Document:

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                                                                    EXHIBIT 10.8

                            ASSET PURCHASE AGREEMENT

                                  dated as of

                                  MAY 31, 2001

                                     among

                              LEEVAC MARINE, INC.,

                            HYGRADE OPERATORS, INC.,

               RED STAR TOWING AND TRANSPORTATION COMPANY, INC.,

                           SHERIDAN TOWING CO., INC.,

                           IRA S. BUSHEY & SONS, INC.

                                      and

                            AMERADA HESS CORPORATION

                       Relating to the purchase and sale

                                     of the

                     Vessels and Other Assets named herein

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                            ASSET PURCHASE AGREEMENT

         AGREEMENT dated as of May 31, 2001, among LEEVAC Marine, Inc.
("BUYER"), a Louisiana corporation, Hygrade Operators, Inc., a New York
corporation, Red Star Towing and Transportation Company, Inc., a New York
corporation, Sheridan Towing Co., Inc., a Delaware corporation (each, a "SELLER"
and collectively, the "SELLERS"), Ira S. Bushey & Sons, Inc. ("PARENT"), a New
York corporation and Amerada Hess Corporation, a Delaware corporation ("HESS").

                                   WITNESSETH:

         WHEREAS, each Seller desires to sell to Buyer; Parent and Hess desire
to facilitate such sale; and Buyer desires to purchase from each Seller, the
business and substantially all of the assets of each Seller for the aggregate
purchase price and upon and subject to the terms and conditions set forth in
this Agreement;

         NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:

                                    ARTICLE 1
                                   DEFINITIONS

         The following capitalized terms, as used in this Agreement, shall have
the meanings set forth below:

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.

         "Balance Sheets" means the balance sheets of each of the Companies as
of December 31, 2000.

         "Balance Sheet Date" means December 31, 2000.

         "Closing Date" means the date of the Closing.

         "Companies" means Hygrade, Red Star and Sheridan.

         "Hygrade" means Hygrade Operators, Inc.

         "Joint Exposure Claim" means a claim asserted by a person that is or
was an employee of Buyer based upon exposure during the course of employment
both before and after the Closing Date to any Contaminant.

         "Knowledge" means with respect to Sellers, Parent and/or Hess the
actual knowledge after due inquiry of supervisory and management level personnel
of Sellers, Parent and Hess who by virtue of their job responsibilities would be
in a position to know the relevant facts.

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         "Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise) of the Vessel Business (as defined herein),
the Vessels (as defined herein) and the Other Assets (as defined herein) taken
as a whole.

         "Person" means an individual, a corporation, an association, a
partnership, a limited liability company, an estate, a trust, or any other
entity or organization, governmental or otherwise.

         "Red Star" means Red Star Towing and Transportation Company, Inc.

         "Sheridan" means Sheridan Towing Co., Inc.

                                    ARTICLE 2
                                PURCHASE AND SALE

         Section 2.01 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, each Seller agrees to sell to Buyer, and Buyer
agrees to purchase from each Seller, all of such Seller's right, title and
interest to all of such Seller's properties and assets including, but not
limited to, the vessels set forth beneath the name of such Seller on SCHEDULE
2.01(a) attached hereto (the vessels named beneath each Seller's name shall
collectively be referred to as, the "Vessels") and the Other Assets (as defined
in Section 3.09) of such Seller, free and clear of all Liens (as defined in
Section 3.04) other than with respect to the Vessels any Lien which arises by
operation of law, has not been recorded and has not been asserted by the holder
thereof. Buyer expressly agrees that the retained assets listed on SCHEDULE
2.01(b) hereof (the "RETAINED ASSETS") shall be excluded from the sale. The
aggregate purchase price for the Vessels and Other Assets is $28,030,000, which
amount includes $1,030,000 due to Hess for drydocking certain Vessels prior to
closing (the "PURCHASE PRICE"), payable in cash. The Purchase Price shall be
paid as provided in Section 2.02.

         Section 2.02 Closing. The closing (the "CLOSING") of the purchase and
sale of the Vessels and Other Assets hereunder shall take place at the offices
of Hess, 1185 Avenue of the Americas, New York, New York, or at such other
location as the parties may agree, on such date and at such time as the parties
may agree, but no later than June 1, 2001. At the Closing:

         (a) Buyer shall deliver to Sellers the Purchase Price in immediately
available funds by wire transfer to an account of Sellers with a bank in New
York City designated by Sellers by notice to Buyer, not later than two business
days prior to the Closing Date.

         (b) The Vessels, including any and all Other Assets and documents and
certificates appurtenant to and/or required to be on board the Vessels, shall be
delivered by Sellers and taken over by Buyer safely afloat in international
waters offshore New York or in New York Harbor, and the remaining Other Assets
shall be delivered by Sellers to Buyer at the offices of Hess or such other
location as may be agreed between Buyer and Sellers.

         (c) The parties shall deliver such other documents, instruments and
agreements required to be delivered under Article 8 of this Agreement.

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         (d) The parties agree that, if by the time of the scheduled date for
closing, Buyer has been unable to assure itself of sufficient employee retention
or replacement hires, the Closing Date may be postponed for a reasonable time
to allow Buyer assurance of sufficient qualified employees to service the Vessel
Business as it has historically been serviced and to provide the service under
the Contract of Affreightment attached hereto as EXHIBIT A.

         Section 2.03 Excluded Liabilities. Notwithstanding anything contained
herein to the contrary, except for the assumption of contracts listed on
SCHEDULE 2.03, Buyer shall not assume or agree to pay, perform or discharge any
debts, obligations or liabilities of any Seller, Parent, Hess or any Affiliate
Employer of any kind or nature, whether or not such debts, liabilities or
obligations related to or arose out of the conduct of the Vessel Business or the
use, operation or ownership of the Vessels and Other Assets, whether accrued,
absolute, contingent or otherwise, or whether due or to become due, or
otherwise, whether known or unknown, which liabilities and obligations, if ever
in existence, shall continue to be liabilities and obligations of each Seller,
Parent or Hess as the case may be (the "EXCLUDED LIABILITIES").

                                    ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

         Sellers, jointly and severally with Parent, represent and warrant to
Buyer, and with respect to the representations applicable to Hess, Hess
severally but not jointly represents and warrants to Buyer, that:

         Section 3.01 Corporate Existence and Power. Each Seller, Parent and
Hess is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to hold, use and lease its properties and assets and to carry
on its business as now conducted. Each Seller, Parent and Hess is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
Each Seller has heretofore delivered to Buyer true and complete copies of such
Seller's certificate of incorporation and bylaws as currently in effect.

         Section 3.02 Corporate Authorization. The execution, delivery and
performance by each Seller, Parent and Hess of this Agreement and any other
documents contemplated hereby to be executed by each Seller and/or Parent or
Hess, and the consummation by each Seller, Parent and Hess of the transactions
contemplated hereby and thereby are within such Seller's, Parent's and Hess's
corporate powers and have been duly authorized by all necessary corporate
action. This Agreement constitutes, and any other documents contemplated hereby
to be executed by each Seller and/or Parent or Hess will upon execution
constitute, valid and legally binding agreements of each Seller, Parent and Hess
enforceable against each Seller, Parent and Hess in accordance with their terms.

         Section 3.03 Governmental Authorization. The execution, delivery and
performance by each Seller, Parent and Hess of this Agreement requires no action
by or in respect of, or filing with, any governmental body, agency, official or
authority.

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         Section 3.04 Non-contravention. The execution, delivery and performance
by each Seller, Parent and Hess of this Agreement and any other documents
contemplated hereby to be executed by each Seller and/or Parent or Hess, and the
consummation by each Seller, Parent and Hess of the transactions contemplated
hereby and thereby do not and will not (a) contravene or conflict with the
certificate of incorporation or bylaws of any Seller, Parent or Hess, (b)
assuming compliance with the matters referred to in Section 3.03, contravene or
conflict with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree applicable to any Seller, Parent or Hess,
(c) constitute a default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation or to a loss of any
benefit under any provision of any agreement, contract or other instrument by
which any of the Vessels or Other Assets are subject or any license, franchise,
permit or other similar authorization applicable to any of the Vessels or Other
Assets, or (d) result in the creation or imposition of any Lien on any of the
Vessels or Other Assets. For purposes of this Agreement, "LIEN" means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, recorded or unrecorded, in respect of such asset.

         Section 3.05 Ownership of Sellers and Parent. Parent is the record and
beneficial holder of all of the issued and outstanding capital stock of each
Seller. There is no existing option, warrant, call, commitment or other
agreement with respect to the capital stock of any Seller. Hess is the record
and beneficial holder of all of the issued and outstanding capital stock of
Parent. There is no option, warrant, call, commitment or other agreement with
respect to the capital stock of Parent.

         Section 3.06 Ownership of Vessels and Other Assets. Each Seller is the
legal, record and beneficial owner of all of its Vessels and Other Assets, free
and clear of any and all preemptive rights, claims or Liens other than, with
respect to the Vessels, Liens which arise by operation of law, which have not
been recorded and have not been asserted by the holder thereof. Seller has the
authority to sell, transfer, assign and deliver its Vessels and Other Assets to
Buyer, and such sale, transfer, assignment and delivery of such Vessels and
Other Assets to Buyer will vest in Buyer good and marketable title to such
Vessels and Other Assets, free and clear of any and all preemptive rights,
claims or Liens other than, with respect to the Vessels, Liens which arise by
operation of law, which have not been recorded and have not been asserted by the
holder thereof.

         Section 3.07 Consents and Approvals. Except for the consents and
approvals set forth on SCHEDULE 3.07 hereof (which consents and approvals shall
be obtained on or before the Closing Date), the execution and delivery by each
Seller, Parent and Hess of this Agreement and any other documents contemplated
hereby to be executed by each Seller and/or Parent and Hess, compliance by each
Seller, Parent and Hess with the terms hereof and thereof and consummation by
each Seller, Parent and Hess of the transactions contemplated hereby and thereby
do not require such Seller, Parent or Hess to obtain any consent, approval or
action of any corporation, person, firm or other entity, or any public
governmental or judicial authority (including any maritime-related agency).

         Section 3.08 Financial Statements. Parent has delivered to Buyer true,
complete and correct copies of the combined financial statements (including
balance sheet, statements of

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income, cash flow and Shareholders' equity) of Sellers for the years ended
December 31, 2000, 1999 and 1998, including the notes relating thereto
(collectively, the "FINANCIAL STATEMENTS"). The Financial Statements of Sellers
provided to Buyer fairly present, in conformity with generally accepted
accounting principles consistently applied the combined financial position of
Sellers as of the dates thereof and their combined results of operations and
changes in financial position for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial statements).
There are no significant assets used in the Vessel Business that are not
reflected in the Financial Statements.

         Section 3.09 Title to Properties; Condition.

         (a) Each Seller has good and marketable title to its Vessels and its
Other Assets (as defined below). For purposes of this Agreement, Other Assets
with respect to any Seller shall mean any and all of such Seller's properties
and assets (other than the Vessels) pertaining to, used in or necessary for the
conduct of its business (for each Seller individually and for the Sellers,
collectively, the "VESSEL BUSINESS"), other than the Retained Assets including,
without limitation, those assets specifically identified on SCHEDULE 3.09, all
equipment, pumps, gear, outfit, furniture, furnishings, fittings, fuel,
lubricants, apparel (other than with logos), appurtenances, appliances,
drawings, logs, spare and replacement parts, consumables and stores and all
other items as are on board, off board or identified to each Vessel and such
assets as appear in the inventory and pictorial condition survey for each of the
Vessels completed in February - March 2001, contract rights, assignable leases,
assignable licenses, assignable permits, customer contact lists, rights to or
associated with each Vessel's name and all rights and value associated
therewith, all machinery and equipment of each Seller not used in connection or
associated with the Vessels, inventories, supplies, manuals (or copies thereof),
specifications, equipment warranties, office furniture and equipment, other
furnishings, fittings, fixtures, accessories and appliances to the extent such
furniture, equipment, furnishings, fittings, fixtures, accessories and
appliances are now or have during the last 12 months been located in the
Brooklyn, New York marine facility, contracts, financial books and records,
vendor relationships, goodwill, operating rights, rights to telephone numbers
for the Brooklyn, New York marine facility and fuel and lubricants on board.
Notwithstanding the foregoing, except for provisions essential to the operation
of the Vessels (other than fuel and lubricants on board), properties of third
parties that are on board the Vessels, such as personal effects of crew members
and cargo, are not included in Other Assets. Each Vessel is duly documented with
the United States Coast Guard in the name of the Seller under whose name the
Vessel is listed on SCHEDULE 2.01, and is afloat. Each Seller, Parent and Hess
has at all times that any Vessel was owned by any Seller or an Affiliate of any
Seller been a citizen of the United States within the meaning of Section 2 of
the Shipping Act of 1916, as amended, (the "SHIPPING ACT") and the Vessels are
under United States flag and qualified to engage in United States coastwise
trade as set forth in the Shipping Act and the applicable regulations pertaining
thereto. At no time have the Vessels been sold, chartered or otherwise
transferred to any person in violation of any applicable laws, rules or
regulations. The Vessels will, on the Closing Date, have current Certificates of
Inspection in effect from the United States Coast Guard or the American Bureau
of Shipping and an American Bureau of Shipping Loadline Certificate and Hull and
Machinery Classification, free of reported or reportable exceptions or notations
for record.

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         (b) There are no actual, pending or to the Knowledge of Sellers, Parent
or Hess after due inquiry threatened claims against the Vessels or the Other
Assets that could reasonably be expected to give rise to a Lien (other than
Liens that would be covered by valid and collectible insurance that would be
assigned to Buyer hereunder, including applicable deductibles), or acts or
incidents which could reasonably be expected to give rise to any such claims,
relating to or arising out of the Vessels or the Other Assets or the operation
of the Vessel Business. Except as set forth on SCHEDULE 3.09, all material
assets necessary or useful in or to the business of each Seller as presently
operated by such Seller are owned of record and beneficially by such Seller
which owns them and not by any affiliate of such Seller or by any other party.
SCHEDULE 3.09 includes a list of all leases, licenses and permits included in
the Other Assets. As to each license or permit the licensee's or permit holder's
interest in which constitutes part of the Other Assets, such license or permit
is in full force and effect, no notice of cancellation or termination under any
option or right reserved to the licensor or permit holder under such license or
permit or notice of default has been received by the Seller that is a party
thereto and no event or condition has occurred or exists which, with notice or
lapse of time or both would constitute a default thereunder. No Seller has
assigned its interests under any such license or permit or sublicensed or
assigned the right, license or permit granted thereby. Each Seller has the right
to transfer all of its right, title and interest in the licenses and permits
included in the Other Assets which by their terms are permitted to be
transferred or assigned without any consent, and the transfer contemplated
hereby will not affect their validity or enforceability.

         (c) Each Vessel is seaworthy, properly manned, equipped and supplied
for its current or next upcoming voyage, the cargo tanks, pipelines, and valves
of each Vessel are suitable for cargo, and the pumps and heating coils, if any,
of each Vessel are in good working condition. Nothing has occurred to the
physical condition of any Vessel since the date of inspection by Buyer of such
Vessel or to the Other Assets since December 31, 2000 that would have any
material adverse effect on the value of the Vessels or the Other Assets or the
suitability of the Vessels or the Other Assets for the purposes for which they
have been and are being employed in the operation of the Vessel Business. Except
as otherwise set forth in this Section 3.09(c), as to condition the Vessels are
being sold AS IS, WHERE IS.

         Section 3.10 Absence of Certain Changes. Since December 31, 2000
(except with respect to Section 3.10(a) below as to which for each Vessel it is
since the date of Buyer's inspection of such Vessel), each Seller has conducted
its business in the ordinary course consistent with past practice and there has
not been:

         (a) any event, occurrence or development of a state of circumstances or
facts which has had or reasonably could be expected to have a Material Adverse
Effect;

         (b) any creation or assumption by any Seller of any Lien on any of the
Vessels or Other Assets other than with respect to the Vessels, any Lien which
arises by operation of law, has not been recorded and has not been asserted by
the holder thereof;

         (c) any transaction or commitment made, or any contract or agreement
entered into, by any Seller relating to the Vessel Business or binding upon the
Vessels or Other Assets (including the acquisition or disposition of any of the
Vessels or Other Assets) or any

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relinquishment by any Seller of any contract or other right, in either case,
material to such Seller, other than transactions and commitments in the ordinary
course of business consistent with past practice and those contemplated by this
Agreement;

         (d) any change in any method of accounting or accounting practice by
any Seller, except for any such change required by reason of a concurrent change
in generally accepted accounting principles;

         (e) any (i) grant of any severance or termination pay to any officer or
employee of any Seller except in connection with the transactions contemplated
under this Agreement, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any officer or employee of any Seller, (iii) increase in
benefits payable under any existing severance or termination pay policies or
employment agreements or (iv) increase in compensation, bonus or other benefits
payable to officers or employees of any Seller, other than in the ordinary
course of business consistent with past practice;

         (f) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of any Seller or any Affiliate Employer (as hereinafter defined),
which employees were not subject to a collective bargaining agreement at
December 31, 2000, or any lockouts, strikes, slowdowns, work stoppages or
threats thereof by or with respect to such employees;

         (g) any material revaluation, write-down or write-off by any Seller of
any of the Vessels or Other Assets;

         (h) any amendment or termination of any material contract relating to
the Vessel Business;

         (i) any breach of the terms of any of the material contracts relating
to the Vessel Business;

         (j) any commencement or notice of commencement or, the threat of
commencement of any litigation or any governmental proceeding against or
investigation of any Seller or any Seller's Vessel Business which would have a
Material Adverse Effect or adversely affect the ability of any Seller, Parent or
Hess to consummate the transactions contemplated hereby;

         (k) any waiver or release of any material right or claim of any Seller
which constitutes a part of the Vessels or Other Assets; or

         (l) to the Knowledge of Sellers, Parent and Hess, any entry into any
commitment of any kind, or the occurrence of any event giving rise to any
contingent liability not covered by the foregoing that would have a Material
Adverse Effect or adversely affect the ability of any Seller, Parent or Hess
to consummate the transaction contemplated hereby.

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         Section 3.11 Material Contracts.

         (a) Except as disclosed in SCHEDULE 3.11, no Seller is a party to or
bound by any written contract (i) with a term greater than one year or (ii)
which will involve annual consideration in excess of $500,000. Each Seller has
delivered to Buyer a copy of each contract listed on SCHEDULE 3.11.

         (b) Each contract disclosed in SCHEDULE 3.11 to this Agreement is a
valid and legally binding agreement of the Seller that is a party thereto, and
is in full force and effect, and no Seller, or to the Knowledge of Sellers, any
other party thereto is in default or breach under the terms of any such
contract, and, to the Knowledge of Sellers, no event or circumstance has
occurred that, with notice or lapse of time or both, would constitute any event
of default thereunder.

         (c) The transfer contemplated herein will not affect the validity or
enforceability of any contract disclosed on SCHEDULE 3.11.

         Section 3.12 Compliance with Laws and Court Orders. No Seller is in
violation of, none has since December 31, 2000 violated, and to Sellers',
Parent's or Hess's Knowledge no Seller is under investigation with respect to
and has not been threatened to be charged with or given notice of any violation
of, any applicable law, rule, regulation, judgment, injunction, order or decree
that could have a Material Adverse Effect or adversely affect the ability of any
Seller, Parent or Hess to consummate the transactions contemplated hereby.

         Section 3.13 Absence of Defaults. None of the Sellers, Parent or Hess
is in default, and no event has occurred which with notice or lapse of time or
both would constitute a material default, in any way under any term or provision
of any agreement or instrument to which any Seller, Parent or Hess is a party or
by which any Seller, Parent or Hess is bound or by or to which the Vessel
Business or any of the Vessels or Other Assets is bound or subject that could
have a Material Adverse Effect or adversely affect the ability of any Seller,
Parent or Hess to consummate the transactions contemplated hereby.

