SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): May 23, 1997
HVIDE MARINE INCORPORATED
(Exact name of registrant as specified in its charter)
FLORIDA 0-28732 65-0524593
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
2200 ELLER DRIVE, P.O. BOX 13038
FORT LAUDERDALE, FLORIDA 33316
(Address of principal executive offices, including zip code)
(954) 523-2200
(Registrant's telephone number, including area code)
- 1 -
<PAGE>
Item 2. Acquisition or Disposition of Assets
On May 23, 1997, the Company acquired 35 oilfield service vessels from
Gulf Marine Maintenance and Offshore Service Company of Dubai, United Arab
Emirates. The vessels, which will be operated by the Company in the Arabian
Gulf, consist of nine anchor-handling tug supply vessels, nine anchor-handling
tugs, seven crew boats, four offshore supply vessels, three large specialized
construction and maintenance vessels, two utility vessels, and one accommodation
jack-up rig.
The purchase price of the vessels was $58.7 million, consisting of
$49.0 million of cash, a note in the amount of $6.0 million, and Company Class A
Common Stock valued at $3.7 million. The sources of the cash portion of the
purchase price was the Company's available cash and cash drawn under its Credit
Facility with Citibank, N.A.
Item 7. Financial Statements and Exhibits
(a) and (b). Financial Statements of Business Acquired and Pro-Forma
Financial Information.
To the extent that the acquisition of assets may be
deemed to constitute the acquisition of a business,
the required financial statements and pro-forma
financial information will be filed within 60 days
hereof, as it is impracticable to provide such data
at this time.
(c). Exhibits. The following exhibit is filed with this report:
2 Asset Sale Agreement between Hvide Marine Incorporated and Wellington
Capital Limited.
- 2 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HVIDE MARINE INCORPORATED
By: /S/ GENE DOUGLAS
Gene Douglas
Vice President-Legal,
General Counsel and Secretary
Date: June 9, 1997
- 3 -
DATED 14th May 1997
(1)WELLINGTON CAPITAL LIMITED
(2)HVIDE MARINE INCORPORATED
ASSET SALE AGREEMENT
REFERENCE
PGM/97-22149
<PAGE>
PAGE 1
AGREEMENT dated 14th May 1997
BETWEEN:
(1) WELLINGTON CAPITAL LIMITED, a company registered in the Cayman Islands
under number CR32002 whose registered office is at P.O. Box 309, Grand
Cayman, Cayman Islands, British West Indies (`THE VENDOR')
(2) HVIDE MARINE INCORPORATED, a company registered in the State of
Florida, United States of America whose registered office is at 2220
Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316, USA
(`THE PURCHASER')
1 INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires -
`ASSETS' means the assets of the Vendor's Group agreed to be sold
and all other rights agreed to be transferred to the Purchaser under
this Agreement;
`BOOK DEBTS' means the debts owing to the Vendor's Group on the
Completion Date;
`BUSINESS DAY' means a day when banks are open for business in
London, New York City, the State of Florida and each of the United
Arab Emirates;
`THE BUSINESS NAMES' means the names Gulf Marine, Gulf Marine
Maintenance & Offshore Service Company or GMMOS;
`CHARTERPARTIES' means the charterparties listed in Annex `A';
`CHARTER NOVATION AGREEMENTS' means agreements in the agreed terms
for the novation in favour of the Purchaser or a member of the
Purchaser's Group of the Charterparties;
`COMPLETION' means completion of the sale and purchase of the Assets
under this Agreement in accordance with the provisions of clause 5;
`COMPANIES ACT' means the Companies Act 1985;
`COMPLETION DATE' means the date on which Completion takes place;
`CONTRACTS' means the contracts listed in Annex `B';
`CREDITORS' means the creditors of the Vendor's Group (including
fiscal authorities) outstanding on
the Completion Date;
`DISCLOSURE LETTER' means a letter of the same date as this Agreement
addressed by the Vendor to the Purchaser for the purpose of clause 4
and which is accepted as such by the Purchaser and includes any
document which is stated in that letter to be deemed to be included
in or attached to it;
`EMPLOYEES' means the employees of the Vendor's Group described in
Annex `C' and/or such other employees of the Vendor's Group working
in the marine department of the Vendor's Group as the Purchaser may
require;
`INTELLECTUAL PROPERTY' means all (if any) industrial and
intellectual property rights which at Completion are used in
connection with the operation of the Assets;
`JETTY AGREEMENT' means the agreement to be made between the Vendor
and the Purchaser in the agreed form concerning access by the
Purchaser to the Vendor's jetty in Dubai, United Arab Emirates;
`LEASES' means leases or sub-leases in the agreed form between
the Vendor and the Purchaser in respect of each of the Premises;
`LOAN NOTE' means a loan note issued by the Purchaser guaranteed by a
first class U.S. bank in the principal amount of US$6,000,000
repayable in equal annual instalments over the three years following
Completion, carrying interest at the rate of 10 per cent per annum on
the amount thereof outstanding from time to time less the said bank's
annual fee for providing such guarantee, the guarantee and note to be
in the agreed form;
`MEMORANDUM OF AGREEMENT' means a memorandum of agreement in the
agreed form in respect of each of the Vessels respectively;
`MOTOR VEHICLES' means the motor vehicles listed in Annex D;
`PLANT' means the plant, machinery, tools and equipment listed in
Annex `E';
`PREMISES' means the leasehold properties situate in the Emirate of
Dubai and in Brunei respectively, brief particulars of which are
given in Annex F;
`PURCHASER'S GROUP' means the Purchaser and any other company
(wherever incorporated) which is a subsidiary (as defined by Section
736 of the Companies Act) of the Purchaser and reference to the
Purchaser shall, where the context allows, include a reference to the
members of the Purchaser's Group;
`PURCHASER'S SOLICITORS' means Richards Butler, Beaufort House, 15
St Botolph Street, London EC3A 7EE;
`RECORDS' means all payroll and stock records and other registers,
lists of names of suppliers or customers, documents of title relating
to any of the Assets and any other documents containing or recording
any part of the Technical Information or any other matter which
relates exclusively to the Assets;
`SEC' means the Securities and Exchange Commission of the United
States of America;
`TECHNICAL INFORMATION' means all data, formulae, methods,
techniques, specifications, instructional materials, manuals and
know-how used by the Vendor's Group in connection with the Assets;
`U.S.$' means the lawful currency of the United States of America;
`VENDOR'S GROUP' means the Vendor and any other company (wherever
incorporated) which is a subsidiary (as defined by Section 736 of the
Companies Act) of the Vendor (including for the avoidance of doubt
but without limitation Gulf Marine Maintenance & Offshore Service
Company Dubai L.L.C. (Dubai incorporated) ,Gulf Marine Maintenance &
Offshore Service Company Limited - W.L.L. (Abu Dhabi incorporated),
GMMOS Marine Inc. (Panama incorporated) and Gulf Marine Maintenance &
Offshore Service Company Limited (Cayman Islands incorporated) and
reference to the Vendor shall, where the context allows, include a
reference to the members of the Vendor's Group;
`VESSELS' means the vessels listed in Annex G;
`WARRANTIES' means the representations and warranties contained in
Schedule 1.
