as of January 17, 2003.

                              CAL DIVE INTERNATIONAL, INC.

                              By:    /s/ JAMES LEWIS CONNOR, III
                                   --------------------------------------------
                              Name:  James Lewis Connor, III
                              Title:  Senior Vice President & General Counsel

                              FLETCHER INTERNATIONAL, LTD., by its duly
                              authorized  investment advisor,
                              FLETCHER ASSET MANAGEMENT, INC.

                              By:  /s/ DENIS J. KIELY
                                   --------------------------------------------
                              Name: Denis J. Kiely
                              Title:  Deputy CEO and Counsel

                              By:  /s/ JONATHAN B. SCHINDEL
                                   --------------------------------------------
                              Name:  Jonathan B. Schindel
                              Title:  COO and Counsel

                                      28exv4w6

 

Exhibit 4.6

		
	 	VOID AFTER 5:00 P.M., NEW YORK CITY

TIME, ON December 12, 2007

(UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)
	 
	 	THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

	 	Right to Purchase 37,500 Shares of

Common Stock, par value $.01 per share

Date: December 12, 2002

ANTEX BIOLOGICS INC.

STOCK PURCHASE WARRANT

     THIS CERTIFIES THAT, for value received, DMG Legacy Fund LLC, or its
registered assigns, is entitled to purchase from Antex Biologics Inc., a
corporation organized under the laws of the State of Delaware (the “Company”),
at any time or from time to time during the period specified in Section 2
hereof, 37,500 fully paid and nonassessable shares of the Company’s common
stock, par value $.01 per share (the “Common Stock”), at an exercise price per
share (the “Exercise Price”) equal to the exercise price of the warrants issued
in Antex Biologics’ proposed Public Offering (the “Public Offering Warrant
Exercise Price”) that is anticipated to close no later then February 15, 2003
(the “Public Offering”), but in no even shall the Exercise Price be greater
than $1.00 per share. (The Public Warrant Offering Price shall be based on a
premium to the offering price of the Units sold in the Public Offering.) In the
event a Public Offering is not completed, then the Exercise Price shall be set
at $1.00 per share. The number of shares of Common Stock purchasable hereunder
(the “Warrant Shares”) and the Exercise Price are subject to adjustment as
provided in Section 4 hereof. The term “Warrants” means this Warrant and the
other warrants of the Company issued in connection with the Promissory Note
issued and dated December 12, 2002, by and among the Company and the other
signatory thereto (the “Promissory Note”).

This Warrant is subject to the following terms, provisions and conditions:

 

 

     1.     Manner of Exercise; Issuance of Certificates; Payment for
Shares. Subject to the provisions hereof, including, without limitation,
the limitations contained in Section 7 hereof, this Warrant may be exercised by
the holder hereof, in whole or in part, by the surrender of this Warrant,
together with a completed exercise agreement in the form attached hereto (the
“Exercise Agreement”), to the Company during normal business hours on any
business day at the Company’s principal executive offices (or such other office
or agency of the Company as it may designate by notice to the holder hereof),
and upon (i) payment to the Company in cash, by certified or official bank
check or by wire transfer for the account of the Company, of the Exercise Price
for the Warrant Shares specified in the Exercise Agreement or (ii) if the
holder is effectuating a Cashless Exercise (as defined in Section 11(c) hereof)
pursuant to Section 11(c) hereof, delivery to the Company of a written notice
of an election to effect a Cashless Exercise for the Warrant Shares specified
in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to
be issued to the holder hereof or such holder’s designee, as the record owner
of such shares, as of the close of business on the date on which this Warrant
shall have been surrendered, the completed Exercise Agreement shall have been
delivered, and payment shall have been made for such shares as set forth above
or, if such date is not a business date, on the next succeeding business date.
The Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding two business days, after this Warrant
shall have been so exercised (the “Delivery Period”). If the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer program, and so long as the certificates
therefore do not bear a legend and the holder is not obligated to return such
certificate for the placement of a legend thereon, the Company shall cause its
transfer agent to electronically transmit the Warrant Shares so purchased to
the holder by crediting the account of the holder or its nominee with DTC
through its Deposit Withdrawal Agent Commission system (“DTC Transfer”). If
the aforementioned conditions to a DTC Transfer are not satisfied, the Company
shall deliver to the holder physical certificates representing the Warrant
Shares so purchased. Further, the holder may instruct the Company to deliver
to the holder physical certificates representing the Warrant Shares so
purchased in lieu of delivering such shares by way of DTC Transfer. Any
certificates so delivered shall be in such denominations as may be reasonably
requested by the holder hereof, shall be registered in the name of such holder
or such other name as shall be designated by such holder and, following the
date on which the Warrant Shares have been registered under the Securities Act,
pursuant to piggback registration rights or as otherwise may be sold by the
holder pursuant to Rule 144 promulgated under the Securities Act (or a
successor rule), shall not bear any restrictive legend. If this Warrant shall
have been exercised only in part, then the Company shall, at its expense, at
the time of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.