         Section 3.14 Litigation. Except as set forth on SCHEDULE 3.14, (a)
there are no actions, claims, suits, investigations, inquiries or proceedings
pending against any Seller, Parent or Hess or in rem against any of the Vessels
or Other Assets or, to Sellers', Parent's or Hess's Knowledge, threatened
against any Seller, Parent or Hess or in rem against any of the Vessels or Other
Assets, at law or in equity, in any court, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
other instrumentality which if adversely decided could (i) affect the validity
or enforceability of this Agreement or the documents contemplated hereby to be
executed by any Seller and/or Parent or Hess; (ii) prevent or delay consummation
of the transactions contemplated hereby or (iii) establish a Lien against any of
the Vessels or Other Assets; and (b) none of the Sellers, Parent or Hess is in
violation of any order, decree, judgment, award, determination, ruling or
regulation of any court, governmental department, commission, board, bureau,
agency or other instrumentality, the result of which violation individually or
violations in the aggregate has had or could have a Material Adverse Effect or
could (i) affect the validity or enforceability of this Agreement or the
documents contemplated to be executed by any Seller and/or Parent or Hess; (ii)
prevent or delay

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consummation of the transactions contemplated hereby; or (iii) establish a Lien
against any of the Vessels or Other Assets.

         Section 3.15 Environmental Matters.

         (a) In this Section 3.15(a), all terms appearing in initial capitals
shall have the meaning given them in Section 3.15(b) hereof. With respect to the
Vessel Business and except as to those matters identified on SCHEDULE 3.15(a);

                  (i) the operations of Sellers have complied in all material
         respects with all applicable Domestic Environmental Laws in all
         jurisdictions in which any Seller currently conducts business;

                  (ii) none of the operations of any Seller are subject to any
         judicial or administrative proceeding alleging the violation of any
         Domestic Environmental Law;

                  (iii) none of the operations of any Seller are the subject of
         any federal or state investigation evaluating whether any Remedial
         Action is needed to respond to a Release of any Contaminant or other
         substance into the environment;

                  (iv) no Seller has filed any notice under any Domestic
         Environmental Law applicable to the jurisdiction in which operations of
         any Seller are conducted indicating past or present treatment, storage
         or disposal of a hazardous waste or reporting a Release of a
         Contaminant or other substance into the environment;

                  (v) none of the operations of any Seller involve the
         generation, transportation, treatment or disposal of hazardous waste,
         as defined under 40 C.F.R. Parts 260-270 (in effect as of the date of
         this Agreement) or any state equivalent thereof, in violation of any
         Domestic Environmental Law applicable to the jurisdiction in which
         operations of any Seller are conducted, including without limitation
         statutes, regulations and laws pertaining to permits and manifests;

                  (vi) no Seller has disposed of any hazardous waste or
         substance or other material by placing it in or on the ground or waters
         of any premises owned, leased or used by any Seller in violation of any
         Domestic Environmental Law applicable to the jurisdiction in which
         operations of any Seller are conducted; and

                  (vii) no Lien in favor of any governmental authority for any
         liability under Domestic Environmental Laws applicable to the
         jurisdiction in which operations of any Seller with respect to the
         Vessel Business of any Seller are conducted, or damages arising from or
         costs incurred by such governmental authority in response to a release
         of a Contaminant or other substance into the environment has been filed
         or attached to any of the Vessels or Other Assets or any of the
         locations upon which the operations of any Seller with respect to the
         Vessel Business of any Seller is conducted

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which, in the case of any non-compliance, violation, disposal. Release,
liability or other condition or circumstance identified in (i) -- (vii) above,
could have a Material Adverse Effect or adversely affect the ability of any
Seller, Parent or Hess to consummate the transactions contemplated hereby.

         (b) The following terms shall have the meanings set forth below:

                  (i) "Contaminant" shall mean those substances or materials
         that are defined as hazardous or toxic or that are regulated by or form
         the basis of liability under any Domestic Environmental Law, including
         without limitation asbestos, polychlorinated biphenyls ("PCBs"), and
         radioactive substances, or any other material or substance that
         constitutes a health, safety or environmental hazard to any person or
         property.

                  (ii) "Domestic Environmental Laws" shall mean all federal,
         state or local laws relating to the environment, including without
         limitation the Comprehensive Environmental Response, Compensation and
         Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
         Hazardous Material Transportation Act (49 U.S.C. Section 1801 et seq.),
         the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
         seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Clean
         Water Act (33 U.S.C. Section 1251 et seq.), the Toxic Substances
         Control Act, as amended (15 U.S.C. Section 2601 et seq.), the National
         Environmental Policy Act (42 U.S.C. Section 4321 et seq.), the Oil
         Pollution Act (33 U.S.C. Section 2701 et seq.), the Marine Protection,
         Research and Sanctuaries Act (33 U.S.C. Section 1401 et seq.), the
         Outer Continental Shelf Lands Act (43 U.S.C. Section 1331 et seq.) and
         the Act to Prevent Pollution from Ships (33 U.S.C. Sections 1902-1912,
         including without limitation Annexes I, II and V of the International
         Convention for the Prevention of Pollution from Ships, 1973, as
         modified by the Protocol of 1978 relating thereto (MARPOL 73/78) done
         at London on February 17, 1978) and other treaties or conventions into
         which the United States has entered, as these laws have been amended or
         supplemented, and any analogous state or local statutes, rules or
         ordinances and the regulations promulgated pursuant thereto.

                  (iii) "Permit" shall mean any permit, approval, authorization,
         license variance, or permission required from a governmental authority
         under any applicable Domestic Environmental Laws.

                  (iv) "Release" shall mean any release, spill, emission,
         leaking, pumping, injection, deposit, disposal, discharge, dispersal,
         leaching, or migration into the indoor or outdoor environment, or into
         or out of any property owned or leased by any of the Companies,
         including the movement of any Contaminant through or in the air, soil,
         surface water, groundwater, or property and including without
         limitation the meanings of such words as set forth in the laws,
         applicable treaties, rules, ordinances or regulations or analogous
         governmental provisions referred to under Domestic Environmental Laws.

                                       10

<PAGE>   12

                  (v) "Remedial Action" shall mean all actions required or
         voluntarily undertaken to (i) clean up, remove, treat, or in any other
         way address any Contaminant in the indoor or outdoor environment; (ii)
         prevent the Release or threat of Release, or minimize the further
         Release of any Contaminant so it does not migrate or endanger or
         threaten to endanger public health or welfare of the indoor or outdoor
         environment; or (iii) perform pre-remedial studies and investigations
         and post-remedial monitoring and care.

         (c) This warranty in Section 3.15 shall not give rise to any remedy
relating to the structural soundness, condition, repair or adequacy for use of
the Vessels or Other Assets.

         Section 3.16 ERISA and Related Matters.

         (a) Set forth on SCHEDULE 3.16(a) is a list of all "employee pension
benefit plans" and all "employee welfare benefit plans" within the meaning of,
respectively, Sections 3(2) and 3(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") (determined without regard to any regulatory
exceptions to such statutory definitions), in which employees of any Seller or
Spentonbush/Red Star Companies, Inc. ("Spentonbush/Red Star") participate or
have participated within the six-year period ending on the Closing Date
(collectively, including any Multiemployer Plans as defined below, the "PLANS").
Except as set forth on SCHEDULE 3.16(a), there are no "multiemployer plans"
within the meaning of Section 3(37) of ERISA ("MULTIEMPLOYER PLANS") in which
any Seller or Spentonbush/Red Star participate or have been a participating
employer within the last six (6) years or in which employees of any such
entities participate or have participated within the last six (6) years.

         (b) All contributions which are required under any Plan for all plan
years ending on or prior to the date hereof which have become due have been
made.

         (c) Each Plan is in material compliance, in form and in operation, with
its terms and all applicable laws. Neither Hess, Parent nor any Seller has
received any written notice (formal or informal) that any Plan has been operated
in violation of any applicable laws.

         (d) No excise tax is due (or would be due in the absence of a waiver)
under Code Section 4971 with respect to any Plan.

         (e) Each Seller and all ERISA Affiliates have paid all premiums (and
interest charges and penalties for late payment, if applicable) due to the PBGC
with respect to each Pension Plan which is covered by Title IV of ERISA for each
plan year thereof for which such premiums are required.

         (f) None of the Sellers nor any ERISA Affiliate have any unpaid
"withdrawal liability" (as defined by Section 4201 of ERISA) to any
Multiemployer Plan which affects the employees of the Vessel Business.

         (g) Except as set forth on SCHEDULE 3.16(i), the execution of this
Agreement and the consummation of the transactions contemplated hereby will not
result in any payment becoming due from any Seller under any employee benefit
arrangement or plan or any Plan. There is no

                                       11

<PAGE>   13

agreement, plan, or arrangement covering any current or former employee,
director, or consultant of any Seller that, individually or collectively, could
give rise to the payment of any amount that would not be deductible pursuant to
the terms of Code Sections 162(m) or 280G.

         (h) As used in this Section 3.16, the following terms shall have the
meanings set forth below:

                  (i) "ERISA Affiliate" shall mean any entity which is (or at
         any relevant time was) a member of a "controlled group of corporations"
         with, under common control" with, or a member of an "affiliated service
         group" with Seller as such terms are defined in Section 414(b), (c),
         (m) or (o) of the Code.

                  (ii) "PBGC" shall mean the Pension Benefit Guaranty
         Corporation.

                  (iii) "Pension Plan" shall mean any "employee pension benefit
         plan" as defined in Section 3(2) of ERISA (other than a Multiemployer
         Plan) which (a) is (or was within the six-year period ending on the
         Closing Date) entered into, maintained, administered, contributed to or
         required to be contributed to, as the case may be, by any Seller or any
         ERISA Affiliate and (b) which covers (or covered within the six-year
         period ending on the Closing Date) any current or former employee,
         director, or consultant of any Seller, or any ERISA Affiliate (with
         respect to their relationship with such entities).

         Section 3.17 Customers and Suppliers. SCHEDULE 3.17 lists the names and
addresses of all of the customers and suppliers of Sellers (and including the
dollar amount of total sales to each such customer or purchases from each such
supplier to the extent separable from other Hess operations not included in the
Vessel Business) from January 1, 2000 through the most recent month ending prior
to the Closing Date. To Sellers', Parent's and Hess's Knowledge, the
relationships of each applicable Seller with the customers and suppliers listed
in SCHEDULE 3.17 are satisfactory, and Sellers are not aware of any unresolved
disputes involving amounts greater than $10,000 individually or $30,000 in the
aggregate with any of such customers or suppliers. Since January 1, 2000, no
material customer or material supplier (for this purpose, a "material customer"
means a customer that accounts for more than $10,000 in sales per any twelve
month period and a "material supplier" means a supplier from which purchases
totaled $10,000 per any twelve month period) has, in writing, cancelled, limited
or notified any Seller of its intent to cancel or limit its relationship with
Sellers.

         Section 3.18 Patents, Trademarks and Copyrights. Except as set forth on
SCHEDULE 3.18, no Seller owns nor is a licensee or sublicensee of any patents,
trademarks, copyrights or other intellectual property rights used in the Vessel
Business except for (i) the corporate names that are owned by each Seller, (ii)
those rights that are incorporated by the manufacturers into the Vessels or
Other Assets, without granting any Seller any specified rights therein; and
(iii) software license agreements and related contracts, pursuant to which the
payment of all costs, fees and royalties have been duly and timely paid by each
Seller and no event of default has occurred thereunder. There have been no
claims made, and none of Hess, Parent nor any Seller has received any notice and
none of Hess, Parent or any Seller otherwise

                                       12

<PAGE>   14
knows or has reason to believe that the operation of the Vessel Business or any
of the Vessels or Other Assets is in conflict with the rights of any third party
with respect to intellectual property.

         Section 3.19 Insurance. SCHEDULE 3.19 sets forth a true, complete and
correct list of all insurance policies of any kind or nature covering each
Seller with respect to the Vessel Business, and the Vessels and Other Assets,
including without limitation policies of fire, theft, employee fidelity,
worker's compensation, property and other casualty and liability insurance, and
indicates the type of coverage, name of insured, the insurer, the expiration
date of each policy and the amount of coverage for statutory workers'
compensation. SCHEDULE 3.19 also sets forth a list of any currently pending
claims under such policies or similar prior policies. The premiums for the
insurance policies listed in SCHEDULE 3.19 have been fully paid. The insurance
afforded under such policies or certificates is in full force and effect and
will continue to cover each Seller with respect to the Vessel Business, and the
Vessels and Other Assets through the Closing. Copies of each such policy have
been made available to Buyer.

         Section 3.20 Employees. Sellers have separately provided to Buyer a
chart listing of all employees of each Seller and each employee of each
Affiliate Employer who are now employed in Sellers' Brooklyn marine facility or
on the Vessels providing services to one or more Sellers and the rates of pay
for and all commission, bonus or other compensation or expense reimbursement or
allowance arrangements regarding such employees. Such chart lists each
management or employment contract or contract for personal services and a
description of any understanding or commitment between any Seller or any
Affiliate of Seller and any employee listed on such chart. A description of
such understandings and commitments has been delivered to Buyer. Except as
agreed to beforehand by Buyer, no Seller has through the date of this Agreement
made, and none will hereafter make, any statement or communication of any kind
regarding whether, or the terms and conditions upon which, any such employee may
continue to be employed by Buyer.

         Section 3.21 Labor Agreements; Disputes. Except as set forth on
SCHEDULE 3.21, no Seller nor any Affiliate of any Seller employing employees
listed on the chart referred to in Section 3.20 to either Seller or the Vessel
Business (an "Affiliate Employer") is a party to and has an obligation under any
collective bargaining agreement or other labor union contract, white paper or
side agreement with any labor union or organization, nor any obligation to
recognize or deal with any labor union or organization. Except as set forth on
SCHEDULE 3.21, there are, and in the last three (3) years there have been, no
pending or overtly threatened representation campaigns, elections or proceedings
or questions concerning union representation involving any employees of any
Seller or any Affiliate Employer. Except as set forth on SCHEDULE 3.21, there
are, and in the last three (3) years there have been, no overt activities or
efforts of any labor union or organization (or representatives thereof) to
organize any employees engaged in the Vessel Business of any Seller, nor of any
demands for recognition or collective bargaining, nor of any strikes, slowdowns,
work stoppages or lock-outs of any kind, or overt threats thereof, by or with
respect to any employees of the Vessel Business, or any actual or claimed
representatives thereof, and no such activities, efforts, demands, strikes,
slowdowns, work stoppages or lock-outs occurred during the three-year period
preceding the date hereof. There are no pending, or to the Knowledge of Sellers,
Parent or Hess threatened, charges or complaints involving any federal, state or
local civil rights enforcement agency or court; complaints or citations under
the

                                       13

<PAGE>   15

Occupational Safety and Health Act or any state or local occupational safety act
or regulation; unfair labor practice charges or complaints with the National
Labor Relations Board; or other claims, charges, actions or controversies
pending, or, to Sellers', Parent's or Hess's Knowledge, threatened or proposed,
involving any Seller or any Affiliate Employer and any employee, former employee
or any labor union or other organization representing or claiming to represent
such employees' interests, which could have a Material Adverse Affect. To the
Knowledge of Sellers, Parent and Hess, each Seller and each Affiliate Employer
is and has been in compliance in all respects with all laws, rules and
regulations respecting employment and employment practices, terms and conditions
of employment and wages and hours, the sponsorship, maintenance, administration
and operation of (or the participation of its employees in) employee benefit
plans and arrangements and occupational safety and health programs except where
the failure to be in compliance would not result in a Material Adverse Effect,
and no Seller nor any Affiliate Employer is engaged in any violation of any law,
rule or regulation related to employment, including unfair labor practices or
acts of employment discrimination, which could have a Material Adverse Effect.

         Section 3.22 Regulatory Filings. Each Seller has filed all reports,
statements, documents, registrations, filings or submissions required, in
connection with the operation of the Vessel Business or the Vessels or Other
Assets, to be filed by each Seller with any federal, state, municipal or other
governmental department, commission, board, bureau, agency or other
instrumentality, the failure to file which would have a Material Adverse Effect.
All such filings complied with applicable law when filed and no deficiencies
have been asserted by any such regulatory authority with respect to such filings
or submissions.

         Section 3.23 Transactions with Affiliates. Except as set forth on
SCHEDULE 3.23, there are no contracts or arrangements (formal or informal,
written or oral) related directly or indirectly to the Vessel Business or the
Vessels or Other Assets between any Seller and any other persons controlling,
under common control with or controlled by such Seller.

         Section 3.24 Finder's Fee. All negotiations with respect to this
Agreement and the transactions contemplated hereby have been carried out by
Sellers directly with Buyer without the intervention of any person on behalf of
Parent, Hess and Sellers in such manner as to give rise to any valid claim by
any such person against Buyer for a finder's fee, brokerage commission or
similar payment.

         Section 3.25 Customary Business Practice. None of Sellers, Parent or
Hess has conducted or maintained any material business practices or
relationships in connection with the Vessel Business in any manner other than is
customary or standard in the industry, and there are no special relationships
with any suppliers or customers that are inconsistent with customary and
standard practice in the industry.

         Section 3.26 No MARAD Financings or Guarantees. The United States
Maritime Administration has not financed or guaranteed any obligation of any
Seller that is presently outstanding.

         Section 3.27 Disclosure. Each response by Brian Douty, Stan Chelluck
and Joe Gehegan to inquiries in connection with the due diligence performed by
representatives of Buyer

                                       14

<PAGE>   16

(other than responses to interviews by Buyer for purposes of making employment
decisions), as revised or updated by subsequent disclosures and this Agreement,
was complete and accurate in all material respects. Copies of the most recent
versions of all documents and other written information referred to herein or in
the schedules that have been delivered or made available to Buyer are true,
correct and complete copies thereof and include all amendments, supplements or
modifications thereto or waivers thereunder. Such documents and other written
information do not omit any material facts necessary, in light of the
circumstances under which such information was furnished, to make the statements
set forth therein not misleading. Except as expressly set forth in this
Agreement and the schedules or in the certificates or other documents delivered
pursuant hereto, including written due diligence materials, there are no other
facts other than facts generally known to the public which impact on the tug and
barge industry generally which will have a material adverse effect on the value
of the Vessel Business or the Vessels or Other Assets.

                                    ARTICLE 4
                     REPRESENTATIONS AND WARRANTIES OF BUYER

                  Buyer represents and warrants to Seller that:

         Section 4.01 Corporate Existence and Power. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and has, or will by
the Closing Date have, all material governmental licenses, authorization,
consents and approvals required to hold, use and lease its properties and assets
and to carry on its business as now conducted or as required to carry out its
obligations under the Contract of Affreightment attached hereto as EXHIBIT A.
Buyer is duly qualified, or by the Closing Date will be qualified, to do
business as a foreign corporation and is or will be in good standing in each
jurisdiction where the failure to be so qualified would have a Material Adverse
Effect or as may be required to perform in all material respects under the
Contract of Affreightment. Buyer is a citizen of the United States within the
meaning of Section 2 of the Shipping Act, and qualified to operate vessels in
the coastwise trade of the United States as set forth in the Shipping Act and
the applicable regulations pertaining thereto.

         Section 4.02 Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby are within the corporate powers of Buyer and
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of Buyer.

         Section 4.03 Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated by this Agreement require no action by or in respect
of, or filing with, any governmental body, agency, official or authority.

         Section 4.04 Non-contravention. Except as set forth on SCHEDULE 4.04,
for which matter a consent will be obtained prior to Closing, the execution,
delivery and performance by Buyer of this Agreement and the consummation by
Buyer of the transactions contemplated hereby do not and will not (a) contravene
or conflict with the certificate of incorporation or bylaws of Buyer, (b)
assuming compliance with the matters referred to in Section 4.03,

                                       15

<PAGE>   17

contravene or conflict with any provision of law, regulation; judgment, order or
decree binding upon Buyer, or (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
Buyer or to a loss of any benefit to which Buyer is entitled under any
agreement, contract or other instrument binding upon Buyer.

