UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
________________
Date of Report (Date of earliest event reported) May 16, 1997
TIDEWATER INC.
(Exact name of registrant as specified in its charter)
Delaware 1-6311 72-0487776
(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
1440 Canal Street, New Orleans, Louisiana 70112
(Address of principal executive offices) (Zip Code)
(504) 568-1010
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
ITEM 2. Acquisition or Disposition of Assets.
Acquisition of the O.I.L. Group of Companies
On May 16, 1997, the registrant, Tidewater Inc. (the
"Company"), acquired all of the ordinary shares of O.I.L.
Limited and its related international marine operating
companies (the "O.I.L. Group") from Ocean Group plc and its
affiliates (collectively the "Ocean Group") in exchange for a
cash payment of 331 million pounds sterling (approximately U.S.
$541.6 million). The consideration paid Ocean Group was
determined through arm's length negotiations between the
Company and Ocean Group. The Company used approximately $41.6
million of its cash to fund the purchase price, with the
remaining $500 million provided by borrowings under a credit
facility made available to the Company by a bank group led by
First National Bank of Commerce of New Orleans, Texas Commerce
Bank and First National Bank of Boston.
Prior to consummation of this acquisition, the O.I.L.
Group was principally engaged in the business of operating
approximately 100 platform supply and anchor handling towing
supply vessels in most international offshore oil and gas
exploration areas outside of the United States. The Company
intends for the foreseeable future to continue to engage in
such operations.
The acquisition was completed on May 16, 1997, as
announced in the press release which has been filed as an
exhibit to this report. Additional information relating to the
acquisition is set forth in the Agreement for the Acquisition
of Share Capital of the O.I.L. Group of Companies, a copy of
which has also been filed as an exhibit to this report.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
All financial statements required to be filed in
connection with this acquisition will be filed by
amendment to this report as soon as they are
available, but in any event within 60 days of the
date by which this report is required to be filed.
(b) Pro Forma Financial Information.
All pro forma financial information required to be
filed in connection with this acquisition will be
filed by amendment to this report as soon as it is
available, but in any event within 60 days of the
date by which this report is required to be filed.
(c) Exhibits.
2.0 Agreement for the Acquisition of the Share
Capital of the O.I.L. Group of Companies, dated
March 20, 1997, between the Company and Ocean
Group plc.[1]
99.1 Press Release issued May 16, 1997 disclosing
completion of the Company's acquisition of the
O.I.L. Group of Companies.
**FOOTNOTES**
[1]: Exhibit 2.0 includes a list briefly identifying the
contents of all schedules omitted therefrom. The Company will
furnish supplementally a copy of any omitted schedule to the
Commission upon request.
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.
By: /s/ Ken C. Tamblyn
--------------------------
Ken C. Tamblyn
Executive Vice President
and Chief Financial Officer
Dated: May 30, 1997.
EXHIBIT 2.0
Agreement for the
acquisition of the
share capital of the
O.I.L. Group of
Companies
between
Ocean Group plc
as Vendor
Tidewater Inc.
as Purchaser
CONTENTS
1. Interpretation...................................................... 1
2. Sale of Shares ......................................................4
3. Consideration .......................................................5
4. Conditions ..........................................................5
5. Completion ..........................................................9
6. Pre-Completion Obligations ..........................................9
7. Restriction of Vendor ..............................................11
8. Warranties .........................................................13
9. Confidentiality ....................................................14
10. Announcements .....................................................14
11. Provisions Relating to this Agreement .............................14
12. Costs .............................................................18
13. Law and Jurisdiction ..............................................19
14. Environmental Indemnity ...........................................19
SCHEDULE 1 : COMPLETION ARRANGEMENTS .................................25
SCHEDULE 2 : COMPLETION CONDITIONS ...................................30
SCHEDULE 3 : THE SALE SHARES .........................................32
SCHEDULE 4 : THE SALE GROUP .........................................34
SCHEDULE 5 : WARRANTIES ..............................................51
SCHEDULE 6 : PARTICULARS OF PROPERTIES ...............................85
SCHEDULE 7 : EMPLOYEE LETTERS ........................................86
SCHEDULE 8 : TAXATION ................................................91
SCHEDULE 9 : NET ASSETS ADJUSTMENT ..................................111
SCHEDULE 10 : PENSIONS ..............................................116
SCHEDULE 11 : VENDOR'S PROTECTION ...................................126
SCHEDULE 12 : THE VESSELS ...........................................133
The following Schedules have been omitted from this Exhibit.
The registrant will provide these Schedules to the Commission
upon request:
Schedule No. 3, which contains information regarding
the number of shares sold by the various affiliates of the
Ocean Group plc.
Schedule 4, which contains information regarding the
registered office, authorized and issued shares, registered
shareholders, auditors and similar information for each of the
Ocean Group plc affiliates involved in the acquisition.
Schedule 7, which includes letters to employees of the
Ocean Group plc affiliates regarding the acquisition.
Schedule 12, which includes a list of vessels owned by
the Ocean Group plc affiliates involved in the acquisition.
THIS AGREEMENT is made on 20 March, 1997
BETWEEN
(1) OCEAN GROUP plc, a company registered in England under
number 73975 whose registered office is at Ocean House,
The Ring, Bracknell, Berkshire RG12 IAN (the "Vendor");
and
(2) TIDEWATER INC., a corporation organized under the laws
of the State of Delaware, U.S.A. whose principal office
is at Tidewater Place, 1440 Canal Street, Suite 2100,
New Orleans, LA 70112, U.S.A. (the "Purchaser").
WHEREAS:
(A) The Vendor owns, directly or indirectly, such percentage
of the entire share capital of each of the companies
listed in column (1) of Schedule 3 (the "Sale Group") as
is specified in column (4) of such Schedule.
(B) The Purchaser wishes to acquire the entirety of the
direct or indirect ownership interest of the Vendor in
the members of the Sale Group through the acquisition of
the Sale Shares from the Vendor on the terms of this
Agreement.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
1.1 Definitions
In this Agreement where the context admits:
"Affiliate" means, in respect of any company, a company
which is its subsidiary or holding company, or a company
which is a subsidiary of that holding company;
"Business Day" means a day, other than a Saturday or
Sunday, on which banks are open for ordinary banking
business in London;
"Competing Acquisition Proposal" means any offer or
proposed offer by any person to acquire all or any
material part of the Sale Group or the assets thereof;
"Completion" means completion of the sale and purchase
of the Sale Shares;
"Completion Conditions" bears the meaning given thereto
in clause 4.1;
"Completion Date" means such date as the parties may
agree or as one party may specify to the other on not
less than 3 days' notice following satisfaction or (if
capable of waiver) waiver of the Completion Conditions
set out in sub-clauses (A)(1), (A)(2) and (B) of
Schedule 2, but, in any event, not later than 30th May
1997;
"Confidentiality Agreement" means the Confidentiality
Agreement dated January 10, 1997 made by and between the
Vendor and the Purchaser a copy of which is attached to
the Disclosure Letter;
"Directors" means the persons named as such in Schedule
4 and "the Continuing Directors" means the persons (if
any) named as such in such Schedule;
"Disclosure Letter" means the letter having the same
date as this Agreement delivered by the Vendor to the
Purchaser;
"Encumbrance" includes any interest or equity of any
person (including any right to acquire, option or right
of pre-emption) or any mortgage, charge, pledge, lien
other than liens arising by operation of law and
securing indebtedness not more than seven days overdue,
assignment, hypothecation or other priority interest,
deferred purchase, title retention, trust, leasing,
sale-and-repurchase or sale-and-leaseback arrangement,
right of set off or any other agreement or arrangement
whatsoever having the same commercial or economic effect
as security (including any hold back or "flawed asset"
arrangement) over or in any property, assets or rights
of whatsoever nature and includes any agreement for any
of the foregoing;
"Indebtedness" means the entire net indebtedness
(expressed in pounds sterling after translation (if
necessary) at the appropriate exchange rate then
prevailing) owed or outstanding as at the Completion
Date by or to members of the Sale Group on the one hand
to or by members of the Vendor's Group on the other;
"Indebtedness Certificate" means a certificate from the
Vendor signed by its Finance Director certifying the
amount of the Indebtedness;
"LIBOR" means in relation to a sum of money the interest
rate at which deposits in the currency of that sum (or
nearest equivalent amount) and for the period during
which it is outstanding (or nearest equivalent period)
are offered by Barclays Bank Plc to leading banks in the
London Inter-bank market as from 11.00am (London time)
on the first Business Day during which it is
outstanding;
"London Stock Exchange" means London Stock Exchange
Limited;
"New York Stock Exchange" means the New York Stock
Exchange, Inc.;
"Properties" means the properties particulars of which
are set out in Schedule 6;
"Restricted Business" has the meaning given in clause
7.1;
"Sale Group" means the companies listed in Schedule 4;
"Sale Shares" means the shares to be bought and sold
pursuant to this Agreement, being all the shares set
forth in column (3) of Schedule 3;
"Taxes Act 1988" means Income and Corporation Taxes Act
1988;
"Value Added Tax" and "VAT" mean value added tax as
provided for in the Value Added Tax Act 1994 and
legislation supplemental thereto or replacing, modifying
or consolidating it;
"Vendor's Group" means the Vendor and each of its
Affiliates, subsidiary undertakings and any other body
corporate in which any such company owns at least 20% in
nominal value of the issued equity share capital other
than the Sale Group;
"Vessels" means the vessels described in Schedule 12;
and
"Warranties" means the warranties set out in Schedule 5,
in paragraph 4 of Schedule 8, in paragraph 5 of Schedule
10 and, for the purposes of Schedule 11, shall include
the provisions of clause 4.5 of this Agreement.
1.2 Construction
In this Agreement, except where the context otherwise
requires:-
(A) words and phrases the definitions of which are
contained or referred to in Part XXVI Companies
Act 1985 shall be construed as having the
meanings so attributed to them;
(B) references to statutory provisions shall be
construed as references to those provisions as
amended or re-enacted or as their application is
modified by other provisions from time to time
and shall include references to any provisions of
which they are re-enactments (whether with or
without modification);
(C) where any statement is qualified by the
expression "so far as the Vendor is aware" or "to
the best of the Vendor's knowledge and belief" or
any similar expression, that statement shall be
deemed to include an additional statement that
such statement has been made after due and
careful enquiry;
(D) references to clause(s) and schedule(s) are
references to clause(s) and schedule(s) of and to
this Agreement, references to sub-clause(s) or
paragraph(s) are, unless otherwise stated,
references to sub-clause(s) of the clause or
paragraph(s) of the schedule in which the
reference appears;
(E) the words "include" and "including" are to be
construed without limitation;
(F) references to a "person" include any individual,
company, body corporate, corporation sole or
aggregate, government, state or agency of a
state, firm, partnership, joint venture,
association, organisation or trust (in each case,
whether or not having separate legal personality
and irrespective of the jurisdiction in or under
the law of which it was incorporated or exists)
and a reference to any of them shall include a
reference to the others;
(G) any reference to writing shall include
typewriting, printing, lithography, photography
and other modes of representing words in a
legible form other than writing on an electronic
display screen or similar device; and
(H) references to any document being "in agreed
terms" or "in an agreed form" are to that
document in the form signed on behalf of the
parties for identification.
1.3 Headings
The headings and sub-headings, and any contents pages,
are inserted for convenience only and shall not affect
the construction of this Agreement.
1.4 Schedules
Each of the schedules shall have effect as if set out in
this Agreement.
2. Sale of Shares
2.1 Sale and Purchase
Subject to the terms and conditions of this Agreement,
on the Completion Date the Vendor with full title
guarantee shall sell or procure the sale of and the
Purchaser shall purchase, free from all Encumbrances and
together with all rights now or hereafter attaching
thereto, the Sale Shares.
2.2 Simultaneous Completion
Neither the Vendor nor the Purchaser shall be obliged to
complete the sale and purchase of the Sale Shares unless
the sale and purchase of all of the Sales Shares is
completed simultaneously.
3. Consideration
3.1 Amount
The total consideration for the Sale Shares (which shall
be allocated as shown in column (5) of Schedule 3)
shall, subject to adjustment as otherwise provided for
in this Agreement, be the payment by the Purchaser of a
sum equal to (A) 328,000,000 (three hundred and twenty-
eight million) pounds sterling less the amount of the
Indebtedness plus or minus (B) the amount of the Net
Assets as provided in Schedule 9.
3.2 Method
The sum specified in clause 3.1 shall be payable in
sterling in cash in accordance with the provisions of
paragraph 1.2 of Schedule 1.
3.3 Payment of Indebtedness
At Completion, the Purchaser shall repay the
Indebtedness on behalf of the Sale Group in accordance
with the provisions of paragraph 1(2) of Schedule 1.
3.4 Estimated Completion Date Payment
At Completion, the Purchaser shall pay to the Vendor the
amount in respect of the Estimated Completion Date
Payment as provided in paragraph 2 of Schedule 9.
4. Conditions
4.1 Conditions
Subject to the following provisions of this clause,
Completion is conditional upon the satisfaction or (if
capable of waiver) waiver of those conditions listed in
Schedule 2 (the "Completion Conditions").
4.2 Satisfaction
(A) Each of the parties will cooperate with the other
and use its reasonable efforts to (i) procure all
necessary consents and approvals, (ii) complete
and file all necessary applications and
certificates, (iii) satisfy all requirements
prescribed by law for completion of the sale of
the Sale Shares and all Completion Conditions and
(iv) effect the transactions contemplated by this
Agreement at the earliest practicable date.
(B) In addition and without limiting sub-clause (A),
the Purchaser agrees, immediately following
exchange and public announcement of this
Agreement, to commence and diligently pursue such
physical inspection and other due diligence of
the Vessels as it deems necessary or prudent to
satisfy itself that the Completion Condition set
out in paragraph (B) of Schedule 2 can be met.
The Vendor shall cooperate in all reasonable
respects by procuring that any relevant member of
the Sale Group shall (i) provide details of the
location of the Vessels; (ii) permit access to
the Vessels to the representatives of the
Purchaser upon prior appointment and permit such
representatives to ascertain the general physical
and operating condition of the Vessels; (iii) at
or prior to such inspection provide to the
Purchaser's representatives details of the
classification of each Vessel and any material
recommendations and notations to such
classification; and (iv) generally provide such
further information as the Purchaser's
representatives may reasonably require to assist
the Purchaser in considering whether or not the
Completion Condition set out in paragraph (B) of
Schedule 2 has been met.
The Purchaser acknowledges and agrees that (i)
the foregoing obligation of the Vendor shall not
require the Vendor to undertake such actions in a
manner that would interfere materially with the
normal conduct of its vessel operations; (ii) it
shall be liable for, and shall indemnify and hold
harmless the Vendor and each member of the Sale
Group from and against all costs, claims,
demands, expenses or liabilities whatsoever
arising, directly or indirectly, out of any
injury or damage to any person and any damage to
or loss of any property of any person whatsoever
in connection with its inspection of the Vessels;
and (iii) inspection of any particular Vessel
shall be subject to the Vendor or the relevant
member of the Sale Group having obtained the
prior consent of the charterer of such Vessel to
such inspection (and the Vendor agrees to use and
to procure that each relevant member of the Sale
Group uses, all reasonable endeavours, (excluding
the expenditure of money) to obtain such
consent).
(C) In addition and without limiting sub-clause (A),
the Vendor undertakes to and agrees with the
Purchaser that the directors of the Vendor will
(i) convene an extraordinary general meeting of
the shareholders of the Vendor (the
"Extraordinary General Meeting") to be held on or
prior to 21st April 1997 for purposes of
considering and, if thought fit, passing the
resolution referred to in paragraph (A)(1) of
Schedule 2 (the "Resolution") (ii) procure the
posting of a circular to shareholders as soon as
reasonably practicable after, but, in any event,
within 14 days of the date of execution of this
Agreement containing, subject to their fiduciary
duties as directors, a recommendation from the
Board of the Vendor that its shareholders vote at
the Extraordinary General Meeting in favour of
the Resolution and, in any event, a statement
that each of the members of the Board intends to
vote his shares in favour of the Resolution; and
(iii) subject, in each case, to their fiduciary
duties as directors, not make any other or
further resolution or recommendation inconsistent
with such recommendation and not withdraw such
favourable recommendation to the shareholders
prior to the Extraordinary General Meeting.
(D) If a Competing Acquisition Proposal is publicly
announced prior to the earlier of Completion and
the termination of this Agreement and either, (i)
the directors of the Vendor withdraw their
favourable recommendation to the shareholders or
make any other or further resolution or
recommendation inconsistent with such favourable
recommendation or (ii) the shareholders of the
Vendor fail to approve the sale of the Sale
Shares at the Extraordinary General Meeting then
the Vendor shall pay to the Purchaser in complete
satisfaction of the obligations of the Vendor
under this Agreement and to the exclusion of any
other remedy or right which the Purchaser may
otherwise have hereunder but without prejudice to
the provisions of Clause 12.2, a termination fee
of US$15 million in cash within 7 Business Days
after the date (on or prior to 31 March 1998)
that the Vendor completes the sale whether
pursuant to the Competing Acquisition Proposal or
otherwise, all or any material part of the Sale
Group or the assets thereof.
(E) The Purchaser shall, no later than 8.30 pm
(London time) on 10th April, 1997 either:
(1) confirm in writing to the Vendor that the
Completion Condition in paragraph (B) of
Schedule 2 has been satisfied (or, as the
case may be, waived) (whereupon the said
Completion Condition shall be satisfied),
falling which,
(2) deliver to the Vendor a written summary of
the reasons why the Purchaser believes that
the Completion Condition in paragraph (B)
of Schedule 2 has not been satisfied,
including, to the extent reasonably
practicable, information with respect to
the expenditures with respect to the
Vessels that the Purchaser has concluded
would be necessary for such Vessels to be
in Satisfactory Condition (as defined in
that paragraph), it being understood that
any such information provided by the
Purchaser to the Vendor pursuant to this
sub-clause shall not preclude the Purchaser
from asserting the need for other
expenditures or asserting that other bases
exist for claiming that such Completion
Condition has not been satisfied in the
event of a dispute between the parties.
4.3 Waiver
The Purchaser may waive in whole or in part all or any
of the Completion Conditions (other than the condition
set out in paragraph (A)(1) of Schedule 2).
4.4 Disclosure
Each of the parties shall disclose in writing to the
other anything which will or may prevent any of the
Completion Conditions from being satisfied by 30th May
1997 immediately after it comes to its notice.
4.5 Certificate
(A) The Vendor shall deliver a certificate, signed by
its Finance Director, in agreed terms (the
"Completion Certificate") to the Purchaser at
Completion confirming that the Condition set out
in paragraph (A)(1) of Schedule 2 has been
satisfied (if this is the case) and confirming
that, save to the extent disclosed pursuant to
clause 8.3, to the best of the knowledge and
belief of the Vendor, none of the Warranties or
covenants contained in clause 6.2 has been broken
or breached to any material extent (save as
already disclosed in the Disclosure Letter) and
accepts that if Completion occurs the Purchaser
will have completed the purchase of the Sale
Shares in reliance, amongst other things, on such
certificate.
(B) If, following Completion, the Purchaser becomes
aware that the condition in paragraph (A)(1) of
Schedule 2 was not satisfied at Completion or
that the Completion Certificate was, when given,
inaccurate, the Purchaser shall be entitled to
claim against the Vendor on the basis of the
Completion Certificate so given.
4.6 Termination
If:
(A) the Completion Condition set out at paragraph (B)
of Schedule 2 is not satisfied or waived within
21 days of the date hereof; or
(B) any fact which would prevent any of the
Completion Conditions set out in paragraph (A) of
Schedule 2 from being satisfied on or prior to
30th May 1997 comes to the knowledge of either of
the parties,
then (unless in the case of paragraph (B) above the
relevant Completion Condition is waived (where capable
of waiver)) this Agreement shall terminate forthwith
without prejudice to the accrued rights of either party
at the time of termination and, with respect to a
termination pursuant to paragraph (B) above in relation
to the Completion Condition set out at paragraph (A)(1)
of Schedule 2 without prejudice to the provisions of
clause 4.2(D).