     If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason (other than the
reasons contemplated by Sections 3(c), 7(f) and (g) hereof) to deliver, on or
prior to the fourth business day following the expiration of the Delivery
Period for such exercise, the number of shares of Common Stock to which the
holder is entitled upon such

 

 

exercise (an “Exercise Default”), then the Company shall pay to the holder
payments (“Exercise Default Payments”) for an Exercise Default in the amount of
(a) (N/365), multiplied by (b) the amount by which the Market Price (as defined
in Section 4(l) hereof) on the date the Exercise Agreement giving rise to the
Exercise Default is transmitted in accordance with this Section 1 (the
“Exercise Default Date”) exceeds the Exercise Price in respect of such Warrant
Shares, multiplied by (c) the number of shares of Common Stock the Company
failed to so deliver in such Exercise Default, multiplied by (d) .24, where N =
the number of days from the Exercise Default Date to the date that the Company
effects the full exercise of this Warrant which gave rise to the Exercise
Default. The accrued Exercise Default Payment for each calendar month shall be
paid in cash or shall be convertible into Common Stock, at the Company’s
option, as follows:

            (a)    In the event Company elects to take such payment in cash, cash payment
shall be made to holder by the fifth day of the month following the month in
which it has accrued; and

            (b)    In the event Company elects to take such payment in Common Stock, the
Company may convert such payment amount into Common Stock at the lower of the
Exercise Price or the Market Price (as in effect at the time of conversion) at
any time after the fifth day of the month following the month in which it has
accrued.

     Nothing herein shall limit the holder’s right to pursue actual damages for
the Company’s failure to maintain a sufficient number of authorized shares of
Common Stock as required pursuant to the terms of Section 3(b) hereof or to
otherwise issue shares of Common Stock upon exercise of this Warrant in
accordance with the terms hereof, and the holder shall have the right to pursue
all remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief).

     2.     Period of Exercise. This Warrant, once listed pursuant to
Section 3(c) hereof, is immediately exercisable, at any time or from time to
time on or after the date of initial issuance of this Warrant (the “Issue
Date”) and before 5:00 p.m., New York City time, on the fifth anniversary of
the Issue Date (the “Exercise Period”). The Exercise Period shall
automatically be extended by one (1) day for (i) each day on which the Company
does not have a number of shares of Common Stock reserved for issuance upon
exercise hereof at least equal to the number of shares of Common Stock issuable
upon exercise hereof, or (ii) by each day for which the Warrant Shares are not
timely delivered in accordance with Section 1 hereof.

     3.     Certain Agreements of the Company. The Company hereby covenants
and agrees as follows:

            (a)    Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, claims and
encumbrances.

            (b)    Reservation of Shares. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant,

 

 

a sufficient number of shares of Common Stock to provide for the exercise in
full of this Warrant (without giving effect to the limitations on exercise set
forth in Section 7(g) hereof).

            (c)    Listing. The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or become listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain, so long
as any other shares of Common Stock shall be so listed, such listing of all
shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be listed
on such national securities exchange or automated quotation system.

            (d)    Certain Actions Prohibited. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it hereunder, but will at all times
in good faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by the
holder of this Warrant in order to protect the economic benefit inuring to the
holder hereof and the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

            (e)    Successors and Assigns. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all of the Company’s assets.

            (f)    Blue Sky Laws. The Company shall, on or before the date of
issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain
exemption for the Warrant Shares for, sale to the holder of this Warrant upon
the exercise hereof under applicable securities or “blue sky” laws of the
states of the United States, and shall provide evidence of any such action so
taken to the holder of this Warrant prior to such date; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(f), (b) subject itself
to general taxation in any such jurisdiction or (c) file a general consent to
service of process in any such jurisdiction.

     4.     Antidilution Provisions. During the Exercise Period, the
Exercise Price and the number of Warrant Shares issuable hereunder shall be
subject to adjustment from time to time as

 

 

provided in this Section 4, provided that no adjustment shall be required for
the issuance of securities in the proposed Public Offering.