1.2 In this Agreement, unless the context otherwise requires -
(A) an expression which is defined in or to which a meaning is given
for the purpose of the Companies Act (excluding its Schedules) has
the same meaning unless it is otherwise defined in this Agreement;
(B) a reference to a statute or a provision of a statute is a
reference to that statute or provision as amended or modified on
the date of this Agreement and includes a reference to any
previous statute or provision which was re-enacted or replaced by
it;
(C) a reference to a document `IN THE AGREED FORM' is a reference (i)
to a document in the form of the draft which, for identification,
is endorsed with a statement (signed on behalf of the parties) to
the effect that it is such a document for the purpose of this
Agreement or (ii) in the absence of such draft at the date of this
Agreement, to a document in such form as the Vendor and the
Purchaser may reasonably agree as at Completion;
(D) a reference to `WRITING', or any cognate expression, includes a reference
to any communication effected by telex, facsimile transmission or similar
means;
(E) a reference to a clause or a Schedule is a reference to a clause of or a
Schedule to this Agreement and a reference to this Agreement includes a
reference to each Schedule; and
(F) a reference to an Annex is a reference to an annex attached to this
Agreement and for the purpose of identification signed on behalf of the
parties.
1.3 The headings in this Agreement are for convenience only and shall not
affect its interpretation.
2 SALE AND PURCHASE OF THE ASSETS
2.1 Subject to the terms of this Agreement the Vendor shall sell or
procure the sale and the Purchaser or such member(s) of the
Purchaser's Group as the Purchaser may direct shall purchase the
Assets as at and from 12.00 noon GMT on the Completion Date.
2.2 The Vendor shall sell or procure the sale and the Purchaser or such
member(s) of the Purchaser's Group as aforesaid shall purchase the
following Assets -
(A) the Vessels;
(B) the Intellectual Property and the Technical Information;
(C) the Plant;
(D) the Motor Vehicles (together where applicable with the benefit of their
unexpired vehicle excise licences); and
(E) the Records.
2.3 Subject to compliance by the parties with their respective
obligations under this Agreement, risk in and title to the Assets
shall pass to the Purchaser on Completion.
3 CONSIDERATION
3.1 The price for the Assets shall be the sum of U.S.$61,000,000 (sixty
one million United States Dollars), apportioned as to U.S.$60,075,000
to the Vessels in the amounts set opposite the name of each Vessel in
Annex H and as to U.S.$925,000 to the remaining Assets.
3.2 The price for the Assets pursuant to clause 3.1 shall be paid or
satisfied -
(A) as to U.S.$52,000,000 by the payment in cash to the Vendor;
(B) as to US$6,000,000 by the delivery to the Vendor of the Loan Note;
(C) as to U.S.$3,000,000 by the issuance to the Vendor of 141,760 (one hundred
and forty one thousand, seven hundred and sixty) shares of Class A Common
Stock of the Purchaser (the `SHARES') having an aggregate value which the
parties agree has been calculated as follows. For purposes of computing the
number of Shares issuable pursuant to this paragraph, the value of a share
of the Purchaser's Class A Common Stock is the average of the closing
prices of a share of the Purchaser's Class A Common Stock on the NASDAQ
National Market on each of the ten trading days preceding April 20, 1997.
The Shares, when issued, shall be duly authorised, fully-paid and
non-assessable and shall not have been registered under the Securities Act
of 1933, as amended (the `ACT'). Certificates representing the Shares shall
bear the following legend -
`These shares have not been registered under the Securities
Act 1933, as amended, and may not be offered or sold except
pursuant to an effective registration statement or an opinion
of counsel satisfactory to the issuer that such transfer may
be lawfully effected in the absence of registration.'
3.3 Forthwith upon the execution of the Agreement the Purchaser shall pay
a deposit of U.S.$6,100,000 ("THE DEPOSIT") (being 10% of the price
for the Assets) to Citibank NA, 336 Strand, London WC2 (`THE
DEPOSITORY') to be held by the Depository pending completion, on
terms that the Deposit together with interest accrued thereon shall
on Completion be paid to the Vendor on account of the purchase price
referred to in clause 3.1 or, in the case of rescission, be repaid to
the Purchaser forthwith upon rescission by the Purchaser of this
Agreement.
3.4 The Vendor shall have the following piggyback registration rights
with respect to the Shares:
(A) if at any time following the Completion Date and prior to the
third anniversary of the Completion Date the Purchaser proposes to
register any of its securities under the Act on Form S-1, S-2 or
S-3 (or any equivalent general registration form then in effect),
the Purchaser shall -
(I) promptly, and at least thirty (30) days before the anticipated filing date,
give written notice of such registration to the Vendor;
(II) include in such registration such Shares as may be specified
in any written request received from the Vendor within 15 days
following delivery of such notice. Notwithstanding any other
provision of this clause 3.4, the Purchaser shall have the
right at any time after it has given notice of registration
pursuant to this section to elect not proceed with such
registration;
(III) prepare and file with the SEC a registration statement with
respect to the Shares and use its best efforts to cause such
registration statement to become effective as soon thereafter
as possible. The Purchaser will promptly notify the Vendor and
confirm such advice in writing, (A) when such registration
statement becomes effective, (B) when any post-effective
amendment to such registration statement becomes effective and
(C) of any request by the SEC for any amendment or supplement
to such registration statement or any prospectus relating
thereto or for additional information;
(IV) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such
registration statement effective for at least six (6) months
(or for such shorter period in which the Vendor has sold all
of the Shares included in such registration statement) and to
comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such
registration statement during such period in accordance with
the intended methods of disposition by the Vendor set forth in
such registration statement;
(V) furnish to the Vendor such number of copies of such
registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such
registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements
of the Securities Act, and such other documents as the Vendor
may reasonably request in order to facilitate the disposition
of the Shares by the Vendor;
(VI) use its best efforts to register or qualify the Shares covered
by such registration statement under such securities or blue
sky laws of any State of the United States as the Vendor or
the managing underwriter, if any, shall reasonably request,
and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Vendor and
each underwriter, if any, to consummate the disposition in
such jurisdictions of the Shares to be sold by the Vendor;
(VII)promptly notify the Vendor at any time when a prospectus relating thereto
is required to be delivered under the Securities Act during the period
mentioned in clause 3.4(a)(iv) and the Purchaser becomes aware that the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing: and at the request of the Vendor promptly prepare and furnish to
the Vendor a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of the Shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(VIII) otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC;
(IX) make available for inspection by the Vendor, by any underwriter
participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent
retained by either the Vendor or any such underwriter, in each case upon
receipt of an appropriate confidentiality agreement, all financial and
other records, corporate documents and properties of the Purchaser and its
subsidiaries, and cause all of the Purchaser's officers, directors and
employees to supply all information, as may be reasonably requested by
either the Vendor, underwriter, attorney, accountant or agent in connection
with such registration statement;
(X) cause all the Shares covered by such a registration statement
to be (i) listed on each securities exchange, if any, on which
similar securities issued by the Purchaser are then listed, or
(ii) authorised to be quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or
the National Market System of NASDAQ if the securities so
qualify; and
(XI) enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings)
and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Shares and in such
connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration
(A) make such representations and warranties to the Vendor and the
underwriters, if any, with respect to the business of the Purchaser,
the registration statement, the prospectus, and documents, if any
incorporated or deemed to be incorporated by reference in the
registration statement, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwitten
offerings and confirm the same if and when requested; (B) obtain
opinions of counsel to the Purchaser and updates thereof (which
counsel and opinions (in form, scope and substance) shall be
reasonably to the Vendor) addressed to the Vendor and each of the
underwriters, if any, covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by the Vendor and underwriters; (C) obtain
"cold comfort" letters and updates thereof from the independent
certified public accountants of the Purchaser (and, if necessary, any
other certified public accountants of any subsidiary of the Purchaser
or of any business acquired by the Purchaser for which financial
statements and financial data is or is required to be included in the
registration statement) addressed to the Vendor and each of the
underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings; (D) deliver such
documents and certificates as may be requested by the Vendor and the
managing underwriters, if any, to evidence the continued validity of
the representations and warranties of the Purchaser made pursuant to
clause 3.4(a)(xi)(A) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Purchaser.