         Section 4.05 Finders' Fees. All negotiations with respect to this
Agreement and the transactions contemplated hereby have been carried out by
Buyer directly with Sellers, Parent and Hess without the intervention of any
person on behalf of Buyer in such manner as to give rise to any valid claim by
any such person against Sellers, Parent or Hess for a finder's fee, brokerage
commission or similar payment, other than RBC Dominion Securities Corporation,
which has been engaged by Buyer to represent it in this transaction at Buyer's
sole expense.

         Section 4.06 Financing. Buyer has, or will have by the Closing Date,
sufficient cash, available lines of credit or other sources of immediately
available funds to enable it to make payment of the Purchase Price less, the
Good Faith Deposit.

                                    ARTICLE 5
                              COVENANTS OF SELLERS

         Each Seller, Parent and Hess, jointly and severally, agree that from
the date hereof until the Closing Date:

         Section 5.01 Conduct of the Companies. Sellers shall, and Parent shall
cause Sellers to, conduct its Vessel Business in the ordinary course consistent
with past practice and use its reasonable commercial efforts to maintain,
preserve and protect the Vessels and Other Assets and the Vessel Business, keep
available the services of the present officers and employees of the Vessel
Business and preserve the present relationships with persons having business
dealings with Sellers. Without limiting the generality of the foregoing, from
the date hereof until the Closing Date:

         (a) No Seller will adopt or propose any change in its certificate of
incorporation or bylaws which would affect its ability to complete the
transactions contemplated in this Agreement;

         (b) No Seller will, merge or consolidate with any other Person or
acquire a material amount of assets of any other Person which would affect its
ability to complete the transactions contemplated in this Agreement;

         (c) No Seller will, without the prior written approval of Buyer, sell,
lease, license or otherwise dispose of any Vessels or Other Assets or property
except (i) pursuant to existing contracts or commitments or (ii) in the ordinary
course consistent with past practice;

         (d) No Seller will, (i) take or agree or commit to take any action that
would make any representation and warranty of Sellers hereunder inaccurate in
any material respect at, or as of any time prior to, the Closing Date or (ii)
omit or agree or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect at any
such time.

                                       16

<PAGE>   18

         (e) No Seller will increase the pay rates of existing employees except
(i) pursuant to existing contracts or commitments or (ii) in the ordinary course
of business consistent with past practice; and

         (f) No Seller will allow its fuel and lubricants on board the Vessels
at the Closing to decline below a level consistent with its routine historical
performance.

         (g) No Seller will agree or commit to do any of the foregoing.

         Section 5.02 Access to Information. Sellers shall permit Buyer and its
counsel, accountants and other representatives reasonable access during normal
business hours to all of their properties, books, contracts, commitments and
other records relating to the Vessel Business, Vessels and Other Assets,
including without limitation tax returns, declarations of estimated tax and tax
reports, and during such period Sellers shall furnish promptly to Buyer all
other information concerning the Vessel Business, Vessels and Other Assets
and personnel as Buyer may reasonably request; provided, however, that, no
investigation pursuant to this Section 5.02 or otherwise shall limit the effect
of any representations or warranties contained in this Agreement. Without
limiting the generality of the foregoing, each Seller shall deliver to Buyer
copies of all financial statements, reports or analyses with respect to the
Vessel Business, Vessels and Other Assets which are prepared or received between
the date hereof and the Closing Date promptly after such preparation or receipt
regardless of whether such financial statements, reports or analyses are
prepared internally or by third parties.

         Section 5.03 Notices of Certain Events. Each Seller shall promptly
notify Buyer of:

         (a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;

         (b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and

         (c) any actions, suits, claims, investigations or proceedings commenced
or, to Sellers', Parent's or Hess's Knowledge threatened against, relating to or
involving or otherwise affecting any Seller, the Vessels, the Other Assets or
the Vessel Business which, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 3.14 or which relate to
the consummation of the transactions contemplated by this Agreement.

         Section 5.04 Continued Administration.

         (a) Sellers, Parent and Hess shall use their best efforts to cause to
have their Plan Administrators administer each and every Plan listed in SCHEDULE
3.16(a) hereto in accordance with its terms and the provisions of the Code and
ERISA. Sellers shall, and shall not permit their Affiliates to amend or
terminate any such Plan except as described on SCHEDULE 3.16(a).

                                       17

<PAGE>   19
         (b) Neither Buyer nor any of its affiliates shall adopt, become a
sponsoring employer of, nor have any obligations under or with respect to any
employee pension benefit plans or employee welfare benefits plans maintained by
the Seller, including but not limited to the Plans listed on SCHEDULE 3.16(a),
and Seller shall retain all liabilities thereunder.

          (c) Seller acknowledges that Seller is responsible, and Buyer is not
responsible, for determining whether restrictions on distributions from a plan
pursuant to Section 401 (k)(10) of the Internal Revenue Code, as amended (the
"CODE"), apply for purposes of any current employees of Seller who become
employees of Buyer as a result of this Agreement.

         Section 5.05 Records. Sellers shall maintain their books, accounts and
records in the usual, regular and ordinary manner.

         Section 5.06 Maintenance of Insurance. Sellers shall maintain in full
force and effect all of their presently existing insurance coverage described in
SCHEDULE 3.19 hereto, or insurance comparable to such existing coverage. Sellers
shall cause Buyer to be named as an additional insured and loss payee under such
policies except for its P&I insurance effective from the signing of this
Agreement and will provide written notice to Buyer of all insured claims arising
between the date of this Agreement and the Closing Date.

          Section 5.07 Additional Disclosure. Sellers and/or Parent or Hess
shall promptly, after the occurrence thereof is known to any Seller and/or
Parent or Hess, advise Buyer of each event subsequent to the date hereof which
causes any covenant of any Seller and/or Parent or Hess to be breached or causes
any representation or warranty of any Seller and/or Parent or Hess contained
herein to no longer be true, correct or complete.

          Section 5.08 Taxes. Each Seller shall (and Parent shall cause each
Seller to) continue to timely file all Tax Returns with the appropriate
governmental agencies in all jurisdictions in which such returns or reports are
required to be filed, and ensure that all Taxes have been properly accrued and
paid when due.

          Section 5.09 Approvals. Sellers, Parent and Hess shall obtain, and
shall cooperate with Buyer in obtaining, as promptly as possible, all approvals,
authorizations and clearances of governmental and regulatory bodies and
officials required by such relevant person to consummate the transactions
contemplated hereby. Each Seller, Parent and Hess shall provide such information
and communications to governmental and regulatory authorities, as such
governmental and regulatory authorities or Buyer may reasonably request and
shall obtain the requisite consents of third parties required to consummate the
transactions contemplated hereby. Notwithstanding any other language herein,
none of Sellers, Parent, Hess or Buyer shall be required to make any payment or
other concession or to assume any obligation in connection with obtaining such
consents.

         Section 5.10 Compliance with Legal Requirements. Sellers, Parent and
Hess shall use their reasonable commercial efforts to comply promptly with all
requirements which federal or state law may impose on any Seller, Parent or Hess
with respect to the transactions contemplated by this Agreement, and will
promptly cooperate with and furnish information to Buyer in connection with any
such requirements imposed upon them in connection therewith.

                                       18

<PAGE>   20
         Section 5.11 Certain Acts or Omissions. Sellers shall not, and Parent
shall cause Sellers not to (a) omit to take any action called for by any of its
covenants contained in this Agreement, or (b) take any action which it is
required to refrain from taking by any of such covenants. Sellers, Parent and
Hess shall, and Parent and Hess shall cause each Seller to, before the Closing,
use reasonably commercial efforts to cure any violation or breach of any of its
representations, warranties or covenants contained in this Agreement which
becomes known, occurs or arises subsequent to the date of this Agreement and
shall obtain the satisfaction of all conditions to Closing set forth in this
Agreement.

         Section 5.12 Personnel. Sellers shall not, and Parent shall cause
Sellers not to, take any action in connection with the settlement or termination
of any employment terms, plans, agreements or benefits regarding employees of
any Seller or any Affiliate Employer that could reasonably be expected to
interfere with Buyer's ability to hire any such employees after the Closing on
terms reasonably satisfactory to Buyer.

         Section 5.13 Repairs. Any Vessels or Other Assets under repair on the
date hereof shall be delivered to Buyer upon completion of such repairs and all
costs therewith shall be paid by Sellers.

         Section 5.14 Transition Matters. Sellers shall, and Parent shall cause
Sellers to, cooperate with Buyer to effect an orderly and timely transfer by the
Closing Date of all licenses, permits and the like that Buyer is to acquire
pursuant to this Agreement or, if any such licenses, permits and the like have
not been fully transferred as of the Closing Date, to the extent permitted by
law allow Buyer to use and operate under the same in Sellers' names until such
time as they have been completely transferred to Buyer. Immediately following
the Closing each Seller shall permanently cease to use its corporate name in the
operation of any vessel transportation business; provided that, with respect to
the operation of the Ocean Star in the Caribbean, Sellers shall be permitted to
use its corporate name for 90 days following the Closing Date.

         Section 5.15 May 31 Financials. Parent shall, prior to June 12, 2001,
deliver to Buyer true, complete and correct copies of the combined unaudited
financial statements (including balance sheet, statements of income, cash flow
and shareholders' equity) of Sellers for the period ended May 31, 2001,
including the notes relating thereto. Such financial statements of Sellers
provided to Buyer shall fairly present, in conformity with generally accepted
accounting principles consistently applied the combined financial position of
Sellers as of the date thereof and their combined results of operations and
changes in financial position for the period then ended (subject to normal
period-end adjustments).

                                    ARTICLE 6
                               COVENANTS OF BUYER

         Buyer agrees that:

         Section 6.01 Approvals. Buyer shall take all reasonable steps, and
shall use reasonable commercial efforts to obtain, and shall cooperate with each
Seller, Parent and Hess in obtaining, as promptly as possible, all approvals,
authorizations and clearances of governmental and

                                       19

<PAGE>   21
regulatory bodies and officials required to consummate the transactions
contemplated hereby. Buyer shall provide such information and communications to
governmental and regulatory authorities as such governmental and regulatory
authorities or any Seller, Parent or Hess may reasonably request and shall use
reasonable commercial efforts to obtain any requisite consents of third parties,
to the extent required to consummate the transactions contemplated hereby but
only if no payment or other concessions are required of Buyer to obtain such
consents.

         Section 6.02 Compliance with Legal Requirements. Buyer shall use
reasonable commercial efforts to comply promptly with all requirements which
federal or state law may impose on them or any of their affiliates with respect
to the transactions contemplated by this Agreement and will promptly cooperate
with and furnish information to Sellers in connection with any such requirements
imposed upon them in connection therewith.

         Section 6.03 Certain Acts or Omissions. Buyer shall not (a) omit to
take any action called for by any of its covenants in this Agreement or (b) take
any action which it is required to refrain from taking by any of such covenants.
Buyer shall use all reasonable efforts to cure, before the Closing, any
violation or breach of any of its representations, warranties or covenants
contained in this Agreement which becomes known, occurs or arises subsequent to
the date of this Agreement and to obtain the satisfaction of all conditions to
Closing set forth in this Agreement.

         Section 6.04 Repainting Vessels. Within 90 days of Closing, Buyer
shall, at Buyer's expense, remove or paint over the Hess logos (including any
Hess Affiliate logos) on each Vessel and the Hess colors on each Vessel above
the waterline.

         Section 6.05 WARN Act. Buyer has offered all employees of Sellers or
any Affiliate Employer employed in the Vessel Business employment. Buyer agrees
that if WARN Act issues arise, the Closing may be delayed until appropriate
notices can be given under such act.

         Provided that the first sentence in this Section 6.05 is true, Seller
has not violated, and will not violate, the WARN Act, or any similar state or
local law. Seller shall further indemnify and hold harmless Buyer from any WARN
Act and similar state or local law liability that may result from an "Employment
Loss," as defined by 29 U.S.C. Section 2101(a)(6), caused by Seller.

         Section 6.06 Recordkeeping; Use of Sellers' Manuals.

         (a) For 6 years, Buyer shall grant Hess reasonable access to all files
pertaining to the pre-closing operation of the Vessel Business currently stored
on the premises at the Brooklyn marine facility and shall not remove, discard or
destroy any such files without first notifying Hess and providing Hess with a
reasonable opportunity to review and, at Hess' cost, to copy or remove such
files. After 6 years from the date hereof, if Buyer is planning to destroy or
discard files pertaining to the pre-closing operation of the Vessel Business,
it will use reasonable efforts to notify Hess and give Hess 5 days to remove
such files. However, with respect to Buyer's obligations after year 6, the
parties agree that Buyer will have no liability to Hess if Buyer fails to notify
Hess. Buyer also agrees to use commercially reasonable efforts to forward as
promptly as practicable all telephone calls, faxes, mail and similar items
pertaining to the pre-Closing

                                       20

<PAGE>   22
operation of the Vessel Business to David Cerulo, Amerada Hess Corporation,
1185 Avenue of the Americas, New York, NY 10036 (telephone: 212-536-8498; fax:
212-536-8621).

         (b) Buyer agrees as promptly as practicable after Closing to delete all
references to Seller, Hess or any of their affiliates in any Vessel Business
manuals and to indemnify Sellers, Hess and their affiliates from any claims
arising from Buyer's use of such manuals post-Closing.

         (c) Seller agrees to use commercially reasonable efforts to forward as
promptly as practicable all telephone calls, faxes, mail and similar items
pertaining to the post-Closing operation of the Vessel Business to Buyer.

                                   ARTICLE 7
                     COVENANTS OF BUYER, SELLERS AND PARENT

         The parties hereto agree that:

         Section 7.01 Confidentiality.

         (a) Prior to the Closing Date and after any termination of this
Agreement, Buyer will hold, and will use its best efforts to cause its officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Sellers furnished to Buyer in connection with the
transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been (a) previously known on a nonconfidential
basis by Buyer, (b) in the public domain through no fault of Buyer or (c) later
lawfully acquired by Buyer from sources other than Sellers, Parent or Hess;
provided that Buyer may disclose such information to its officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement and to its lenders in
connection with obtaining the financing for the transactions contemplated by
this Agreement so long as such Persons are informed by Buyer of the
confidential nature of such information and are directed by Buyer to treat such
information confidentially. Buyer's obligation to hold any such information in
confidence shall be satisfied if it exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. If this Agreement is terminated, Buyer will, and will use its best
efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to, destroy or deliver to Hess, upon request,
all documents and other materials, and all copies thereof, obtained by Buyer or
on its behalf from Sellers, Parent or Hess in connection with this Agreement
that are subject to such confidence.

         (b) Prior to the Closing Date and after any termination of this
Agreement, each Seller, Parent and Hess will hold, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning Buyer
furnished to any Seller, Parent or Hess in connection with the transactions
contemplated by this Agreement, except to the extent that such information can
be shown to have been (a) previously known on a nonconfidential basis by any
Seller, Parent or Hess, (b) in the public domain through no fault of

                                       21

<PAGE>   23

Seller or (c) later lawfully acquired by any Seller, Parent or Hess from sources
other than Buyer; provided that any Seller, Parent or Hess may disclose such
information to their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the transactions
contemplated by this Agreement and to their respective lenders in connection
with obtaining the financing for the transactions contemplated by this Agreement
so long as such Persons are informed by such Seller, Parent or Hess of the
confidential nature of such information and are directed by such Seller, Parent
or Hess to treat such information confidentially. Parent's, Hess' and any
Seller's obligation to hold any such information in confidence shall be
satisfied if it exercises the same care with respect to such information as it
would take to preserve the confidentiality of its own similar information. If
this Agreement is terminated, Seller, Parent or Hess will, and will use their
best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or deliver
to Buyer, upon request, all documents and other materials, and all copies
thereof, obtained by such Seller, Parent or Hess or on its behalf from Buyer in
connection with this Agreement that are subject to such confidence.

         Section 7.02 Public Announcements. Buyer, each Seller, Parent and Hess
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange, will not issue any such
press release or make any such public statement prior to such consultation.

         Section 7.03 BDIS System. Hess retains a personal, nontransferable and
nonexclusive right to use BDIS solely for internal business purposes. Such right
to use includes the right to modify BDIS and to prepare derivative works based
on BDIS, provided that any such modification or derivative work that contains
any part of BDIS subject to this Agreement is treated hereunder the same as
BDIS. Buyer claims no ownership interest in any portion of such a modification
or derivative work that is not part of BDIS.

                                    ARTICLE 8
                              CONDITIONS TO CLOSING

         Section 8.01 Conditions to the Obligations of the Parties. The
obligations of Sellers and Buyer to consummate the Closing are subject to the
satisfaction of the following conditions:

         (a) if required by applicable law, this Agreement shall have been
adopted by the stockholders of Sellers in accordance with such law;

         (b) any applicable waiting period (and any extensions thereof) under
the HSR Act relating to the sale shall have expired or been terminated, and no
condition with respect to obtaining such termination shall have been imposed on
any Seller or Buyer;

         (c) On the Closing Date, no action or proceeding by any public
authority or any other person shall be pending before any court or
administrative body or overtly threatened to restrain, enjoin or otherwise
prevent the consummation of this Agreement or the transactions contemplated
hereby, and no action or proceeding by any public authority or private person
shall be pending before any court or administrative body or overtly threatened
to recover any damages

                                       22

<PAGE>   24

or obtain other relief as a result of this Agreement or the transactions
contemplated herein or as a result of any agreement entered into in connection
with or as a condition precedent to the consummation thereof, which action or
proceeding could result in a decision, ruling or finding which would have a
Material Adverse Effect or prevent or interfere with Buyer's ability to conduct
normal operations after the Closing with the Vessel Business, Vessels or Other
Assets or the ability of Buyer or any Seller or Parent to fulfill its
obligations under this Agreement;

         (d) All orders, consents, permits, authorizations, approvals and
waivers of every governmental entity or third party required for the
consummation of the transactions contemplated hereby, and all filings,
registrations and notifications to or with all governmental entities required
with respect to the consummation of such transactions, shall have been obtained
or given.