5. Completion
5.1 Completion Location
Completion shall take place on the Completion Date at
the offices of Simmons & Simmons 21 Wilson Street,
London EC2M 2TX prior to 2.30 pm, London time.
5.2 Vendor's Obligations
On Completion the Vendor shall do or procure the doing
of those things set out in paragraph 1.1 of Schedule 1.
5.3 Purchaser's Obligations
On Completion the Purchaser shall do or procure the
doing of those things set out in paragraph 1.2 of
Schedule 1.
5.4 Failure to Complete
If the obligations of the Vendor under Schedule 1 are
not complied with in any material respect on the
Completion Date, the Purchaser may:-
(A) defer Completion to a date not later than the
later of (i) 30th May 1997 or (ii) 28 days after
the Completion Date (in either event so that the
provisions of this sub-clause 5.4, apart from
this item (A), shall apply to Completion as so
deferred); or
(B) proceed to Completion so far as practicable
(without prejudice to its rights under this
Agreement); or
(C) terminate this Agreement.
6. Pre-Completion Obligations
6.1 Purchaser's Right of Access
After the date of satisfaction (or waiver) of the
Completion Condition set out at paragraph (B) of
Schedule 2, the Purchaser and any persons authorised by
it, upon reasonable notice and subject to the terms of
the Confidentiality Agreement, shall be allowed all
reasonable access to all the premises books and records
of each member of the Sale Group, and the Vendor shall
supply or procure the supply of any information
reasonably required by the Purchaser relating to the
members of the Sale Group and their respective affairs.
6.2 Liaison on Conduct of Business
The Vendor covenants that, from the date of this
Agreement until Completion, the business of the Sale
Group will be carried on in the usual and normal course
and that no member of the Sale Group shall enter into
any contract or commitment or do anything which, in any
such case, is either out of the ordinary and usual
course of its business or of a material nature without
the prior consent in writing of the Purchaser. In
particular, but without limiting the foregoing, the
Vendor covenants that from the date of this Agreement
until Completion, each member of the Sale Group shall
preserve the possession and control of all of its assets
other than those permitted to be disposed of pursuant to
the terms of this Agreement, shall conduct its business
only in the ordinary course consistent with past
practice and, except as otherwise provided herein or
with the prior consent in writing of the Purchaser,
(A) shall procure that items 2.7(A)(1) to (26) of
Schedule 5 (other than items 2.7(A)(7) and (14))
shall be complied with at all times from the date
hereof to Completion; or
(B) shall not enter into any new vessel charters
including charterer's options to extend (i) on
other than arms' length terms, or (ii) for less
than full and proper consideration, or (iii) for
a term in excess of six months, or (iv) having
change of control or other comparable provisions
that would cause such contracts to terminate on,
or cause by its terms the rights or obligations
of the parties thereto to be materially affected
by, the sale of the Sale Shares to the Purchaser
upon the terms of this Agreement; or
(C) shall not dispose of or enter into any agreement
to dispose of (whether by one transaction or by a
series of transactions) any Vessel, or, except
for dispositions made in the ordinary course of
business and consistent with past practices,
sell, dispose of, lease, license, mortgage,
encumber or subject to any Encumbrance any of its
other properties or assets; or
(D) shall not make or agree to make any capital
expenditure other than those made in the ordinary
course of business and consistent with past
practices out of available cash (excluding the
proceeds of borrowings) (it being understood that
any capital expenditures made or agreed to be
made with respect to the acquisition of a vessel
shall be deemed outside of the ordinary course of
business); or
(E) save as referred to in the Disclosure Letter,
shall not declare, make or pay any dividends or
distributions (whether of capital or profits); or
(F) shall not authorise or agree to commit to do any
of the actions prohibited by sub-paragraphs (B),
(C) or (D) or (E).
6.3 Employees
The Vendor shall use all reasonable endeavours to
provide to the Purchaser within 10 Business Days after
the execution of this Agreement, a list of all employees
and consultants of the Sale Group (other than vessel
crews).
7. Restriction of Vendor
7.1 Restricted Business
In this clause, "Restricted Business" means the
provision of platform supply vessels and anchor-handling
tug supply vessels to the offshore oil and gas
industries.
7.2 Covenants
The Vendor undertakes with the Purchaser that it will
not and that none of its Affiliates will:
(A) for the period of 3 years after Completion,
either on its own account or in conjunction with
or on behalf of any person, carry on, or be
engaged, concerned or interested (directly or
indirectly) in carrying on anywhere in the world,
a Restricted Business (other than as a holder of
less than 3 per cent. of any class of shares or
debentures listed on the London Stock Exchange,
the New York Stock Exchange or any other stock
exchange);
(B) for the period of 2 years after Completion,
either on its own account or in conjunction with
or on behalf of any other person, solicit or
entice away from any member of the Sale Group any
person who on or after 1st January, 1997 is or
was an officer, manager, employee, servant or
customer of such member (save for any such person
who answers a public advertisement or who is
approached by or who approaches the Vendor or any
of its Affiliates, at a time when he is no longer
an employee of any such member or of the
Purchaser) whether or not such person would
commit a breach of contract by reason of leaving
service or transferring business; and
(C) directly or indirectly use or attempt to use in
the course of any business, at any time after
Completion, on its own account or in conjunction
with or on behalf of any person, any trade or
service mark or logo used in the business of any
member of the Sale Group (including, but not
limited to OSA and/or OIL names or marks) or any
other name, logo, trade or service mark which is
or might be confusingly similar thereto.
7.3 Reasonableness
The restrictions contained in sub-clause 7.2, as
qualified by the exceptions contained in this clause 7,
are considered reasonable by the parties, but if any
such restriction shall be found to be void or voidable
but would be valid and effective if some part or parts
of the restriction were deleted, or the period or area
of application reduced, such restriction shall apply
with such modification as may be necessary to make it
valid and effective.
7.4 Registration
Any provision of this Agreement, or of any agreement or
arrangement of which it forms a part, by virtue of which
such agreement or arrangement is subject to registration
under the Restrictive Trade Practices Act 1976 shall
only take effect the day after particulars of such
agreement or arrangement have been duly furnished to the
Director General of Fair Trading pursuant to section 24
of that Act.
7.5 Limited Exceptions
(A) Nothing contained in sub-clause 7.2 shall
prohibit the Vendor or any Affiliate of the
Vendor from making acquisitions of other
businesses an insignificant part of which
consists of activities that would but for this
clause 7.5 constitute a breach by the Vendor, or
any Affiliate of the Vendor, of the restrictions
contained in sub-clause 7.2, provided that the
Vendor or such Affiliate disposes of any business
or assets that would otherwise be in breach of
sub-clause 7.2 within one year of the date of
acquisition. For the purposes of the foregoing
an "insignificant" part means less than 20% by
reference to the contribution to total revenues
of the business so acquired.
(B) Nothing contained in clause 7.2 shall prohibit
O.I.L. (Shetland) Limited from continuing to
carry on its existing business in the same scope
and manner and to the same extent as presently
carried on.
(C) Nothing contained in sub-clause 7.2(C) shall
prohibit O.I.L. (Shetland) Limited using "O.I.L."
as part of its name for a period of twelve months
from Completion.
(D) The Purchaser covenants that neither it nor any
member of the Sale Group shall following the
expiry of twelve months after Completion use the
name or business name "Ocean" or the logo used by
the Vendor in its business or any other name,
logo, trade or service mark which is or might be
confusingly similar thereto.
8. Warranties
8.1 Purchaser's knowledge
The Warranties are given subject to matters fairly
disclosed in this Agreement or in the Disclosure Letter,
but no other information relating to the Sale Group of
which the Purchaser has knowledge (actual or
constructive) shall prejudice any claim made by the
Purchaser under the Warranties or operate to reduce any
amount recoverable.
8.2 Warranties to be independent
Each of the Warranties shall be separate and independent
and, save as expressly provided, shall not be limited by
reference to any other Warranty or anything in this
Agreement.
8.3 Further Disclosure
Each of the parties shall prior to Completion forthwith
disclose in writing to the other any act, action, event
or occurrence which may arise or become known to it
after the date of this Agreement and before Completion
which constitutes a material breach of the Warranties or
which would constitute a breach with respect to the
Warranties if they were to be repeated as at Completion.
8.4 Right of Termination
In the event of:-
(A) it becoming apparent on or before Completion that
the Vendor is in breach of any of the Warranties
to an extent which constitutes, individually or
collectively, a Material Breach; or
(B) any act, action, event or occurrence arising
after the date of this Agreement and before
Completion which would if the Warranties were to
be repeated as at Completion, constitute a
Material Breach of the Warranties; or
(C) the failure by the Vendor to perform and comply
in all material respects with all agreements and
covenants required to be performed or complied
with by it prior to or on the Completion Date,
including without limitation, the provisions
regarding Liaison of Business in clause 6.2;
then, in any such event, the Purchaser may terminate
this Agreement by notice in writing to the Vendor, such
termination discharging in full all obligations of each
party to the other and so that this Agreement shall
cease to be of any force or effect but without prejudice
to the provisions of clause 12.2 and (in relation to
sub-paragraph 8.4(A) only) of clause 4.2(D).
For the purposes of this sub-clause 8.4 (A) and (B)
only, a Material Breach shall be deemed to have occurred
with respect to the Warranties if there transpires any
act, action, event or occurrence that constitutes or
that would, if such Warranties were to be given as at
Completion, have constituted a breach of such Warranties
and that results, or would reasonably be likely to
result, individually or in the aggregate, in a
quantifiable loss of 20 million pounds sterling or more.
For the purposes of sub-clause 8.4(C) only, a failure to
perform and comply with covenants and obligations in all
material respects shall be deemed to occur if that
results, or would reasonably be likely to result,
individually or in aggregate, in a quantifiable loss of
10 million pounds sterling or more.
9. Confidentiality
The confidentiality obligations of the parties shall
continue to be governed by the Confidentiality
Agreement.
10. Announcements
10.1 Restriction
Between the date hereof and the Completion Date, and
subject to sub-clause 10.2, neither the Vendor nor the
Purchaser shall make any announcement concerning the
sale of the Sale Shares without the prior written
approval of the other, such approval not to be
unreasonably withheld or delayed.
10.2 Permitted Announcements
Either the Vendor or the Purchaser may make an
announcement concerning the sale of the Sale Shares if
the announcement is required by law or by any securities
exchange or regulatory or governmental body having
jurisdiction over it, wherever situated, including but
not limited to the United States Securities and Exchange
Commission, the New York Stock Exchange, the London
Stock Exchange, and The Panel on Take-overs and Mergers,
and whether or not the requirement has the force of law
provided that any such announcement shall be made only
after consultation with the other party to the extent
that the same is practicable.
11. Provisions Relating to this Agreement
11.1 Assignment
(A) This Agreement and the benefits and obligations
under it and any part of it (including the
Warranties) shall not be assignable except that
the Purchaser may, upon giving written notice to
the Vendor, assign the benefit (but not the
burden) of this Agreement to an Affiliate of the
Purchaser provided that any such assignee remains
an Affiliate of the Purchaser and provided
further that before such assignee ceases to be an
Affiliate of the Purchaser, the Purchaser will
procure that the benefit of this Agreement is
assigned to the Purchaser or (upon giving further
written notice to the Vendor) to another company
which is an Affiliate of the Purchaser (any such
further assignment to be subject to the same
conditions as above).
(B) The Purchaser may, on one occasion only, also
assign all or any part of its rights and benefits
under this Agreement, including the Warranties
and any cause of action arising from any of them,
to a transferee of the entire share capital of
OIL Engineering Limited or of all or
substantially all of the assets and undertaking
of OIL Engineering Limited Provided that
(1) without prejudice to the provisions of
Schedule 11, the amount of the liability of
the Vendor to any such transferee to whom
any such assignment is made shall not, in
respect of any breach of the Warranties or
any cause of action arising, exceed the
lesser of:
(a) the amount of the loss of such
transferee for which the Vendor would
otherwise be liable hereunder in
respect of the relevant breach of
Warranty giving rise to such cause of
action, and
(b) the amount of the loss of the
Purchaser for which the Vendor would
have been liable hereunder in respect
of the relevant breach of Warranty
giving rise to such cause of action;
and
(2) the Vendor shall have no liability
whatsoever to such transferee (if it
otherwise would have) unless such
transferee fully observes the obligations
expressed to be undertaken by the Purchaser
pursuant to Schedule 11 of this Agreement.
11.2 Entire Agreement
(A) This Agreement, together with any documents,
schedules or exhibits referred to in it
(including, inter alia, the Confidentiality
Agreement), constitutes the whole agreement
between the parties relating to its subject
matter and supersedes and extinguishes any prior
drafts, agreements, undertakings,
representations, warranties and arrangements of
any nature, whether in writing or oral, relating
to such subject matter.
(B) The Purchaser acknowledges that it has not been
induced to enter into this Agreement by any
representation or warranty other than those
contained in this Agreement (as qualified by the
Disclosure Letter) and, having negotiated and
freely entered into this Agreement, agrees that
it shall have no remedy in respect of any other
such representation or warranty except in the
case of fraud. The Purchaser acknowledges that
its legal advisers have explained to it the
effect of this sub-clause.
(C) No variation of this Agreement shall be effective
unless made in writing and signed by each of the
parties.
11.3 Agreement Survives Completion
The covenants, conditions, provisions and Warranties
contained in this Agreement will not merge or terminate
upon Completion, but to the extent that they have not
been fulfilled and satisfied or are capable of having
effect will remain in full force and effect.
11.4 Rights etc cumulative and other matters
(A) The rights, powers, privileges and remedies
provided in this Agreement are cumulative and are
not exclusive of any rights, powers, privileges
or remedies provided by law or otherwise.
(B) No failure to exercise nor any delay in
exercising any right, power, privilege or remedy
under this Agreement shall impair or operate as a
waiver thereof.
(C) No single or partial exercise of any right,
power, privilege or remedy under this Agreement
shall prevent any further or other exercise
thereof or the exercise of any other right,
power, privilege or remedy.
11.5 Further Assurance
At any time after Completion, the Vendor shall, at the
request and cost of the Purchaser, execute or procure
the execution of such documents and do or procure the
doing of such acts and things as the Purchaser may
reasonably require for the purpose of vesting the Sale
Shares in the Purchaser or its nominees and giving to
the Purchaser the full benefit of all the provisions of
this Agreement.
11.6 Invalidity
If any provision of this Agreement shall be held to be
illegal, void, invalid or unenforceable under the laws
of any jurisdiction, the legality, validity and
enforceability of the remainder of this Agreement in
that jurisdiction shall not be affected, and the
legality, validity and enforceability of the whole of
this Agreement shall not be affected in any other
jurisdiction.
11.7 Counterparts
This Agreement may be executed in any number of
counterparts, which shall together constitute one
Agreement. Any party may enter into this Agreement by
signing any such counterpart.
11.8 Notices
(A) Any notice (which term shall include any other
communication) required to be given under this
Agreement or in connection with the matters
contemplated by it shall, except where otherwise
specifically provided, be in writing in the
English language.
(B) Any such notice shall be addressed as provided in
sub-clause 11.8(C) and may be:-
(1) personally delivered, in which case it
shall be deemed to have been given upon
delivery at the relevant address; or
(2) if within the United Kingdom, sent by first
class pre-paid post, in which case it shall
be deemed to have been given two Business
Days after the date of posting; or
(3) if from or to any place outside the United
Kingdom, sent by pre-paid priority airmail,
in which case it shall be deemed to have
been given seven Business Days after the
date of posting; or
(4) sent by facsimile, in which case it shall
be deemed to have been given when
despatched, subject to confirmation of
uninterrupted transmission by a
transmission report, provided that any
notice despatched by facsimile after 17.00
hours on any day shall be deemed to have
been received at 08.00 on the next Business
Day.
(C) The addresses and other details of the parties
referred to in sub-clause 11.8(B) are, subject to
sub-clause 11.8(D):-
(1) Name: Ocean Group plc
For the attention of: Finance Director,
Ocean Group plc
Address: Ocean House, The
Ring, Bracknell,
Berkshire RG12 1AD
Facsimile number: 01344 744352
(2) Name: Tidewater Inc.
For the attention of: William C.
O'Malley
Address: Tidewater Place,
1440 Canal Street,
New Orleans, LA 70112
Facsimile number: 001 504 566 4580
With copies to
(a) Cliffe Laborde, Senior Vice President
and General Counsel, Tidewater Inc.,
at the same postal address, on
facsimile number 001 504 566 4559;
and
(b) Curtis R. Hearn, Jones Walker,
Waechter, Poitevent, Carrere &
Denegre, Place St. Charles, 201 St.
Charles Avenue, New Orleans,
Louisiana 70170-5100 USA, on
facsimile number 001 504 582 8108.
(D) Any party to this Agreement may notify the other
parties of any change to the address or any of
the other details specified in sub-clause
11.8(C), provided that such notification shall
only be effective on the date specified in such
notice or five Business Days after the notice is
given, whichever is later.
12. Costs
12.1 Pay own costs
Subject to sub-clause 12.2, each party shall pay its own
costs of and incidental to the negotiation, preparation,
execution and carrying into effect of this Agreement.
12.2 Vendor pays
The Vendor shall on demand fully reimburse and indemnify
the Purchaser in respect of all expenses which the
Purchaser has incurred(including legal fees and
expenses) in:-
(A) the negotiation, preparation, execution and
carrying into effect of this Agreement; and
(B) investigating the affairs of the Sale Group.
with, in each case, any VAT chargeable if, by reason of
a knowing and intentional breach of any Warranty or
covenant of this Agreement by the Vendor, the Purchaser
shall exercise the right conferred by clause 8.4 of this
Agreement to terminate this Agreement.
13. Law and Jurisdiction
13.1 English Law
This Agreement shall be governed by, and construed in
accordance with, English law.
13.2 Jurisdiction
In relation to any legal action or proceedings to
enforce this Agreement or arising out of or in
connection with this Agreement ("proceedings") each of
the parties irrevocably submits to the jurisdiction of
the English courts and waives any objection to
proceedings in such courts on the grounds of venue or on
the grounds that the proceedings have been brought in an
inconvenient forum.
13.3 Process Agent
The Purchaser appoints Simmlaw Services Limited of 21
Wilson Street London EC2M 2TX as its process agent to
receive on its behalf service of process in any
proceedings in England. Service upon the process agent
shall be good service upon the Purchaser whether or not
it is forwarded to and received by the Purchaser. If
for any reason the process agent ceases to be able to
act as process agent, or no longer has an address in
England, the Purchaser irrevocably agrees to appoint a
substitute process agent with an address in England
acceptable to the Vendor and to deliver to the Vendor a
copy of the substitute process agent's acceptance of
that appointment within 30 days.
14. Environmental Indemnity
14.1 Indemnity
The Vendor hereby agrees with the Purchaser (for itself
and as agent of each member of the Sale Group) to
indemnify and keep the Purchaser and each member of the
Sale Group fully and effectively indemnified from and
against any and all liabilities, losses, damages,
claims, costs, expenses, interest, awards, judgments and
penalties (including, without limitation, proper and
reasonable lawyers' and consultants' fees and expenses)
(hereinafter a "Loss") actually suffered or incurred by
the Purchaser or any member of the Sale Group by reason
of an Environmental Claim relating to or arising or
resulting from or which would not have been made but for
(i) any Release prior to the date hereof of Hazardous
Materials or Waste into the Environment on or about or
from the Shetland Property or (ii) any breach of
Environmental Laws prior to the date hereof at or from
the Shetland Property.
14.2 Indemnity Period
The Environmental Indemnity shall only apply in respect
of Environmental Claims made against the Purchaser or
any member of the Sale Group on or prior to the tenth
anniversary of the date of this Agreement.
14.3 Notification
The Purchaser shall provide prompt written notice to the
Vendor of any matter of which the Purchaser shall become
aware which gives rise to or which the Purchaser has
reason to believe may give rise to a Loss by reason of
an Environmental Claim and, as a result, a claim under
the Environmental Indemnity.