(B) notwithstanding any other provision of this clause 3.4, if the
Purchaser's managing underwriter advises the Purchaser that the number
of Shares requested to be included in the registration statement
exceeds the number of such Shares that can be sold in an orderly
manner in the offering or that the inclusion of the Shares would
adversely affect the offering, then the Shares shall be included in
such offering, subject to reduction pro rata in proportion to the
number of shares proposed to be included in such offering by the
Vendor, on the one hand, and all other persons (including the
Purchaser), on the other hand Provided however that if the registrable
statement includes securities held by persons granted registration
rights by that certain Registration Rights Agreement dated as of
August 14th 1996 by and between the Purchaser and the shareholders
identified therein ("THE 1996 AGREEMENT") the inclusion of shares
shall be governed by the provisions of section 2(d) or section 3(d) of
the 1996 Agreement;
(C) in connection with any registration of the Shares hereunder, the
Vendor shall furnish to the Purchaser such information relating to
the Vendor and the Shares as the Purchaser may reasonably request;
(D) all fees and expenses in connection with any registration of the
Shares hereunder, including registration fees, printing expenses,
blue sky fees and expenses, and the Purchaser's legal and
accounting fees and expenses shall be paid by the Purchaser,
except as hereinafter provided. All selling expenses, including
underwriting discounts, selling commissions, stock transfer taxes
and all fees and expenses of counsel to the Vendor in connection
with any registration of the Shares hereunder shall be borne by
the Vendor;
(E) the Vendor agrees, for the period of one year from the date of
Completion, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any shares of
the Purchaser's Common Stock (other than those included in the
registration) without the prior written consent of the Purchaser
or the underwriters, as the case may be, for a period of one year
from Completion. The Vendor agrees that the Company may instruct
its transfer agent to place a stop-transfer notation in its
records to enforce the provisions of this paragraph.
3.5 Indemnification:
(A) Indemnification by the Purchaser. The Purchaser shall, notwithstanding
termination of this Agreement and without limitation as to time,
indemnify and hold harmless, to the full extent permitted by law, the
Vendor, its officers, directors, agents and employees, each person who
controls the Vendor (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), and the officers,
directors, agents or employees of any such controlling person, from
and against all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and
attorney's fees) and reasonable expenses (collectively, "LOSSES")
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus, or arising out of or based upon
any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not
misleading except insofar as the same are based solely upon
information furnished in writing to the Purchaser by the Vendor
expressly for use therein. The Purchaser shall also indemnify
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their
officers, directors, agents and employees and each person who controls
such persons (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) to the extent ordinarily provided
in customary underwriting and similar agreements.
(B) Indemnification by the Vendor. In connection with any registration
statement in which the Vendor is participating or offering any of the
shares for sale pursuant to clause 3.4 hereof the Vendor agrees to
indemnify and hold harmless, to the full extent permitted by law, the
Purchaser, its directors, officers, agents and employees, each person
who controls the Purchaser (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the directors,
officers, agents or employees of such controlling persons, from and
against all Losses arising out of or based upon any untrue statement
of a material fact contained in any registration statement, prospectus
or preliminary prospectus, or arising out of or based upon any
omissions or alleged omission of a material fact required to be stated
therein or necessary to make the statement therein not misleading, to
the extent, but only to the extent, that such untrue statement or
omission is contained in any information furnished in writing by the
Vendor to the Purchaser expressly for use in such registration
statement or prospectus and that such information was relied upon by
the Purchaser in preparation of any registration statement, prospectus
or preliminary prospectus. In no event shall the liability of the
Vendor hereunder be greater in amount than the dollar amount of the
proceeds (net of the payment of all expenses) received by the Vendor
upon the sale of the Shares giving rise to such indemnification
obligation. The Purchaser shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution to
the same extent as provided above with respect to information so
furnished in writing by such Persons expressly for use in any
prospectus or registration statement.
(C) Conduct of Indemnification Proceedings. If any action or proceeding
(including any governmental investigation or inquiry) shall be brought
or any claim shall be asserted against any person entitled to
indemnity hereunder (an "INDEMNIFIED PARTY"), such indemnified party
shall (within a reasonable period of time) notify the party from which
such indemnity is sought (the "INDEMNIFYING PARTY") in writing, and
the indemnifying party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified party
and the payment of all fees and expenses incurred in connection with
the defense thereof. All such fees and expenses (including any fees
and expenses incurred in connection with investigating or preparing to
defend such action or proceeding) shall be paid to the indemnified
party, as incurred, within 15 days of written notice thereof to the
indemnifying party (regardless of whether it is ultimately determined
that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ
separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be the expenses of such indemnified party unless (a) the
indemnifying party has agreed to pay such fees and expenses or (b) the
indemnifying party shall have failed to promptly assume the defense of
such action, claim or proceeding and to employ counsel reasonably
satisfactory to the indemnified party in any such action, claim or
proceeding or (c) the named parties to any such action, claim or
proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified
party shall have been advised by counsel that there may be one or more
legal defenses available to it which are different from or additional
to those available to the indemnifying party (in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action, claim or proceeding on behalf of such
indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any such action, claim or
proceeding or separate but substantially similar or related actions,
claims or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified
parties, unless in the reasonable judgment of any such indemnified
party a conflict of interest may exist between such indemnified party
and any other or such indemnified parties with respect to such action,
claim or proceeding, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or
counsels).
(D) Contribution. If the indemnification provided for in this clause 3.5
is unavailable to an indemnified party under clause 3.5(a) or 3.5(b)
hereof (other than by reason of exceptions provided in those sections)
in respect of any Losses, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall jointly and
severally, contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party
and indemnified party in connection with the actions, statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such indemnifying
party and such indemnified party shall be determined by reference to,
among other things, whether any action in question, including any
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact, has been taken or
made by, or relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to
the limitations set forth in clause 3.5(c), any legal or other fees or
expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this clause 3.5(d) were determined by
pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the
provision of this clause 3.5(d), the Vendor shall not be required
to contribute any amount in excess of the amount by which the
total price at which the Shares sold by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
3.6 The Purchaser shall file the reports required to be filed by it under
the Securities Act and the Exchange Act in a timely manner and, if at
any time the Purchaser is not required to file such reports, it will,
upon the request of the Vendor, make available public or other
information so long as necessary to permit sales of their securities
pursuant to Rules 144 and 144A. The Purchaser further covenants that
it will take such further action as the Vendor may reasonably
request, all to the extent required from time to time to enable the
Vendor to sell the Shares without registration under the Securities
Act within the limitation of the exemptions provided by Rules 144 and
144A. Upon the request of the Vendor, the Purchaser shall deliver to
the Vendor a written statement as to whether it has complied with
such requirements.
3.7 Transfer of Piggyback Registration Rights. All covenants and
agreements contained in this Agreement shall bind and inure to the
benefit of transferees of the Vendor (such transferees only being
permitted within the Vendor's Group and any transferee shall
retransfer to the Vendor's Group prior to ceasing to be a member
thereof), provided that such transferees agree to be bound by the
terms of this Agreement.
3.8 All outgoings and income relating to the Assets shall, insofar as
they relate to a period falling partly before and partly after the
Completion Date be apportioned pro rata temporis as between the
Vendor and the Purchaser, who shall account to one another on or as
soon as practicable after Completion. The following terms shall also
apply:-
(I) the Purchaser shall account to the Vendor for any amounts
received by it in respect of the Book Debts within 14 days of
receipt by the Purchaser's Group.