         Section 8.02 Conditions to the Obligations of Buyer. The obligations of
Buyer to consummate the Closing are subject to the satisfaction of the following
further conditions:

         (a) Each Seller, Parent and Hess shall have performed all of its
obligations hereunder required to be performed by it at or prior to the Closing
Date, the representations and warranties of each Seller, Parent and Hess
contained in this Agreement and in any certificate or other writing delivered by
any Seller, Parent or Hess pursuant hereto shall be true in all material
respects at and as of the Closing Date as if made at and as of such time and
Buyer shall have received a certificate signed by an executive officer of each
of Sellers, Parent and Hess dated as of the Closing Date to the foregoing
effect;

         (b) All action necessary to authorize the execution, delivery and
performance by the each Seller, Parent and Hess of this Agreement shall have
been duly and validly taken by the each Seller and Parent, and each Sellers,
Parent and Hess shall have delivered to Buyer copies, certified as of the
Closing Date by its Secretary, of all resolutions of the Board of Directors
authorizing this Agreement and the transactions contemplated by this Agreement;

         (c) Buyer shall have received an opinion, addressed to Buyer and dated
the Closing Date, of General Counsel for Sellers, Parent and Hess, in a form and
containing provisions satisfactory to Buyer;

         (d) Each Seller shall deliver fully executed and duly acknowledged
instruments of conveyance and transfer, including, but not limited to, Bills of
Sale and Satisfaction of Mortgages and Abstracts of Title, and such other
instruments conveying title to the Vessels and Other Assets, free and clear of
all Liens. All such instruments of conveyance shall be in form and content
reasonably satisfactory to Buyer and its counsel;

         (e) No incident or event shall have occurred resulting in the
destruction, damage to, or loss of any Vessel or Other Asset (whether or not
covered by insurance) in excess of $100,000 that has not been cured to a
commercially reasonable standard by Sellers;

         (f) Sellers, Parent and Hess shall have delivered to Buyer true,
complete and correct copies of audited combined financial statements (including
balance sheet, statements of income, cash flow and shareholder's equity) of
Sellers for the years ended December 31, 2000, 1999 and

                                       23

<PAGE>   25

1998, including the notes relating thereto, which shall not vary materially from
the Financial Statements, and Buyer shall have received from a certified public
accounting firm chosen by Buyer a clean opinion that the financial statements
are presented fairly in accordance with generally accepted accounting
principles, without exception with the cost of such audit to be paid by Buyer;

         (g) Hess and Buyer shall have entered into a Contract of Affreightment,
substantially in the form which is attached hereto as EXHIBIT A;

         (h) Each lender of Sellers shall have released any Liens on the Vessels
and Other Assets and consented to the conveyance of the Vessels and Other Assets
to Buyer, free and clear of any and all Liens other than with respect to the
Vessels any Liens which arose by operation of law, have not been recorded and
have not been asserted by the holder thereof;

         (i) Effective physical possession and control of the Vessels and Other
Assets shall have been tendered by each Seller and Parent to Buyer;

         (j) Specific assignments of material contracts and any proprietary
information, licenses and permits to the extent permitted by law that Buyer may
reasonably request to assure their continuity, together with any consents to
such assignments that may have been obtained;

         (k) Buyer and Hess shall have entered into a lease regarding Sellers'
office space and dock space in the form attached hereto as EXHIBIT B; and

         (l) The following additional documents shall have been executed and
delivered by Sellers:

                  (i) CONSENTS. Copies of all required consents and approvals;

                  (ii) RELEASES. A release in a form and containing terms
         satisfactory to Buyer of any and all claims of Sellers, Parent or Hess,
         if any, may have against the Vessels or Other Assets or Buyer, except
         as may arise under this Agreement, under the Contract of Affreightment,
         or under any other documents executed in connection herewith;

                  (iii) CERTIFICATE OF SECRETARY. A Certificate of Secretary of
         each Seller, Parent and Hess attesting to the incumbency and the
         signature specimens with respect to the officers of such entities
         executing this Agreement and any other document delivered pursuant to
         this Agreement by or on behalf of such entities, and attesting to such
         other instruments and documents as counsel for Buyer shall reasonably
         request;

                  (iv) OTHER REQUESTED DOCUMENTS. Further instruments and
         documents, in form and content reasonably satisfactory to counsel for
         Buyer, as may be necessary or reasonably appropriate more fully to
         consummate the transactions contemplated hereby.

                                       24

<PAGE>   26

         Section 8.03 Conditions to the Obligations of Sellers and Parent. The
obligations of each Seller, Parent and Hess to consummate the Closing are
subject to the satisfaction of the following further conditions:

         (a) Buyer shall have performed all of its obligations hereunder
required to be performed by it at or prior to the Closing Date, the
representations and warranties of Buyer contained in this Agreement and in any
certificate or other writing delivered by Buyer pursuant hereto shall be true in
all material respects at and as of the Closing Date as if made at and as of such
time and Seller shall have received a certificate signed by the President of
Buyer dated as of the Closing Date to the foregoing effect;

         (b) Hess and Buyer shall have entered into a Contract of Affreightment,
the form of which is attached hereto as EXHIBIT A;

         (c) Seller shall have received the Purchase Price;

         (d) The following additional documents shall have been executed and
delivered by Buyer:

                  (i) Consents. Copies of all required consents and approvals;

                  (ii) Certificate of Secretary. A Certificate of Secretary of
         Buyer attesting to the incumbency and the signature specimens with
         respect to the officers of such entity executing this Agreement and any
         other document delivered pursuant to this Agreement by or on behalf of
         such entity, and attesting to such other instruments and documents as
         counsel for Seller shall reasonably request;

                  (iii) Other Requested Documents. Further instruments and
         documents, in form and content reasonably satisfactory to counsel for
         Sellers, as may be necessary or reasonably appropriate more fully to
         consummate the transactions contemplated hereby.

         (e) All action necessary to authorize the execution, delivery and
performance by Buyer of this Agreement shall have been duly and validly taken by
Buyer and Buyer shall have delivered to Sellers, Parent and Hess copies,
certified as of the Closing Date by the Secretary of Buyer, of all resolutions
of the board of directors of Buyer authorizing this Agreement and the
transactions contemplated by this Agreement.

                                    ARTICLE 9
                                   TAX MATTERS

         Section 9.01 Preparation and Filing of Tax Returns. Sellers, jointly
and severally with Parent and Hess represent and warrant to Buyer that:

         (a) Insofar as the same relates to the Vessels and/or Other Assets, all
returns (including, income, franchise, sales and use, excise, severance,
property, gross receipts, payroll

                                       25

<PAGE>   27

and withholding tax returns and information returns), deposits and reports (all
such returns, deposits and reports herein referred to collectively as "Tax
Returns" or singularly as a "Tax Return") of or relating to any United States
(including state or local) or foreign tax that are required to be filed (taking
into account all extensions) on or before the Closing Date by Sellers, have been
or will be timely filed with the appropriate federal, state, local and foreign
authorities;

         (b) Insofar as the same relates to the Vessels and/or Other Assets, all
state, local and foreign income, excise, property, sales and use taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions which are called for as due by the Tax Returns, or which
are claimed to be due with respect to the periods covered thereby, from Sellers
(the "Taxes"), have been properly accrued or paid. Sellers have not received
any notice of assessment or proposed assessment by any taxing authority in
connection with any Tax Returns and there are no pending tax examinations of any
Tax Returns of or tax claims in respect of the Tax Returns asserted with respect
to the Vessels and Other Assets; and

         (c) There has been no disregard of any applicable statute, regulation,
rule, revenue ruling or other authority in the preparation of any Tax Return
applicable to the Vessels or Other Assets. There are no tax liens on any of the
Vessels or Other Assets except for Liens for current taxes not yet due and
payable. There is no basis for any additional assessment of any Taxes, penalties
or interest with respect to the Vessels and Other Assets. Sellers have not
waived any law or regulation fixing, or consented to the extension of, any
period of time for assessment of any Taxes which waiver or consent is currently
in effect.

         Section 9.02 Access to Information. After the Closing:

         (a) Sellers, Parent, Hess and each member of the affiliated group of
corporations filing consolidated United States Income Tax Returns which include
the Sellers (the "Hess Group") shall grant to Buyer (or its designees) access at
all reasonable times to all of the information, books and records relating to
the Vessels and Other Assets within the possession of Hess or any member of Hess
Group (including without limitation work papers and correspondence with taxing
authorities), and shall afford Buyer (or its designees) the right (at Buyer's
expense) to take extracts therefrom and to make copies thereof, to the extent
reasonably necessary to permit Buyer (or its designees) to prepare Tax Returns,
to conduct negotiations with Tax authorities, and to implement the provisions
of, or to investigate or defend any claims between the parties arising under,
this Agreement.

         (b) Buyer shall grant to Parent (or its designees) access at all
reasonable times to all of the information, books and records relating to the
Vessels and Other Assets within the possession of Buyer (including without
limitation work papers and correspondence with taxing authorities), and shall
afford Parent (or its designees) the right (at Parent's expense) to take
extracts therefrom and to make copies thereof, to the extent reasonably
necessary to permit Parent (or its designees) to prepare Tax Returns, to conduct
negotiations with Tax Authorities, and to implement the provisions of, or to
investigate or defend any claims between the parties arising under, this
Agreement.

         (c) Each of the parties hereto will preserve and retain all schedules,
work papers and other documents relating to any Tax Returns of or with respect
to the Vessels and Other Assets

                                       26

<PAGE>   28

or to any claims, audits or other proceedings affecting the Vessels and Other
Assets until the expiration of the statute of limitations (including extensions)
applicable to the taxable period to which such documents relate or until the
final determination of any controversy with respect to such taxable period, and
until the final determination of any payments that may be required with respect
to such taxable period under this Agreement.

         Section 9.03 Sales Taxes. The Purchase Price excludes, and Buyer will
be liable for, any Transfer Taxes (as defined below) required to be paid in
connection with the sale of the Vessels and Other Assets pursuant to this
Agreement. "TRANSFER TAXES" shall mean any sales, use, excise, stock, document,
filing, recording, authorization, transfer and similar taxes, fees and charges.

         Section 9.04 Apportionment of Property Taxes. All ad valorem, real
property and personal property taxes attributable to the Vessels and Other
Assets for the tax period during which the Closing Date occurs shall be prorated
as of the Closing Date based upon such tax assessed against the assets for the
tax period. The owner of record of the Companies on the assessment date will
cause the Companies to file all required reports and returns incident to the
Property Taxes.

         Section 9.05 Other Taxes. With the exception of income and franchise
taxes, all federal, state and local taxes (including interest and penalties
attributable thereto) on the ownership or operations of the Vessels and Other
Assets which are imposed with respect to periods or portions of periods to the
Closing Date shall be paid by Sellers and all such taxes imposed with respect to
periods or portions of periods beginning on or after the Closing Date shall be
paid by Buyer.

         Section 9.06. Purchase Price Allocations.

         (a) On or before the Closing Date, Sellers and Buyer mutually agree to
allocate the Purchase Price among the Vessels and Other Assets as set forth in
EXHIBIT C attached hereto. Sellers and Buyer agree that said allocation as set
forth in EXHIBIT C is the proper allocation of the Purchase Price in accordance
with the fair market value of the Vessels and Other Assets and that said
allocation of the Purchase Price of the Vessels and Other Assets as set forth in
EXHIBIT C shall apply for purposes of Section 1060 of the Internal Revenue Code
of 1986 (as amended and together with any regulations promulgated thereunder,
the "Code"). Sellers and Buyer agree (and each agrees to cause its affiliates)
to report the federal, state and local income and other tax consequences of the
transactions contemplated herein, and in particular to report the information
required under Section 1060(b) of the Code (and any regulations promulgated
thereunder), in a manner consistent with such allocation.

         (b) Sellers and Buyer further agree (and each agrees to cause its
affiliates) to not take any tax position inconsistent with such allocation in
connection with the examination of any of their tax returns, refund claims or
litigation, investigations or other proceedings involving any of their tax
returns. Sellers and Buyer each further agree that they will not take any
position inconsistent with this allocation in preparing financial statements,
tax returns, reports to shareholders or government authorities or otherwise.

                                       27

<PAGE>   29

         (c) Sellers and Buyer each agree to furnish the other a copy of IRS
Form 8594 (Asset Acquisition Statement under Section 1060 of the Code) as filed
with the Internal Revenue Service by such party or any affiliate thereof,
pursuant to Section 1060 of the Code, as a result of the consummation of the
transactions contemplated hereby, within thirty (30) days of the filing of such
form with the Internal Revenue Service.

                                   ARTICLE 10
                                 INDEMNIFICATION

         Section 10.01 Indemnification of Buyer Indemnitees. Each Seller,
jointly and severally with Parent hereby agrees to indemnify and hold Buyer and
its respective officers, directors, stockholders, agents, employees, and
attorneys (the "BUYER INDEMNITEES") harmless from and against any and all
liabilities, obligations, damages, deficiencies, losses and expenses:

         (a) resulting from any misrepresentation or breach of warranty of the
surviving Representations and Warranties as set forth on SCHEDULE 12.03 or
nonfulfillment of any covenant or agreement on the part of any Seller, Parent or
Hess under the terms of this Agreement;

         (b) comprising or resulting from any Excluded Liabilities;

         (c) arising as a result of the ownership of the Vessels and/or Other
Assets and/or the use and operation of the Vessels and Other Assets and the
conduct by Sellers and the employees of any Affiliate Employer of the Vessel
Business before the Closing Date;

         (d) resulting from any Liens existing on the Closing Date which arose
out of the action (or failure to act) of any Seller, Parent or Hess; and

         (e) resulting from all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys'
fees, incident to the foregoing.

         Section 10.02 Indemnification of Seller Indemnitees. Buyer agrees to
indemnify and hold Sellers and Parent and their respective officers, directors,
stockholders, agents, employees, and attorneys (the "SELLER INDEMNITEES")
harmless from and against any and all liabilities, obligations, damages,
deficiencies, losses and expenses:

         (a) resulting from any misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement on the part of Buyer under the terms
of this Agreement;

         (b) arising as a result of the ownership of the Vessels and Other
Assets and/or the use and operation of any of the Vessels and Other Assets and
the conduct of the Vessel Business from and after the Closing Date provided that
this provision of this Agreement shall not be deemed to have any effect with
respect to Buyer's services to Hess or its Affiliates subsequent to the Closing
Date; and

         (c) resulting from all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys'
fees, incident to the foregoing.

                                       28

<PAGE>   30

         Section 10.03 Method of Asserting Claims, Etc. The items listed in
Section 10.01 and Section 10.02 are sometimes collectively referred to herein as
"DAMAGES"; provided, however, that such reference shall be understood to mean
the respective damages from and against which the Buyer Indemnitees or Seller
Indemnitees, as the case may be, are indemnified as the context requires. The
person claiming indemnification hereunder, whether a Buyer Indemnitee or a
Seller Indemnitee, is sometimes referred to as the "INDEMNIFIED PARTY" and the
party against whom such claims are asserted hereunder is sometimes referred to
as the "INDEMNIFYING PARTY". All claims for indemnification by an Indemnified
Party under Section 10.01 or Section 10.02 hereof, as the case may be, shall be
asserted and resolved as follows:

         (a) If any claim or demand for which an Indemnifying Party would be
liable for Damages to an Indemnified Party hereunder is overtly asserted against
or sought to be collected from such Indemnified Party by a third party (a "THIRD
PARTY CLAIM"), such Indemnified Party shall with reasonable promptness (but in
no event later than thirty (30) days after the Third Party Claim is so asserted
or sought against the Indemnified Party) notify in writing the Indemnifying
Party of such Third Party Claim enclosing a copy of all papers served, if any,
and specifying the nature of and specific basis for such Third Party Claim and
the amount or the estimated amount thereof to the extent then feasible, which
estimate shall not be conclusive of the final amount of such Third Party Claim
(the "CLAIM NOTICE"). For this purpose the commencement of any audit or other
investigation respecting Taxes shall constitute a Third Party Claim.
Notwithstanding the foregoing, failure to so provide a Claim Notice as provided
above shall not relieve the Indemnifying Party from its obligation to indemnify
the Indemnified Party with respect to any such Third Party Claim except to the
extent that a failure to so notify the Indemnifying Party in reasonably
sufficient time prejudices the Indemnifying Party's ability to defend against
the Third Party Claim. The Indemnifying Party shall have thirty (30) days from
delivery of the Claim Notice (the "NOTICE PERIOD") to notify the Indemnified
Party (i) whether or not the Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such Third
Party Claim and (ii) whether or not the Indemnifying Party desires, at the sole
cost and expense of the Indemnifying Party, to defend the Indemnified Party
against such Third Party Claim.

         (b) If the Indemnifying Party notifies the Indemnified Party within the
Notice Period that the Indemnifying Party does not dispute its liability to the
Indemnified Party and that the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to this
Article, then the Indemnifying Party shall have the right to defend, at its sole
cost and expense, such Third Party Claim by all appropriate proceedings, which
proceedings shall be diligently prosecuted by the Indemnifying Party to a final
conclusion or settled at the discretion of the indemnifying Party (but only if
the Indemnifying Party is liable hereunder to the Indemnified Party for the full
amount of, and all obligations under, such settlement; otherwise, no such
settlement shall be agreed to without the prior written consent of the
Indemnified Party). If the Indemnifying Party is liable hereunder to the
Indemnified Party for the full amount of such Third Party Claim, the
Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however, that the
Indemnified Party is hereby authorized, at the sole cost and expense of the
Indemnifying Party (but only if the Indemnified Party is actually entitled to
indemnification hereunder or if the Indemnifying Party assumes the defense with
respect to the Third Party Claim), to file during the

                                       29

<PAGE>   31

Notice Period any motion, answer or other pleadings which the Indemnified Party
shall deem necessary or appropriate to protect its interests or those of the
Indemnifying Party and not prejudicial to the Indemnifying Party (it being
understood and agreed that if an Indemnified Party takes any such action which
is prejudicial and conclusively causes a final adjudication which is adverse to
the Indemnifying Party, the Indemnifying Party shall be relieved of its
obligations hereunder with respect to such Third Party Claim); and provided
further, that if requested by the Indemnifying Party, the Indemnified Party
agrees, at the sole cost and expense of the Indemnifying Party, to cooperate
with the Indemnifying Party and its counsel in contesting any Third Party Claim
which the indemnifying Party elects to contest, or, if appropriate and related
to the Third Party Claim in question, in making any counterclaim against the
person asserting the Third Party Claim, or any cross-complaint against any
person. The Indemnified Party may participate in, but not control (except if the
Indemnifying Party is not liable hereunder to the Indemnified Party for the full
amount of such Third Party Claim, in which case whichever of the Indemnifying
Party or the indemnified Party is liable for the largest amount of Damages with
respect to the Third Party Claim shall control), any defense or settlement of
any Third Party Claim with respect to which the Indemnifying Party is
participating pursuant to this Section 10.03(b), and except as provided in the
preceding sentence, the Indemnified Party shall bear its own costs and expenses
with respect to such participation.

         (c) If the Indemnifying Party fails to notify the Indemnified Party
within the Notice Period that the Indemnifying Party does not dispute its
liability to the Indemnified Party and that the Indemnifying Party desires to
defend the Indemnified Party pursuant to this Article, then the Indemnified
Party shall have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings, which
proceedings shall be promptly and vigorously prosecuted by the Indemnified Party
to a final conclusion or settled. The Indemnified Party shall have full control
of such defense and proceedings, including any compromise or settlement thereof;
provided however, that if requested by the Indemnified Party, the Indemnifying
Party agrees, at the sole cost and expense of the Indemnifying Party, to
cooperate with the Indemnified Party and its counsel in contesting any Third
Party Claim which the Indemnified Party is contesting, or, if appropriate and
related to the Third Party Claim in question, in making any counterclaim against
the person asserting the Third Party Claim, or any cross-complaint against any
person. Notwithstanding the foregoing provisions of this Section 10.03(c), if
the Indemnifying Party has timely notified the Indemnified Party that the
Indemnifying Party disputes its liability to the Indemnified Party and if such
dispute is resolved in favor of the Indemnifying Party by final, non-appealable
order of a court of competent jurisdiction, the Indemnifying Party shall not be
required to bear the costs and expenses of the Indemnified Party's defense
pursuant to this Section 10.03(c) or of the Indemnifying Party's participation
therein at the Indemnified Party's request and the Indemnified Party shall
reimburse the Indemnifying Party in full for all costs and expenses of such
litigation. The Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party pursuant to this
Section 10.03(c) (other than a dispute as to the Indemnifying Party's liability
to the Indemnified Party) and the Indemnifying Party shall bear its own costs
and expenses with respect to such participation.

         (d) If any Indemnified Party should have a claim against any
Indemnifying Party hereunder which does not involve a Third Party Claim, the
Indemnified Party shall notify the

                                       30

<PAGE>   32

Indemnifying Party of such claim by the Indemnified Party in writing, specifying
the nature of and specific basis for such claim and the amount or the estimated
amount of such claim (the "INDEMNITY NOTICE"). If the Indemnifying Party does
not notify the Indemnified Party in writing within thirty (30) days from
delivery of the Indemnity Notice that the Indemnifying Party disputes such
claim, the amount or estimated amount of such claim specified by the Indemnified
Party shall be conclusively deemed a liability of the Indemnifying Party
hereunder. If the Indemnifying Party has timely disputed such claim, as provided
above, such dispute shall be resolved by litigation in an appropriate court of
competent jurisdiction or as the parties otherwise at such time agree.