     In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up or
down to the nearest cent.

            (a)    Subdivision or Combination of Common Stock. If the Company, at
any time during the Exercise Period, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company, at
any time during the Exercise Period, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record
for effecting such combination, the Exercise Price in effect immediately prior
to such combination will be proportionately increased.

            (b)    Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of Section 4(a), the number of shares
of Common Stock issuable upon exercise of this Warrant at each such Exercise
Price shall be adjusted by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant at such Exercise Price immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.

            (c)    Consolidation, Merger or Sale. In case of any consolidation of
the Company with, or merger of the Company into, any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder hereof will have the right to acquire and receive upon
exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. In any such case, the Company
will make appropriate provision to insure that the provisions of this Section 4
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Warrant and the obligations to deliver to the holder hereof such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
the holder may be entitled to acquire.

            (d)    Distribution of Assets. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to
holders of Common Stock as a partial liquidating dividend, stock repurchase by
way of return of capital or otherwise (including any

 

 

 dividend or distribution to the Company’s shareholders of cash or shares
(or rights to acquire shares) of capital stock of a subsidiary) (a
“Distribution”), at any time during the Exercise Period, then the holder hereof
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets (or rights) which would have been payable to the holder had such holder
been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution. If the Company
distributes rights, warrants, options or any other form of convertible
securities and the right to exercise or convert such securities would expire in
accordance with their terms prior to the expiration of the Exercise Period,
then the terms of such securities shall provide that such exercise or
convertibility right shall remain in effect until 30 days after the date the
holder hereof receives such securities pursuant to the exercise hereof.

            (e)    Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder hereof, which notice shall
state the Exercise Price resulting from such adjustment and the increase or
decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be
certified by the chief financial officer of the Company.

            (f)    Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than $.01, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than $.01.

            (g)    No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a
cash adjustment in respect of any fractional share which would otherwise be
issuable in an amount equal to the same fraction of the Market Price of a share
of Common Stock on the date of such exercise.

            (h)    Other Notices. In case at any time:

                     (i)    the Company shall declare any dividend upon the Common Stock payable
in shares of stock of any class or make any other distribution (other than
dividends or distributions payable in cash out of retained earnings consistent
with the Company’s past practices with respect to declaring dividends and
making distributions) to the holders of the Common Stock;

                     (ii)    the Company shall offer for subscription pro rata to the holders of
the Common Stock any additional shares of stock of any class or other rights;

                     (iii)    there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all of its assets to, another
corporation or entity; or

 

 

                     (iv)    there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company
shall close or a record shall be taken for determining the holders of Common
Stock entitled to receive any such dividend, distribution, or subscription
rights or for determining the holders of Common Stock entitled to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock
shall be entitled to receive such dividend, distribution, or subscription
rights or to exchange their Common Stock for stock or other securities or
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up, as the case may be.
Such notice shall be given at least thirty (30) days prior to the record date
or the date on which the Company’s books are closed in respect thereto.
Failure to give any such notice or any defect therein shall not affect the
validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv)
above. Notwithstanding the foregoing, the Company shall publicly disclose the
substance of any notice delivered hereunder prior to delivery of such notice to
the holder hereof.

                 (l)    Certain Definitions.

                         (i)    “Common Stock Deemed Outstanding” shall mean the number of shares of
Common Stock actually outstanding (not including shares of Common Stock held in
the treasury of the Company), plus (x) in the case of any adjustment required
by Section 4(a) resulting from the issuance of any Options, the maximum total
number of shares of Common Stock issuable upon the exercise of the Options for
which the adjustment is required (including any Common Stock issuable upon the
conversion of Convertible Securities issuable upon the exercise of such
Options), and (y) in the case of any adjustment required by Section 4(a)
resulting from the issuance of any Convertible Securities, the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of the Convertible Securities for which the adjustment is required, as
of the date of issuance of such Convertible Securities, if any.

                         (ii)    “Market Price,” as of any date, (i) means the average of the closing
bid prices for the shares of Common Stock as reported on the American Stock
Exchange by Bloomberg Financial Markets (“Bloomberg”) for the five consecutive
business days immediately preceding such date, or (ii) if the American Stock
Exchange is not the principal trading market for the shares of Common Stock,
the average of the reported bid prices reported by Bloomberg on the principal
trading market for the Common Stock during the same period, or, if there is no
bid price for such period, the last sales price reported by Bloomberg for such
period, or (iii) if the foregoing do not apply, the last sale price of such
security in the over-the-counter market on the pink sheets or bulletin board
for such security as reported by Bloomberg,

 

 

 or if no sale price is so reported for such security, the last bid price
of such security as reported by Bloomberg, or (iv) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price
shall be the average fair market value as reasonably determined by an
investment banking firm selected by the Company and reasonably acceptable to
the holder, with the costs of the appraisal to be borne by the Company. The
manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

                         (iii)    “Common Stock,” for purposes of this Section 4, includes the Common
Stock and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only Common Stock in respect
of which this Warrant is exercisable, or shares resulting from any subdivision
or combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to
in Section 4(e) hereof, the stock or other securities or property provided for
in such Section.