(II) the Purchaser shall for a period of 6 months after Completion
give to the Vendor reasonable access to its books and records
in relation to receipt of the Books Debts.
3.9 As further consideration for the sale of the Assets, the Purchaser
shall as from Completion subject to the provisions of clause 5.6 -
(A) perform any outstanding obligations and liabilities of any member
of the Vendor's Group under the Contracts (except for any
obligations or liabilities attributable to a breach on the part of
a member of the Vendor's Group) in accordance with their terms;
and
(B) perform all obligations under the Charterparties (as novated
pursuant to the Charter Novation Agreements) in accordance with
their terms.
3.10 The Purchaser shall indemnify the Vendor and each member of the
Vendor's Group in respect of any losses, damages, costs, claims and
expenses which may be incurred by the Vendor and each member of the
Vendor's Group as a result of:
(A) any failure by the Purchaser in the performance of any of the
obligations of the Purchaser falling due after Completion under the
Charterparties or the Contracts;
(B) any act, default or transaction of the Purchaser or any member of
the Purchaser's Group or any circumstance occurring in respect of
their respective business after Completion.
Provided that the Purchaser shall have no liability under this clause
3.10 for any act or omission of the Vendor in the performance of its
obligations under clause 5.6.
3.11 The Vendor shall indemnify the Purchaser and each member of the
Purchaser's Group in respect of any losses, damages, costs, claims
and expenses which may be incurred by the Purchaser or any member of
the Purchaser's Group as a result of -
(A) any failure by the Vendor or any member of the Vendor's Group in
the performance of any of the obligations of the Vendor or any
member of the Vendor's Group falling due on or before Completion
under the Charterparties or the Contracts or otherwise in respect
of any of the Assets;
(B) any claim for payment by any of the Creditors and any tax arising out
of the sale of the Assets for which the Vendor is primarily liable;
(C) any act, default or transaction of the Vendor or any member of the
Vendor's Group or any circumstance occurring in respect of their
respective businesses prior to Completion.
4 WARRANTIES
4.1 The Vendor represents and warrants to the Purchaser (except to the
extent of matters fairly and accurately disclosed in the Disclosure
Letter) in the terms contained in Schedule 1, subject to the
provisions of Schedule 2, the terms of which each party acknowledges
are in the circumstances fair and reasonable.
4.2 The Purchaser acknowledges that the Vendor has made no
representations to the Purchaser on which the Purchaser has relied in
entering into this Agreement other than the Warranties and the
matters referred to in the Disclosure Letter or disclosed pursuant to
clause 4.3(b) hereof.The Vendor undertakes with the Purchaser that -
(A) each of the Warranties shall except to the extent of the matters
contained in the Disclosure Letter remain true and accurate at
Completion on the basis that any express or implied reference in
Schedule 1 to the date of this Agreement were a reference to the
Completion Date; and
(B) any matter which becomes known before Completion to the Vendor and
which gives rise, or might give rise, to a claim under the
Warranties or which would materially affect the willingness of a
prudent purchaser for value to purchase the Assets on the terms of
this Agreement shall be forthwith disclosed to the Purchaser in
writing.
4.3 Any payment made by the Vendor under the Warranties shall be treated
as a reduction in the consideration for the relevant Asset.
4.4 Without prejudice to any other right or remedy of the Purchaser, the
Vendor shall at the request of the Purchaser at any time within six
months after the Completion Date assign to the Purchaser for no
further consideration and otherwise on the terms of this Agreement
any intellectual or industrial property rights, or applications for
any such rights, in each case being Intellectual Property which was
not assigned to the Purchaser at Completion.
5 COMPLETION
5.1 The sale and purchase of the Assets shall be completed at 12.00 noon
at the offices of the Purchaser's Solicitors on 23rd May 1997 or at
such other place or time, or on such other date, as the Vendor and
Purchaser may agree.
5.2 The Vendor shall on Completion deliver, or procure delivery, to the
Purchaser (or as the Purchaser may direct) of-
(A) such of the Assets as are capable of passing by delivery;
(B) title to the Vessels;
(C) subject as provided in clause 5.6, duly executed assurances of the
remaining Assets, together with any requisite consents required to
vest in the Purchaser the full beneficial ownership of the Assets;
(D) a duly executed engrossment of the following documents, each in the
agreed form-
(I) Memorandum of Agreement in respect of each of the Vessels
respectively;
(II) Charter Novation Agreements;
(III) Leases including lease at a rental of Dh600,000 per annum for
the leasehold premises shown on the attached plan, being part
of the 256,464 square feet of land as per Halcrow Middle East
plan; and
(IV) Jetty Agreement.
(V) Sponsorship or other agreement in the agreed form under which
the relevant member of the Vendor's Group having a presence in
Dubai will pay Mohammed Khalifa Bin Hadher an annual
sponsorship fee of Dh1,000,000 per annum.
(E) such evidence as the Purchaser may require as to the satisfaction by
the Vendor of its obligations under clause 8.1;
(F) written confirmation in the agreed form signed by Mohammed Khalifa bin
Hadher.
5.3 Following the performance of the Vendor's obligations under clause
5.2, the Purchaser shall on Completion -
(A) pay to the Vendor, by telegraphic transfer to its bank account at
Bank of Scotland Plc, International Division, P.O. Box 30, Broad
Street House, 55 Old Broad Street, London EC2P 2HL (Sort Code
80-20-11, for the Vendor's account the sum of U.S.$51,850,000 on
account of the consideration payable to the Vendor in cash at
Completion;
(B) together with the Vendor give irrevocable instructions to the
Depository to release to or to the order of the Vendor the amount
of the Deposit together with interest accrued thereon in
satisfaction of the balance of the consideration payable to the
Vendor in cash at Completion
(C) deliver to the Vendor the Loan Note and the guarantee thereof referred
to in the definition of Loan Note;
(D) allot to the Vendor in accordance with clause 3.2(c) the shares
specified in that clause, namely 144, 123 Class A Common Stock in
the Purchaser, and deliver to it the certificates for the same;
and
(E) deliver to the Vendor duly executed engrossments as mentioned in
clause 5.2(d).
5.4 The Vendor shall on the Completion Date deliver to, or procure the
delivery to, the Purchaser of such of the Plant as is not situated at
the Premises on the following terms-
(A) the Vendor shall ensure that prior to such delivery any of such Plant
which is fixed to the Vendor's premises is severed from them;
(B) the Purchaser shall, at its own cost and with the minimum
inconvenience and damage to the Vendor and its property and
business, remove such Plant from the Vendor's premises at any time
within seven days from the Completion Date.
5.5 The provisions of clause 5.4 shall apply to Plant which is at the
Premises as if references therein to the Completion Date were
referenced to the date of termination without renewal of the Lease.
5.6 If the assignment, grant or transfer of any of the Assets requires
the consent of a third party or some act, matter or thing to be done
or obtained, and that consent is not available or that act, matter or
thing cannot be done or be obtained, in each case on the date of this
Agreement, the Vendor shall use its best endeavours to obtain the
consent or to obtain or do that act, matter or thing before the
Completion Date, failing which and entirely without prejudice to the
right of the Purchaser not to complete the purchase of the Assets and
to rescind this Agreement, the Purchaser may in its sole discretion
elect to complete this Agreement on the basis that -
(A) the Vendor shall continue to use its best endeavours to obtain the
consent or, as the case may be, to obtain or do that act, matter
or thing and upon obtaining or doing it shall immediately deliver
to the Purchaser a duly executed assignment or instrument of grant
or transfer of the Asset, together with the consent;
(B) the Vendor shall, from the Completion Date until the obligations
under paragraph (a) of this clause 5.6 have been complied with ,
hold that Asset in trust for the Purchaser and shall (so far as it
may lawfully do so) act under the direction of the Purchaser in
all matters relating to that Asset.