14.4 Environmental Proceedings
(A) In relation to Environmental Proceedings in the
form of third party claims resulting from any
matter to which the indemnity in clause 14.1 is
applicable, the Vendor (or such other person as
the Vendor shall determine) shall have the right
at any time to assume conduct of such
Environmental Proceedings Provided that such
right is subject to the Vendor agreeing at the
time of such assumption that any Loss which may
be incurred by the Purchaser or any member of the
Sale Group shall (subject to the other provisions
of this clause 14) be recoverable under the
indemnity contained in sub-clause 14.1.
(B) If Environmental Proceedings arise under sub-
clause 14.4(A) above and the Vendor does not
assume conduct of such Environmental Proceedings
as provided for in such sub-clause, the Purchaser
(or such other person as the Purchaser shall
determine) shall have conduct of such
Environmental Proceedings.
(C) In relation to Environmental Proceedings in the
form of an action brought by a regulatory
authority resulting from any matter to which sub-
clause 14.1 applies, the Purchaser (or such other
person as the Purchaser shall determine) shall
have the right to assume conduct of such
Environmental Proceedings.
(D) The person having conduct of any Environmental
Proceedings as provided for above (the "Conduct
Party") shall ensure that:
(1) reasonably frequent and detailed reports
shall be provided to the other party
regarding the progress of such
Environmental Proceedings;
(2) save as may be prohibited by law, copies of
all correspondence and documents passing
between the parties to such Environmental
Proceedings shall be provided to the other
party;
(3) all reasonable efforts are made in such
Environmental Proceedings to minimise
losses;
(4) all reasonable instructions and requests of
the other party in relation to such
Environmental Proceedings are complied
with;
(5) no settlement or admission (including any
failure to or decision not to appeal) shall
be agreed or made without the prior consent
in writing of the other party, provided
that such consent is not to be unreasonably
withheld; and
(6) the other party shall provide or procure
the provision to the Conduct Party of all
such information and assistance as the
Conduct Party may reasonably request.
14.5 Environmental Limitations
(A) Cap
The liability of the Vendor under the
Environmental Indemnity shall not in any event
exceed in aggregate (i) the purchase price
payable hereunder for the Sale Shares as set out
in clause 3.1 (subject to adjustment as therein
referred to) plus the amount of the Indebtedness
less (ii) all sums paid by the Vendor under this
Agreement by reason of any breach by the Vendor
of its obligations contained herein or of the
Warranties or under the indemnities in any of the
schedules hereto.
(B) Acts and omissions after Completion
(1) The Purchaser shall not be entitled to
claim under the Environmental Indemnity to
the extent that the relevant claim would
not have arisen but for, results from or is
increased by a member of the Sale Group or
their respective officers, directors,
employees, partners, agents, contractors,
sub-contractors or consultants disclosing
after Completion information to any
relevant authority or any other person,
except where the disclosure is required by
law.
(2) The Purchaser shall procure that with
effect from Completion each member of the
Sale Group shall so far as reasonable
avoid, reduce and mitigate any claim under
the Environmental Indemnity provided that
this clause shall not entitle the Purchaser
to claim for the cost of work carried out
before notification of a potential
Environmental Claim is made under sub-
clause 14.3.
(C) Future Laws
The Purchaser shall only be entitled to claim
under the Environmental Indemnity the extent that
the claim results from Environmental Laws which
are in force and directly binding on the
Purchaser or the relevant member of the Sale
Group as at Completion. The Purchaser and each
member of the Sale Group shall not be entitled to
be paid under the Environmental Indemnity to the
extent that the claim would not have arisen but
for, results from or is increased by
Environmental Laws which come into force after
the date of Completion (except for the
contaminated land provisions set out at the date
of Completion in section 57 of the Environment
Act 1995 and including the first set of
regulations and guidance which comes into force,
but not subsequent amendments to them) or changes
in policy, guidance or practice by the relevant
authorities after the date of Completion.
(D) Losses
The Purchaser shall not be entitled to claim
under the Environmental Indemnity in respect of
loss of profits, loss of sales, loss of
production, business interruption, or any other
indirect or consequential loss or damage.
14.6 Environmental Definitions
In this clause 14 the following expressions shall bear
the following respective meanings:
"Environment" means all or any of the media of air,
water and land and in relation to the media of air and
water includes, without limitation, the air and water
within buildings and the air and water within other
natural or man-made structures above or below ground and
any water contained in any underground strata;
"Environmental Claims" means any and all actions, suits,
demands, demand letters, costs, claims, liens, notices
of non-compliance or violation, notices of liability or
potential liability, investigations, proceedings,
consent orders or consent agreements relating in any way
to any Environmental Law, any Environmental Matter or
Hazardous Material or Waste arising from any alleged
injury or threat of injury to health, safety or to the
Environment or damage or alleged damage to property;
"Environmental Indemnity" means the indemnity contained
at clause 14.1;
"Environmental Laws" means any law now in effect
relating to pollution or protection of the Environment,
health or safety or to the use, handling,
transportation, treatment, storage, disposal, release,
discharge of Hazardous Materials or Waste and, in
respect of the United Kingdom, section 57 and paragraph
162 of Schedule 22 to the Environment Act 1995 shall,
notwithstanding any provision in this Agreement to the
contrary, be deemed to be in force and applied on the
date hereof;
"Environmental Matters" means:
(i) the Release of, contact with and exposure of any
person to, Hazardous Materials or Waste; and
(ii) any other matters relating to the condition,
protection, maintenance or restoration of the
Environment or any part of it arising out of the
manufacturing, processing, treatment, handling,
storage, export or transportation of Hazardous
Materials or Waste;
"Environmental Proceedings" means criminal, civil,
judicial, regulatory or administrative proceeding suit
or action brought or taken by a relevant authority under
Environmental Laws or some other person (not being the
Purchaser) to which the indemnified person is a party;
"Hazardous Materials" means (a) oil, petroleum and
petroleum products, bi-products or breakdown products,
radioactive materials, asbestos-containing materials and
polychlorinated biphenyls, arsenic, chromium, copper,
mercury and (b) any other pollutant, contaminants,
chemicals, materials, articles or substances whether in
soluble, liquid or gaseous form which have resulted or
may result in the pollution or impairment of the
Environment;
"Law" means any Governmental, supra-Governmental,
federal, state, local or foreign statute, law, and any
court judgment, ordnance, regulation, rule, code, order,
code of practice, guidance (including the first version
which comes into force of any statutory guidance issued
under section 57 of the Environment Act 1995) or other
requirement having the force of law in any jurisdiction
(including common law);
"Release" includes spillage, escape, leaching, release,
discharge, leak or emission or continuing migration
howsoever caused;
"Shetland Property" means the property at Lerwick,
Shetland Islands previously owned or leased or occupied
by O.I.L. Limited;
"Waste" includes any unwanted or surplus substance
irrespective of whether it is capable of being recycled
or recovered or has any value.
A S W I T N E S S the hands of the duly authorised
representatives of the parties on the date first before
written.
SCHEDULE 1 : COMPLETION ARRANGEMENTS
1. Obligations
1.1 Vendor's Obligations
On Completion the Vendor shall:-
(A) deliver to the Purchaser:-
(1) duly executed transfers of the Sale Shares
by the registered holders thereof in favour
of the Purchaser or its nominees together
with the related share certificates;
(2) such waivers or consents as the Purchaser
may require to enable the Purchaser or its
nominees to be registered as holders of the
Sale Shares;
(3) the Completion Certificate referred to in
clause 4.5(A);
(4) the Indebtedness Certificate;
(5) duly executed and completed memoranda of
satisfaction (or equivalent document in any
overseas jurisdiction evidencing discharge
or release of any security) in respect of
that security identified for such treatment
in schedule 7 attached to the Disclosure
Letter ("the Security Schedule") in such
respective form as the Purchaser shall
reasonably require;
(6) duly executed and completed forms of
release in such respective form as the
Purchaser shall reasonably require
releasing the Sale Shares and/or the Sale
Group and/or the Vessels from the
guarantees and/or security (given with
respect to any loans, indebtedness or other
obligations of any member of the Vendor's
Group) which are identified for such
treatment in the Security Schedule;
(7) duly executed letters of consent in such
respective form as the Purchaser shall
reasonably require in respect of the change
of control provisions identified in the
documents of the Sale Group listed or
referred to in paragraph 2 of this Schedule
1;
(B) deliver to the Purchaser, certified as correct by
the secretary of the relevant company, the
minutes of each board meeting referred to in sub-
paragraph (F);
(C) procure that the Directors and the secretary of
each member of the Sale Group submit letters of
resignation, subject to the Purchaser's
acceptance, retiring from all their offices as
such dated as of the Completion Date, and a deed
(in the agreed terms) made out in favour of the
relevant member of the Sale Group acknowledging
that following such loss of office such director
or secretary has no claim outstanding for
compensation, indemnity or otherwise and without
any payment under the Employment Protection
(Consolidation) Act 1978 (as amended) (it being
understood by the Purchaser that to the extent
that Vendor does not directly or indirectly own
100% of the share capital of a member of the Sale
Group, this obligation shall only apply to
directors and/or officers appointed to such
company by the Vendor, a member of the Sale Group
or an affiliate of the Vendor);
(D) procure the resignation of the auditors of each
member of the Sale Group of which the Vendor
directly or indirectly owns more than 50% of the
issued share capital in accordance with section
392 of the Companies Act 1985, accompanied by a
written statement pursuant to section 394 of that
Act that there are no circumstances connected
with their resignation which should be brought to
the notice of the members or creditors of each
such company and that no fees are due to them;
(E) deliver to the Purchaser as agent for the Sale
Group:-
(1) subject to compliance with law, all the
statutory and other books (duly written up
to but not including the Completion Date)
of each member of the Sale Group of which
the Vendor directly or indirectly owns more
than 50% of the issued share capital and
their certificate(s) of incorporation, any
certificates of incorporation on change of
name and common seal(s);
(2) certificates in respect of all issued
shares in the capital of each member of the
Sale Group expressed to be owned directly
or indirectly by the Vendor as set out in
Schedule 4;
(3) transfers of all shares (if any) in any
member of the Sale Group not held directly
by the Vendor (other than Sale Shares) and
which are expressed to be owned indirectly
by the Vendor in column (4) of Schedule 3
(other than shares held by another member
of the Sale Group whose shares are
delivered pursuant to sub clause (2) or (3)
hereof);
(4) the title deeds to the Properties;
(5) certificates of ownership ( issued by the
appropriate government or regulatory
authority) with respect to each Vessel;
(6) a copy (certified as correct by the
secretary of the Vendor) of the minutes of
a duly held meeting of a committee of the
board of the Vendor authorising the
execution by the Vendor of this Agreement.
(7) a receipt in agreed terms duly executed by
the Vendor (for itself and each other
member of the Vendor's Group) acknowledging
repayment of the Indebtedness and
confirming that there is as at the
Completion Date no other or further
indebtedness or other amounts owing by any
member of the Sale Group in favour of or to
any member of the Vendor's Group on any
account whatsoever; and
(8) an assignment in terms reasonably required
by the Purchaser duly executed by the
Vendor or other relevant member of the
Vendor's Group of the trade or service
marks or trade names OSA, OIL or any
derivatives thereof in favour of such
member or members of the Sale Group as the
Purchaser shall specify.
(F) procure a board meeting of each member of the
Sale Group of which the Vendor owns directly or
indirectly more than 50% of the issued share
capital to be held at which there shall be:-
(1) with respect to those members of the Sale
Group whose shares will be transferred to
and registered in the name of Purchaser
hereunder, passed a resolution to register
the transfers of the Sale Shares and
(subject only to due stamping) to register,
in the register of members, each transferee
as the holder of the shares concerned;
(2) appointed as directors and/or secretary
such persons as the Purchaser may nominate,
such appointments to take effect upon
Completion;
(3) tendered the resignations and
acknowledgements of the directors and
secretary referred to in sub-paragraph (C);
(4) changed the situation of the registered
office and (subject to the Companies Acts)
the accounting reference date, each as the
Purchaser may direct.
(G) procure that any member of the Vendor's Group
which uses O.I.L. as part of its corporate name
to pass a special resolution to change its name
to another name which does not contain O.I.L. or
anything similar (save for O.I.L. Shetland
Limited as provided in clause 7.5(B)).
(H) procure the release and removal from the registry
of ships in the relevant country of registration
in respect each of the Vessels, the security
identified for such treatment in the Security
Schedule.
(I) procure O.I.L. Limited grants a licence in the
agreed terms to Cory Towage Limited guaranteed by
the Vendor in respect of the Property at
Birkenhead.
(J) grant a licence in agreed terms to O.I.L. Limited
in respect of the Property at Woking until 31
December 1998.
1.2 Purchaser's Obligations
On Completion the Purchaser shall by way of wire
transfer of immediately available funds to an account
specified by the Vendor:
(A) pay the sum of 328 million pounds sterling in
respect of (1) the consideration for the Sale
Shares as specified in sub-clause 3.1(A) and (2)
the payment of the Indebtedness on behalf of the
Sale Group as specified in sub-clause 3.3; and
(B) pay the Estimated Completion Date Payment for
which provision is made in Schedule 9 hereof.
2. Documents requiring consents
Consent(s) under or pursuant to the following provisions
of the following documents:-
(A) under clause 11 and a waiver of the special
condition numbered 1 each pursuant to the letter
agreement dated 9 February 1995 between Hongkong
Bank Malaysia Berhad ("HK Bank") and Ocean Fleet
Sdn Bhd in respect of the vessel "MV OSA London",
duly executed by HK Bank;
(B) under clause 11 and a waiver of the special
condition numbered 1 each pursuant to the letter
agreement dated 13 February 1995 between HK Bank
and Ocean Fleet Two Sdn Bhd in respect of the
vessel "OSA Hustler", duly executed by HK Bank;
(C) pursuant to clauses 14.1 of the Financial
Agreements dated 28 May 1993, 5 August 1993, 10
September 1993, 27 August 1993, 28 May 1993, 28
May 1993 and 28 May 1993 each between Lloyds Bank
PLC ("Lloyds") and OIL Limited in respect of the
vessels "OIL Bonny", "OIL Benin", "OIL Benue",
"OIL Randan", "OIL Orashi", "OIL Otamiri" and
"OIL Ogun" respectively, duly executed by Lloyds;
(D) pursuant to clauses 4.1 of the Guarantee
Agreements dated 28 May 1993, 5 August 1993, 10
September 1993, 27 August 1993, 28 May 1993, 28
May 1993 and 28 May 1993 each between Lloyds and
the Secretary of State for Trade and Industry
("SSTI") in respect of the vessels "OIL Bonny",
"OIL Benin", "OIL Benue", "OIL Randan", "OIL
Orashi", "OIL Otamiri" and "OIL Ogun"
respectively, duly executed by the SSTI;
(E) under clause 25.2 of the Terminal Services
Agreement dated 4 September 1992 made between
Canadianoxy Offshore International Ltd ("Canoxy")
and OIL Limited, duly executed by Canoxy; and
(F) those other documents referred to in paragraph 5
of the Security Schedule.
SCHEDULE 2 : COMPLETION CONDITIONS
Completion Conditions
(A) Completion Conditions applicable to both
parties:-
(1) the passing at a duly convened and held
Extraordinary General Meeting of the Vendor
of a resolution to approve the transactions
described in this Agreement;
(2) the Office of Fair Trading having indicated
in terms satisfactory to the Purchaser that
it is not the intention of the Secretary of
State to refer the proposed acquisition of
the Sale Group and/or the Sale Shares by
the Purchaser or any matters arising
therefrom to the Monopolies and Mergers
Commission;
(3) no United Kingdom or United States
government or governmental, supra-national
or state agency or regulatory body having
instituted any action, suit or
investigation for the purpose of
restraining or prohibiting the transaction;
(4) no order or judgment of any court or
governmental, statutory or regulatory body
in the United Kingdom or elsewhere having
been issued or made prior to Completion
which has the effect of making the
acquisition by the Purchaser of those of
the Sale Shares which are shares in the
capital of OIL Limited and/or OSA Marine
Services GmbH unlawful or otherwise
prohibiting the Purchaser from acquiring
such shares on the Completion Date.
(B) Additional Completion Condition to the
Purchaser's obligations
The Vessels, taken as a whole, are of an industry
standard to be expected by a prudent operator,
taking account of:
(a) the age and type of each Vessel;
(b) the nature of the use to which such
Vessel is put and the environment in
which it operates in the performance
of the business of the members of the
Sale Group; and
(c) the position of such vessel in its
dry-dock and repair and maintenance
schedule
(such standard taking account of such
matters in this paragraph (B) being
referred to as "Satisfactory Condition")
and, to the extent that the Vessels are not
in Satisfactory Condition, the cost of
putting them in Satisfactory Condition (the
"Upgrade Cost") does not exceed 15 million
pounds sterling PROVIDED that expenditures
included in the Sale Group's budget for
calendar year 1997 (less that actually
spent or used up to date) and made known to
the Purchaser at the date of this Agreement
and to be made in respect of the
outfitting, equipping, repair, maintenance,
insurance and dry-docking costs of the
Vessels shall not be included in any
calculation of the Upgrade Cost.
SCHEDULE 5 : WARRANTIES
Part I - Introduction
1. In this Schedule where the context admits:-
1.1 "Audited Accounts" means the audited financial
statements of each member of the Sale Group prepared in
accordance with accounting principles generally accepted
in the United Kingdom (with respect to companies
incorporated in the United Kingdom) or its jurisdiction
of incorporation (with respect to companies incorporated
under the laws of other countries) for (in respect of
those members of the Sale Group incorporated in the
United Kingdom) the accounting reference period ended on
the Balance Sheet Date and (in respect of each member of
the Sale Group) for each of the two accounting reference
periods the last of which ended prior to the accounting
reference period ended on the Balance Sheet Date, which
financial statements comprise a balance sheet, profit
and loss account, cash flow statement, notes, and
auditors' and directors' report and true copies of which
are annexed to the Disclosure Letter;
2 "Balance Sheet Date" means 31 December 1996;
"Computer Systems" means all computer systems used by or
for the benefit of the Sale Group at any time, including
computer processors, associated and peripheral
equipment, computer programs, technical and other
documentation, and data entered into or created by such
computer systems from time to time;
"Companies Acts" means statutes from time to time in
force concerning companies including (in relation to
companies incorporated in the United Kingdom) the
Companies Act 1985, the Companies Act 1989, the
Companies Securities (Insider Dealing) Act 1985 and the
Companies Consolidation (Consequential Provisions) Act
1985;
"encumbrance" includes any interest or equity of any
person (including any right to acquire, option or right
of pre-emption) or any mortgage, charge, pledge, lien,
assignment, hypothecation, security interest, title
retention or any other security agreement or
arrangement;
"environmental liability" includes liability for any
form of damage to the environment and for any of the
following: damage to living organisms or persons
(including impairment of health and interference with
amenity); damage to land or personal property;
interference with riparian or other proprietary or
possessory rights; and public or private nuisance, and
includes any fines or penalties imposed and any costs or
expenses of remediation;
"intellectual property" means patents, trade marks,
service marks, rights in any designs, trade or business
names and copyright (whether, in each case, registered
or unregistered, and including applications for
registration of any such property and all rights of a
similar nature or having similar effect which may
subsist in any part of the world);
"SSAP" means Statement of Standard Accounting Practice
in force at the date hereof; any question whether a
person is connected with another shall be determined in
accordance with section 839 Income and Corporation Taxes
Act 1988 which shall apply in relation to this schedule
as it applies in relation to that Act;
"Vessels" means the vessels described in Schedule 12;
and
references to any Act, statutory instrument, regulation,
bye-law or other requirement of English law and to any
English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status,
court, official or any legal concept or thing shall in
respect of any jurisdiction other than England be deemed
to include that which most nearly approximates in that
jurisdiction to the English legal term.
1.2 Where, in this Schedule, a term is defined in and for
the purpose of a particular paragraph or sub-paragraph,
the relevant definition shall apply, where the context
admits, for all other purposes of this Schedule.