         Section 10.04 Limitation. The maximum liability under the
indemnification provisions of this Article 10 shall be limited to an amount
equal to the Purchase Price. Notwithstanding anything contained elsewhere in
this Agreement, an Indemnifying Party shall have no liability for
indemnification hereunder until the Indemnified Party's Damages exceed $25,000,
in the aggregate (the "Threshold Amount") and then only to the extent of such
excess. With respect to the remedies available under this Agreement, the
Indemnifying Party shall not be responsible for any resulting indirect,
incidental, consequential, exemplary, punitive or special damages, whether or
not the Indemnifying Party was made aware of such damages or the possibility
thereof.

         Section 10.05 Special Allocation of Damages for Joint Exposure Claims.
In the event Damages are incurred in respect of Joint Exposure Claims, such
Damages (other than punitive or special damages) shall be allocated among
Sellers and Buyer as herein set forth notwithstanding any evidence, analysis or
determination indicating a different allocation of responsibility for such
Damages amongst the Parties. With respect to Joint Exposure Claims, the portion
of such Damages allocable to a Seller shall equal that fraction the numerator of
which is the total number of days the employee making the Joint Exposure Claim
was employed by Seller and exposed to the substance or material giving rise to
the Joint Exposure Claim and the denominator of which is the total number of
days such employee has been employed by Seller and Buyer and exposed to the
substance or material giving rise to the Joint Exposure Claim. Similarly, the
portion of such Damages allocable to Buyer shall equal that fraction the
numerator of which is the total number of days the employee making the Joint
Exposure Claim was or has been employed by Buyer and exposed to the substance or
material giving rise to the Joint Exposure Claim and the denominator of which is
the total number of days such employee was or has been employed by Buyer and
Seller and exposed to the substance or material giving rise to the Joint
Exposure Claim.

                                   ARTICLE 11
                                   TERMINATION

         Section 11.01 Termination. This Agreement may be terminated at any time
prior to the Closing:

         (a) by mutual written consent of Sellers and Parent (acting
unanimously) and Buyer;

         (b) by either Sellers and Parent (acting unanimously) or Buyer by
giving written notice to the other in accordance with Section 12.01, if there
shall be any law or regulation that

                                       31

<PAGE>   33
makes consummation of the transaction illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining Buyer or any Seller or Parent
from consummating the transaction is entered and such judgment, injunction,
order or decree shall become final and nonappealable.

         (c) by Buyer, upon notice of termination of its obligation to
consummate the transaction delivered to Sellers, Parent and Hess, if Buyer
reasonably has determined that there has been any breach of any material
covenant of any Seller, Parent or Hess or that any Seller, Parent or Hess has
materially breached any of its material representations or warranties, stating
in particularity the default or defaults on which the notice is based; provided,
however, that such Seller, Parent or Hess shall, after receipt of such notice,
have thirty (30) days in which to cure such breach and, if so cured, Buyer
shall, for that reason, have no right to terminate this Agreement; or

         (d) by Sellers and Parent, upon notice of termination of its obligation
to consummate the transaction delivered to Buyer, if Sellers and Parent
reasonably and unanimously have determined that there has been any breach of any
covenant of Buyer or that Buyer has materially breached any of its
representations or warranties, stating in particularity the default or defaults
on which the notice is based; provided, however, that Buyer shall, after receipt
of such notice, have thirty (30) days in which to cure such breach and, if so
cured, Sellers and Parent shall, for that reason, have no right to terminate
this Agreement.

         Section 11.02 Effect of Termination. If this Agreement is terminated
pursuant to Section 11.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, and provided that the
agreements contained in Section 7.01 and Section 12.05 shall survive the
termination hereof.

                                   ARTICLE 12
                                  MISCELLANEOUS

         Section 12.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,

         if to Buyer, to:

         LEEVAC Marine, Inc.
         c/o HORNBECK-LEEVAC Marine Services, Inc.
         414 North Causeway Boulevard
         Mandeville, Louisiana 70448
         Attn: Christian G. Vaccari
         Telecopy: (504) 727-2006

                                       32

<PAGE>   34
         with a copy to:

         R. Clyde Parker, Jr.
         Winstead Sechrest & Minick P.C.
         910 Travis, Suite 2400
         Houston, Texas 77002
         Telecopy: (713) 650-2400

         if to Sellers or Parent, to:

         Lawrence H. Ornstein
         Amerada Hess Corporation
         1185 Avenue of the Americas
         New York, New York 10036
         Telecopy: (212) 536-8458

         with a copy to:

         Nicholas P. Brountas, Jr.
         Amerada Hess Corporation
         1185 Avenue of the Americas
         New York, New York 10036
         Telecopy: (212) 536-8241

or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.

         Section 12.02 Risk of Loss. The risk of any loss, damage, impairment,
confiscation or condemnation of the Vessels or Other Assets or any part thereof
shall be upon Sellers at all times prior to the Closing Date. In any such event,
Sellers may either (a) repair, replace or restore any such property as soon as
possible after its loss, impairment, confiscation or condemnation, or (b) if
insurance proceeds are sufficient to repair, replace or restore the property,
pay such proceeds to Buyer; provided however, that any repair, replacement or
restoration or the determination that insurance proceeds are sufficient must be
made, or provide sufficient funds so that repairs can be made, in such a manner
as to return the Vessel to at least the same operating condition and value as
existed immediately preceding the event. During any such repair, replacement or
restoration, and during any drydocking contemplated in Section 5.13, Buyer shall
be entitled to have a representative present at the shipyard or other applicable
location.

         Section 12.03 Survival of Representations and Warranties. The
respective representations and warranties made by the parties in this Agreement
or in any certificate or document executed and delivered by either party to the
other party pursuant to this Agreement,

                                       33

<PAGE>   35

shall survive the Closing Date and the consummation of the transactions
contemplated hereby for the periods set forth on SCHEDULE 12.03.

         Section 12.04 Amendments; No Waivers. Any provision of this Agreement
may be amended or waived prior to the Closing Date if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
Sellers, Parent, Hess and Buyer or in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.

         Section 12.05 Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
Buyer shall be responsible for all fees and expenses of the escrow agent.

         Section 12.06 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Buyer may
assign this Agreement to one or more of its affiliates so long as Buyer
guarantees the performance of this Agreement.

         Section 12.07 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard
to conflicts of law rules of such state.

         Section 12.08 Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.

         Section 12.09 Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 12.01 shall be deemed
effective service of process on such party.

                                       34
<PAGE>   36
         Section 12.10 Entire Agreement. This Agreement and the documents to be
executed in connection herewith contain, and is intended as, and represents a
complete statement of all of the terms, understandings and the arrangements
between the parties hereto with respect to the matters provided for in this
Agreement, supersedes any previous or contemporaneous agreements and
understandings whether oral or written between the parties hereto with respect
to those matters, and cannot be changed or terminated except as provided in
this Agreement. None of the parties makes, and each of the parties hereby
expressly disclaims any reliance upon, any representations or warranties with
respect to the transaction which is the subject of this Agreement other than
those set forth herein.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

                                          LEEVAC MARINE, INC.

                                          By: /s/ CHRISTIAN G. VACCARI
                                             -----------------------------------
                                          Name: Christian G. Vaccari
                                               ---------------------------------
                                          Title: CEO
                                                --------------------------------

                                          HYGRADE OPERATORS, INC.

                                          By: /s/ JOSEPH P. GEHEGAN
                                             -----------------------------------
                                          Name: Joseph P. Gehegan
                                               ---------------------------------
                                          Title: Vice President
                                                --------------------------------

                                          RED STAR TOWING AND TRANSPORTATION
                                          COMPANY, INC.

                                          By: /s/ JOSEPH P. GEHEGAN
                                             -----------------------------------
                                          Name: Joseph P. Gehegan
                                               ---------------------------------
                                          Title: Vice President
                                                --------------------------------

                                          SHERIDAN TOWING CO., INC.

                                          By: /s/ JOSEPH P. GEHEGAN
                                             -----------------------------------
                                          Name: Joseph P. Gehegan
                                               ---------------------------------
                                          Title: Vice President
                                                --------------------------------

                                       35
<PAGE>   37
                                          IRA S. BUSHEY & SONS, INC.

                                          By: /s/ JOSEPH P. GEHEGAN
                                             -----------------------------------
                                          Name: Joseph P. Gehegan
                                               ---------------------------------
                                          Title: Vice President
                                                --------------------------------

                                          AMERADA HESS CORPORATION

                                          By: /s/ L.H. ORNSTEIN
                                             -----------------------------------
                                          Name: L.H. Ornstein
                                               ---------------------------------
                                          Title: Senior Vice President
                                                --------------------------------

         The undersigned hereby guarantees each and every obligation and
performance of each of the Sellers and Parent under this Agreement.

                                          AMERADA HESS CORPORATION

                                          By: /s/ L.H. ORNSTEIN
                                             -----------------------------------
                                          Name: L.H. Ornstein
                                               ---------------------------------
                                          Title: Senior Vice President
                                                --------------------------------

                                       36<PAGE>   1
                                                                    EXHIBIT 10.9

                            CONTRACT OF AFFREIGHTMENT

         AGREEMENT dated May 31, 2001, between Amerada Hess Corporation, a
Delaware corporation, having an office at 1185 Avenue of the Americas, New York,
New York, 10036 (herein "Hess") and LEEVAC Marine, Inc., a Louisiana corporation
having an office at 414 North Causeway Boulevard, Mandeville, Louisiana 70448
(herein "Owner" or "LMI").

                                    RECITALS:

A.       Hess will employ the services of vessels, tugs and barges for the
         transportation of liquid petroleum products in bulk from and to various
         coastal and inland waterway locations in the northeastern United
         States;

B.       Owner is willing to furnish the services of vessels, tugs and barges as
         may be required by Hess from time to time subject to the terms and
         conditions set forth herein.

                          THE PARTIES AGREE AS FOLLOWS:

ARTICLE 1 - SCOPE OF WORK

A.       1.       Subject to the limitations set forth herein, Owner will
                  transport liquid petroleum products in bulk from and to
                  various coastal and inland waterway locations in the
                  northeastern United States that have historically been
                  serviced by any of Hygrade Operators, Inc., Red Star Towing
                  and Transportation Company and Sheridan Towing, as per
                  Schedule A, as requested by Hess, through the use of Provided
                  Vessels (as defined in Article 3B). Owner will furnish such
                  service to Hess under the terms in this Agreement. Except as
                  otherwise provided in this Agreement, Hess will be obligated
                  to use Owner's services for Hess's waterway transport
                  requirements in the northeastern United States for the term of
                  this Agreement. If, subject to Article 1H, at any time Owner
                  is unable to meet Hess's requirements, under the terms of this
                  Agreement, Hess may procure transportation services elsewhere,
                  subject to a good faith effort to pursue such services at a
                  commercially reasonable rate, and Owner will be responsible
                  for any excess costs above the rates in Schedule A for such
                  procured transportation services, for up to the [Confidential
                  material omitted and filed separately with the Commission]
                  barrels maximum per month; provided that no more than
                  [Confidential material omitted and filed separately with the
                  Commission] barrels per month shall be dirty barrels.

         2.       Except in the circumstances provided in Article 1A3 below, if
                  Hess requests transportation of barrels above the
                  [Confidential material omitted and filed separately with the
                  Commission] monthly maximum (or the [Confidential material
                  omitted and filed separately with the Commission] dirty barrel
                  maximum, as applicable), Owner will use

<PAGE>   2
                  commercially reasonable efforts, subject to Article 1H, to
                  move Hess barrels in vessels owned by Owner, its parent or any
                  affiliate and not otherwise committed at the Schedule A rates.
                  If such owned vessels are not available, above the
                  [Confidential material omitted and filed separately with the
                  Commission] monthly maximum (or the dirty barrel maximum, as
                  applicable), Owner will use commercially reasonable efforts to
                  charter third-party vessels at market rates and on such other
                  terms and conditions as are reasonably satisfactory to Hess
                  and pass the cost through to Hess. If, above the [Confidential
                  material omitted and filed separately with the Commission]
                  monthly maximum (or the dirty barrel maximum, as applicable),
                  Owner is unable to charter third party vessels, or such
                  vessels are either not available at market rates or not
                  acceptable to Hess, it shall not constitute a breach of this
                  Agreement or be counted against Owner for purposes of Article
                  47A or B. In such event, Hess may procure transportation
                  services elsewhere for such volumes in excess of the monthly
                  maximum. Hess will pay in a timely fashion all invoices of any
                  Provided Vessel chartered in by Owner to move Hess barrels
                  upon receipt of the relevant invoice in accordance with
                  Article 43 and the parties will use their best efforts to
                  reconcile such payments and credit the proper party (Hess or
                  Owner) at the end of each month consistent with the interest
                  otherwise expressed in this Article 1A2 and in Article 1A1.
                  above.

         3.       Hess will provide Owner with 60 days' written notice of any
                  permanent new transportation needs that exceed the
                  [Confidential material omitted and filed separately with the
                  Commission] barrels monthly (or the dirty barrel maximum, as
                  applicable). Owner will, within 30 days following receipt of
                  such notice provide Hess with a preliminary indication of
                  Owner's intentions with respect to transporting Hess's
                  additional need and prior to the end of the 60-day notice
                  period, prepare and deliver a written proposal to Hess
                  concerning a means acceptable to Owner to satisfy Hess's new
                  transportation needs or a notice that, despite commercially
                  reasonable efforts, it is unable to make such a proposal.
                  Within 30 days following receipt of Owner's proposal, Hess
                  shall advise Owner in writing of its acceptance or rejection
                  of the proposal. If accepted, Owner will implement the
                  proposal in accordance with its terms. If rejected, Hess may
                  procure transportation services elsewhere for such new needs.
                  If, despite commercially reasonable efforts, Owner is not able
                  to provide such a proposal to Hess or Hess rejects the
                  proposal, it shall not constitute a breach of this Agreement
                  or be counted against Owner for purposes of Article 47A or B.

B.       Hess commits to a [Confidential material omitted and filed separately
         with the Commission] barrel minimum annual volume for each Contract
         Year.

         If Hess fails to ship the minimum annual volume for each Contract Year
         and the failure to ship is not excused by force majeure or by the
         inability of Owner to furnish necessary vessels to fulfill its
         obligations, Hess will pay to Owner the deficiency in the number of
         barrels that Hess has failed to ship multiplied by the

                                       2

<PAGE>   3
         factor of [Confidential material omitted and filed separately with the
         Commission] per barrel ("Deficiency Payment"). Those barrels
         constituting uncontested, paid Dead Freight will be included in the
         minimum annual volume as if those barrels had been shipped by Hess.
         Payment of the Deficiency Payment for each Contract Year will be
         reconciled and paid within 30 days following the end of such Contract
         Year.

C.       Hess will be entitled to an offset against any Deficiency Payment due
         for an applicable Contract Year in the manner set forth below in this
         paragraph. To the extent Owner, as a result of increased availability
         of its owned vessels due to Hess's shortfall in transported volumes,
         transports in such Contract Year, barrels in the northeastern United
         States for third parties that were not the result of commercial
         arrangements existing prior to the time of the decline in transported
         Hess volumes that resulted in or contributed to Hess's shortfall
         ("Third Party Volume"), Hess will be entitled to offset the Deficiency
         Payment by an amount calculated by multiplying $[Confidential material
         omitted and filed separately with the Commission] times the number
         determined by subtracting (i) the aggregate of barrels transported for
         Hess in the northeastern United States in such Contract Year ("Hess
         Volume") from (ii) the aggregate of Hess Volume in such Contract Year
         plus Third Party Volume; provided that the number used for purposes of
         this clause (ii) will not exceed [Confidential material omitted and
         filed separately with the Commission] barrels.

         Example 1: [Confidential material omitted and filed separately with the
         Commission]

         Example 2: [Confidential material omitted and filed separately with the
         Commission]

                                       3
<PAGE>   4
D.       1.       In the event of a significant change in business due to an
                  unforeseen event or interruption in business of Hess (for
                  example, a sale or closing of assets constituting all or a
                  substantial portion of a business operation such as retail
                  locations, a terminal or a refinery), Hess will have the
                  option to permanently reduce the required annual minimum
                  barrels to the extent attributable to the event or
                  interruption for the remainder of the term of this Agreement.

         2.       Hess will be required to give Owner a ninety (90) day written
                  notice of its intent to permanently reduce the minimum barrels
                  under this Agreement, and in such event, Hess will pay to
                  Owner the Adjustment Fee. Such a notice of reduction, once
                  delivered to Owner, shall be irrevocable. Payment of the
                  Adjustment Fee shall be made as follows: [Confidential
                  material omitted and filed separately with the Commission]%
                  of the Adjustment Fee on the 90th day following written
                  notice, [Confidential material omitted and filed separately
                  with the Commission]% of the Adjustment Fee on the same day
                  of each of the third, sixth and ninth months following the
                  90th day.

         3.       The Adjustment Fee shall be defined as $[Confidential material
                  omitted and filed separately with the Commission] per
                  day times the days remaining under this Agreement following
                  the effective date of the reduction in the minimum, times the
                  percentage reduction (calculated to one decimal place) in the
                  minimum annual barrels provided for in this Agreement.

         4.       In the event of a permanent reduction in minimums as
                  contemplated in this Article 1D, the monthly maximum volumes
                  provided for in this Agreement shall be reduced by the same
                  percentage that the minimums are reduced.

E.       Owner will make all reasonable efforts to safely navigate in ice and
         break ice, if necessary. Owner will be compensated for this in
         accordance with Schedule B. Hess will pay Owner an ice charge equal to
         the hourly rate in Schedule B, over

                                       4
<PAGE>   5

         and above the freight rate, for each hour that a tug and barge unit is
         operating in ice or is stuck in ice. If Owner requires the services of
         an assist tug, its costs, as stipulated on Schedule B when breaking
         ice, will be paid by Hess. All invoices for ice charges are payable in
         full upon receipt and shall be submitted together with copies of ice
         logs from each Provided Vessel invoiced, duly signed by the Master of
         the Provided Vessel. In addition, a copy of the United States Coast
         Guard's (USCG) daily Ice Report will be provided by Owner when
         available.

         Whenever possible, Owner will notify Hess prior to commencing any
         voyage where ice charges and delays are anticipated. Upon receipt of
         such information, Hess may elect to direct the Provided Vessel to
         another terminal or port. In such event and if the Provided Vessel is
         already in transit, then Hess will pay Owner any deviation costs
         resulting from the change in destination.

F.       For the stub period commencing June 1, 2001, the minimum volumes shall
         be [Confidential material omitted and filed separately with the
         Commission], and for purposes of the stub period in 2006, the
         minimum volumes shall be the average actual volumes for such stub
         period over the prior 3 years.

G.       Owner will coordinate the provision of barge services to Hess in the
         southeastern United States in exchange for a commission equal to
         [Confidential material omitted and filed separately with the
         Commission]% of the freight charges paid by Hess for such barges
         coordinated by Owner. Owner and Hess agree to establish procedures for
         the nomination of such barges. Freight charges through December 31,
         2001, will be according to the currently existing rate schedule with
         Vane Brothers shown on Schedule C attached hereto, and thereafter
         freight charges will be at generally prevailing area rates until such
         time, if any, as Hess and Vane Brothers or another transportation
         provider shall negotiate a new schedule of freight charges. Owner's
         responsibility extends solely to using reasonable commercial efforts to
         coordinate the barge services and manage the logistics thereof, and
         Owner will not be responsible for the actual provision of barge
         services or be liable or penalized in any way if such barge services
         are not provided. Within 30 days after December 31 of each year of this
         contract, Hess shall have the right to discontinue the services
         provided by Owner under this Article 1G, provided Hess provides Owner
         with written notice within such 30-day period.