5.7 If the Purchaser exercises any right conferred on it by any provision
of this Agreement or otherwise not to complete its purchase of any of
the Assets, then the Purchaser shall not be obliged to complete its
purchase of any other of the Assets.
5.8 The Vendor shall from time to time and at all times after the
Completion Date each party bearing its own costs and expenses in this
regard upon request by the Purchaser do all such acts and execute all
such documents as are necessary for perfecting the transfer of the
Assets (except for the Vessels, transfer of which shall be subject to
their respective Memorandums of Agreement) to the Purchaser and for
vesting in the Purchaser title to the Assets in accordance with this
Agreement.
5.9 This Agreement shall, so far as it remains to be performed, continue
in full force and effect notwithstanding Completion.
5.10 The Vendor shall permit (and does hereby permit) the Purchaser and
each member of the Purchaser's Group to use any of the Business Names
in connection with the Assets for a period of thirty-six months from
Completion provided that
(A) the Purchaser shall only be entitled to use the Business Names
with and in conjunction with the Purchaser's name or the word
"Seabulk" except in the names or in the marketing of individual
vessels where a Business Name may be used alone;
(B) at the end of such period the Vendor shall have the exclusive right to
use the Business Names and the Purchaser's Group shall have no such
right;
(C) with effect from Completion, the Vendor's Group shall continue to
be entitled to use the Business Names in connection with its
continuing business.
5.11 The Vendor shall ensure that the Purchaser shall receive the benefit
of all orders outstanding at Completion in respect of parts and
equipment for use on or in connection with the Assets and at or as
soon as practicable after Completion the Vendor and the Purchaser
shall agree the price therefor paid by the Vendor, which amount the
Purchaser shall thereupon reimburse to the Vendor. Those said orders
outstanding at the date hereof are listed in Annex I. Those further
orders outstanding at Completion shall be mutually agreed between the
parties at or as soon as practicable after Completion. Such prices
will be agreed between the Vendor and the Purchaser on the basis of
fair market value and on the basis that the parts and equipment are
genuinely required for use on or in connection with the Assets. For
the purpose of this clause 5.11 all orders in relation to the `GMMOS
Neptune' shall be excluded from this clause.
5.12 The Purchaser shall also pay Atos International L.L.C. (`ATOS') as
Purchaser's agreed share of the capital expenditure of the drydocking
and refurbishment of `GMMOS Neptune' the sum of UAE Dhs 1,284,500
(one million two hundred and eighty four thousand five hundred)
payment to be made within 30 days of the invoice submitted on
completion of the works.
5.13 Unless the Parties expressly agree in writing otherwise to the
contrary, if the Purchaser is unwilling to pay the full price for the
Assets (except as provided in clause 12.5) at the Completion Date for
any reason or if Completion does not for any other reason take place
on the Completion Date or such later date as the Parties mutually
agree in writing then this Agreement will be considered cancelled and
terminated and neither party will have any claim against the other
and the deposit will be returned to the Purchaser and in particular,
the Vendor shall be free to negotiate with or sell or agree to sell
the Assets to any third party.
6 PROVISIONS PENDING COMPLETION
6.1 The Vendor shall not at any time prior to Completion without the
prior written consent of the Purchaser do or omit to do, or permit or
procure any other person to do or omit to do, any act or thing the
doing or omission of which would (or would be likely to) cause,
constitute or result in a breach of any of the Warranties or of the
undertaking given under clause 4.3.
6.2 Without prejudice to the generality of clause 6.1, the Vendor
undertakes to the Purchaser that it shall not at any time prior to
Completion without the prior written consent of the Purchaser so far
as it affects the Assets-
(A) make any change in the conduct of its business as carried on at the
date of this Agreement;
(B) dispose of or agree to dispose of any item of the Assets;
(C) grant or issue or agree to grant or issue any mortgage, charge,
debenture or security for money secured over any Asset which will
not be discharged on Completion;
(D) knowingly do or omit to do anything whereby the condition of the
Assets might be adversely affected;
(E) permit or suffer any of its insurances in respect of any of the Assets
to lapse or do anything which would make any policy of insurance void
or voidable;
(F) change the terms of employment or increase the remuneration of any of
the Employees.
6.3 Until Completion the Vendor shall -
(A) take all reasonable steps to ensure that the Assets are maintained
in the same state of repair and working order and condition as
they are at the date hereof, fair wear and tear excepted;
(B) maintain any subsisting policy of insurance relating to any of the
Assets;
(C) procure that the Purchaser and its agents and representatives are
given full access to and permitted to inspect the Assets and upon
request furnish such information regarding the same as the
Purchaser may require, in each case without the Vendor charging
the Purchaser therefor; and
(D) not enter into any charterparty or any other contract or
commitment in respect of any Asset without first consulting with
and having due regard for the interests of the Purchaser.
7 RETAINED ASSETS
7.1 As soon as possible but in any event not more than 30 days after the
Completion Date the Vendor shall, at its cost and with the minimum
inconvenience and damage to the Premises and to the Purchaser and its
property and business, remove any asset which is situated at or on
the Premises on the Completion Date and which is not included in the
sale of the Assets and, in the case of any such asset which is fixed
to those Premises, shall sever it from the Premises.
7.2 Any such asset mentioned in clause 7.1 shall remain at or on the
Premises at the sole risk of the Vendor; and, if it is not removed in
accordance with the provisions of that clause, the Purchaser may
dispose of the asset for such price and on such terms as it may think
fit and shall account to the Vendor for any proceeds of sale, after
deduction of the costs of dismantling, severance, removal and sale.
7.3 The Vendor shall indemnify the Purchaser against any loss or damage
suffered by it in consequence of the dismantling, severance or
removal by the Vendor of any asset mentioned in clause 7.1.
8 EMPLOYEES AND OTHER MATTERS
8.1 The Vendor shall -
(A) On or before Completion or such later date as the visas of the
Employees with the Vendor are cancelled in readiness for transfer
to the Purchaser (or its nominee) pay to each of the Employees all
emoluments (including end of service benefits, bonuses, accrued
holiday pay and all other benefits both statutory and contractual)
due to him for the pay period ending on the date of such
cancellation;
(B) As and when required by law pay to any person previously employed
by it who is not an Employee any redundancy or other end of
service payment whether required to be paid pursuant to statutory
or contractual obligations.
8.2 The Vendor shall indemnify the Purchaser against -
(A) any holiday pay and/or end of service gratuity which has accrued
before the Completion Date or, if later, the date of such
cancellation as is referred to in clause 8.1(a) and which the
Purchaser is or becomes liable to pay to any of the Employees; and
any loss, damage, costs, claims or expenses arising out of or in
connection with any act or omission by the Vendor or any other
event or occurrence on or before the Completion Date or, if later,
the date of such cancellation as aforesaid, which the Purchaser
may incur in relation to any contract of employment concerning any
of the Employees.
8.3 The Purchaser acknowledges its intention to make to each of the
Employees a written offer of suitable alternative employment as from
the beginning of the first working day after Completion (or such
later date as it is reasonably practicable to do so) and the Vendor
shall provide the Purchaser (without charge to the Purchaser) with
all such assistance as the Purchaser may be reasonably required in
securing the services of the Employees and complying with all laws
and regulations of the United Arab Emirates and the Emirate of Dubai
concerning the Employees, their sponsorship and transfer.