Part II - Warranties
2. The Vendor warrants to and for the benefit of the
Purchaser, that, except for matters fairly disclosed in
or by the Disclosure Letter:-
2.1 The Sale Group and the Vendor
(A) Capacity of the Vendor
The Vendor has full power and authority to enter
into and perform this Agreement, and any other
agreement entered into on the date hereof or at
Completion, and this Agreement constitutes legal
and binding obligations of the Vendor.
(B) Liabilities owing to or by the Vendor
There is not outstanding any indebtedness or
other liability (actual or contingent) owing by
any member of the Sale Group to the Vendor or any
member of the Vendor's Group or (so far as the
Vendor is aware) to any Director of any of them,
nor is there any indebtedness owing to any member
of the Sale Group by any such company or (so far
as the Vendor is aware) any such person.
(C) Vendor's other interests
No member of the Vendor's Group nor (so far as
the Vendor is aware) any Director of any such
member other than as a nominee has any interest,
direct or indirect, in any business (other than
that now carried on by the Sale Group) which is
or is likely to be or become competitive with the
business now carried on by the Sale Group or
intends to acquire any such interest.
2.2 Share Capital; The Constitutions
(A)Share Capital - The Vendor owns, directly or
indirectly, all of the Sale Shares, all of which
are duly authorized, validly issued, fully paid
and non-assessable. Except for the Vendor or
another member of the Sale Group and except as
indicated on Schedule 4, no other person has any
interest in the share capital of any member of
the Sale Group. To the extent that the Vendor
owns, directly or indirectly, less than 100% of
the issued share capital of any member of the
Sale Group, the Vendor has no reason to believe
it does not have the power to effectively control
the operations of such member.
(B) Options etc. - No person has the right (whether
exercisable now or in the future and whether
contingent or not) to call for the allotment,
issue, sale, transfer or conversion of any share
or loan capital of any member of the Sale Group
under any option or other agreement (including
conversion rights and rights of pre-emption).
(C) Memorandum and Articles - The copy of the
memorandum and articles of association (or
equivalent constitutional document) of each
member of the Sale Group annexed to the
Disclosure Letter is true and complete and has
embodied in or annexed to it a copy of every
resolution or agreement as is required by law to
be embodied in or annexed to it, and sets out
completely the rights and restrictions attaching
to each class of authorised share capital of each
member of the Sale Group.
2.3 The Sale Group and its Investments
(A)Particulars of Sale Group - The particulars of
the Sale Group set out in Schedule 4 are true and
complete in each case and no member of the Sale
Group has any other subsidiary save as set out in
the said Schedule 4.
(B) Investments, associations and branches - No
member of the Sale Group:-
(1) is the holder or beneficial owner of, or
has agreed to acquire, any class of the
share or other capital of any other company
or corporation (whether incorporated in the
United Kingdom or elsewhere) other than of
another member of the Sale Group; or
(2) is, or has agreed to become, a member of
any partnership, joint venture, consortium
or other unincorporated association, body
or undertaking in which it is to
participate with any other in any business
or investment.
(C) City Code - During the 10 years prior to the date
of this Agreement, no member of the Sale Group
has:-
(1) had at any time any equity share capital
listed on the London Stock Exchange;
(2) had any dealings in its equity share
capital advertised in a newspaper on a
regular basis for a continuous period of at
least 6 months;
(3) had at any time any equity share capital
subject to a marketing arrangement as
described in section 163(2)(b) of the
Companies Act 1985, being by way of
example, subject to dealings on the
Unlisted Securities Market or the
Alternative Investments Market; or
(4) filed a prospectus, at the Companies'
Registry, for the issue of any equity share
capital.
2.4 Compliance with Laws
(A) Compliance with Laws - Each member of the Sale
Group has conducted its business in all material
respects in accordance with all applicable laws
and regulations of all countries within the
United Kingdom and any relevant foreign country
and there is no order, decree or judgement of any
Court or governmental agency of the United
Kingdom or any foreign country outstanding
against any member of the Sale Group which may
have a material adverse effect upon the business
or assets of the Sale Group, taken as a whole.
(B) Licences etc - Each member of the Sale Group
possesses all material licences, consents,
permits and authorities (public and private) to
enable it to carry on its business effectively in
the places and in the manner in which such
business is now carried on and all such licences,
consents, permits and authorities are valid and
subsisting and the Vendor knows of no reason why
any of them should be suspended, cancelled or
revoked.
(C) Breach of statutory provisions - No member of the
Sale Group nor any of its officers, agents or
employees (during the course of their duties in
relation to such member) have committed, or
omitted to do, any act or thing the commission or
omission of which is, or could be, in
contravention of any Act, order, regulation or
the like in the United Kingdom or elsewhere which
is punishable by imprisonment, fine or other
penalty.
(D) Investigations and Inquiries - So far as the
Vendor is aware no member of the Sale Group has
received notification that any investigation or
inquiry is being or has been conducted by any
governmental or other official body in respect of
the affairs of any member of the Sale Group and
the Vendor is not aware of any circumstances
which would give rise to such investigation or
inquiry.
(E) Litigation - No member of the Sale Group (i) is
engaged in any litigation or arbitration,
administrative or criminal proceedings, (ii) is a
party to any undertaking or assurance given to
any Court or governmental agency or the subject
of any injunction which is still in force, or
(iii) has pending against it any litigation or is
a party to any arbitration, administrative or
criminal proceeding. So far as the Vendor is
aware:-
(1) no litigation or arbitration,
administrative or criminal proceedings is
threatened by or against any member of the
Sale Group; and
(2) there are no facts likely to give rise to
any such litigation or arbitration,
administrative or criminal proceedings.
(F) Fair Trading - No agreement, practice or
arrangement carried on by any member of the Sale
Group during the past six years or to which any
such member is a party or which continues to have
a continuing effect:-
(1) is or ought to be registered in accordance
with the provisions of the Restrictive
Trade Practices Acts 1976 and 1977 or
contravenes the provisions of the Resale
Prices Act 1976 or is or has been the
subject of any enquiry, investigation or
proceeding under any of those Acts; or
(2) is or has been the subject of any enquiry,
investigation, reference or report under
the Fair Trading Act 1973 or the
Competition Act 1980 or constitutes an
anti-competitive practice within the
meaning of the 1980 Act; or
(3) infringes Article 85, or constitutes an
abuse of dominant position contrary to
Article 86, of the Treaty establishing the
European Economic Community or infringes
any regulation or other enactment made
under Article 87 and/or Article 235 of that
Treaty or is or has been the subject of any
enquiry, investigation or proceeding in
respect thereof; or
(4) has been notified to the Directorate
General of Competition of the Commission of
the European Communities and/or the EFTA
Surveillance Authority; or
(5) infringes any other competition, anti-
restrictive trade practice or anti-trust
law or legislation applicable in any
jurisdiction in which such member has
assets or carries on business or in which
the activities of such member may have an
effect.
No member of the Sale Group has given any
assurance or undertaking (written or oral) to the
Restrictive Practices Court, the Director General
of Fair Trading, the Secretary of State for Trade
and Industry, the Commission, the EFTA
Surveillance Authority or the Court of Justice
for the European Communities or to any other
court, person or body or is subject to any
decision, regulation, order or other instrument
made by any of them in any such case relating to
any matter referred to in this sub-paragraph (F).
No member of the Sale Group is in default under,
or in contravention of, any Act, Article,
decision, regulation, order or other instrument
or of any undertaking relating to any matter
referred to in this sub-paragraph (F).
(G) No member of the Sale Group is or has been in
receipt of any aid which could be construed as
falling within Article 92(1) of the EC Treaty
other than:-
(1) aid in operation at the date of UK
Accession to the Community which is treated
as existing aid pursuant to Article 93(1);
or
(2) aid or any alteration to existing aid
falling within Article 92(3) which has been
duly notified to the European Commission
pursuant to Article 93(3) and approved by
the European Commission;
and no member of the Sale Group is aware of any
pending or threatened investigation, complaint,
action or decision in relation to the receipt or
alleged receipt by it of any aid or alleged aid.
(H) Defective products - No member of the Sale
Group has manufactured, sold or supplied any
product or service which:-
(1) is or was, in any material respect, faulty
or defective; or
(2) does not comply in any material respect
with any warranty or representation,
express or implied, made by or on behalf of
such member in respect of it or with all
laws, regulations, standards and
requirements applicable to it.
(I) Inducements - So far as the Vendor is aware, no
officer, agent or employee of any member of the
Sale Group has paid any bribe or used any of such
member's assets unlawfully to obtain an advantage
for any person.
2.5 The Sale Group's and Vendor's Solvency
(A) Winding Up - No order has been made, petition
presented or resolution passed for the winding up
of any member of the Sale Group or the Vendor.
No member of the Sale Group has been a party to
any transaction which could be avoided in a
winding up.
(B) Administration and Receivership - No steps have
been taken for the appointment of an
administrator or receiver (including an
administrative receiver) of all or any part of
the assets of any member of the Sale Group.
(C) Compositions - No member of the Sale Group has
made or proposed any arrangement or composition
with its creditors or any class of its creditors.
(D) Insolvency - No member of the Sale Group is
insolvent, is unable to pay its debts within the
meaning of the insolvency legislation applicable
to such member or and has stopped paying its
debts as they fall due.
(E) Unsatisfied Judgments - No distress, execution or
other process has been levied against any member
of the Sale Group or action taken to repossess
goods in such member's possession which has not
been satisfied in full. No unsatisfied judgment
is outstanding against any member of the Sale
Group.
(F) Floating Charges - No floating charge created by
any member of the Sale Group has crystallised
and, so far as the Vendor is aware, there are no
circumstances likely to cause such a floating
charge to crystallise.
(G) Analogous Events - No event analogous to any of
the foregoing has occurred in or outside England.
2.6 The Sale Group's Accounts and Records
(A)Books and records - All accounts, books,
ledgers, financial and other records of
whatsoever kind (together the "records") of each
member of the Sale Group:-
(1) have been properly maintained in accordance
with all applicable legal requirements;
(2) are up-to-date; and
(3) do not contain or reflect any material
inaccuracies or discrepancies
and no notice or allegation that any of the
records is incorrect or should be rectified has
been received.
(B) Accounts - The Audited Accounts:-
(1) were prepared in accordance with the
requirements of all relevant statutes and
accounting practices generally accepted in
the relevant jurisdiction at the time they
were audited;
(2) showed a true and fair view of the assets
and liabilities of each member of the Sale
Group as at the end of the accounting
reference period to which they relate, and
the profits of each member of the Sale
Group for the period to which they relate;
(3) apply bases and policies of accounting
which have been consistently applied in the
audited financial statements of each member
of the Sale Group for the three accounting
reference periods ended on the Balance
Sheet Date.
(C) Provisions for liabilities - Proper provision in
accordance with accounting practices generally
accepted in the relevant jurisdiction at the time
they were audited has been made in the Audited
Accounts for all actual liabilities of each
member of the Sale Group outstanding at the end
of the accounting referencing period to which
they relate and for all other liabilities of each
member of the Sale Group then outstanding whether
contingent, known, quantified, disputed or not,
including the cost of any work or material for
which payment has been received or credit taken,
any future loss which may arise in connection
with uncompleted contracts and any claims against
each member of the Sale Group in respect of
completed contracts.
(D) Prepared Financial Statements - There is
scheduled to the Disclosure Letter as Schedule 9
thereto a balance sheet and profit and loss
account which reflects the combined financial
position and profits and losses of the members of
the Sale Group as of 31 December, 1996 (the
"Prepared Financial Statements"). The Prepared
Financial Statements have been derived from the
Audited Accounts and, in respect of members of
the Sale Group not incorporated in the United
Kingdom, consolidation schedules used for the
purposes of the Vendor's consolidated audited
financial statements for the 12 month period
ended 31 December 1996. The Prepared Financial
Statements include all adjustments necessary to
eliminate intercompany items (between members of
the Sale Group) and to reflect any accounting
differences between the Audited Accounts and such
consolidation schedules. The Prepared Financial
Statements show, on a combined basis, in
accordance with accounting principles generally
accepted in the United Kingdom, a true and fair
view of the assets and liabilities at the Balance
Sheet Date and the profits or losses for the
twelve months then ended of the members of the
Sale Group.
(E) Returns - Each member of the Sale Group has
complied in all material respects with the
provisions of the Companies Acts or, to the
extent applicable, comparable provisions of the
laws of other jurisdictions, and all returns,
particulars, resolutions and other documents of
or relating to such members required to be
delivered to the Companies' Registry or to any
other authority whatsoever have been properly
made and delivered. All documents delivered to
the Companies' Registry or to such other
authority, whether or not required by law, were
true and accurate when so delivered.
2.7 The Sale Group's Business
(A) Business since the Balance Sheet
Date - Since the Balance Sheet Date, each
member of the Sale Group has carried on its
business in the ordinary and usual course
and without entering into any transaction,
assuming any liability or making any
payment which is not in the ordinary course
of its business and without any
interruption or alteration in the nature,
scope or manner of its business and there
has been no material adverse change in the
financial position of the Sale Group taken
as a whole. In particular, but without
limiting the foregoing, no member of the
Sale Group since the Balance Sheet Date has
or has committed to do any of the
following:-
(1) amended its memorandum or articles of
association or equivalent constitutional
documents; or
(2) entered into any new line of business (for
the purpose of which expression, the
geographic location of any vessel shall be
irrelevant); or
(3) entered into an agreement or arrangement or
permitted any action whereby another
company becomes its subsidiary or
subsidiary undertaking; or
(4) entered into any transaction other than on
arms' length terms and for full and proper
consideration; or
(5) acquired or agreed to acquire (i) by
merging or consolidating with, or by
purchasing a substantial portion of the
assets of, or by any other manner, any
business or any corporation, partnership,
joint venture, association or other
business organization or division thereof
or (ii) any assets that are material,
individually or in the aggregate, to such
party except purchases of inventory in the
ordinary course of business consistent with
past practices; or
(6) disposed of or entered into any agreement
to dispose of (whether by one transaction
or by a series of transactions) any Vessel,
or, except for dispositions made in the
ordinary course of business and consistent
with past practices, sold, leased,
licensed, mortgaged, encumbered or
subjected to any Encumbrance or otherwise
disposed of any of its other properties or
assets; or
(7) made or agreed to make any capital
expenditure other than those capital
expenditures made or to be made in the
ordinary course of business that are
consistent with past practices and that are
made or to be made out of available cash
(without using the proceeds of borrowings);
or
(8) other than from or with a member of the
Vendor's Group, taken or agreed to take any
loans, borrowings or other form of funding
or financial facility or assistance, or
entered into or agreed to enter into any
foreign exchange contracts, interest rate
swaps, collars, guarantees or agreement or
other interest rate instruments; or
(9) other than to or with a member of the
Vendor's Group, granted or agreed to grant
any loans or other financial facilities or
assistance to or any guarantees or
indemnities for the benefit of any person
or created or allowed to subsist any
mortgage, charge or other encumbrance over
the whole or any part of its undertaking,
property or assets; or
(10) entered into or agreed to enter into any
joint venture, partnership or agreement or
arrangement for the sharing of profits or
assets; or
(11) entered into or agreed to enter into any
death, retirement, profit sharing, bonus,
share option, share incentive or other
scheme for the benefit of any of its
officers or employees or made any variation
(including, but without limitation, any
increase in the rates of contribution) to
any such existing scheme or effected any
key man insurance; or
(12) commenced, compromised or discontinued any
legal or arbitration proceedings (other
than routine debt collection); or
(13) terminated the employment or office of any
of its directors, officers or senior
employees (here meaning an employee whose
present gross annual remuneration exceeds
50,000 pounds sterling) or appointed any
new director, officer or senior employee or
consultant (or, with respect to consultants
only, in receipt of gross fees from the
Sale Group of more than 50,000 pounds
sterling in any year) or materially altered
the terms of employment or engagement of
any director, senior employee or consultant
of the type described ; or
(14) declared, made or paid any dividend or
distribution (whether of capital or of
profits); or
(15) offered price reductions or discounts or
allowances on sales of services or provided
them at less than cost to an extent which
may materially affect its profitability; or
(16) (other than with respect to the entry into
of new Vessel charters, or the renewal or
extension of existing Vessel charters, or
the entry into of dry dock contracts, or
the renewal of insurances in any such case
in the ordinary course of business only)
made or agreed to any amendment, variation,
deletion, addition, renewal or extension to
or of, or terminated or given any notice or
intimation of termination of, or breached
or failed to comply with the terms of any
contract or arrangement involving receipts
or expenditure in any one year of greater
than 250,000 pounds sterling with respect
to contracts entered into by the
engineering and fabrication business and
50,000 pounds sterling for all other
businesses and operations of the Sale
Group; or
(17) paid or agreed to pay any remuneration, fee
or other sum to the Vendor or any member of
the Vendor's Group in excess of 50,000
pounds sterling (other than remuneration
properly accrued due or reimbursement of
business expenses properly incurred, in
each case as disclosed in the Disclosure
Letter); or
(18) created, allotted or issued or agreed to
create, allot or issue any of its shares or
other securities of whatsoever nature
convertible into its shares; or
(19) created, issued, redeemed or granted any
option or rights of subscription in respect
of any of its share capital or agree so to
do; or
(20) pledged or otherwise encumbered any of its
share capital; or
(21) failed to take any action required to
maintain any of its insurances in force or
knowingly done anything to make any of its
policies of insurance void or voidable; or
(22) changed its accounting reference date(s);
or
(23) changed its residence for taxation
purposes; or
(24) made any change to the accounting
procedures, principles or methods by
reference to which its accounts are drawn
up; or
(25) passed any resolutions in general meeting
or by way of written resolution including,
without limitation, any resolution for
winding up or to capitalise any profits or
any sums standing to credit of share
premium accounts or capital redemption
reserve fund or any other reserves; or
(26) to an extent material in the context of the
business of the Sale Group as a whole
violated any applicable law, statute, rule,
governmental regulation or order.
(B) Commission - No one is entitled to receive from
any member of the Sale Group any finder's fee,
brokerage or other commission in connection with
this Agreement or the sale and purchase of the
Sale Shares.
(C) Consequence of share acquisition by the
Purchaser - The acquisition of the Sale Shares by
the Purchaser or the execution, delivery or
performance of the terms of this Agreement will
not:-
(1) so far as the Vendor is aware, cause any
member of the Sale Group to lose the
benefit of any right or privilege it
presently enjoys or cause any person who
normally does business with such member not
to continue to do so on the same basis as
previously;
(2) so far as the Vendor is aware, relieve any
person of any obligation to any member of
the Sale Group or enable any person to
determine any such obligation or any right
or privilege enjoyed by such member or to
exercise any other right, whether under an
agreement with such member or otherwise;
(3) result in any present or future
indebtedness of any member of the Sale
Group becoming due and payable, or capable
of being declared due and payable, prior to
its stated maturity;
(4) give rise to or cause to become exercisable
any right of pre-emption;
(5) result in a breach of any provision of the
memorandum or articles of association of
any member of the Sale Group; or
(6) result in a breach of any order, judgement
or decree of any court or government agency
by which any member of the Sale Group is
bound.
(D) Grants - Full particulars of all grants or other
financial assistance received by each member of
the Sale Group from any supranational, national
or local authority or government agency (and all
applications for any such) are , other than with
respect to any of the same which have been repaid
in full, given in the Disclosure Letter and
there are no circumstances, including the sale of
the Sale Shares, which might lead to the whole or
any part of any such grant or other financial
assistance becoming repayable or forfeited.
(E) Insurances - True and complete copies of cover
notes relating to all the marine insurance
policies and an accurate summary of the terms of
cover of the non-marine insurances shared with
the Vendor's Group (together with the policy
details for the general liability insurances
which form part of such non-marine insurances)
(including in each such case details of the limit
and basis of cover under each policy and the
amount of the applicable excess) in which each
member of the Sale Group has an interest (the
"Sale Group's Insurances") are given in the
Disclosure Letter. The Sale Group's Insurances
afford the Sale Group adequate cover against such
risks as companies carrying on a similar business
as the Sale Group commonly cover by insurance and
in particular:
(1) so far as the Vendor is aware, each member
of the Sale Group has maintained all
insurance required by statute;
(2) so far as the Vendor is aware, each member
of the Sale Group is now, and has been at
all material times, adequately covered
against accident, damage, injury, third
party loss (including product liability),
loss of profits and other risks normally
insured against by companies carrying on a
similar business; and
(3) the insurance afforded under such Sale
Group's Insurances is consistent with all
contractual requirements under existing
agreements between any member of the Sale
Group and any third party.