                         (iv)    “Measurement Date” means (i) for purposes of any private offering of
securities under Section 4(2) of the Securities Act of 1933, as amended, the
date that the Company enters into legally binding definitive agreements for the
issuance and sale of such securities and (ii) for purposes of any other
issuance of securities, the date of issuance thereof.

     5.     Issue Tax. The issuance of certificates for Warrant Shares upon
the exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

     6.     No Rights or Liabilities as a Shareholder. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.

     7.     Transfer, Exchange, Redemption and Replacement of Warrant.

             (a)    Restriction on Transfer. This Warrant and the rights granted
to the holder hereof are transferable, in whole or in part, upon surrender of
this Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Sections 7(f) and (g) hereof. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained

 

 

 herein, the registration rights described in Section 8 hereof are
assignable only in accordance with the provisions of the Registration Rights
Agreement.

             (b)    Warrant Exchangeable for Different Denominations. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office
or agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right
to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares (at the Exercise Price therefor) as shall be designated by the
holder hereof at the time of such surrender.

             (c)    Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

             (d)    Cancellation; Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided
in this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 7. The Company shall
indemnify and reimburse the holder of this Warrant for all losses and damages
arising as a result of or related to any breach of the terms of this Warrant,
including costs and expenses (including legal fees) incurred by such holder in
connection with the enforcement of its rights hereunder.

             (e)    Warrant Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.

             (f)    Transfer or Exchange Without Registration. If, at the time of
the surrender of this Warrant in connection with any transfer or exchange of
this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder) shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer or exchange, (i) that the holder or
transferee of this Warrant, as the case may be, furnish to the Company a
written opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect
that such transfer or exchange may be made without registration under the
Securities Act and under applicable state securities or blue sky laws (the cost
of which shall be borne by the Company if the Company’s counsel renders such an
opinion), (ii) that the holder or transferee execute and deliver to the Company
an investment letter in form and substance acceptable to the Company and (iii)
that the transferee be an “accredited

 

 

 investor” as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter, or status as an “accredited investor”
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.

             (g)    Additional Restrictions on Exercise or Transfer.
                      (i) At
no time may the Holder exercise this Warrant if the number of
shares of Common Stock to be issued pursuant to such exercise would exceed,
when aggregated with all other shares of Common Stock owned by the Holder at
such time, the number of shares of Common Stock which would result in the
Holder owning more than 4.99% of all of the Common Stock outstanding at such
time; provided, however, that upon the Holder providing the Issuer with
sixty-one (61) days notice (pursuant to Section 9 hereof) (the “Waiver Notice”)
that the Holder would like to waive this Section 7(g)(i) with regard to any or
all shares of Common Stock issuable upon exercise of this Warrant, this Section
7(g)(i) will be of no force or effect with regard to all or a portion of the
Warrant referenced in the Waiver Notice.

                      (ii) In no event shall the holder hereof have the right to exercise any
portion of this Warrant for shares of Common Stock or to dispose of any portion
of this Warrant to the extent that such right to effect such exercise or
disposition would result in the holder or any of its affiliates beneficially
owning more than 9.99% of the outstanding shares of Common Stock. For purposes
of this Section 7(g)(ii), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder. The restriction contained in this
Section 7(g)(ii) may not be altered, amended, deleted or changed in any manner
whatsoever unless the holders of a majority of the outstanding shares of Common
Stock and the holder hereof shall approve, in writing, such alteration,
amendment, deletion or change.

     8.     Registration Rights. The initial holder of this Warrant (and
certain assignees thereof) is entitled to the benefit of unlimited “piggyback”
registration rights in respect of the Warrant Shares as such rights and terms
and conditions of such rights are usual and customary.

     9.     Notices. Any notices required or permitted to be given under
the terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a party. The
addresses for such communications shall be:

	 	If to the Company:

	 	Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Facsimile: (301) 590-1252

Attn: Chief Executive Officer

	 	with a copy simultaneously transmitted by like means to:

 

 

	 	Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2401

Facsimile: (202) 778-5196

Attn: Alfred Moses, Esq.