8.4 Pending employment of the Employees by the Purchaser the Vendor
shall, as from Completion, make available to the Purchaser or as it
may direct the services of the Employees and such other services of
the Vendor's Group as the Purchaser may require including insurances,
the purchasing of goods and services and immigration and work permit
services at cost plus 2% (two per cent), that cost (which shall
include all sums payable by the Vendor under clause 8.2 in respect of
the period after Completion) to be reimbursed by the Purchaser to the
Vendor against the Vendor's invoices therefor. Those invoices shall
be submitted weekly on terms that they shall be settled within 14
days.
9 COMPETITION
9.1 In consideration of the purchase of the Assets, the Vendor undertakes
with the Purchaser that the Vendor will, and will procure that every
other member of the Vendor's Group will, comply with the provisions
of Schedule 3.
9.2 The Vendor acknowledges that the restrictions contained in Schedule 3
are reasonable in the interests of both the Vendor and the Purchaser
and are necessary for the protection of the profitable deployment of
the Assets in the Purchaser's business.
10 CONDITIONS
10.1 Without prejudice to any other remedy and without any liability to
the Purchaser, the Purchaser shall be entitled not to complete its
purchase of the Assets and to rescind this Agreement if on or before
Completion -
(A) the Purchaser is not in all respects and for any reason satisfied with
the due diligence investigation by it or on its behalf in respect of
any one or more of the Assets;
(B) there has been a breach of any of the Warranties;
(C) any matter referred to in clause 4.3 which has not been fairly
disclosed in the Disclosure Letter and which would materially
affect the willingness of a prudent purchaser for value to
purchase the Assets on the terms of this Agreement comes to the
notice of the Purchaser;
(D) the Vendor fails to comply with its obligations under clause 5;
(E) the Vendor fails to comply with its obligations under clause 6; or
(F) the Vendor fails to comply with its obligations under clause 12.4.
10.2 This Agreement shall ipso facto terminate and neither party shall
have any claim against the other party unless before Completion the
terms of this Agreement have been approved by the Board of Directors
of the Purchaser.It is intended that each party shall seek to procure
the fulfilment of the conditions contained in clauses 10.1 and 10.2.
11 NOTICES
Any notice, instruction, consent or other document to be given under
this Agreement shall be in writing and delivered personally or by
pre-paid recorded delivery or facsimile (provided that, in the case
of facsimile, the notice is confirmed by being delivered by hand or
sent by first class post within 72 hours thereafter) to the recipient
party at the above address or to such other address, or to a
facsimile number, as is notified in writing from time to time by such
party to each of the other parties. Any notice delivered personally
shall be deemed to be received when delivered, any notice sent by
pre-paid recorded delivery post shall be deemed to have been received
5 Business Days after posting and any notice sent by facsimile, at
the time of transmission (provided that if transmission occurs after
6 p.m. on a Business Day, or not on a Business Day, delivery will be
deemed to occur at 9 a.m. on the next Business Day). References to
time in this clause are references to local time in the country of
the recipient of the notice.
12 GENERAL
12.1 The Vendor shall -
(A) at all reasonable times before Completion allow the Purchaser or
its duly authorised agent to inspect the Premises, the Assets and
all records and other documents relating to the Assets; and
(B) at all reasonable times during the period of 60 days from the
Completion Date allow the Purchaser or its agent to inspect and to
take copies of or extracts from any records and other documents
(as so defined) relating to the Assets which are not delivered to
the Purchaser on Completion, and not destroy any part thereof
without first offering the same to the Purchaser.
12.2 Time shall be of the essence of this Agreement.
12.3 Except as required by law or regulation, prior to Completion no
announcement of the sale and purchase hereunder or the terms of this
Agreement shall be made by either party except in the agreed terms
and pending any announcement each party shall use its best endeavours
to keep the same confidential.
12.4 The Vendor undertakes to provide the Purchaser up to Completion with
such financial and other information concerning the Assets as the
Purchaser may from time to time properly require and to assist in
clarifying reasonable enquiries submitted within three months after
Completion.
12.5 M.V. "GMMOS HUNTER" - Notwithstanding anything to the contrary
contained in this Agreement:
(A) The Memorandum of Agreement to be entered into in respect of m.v.
"GMMOS Hunter" (`HUNTER') shall provide for the delivery of Hunter
by the Vendor to the Purchaser's nominee as soon as practicable
following redelivery under her current charter to the National
Iranian Oil Company;
(B) Such Memorandum of Agreement shall be entered into prior to Completion
and provide (inter alia) that:
(I) the purchase price for Hunter shall be US$525,000 (Five hundred and
twenty-five thousand United States Dollars);
(II) Hunter shall be delivered to the Purchaser's nominee in
exchange for the above purchase price in the condition she was
at the time of her inspection by Noble Denton in May 1997,
fair wear and tear alone excepted, and otherwise in the
condition and upon the terms required by Norwegian Saleform
1993;
(III)such Memorandum of Agreement shall cease to have effect if Completion
does not take place, and
(IV) if Hunter's current charter is not terminated within 6 (six)
months after Completion, then the Vendor and the Purchaser (or
its nominee) shall negotiate in good faith with a view to
arranging a termination of the charter or the purchase by the
Purchaser's nominee of Hunter subject to such charter, in
either case on terms satisfactory in all respects to the
Vendor and the Purchaser or its nominee. Provided that if the
NIOC charter of the Hunter has not been terminated within 12
(twelve) months after Completion the Memorandum of Agreement
in respect of the Hunter shall cease to have effect.
(C) The amount payable pursuant to clause 3.2(a) shall be reduced by
the amount of the purchase price for Hunter referred to in
sub-clause (b)(i) above.
12.6 Subject as provided in this Agreement, the parties shall pay their
respective costs in connection with this Agreement.
12.7 This Agreement and the other documents referred to herein constitutes
the whole agreement of the parties in relation to its subject matter
and supersedes any previous agreement between them in relation to
that matter; and no modification of this Agreement shall be effective
unless it is made in writing.
12.8 Any right of rescission conferred on either party by this Agreement
is in addition to and without prejudice to any other right or remedy
available to that party; and the exercise, or partial exercise, of or
any delay or omission in exercising any right (including a right of
rescission) conferred on either party by this Agreement shall not
constitute a waiver of that or any other right or remedy available to
that party.
12.9 If any provision of this Agreement is held by a court or other
competent authority to be invalid or unenforceable in whole or in
part, this Agreement shall continue to be valid as to its other
provisions and the remainder of the affected provision.
12.10 This Agreement shall be governed by and construed in accordance with
English law and each of the parties hereby irrevocably submits to the
non-exclusive jurisdiction of the English courts as to any claim,
dispute or matter arising out of or relating to this Agreement or any
of the documents executed pursuant hereto, and waives any objection
on the ground of venue or forum non conveniens or any similar ground.
Each of the parties shall at all times maintain an agent for service
of process in England, the identity and address of such agent to be
notified to each of the other parties forthwith upon execution of
this Agreement and each party undertakes not to revoke authority of
such agent. If, for any reason, any such agent no longer serves as
agent of its appointor to receive service of process, the appointor
shall promptly appoint another such agent and advise the other
parties thereof immediately.
12.11 This Agreement may be executed in more than one counterpart and shall
come into force once each party has executed such a counterpart in
identical form and exchanged it with the other parties.