All the Sale Group's Insurances are in full force
and effect and so far as the Vendor is aware
there are no circumstances which might lead to
any liability under any of the Sale Group's
Insurances being avoided by the insurers or the
premiums being increased and no event has
occurred which might give rise to any claim for
an amount in excess of 50,000 pounds sterling.
In relation to each of the Sale Group's
Insurances, all premiums have been paid on time
and there is scheduled to the Disclosure Letter
all outstanding claims for an amount in excess of
US$50,000 and the Vendor is not aware of any
circumstances likely to give rise to a claim.
(F) Trading Name - No member of the Sale Group trades
under any name other than (a) its corporate name
and (b) any other name given in the Disclosure
Letter.
(G) Dependence - There is scheduled to the Disclosure
Letter the top 20 customers of the Sale Group for
the year ended 31st December 1996 on the basis of
revenues identified by rank of priority and, so
far as the Vendor aware, none of such customers
has indicated an intention to cease trading with
any member of the Sale Group.
2.8 The Sale Group's Assets
(A)The Vessels -
(1) The legal owners of the Vessels and the
beneficial owners of the Vessels are
members of the Sale Group as shown in
Schedule 12.
(2) True and complete copies of all charter,
bareboat or operating agreements to which
any of the Vessels are subject, are
attached to the Disclosure Letter. Such
agreements are valid and binding and in
full force and effect, and no member of the
Sale Group is in default thereunder nor, so
far as Vendor is aware, is any other party
in default thereunder.
(3) None of the Vessels is subject to any
mortgage, charge, lien, encumbrance or
third party rights whatsoever, save as
expressly described in the Disclosure
Letter. No transactions or events have
occurred which could reasonably be expected
to give rise to the assertion of a lien
against any of the Vessels. No Vessel is
under arrest or detention and there are no
actual, pending, or to Vendor's knowledge,
threatened claims, actions or proceedings
against any of the Vessels or, to Vendor's
knowledge, any acts or occurrences that
could reasonably be expected to give rise
to any such claims, relating to any of the
Vessels.
(4) None of the Vessels (other than OIL Tracer)
is currently in drydock except for normal
routine drydockings for repair or
maintenance.
(5) In the case of Vessels registered in the
United Kingdom, each Vessel is registered
in the United Kingdom in the Registry of
British Ships, and in the case of Vessels
registered in other jurisdictions, each
Vessel is properly registered, and all fees
and dues have been paid to date in
connection with their registration.
(6) Each of the Vessels has the class notation
stated with reference to it in Schedule 12.
(B) Assets and Charges -
(1) Except for current assets disposed of by
any member of the Sale Group in the
ordinary course of its business, such
member is the beneficial owner of and has a
good and marketable title to all assets
included in the Audited Accounts for 1996
and to all assets which have been acquired
by such member since the Balance Sheet Date
and no such asset, nor any of the
undertaking, goodwill or uncalled capital
of such member, is subject to any
encumbrance or any agreement or commitment
to give or create any encumbrance and no
claim has been made by any person to be
entitled to any.
(2) Since the Balance Sheet Date, save for
disposals of current assets in the ordinary
course of its business, the assets of each
member of the Sale Group have been in the
possession, or under the control, of such
member.
(3) No asset is shared by any member of the
Sale Group with any other person and no
such member depends for its business upon
any assets, facilities or services owned or
supplied by other members of the Vendor's
Group.
(4) No charge in favour of any member of the
Sale Group is void or voidable for want of
registration.
(5) The assets owned collectively by the
members of the Sale Group constitute all of
the assets, including all vessels described
in Schedule 12 hereto, used by the members
of the Sale Group to conduct their
respective businesses as the same are
carried out at the date hereof, including,
without limitation, those businesses
described in clause 7 of the Agreement.
(C) Title Retention - No member of the Sale Group has
acquired or agreed to acquire any material asset
on terms that property therein does not pass
until full payment is made.
(D) Assets other than Vessels - All assets other than
Vessels (which are covered by sub-clause (A)),
including all plant and machinery, including
fixed plant and machinery, Computer Systems and
other equipment used in, or in connection with,
the business of the Sale Group (but excluding
except with regard to sub-paragraph (3), motor
vehicles):-
(1) is in good repair and condition and in
satisfactory working order and is regularly
maintained and fully serviceable;
(2) is capable, and will (subject to fair wear
and tear) be capable, over the period of
time during which it will be written down
to a nil value in the accounts of the Sale
Group, of doing the work for which it was
designed or purchased and is not dangerous
or in need of renewal or replacement; and
(3) is in the possession and control, and is
the absolute property free from any
encumbrance, of the Sale Group, save for
those items held under hire purchase or
rental agreements the aggregate value of
which does not exceed 25,000 pounds
sterling.
(E) Intellectual Property Rights - No member of the
Sale Group owns or uses any intellectual
property.
(F) Computer Systems - In this sub-paragraph (F):-
"Computer Systems" means all computer systems
used by or for the benefit of the Sale Group at
any time, including computer processors,
associated and peripheral equipment, computer
programs, technical and other documentation, and
data entered into or created by such computer
systems from time to time.
(1) The Computer Systems have been
satisfactorily maintained and supported and
have the benefit of appropriate maintenance
and support arrangements.
(2) Details of disaster recovery plans in
effect are set out in the Disclosure
Letter.
(3) The Sale Group has procedures to ensure
internal and external security of the
Computer Systems, including procedures for
taking and storing on-site and off-site
back-up copies of computer programs and
data.
(4) Where any of the records of the Sale Group
are kept on Computer Systems, the Sale
Group is and will following Completion
remain licenced to use all hardware and
software necessary to enable it to keep,
copy, maintain and use those records in the
course of its business and does not share
any hardware or software relating to those
records with any person.
(G) Properties -
(1) General -
The particulars of the Properties shown in
Schedule 6 are true and correct. Except as
shown the Sale Group has no other interest
in land and does not occupy any other
property and has not entered into any
agreement to acquire or dispose of any land
or premises or any interest therein which
has not been completed.
(2) Title to Properties -
In respect of the Properties located with
the United Kingdom.:-
(a) The owner of each Property shown in
Schedule 6 is solely legally and
beneficially entitled to and has good
title to and exclusive occupation of
each Property.
(b) Each Property is held free from any
mortgage or charge (whether legal or
equitable, fixed or floating),
encumbrance, lease, sub-lease,
tenancy, licence or right of
occupation, rent charge, exception,
reservation, easement (or in
Scotland, servitudes), quasi-easement
or privilege (or agreement for any of
the same).
(c) There are appurtenant to each
Property all rights and easements (or
in Scotland, servitudes) necessary
for its current use and enjoyment
(without restriction as to time or
otherwise) and the access for each of
the Properties is over roads adopted
by the local authority and maintained
at public expense.
(d) The lease, sub-lease, tenancy or
agreement for any of the same under
which any of the Properties are held
is valid and subsisting against all
persons, including any person in whom
any superior estate or interest is
vested.
(e) Each member of the Sale Group has in
its possession all of the title deeds
and documents necessary to prove its
title to the Properties and the
documents of title consist of
original documents or properly
examined abstracts (or, in Scotland,
official extracts).
(f) The member of the Sale Group named in
Schedule 6 as its owner holds the
relevant Property subject to the
leases, underleases, tenancies,
licences or other agreements or
arrangement particulars of which are
set out in Schedule 6 but is
otherwise in physical possession and
actual occupation of the whole of
such Property on an exclusive basis
and no part of such Property is
vacant.
(g) There are no agreements for sale,
estate contracts, options, rights or
pre-emption or similar matters
affecting any of the Properties.
(h) So far as the Vendor is aware there
is no agreement, obligation or matter
which is registered or, although not
registered, is capable of
registration as a local land charge
or, in Scotland, as a burden on any
of the Properties.
(i) The Vendor has not received any
notice alleging that any covenants,
restrictions and other encumbrances
affecting any of the Properties have
not been complied with to date.
(j) So far as the Vendor is aware there
is no circumstance which (with or
without the passage of time or the
taking of other action) would entitle
any third party to exercise a right
or power of entry or to take
possession, or which would adversely
restrict the continued possession,
enjoyment or use of any of the
Properties for the purpose (the
"Current Use") referred to in
Schedule 6.
(k) There are available to each of the
Properties all services as are
necessary for the existing use of
each such Property.
(l) All works reasonably necessary for
the repair or preservation of the
Properties can be carried out
conveniently without access to
adjoining or adjacent land.
(m) All works reasonably necessary for
the repair or preservation of the
adjoining or adjacent land can be
carried out conveniently without
access to any of the Properties.
(n) No applications have been made for
access orders under the Access to
Neighbouring Land Act 1992 (or, in
Scotland, the Civic Government
(Scotland) Act 1982) to give access
to any of the Properties or to permit
the carrying out of works for the
preservation of any of the
Properties.
(3) In respect of each of the Properties
located outside the United Kingdom:
(a) The owner of the Property listed in
Schedule 6 is the sole legal and
beneficial owner of the interest in
such Property specified therein and
has exclusive occupation thereof.
(b) There are appurtenant to each
Property all rights necessary for its
continued use for the Current Use and
enjoyment (without restriction as to
time and otherwise).
(c) There are available to each Property
all services necessary for its
continued use for the Current Use.
(d) The member of the Sale Group named in
Schedule 6 as its owner has in its
possession all of the title deeds and
documents necessary to prove its
title.
(H) Matters affecting the Properties located in the
United Kingdom - No Property located in the
United Kingdom (the "UK Properties") or any part
thereof is affected by any of the following
matters or is to the knowledge of the Vendor
likely to become so affected:-
(1) any outstanding litigation, dispute, notice
or complaint or any exception, reservation,
right, covenant, restriction or condition
which is of an unusual nature or any
adjacent land used or occupied in
connection with the UK Properties or which
affects or might in the future affect the
use of any of the UK Properties for the
purpose for which it is now used; or
(2) any notice, order, demand, requirement or
proposal of which the owner has notice or
of which the Vendor is aware made or issued
by or on behalf of any government or
statutory authority, department or body for
acquisition, clearance, demolition or
closing, the carrying out of any work upon
any building, the modification of any
planning permission, the discontinuance of
any use or the imposition of any building
or improvement line, the alteration of any
road or footpath or which otherwise affects
any of the UK Properties or their current
use; or
(3) any commutation or agreement for the
commutation of rent or payment of rent in
advance of the due dates of payment
thereof; or
(4) any outstanding claim or liability
(contingent or otherwise) whether under the
Planning Acts (as that expression is
defined in the Town and Country Planning
Act 1990) (or in Scotland, the Town and
Country (Planning) (Scotland) Acts 1972 to
1977 and subsequent statutory modifications
thereof) or otherwise; or
(5) any outgoings (including, in Scotland,
feudoty) except uniform business rates,
water rates, service payments and service
charges; or
(6) any benefit from transitional relief from
the uniform business rate; or
(7) any appeal in relation to revaluation for
rating purposes.
(I) Condition of the Properties located within the
United Kingdom -
(1) So far as the Vendor is aware, none of the
Properties will require substantial
expenditure in the foreseeable future which
is material in the context of the purposes
for which it is presently used and, so far
as the Vendor is aware, no deleterious
material (including without limit high
alumina cement, woodwool, calcium chloride,
sea dredged aggregates or asbestos
material) has been used in the
construction, alteration or repair thereof
or of any of them and there are no
development works, redevelopment works or
fitting out works outstanding in respect of
any of the Properties nor have any been
carried out in the last five years.
(2) neither the Vendor nor any member of the
Sale Group named in Schedule 6 as its owner
has received any adverse surveyors',
engineers' or other professionals' reports
in respect of any of the UK Properties;
(3) so far as the Vendor is aware, the UK
Properties have not been constructed,
altered or repaired using any method of
construction not in accordance with
currently accepted good building practice;
(4) so far as the Vendor is aware, the UK
Properties have not been affected by
flooding, subsidence or structural,
building or drainage defects and are not
affected by past or present mining
activity;
(5) neither the Vendor nor any member of the
Sale Group named in Schedule 6 as its owner
has any evidence or received any allegation
(whether from the regulatory authorities,
members of staff, members of the public or
otherwise) that any activity or process is
carried on at any of the UK Properties in
such a way as to place at risk the
environment or the health and safety of
members of staff or members of the public;
(6) the UK Properties have been inspected by
the fire officer, the Health and Safety
Executive and other regulatory authorities
in accordance with statutory requirements
and their requirements and recommendations
have been complied with;
(7) so far as the Vendor is aware, the UK
Properties have not been used and no
activity or process carried on there
involves or has involved the production,
treatment, keeping or disposal of waste,
underground storage tanks, the production,
use or storage of corrosive, explosive or
radio-active materials or other substances
regarded as threatening to health or to the
environment, the release or discharge of
polluting materials to the air, water or
soil or the creation of noise or vibration.
(J) Restrictions -
No notice has been given or received alleging
breach of any restrictions conditions and
covenants (including any imposed by or pursuant
to any lease, sub-lease, tenancy or agreement for
any of the same and whether a member of the Sale
Group is the landlord or tenant thereunder and
any arising in relation to any superior title)
affecting any of the Properties.
(K) User -
In respect of each of the Properties located
within the United Kingdom:-
(1) So far as the Vendor is aware, the current
use of the Properties and all fixtures,
machinery and equipment therein and the
conduct of any business therein complies in
all material respects with all relevant
statutes and regulations including without
prejudice to the generality of the
foregoing the Factories Act 1961, the
Offices Shops and Railway Premises Act
1963, the Fire Precautions Act 1971, the
Health and Safety at Work etc., Act 1974
and with all rules, regulations and
delegated legislation thereunder and all
necessary licences and consents required
thereunder have been obtained. So far as
the Vendor is aware, there are no
outstanding requirements or recommendations
of any competent authority or the insurers
of the Properties.
(2) So far as the Vendor is aware, the Current
Use is the permitted use under Town and
Country Planning legislation.
(3) No application for any consent or
permission has been submitted by a member
of the Sale Group which awaits
determination and no planning decision or
deemed refusal is subject to appeal.
(4) So far as the Vendor is aware, there are no
conditions which remain to be fulfilled
under any consent or permission which has
been implemented or in the case of
continuing conditions are not being
complied with.
(5) So far as the Vendor is aware, no planning
permission affecting any of the Properties
is the subject to a challenge as to its
validity and no planning permission has
been issued within the three months
immediately before this Agreement.
(6) No enforcement notice, stop notice or
breach of condition notice has been served
on a member of the Sale Group affecting any
of the Properties and, so far as the Vendor
is aware, no such enforcement action has
been threatened.
(7) So far as the Vendor is aware, no
revocation, modification or discontinuance
order affecting any of the Properties has
been made or threatened.
(8) So far as the Vendor is aware, there are no
restrictive covenants or agreements,
conditions or other matters which preclude
or limit the use of any of the Properties
for the purposes for which the Properties
are now used and no notices have been
received by any member of the Sale Group
alleging that any such restrictions or
conditions have not been observed and
performed and no agreements have been
entered into with any public authority or
statutory authority in respect of any of
the Properties whether pursuant to the
Planning Acts or otherwise.
(9) So far as the Vendor is aware, all
necessary planning permissions listed
building consents, bye-law consents,
building regulation consents and other
permissions and approvals (whether or not
required by Statute) for the construction,
extension and alteration of the Properties
have been obtained and complied with.
(L) Leasehold Properties -
In relation to each of the Properties located
within the United Kingdom and referred to in
Schedule 6 which is leased:
(1) Any necessary action to protect the
interests of the Sale Group has been taken
in relation to rent review provisions in
relation to any lease, sub-lease, tenancy
or agreement for any of the same and
whether any member of the Sale Group is the
landlord or the tenant thereunder and all
appropriate time limits have been complied
with and no rent reviews are outstanding at
the date hereof or exercisable prior to
Completion.
(2) In relation to any lease, sub-lease,
tenancy or agreement for any of the same
under which any member of the Sale Group is
the landlord:-
(a) no forfeiture (or, in Scotland,
irritancy) proceedings have been
taken by the relevant member of the
Sale Group or are contemplated;
(b) no notice has been served by such
member which is still outstanding;
(c) no works have been carried out which
could give rise to a claim against
such member for compensation or which
would have to be disregarded on any
rent review;
(d) brief details of such leases,
sub-leases, tenancies or agreements
for any of the same are set out in
Schedule 6 and such details are true
and correct in all material respects.
(3) None of the Properties is used for any
purpose other than the use specified for
each Property in Schedule 6.
(4) The Property is held under the terms of the
lease (the "Lease") briefly referred to in
Schedule 6 and no collateral assurances,
undertakings or concessions (or, in
Scotland, Back Letters) binding on the
relevant members of the Sale Group have
been made by any party to the Lease.
(5) There are no rent reviews outstanding or
exercisable by the lessor as at a date
prior to the Completion Date.
(6) The security of tenure provisions of Part
II of the Landlord and Tenant Act 1954 are
not excluded nor is the right to
compensation for disturbance.
(7) The rent and all other sums payable under
the Lease have been paid to date, no notice
has been received by the relevant member of
the Sale Group alleging that any covenants
and conditions contained in the Lease or in
any licence, consent or other document
entered into supplemental to the Lease,
whether on the part of the landlord or the
tenant have not been observed and performed
to date, and, so far as the Vendor is
aware, no breaches have been waived or
acquiesced in and the Lease is valid and in
full force;
(8) Where the landlord is entitled to elect
that supplies made under the Lease should
be standard rated for VAT purposes and to
increase the rent accordingly it has not
done so.
(9) The receipts for rent and any service
charge due on the date for payment next
before the Completion Date have been issued
without qualification.
(10) No alterations or improvements carried out
by any member of the Sale Group or any
predecessor in title are required by the
Lease to be reinstated or removed on or
before the end of the term.
(M) Properties Subject to Tenancies -
In relation to each of the Properties located
within the United Kingdom and referred to in
Schedule 6:
(1) all material details of the leases,
tenancies, licences and agreements to which
the Property is subject ("Letting
Documents") are correctly summarised in
Schedule 6;
(2) so far as the Vendor is aware, all material
covenants (and, in Scotland, obligations)
and conditions contained in the Letting
Document or in any licence, consent or
other document entered into supplemental to
the Letting Documents have been observed
and performed to date;
(3) all rent, additional rent and other sums
due under the Letting Documents has been
and is paid promptly as and when it becomes
due and no rent has been commuted, waived
or paid in advance of the due date for
payment;
(4) no premium or rent has been taken or
accepted or agreed beyond what is legally
permitted;
(5) no collateral assurances, undertakings or
concessions (and, in Scotland, Back
Letters) binding on any member of the Sale
Group have been made by any party to the
Letting Documents;
(6) where, the member of the Sale Group named
in Schedule 6 as its owner is entitled to
elect that supplies made under the Letting
Documents should be standard rated for VAT
purposes and to increase the rent
accordingly it has not done so;
(7) no buildings erected on the Property or
alterations or improvements carried out by
the tenants entitle the tenants to any
compensation;
(8) so far as the Vendor is aware, no
predecessor in title of the present tenant
(nor, in Scotland, where such parties may
have been taken jointly and severally
liable as parties to any lease have been
discharged) nor any surety has been
released;
(9) there are no rent reviews in the course of
being determined or exercisable from a date
prior to the Completion Date and no rent
reviews are or should be currently under
negotiation or the subject to a reference
to an expert or arbitrator or the Courts;
(10) the Property is subject to no tenancies
which are being continued after the
contractual expiry date by Part II Landlord
and Tenant Act 1954 (nor, in Scotland, is
it subject to any leases which have been
renewed by tacit relocation);
(11) no notice has been served in respect of any
such lease or licence under Part II
Landlord and Tenant Act 1954 and no notice
of intention to make improvements has been
served under section 3(1) Landlord and
Tenant Act 1927.