If to the holder, at such address as such holder shall have provided in writing
to the Company, or at such other address as such holder furnishes by notice
given in accordance with this Section 9.

     10.     Governing Law; Jurisdiction. This Warrant shall be governed by
and construed in accordance with the laws of the State of Delaware. The
Company irrevocably consents to the jurisdiction of the United States federal
courts and state courts located in the State of Delaware in any suit or
proceeding based on or arising under this Warrant and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives any objection to the laying of venue and
the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company further agrees that service of process upon the Company
mailed by certified or registered mail shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
Nothing herein shall affect the holder’s right to serve process in any other
manner permitted by law. The Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.

     11.     Miscellaneous.

             (a)    Amendments. Except as provided in Section 7(g) hereof, this
Warrant and any provision hereof may only be amended by an instrument in
writing signed by the Company and the holder hereof.

             (b)    Descriptive Headings. The descriptive headings of the several
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.

             (c)    Cashless Exercise. Notwithstanding anything to the contrary
contained in this Warrant, this Warrant may be exercised at any time during the
Exercise Period by presentation and surrender of this Warrant to the Company at
its principal executive offices with a written notice of the holder’s intention
to effect a cashless exercise, including a calculation of the number of shares
of Common Stock to be issued upon such exercise in accordance with the terms
hereof (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu
of paying the Exercise Price in cash, the holder shall surrender this Warrant
for that number of shares of Common Stock determined by multiplying the number
of Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market
Price of a share of the Common Stock on the date of exercise and the Exercise
Price, and the denominator of which shall be the then current Market Price per
share of Common Stock.

 

 

             (d)    Business Day. For purposes of this Warrant, the term “business
day” means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or executive order to close.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

	 
	ANTEX BIOLOGICS INC
	 
	By: /s/ Jeffrey Pirone                   
	 
	Title:  Executive Vice President

 

 

FORM OF EXERCISE AGREEMENT

(To be Executed by the Holder in order to Exercise the Warrant)

	 	 	To: Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Facsimile: (301) 590-1252

Attn: Chief Executive Officer

     The undersigned hereby irrevocably exercises the right to purchase
______ shares of the Common Stock of Antex Biologics Inc., a corporation
organized under the laws of the State of ______ (the “Company”), evidenced by the attached Warrant, and herewith [makes payment of
the Exercise Price with respect to such shares in full][elects to effect a
Cashless Exercise (as defined in Section 11(c) of such Warrant], all in
accordance with the conditions and provisions of said Warrant.

     The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.

	•	 	The undersigned requests that the Company cause its transfer agent to
electronically transmit the Common Stock issuable pursuant to this
Exercise Agreement to the account of the undersigned or its nominee
(which is ______) with DTC through its Deposit Withdrawal
Agent Commission System (“DTC Transfer”), provided that such transfer
agent participates in the DTC Fast Automated Securities Transfer
program.
	 
	•	 	In lieu of receiving the shares of Common Stock issuable pursuant to
this Exercise Agreement by way of DTC Transfer, the undersigned hereby
requests that the Company cause its transfer agent to issue and
deliver to the undersigned physical certificates representing such
shares of Common Stock.

     The undersigned requests that a Warrant representing any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder
and delivered to the undersigned at the address set forth below:

	 	 	 
	Dated:______________________________	 	
____________________________________
	 	 	
     Signature of Holder
	 
	 	 	
____________________________________
	 	 	
     Name of Holder (Print)
	 
	 	 	
     Address:
	 
	 	 	
____________________________________
	 
	 	 	
____________________________________
	 
	____________________________________	 	 

 

 

FORM OF ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

	 	 	 	 	 
	Name of Assignee	 	
Address
	 	No. of Shares

, and hereby irrevocably constitutes and appoints
__________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.

	 	 	 	 	 	 	 
	Dated: ______________, ______	 	 	 	 	 	 
	 
	In the presence of	 	 	 	 	 	 
	 
	____________	 	 	 	 	 	 
	 
	 	 	
Name:	 	____________________________
	 
	 	 	 	 	Signature:
	 	__________________________
	 
	 	 	 	 	Title of Signing Officer or Agent (if any):
	 
	 	 	 	 	 	 	__________________________
	 
	 	 	 	 	Address:
	 	__________________________
	 
	 	 	 	 	 	 	__________________________

Note: The above signature should correspond exactly with the name on the face
of the within Warrant.

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