12.12 The Purchaser acknowledges that it has been informed that an offer is
likely to be made for the purchase of the `GMMOS Hercules' for
approximately US$5.5 million (five and a half million). If such
vessel is sold by the Purchaser within three months after Completion,
the Purchaser will pay the Vendor forthwith on completion of the sale
50% of the amount by which the net sale proceeds actually received
exceed US$2.5 million (two and a half million).
12.13 If the tender bond no. TBG/SUK970059 for US$100,000 issued by
Emirates Bank International dated 30th March 1997 in favour of Total
Sirri is called, then the Purchaser shall, if Completion shall have
taken place, reimburse the Vendor 50% of the amount called not
exceeding US$50,000.
IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the
parties hereto the day and year first above written.
<PAGE>
SCHEDULE 1
WARRANTIES
1 ACCURACY OF INFORMATION
All information concerning the Assets which has been disclosed by or
on behalf of the Vendor to the Purchaser or its agent including -
(A) the particulars of the Charterparties;
(B) the particulars of the Contracts;
(C) the information contained in the Disclosure Letter;
(D) all other information concerning the Assets which has been disclosed
by or on behalf of the Vendor to the Purchaser or its agent,
is accurate, and there is no further information which is known, or
would on reasonable enquiry be known, to the Vendor and which is
material to be known by a purchaser for value of any of the Assets.
2 TITLE TO THE ASSETS
2.1 The Vendor has the right to enter into this Agreement without the
consent or concurrence of any other person.
2.2 The Assets -
(A) are the absolute and sole property of the Vendor or the Vendor's
Group and will on Completion be free from any lien, option,
mortgage, charge, lease, licence, covenant, condition, agreement
or other encumbrance;
(B) where purchased on terms that property does not pass until full
payment has been made, have been paid for in full by the Vendor;
(C) in the case of tangible assets, are in the possession or under the
exclusive control of the Vendor.
2.3 The Vendor has not omitted to do anything to be done by it for the
protection of its title to, or for the enforcement or the
preservation of any order of priority of its title to, any property
or rights owned by it.
2.4 The documents recording or evidencing the Assets including the deeds
and other documents of title to the Assets are in the possession or
under the exclusive control of the Vendor.
3 PLANT, MACHINERY AND EQUIPMENT
3.1 Annex `E' contains full and accurate details of the Plant.
3.2 Annex `F' contains full and accurate details of the Motor Vehicles.
4 THE PLANT AND MOTOR VEHICLES FORMING PART OF THE ASSETS ARE SOLD AS
IS WHERE IS ON COMPLETION.CHARTERPARTIES AND CONTRACTS
4.1 Annex `A' contains details of all the Charterparties and Annex B
contains details of all the Contracts and commitments (other than the
Charterparties) entered into by the Vendor or the Vendor's Group for
utilisation of the Assets or to which the Assets are subject at the
Completion Date, apart from the contracts of employment of the
Employees. Complete and accurate copies of the Charterparties and
Contracts are attached to the Disclosure Letter.
4.2 Each of the Charterparties and Contracts is valid and subsisting
and in full force and effect.
4.3 No party to any of the Charterparties and Contracts respectively
is in breach of the Charterparty or Contract to which he is a party.
4.4 The Vendor is not a party to any contract which may restrict the
utilisation of the Assets or the use or disclosure of any information
relating thereto.
4.5 No default or event has occurred (and no claim of default or other
event has occurred) or, so far as the Vendor is aware, is about to
occur as a result of which any of the Charterparties or Contracts
respectively will or may be terminated.
5 INTELLECTUAL PROPERTY
5.1 The Vendor has the absolute right to transfer to the Purchaser the
Intellectual Property and to permit the Purchaser to use the Business
Name in accordance with clause 5.10, in each case without infringing
the rights of, and without challenge by, any third party and without
obligation to make payment to any third party.
6 UTILISATION OF ASSETS
6.1 In utilising the Assets the Vendor does not infringe any proprietary
right or interest of any other person or incur any liability to pay
any royalty or similar sum.
6.2 The Vendor is not a member of any partnership, consortium, trade
association or any other association of persons (whether incorporated
or not incorporated) which relates to the use of the Assets.
6.3 The Vendor's Group does not require, in order to utilise the Assets
or to use any information, process, equipment, computer program,
promotional materials or any other item used or required to be used
for the purpose of the Assets -
(A) any proprietary right or interest except those to which it is
entitled by virtue of its ownership of the Intellectual Property; or
(B) any consent or licence of any governmental or other authority or
of any other person, except those of which complete and accurate
particulars have been given to the Purchaser in writing.
6.4 Each of the consents and licences referred to in paragraph 6.3 is
valid and in force, the Vendor is not in breach of any such consent
of licence and there are no circumstances (including the sale of the
Assets) which are known, or would on reasonable enquiry be known, to
the Vendor and which might invalidate any such consent or licence and
render it liable to forfeiture or modification or (in the case of a
renewable consent or licence) affect its renewal.
6.5 All software required for the utilisation of the Assets which is in
the possession of the Vendor will be delivered to the Vendor on
Completion.
6.6 Save for the Technical Information the Vendor does not have any
other information necessary for the operation of the Assets.
7 LITIGATION
The Vendor is not engaged or involved in or threatened with -
(A) any litigation, prosecution, arbitration or other legal proceedings
(whether as paintiff, defendant or third party) except for normal debt
collection;
(B) any proceedings or enquiries before any tribunal, board of enquiry,
commission or any other administrative body, whether judicial or
quasi-judicial;
(C) any investigation by any authority; or
(D) any industrial dispute or action;
in each case relating to or affecting any of the Assets and there are
no circumstances (including the sale of the Assets) which are known,
or which on reasonable enquiry would be known, to the Vendor and
which might give rise to the same.
8 INSURANCE
8.1 The Assets are fully insured (in the case of insurance against loss
of or damage to property for an amount not less than the
reinstatement value) against all such risks as are usually insured
against by persons carrying on similar businesses to that of the
Vendor.
8.2 The policies of insurance relating to the Assets are valid and in
force and all premiums due have been paid and there are no
circumstances which are known to the Vendor which might invalidate or
affect the renewal of any of the policies or might entitle the Vendor
to make, or oblige it to notify the insurers of, any claim under any
of the policies.
9 LIABILITIES
The Vendor has punctually discharged and will continue punctually to
discharge all liabilities (except those expressly assumed by the
Purchaser) incurred or to be incurred by the Vendor in connection
with or relating to any of the Assets in respect of the period up to
Completion.
10 EMPLOYEES
10.1 Annex C contains a complete list of the Employees. Complete and
accurate particulars have been given in writing to the Purchaser of
the terms of employment of the Employees.
10.2 The Vendor is not a party to any agreement, arrangement or scheme
(whether or not legally enforceable) for profit sharing or for the
payment to the Employees or other individuals whose services are
provided to it of bonuses or incentive payments or the like.
10.3 None of the Employees has given or received notice of termination
of his employment or engagement.
11 PENSIONS
11.1 There are no retirement benefit or life assurance schemes or
arrangements to which the Vendor contributes or has contributed under
which any of the Employees or their dependants are or will be
entitled to benefit.
11.2 There is no legal liability or voluntary commitment of the Vendor to
pay or make provision for payment of any pension or other benefit on
retirement, death, sickness, disability or other similar
circumstances in respect of any of the Employees or their dependants.
12 VENDOR'S CAPACITY
The Vendor (or the relevant member(s) of the Vendor's Group as the
case may be) has full power and authority to enter into and perform
its obligations under this Agreement and the documents listed in
clause 5.2(d), each of which will on execution thereof binding on the
Vendor (or the relevant member(s) of the Vendor's Group as the case
may be) and enforceable in accordance with their respective terms.