(N) Outstanding Property Liabilities - Except in
relation to the Properties no member of the Sale
Group has any liabilities (actual or contingent)
arising out of the conveyance, transfer, lease,
tenancy, licence, agreement or other document
relating to land or premises or an interest in
land or premises, including, without limitation,
leasehold premises assigned or otherwise disposed
of.
2.9 The Sale Group's Contracts
(A) Documents - All agreements to which any member
of the Sale Group is a party and other documents
owned by or which ought to be in the possession
of any such member are in the possession of such
member and are properly stamped and are free from
any encumbrance.
(B) Material contracts - With respect to all
contracts other than (i) contracts involving
receipts or expenditure of, in the case of
contracts entered into by the engineering and
fabrication businesses, less than 250,000 pounds
sterling in any one year and, in respect of the
other businesses of any member of the Sale Group
less than 50,000 pounds sterling in any one year,
in each case by or to a member of the Sale Group
(save that such limitation shall not apply to the
Warranties set out in paragraph (2), (11), (12),
(13), (14) and (15) below) (ii) Vessel charters,
and (iii) any contracts relating to the
Properties and the Sale Group Insurances, no
member of the Sale Group is a party to or subject
to any subsisting agreement, transaction,
obligation, commitment, understanding,
arrangement or liability which:
(1) is incapable of complete performance in
accordance with its terms within six months
after the date on which it was entered into
or undertaken; or
(2) is known by the Vendor or by such member to
be likely to result in a loss to such
member on completion of performance; or
(3) in the reasonable opinion of the Vendor,
cannot readily be fulfilled or performed by
such member on time and without undue or
unusual expenditure of money and effort; or
(4) involves or is likely to involve
obligations, restrictions, expenditure or
receipts of an unusual, onerous or
exceptional nature and not in the ordinary
course of such member's business; or
(5) is a lease or a contract for hire or rent,
hire purchase or purchase by way of credit
sale, conditional sale or periodical
payment; or
(6) is with any trade union or body or
organisation representing its employees; or
(7) is a contract for services (other than
contracts for the supply of electricity or
normal office services) or is in the nature
of an agency, distributorship or management
agreement; or
(8) requires such member to pay any commission,
finder's fee, royalty or the like; or
(9) restricts to a material degree such
member's freedom to carry on the whole or
any part of its business in any part of the
world in such manner as it thinks fit; or
(10) involves liabilities which may fluctuate in
accordance with an index or rate of
currency exchange; or
(11) is a contract for the sale of shares or the
assets of a business which contains
warranties or indemnities; or
(12) can be terminated as a result of any change
in the underlying ownership or control of
such member, or would by its terms result
in the rights and obligations of the
parties thereto being materially affected
thereby; or
(13) is in any way otherwise than in the
ordinary course of such member's business;
or
(14) is an agreement or arrangement or an
obligation under which it is or may become
liable to make any investment (as defined
in section 1(1) of the Financial Services
Act 1986) with, or to deposit any money
with, or to provide any loan or financial
accommodation or credit (other than normal
trade credit) to any person, or to
subscribe, convert, acquire, dispose of or
underwrite any investment
(C) Defaults - No member of the Sale Group is in
breach of, nor does there exist any invalidity or
grounds for termination, avoidance, rescission or
repudiation of, any agreement to which such
member is a party which, in any such case, would
be material in the context of the financial or
trading position of such member nor (so far as
the Vendor is aware) are there any circumstances
likely to give rise to any such thing.
(D) Sureties - No person (other than a member of the
Sale Group) has given any guarantee of or
security for any overdraft or other loan facility
granted to any member of the Sale Group.
(E) Powers of Attorney - No powers of attorney given
by any member of the Sale Group (other than to
the holder of an encumbrance solely to facilitate
its enforcement) are now in force. No person, as
agent or otherwise, is entitled or authorised
(whether expressly or by implication) to bind or
commit any member of the Sale Group to any
obligation not in the ordinary course of such
member's business, and the Vendor is not aware of
any person purporting to do so.
(F) Insider Contracts -
(1) There is not outstanding, nor has there at
any time during the last three years been,
any agreement or arrangement to which any
member of the Sale Group is a party and in
which (i) the Vendor or, (ii) any member of
the Vendor's Group or so far as the Vendor
is aware any director thereof, is or has
been interested, whether directly or
indirectly.
(2) No member of the Sale Group is a party to,
nor have its profits or financial position
during such period been affected by, any
agreement or arrangement which is not
entirely of an arm's length nature.
(3) All costs incurred by any member of the
Sale Group have been charged to such member
and have not been borne by any other member
of the Vendor's Group.
(G) Debts - There are no debts owing by or to any
member of the Sale Group other than debts which
have arisen in the ordinary course of business.
(H) Options and Guarantees - No member of the Sale
Group is a party to any option or pre-emption
right, or a party to nor has it given any
guarantee, suretyship, comfort letter or any
other obligation (whatever called) to pay,
provide funds or take action in the event of
default of any person other than another member
of the Sale Group in the payment of any
indebtedness or in the performance of any
obligation.
(I) Tenders, etc - Other than in respect of Vessel
contracts or other contracts with a value of less
than 50,000 pounds sterling, in each case in the
ordinary course of business, no offer, tender or
the like is outstanding which is capable of being
converted into an obligation of any member of the
Sale Group by an acceptance or other act of any
person (other than such member).
2.10 The Sale Group and its Bankers
(A)Borrowings - Except as reflected in the
Audited Accounts for the period ended on the
Balance Sheet Date, no member of the Sale Group
has, nor are any of its assets subject to, any
indebtedness for borrowed money due to a person
other than a member of the Vendors' Group. The
total amount borrowed by each member of the Sale
Group does not exceed the limits of its
facilities, and the total amount borrowed by each
member of the Sale Group from whatsoever source
does not exceed any limitation on its borrowings
contained in its articles of association, or in
any debenture, loan stock deed or other
instrument.
(B) Continuance of facilities - Full and accurate
particulars of all overdrafts, loans or other
financial facilities outstanding or available to
each member of the Sale Group (including full and
accurate copies of all documents relating
thereto) are given in the Disclosure Letter and
neither the Vendor nor any such member has done
anything whereby the continuance of any such
facilities in full force and effect might be
affected or prejudiced.
(C) Off-balance sheet financing - No member of the
Sale Group has engaged in any borrowing or
financing which is not reflected in the Audited
Accounts.
(D) Events of Default - No event which is or, with
the passing of any time or the giving of any
notice, certificate, declaration or demand, would
become an event of default under or any breach of
any of the terms of any loan capital, borrowing,
debenture or financial facility of any member of
the Sale Group or would entitle any third party
to call for repayment prior to normal maturity
has occurred or been alleged.
2.11 The Sale Group and its Employees
(A)Directors - With respect to each company
specified in Schedule 4, no person (other than
those named in Schedule 4 as a director of such
company) is a director (including a shadow
director) of such company.
(B) Particulars of Employees
(1) Each member of the Sale Group's
arrangements with (and, where applicable,
the full details of the terms and
conditions of employment with) each
employee of the Sale Group in receipt of
annual basic remuneration in excess of
30,000 pounds sterling (excluding vessel
crew) ("Relevant Employee") (including (i)
all remuneration payable and other benefits
provided or which each member of the Sale
Group is bound to provide (whether now or
in the future) to each such Relevant
Employee or to any person connected with
any such person, (ii) all profit sharing,
incentive, bonus arrangements, commission
arrangements and any other benefit to which
any such Relevant Employee is entitled to
which each member of the Sale Group is a
party whether legally binding on such
member or not, (iii) the beginning of the
continuous period of employment of each
such Relevant Employee, (iv) the date of
birth of each such Relevant Employee and
(v) details of the notice period and
holiday to which each such employee is
entitled) are given in the Disclosure
Letter, in each case whether legally
binding on the relevant member of the Sale
Group or not.
(2) Full details of the extent to which any
member of the Sale Group Company recognises
any trade union are set out in the
Disclosure Letter.
(3) Full details of any person who is not an
employee of a member of the Sale Group but
whose services are provided to any such
member other than under crewing agency
agreements are set out in the Disclosure
Letter.
(4) Since the Balance Sheet Date, no change has
been made in (i) the rate of remuneration,
or the emoluments or pension benefits, of
any Relevant Employee (or of a person who
was formerly a Relevant Employee) and (ii)
the terms of engagement of any such
Relevant Employee, and no additional
Relevant Employee has been appointed.
(5) No person who is a Relevant Employee at the
date of this Agreement has given or
received notice terminating his employment,
except as may be expressly contemplated by
this Agreement.
(6) No member of the Sale Group has given
notice of any redundancies to any Relevant
Employee or government department or
started consultations with any trade union
pursuant to any statute or regulation.
(7) No remuneration or other benefit which has
fallen due for payment has not been paid.
(8) There are no employee representatives
representing all or any of the Relevant
Employees.
(9) The Vendor has complied with all of its
statutory obligations to inform and consult
appropriate representatives as required by
law.
(10) There is no plan, scheme or commitment
relating to redundancy affecting any of the
Relevant Employees more generous than the
statutory redundancy requirements.
(11) All plans for the provision of benefits to
the Relevant Employees comply in all
material respects with all relevant
statutes, regulations or other laws and all
necessary consents in relation to such
plans have been obtained and all
governmental filings in relation to such
plans have been made.
(12) There are no loans of a principal amount in
excess of 10,000 pounds sterling owed by
any of the Relevant Employees to any member
of the Sale Group.
(13) Except for the Pension Schemes defined in
Schedule 10, no member of the Sale Group is
under any present or future liability to
pay to any of the Relevant Employees any
pension, superannuation allowance, death
benefit, retirement gratuity or like
benefit or to contribute to any life
assurance scheme, medical insurance scheme,
or permanent health scheme and no member of
the Sale Group has made any such payments
or contributions on a voluntary basis nor
is it proposing to do so.
(14) There are no training schemes, arrangements
or proposals whether past or present in
respect of which a levy may henceforth
become payable by any member of the Sale
Group under the Industrial Training Act
1982 (as amended by the Employment Act
1989) and pending Completion no such
schemes, arrangements or proposals will be
established or undertaken.
(15) None of the Relevant Employees will become
entitled by virtue of their contract of
service to any enhancement in or
improvement to their remuneration, benefits
or terms and conditions of service only by
reason of Completion of the sale and
purchase under or pursuant to this
Agreement.
(16) No member of the Sale Group has in the last
twelve months, entered into any informal or
formal agreement to amend or change the
terms and conditions of employment of any
Relevant Employees (whether such amendment
or change is to take effect prior to or
after Completion).
(C) Service Contracts
There is not outstanding any contract of service between
any member of the Sale Group and any Relevant Employee
which is not terminable by such member without
compensation (other than any compensation payable by
statute) on three months' notice or less given at any
time.
(D) Disputes with Employees
There is no:-
(1) outstanding or threatened claim against
any member of the Sale Group by any person
who is now or has been an officer or
employee of any member of the Sale Group;
or
(2) actual or threatened dispute between any
member of the Sale Group and a material
number or class of its employees; or
(3) industrial action involving any employee,
whether official or unofficial, currently
occurring or, so far as the Vendor is
aware, threatened; or
(4) industrial relations matter which has been
referred to ACAS or any similar
governmental agency in the applicable
jurisdiction for advice, conciliation or
arbitration; or
(5) single claim for unpaid overtime by any
employee of the Sale Group in excess of
3,000 pounds sterling or aggregate claims
in respect thereof in excess of 50,000
pounds sterling;
and no payments are due by any member of the Sale
Group under the provisions of the Employment
Rights Act 1996.
2.12 The Sale Group and the Environment
(A) Environmental Permits
(1) The members of the Sale Group have all
material authorisations, permissions,
consents, licences and agreements necessary
in relation to environmental matters for
the conduct of their respective businesses
("Environmental Permits").
(2) So far as the Vendor is aware each member
of the Sale Group has complied in all
material respects with all conditions
attaching to the Environmental Permits.
(3) No member of the Sale Group has received
any communication revoking or suspending
any of the Environmental Permits.
(B) Compliance with Environmental Protection Laws
(1) So far as the Vendor is aware, no member of
the Sale Group has committed any breach of
statutory or other legal requirements for
the protection of the environment
("Environmental Law").
(2) No member of the Sale Group has received
any communication from any competent
authority in respect of such member's
business, alleging failure to comply with
Environmental Law.
(C) Environmental Liability
To the actual knowledge of John Allen, John
Coghlan and Rodney Lenthall (three directors of
the Vendor), there exists no actual or potential
environmental liability under Environmental Law
on the part of any member of the Sale Group
arising from any activities or operations of such
member from wastes or other substances used, kept
or produced by such member or from the condition
of any properties now or formerly owned or
occupied by such member or facilities now or
formerly used by such member.
(D) Wastes and Other Substances
So far as the Vendor is aware, each member of the
Sale Group has at all times taken all necessary
steps required by Environmental Law to ensure
proper keeping, treatment, consignment, carriage
and disposal of wastes produced in the course of
such member's business. For the purpose of this
warranty "wastes" include substances which are
wastes to the Sale Group notwithstanding that
they may be of value or utility to some other
person.
2.13 Miscellaneous
(A) The information contained in the confidential
information pack delivered by the Vendor to the
Purchaser pursuant to a confidentiality letter
dated 10 January 1997 as supplemented by
materials delivered on 21 January 1997 was when
given and is still true and accurate and not
misleading.
(B) The information given in Schedules 3, 4 and 12 is
true and accurate in all respects and is not
misleading because of any omission or ambiguity
or for any other reason.
(C) The registers of members (or any similar evidence
of title to shares of a member of the Sale Group
which is not incorporated in England) of each
member of the Sale Group have been properly kept
and contain an accurate and complete record of
the matters which should be dealt with in those
registers and no notice or allegation that any of
them is incorrect or should be rectified has been
received.
SCHEDULE 6 : PARTICULARS OF PROPERTIES
<TABLE>
<CAPTION>
Registered/
Property Owner Tenure Unregistered Use Current Annual Rent Lettings by Owner
<S> <C> <C> <C> <C> <C> <C>
1. Monks Ferry, OIL Limited Leasehold Unregistered Offices 38,140 pounds None
Birkenhead sterling
2. 11th Floor, Salvesen OIL Limited Leasehold Registered Offices 43,000 pounds Sub-lease dated
Tower Blaikies Quay, (Scotland) sterling 05.02.90 to WEL
Aberdeen Technical
Services Limited
3. Land at Hareness Road OIL Limited Freehold Registered Industrial N/A None
Altens Industrial Estate (Scotland)
Nigg, Aberdeen
4. Ogbogoro Waterside OIL (Nigeria) Leasehold Not applicable Supply base Nira 150,000 None
Off Choba Road,
PO Box 1124
Port Harcourt, Nigeria
5. Offices at Loyang OSA Marine Leasehold Not applicable Offices $10,982 per month None
Offshore Services Asia
Supply Base, Singapore Limited
6. Lot 3.16, 3rd Floor, Ocean Support Leasehold Not applicable Offices RM2060 per month None
Plaza Berjaya, Jalan Services Sdn
Imbl, Kuala Lumpa Bhd
7. Rue Americo, Peixoto OSA do Brasil Leasehold Not applicable Offices 10,764.30 pounds None
120,28.700 Imbetiba, Representacaoes sterling
Macae, R J Brazil
</TABLE>
SCHEDULE 8 : TAXATION
Taxation
1. Interpretation
In this schedule, where the context admits:
1.1 "Balance Sheet Date" and "Net Asset Statement"
have the same meanings as in Schedule 5 and
Schedule 9 respectively;
1.2 "event" includes (without limitation):
(A) any omission, transaction or distribution
whether or not a member of the Sale Group
is a party thereto;
(B) the death of any person;
(C) the failure to avoid an apportionment or
deemed distribution of income (whether or
not it is or was possible, by taking action
after Completion, to avoid such
apportionment or deemed distribution);
(D) a member of the Sale Group ceasing to be a
member of any group or associated with any
person on or before Completion;
(E) Completion; and
(F) any event which is treated as having
occurred for the purposes of any
legislation
and references to the result of events on or
before the date of Completion shall include the
combined result of two or more events the first
of which shall have taken place on or before
the date of Completion;
1.3 "group relief" has the meaning given to that
expression by s.402 Taxes Act 1988;
1.4 "relief" means any relief, allowance or credit
in respect of taxation (including, for the
avoidance of doubt and without limitation, any
credit or deduction available in any
jurisdiction and under any arrangements or
otherwise in respect of double taxation) or any
deduction in computing income, profits or gains
for the purpose of taxation;
1.5 "taxation claim" means
(A) a claim for taxation against any member of
the Sale Group or the Purchaser (but in the
latter case only where a claim relates to
or is in respect of a member of the Sale
Group and, without prejudice to paragraph
1.5(A)(2) below, such claim would be made
against such member but in accordance with
any legislation of any taxing jurisdiction
is made against the Purchaser) whether made
before or after the date hereof, whether
satisfied or unsatisfied at the date hereof
and whether or not the taxation in question
is also chargeable against or attributable
to any other person, and includes any
assessment, notice, demand or other
communication from or action taken by any
person, authority or body responsible for
the assessment, collection or recovery of
taxation in any country which claims:-
(1) payment of taxation;
(2) to deprive such member or the
Purchaser of any relief whether
arising before or after the date
hereof; or
(3) to nullify or cancel any right to the
repayment of taxation whether arising
before or after the date hereof;
and which arises from or by reference to
any income, profits or gains earned,
accrued or received on or before the date
of Completion or any event on or before the
date of Completion; or
(B) a claim for taxation against the Purchaser
arising by reference to a payment under
paragraph 2.1; or
(C) a liability to pay stamp duty (including,
interest, fines or penalties in respect
thereof) on any document in existence at
the date hereof to which any member of the
Sale Group is a party.
1.6 "relevant taxation claim" means any taxation
claim save to the extent that:-
(A) provision or reserve in respect thereof has
been made in the Net Asset Statement or to
the extent that payment or discharge of
such claim has been taken into account in
the Net Asset Statement;
(B) it is a claim arising from the denial of a
relief or credit or right to repayment of
taxation, the benefit of which has not been
taken into account in computing (and so
reducing or eliminating) any provision for
taxation in the Net Asset Statement;
(C) it is a claim against the Purchaser which
does not relate to the Sale Shares or the
Sale Group or a payment made under
paragraph 2.1 or which is for stamp duty or
stamp duty reserve tax arising out of this
Agreement or Completion; or
(D) it is a taxation claim which would not have
arisen but for a voluntary act or
transaction (including without limitation
the withdrawal or waiver of claims where
such withdrawal or waiver is made after
Completion where full details of such
claims have been provided by the Vendor to
the Purchaser in the Disclosure Letter, or
where knowledge by the Purchaser or the
member of the Sale Group making the waiver
or withdrawal of such details could
reasonably be imputed from the act of
withdrawal or waiver), which could
reasonably have been avoided, carried out
by the Purchaser (or persons deriving title
from it) or any member of the Sale Group
after Completion otherwise than in the
ordinary course of business and which the
Purchaser ought reasonably to have been
aware (or, in the case of a claim relating
to non UK taxation, where the Purchaser or
the member of the Sale Group making the
waiver or withdrawal was aware) that such a
voluntary act or transaction, or failure to
act or omission to act, could give rise to
a taxation claim but so that this exclusion
shall not extend to any voluntary act
carried out with, or any failure or
omission to act which has the approval
concurrence or assistance of the Vendor;
(E) it is a claim arising from an increase in
the rates of taxation or from a change in
law, where such increase or change occurs
after the date of Completion and has
retrospective effect;
(F) it is a claim arising from the receipt of a
payment made under paragraph 2.1, and the
payment of taxation, deprivation of relief,
or nullification or cancellation of a right
to repayment arises from the reduction in
base cost available to the Purchaser in
respect of the Sale Shares;
(G) such tax claim arises or is increased by
virtue of the failure or omission by any
member of the Sale Group to make any claim,
election, surrender or disclaimer or give
any notice or consent to any other thing
after Completion, the making, the giving,
or doing of which was taken into account in
computing the provision for tax in the Net
Asset Statement (where full details of such
claim, election, or disclaimer have been
provided by the Vendor to the Purchaser in
the Disclosure Letter); or
(H) it is a claim made, or in respect of which
notice under paragraph 2.7(A) is first
given after the end of the seven year
period beginning with the date of
Completion.