H.       It is Owner's policy not to haul dirty barrels on single-hull vessels.
         Owner will only transport dirty barrels on double bottomed or double
         hulled vessels. In no event will Hess require Owner to use any vessel
         owned by Owner in contravention of this policy. Owner has time
         chartered the barge "New Jersey" from Moran at a rate of $[Confidential
         material omitted and filed separately with the Commission]/day
         for a one-year period beginning on or around July 1, 2001 to transport
         Hess dirty barrels. Notwithstanding anything to the contrary contained
         in this Agreement, Hess will be responsible for the costs of such time
         charter (or any time charter of an agreed substitute vessel); it being
         understood that Owner agrees to reimburse Hess at the time charter rate
         for any days the "New Jersey" (or an agreed upon substitute vessel) is
         used for non-Hess moves. If, at any time, Hess requires the transport
         of dirty barrels from any Hess-owned inner berth and Owner has no
         double bottomed or doubled hulled

                                       5
<PAGE>   6

         vessels available and provided the "New Jersey" (or any agreed upon
         substitute vessel) is moving barrels for Hess' account at that time,
         Owner will use commercially reasonable efforts to charter appropriate
         third-party vessels at market rates and on such other terms and
         conditions as are reasonably satisfactory to Hess and pass the cost
         through to Hess. If Owner is unable to charter third-party vessels for
         such inner berth moves, or such vessels are either not available at
         market rates or not acceptable to Hess, provided the "New Jersey" (or
         any agreed upon substitute vessel) is moving barrels for Hess' account
         at that time, it shall not constitute a breach of this Agreement or be
         counted against Owner for purposes of Article 47A or B.

ARTICLE 2 - PERIOD OF AGREEMENT

The original term of this Agreement will be from the effective date of this
Agreement through March 31, 2006. The parties agree to negotiate in good faith
to reach acceptable terms and conditions to extend the Agreement past the end of
its term by September 30, 2005. If no agreement is reached by such date, each
party will be relieved of any further obligation regarding any extension of this
Agreement.

ARTICLE 3 - DEFINITIONS

A.       "Cargo" means clean or dirty petroleum products, maximum of (3) grades,
         within a vessel's natural segregations with grades defined as including
         specific grades of gasoline as separate grades. Additional grades may
         be carried with single valve segregation with some line admixture.

B        "vessel" means any barge or tow, whichever is appropriate. The term
         "tow" means any combination of tugs and barges with the ability to
         function as a single unit. "Provided Vessel" means a vessel, owned or
         chartered by Owner, or its parent or other affiliate, and provided for
         service under this Agreement.

C.       "Terminal" or "Port" means any refinery, terminal or vessel delivering
         product to or receiving product from Provided Vessels under this
         Agreement.

D.       "All Fast" means that the vessel is safely secured to the dock and that
         there is unrestricted access to the vessel, including the gangway being
         down and secured.

E.       "Dead Freight" means a charge at the rate specified in Schedule A on
         the difference between actual volume loaded and minimum volume ordered
         when actual volume is less than minimum volume ordered.

F.       "Contract Year" means (i) the period of time between the effective date
         of this Agreement and December 31, 2001; (ii) each period of time
         between January 1

                                       6
<PAGE>   7

         and December 31 for the years 2002, 2003, 2004, and 2005; and (iii) the
         period of time between January 1, 2006 and March 31, 2006.

G.       "Master" means any of the master of the vessel, the captain of the
         vessel or the Owner.

H.       "Dirty barrels" means Nos. 4, 5 or 6 oil, vacuum gas oil, slurry and
         Algerian resid.

ARTICLE 4 - VAPOR PRESSURE

Owner will not be required and shall have no obligation under this Agreement to
carry or ship Cargo which has a vapor pressure exceeding [Confidential material
omitted and filed separately with the Commission] pounds at [Confidential
material omitted and filed separately with the Commission] degrees Fahrenheit as
determined by the Reid Method.

ARTICLE 5 - SEAWORTHINESS

Owner warrants that at the commencement of loading (i) each Provided Vessel will
be seaworthy, properly manned, equipped and supplied for the voyage, (ii) the
cargo tanks, pipelines, and valves of each Provided Vessel will be suitable for
the Cargo, and (iii) the pumps and heating coils, if any, of each Provided
Vessel will be in good working condition. Owner will, as far as these conditions
can be obtained with the exercise of due diligence, further maintain such
condition and will use best efforts in the loading, stowage, custody, care and
delivery of the Cargo. Owner will provide sufficient towing power including
assisting tugs to handle properly and safely any Provided Vessel(s) while both
in loaded and light conditions. Owner will use best efforts to maintain the
seaworthiness of all Provided Vessels throughout the voyage and Owner and the
Provided Vessels will be in compliance with all local, state and federal laws,
ordinances and regulations at all times.

ARTICLE 6 - CARGO TANK INSPECTION

Hess or its representative may, before loading, inspect all cargo tanks of each
Provided Vessel. Prior to inspection, all Provided Vessel pipeline and manifold
valves will be opened in a manner that allows compatible products to collect in
single segregated compartments. Owner will inform Hess of prior cargo and the
associated general specifications of Cargo(es) last carried by the applicable
Provided Vessel. If any tank is found to be unfit for the Cargo by reason of
contamination, Hess or its representative may refuse to load Cargo into such
tank and the Cargo capacity of the tank will not be included in the Provided
Vessel's minimum Cargo. Hess or its representative's failure to inspect will not
relieve Owner of any liability for Cargo loss or contamination due to Owner's
failure to make the Provided Vessel seaworthy, suitable for the Cargo or free of
contamination. No such inspection by Hess or its representative will relieve
Owner of any of its obligations under this Agreement.

                                       7

<PAGE>   8

ARTICLE 7 - VESSEL CONNECTION CONSTRUCTION

All flanges, fittings, spool pieces and reducers must be of steel construction.

ARTICLE 8 - SAFE BERTH, SHIFTING

A.       The loading and discharging berths will be such Terminal, wharf, craft
         or other place alongside a Provided Vessel, designated by Hess and
         accessible and ready when the Provided Vessel arrives and at which the
         Provided Vessel can lie safely afloat (within the specified maximum
         drafts and the specified minimum water depths) free of all wharfage and
         dockage dues. All charges at the Terminals for duties, tugs and pilots
         and mooring masters will be borne by Owner. All charges at the
         Terminals for line handling, booming and tax on services for Cargo
         Transfers will be borne by Hess. Hess will not be deemed to warrant the
         safety of any channel, fairway, anchorage or other waterway used in
         approaching the designated berth. Hess will not be liable for:

         1.       Any loss, damage, injury, or delay to any Provided Vessel
                  resulting from the use of such waterways;

         2.       Any damage to Provided Vessels at Hess's facility or any other
                  such facility designated by Hess when such damage is caused by
                  other vessels passing in the waterway unless such damage is a
                  result of improperly maintained Hess facilities.

         Hess will comply with all applicable federal, state and local laws and
         regulations relating to safe berthing.

B.       At Hess's owned or operated Terminals, Hess will furnish Provided
         Vessels with a berth(s) in order of their arrival, as determined by
         receipt of Notice of Readiness ("NOR"). Hess or its representative has
         the right to require a Provided Vessel to shift berth from one safe
         berth to another safe berth. When such shifting is done for the
         convenience of Hess or its representative, Hess will pay all pilot,
         tug, and port expenses incurred in shifting the Provided Vessel, and
         the time consumed on account of such shifting will count as used
         laytime. When the shifting is required due to the fault or condition of
         a Provided Vessel, Owner will pay all expenses incurred in shifting the
         Provided Vessel, and time consumed on account of such shifting will not
         count as used laytime, or demurrage if the Provided Vessel is on
         demurrage.

C.       Hess or its representative has the right to instruct the Provided
         Vessel to vacate its berth if it appears that the Provided Vessel will
         not, because of disability or any other cause on the part of the
         Provided Vessel, be able to complete loading or discharge of Cargo
         within the "allowed laytime"; provided that the Provided Vessel will
         not be required to vacate a berth unless that berth is needed to

                                       8
<PAGE>   9

         accommodate another vessel. In such instance, laytime will be
         calculated in accordance with Article 17E. The Provided Vessel, after
         tendering NOR to recommence loading or discharging, will be reberthed
         in order of its original arrival as determined by the original
         confirmed receipt of each Provided Vessel or other vessel NOR and
         laytime will resume upon the Provided Vessel's reberthing. If the
         Provided Vessel does not vacate the berth within four (4) hours
         following such instructions, Owner will reimburse Hess, upon demand and
         receipt of proper supporting documents, for any demurrage claims Hess
         may be required to pay third parties, which reimbursement by Owner to
         Hess for the first six hours following the initial four hour period is
         limited to the demurrage rate on the Provided Vessel and thereafter is
         limited to the demurrage rate Hess is required to pay to such third
         parties.

D.       If the Master of the Provided Vessel determines that a stand-by tug is
         required for assistance, and such tug assistance is not required by the
         Terminal or wharf, all resulting charges for such tug assistance will
         be for Owner's account. There are currently no standby tugs required in
         New York Harbor except when loaded barges are at anchorage. In such
         instance or instances charges for standby tugs will be to Hess'
         account.

ARTICLE 9 - PUMPING IN AND OUT

Cargo will be pumped into the cargo tanks of the Provided Vessel by Hess (or its
supplier) at its expense but at its risk and peril only to the point where the
Provided Vessel's hoses are attached to the shipper's lines or if such Provided
Vessel's hoses are not used, then to the permanent hose connections on the
Provided Vessel receiving the Cargo. Loading will be done as quickly as the
Provided Vessel can safely receive the Cargo and within the shore constraints.

Cargo will be pumped out of the cargo tanks by Owner at its expense but at its
risk and peril only to the point where the Provided Vessel's hoses are connected
to the receiver's lines, or if the Provided Vessel's hoses are not used, then to
the permanent hose connections on the Provided Vessel discharging the Cargo. If
Hess or receiver requires any of the Cargo to be heated before discharge from a
Provided Vessel fitted with heating coils, steam will be furnished by Hess or
its designee at Hess's expense unless the Provided Vessel is equipped with its
own heating plant.

Owner warrants that each Provided Vessel is capable of discharging its full
Cargo by maintaining pressure of [Confidential material omitted and filed
separately with the Commission] psi at the Provided Vessel's manifold or
within the time specified in Schedule "B," providing shore facilities permit. If
the Provided Vessel does not maintain the warranted discharge rate or pressure,
the time used discharging in excess of allowed time will not count as used
laytime, or as demurrage if the Provided Vessel is on demurrage provided the
Provided Vessel's failure to comply with the foregoing warranty was not caused
by factors onshore beyond the control of the Provided Vessel.

                                       9
<PAGE>   10

ARTICLE 10 - FREIGHT AND TAXES

A.       Hess or its authorized representative will furnish Owner, free of cost,
         copies of Loading Certificates. Freight will be paid on intake
         quantity, as determined in Article 12.

B.       Freight will be earned and payable to Owner under the terms of this
         Agreement at the rate specified in Schedule A for specific routes and
         movements, without discount, when Cargo is loaded based on the quantity
         loaded as determined in Article 12 at the loading location as shown by
         the Provided Vessel's gauges at load port adjusted by the Provided
         Vessel's experience factor for the previous five independently
         inspected loadings (VEF) which determination may be verified by an
         Independent Certified Petroleum Inspector at Hess' option and expense.
         In the absence of such Provided Vessel's gauge information, the
         relevant shore tank gauges as recorded by the associated facility will
         be used. If shore tank gauges are unavailable, freight will be payable
         based on an Independent Certified Petroleum Inspector's Report of such
         quantity.

C.       Moves not specified in Schedule A will be determined with reference to
         the rates and terms as set out in Schedules A and B.

D.       Unless otherwise specified and to the extent not prohibited by law,
         dues, taxes and other charges upon the Provided Vessel (excluding those
         assessed on the quantity of Cargo loaded or discharged or on the
         freight) will be paid by Owner and dues, taxes and other charges on the
         Cargo will be paid by Hess. Hess will be responsible for any charges
         for the use of any place(s) arranged by Hess solely for the purpose of
         loading or discharging cargo. However, Owner will be responsible for
         charges for any such place(s) when used solely for purposes of the
         Provided Vessel, such as, but not limited to, awaiting Owner's orders,
         tank cleaning, repairs, before, during or after loading or discharging.
         If the parties enter into a Use Agreement for Hess's Brooklyn, New
         York, facility, Owner's tugs and/or barges (without gas bottoms) will
         be able to lay up at Pier 2.

E.       The rates stipulated in Schedules A and B will be fixed for the first
         Contract Year, with an escalation of [Confidential material omitted and
         filed separately with the Commission]% in each of the second through
         sixth Contract Years, to be applied to the then current rates per
         Schedules A and B.

F.       If the operating costs of the Provided Vessels increase or decrease due
         to the imposition of new taxes or the increase or decrease in existing
         taxes and fees (exclusive of income taxes); or due to changes in the
         rules and regulations for the manning and operation of the tow; then
         the affected party will have the right to a corresponding increase or
         decrease in Schedule A rates which will directly reflect such increased
         or decreased costs. The affected party will present its request to the
         other party in writing together with a detailed line-by-line accounting
         of its operating costs, if applicable, together with supporting
         documentation for the new or increased or decreased taxes, fees and/or

                                       10
<PAGE>   11

         operating costs and other such documentation as the other party may
         reasonably request. Hess will have the right to an independent audit of
         the books and accounts of Owner relating to the expense of Owner to
         which an increase in Schedule A and B rates is sought. If the Parties
         agree, the adjustment of Schedule A and B rates will become effective
         on an agreed date. If the parties cannot agree, the matter may be
         resolved as set forth in Article 41.

G.       Dead Freight shall be payable by Hess on the same terms and conditions
         as though actually transported.

ARTICLE 11 - FUEL PRICE

Freight rates per barrel as specified in Article 10 are based upon a fuel price
of $[Confidential material omitted and filed separately with the Commission] per
gallon. The rates will be increased or decreased weekly based on the previous
week ending's posting for Mobil Marine Diesel dockside fuel prices at IMTT
Bayonne. There will be no adjustment to the per barrel freight rates in Article
10 if the above-referenced price is between $[Confidential material omitted and
filed separately with the Commission] and $[Confidential material omitted and
filed separately with the Commission] per gallon. Above $[Confidential material
omitted and filed separately with the Commission] per gallon, for every
$[Confidential material omitted and filed separately with the Commission] per
gallon (or part thereof) increase in the contract fuel price, there will be a
[Confidential material omitted and filed separately with the Commission]%
increase in the per barrel freight rate. Below $[Confidential material omitted
and filed separately with the Commission] per gallon, for every $[Confidential
material omitted and filed separately with the Commission] per gallon decrease
in the contract fuel price (or part thereof), there will be a [Confidential
material omitted and filed separately with the Commission]% decrease in the per
barrel freight rate. In connection with transportation under this Agreement on
third-party vessels chartered by Owner for transportation services below the
monthly maximum (or the dirty barrel maximum, as applicable), Owner shall be
entitled to pass through to Hess fuel charges from such third party vessels in
excess of $[Confidential material omitted and filed separately with the
Commission] per gallon for the first [Confidential material omitted and filed
separately with the Commission] barrels so moved each month.

ARTICLE 12 - QUANTITY DETERMINATION

In the event that shore tank figures are used as the basis for quantity
determination, the quantity loaded and discharged will be determined by properly
calibrated meters or, if none, by manual gauging of shore tanks before and after
delivery. Shore tanks will not be gauged for custody transfer when the floating
roof is in the critical zone. If a shore tank becomes active after the opening
gauge and prior to the closing gauges, thereby necessitating measurement
adjustments, the volume delivered will be based on the most accurate
measurements available as determined by the inspector in consultation with
receiving facility personnel. These measurements will recognize receiving tank
gauges, other tank or custody transfer meters or volume measurements of the
Provided Vessel before and after Cargo transfer adjusted by VEF. All such
Provided Vessels' gauges, cargo temperatures and samples will be obtained
manually through open hatches where the practice is not prohibited by the
Terminal or local, state or federal regulations. The quantity delivered will be
reported in barrels (42 U.S. gallons of 231 cubic inches) corrected to 60
degrees Fahrenheit in accordance with the American Petroleum Institute ("API")
Manual of Petroleum Measurement Standards or similar standards.

                                       11
<PAGE>   12

A.       Delivery by Shore Tank to Provided Vessel:

         Free water as determined by water cuts of the shore tank will be
         deducted from the total observed volume in the shore tank prior to
         applying temperature correction factors.

B.       Delivery by Provided Vessel to Shore Tank:

         Total volume received by shore tank corrected to 60 degrees Fahrenheit
         will be reduced by the amount of free water delivered by the Provided
         Vessel as determined from water cuts of each Provided Vessel tank.

C.       Delivery by Ship to Provided Vessel:

         Total volume received by the Provided Vessel based on the Provided
         Vessel's gauges, adjusted for VEF, corrected to 60 degrees Fahrenheit,
         will be reduced by the amount of free water on the barge prior to
         loading and as determined by an independent public gauger.

All metering, meter proving, gauging, sampling, temperature measurement,
analysis and calculation procedures will be in accordance with the latest
applicable chapters of the API Manual of Petroleum Measurements Standards or
similar standard in effect at the designated receiving facility.

Each party, at its expense, may have a representative present to witness the
measurements and tests required in this Agreement.

ARTICLE 13 - NOMINATION AND ETA

A.       Advance Scheduling Information:

         Each week, Hess will provide to Owner a nonbinding schedule of expected
         barge movement needs for the following week.

B.       Nomination Procedure:

         Hess will order transportation by giving Owner notice (Nomination
         Order) specifying the following:

         1.       [Confidential material omitted and filed separately with the
                  Commission], Hess will advise preliminary loading and
                  discharging locations and approximate quantity and grade of
                  Cargo to be loaded.

         2.       [Confidential material omitted and filed separately with the
                  Commission] hours prior to loading, Hess will fix a 24-hour
                  window loading range, with the expected time of loading, with
                  firm advice on

                                       12
<PAGE>   13

                  loading/discharging locations and approximate quantity and
                  grade of Cargo to be loaded.

         3.       [Confidential material omitted and filed separately with the
                  Commission] before the beginning of the window loading range,
                  Hess will designate time, berth and final loading orders and
                  approximate quantity and grade of Cargo to be loaded.

         4.       At any time, Hess may request transportation outside of the
                  nominating procedure. Owner will use its reasonable commercial
                  efforts to provide this transportation, but failure to meet
                  nominating window for this transportation will not count
                  against Owner under Article 47A or B, will not constitute a
                  breach of this Agreement and the Cargo to be transported will
                  not be included in the calculation of the minimum annual
                  volume requirements unless and until the Cargo is transported
                  by Owner.

         Within twenty-four hours of receipt of the Nomination Order, Owner will
         identify to Hess the Provided Vessel(s) designated to be provided and
         their last three (3) cargoes.

         Owner may, at its option at any time prior to loading, substitute
         another vessel for the previously designated Provided Vessel subject to
         the acceptance of such substitute vessel by Hess.

C.       ETA Clause:

         The Owner will notify the Terminal of the arrival time of each vessel
         nominated as a Provided Vessel not less than once during each
         [Confidential material omitted and filed separately with the
         Commission] period commencing concurrently when NOR is tendered at the
         final port(s) of call on the previous voyage but not more than
         [Confidential material omitted and filed separately with the
         Commission] prior to the estimated time of arrival ("ETA"). The Owner
         will confirm or amend the ETA approximately [Confidential material
         omitted and filed separately with the Commission] prior to the arrival
         time of the Provided Vessel designated to be provided. The Owner will
         notify the Terminal no less than [Confidential material omitted and
         filed separately with the Commission] before such Provided Vessel's
         arrival.

D.       Voyage Cancellation

         1.       If Hess cancels a voyage due to failure on the part of Owner
                  to provide the Provided Vessel designated to be provided at
                  the time agreed upon in the Nomination Order, Hess will not be
                  obligated to pay any cancellation fee or demurrage to Owner.

         2.       If Hess cancels a voyage prior to [Confidential material
                  omitted and filed separately with the Commission] prior to the
                  Provided Vessel designated to be provided tendering its
                  NOR/Notice of Arrival ("NOA"), Hess will not be obligated to
                  pay any cancellation fee to Owner.