<PAGE>
12.1 SCHEDULE 2
PROVISIONS CONCERNING THE WARRANTIES
INTERPRETATION
1 In this Schedule `CLAIM' means a claim for breach of any of the Warranties.
BASIS ON WHICH WARRANTIES GIVEN
2 In so far as the Warranties relate to matters of fact, they shall
constitute representations upon the faith of which the Purchaser has
entered into this Agreement.
3 Except in the case of the Vessels which, and the class status
documentation of which, the Purchaser has inspected and accepted
under the Memorandum of Agreement the Vendor's liability under the
Warranties shall not be affected by any actual or constructive
knowledge of the Purchaser of any matter concerning the Assets.
4 Each of the Warranties is a separate representation or warranty and
shall not be restricted in its extent or application by the terms of
any of the others Warranties or by any other term of this Agreement.
TIME LIMIT FOR MAKING CLAIMS
5 The Vendor shall not (subject to paragraph 7) be liable for a Claim unless -
(A) the Purchaser gives written notification of the particulars of the
Claim before 30th June 1998; and
(B) liability for the Claim is accepted by the Vendor in writing
or a writ in respect of the Claim is duly served in either
case within 90 days from the last day for notification of the
Claim under sub-paragraph (a).
MONETARY LIMITS FOR CLAIMS
6 The Vendor shall not be liable for a Claim unless the amount payable
in respect of that Claim when added to the amount of every other Claim
exceeds US$25,000, in which event the Vendor shall be liable for the
full amount thereof and not merely the excess
7 The price of US$61,000,000 for the sale of the Assets has been
calculated on the basis of the individual agreed values of the Assets
as set out in Annex H hereof. It is agreed that no part of the total
price of US$61,000,000 is attributable to anything other than the
Assets listed in Annex I and it is also accordingly agreed that the
Vendor shall not be liable for any Claim except to the extent that the
Claim relates to one of those Assets.
The maximum liability of the Vendor under any Claim in respect of any
of the Assets referred to in Annex H shall be the agreed value of
that Asset set out in Annex H. For the avoidance of doubt nothing
contained in this paragraph shall be construed as to limit the
liability of the Vendor under or pursuant to the provisions of clause
3.11 of the within written Agreement.
FRAUDULENT MISREPRESENTATION
8 The provisions of paragraph 5 to 7 (inclusive) shall not apply to any
Claim which arises from fraud or deceit on the part of the Vendor in
respect of the Warranties or the Disclosure Letter.
OTHER LIMITATION OF LIABILITY
9 Having completed the purchase of the Vessels after inspecting and
accepting both the Vessels on an as is where is basis and the
Classification Society documentation relating to the Vessels the
Purchaser shall not be entitled to make and the Vendor shall not be
liable for any Claim against the Vendor (or any company in the
Vendor's Group) relating to or in respect of any damages, loss or
expense arising from the condition of the Vessels or their
classification status.
10 The Vendor shall not be liable for a Claim to the extent that its
subject matter has been fairly and accurately disclosed in the
Disclosure Letter.
11 The Vendor shall not be liable for any Claim to the extent that the
Claim would arise or the amount of the Claim would be increased after
the date of this Agreement as a result of -
(A) the enactment of any legislation with retrospective effect; or
(B) a judgment or change in the interpretation or application of any law
or of any ruling or practice of any administrative authority.
12 The amount of the Vendor's liability for any Claim shall be reduced
by any sum which is recovered (whether by way of insurance,
indemnification or otherwise) by the Purchaser or a subsidiary of the
Purchaser (otherwise than from another of those companies) in respect
of the loss or damage suffered by reason of the relevant breach, less
the amount of any reasonable costs and expenses incurred in obtaining
payment of that sum and of any tax for which the Purchaser or a
subsidiary of the Purchaser may be liable by reason of its receipt of
that sum. If the Vendor has paid to the Purchaser any amount in
respect of the Claim before the recovery of that sum, the Purchaser
shall repay to him, or procure the repayment to him of, the amount by
which his liability is so reduced.
PROCEDURE FOR MAKING A CLAIM
13 If any matter which will or might give rise to a Claim comes to the
notice of the Purchaser, the following provisions shall apply -
(A) the Purchaser shall as soon as reasonably possible (and in any
event within the following 14 days) notify the Vendor in
writing of the matter and at no charge to the Purchaser, make
available to it all information and documents in the
possession or under the control of the Purchaser in so far as
they relate to that matter;
(B) the Purchaser shall not make any admission of liability or
take any other action in connection with the matter without
the previous written consent of the Vendor (which shall not be
unreasonably delayed or withheld); and
(C) subject to it being indemnified to its reasonable satisfaction
against all costs and expenses (including additional tax)
which might be incurred by it, the Purchaser shall take all
such steps as the Vendor may reasonably request to mitigate
its liability under the Claim.
DAMAGES FOR BREACH OF WARRANTY
14 The Vendor's liability for a Claim shall not be reduced in
consequence of any subsequent sale or sub-sale by the Purchaser of
the Assets or any of them, which shall be wholly disregarded for the
purpose of calculating the amount of the liability.
<PAGE>
SCHEDULE 3
COMPETITION
PART 1 - INTERPRETATION
1 In this Schedule -
(A) `THE RESTRICTED BUSINESS' means the business of owning,
operating and chartering oilfield and offshore construction
and service vessels as carried on by the Purchaser at any time
after the Completion Date;
(B) `THE RESTRICTED PERIOD' means the period of 3 years from the
Completion Date or until such time as the Vendor ceases to
hold Class A ordinary shares in the Purchaser, whichever is
the later;
(C) `THE RESTRICTED TERRITORY' means the territorial waters of
each of the following countries taken separately, that is to
say Brunei, India, Pakistan, Oman and (separately) each
country bordering the Arabian Gulf.
PART 2 - RESTRICTIONS
2 The Vendor will not and will procure that every Member of the
Vendor's Group will not -
(A) at any time during the Restricted Period within the Restricted
Territory directly or indirectly carry on or be engaged or
interested in, or assist any other person in relation to, the
Restricted Business, except as provided by Part 3 of this
Schedule;
(B) for a period of three years from the Completion Date directly
or indirectly solicit or entice, or endeavour to solicit or
entice, away from the Purchaser any of the Employees;
(C) for a period of three years from the Completion Date solicit,
or endeavour to solicit, custom from any person who at any
time within two years before the Completion Date was a
customer of the Vendor in connection with the Assets;
(D) at any time after the Completion Date disclose to any person
or directly or indirectly use, or attempt so to use, for any
purpose any of the Technical Information or any other
information concerning the Assets;
(E) at any time after the Completion Date directly or indirectly
use, or attempt to use, for any purpose any trade mark or
logogram (whether or not forming part of the Intellectual
Property) which is identical to or confusingly or deceptively
similar to any trade mark or logogram used in connection with
the Assets at any time within twelve months before the
Completion Date.
PART 3 - EXEMPTION
3 Nothing contained in Part 2 of this Schedule shall prevent the
Vendor or any other Member of the Vendor's Group from -
(A) owning or acquiring for the purposes of investment not more than 5 per
cent. of any class of shares or other securities of any undertaking
listed on a recognised stock exchange; and
(B) continuing to operate the vessels `Fast' and `Bassem' in the ordinary
course and the vessel `Hunter' in the ordinary course until the
completion of the sale of the vessel to the Purchaser or the expiry of
12 months after Completion whichever is the earlier.