1.7 "tax" or "taxation" includes (without
limitation) corporation tax, advance
corporation tax, income tax (including PAYE),
capital gains tax, the charge under s.419 Taxes
Act 1988, the charge under s.601(2) Taxes Act
1988, value added tax, the charge to tax under
Schedule 9(A) Value Added Tax Act 1994, excise
duties, customs and other import duties,
capital transfer tax, inheritance tax, stamp
duty, stamp duty reserve tax, capital duty,
national insurance contributions, foreign
taxation of any type and description and
wherever payable, amounts payable in
consideration for the surrender of group relief
or advance corporation tax or refunds pursuant
to Section 102 Finance Act 1989, and any
payment whatsoever which any member of the Sale
Group may be or become bound to make to any
person as a result of the operation of any
enactment relating to taxation and all
penalties, charges and interest relating to any
claim for taxation or resulting from a failure
to comply with the provisions of any enactment
relating to taxation;
1.8 "Taxes Act 1988" means the Income and
Corporation Taxes Act 1988;
1.9 "TCGA 1992" means the Taxation of Chargeable
Gains Act 1992;
1.10 "UK tax or taxation" means any tax or taxation
levied, imposed or charged by any authority or
body representing or acting on behalf of or
appointed by the government of the United
Kingdom;
1.11 references to income or profits or gains
earned, accrued or received shall include
income or profits or gains treated as earned,
accrued or received for the purposes of any
legislation; and
1.12 any taxation claim shall be treated as a
relevant taxation claim for all the purposes of
this schedule notwithstanding any other
provision hereof to the extent it would not
have arisen but for:-
(A) the transfer of assets by O.I.L. Limited to
Shetland Holdings Limited pursuant to the
agreement dated 20 March 1997 made between
them prior to execution of this Agreement.
2.Taxation Payments
2.1 Payments
(A) Subject to and in accordance with the terms
of this Schedule the Vendor shall make
payments to the Purchaser equal to the
amount of each relevant taxation claim and
all costs properly incurred by the
Purchaser or any member of the Sale Group
in connection therewith and in enforcing
the Purchaser's rights thereunder.
(B) For this purpose the amount of any relevant
taxation claim shall depend upon whether
the claim is of the type described in item
(1), (2) or (3) of paragraph 1.5(A). In
the case of a claim of the type described
in item (1), the amount is the payment
claimed, in the case of a claim of the type
described in item (2), the amount is the
amount of taxation (on the basis of rates
current at the date of the loss of the
relief) which would have been relieved,
allowed or credited by the relief of which
it is claimed to deprive any member of the
Sale Group or the Purchaser, and in the
case of a claim of the type described in
item (3), the amount is the repayment which
it is claimed to nullify or cancel.
(C) Where any relevant taxation claim has been
reduced or eliminated by (or where a
relevant taxation claim would have arisen
but for) some relief available to any
member of the Sale Group then such relief
shall be disregarded for the purposes of
determining whether, in what amount, and on
what date any payment should be made by the
Vendor hereunder, and accordingly the
relevant taxation claim shall be treated as
not being reduced or eliminated (or, as the
case may be, shall be treated as having
arisen).
(D) The Vendor may satisfy the whole or any
part of any relevant taxation claim by
making payments directly to the taxing
authority which has made the claim provided
that the Vendor shall notify the Purchaser
in writing within seven days of making such
a payment, setting out full details of the
amount or amounts paid and on giving such
notice shall be released to the extent of
the payment made from its obligation under
sub-paragraph (A) of this paragraph 2.1.
2.2 Date for Payment
The Vendor shall be bound to make payments in
respect of relevant taxation claims on the
following dates:-
(A) in so far as a relevant taxation claim
represents taxation to be borne by the Sale
Group but which has not yet become due, the
Vendor shall make the payment in respect of
that claim (or so much thereof as
represents that taxation) on the date on
which that taxation becomes due;
(B) in so far as a relevant taxation claim
consists of the nullification or
cancellation of a right to repayment of
taxation the Vendor shall make the payment
in respect of that claim (or so much
thereof as represents that nullification or
cancellation) on the date on which that
repayment would otherwise have become due;
and
(C) in any other case the Vendor shall make the
payment 14 days after the date on which a
notice setting out details of the relevant
taxation claim is delivered to the Vendor;
(D) and for this purpose references to a date
on which taxation becomes due include a
reference to the date on which it would
have become due were it not for the
availability of some relief. Any payment
which becomes due on a day which is not a
business day shall be paid on the next
following business day, and any payment
which is made after noon on any day before
shall, for the purposes of calculating
interest, be deemed to have been paid on
the next following business day. No
payment shall be treated as made until
cleared funds in respect thereof are
available to the Purchaser.
2.3 Reduction in Consideration
Insofar as the payments made by the Vendor to
the Purchaser pursuant to sub-paragraph 2.1 are
less than the consideration for the Sale
Shares, they shall constitute a repayment of
and a reduction in such consideration. The
liability of the Vendor to make payments under
sub-paragraph 2.1 shall not in any event exceed
(i) the consideration payable pursuant to this
Agreement for the Sale Shares as set out in
clause 3.1 (subject to adjustment as therein
referred to) plus the amount of the
Indebtedness less (ii) a sum equal to the
aggregate of all amounts for which the Vendor
has made payment in respect of the Warranties,
under clause 14 in respect of any Loss as
defined therein and under the indemnities in
any of the schedules to this Agreement.
2.4 Disclosure not relevant
The Vendor's obligation to make payment under
sub-paragraph 2.1 shall not be affected by the
disclosure, in the Disclosure Letter or
otherwise, of the relevant taxation claim
giving rise to the payment, or the
circumstances giving rise to that relevant
taxation claim.
2.5 Credits and Reductions
If any relevant taxation claim is disputed by
any member of the Sale Group or by either party
or represents taxation for which credit is or
may become due to any member of the Sale Group
or the Purchaser at a later date or in respect
of which it is subsequently found that there
arises a corresponding credit or right to
repayment of taxation, the amount of the
relevant taxation claim shall nevertheless be
payable in full by the Vendor on the due date
ascertained in accordance with sub-paragraph
2.2 but if subsequently any reduction is made
in the claim or it is found that the liability
in respect thereof falls short of the amount
claimed or such credit or repayment is received
by any member of the Sale Group or the
Purchaser the Purchaser shall promptly repay to
the Vendor an amount equal to such reduction,
shortfall, credit or repayment up to the amount
previously paid by the Vendor in respect of
that relevant taxation claim and without
interest, save to the extent that interest is
included (or allowed) in such credit,
repayment, reduction or shortfall. For this
purpose, no credit shall be taken to have been
received by the Sale Group unless it shall have
relieved the Sale Group of a present obligation
to pay taxation.
2.6 Over-provisions
If, at the request and cost of the Vendor, the
Sale Group's auditors shall certify that any
provision for taxation (not being a provision
for deferred taxation) contained in the Net
Asset Statement is an over-provision, the value
of such over-provision shall be set against the
liability of the Vendor under sub-paragraph
2.1, except in so far as such over-provision is
attributable to the effect of a change in rates
of taxation after the date hereof, but no
deduction shall be made from any payment which
the Vendor shall be obliged to make hereunder
unless such certificate is in existence on the
due date for that payment. In the event that
such a certificate is given after the Vendor
has made a payment hereunder, the Purchaser
shall refund to the Vendor (without interest)
any payment made by the Vendor to the extent
that such over-provision could have been set
against such payment if the certificate had
been in existence on the due date of payment.
The Purchaser shall procure that the Sale Group
shall co-operate in obtaining any such
certificate if the Vendor shall so request.
2.7 Notice and Mitigation
(A) If the Purchaser shall become aware of any
relevant taxation claim or an event likely
to give rise to such a claim it shall
forthwith give written notice thereof to
the Vendor setting out reasonable
particulars thereof, insofar as then
available, including the amount and the
date on which the Vendor is bound to make a
payment in respect of that relevant
taxation claim, ascertained in accordance
with sub-paragraph 2.2, but no failure by
the Purchaser to comply with this
sub-clause shall affect the Vendor's
obligations under sub-paragraph 2.1 unless
the failure to comply with this sub-
paragraph 2.7(A) shall have prevented the
Vendor (or the Purchaser or any member of
the Sale Group acting in accordance with
the wishes of the Vendor under sub-
paragraph 2.7(C)) from taking such actions
which might reasonably have been expected
to reduce or eliminate the taxation claim,
in which case no claim may be made under
sub-paragraph 2.1 to the extent that such
claim would have been so eliminated or
reduced.
(B) Except in a case where fraud is alleged the
Purchaser shall take such action and give
such information and assistance in
connection with the affairs of the Sale
Group as the Vendor may reasonably and
promptly by notice request to avoid,
resist, appeal or compromise a relevant
taxation claim provided that:-
(1) neither the Sale Group nor the
Purchaser shall be obliged to appeal
against any assessment, notice, demand
or decision if, having given the
Vendor written notice of the receipt
thereof, the Purchaser has not within
14 days thereafter received
instructions in writing from the
Vendor to do so; and
(2) neither the Sale Group nor the
Purchaser shall in any circumstances
be obliged to pursue any appeal beyond
the General Commissioners of Inland
Revenue, the Special Commissioners of
Inland Revenue, or Value Added Tax
Tribunal or any equivalent forum in
the United Kingdom or any other
jurisdiction unless, in the opinion of
leading tax counsel of at least ten
years' call (approved by the Purchaser
in advance, such approval not to be
unreasonably withheld) an appeal to
any higher court will, on the balance
of probabilities, be successful.
(C) The action which the Vendor may request
under sub-paragraph (B) shall include
(without limitation) the Sale Group or the
Purchaser applying to postpone (so far as
legally possible) the payment of any
taxation and allowing the Vendor to take on
or take over at its own expense the conduct
of all proceedings of whatsoever nature
arising in connection with the relevant
taxation claim in question. If the Vendor
takes on or takes over the conduct of
proceedings, the Purchaser shall, and shall
procure that the Sale Group shall, provide
such information and assistance as the
Vendor may reasonably require in connection
with the preparation for and conduct of
such proceedings.
(D) Where the Sale Group or the Purchaser is
entitled to recover, or to receive credit
for, from some other person (including any
taxing or other authority) any sum in
respect of any relevant taxation claim
(including, without restriction, the set-
off of the amount represented by a relevant
taxation claim under any provisions of any
jurisdiction which deal with double tax
relief, or the set-off or increased set-off
of ACT, or any deduction against a
liability to taxation in respect of an
amount paid under a relevant taxation
claim) the Purchaser shall take such action
as the Vendor may reasonably and promptly
by notice request to enforce such recovery
by the Sale Group and shall account to the
Vendor for any amount so recovered by the
Sale Group not exceeding the amount paid by
the Vendor hereunder in respect of that
relevant taxation claim together with any
interest or repayment supplement included
in such recovery less any taxation payable
thereon.
(E) Notwithstanding anything in this Agreement,
neither the Purchaser nor the Sale Group
shall be obliged to take any steps to
reduce the amount of any relevant taxation
claim or to recover any amount from any
other person unless the Vendor shall first
indemnify and secure the Sale Group and the
Purchaser to their satisfaction against all
losses, costs, interest, damages and
expenses which may be incurred thereby.
2.8 Interest
The Vendor shall make all payments under this
schedule in immediately available funds before
noon on the due date for payment without
deduction or withholding on any account (save
as expressly provided in this schedule) and if
any amount is not paid when due the Vendor
shall pay to the Purchaser interest (accruing
daily and compounded monthly) on such amount at
the rate of 4 per cent per annum above the base
rate of Barclays Bank PLC from time to time
from the due date until the date of actual
payment (as well after judgment as before).
2.9 Deductions and Withholdings
(A) Any amount payable pursuant to
sub-paragraphs 2.1 or 2.8 shall be paid
free and clear of all deductions,
withholdings or set-offs whatsoever, save
only as may be required by law.
(B) If any deductions or withholdings are
required by law to be made from any sums,
the Vendor shall be obliged to pay the
Purchaser such amount as will after the
deduction or withholding has been made,
leave the Purchaser with the same amount as
it would have been entitled to receive in
the absence of such requirement to make a
deduction or withholding provided that if
the Purchaser subsequently receives a
credit for such deduction or withholding
then such credit shall be applied in
accordance with the provision of
sub-paragraph 2.5.
2.10 Advance Corporation Tax ("ACT")
Where any member of the Sale Group actually
uses during an accounting period ending after
Completion advance corporation tax ("ACT")
which any member of the Sale Group became
liable to account for or is treated as having
paid in respect of distributions made or deemed
to be made by s.240(2) Taxes Act 1988 prior to
Completion ("Pre Completion ACT") to reduce its
liability to mainstream corporation tax and:
(A) availability of such Pre Completion ACT was
not taken into account as an asset in the
Net Assets Statement; and
(B) no repayment has been made by the Purchaser
to the Vendor under paragraphs 2.5 or
2.7(D) above in relation to the off set of
such Pre Completion ACT,
the Purchaser shall pay to the Vendor an
amount, by way of additional purchase
consideration for the Sale Shares, equal to the
amount of the Pre Completion ACT so set off.
3. Group Arrangements and Negotiations
3.1 Group relief, ACT and tax refunds
(A) In respect of the accounting periods ended
on or before 31 December 1996 the Vendor
and its subsidiaries ("surrendering
companies") may surrender group relief, ACT
or tax refunds to such members of the Sale
Group as can utilise the same ("claimant
companies").
(B) The amount of group relief, ACT or tax
refunds surrendered shall be determined by
the surrendering companies but shall not,
in the case of group relief and ACT, exceed
the maximum amount which can be utilised at
the date of the surrender by the claimant
companies by way of relief from liability
to corporation tax after utilising all
other reliefs (including other group relief
available to them) known to be available at
the date of surrender.
(C) For the avoidance of doubt, no payment
shall be due from any claimant company to
any surrendering company in any
circumstances in respect of surrenders
made.
(D) The parties shall co-operate to secure the
agreement with the Inland Revenue of the
tax returns relating to the accounting
period referred to above and shall take all
necessary action to procure the surrenders
as aforesaid.
3.2 Value Added Tax Group Registration
(A) On the date of Completion, the Vendor shall
procure that an application is made to H.M.
Customs & Excise pursuant to s.43(5) Value
Added Tax Act 1994 for the exclusion from
O.I.L. Limited's group registration of
Transit Boston Limited and Transit Medway
Limited and for such exclusion to take
effect at the earliest date permitted by
the said section.
(B) Until such application has taken effect,
the parties shall furnish or procure to be
so furnished such information as may be
required to enable the continuing
representative member of the group in
question to make the returns required in
respect of the group and the Purchaser
shall arrange for such returns to be made
accordingly.
(C) Such payments shall be made as may be
appropriate to ensure that the resulting
position between all the companies and
bodies concerned is the same as it would
have been if such applications had been
granted with effect from the date of
Completion.
3.3 Conduct of Negotiations
(A) The Vendor (which may act through a duly
authorised agent for the purposes of this
sub-paragraph) shall prepare the Sale
Group's statutory accounts and tax returns
for accounting periods ended on or prior to
Completion. The Purchaser shall procure
that such returns are authorised, signed
and submitted by the Sale Group to the
appropriate authority without amendment or
with such amendments as the Vendor shall
agree (such agreement not to be
unreasonably withheld) and that the Vendor
is given all such assistance as may be
required to agree the said returns with the
appropriate authorities. The Vendor shall
prepare all documentation and deal with all
matters (including correspondence) relating
to the said returns and the Purchaser shall
procure that such access to the books,
accounts and records of the Sale Group is
afforded as may be required to enable the
Vendor to prepare the said returns and
conduct matters relating thereto in
accordance with the Vendor's rights under
this sub-paragraph.
(B) Without the prior written approval of the
Purchaser the Vendor shall take no action
the effect of which is likely to increase
the amount of taxation payable by the Sale
Group in respect of accounting periods
after the Balance Sheet Date or likely to
prejudice the tax affairs of the Sale
Group.
4. Taxation Warranties
The Vendor hereby warrants to and for the benefit of
the Purchaser in the following terms.
4.1 General Taxation Matters
(A) Residence
Each member of the Sale Group is and always has
been resident for taxation purposes only in the
jurisdiction in which it is incorporated.
(B) [Deleted]
(C) Returns
Each member of the Sale Group has properly and
punctually made all returns and provided all
information required for taxation purposes and
none of such returns is disputed by the Inland
Revenue or any other authority concerned (in
the United Kingdom) and the Vendor is not aware
that any dispute is likely, or that any event
has occurred which would or might give rise to
a payment under paragraph 2.1.
(D) Payment of Tax
Each member of the Sale Group has duly and
punctually paid all taxation which it has
become liable to pay and is under no liability
to pay any penalty or interest in connection
with any claim for taxation and has not paid
any tax which it was and is not properly due to
pay.
(E) Audits
No member of the Sale Group has in the last six
years received any audit visit or inspection
from any taxation authority.
(F) Consideration for Transactions
(1) No event has occurred which could give
rise to a liability for an accounting
period ending after Completion to
taxation on any member of the Sale
Group calculated by reference to
deemed (as opposed to actual) income,
profits or gains.
(2) There has been no supply of any
service of any description (including
but not limited to any loan of any
property) by any member of the Sale
Group where such service continues to
be provided by any member of the Sale
Group at the date hereof for a
consideration which was less than the
consideration which could be deemed to
have been received for taxation
purposes.
(3) No member of the Sale Group has
entered into any transaction or
arrangement under which it may be
required to pay or will receive for
any asset or services an amount which
exceeds the market value thereof.
(4) No event has occurred which could
result in any member of the Sale Group
being liable to pay or bear a
liability to taxation which is
primarily or directly chargeable
against or attributable to any other
person or entity (other than any other
member of the Sale Group).
(5) No member of the Sale Group has
disposed of any asset to any other
company which was at the time of that
disposal a member of the same group of
companies as the disposing company for
the purposes of any taxation where
that asset continues to be held by any
member of the Sale Group at the date
hereof.
(G) Transferred tax refunds
The Disclosure Letter contains particulars
of all arrangements relating to the
transfer of tax refunds to which each
member of the Sale Group is or has been a
party and no member of the Sale Group has
made nor is liable to make any payment
under any such arrangement or agreement
save in consideration for the transfer of
tax refunds allowable to such member by way
of discharge from liability to corporation
tax and equivalent to the taxation for
which such member would have been liable
had it not have been for the transfers.
(H) Special Arrangements and Concessions
(1) Full details of any special
arrangements and concessions
(including, without limitation, any
arrangements and concessions relating
to the taxation of foreign exchange
gains and losses and/or financial
instruments and/or loan relationships)
which relate to or affect any member
of the Sale Group and which have been
made with any taxation authority or
relied upon by any member of the Sale
Group in either case within the last
six years, are set out in the
Disclosure Letter.
(2) No member of the Sale Group has taken
any action which has had, or might
have, the result of prejudicing or
disturbing any such special
arrangement or concession.
4.2 Distributions and Payments
(A) Distributions
(1) No distribution within the meaning of
Section 210 Taxes Act 1988 has been
made within the last six years by any
member of the Sale Group nor is any
member of the Sale Group bound to make
any such distribution or any
distribution under Section 209 or 212
Taxes Act 1988.
(2) No securities (within the meaning of
s.254(1) Taxes Act 1988) issued by any
member of the Sale Group and remaining
in issue at the date hereof were
issued in such circumstances that the
interest payable thereon fails to be
treated as a distribution under
s.209(2)(e)(iii) Taxes Act 1988.
(3) No member of the Sale Group has
received any capital distribution to
which the provisions of s.189 TCGA
1992 could apply.