                                       13
<PAGE>   14

         3.       If Hess cancels a voyage within the [Confidential material
                  omitted and filed separately with the Commission] and
                  [Confidential material omitted and filed separately with the
                  Commission] period of Owner's nominated date and time of
                  loading, Hess will be obligated to pay a cancellation fee to
                  Owner in an amount of [Confidential material omitted and filed
                  separately with the Commission] day of [Confidential material
                  omitted and filed separately with the Commission] demurrage
                  for the nominated vessel at the demurrage rate specified in
                  Schedule B of this Agreement.

         4.       If Hess cancels a voyage within the [Confidential material
                  omitted and filed separately with the Commission] period of
                  Owner's nominated date and time of loading, Hess will be
                  obligated to pay a cancellation fee to Owner in an amount of
                  [Confidential material omitted and filed separately with the
                  Commission] demurrage for the nominated vessel at the
                  demurrage rate specified in Schedule B of this Agreement.

         5.       If the nominated vessel has not given an NOR or NOA, as
                  applicable, to load or if the nominated vessel is not suitable
                  for loading by the designated time, Hess will have the right
                  to cancel the voyage. Otherwise, the Nomination Order will
                  remain in effect.

ARTICLE 14 - NOTICE

A.       The Terminal may be notified by radio, letter, telephone,
         telecopy/rapifax or electronic mail of the ETA of each Provided Vessel
         designated to be provided not [Confidential material omitted and filed
         separately with the Commission] prior to such Provided Vessel's
         expected arrival date. The Terminal will be further notified of
         scheduled arrival [Confidential material omitted and filed separately
         with the Commission] and [Confidential material omitted and filed
         separately with the Commission] in advance of arrival. After the
         [Confidential material omitted and filed separately with the
         Commission] notice, the Terminal will be immediately notified when a
         scheduled arrival time changes by more than [Confidential material
         omitted and filed separately with the Commission]. Failure to adhere to
         these ETA notices will result in laytime commencing when such Provided
         Vessel is made All Fast at the designated berth. The Provided Vessel's
         log or any other form mutually agreed to by Hess and Owner shall serve
         as official record of NOA, detailing the date, time and name of Hess's
         representative who was notified.

B.       The Provided Vessel will be required to promptly respond to any
         Terminal preberthing questions.

C.       No later than [Confidential material omitted and filed separately with
         the Commission], the original ETA will be confirmed by Owner and Hess,
         or if necessary, the nominated date, time and the Provided Vessel
         designated to be provided may be amended with the concurrence of both
         parties.

                                       14
<PAGE>   15

ARTICLE 15 - VESSEL CLEARANCE

At the time the Terminal is first notified of the Provided Vessel designated to
be provided and its last three cargoes, the Terminal will have the right to
refuse acceptance of such Provided Vessel if in the facility's reasonable
opinion such Provided Vessel is unacceptable. The acceptance or rejection of the
nominated vessel by Hess will be confirmed to the Owner within [Confidential
material omitted and filed separately with the Commission] after the receipt of
Nomination Order. The acceptance of a Provided Vessel designated to be provided
will not constitute a continuing acceptance of such Provided Vessel for any
subsequent loading or discharge.

ARTICLE 16 - NOTICE OF READINESS (NOR)/NOTICE OF ARRIVAL (NOA)

After the Provided Vessel designated to be provided has arrived at the customary
anchorage or other place of waiting and is otherwise ready to receive or
discharge Cargo, including having received all clearances and required approvals
from local, state or federal agencies, the Owner or his agent will cause NOR/NOA
of the Provided Vessel designated to be provided to be tendered to the Terminal
by letter, telegraph, telex or telecopy, rapifax, wireless, radio telephone or
telephone. The notice will not be given until after the Provided Vessel
designated to be provided has received all port clearances. The Terminal will
attempt to berth the Provided Vessel designated to be provided on an equal basis
with all other vessels arriving at the port to load or discharge in order of
rotation determined by receipt of NOR by the Terminal. The NOR/NOA will not
constitute an agreement to alter the nominated or scheduled time of the Provided
Vessel designated to be provided.

ARTICLE 17 - LAYTIME

A.       As detailed below, total laytime will consist of laytime allowed to
         provide berth (as set forth in Article 17B1 below) and to prepare for
         loading or unloading, plus the time allowed for loading or unloading,
         day or night, Saturdays, Sundays and holidays not excepted.

B.       Commencement Of Laytime

         1.       Laytime for Provided Vessels designated to be provided
                  tendering NOR within the nominated/scheduled time will
                  commence after receipt of NOR or upon such Provided Vessel
                  being All Fast to the berth, whichever occurs first.

         2.       If a Provided Vessel arrives before the latest accepted
                  scheduled time, used laytime will not commence until the
                  scheduled time, unless the Terminal elects to accept the
                  Provided Vessel earlier, in which case used laytime will begin
                  after the Provided Vessel has been made All Fast.

                                       15
<PAGE>   16

         3.       If the Provided Vessel arrives after the original scheduled
                  time or agreed upon rescheduled time, laytime will commence
                  after the Provided Vessel is secured to the dock and been made
                  All Fast. Further, the Terminal may discontinue
                  loading/discharging and order the Provided Vessel out of berth
                  prior to completion of loading/discharging, without liability,
                  so as to meet the Terminal's obligations to accommodate
                  another vessel; provided that such Provided Vessel shall be
                  entitled on a first priority basis to the next available
                  berth. All costs and expenses for such shifting Provided
                  Vessel in and out of berth will be for Hess's account. At its
                  election, Hess may order the Provided Vessel to depart the
                  Terminal where it is taking on barrels with less than the
                  originally nominated quantity of barrels for delivery, in
                  which event Hess shall remain responsible for payment of the
                  applicable Dead Freight. Further, Hess may order the Provided
                  Vessel to depart the Terminal where it is deliverying barrels
                  with a quantity of barrels remaining on board that it was
                  scheduled to deliver at such Terminal, in which event the
                  further transportation of such barrels remaining on board
                  other than for transportation to a berth for loading purposes
                  shall be subject to freight charges on the same terms and
                  conditions as any other barrels transported hereunder.

C.       The amount of laytime to load or discharge from Provided Vessels will
         be as specified in Schedule B.

D.       When discharging, the Provided Vessel will maintain:

         1.       A pressure of [Confidential material omitted and filed
                  separately with the Commission] psi at the Provided Vessel's
                  rail, provided the Terminal is capable of receiving at that
                  pressure; or

         2.       A rate sufficient to allow the Provided Vessel to discharge
                  completely within the allowed laytime per Schedule "B" less
                  two hours, assuming the Terminal is capable of receiving at
                  such rate.

E.       Time consumed due to any of the following will not count as used
         laytime:

         1.       Any delay in the Provided Vessel reaching or departing the
                  berth (including weather delays) caused by any reason or
                  condition not reasonably within the Terminal's control.

         2.       Any delay, unless ordered by a regulatory authority, on an
                  inward passage including, but not limited to, awaiting
                  daylight, tide, tugs or pilot, time used on lightering
                  operations, and moving from an anchorage or other waiting
                  place, until the Provided Vessel is All Fast.

         2.       Any delay due to the Provided Vessel's condition or breakdown,
                  or other causes attributable to the Provided Vessel, or
                  failure to maintain agreed pumping rates or discharge
                  pressure, or inability of the Provided Vessel's facilities to
                  load or discharge Cargo within the allowed laytime.

                                       16
<PAGE>   17

         3.       Any delay due to prohibition of loading or discharging at any
                  time by Owner or operator of the Provided Vessel or by the
                  port authorities unless the prohibition is caused by the
                  Terminal's failure to comply with applicable laws and
                  regulations.

         4.       Any delay due to bunkering or provisioning of the Provided
                  Vessel.

         5.       Any delay due to discharging or shifting of slops, ballast or
                  contaminated Cargo of the Provided Vessel or for any other
                  purpose of the Provided Vessel.

         6.       Any delay due to the Provided Vessel's incompatibility with
                  the configuration of the berthing, or other port facilities,
                  including time consumed in making up connections to remedy any
                  incompatibility.

         7.       Any delay due to pollution or threat thereof caused by any
                  defect in the Provided Vessel or any act or omission to act by
                  the Master or crew of the Provided Vessel.

         8.       Any delay due to the Provided Vessel's violation of the
                  operating or safety regulations of the Terminal, noncompliance
                  with federal or state laws or U.S. Coast Guard or other
                  applicable regulations, or failure to obtain or maintain
                  required certification.

         9.       Any delay caused by strike, lockout, stoppage or restraint of
                  labor of Master, Officers or crew of the Provided Vessel or of
                  tugboats or pilots.

         10.      Any delay due to the Provided Vessel not being capable of
                  discharging the entire Cargo within the allotted laytime or
                  maintaining the applicable discharge rate while maintaining
                  [Confidential material omitted and filed separately with the
                  Commission] psi at the ship's rail provided shore facilities
                  are capable of receiving at that pressure. Time used for
                  pumping beyond the allowed laytime will not count as used
                  laytime unless the Provided Vessel has maintained
                  [Confidential material omitted and filed separately with the
                  Commission] psi at ship's rail or maintained the applicable
                  discharge rate (except during stripping operations) as
                  specified in Schedule B of this Agreement.

         11.      Any delay due to the Provided Vessel awaiting U.S. Coast
                  Guard, Customs and/or Immigration clearance(s) and pratique,
                  if applicable.

F.       Used laytime will cease upon disconnection of hoses after all Cargo has
         been loaded or discharged and the Provided Vessel has been released by
         the Terminal. The Provided Vessel will vacate its berth expeditiously
         consistent with safe operating practices (unless permission to remain
         is expressly granted by the Terminal or refinery). When the Provided
         Vessel has completed loading or discharging, time awaiting arrival of
         towboat or any other delay of departure of the Provided Vessel in
         excess of [Confidential material omitted and filed separately with the
         Commission] following notice of the request

                                       17
<PAGE>   18

         therefor, unless caused by fault or negligence of Hess, will be for
         Owner's account. Any delays caused by Owner or the Provided Vessel in
         completing, loading or discharging and expeditiously (not in excess of
         [Confidential material omitted and filed separately with the
         Commission] following notice of the request therefor) vacating the
         berth which results in Hess incurring third party demurrage and
         additional expenses will be for Owner's account. Hess will notify Owner
         when it becomes aware that demurrage may be incurred.

G.       Laytime Reversibility. The total laytime will be the sum of the laytime
         allowed at loading Terminal and discharging Terminal.

ARTICLE 18 - SHORE RELEASE CLAUSE

Time spent awaiting the release of the Provided Vessel by shore authorities or
Cargo inspector after disconnection of hoses will count as used laytime or
demurrage if the Provided Vessel is on demurrage.

ARTICLE 19 - DEMURRAGE

A.       Demurrage, if any, will be at the agreed rates provided in Schedule B
         of this Agreement for the Provided Vessel and will be invoiced on a per
         voyage basis independent of freight earned. Any dispute relative to
         demurrage as invoiced will not delay the payment of freight earned as
         invoiced under this Agreement.

B.       Hess will pay demurrage per running hour and pro rata for a part
         thereof, at the applicable rate specified in Schedule B of this
         Agreement for all time that used laytime exceeds the allowed laytime.
         If, however, demurrage is incurred at ports of loading or discharge by
         reason of fire, explosion, weather, strike, lockout, stoppage, or
         restraint of labor in or about any Terminal or refinery, owned or
         controlled supplier or receiver of the Cargo, the rate of demurrage
         will be reduced [Confidential material omitted and filed separately
         with the Commission] of the amount per running hour or pro rata for
         part of any hour for demurrage so incurred. Hess will not be liable for
         demurrage for delay caused by strike, lockout, stoppage or restraint of
         labor of the Master, officers and crew of the Provided Vessel or pilots
         or any other act or condition within Owner's or the Provided Vessel's
         control.

C.       If loading or discharging is terminated prematurely as the result of a
         force majeure situation used laytime will cease at the time the
         incident causing the termination of the operation commences.

D.       Demurrage claims must be accompanied by such supporting data as may be
         reasonably requested; e.g. copies of the Provided Vessel's port log
         signed by the Master, copy of any pump readings, copy of the charter
         party agreement (if applicable), NOR, laytime statement, copy of
         carrier's paid invoice (if applicable), or any other agreed form, etc.
         Neither party subject to this Agreement will be obligated to pay
         demurrage in excess of the total demurrage amount actually

                                       18
<PAGE>   19
         incurred. All claims must be made within [Confidential material omitted
         and filed separately with the Commission] from the date of the
         completion of loading or discharge, as applicable, of the Cargo in
         question. Demurrage claims not received within the [Confidential
         material omitted and filed separately with the Commission] time frame
         will be deemed to have been waived.

E.       Tug demurrage is not applicable in [Confidential material omitted and
         filed separately with the Commission]. [Confidential material omitted
         and filed separately with the Commission] is defined as bounded by the
         [Confidential material omitted and filed separately with the
         Commission] on the north, [Confidential material omitted and filed
         separately with the Commission] on the east and [Confidential material
         omitted and filed separately with the Commission] on the south.

F.       Demurrage charges will be based upon the size of the Provided Vessel as
         set forth in Schedule B.

ARTICLE 20 - SPECIFIC PORTS AND PLACES

Subject to any changes in U.S. law that would otherwise permit Owner to transit
through Cuba, Owner represents and warrants for each voyage, that the Provided
Vessel has not called on Cuba in the previous 180 days.

ARTICLE 21 - STATEMENT OF FACTS

Owner will instruct any port agent to release port information to Hess on
request and to forward to Hess copies of the Statement of Facts and NOR as soon
as possible after the Provided Vessel has completed loading or discharge at the
port. No port agents will be required at Hess-owned or operated Terminals.

ARTICLE 22 - CARGO RETENTION

A.       IN-TRANSIT LOSS: Owner will not be liable for: (i) nonpumpable cargo
         not caused by the fault or neglect of Owner, the Provided Vessel, its
         Masters, Officers, or Crew and (ii) in-transit losses of less than
         [Confidential material omitted and filed separately with the
         Commission]% on clean cargoes and [Confidential material omitted and
         filed separately with the Commission]% on dirty cargoes carried, not
         caused by the fault or neglect of Owner, the Provided Vessel, its
         Masters, Officers, or Crew. The determination of any losses that may
         occur will be based on the agreed barge ullage or innage
         measurement/gauging at the loading or discharge ports as they may
         apply.

B.       If any Cargo remains on board any Provided Vessel upon completion of
         discharge, Hess will have the right to deduct from freight payable to
         Owner or to invoice Owner separately an amount according to the FOB
         port loading value of the Cargo, plus freight, provided an independent
         surveyor requested by Hess and appointed by Hess, subject to Owner's
         reasonable approval, certifies that all such Cargo is liquid and
         free-flowing and can be reached by the Provided Vessel's pumps and
         pipes. If such later certification is the case, the time and cost of
         the survey will be for Owner's account. In all other cases, such time
         and

                                       19
<PAGE>   20
         expense will be for Hess's account. Prior to the inspection for Cargo
         remaining on board (ROB), all pipeline and manifold valves of the
         Provided Vessel will be opened in a manner that allows compatible
         products to collect in single segregated compartments. Owner will not
         be responsible for any loss or damage arising from inherent defect,
         quality or vice of the Cargo, nor will Owner be responsible for normal
         and ordinary variation in measured quantity of Cargo up to
         [Confidential material omitted and filed separately with the
         Commission]% on clean cargoes and [Confidential material omitted and
         filed separately with the Commission]% on dirty cargoes.

ARTICLE 23 - REPRESENTATIVE CLAUSE

Owner will permit Hess representatives aboard any Provided Vessel at loading and
discharging port(s) to inspect the Provided Vessel or monitor cargo operations.
However, the Master and officers of the Provided Vessel will at all times be
responsible for cargo operations.

ARTICLE 24 - QUARANTINE/FUMIGATION

Time lost at any port due to quarantine will not count against laytime or for
demurrage unless such quarantine was in force at the time when the port was
nominated by Hess.

ARTICLE 25 - TANK CLEANING

Owners will exercise due diligence to ensure that the Provided Vessel presents
for loading with its tanks, pumps and pipelines properly cleaned (subject to the
last sentence of this Article 25) consistent with industry practice to the
satisfaction of any inspector appointed by or on behalf of Hess and ready for
loading the Cargo. Any time used to clean tanks, pumps and pipelines to an
independent inspector's satisfaction will not count as laytime or, if the
Provided Vessel is on demurrage, as demurrage and will, together with any costs
incurred in the foregoing operations, be for Owner's account. If Hess requires a
barge to be changed from dirty to clean service or from clean to dirty service,
the cost of cleaning will be for Hess's account. Hess will continue to permit
the loading of No. 2 Oil and No. 2 Diesel over gas bottoms to the extent
permitted by law for so long as Hess determines in its reasonable judgment that
such practice does not result in an unsafe or unhealthy work environment;
provided further, that if Hess makes a determination that such practice can not
continue for such reasons, Owner shall have the right to recover additional
costs related to such change in practice to the extent permitted under the
procedures set forth in Article 10F.

ARTICLE 26 - INERT GAS SYSTEM

All Provided Vessels that are equipped with an inert gas system will keep the
system operable at all times during berthing, while at berth and during
unberthing. The Master

                                       20
<PAGE>   21

of such a Provided Vessel will provide the Terminal with a signed declaration
that the Provided Vessel's inert gas system is operational and that the cargo
and slop tanks are inerted. The Master of the Provided Vessel will immediately
notify the Terminal if the inert gas system becomes inoperable or if such a
Provided Vessel is unable to maintain a positive pressure and/or oxygen content
at or below [Confidential material omitted and filed separately with the
Commission] percent by volume in the cargo and slop tanks. In addition, such a
Provided Vessel will comply with any Terminal guidelines on inert gas systems.
None of the Provided Vessels currently has inert gas systems.

ARTICLE 27 - CLOSED CARGO OPERATIONS

Owners undertake that any Provided Vessel so fitted for closed cargo operations
complies with, and will be operated for the duration of this Agreement in
accordance with the recommendations regarding closed loading and closed
discharging operations as set out in the 1996 Edition of ISGOTT as amended.

If the Provided Vessel has closed sampling equipment, the equipment will be
used, when appropriate, during this Agreement.

ARTICLE 28 - WHARF DAMAGE

Owner assumes full responsibility for any damage sustained by wharves, berths,
or docks owned or maintained by Terminal arising out of the negligent or
improper operation of the Provided Vessel, or of any other waterborne craft
owned or operated by Owner or being operated by subcontractors of Owner. Owner
will defend and indemnify Hess and the Terminal for any claims, losses, costs or
expense, incurred by or asserted against Hess or the Terminal for all wharf,
berth or dock damages to the extent caused by the negligent or improper
operation of the Provided Vessel or by such Provided Vessel's unseaworthiness.

ARTICLE 29 - AGENCY

Owner will appoint, instruct and pay for any agents of a Provided Vessel at all
loading and discharging ports and for custom house and other business relating
to any such Provided Vessel.

ARTICLE 30 - ASSIST TUGS

All pilotage and assist tugs, except those assist tugs required by any Terminal,
will be for Owner's account. Hess does not require assist tugs at its
facilities.

                                       21
<PAGE>   22

ARTICLE 31 - INDEMNIFICATION

Hess will have no obligation or liability for the control, maintenance and
operation of the Provided Vessels in the performance of this Agreement; Owner
will defend and indemnify (collectively referred to as "Indemnity") Hess, its
partners, managers, officers, employees and agents against all suits, actions,
claims, expenses, demands and damages, losses or other liabilities (including
reasonable attorney's fees and court costs) (collectively referred to as
"Liability"), arising from, based upon or relating to such operation,
maintenance and control of the Provided Vessels and from Owner's nonperformance
or breach of its obligations hereunder; provided, however, the Indemnity will
not be provided to the extent the Liability arises from the negligence or
willful misconduct of Hess. Owner's indemnification obligations are subject to
the limitations set forth in the first sentence of the final paragraph of
Article 36B.

Hess will not be responsible for any admixture and for any leakage,
contamination or deterioration incurred on a Provided Vessel as a result of:

A.       A material or structural defect in the Provided Vessel at the inception
         of or during the voyage.

B.       Error or fault of the Master, mariners or other servants of Owner
         during loading, care, and/or discharge of the Cargo.

ARTICLE 32 - INSURANCE

Owner will maintain, at its sole cost, and will require any subcharters it may
engage to maintain, at all times while performing under this Agreement, in
addition to other customary insurance, the insurance coverage set forth below
with companies satisfactory to Hess with full policy limits applying, but not
less than as required herein. A certificate evidencing these coverages providing
a 30-day written notice of cancellation will be delivered to Hess prior to
commencement of this Agreement.

A.       Hull and Machinery and War Risk Insurance in an amount of not less than
         the market value of each Provided Vessel as determined by an agreed
         upon broker, owned or chartered and used in performing work or
         rendering services hereunder. Such insurance will be endorsed to
         include navigation limits sufficient to cover all locations and
         collision and towers liability with the sistership clause unamended.

B.       Owners Protection and Indemnity Insurance as defined and available in
         the current Rules of the International Group of P&I Clubs with limits
         of not less than $100,000,000.

C.       Owners Pollution Liability Insurance in the amount of not less than
         $1,000,000,000 placed with a P&I Club which is a member of the
         International Group of P&I Clubs.

                                       22
<PAGE>   23

ARTICLE 33 - POLLUTION PREVENTION AND RESPONSIBILITY

A.       When an escape or discharge of product occurs from the Terminal, the
         Terminal will take whatever measures are reasonably necessary to clean
         up the spill or discharge and to mitigate any pollution damage. If the
         Terminal does not take adequate measures to clean up and mitigate
         damage, then the Provided Vessel may, at its option and upon written
         notice to Terminal, undertake such measures as are reasonable and
         necessary under the circumstances; and all such reasonably necessary
         measures so taken will be for the account of Terminal unless, as
         provided in paragraph B hereof, the spill or discharge is the fault of
         the Provided Vessel or the Provided Vessel's personnel. The Terminal
         will comply with and cooperate with all authorized Agencies involved in
         the remediation of any pollution incident.

B.       If an escape or discharge of product occurs from the Provided Vessel
         and causes or threatens to cause pollution damage, the Provided Vessel
         will promptly take whatever measures are necessary to prevent or
         mitigate such damage. The Provided Vessel hereby authorizes the
         Terminal, or its nominee at the Terminal's option, upon notice to the
         Provided Vessel, to undertake such measures as are reasonably necessary
         to prevent or mitigate the pollution damage. The Provided Vessel will
         comply with and cooperate with all authorized governmental agencies
         involved in the remediation of any pollution incident. The Terminal or
         its nominee will keep the Provided Vessel advised of the nature and
         results of any such measures taken, and if time permits, the nature of
         the measures intended to be taken. Any of the above measures will be at
         the Provided Vessel's expense with the right to deduct the costs
         thereof from moneys as set forth in this Agreement (except to the
         extent that such escape or discharge was caused by the Terminal),
         provided that if the Provided Vessel reasonably determines such
         measures should be discontinued, the Provided Vessel will so notify the
         Terminal or its nominee and thereafter the Terminal or its nominee will
         have no right to continue such measures at the Provided Vessel's
         authority or expense. The preceding sentence will not affect any
         liability of the Provided Vessel to the Terminal or third parties,
         including but not limited to governments.

C.       The Provided Vessel will comply with the U.S. Federal Water Pollution
         Control Act, as amended, 33 U.S.C. Sec 1321 et seq., and will have
         secured and will carry aboard the Provided Vessel a current U.S. Coast
         Guard Certificate of Financial Responsibility (Water Pollution).

D.       During the term of this Agreement, Owner warrants that Owner will
         comply with all financial capability, responsibility, security or like
         laws, regulations and other requirements with respect to oil, petroleum
         products, or other pollution damage applicable to the Provided Vessel
         emerging, leaving, remaining at or passing through any ports or places
         or waters in the performance of the Agreement. Owner at its sole risk
         and expense will make all arrangements by bond,

                                       23
<PAGE>   24

         insurance or otherwise and obtain all such certificates or other
         documentary evidence and take all such other action, as may be
         necessary, to satisfy such laws, regulations and other requirements.
         Any delay resulting to the Provided Vessel will not count as used
         laytime or for demurrage and will be at the risk and for the account of
         the Owner.

ARTICLE 34 - ENVIRONMENTAL COMPLIANCE

Each Provided Vessel will comply with all applicable local, state, and federal
environmental laws, ordinances and regulations while berthed at the Terminal. If
a Provided Vessel fails to comply with such laws, ordinances and regulations,
the Provided Vessel will be required to leave the Terminal or cease operations.
Any Provided Vessel delay time caused by the Provided Vessel's failure to meet
such laws, ordinances and regulations will not count as used laytime, or
demurrage if the Provided Vessel is on demurrage.

ARTICLE 35 - U.S. COAST GUARD COMPLIANCE

Each Provided Vessel will comply with all applicable U.S. Coast Guard
regulations in effect as of the date of such Provided Vessel's berth: Any delay
resulting from a Provided Vessel's non-compliance will not count as used
laytime, or demurrage if the Provided Vessel is on demurrage.

ARTICLE 36 - BREACH

A.       In addition to any breach provisions elsewhere in this Agreement, the
         occurrence of any of the following events is a breach of this
         Agreement:

         1.       Failure of Owner to proceed with or complete its services as
                  provided in this Agreement.

         2.       Failure of Hess to proceed with or complete its commitments as
                  provided in this Agreement.

         3.       Either party shall commence a voluntary case or other
                  proceeding seeking liquidation, reorganization, rehabilitation
                  or other relief with respect to itself or its debts under any
                  bankruptcy, insolvency or other similar law or shall make a
                  general assignment for the benefit of creditors, or shall take
                  any corporate action to authorize any of the foregoing, or an
                  involuntary case or proceeding shall be commenced against
                  either party seeking such relief.

         4.       [Confidential material omitted and filed separately with the
                  Commission]

                                       24
<PAGE>   25

         5.       Owner fails to maintain the Provided Vessels that are owned by
                  Owner in operating condition or to make available supplies or
                  personnel that are reasonably required for Owner's performance
                  under this Agreement.

         6.       Breach of any warranty or representation of this Agreement
                  that has not been cured within a reasonable amount of time.

B.       Upon the occurrence of any breach, if the breaching party has not cured
         such breach within thirty days following receipt of notice of such
         breach from the nonbreaching party and provided the nonbreaching party
         is not itself in material breach and the notice is given prior to the
         earlier of a cure of the breach or 10 days after such nonbreaching
         party becomes aware of such breach, the nonbreaching party, in addition
         to all remedies available to the nonbreaching party at law or equity:

         1.       May terminate this Agreement immediately by giving written
                  notice of termination to the other party, if the breach is
                  material; or

         2.       Shall take such action that is reasonably necessary to remedy
                  the breach or mitigate damages, including hiring another
                  transporter to perform any necessary services, subject to
                  having used good faith effort to obtain such services at
                  commercially reasonable rates.

In the event of a material breach by Owner which has not been cured, Hess must,
within thirty (30) days following the end of the cure period with respect to
such breach either terminate this Agreement or be deemed to have waived the
breach; provided, however, that termination for a breach other than as described
in the Article 36A4 or 36A5 shall not limit Hess's rights to seek damages as
provided below.

If following a material breach by Owner, Hess, under the terms of this
Agreement, has elected to terminate (other than for a breach under Articles 36A4
or 36A5), or Hess has been deemed to have waived the breach but not terminated
the Agreement or in the event of a breach by Owner other than a material breach,
the maximum amount that may be recovered by Hess is an aggregate amount equal to
the additional costs which Hess incurs as a result of any action taken to remedy
the breach, including reimbursing Hess for any rates and charges of the
substitute transporter that are greater than those of Owner pursuant to this
Agreement, for a period of [Confidential material omitted and filed separately
with the Commission] days, subject to Hess having used good faith efforts to
obtain such substitute transportation at commercially reasonable rates.

With respect to the remedies available under this Agreement, including any
indemnification by Owner, the breaching party shall not be responsible for any
resulting indirect, incidental, consequential, exemplary, punitive or special
damages, including, without limitation, loss of profits or revenues, loss of use
of facilities, cost of capital, cost of substitute service except as otherwise
provided in this Agreement or downtime, whether or not the breaching party was
made aware of such damages or the possibility

                                       25
<PAGE>   26

thereof. Further, with respect to breaches described in Articles 36A4 and 36A5,
Hess's sole remedy shall be to terminate this Agreement.

ARTICLE 37 - COGSA AND TITLE TO CARGO:

Except as provided in Article 5. (Seaworthiness) herein, the Carriage of Goods
By Sea Act ("COGSA"), 46 U.S.C. Sections 1301-1315, as applied to common
carriage, is incorporated in this Agreement by reference. Cargo transported will
be in the Owner's care and custody from the time it passes into the Provided
Vessel's permanent manifold connection (or Owner furnished reducer or hose)
during loading, and until the time it passes out of the Provided Vessel's
permanent manifold connection (or Owner furnished reducer or hose) during
discharge.

ARTICLE 38 - FORCE MAJEURE

Neither any Provided Vessel, her Master, Owner, nor Hess, will be responsible
for any loss or damage to the Provided Vessel or cargo or for any delay to or
failure to discharge or deliver the Cargo or for any failure in performing
hereunder (except as provided in Article 33) arising or resulting from: act of
God; act of war; perils of the seas; act of public enemies, pirates or any
assailing thieves; arrest or restraint of princes, rulers or people, or seizure
under legal process provided bond is promptly furnished to release the Provided
Vessel or Cargo; subject to Article 46, strike or lockout or stoppage or
restraint of labor, either partial or general; riot or civil commotion or
similar want or occurrence beyond the control of the relevant party. Provided
Vessels will have liberty to sail with or without pilots, to tow or to be towed,
to go to the assistance of vessels in distress and to deviate for the purpose of
saving life or property or for landing any ill or injured person abroad.

ARTICLE 39 - SUBCHARTERING AND ASSIGNMENT

Hess may subcharter or assign this Agreement to any individual or company, but
Amerada Hess Corporation will always remain responsible for the fulfillment of
this Agreement. Owner may not assign this Agreement or Owner's obligations
hereunder without the written consent of Hess which will not be unreasonably
withheld provided that if Owner assigns this Agreement to an affiliate, Owner
shall remain responsible for the fulfillment of this Agreement.

ARTICLE 40 - APPLICABLE LAW

This agreement and all amendments, waivers and consents hereunder will be
governed by and construed in accordance with the internal laws of the state of
New York, without regard to conflict of laws principles.

                                       26
<PAGE>   27

ARTICLE 41 - DISPUTE RESOLUTION

All unsettled disputes in amounts up to [Confidential material omitted and filed
separately with the Commission], excluding interest, attorney fees and court
costs, will be resolved through binding arbitration in Stamford, Connecticut in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a board of three persons, consisting of one arbitrator to be
appointed by Owner, one by Hess, and one by the two chosen. The decision of any
two of the three on any point will be final. The arbitrators may grant any
relief which they, or a majority of them, deem just and equitable and within the
scope of the agreement of the parties, including, specific performance. Awards
made under this clause may include costs including a reasonable allowance for
attorney's fees. Judgment upon the award may be entered in any court having
jurisdiction. A party ("claimant") having a claim in excess of [Confidential
material omitted and filed separately with the Commission], excluding interest,
attorney fees and court costs, may not cause binding arbitration without the
defending parties' consent but may elect to have the claim resolved through
litigation commenced in United States District Court in New York. If that Court
does not have jurisdiction, the litigation may be commenced in any U.S. state
court having jurisdiction.

ARTICLE 42 - DEMISE

Nothing herein contained will be construed as creating a demise of any of the
Provided Vessels to Hess.

ARTICLE 43 - INVOICING AND AUDIT

A.       1. Invoices for freight and other charges, except demurrage and ice
         charges, will be payable net [Confidential material omitted and filed
         separately with the Commission] business days after receipt, by wire
         transfer, and demurrage and ice charges will be payable net
         [Confidential material omitted and filed separately with the
         Commission] days after receipt of invoice, with proper documentation,
         by check or wire transfer.

         2. Within 10 days after the end of each month, Owner shall provide Hess
         with the information set forth on Exhibit I for the month most recently
         ended. Hess will have 10 days to review such information and dispute,
         in writing, any of the information as well as the rates charged by
         Owner on any freight invoices. Owner and Hess will use their
         commercially reasonable efforts to resolve any disputes within 30 days
         of Hess' notice. Disputes not settled within such time period will be
         subject to resolution under Article 41.

B.       All sums that become due under this Agreement will be paid by Hess or
         Owner, as the case may be, in accordance with the above after
         submission of an itemized invoice to Hess or Owner, as the case may be.
         If Hess or Owner, as the case may be, objects to any item contained in
         any non-freight invoice, or to the sufficiency of the documents
         submitted in support of any such item, Hess will provide Owner or Owner
         will provide Hess, as the case may be, written

                                       27
<PAGE>   28

         explanation outlining disputed charges within 30 days of receipt of
         invoice. Hess will pay Owner or Owner will pay Hess, as the case may
         be, that portion of the invoice amount not in dispute, within the above
         time. Any dispute not settled within 30 days will be subject to
         resolution under Article 41.

ARTICLE 44 - DRUG AND ALCOHOL POLICY

Owner represents and warrants that it has a policy on drug and alcohol abuse
applicable to the Provided Vessels which meets or exceeds the standards
contained in the most current/revised edition of the Oil Companies International
Marine Forum Guidelines for the Control of Drugs and Alcohol Onboard Ship. Owner
further represents and warrants that its policy will remain in effect during the
term of this Agreement and that Owner will ensure compliance with the policy.

ARTICLE 45 - CLAIMS TIME BAR

Hess or Owner, as the case may be, will be discharged and released from all
liability for any claim for demurrage, deviation or detention which Hess or
Owner, as the case may be, may have under this Agreement unless a claim in
writing has been presented to Hess or Owner, as the case may be, together with
all supporting documentation, within forty-five (45) days of the completion of
discharge of the Cargo to which the claim applies.

ARTICLE 46 - LABOR AGREEMENT

[Confidential material omitted and filed separately with the Commission]

ARTICLE 47 - PERFORMANCE GUARANTIES

A.       Nominated Orders. Owner warrants that, so long as this Agreement is in
         effect, including during any cure periods, and subject to the
         provisions governing monthly maximums set forth herein, a Provided
         Vessel will arrive at the nominated loading port within the nominated
         window. Failure to provide a Provided Vessel for the nominated time
         will void the exclusivity of the Agreement for that move as follows:

         1.       Hess will have the right to secure a transporter on its own.
                  Provided Hess has used good faith efforts to obtain such
                  services at commercially reasonable rates, costs in excess of
                  the Schedule A rates will be reimbursed by Owner.

                                       28
<PAGE>   29

B.       Performance Test. Hess will have the right to terminate this Agreement
         if Owner fails to perform within the nominated windows less than
         [Confidential material omitted and filed separately with the
         Commission]% of the nominations. Measurement of Owner's performance
         under this section will not begin until ninety (90) days after the
         commencement of this Agreement. Hess will review Owner's performance on
         a quarterly basis. Any delays caused by Hess will not count against
         Owner's performance.

C.       Pollution Incidents. Any pollution incident aboard any Provided Vessels
         as a result of Owner's actions or the condition of the Provided
         Vessels, in excess of [Confidential material omitted and filed
         separately with the Commission] over the initial term of this Agreement
         or multiple incidents that total [Confidential material omitted and
         filed separately with the Commission] or more will give Hess the option
         to terminate the Agreement. If Hess does not give written notice of
         termination of this Agreement to Owner within 30 days of its right to
         terminate accruing, it will lose the right to terminate for any prior
         incidents, and the accumulation of [Confidential material omitted and
         filed separately with the Commission] for purposes of this provision
         will reset to [Confidential material omitted and filed separately with
         the Commission]. Any notice of termination will give Owner
         [Confidential material omitted and filed separately with the
         Commission] days' notice of termination.

D.       Cargo Contaminations. If more than one (1) cargo contamination occurs
         during any calendar quarter, as a result of Owner's actions or the
         condition of the Provided Vessels, Hess will have the option, in
         addition to recovering all costs associated with contaminations, to
         count the contaminated volumes toward the minimums as provided in this
         Agreement or terminate this Agreement.

E.       Weather. Delays in reaching the nominated loading Terminal or arriving
         at the discharge Terminal resulting from weather conditions that
         prevent the safe movement of vessels in the affected area of the
         northeastern United States or enroute to the discharge Terminal as
         evidenced by the majority of tug and barge units in the affected area
         of the northeastern United States remaining at berth or anchorage or by
         direction of U.S. Coast Guard will not count against Owner's
         performance obligations. Performance obligations in other areas of the
         northeastern United States not then so affected by the weather will not
         be subject to the preceding sentence.

ARTICLE 48 - MISCELLANEOUS

A.       Entirety of Agreement. This Agreement, any exhibits, schedules or
         attachments hereto and thereof supersede all prior agreements and
         undertakings between the parties hereto relating to the subject matter
         of this Agreement. No course of prior dealings between the parties or
         their predecessors will be relevant to supplement or explain any terms
         used herein.

B.       Section Headings. The section and clause headings contained in this
         Agreement are for reference purposes only and will not affect in any
         way the meaning or interpretation of this Agreement.

                                       29
<PAGE>   30

C.       Severability. This Agreement is subject to all applicable federal and
         state laws and nothing herein is intended to violate any such law. If
         any clause or provisions of this Agreement is held to be invalid or
         unenforceable by any court, the invalidity or unenforceability of such
         clause or provisions will not affect the remaining provisions of this
         Agreement and this Agreement will be construed and enforced as if such
         invalid or unenforceable clause or provisions had not been contained in
         this Agreement.

D.       Counterparts. This Agreement may be executed in one or more
         counterparts, each of which will be deemed to be an original, but all
         of which together will constitute one instrument.

E.       Independent Contractor. Owner is an independent contractor and has the
         full power and authority to select the means, methods and manner of
         performing the services herein set forth, including, subject to Article
         39, having such work performed by other persons or business entities,
         and is responsible to Hess only for the results contracted for.

F.       Exceeding Maximums. Owner makes no representations or commitments in
         this Agreement (except for the commitments set forth in Article IA2 and
         IA3) with respect to third-party owned vessels used to transport
         volumes for Hess in excess of the then current monthly maximum (or
         dirty barrel maximum, as applicable) provided such third-party operator
         has executed a master service agreement acceptable to Hess and Owner.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

LEEVAC MARINE, INC.                               AMERADA HESS CORPORATION

By: /s/ CHRISTIAN G. VACCARI                      By: /s/ L.H. ORNSTEIN
   ---------------------------                       ---------------------------
Name: Christian G. Vaccari                        Name: L.H. Ornstein
     -------------------------                         -------------------------
Its: CEO                                          Its: Senior Vice President
    --------------------------                        --------------------------

Witness: /s/ TODD M. HORNBECK                     Witness: /s/ ILLEGIBLE
        ----------------------                            ----------------------

Date: May 31, 2001                                Date: May 31, 2001
     -------------------------                         -------------------------

                                       30
<PAGE>   31

The undersigned hereby guarantees the obligations and performance of Owner under
this Agreement.

                                                HORNBECK-LEEVAC MARINE
                                                SERVICES, INC.

                                                By: /s/ CHRISTIAN G. VACCARI
                                                   ----------------------------
                                                Name:  Christian G. Vaccari
                                                     --------------------------
                                                Its:   CEO
                                                    ---------------------------

                                                Witness: /s/ James O. Harp, Jr.
                                                        -----------------------

                                                Date: May 31, 2001
                                                     --------------------------

                                       31

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