(4) No member of the Sale Group has issued
any share capital, nor granted options
or rights to any person which entitles
that person to require the issue of
any share capital to which the
provision of s.249 Taxes Act 1988
could apply.
(B) Group Income
The Disclosure Letter contains particulars
of all elections effective at the date
hereof made by each member of the Sale
Group under s.247 Taxes Act 1988.
(C) Surrender of Advance Corporation Tax
The Disclosure Letter contains particulars
of all arrangements and agreements to which
each member of the Sale Group is a party
relating to the surrender of advance
corporation tax made or received by any
such member under s.240 Taxes Act 1988 and
no member of the Sale Group has paid nor is
liable to pay any amount in excess of the
advance corporation tax surrendered to it
nor for the benefit of any advance
corporation tax which is or may become
incapable of set off against such member's
liability to corporation tax.
(D) Payments Under Deduction
Where any member of the Sale Group has made
any payment to any person which ought to
have been made under deduction of tax each
such member has (if required by law to do
so) provided certificates of deduction to
such person.
4.3 Losses
(A) Group Relief
The Disclosure Letter contains particulars
of all arrangements and agreements relating
to group relief to which any member of the
Sale Group is a party and:-
(1) no member of the Sale Group has made
nor is liable to make any payment
under any such arrangement or
agreement save in consideration for
the surrender of group relief
allowable to such member by way of
relief from corporation tax and
equivalent to the taxation for which
such member would have been liable had
it not been for the surrender; and
(2) no member of the Sale Group is a dual
resident investing company within the
meaning of s.404 Taxes Act 1988.
4.4 Close Companies
No member of the Sale Group is nor has been
within the last six years a close company.
4.5 Anti-Avoidance
(A) s.765 Taxes Act 1988
No member of the Sale Group has without the
prior consent of the Treasury been a party
to any transaction for which consent under
s.765 Taxes Act 1988 was required. Where
such consent would have been required but
for the provisions of s.765A(1) Taxes Act
1988, each such member has complied in full
with the requirements of The Movements of
Capital (Required Information) Regulations
1990.
(B) Controlled Foreign Companies
(1) The Disclosure Letter contains full
details of each member of the Sale
Group's interest in the share capital
of any company not resident in the
United Kingdom for taxation purposes
(or which is treated for the purposes
of any double taxation convention as
not being so resident) which is
controlled by persons resident in the
United Kingdom for taxation purposes
and in which such member has 10% or
more of the voting rights (a
"controlled foreign company") and the
disclosure letter contains full
details of the interest of each member
of the Sale Group in any other company
which may result in the application of
similar or equivalent provisions in
any jurisdiction outside the United
Kingdom.
(2) No enquiries have been made or
intimated by the Inland Revenue in
respect of any controlled foreign
company.
(3) No direction has been made by the
Board of Inland Revenue under s.747
Taxes Act 1988 in respect of any
controlled foreign company.
(4) In relation to each controlled foreign
company, either Section 748(1) Taxes
Act 1988 applies, or the jurisdiction
in which the controlled foreign
company is resident is included in the
list of Excluded Countries published
by the Inland Revenue (and current at
the date hereof), or the condition set
out at section 747(1)(c) Taxes Act
1988 is not satisfied.
(C) Anti-avoidance
No member of the Sale Group has ever been
requested to furnish information pursuant
to notices served under ss 745 or 778 Taxes
Act 1988.
4.6 Capital Assets
(A) Base Values - United Kingdom Taxation
(1) The Disclosure Letter contains full
and accurate particulars of:-
(a) the extent to which the book value
of an asset or a particular class
of assets as shown in the Net
Asset Statement is in excess of
either (aa) the amount falling to
be deducted under s.38 TCGA 1992
from the consideration receivable
on a disposal of that asset, or
(bb) the balance of the qualifying
expenditure as defined in s.25 CAA
1990 attributable to that asset or
pool of assets, as the case may
be, brought forward into the
accounting period in which
Completion will occur and save to
the extent disclosed, no such
excess exists (where provision
for taxation in respect of such
excess has not been made in the
Net Asset Statement).
(B) Roll-over relief
In respect of assets held by any member of
the Sale Group at the date hereof the
Disclosure Letter contains full and
accurate particulars of all claims made by
any member of the Sale Group under s.33A
Capital Allowances Act 1990 or ss.152 to
156, s.158, ss.242 to 244, s.247 or s.248
TCGA 1992 and no such claim or other claim
has been made by any other person (in
particular pursuant to s.165 or s.175 TCGA
1992) which affects or could affect the
amount or value of the consideration for
the acquisition of any asset by such member
taken into account in calculating liability
to corporation tax on chargeable gains on a
subsequent disposal (to the extent such
liability has not been reflected in the
computation of deferred taxation in the Net
Asset Statement.)
(C) Chargeable Debts
No gain chargeable to corporation tax will
accrue to any member of the Sale Group on
the disposal of any debt owing to such
member not being a debt on a security or on
the disposal of any corporate bond not
being a qualifying corporate bond.
(D) Chargeable Policies
No member of the Sale Group has acquired
benefits under any policy of assurance
otherwise than as original beneficial
owner.
(E) Company Migration
There are no circumstances extant at the
date hereof pursuant to which any member of
the Sale Group may become liable to tax
pursuant to s.185 (Deemed disposal of
assets on company ceasing to be resident in
U.K.), s.187 (Postponement of charge on
deemed disposal) TCGA 1992 or s.132
(Liability of other persons for unpaid tax)
Finance Act 1988 or s.191 TCGA 1992
(Non-payment of tax by non-resident
companies).
4.7 Elections and Clearances
(A) Elections
The Disclosure Letter contains full
particulars of all elections made by each
member of the Sale Group under the
following provisions:-
(1) ss.524, 527 and 534 Taxes Act 1988
(lump sum receipts for patents and
copyright);
(2) s.37 Capital Allowances Act 1990
(short life assets); and
(3) s.11 Capital Allowances Act 1990
(leasehold interests).
(B) Clearances
There are annexed to the Disclosure Letter
copies of all correspondence relating to
applications for clearance under any
enactment relating to taxation, where such
applications relate to assets held by, or
liabilities of, any member of the Sale
Group at Completion, or to other
circumstances extant at Completion relating
to the activities of the Sale Group or to
any applications made since the Balance
Sheet Date.
4.8 Miscellaneous
(A) Leaseholds
No member of the Sale Group is liable to
taxation under the provisions of ss.34, 35
and 36 Taxes Act 1988.
(B) Foreign Exchange Gains and Losses
(1) The exchange gains and losses of each
member of the Sale Group have not been
calculated in accordance with schedule
15 Finance Act 1993 and regulations
made thereunder.
(2) The Disclosure Letter contains full
details of all claims to defer
unrealised gains made by each member
of the Sale Group pursuant to s.139
Finance Act 1993.
(3) The Disclosure Letter contains details
of all debts to which the provisions
of the Finance Act 1993 do not apply
at present by virtue of Regulation 3
of the Exchange Gains and Losses
(Transitional Provisions) Regulations
1994.
(4) No member of the Sale Group has
received any direction as referred to
in s.136(1)(d) or s.136A(7)(b) Finance
Act 1993 in respect of qualifying
assets or liabilities extant at the
date hereof.
(C) Financial Instruments
(1) The Disclosure Letter contains full
details of all qualifying contracts
with non-resident persons for the
purposes of s.168 Finance Act 1994
extant at the date hereof.
(D) Loan Relationships
(1) Each member of the Sale Group applies
an authorised accruals method of
accounting (as that term is defined in
s.85 Finance Act 1996) in respect of
all loan relationships (as the term is
defined in s.81 Finance Act 1996) to
which it is a party.
(2) The Disclosure Letter contains full
and accurate particulars of any loan
relationship to which any member of
the Sale Group is a party, whether as
debtor or creditor, where any other
party to that loan relationship is
connected with any member of the Sale
Group for the purposes of Chapter II
of Part IV Finance Act 1996.
(3) The Disclosure Letter contains full
and accurate particulars of any debtor
relationship (as that term is defined
in s.103 Finance Act 1996) of any
member of the Sale Group which relate
to a relevant discounted security (as
that term is defined in paragraph 3 of
Schedule 13 Finance Act 1996) to which
paragraph 17 or paragraph 18 of
Schedule 9 Finance Act 1996 applies.
(4) The Disclosure Letter contains full
and accurate particulars of (i) any
loan relationship to which any member
of the Sale Group is a party, whether
as debtor or creditor, to which
paragraph 8 of Schedule 15 Finance Act
1996 has applied or will apply on the
occurrence of a relevant event (as
defined in paragraph 8(2)) in respect
thereof; (ii) in each case, the amount
of any deemed chargeable gain or
deemed allowable loss which has arisen
or will arise in consequence of that
relevant event; and (iii) any election
made pursuant to paragraph 9 of
Schedule 15 Finance Act 1996.
4.9 Taxation of Employees and Agents
(A) P.A.Y.E.
Each member of the Sale Group has properly
operated the Pay As You Earn system
deducting tax as required by law from all
payments to or treated as made to employees
and ex-employees of such member and
punctually accounted to the Inland Revenue
for all tax so deducted and all returns
required pursuant to s.203 Taxes Act 1988
and regulations made thereunder have been
punctually made and are accurate and
complete in all respects.
(B) Dispensations and P.A.Y.E Audits
The Disclosure Letter contains full details
of all dispensations obtained by each
member of the Sale Group which are still
current.
(C) Slave Companies
Any payment made to or for the direct or
indirect benefit of any person who is or
might be regarded by any UK taxation
authority as an employee of any member of
the Sale Group is made to such person
direct and is not made to any company or
other entity associated with that person.
(D) National Insurance
Each member of the Sale Group has paid all
national insurance contributions for which
it is liable and has kept proper books and
records relating to the same.
4.10 Value Added Tax
(A) Each member of the Sale Group to which the
statutory provisions and regulations
relating to value added tax apply (a
"relevant member of the Sale Group") has
complied with all statutory provisions and
regulations relating to value added tax and
has duly paid or provided for all amounts
of value added tax for which such member is
liable.
(B) All supplies made by each relevant member
of the Sale Group are taxable supplies and
each such member is not and will not be
denied credit for any input tax by reason
of the operation of s.26 Value Added Tax
Act 1994 and regulations made thereunder.
(C) All input tax for which each relevant
member of the Sale Group has claimed credit
has been paid by such member in respect of
supplies made to it relating to goods or
services used or to be used for the purpose
of such member's business.
(D) No member of the Sale Group is nor has
been, for value added tax purposes a member
of any group of companies (other than that
comprising the relevant members of the Sale
Group alone) and no act or transaction has
been effected in consequence whereof such
member is or may be held liable for any
value added tax chargeable against some
other company except where that other
company is a member of the Sale Group.
(E) No supplies have been contracted to be made
to any member of the Sale Group to which
the provisions of s.8 Value Added Tax Act
1994 might apply.
(F) No member of the Sale Group has been nor is
liable to be registered for value added tax
otherwise than pursuant to the provisions
of paragraph 1 schedule 1 Value Added Tax
Act 1994.
(G) No member of the Sale Group has been
required to give security under paragraph 4
schedule 11 Value Added Tax Act 1994.
(H) The Disclosure Letter contains details and
copies of all elections, together with the
relevant notification, made by each member
of the Sale Group pursuant to paragraph 2
schedule 10 Value Added Tax Act 1994 in
relation to assets held by any member of
the Sale Group at the date hereof.
(I) No member of the Sale Group is nor has
since 1st August 1989 been in relation to
any land, building or civil engineering
work a developer within the meaning of
paragraph 5(5) schedule 10 Value Added Tax
Act 1994.
(J) The Disclosure Letter contains full details
of any assets of each member of the Sale
Group which are held by such member at the
date hereof to which the provisions of Part
XV Value Added Tax Regulations 1995 (the
Capital Goods Scheme) apply and in
particular:-
(1) the identity (including in the case of
leasehold property, the term of
years), date of acquisition and cost
of the asset; and
(2) the proportion of input tax for which
credit has been claimed (either
provisionally or finally in a tax year
and stating which).
SCHEDULE 9 : NET ASSETS ADJUSTMENT
1. Interpretation
(A) In this Schedule 9, unless the context
otherwise requires, the following expressions
shall bear the following respective meanings:-
"Net Assets Statement" means the combined
balance sheet of the Sale Group as at the
Relevant Date prepared in accordance with the
provisions of paragraph 9 below;
"Relevant Date" means the Completion Date;
"Estimated Completion Date Payment" shall mean
an estimate (together with the corresponding
calculation) prepared in good faith by the
Vendor and notified to the Purchaser of the
likely amount of the Net Assets;
"Net Assets" means the amount (if any) by
which the assets exceed (or fall short of) the
liabilities of the Sale Group as shown in the
Net Assets Statement and shall be expressed as
a positive or negative figure accordingly;
(B) Capitalised words and expressions used but not
defined in this Schedule 9 shall bear the
meanings (if any) defined elsewhere in this
Agreement.
2. Estimated Completion Date Payment
The Vendor shall deliver to the Purchaser a copy of
the Estimated Completion Date Payment not later than
three Business Days prior to Completion and the
Purchaser shall (if it is a positive figure) pay to
the Vendor on Completion a sum (not exceeding 3
million pounds sterling) equal to the amount of the
Estimated Completion Date Payment as provided for in
clause 3.1.
3. Net Assets Statement
Within 45 days after the Completion Date, the Vendor
shall deliver to the Purchaser a copy of a draft Net
Assets Statement prepared in accordance with the
provisions of paragraph 9 below including its
calculation of the amount of the Net Assets.
4. Review Period
(A) The Purchaser shall have 45 days following
receipt of the draft Net Assets Statement
pursuant to paragraph 3 to advise the Vendor
whether it has any objections to the same,
failing which the Purchaser shall be deemed to
have accepted the Net Assets Statement and the
amount of the Net Assets specified therein.
(B) The Purchaser shall give to the Vendor
promptly upon request access after Completion
to the books and records and staff of the Sale
Group as is necessary to assist it in
preparing the Net Assets Statement and
calculating the amount of the Net Assets.
5. Independent Accountant
In the event that the Vendor and the Purchaser are
unable to reach agreement within 45 days of any
notice given pursuant to paragraph 4 (or such longer
period as the parties may agree), any matter in
dispute shall be referred to the decision of a
single independent chartered accountant or an
independent firm of chartered accountants to be
agreed upon between them or, in absence of such
agreement, to be selected (at the instance of either
party) by the then President of the Institute of
Chartered Accountants in England and Wales, and any
such chartered accountant or firm of chartered
accountants (whose costs shall be paid by the
parties as he or they shall direct) shall act as an
expert not as an arbitrator and their decision in so
acting shall be final and binding upon both parties.
In giving such decision, the accountant or firm
shall state what adjustments (if any) are required
to be made to the Net Assets Statement and what the
amount of the Net Assets is.
6. Information and Explanations
The Vendor shall provide such information and
explanations relating to the draft Net Asset
Statement, its preparation and/or the calculation of
the Net Assets as the Purchaser and/or the said
independent chartered accountant (or firm of
chartered accountants) shall reasonably require.
7. Increase or reduction of Consideration
(A) When the Net Assets Statement and the amount
of the Net Assets has become binding, either
by acceptance (or deemed acceptance) by the
Purchaser or by binding determination of the
independent chartered accountant or firm of
accountants appointed in paragraph 5, then:
(1) If the Net Assets is greater than the
payment made on Completion pursuant to
paragraph 2 above the Purchaser shall make
a cash payment to the Vendor in the amount
of such excess; or
(2) If the Net Assets is less than the payment
made on Completion pursuant to paragraph 2
above the Vendor shall make a cash payment
to the Purchaser in the amount of such
shortfall.
(B) The consideration for the Sale Shares as
specified in sub-clause 3.1 of the foregoing
Agreement shall be increased by the amount of
the Net Assets (if a positive figure) or
reduced by the amount of the Net Assets (if a
negative figure).
8. Payment
Any payment made under sub-paragraph (1) or (2) of
paragraph 7(A) above shall be paid within five days
after the Net Assets Statement has become binding as
aforesaid together with interest on such sum from
the day following the Completion Date to the date of
actual payment in full (as well before as after
judgment) at a rate equal to LIBOR plus 0.5% on a
daily basis (LIBOR being based on a 90 day rate and
an assumed sterling deposit of 1 million pounds
sterling).
9. Net Assets Statement
(A) The Net Assets Statement shall consist of a
combined balance sheet of the Sale Group as at
the Relevant Date.
(B) Subject to the specific adjustments to be made
pursuant to sub-paragraph (C) below, the Net
Assets Statement shall:-
(1) be prepared as if the Relevant Date were
the end of an accounting reference period;
(2) be prepared under the historic cost
convention and in accordance with the
requirements of generally accepted
accounting practices and principles
applied in the United Kingdom as at the
Relevant Date; and, subject to the
foregoing,
(3) consistently apply and adopt the same
bases and policies of accounting as those
applied or adopted in the preparation of
the Prepared Financial Statements.
(C) In preparing the Net Assets Statement:-
(1) no value shall be attributed to any
tangible fixed asset, goodwill or any
other intangible asset;
(2) inter-company balances between members of
the Sale Group will be eliminated;
(3) assets of the Sale Group shall include
cash and securities representing the same,
bank balances, trade and other debtors
(excluding the Indebtedness), stocks
(inventory), prepayments (except
prepayments in respect of vessel
drydocking) and accrued income and the
share of net assets of companies treated
as associated companies;
(4) liabilities shall include all current
liabilities, minority interests, long and
medium term loans of the Sale Group
excluding the Indebtedness;
(5) full provision shall be made for any
liability arising as a result of the
change of control of the Sale Group on
Completion;
(6) full provision or accrual (on a time-
apportioned basis) shall be made for all
bonuses and pension contributions
liabilities of the Sale Group;
(7) full provision shall be made for rebates
or discounts that will fall due and fees
and commissions that will be payable after
the Relevant Date in either case in
respect of sales or other transactions
that took place before the Relevant Date;
(8) full provision shall be made for all
taxation liabilities of the Sale Group to
United Kingdom fiscal authorities in
respect of the period ended 31 December
1996 (whether or not any provision
therefor was made in the Prepared
Financial Statements);
(9) full provision shall be made for all tax
arising on profits, gains or other
transactions arising on or after 01
January 1997 and on or before the Relevant
Date (calculated and accrued after
allowance for capital allowances and based
on the proportion of time that has elapsed
to the Relevant Date and after setting off
available advance corporation tax (if
any)) Provided that no provision shall be
made for deferred taxation;
(10)a provision of 250,000 pounds sterling in
respect of the actual or threatened claims
made by the Brazilian and Chilean seamen
referred to in the Disclosure Letter.
10. Further Provisions
(A) If, within six months after the Relevant Date,
any trade debts or accrued income which are
shown as assets in the Net Assets Statement
have not been collected in full, the Purchaser
may, if it so elects, procure the assignment
by the relevant member of the Sale Group of
such trade debts and/or accrued income to the
Vendor and the Vendor shall pay to such
transferor the value of such debts and/or
accrued income as shown in the Net Assets
Statement less any subsequent recoveries.
Notwithstanding any such transfer the
Purchaser shall procure that the Vendor is
provided with such information and copy
correspondence as the Vendor shall reasonably
require to assist it in seeking to collect
such sums from the relevant third parties. In
addition, if within six months after the
Relevant Date, the amount payable to trade
creditors of the Sale Group as at the Relevant
Date (i) exceeds the amounts accrued or
provided for them in the Net Assets Statement
then the Vendor shall upon demand forthwith
pay such excess to the Purchaser; or(ii) is
less than the amounts so accrued or provided,
then the Purchaser shall, upon demand,
forthwith pay the amount of any such shortfall
to the Vendor.
(B) If, notwithstanding the provisions of Schedule
9, any member of the Vendor's Group makes any
payment to any member of the Sale Group in
respect of the Indebtedness, then the
Purchaser shall account to the Vendor for the
same accordingly.
SCHEDULE 10 : PENSIONS
Pensions and Employment
1. Interpretation
1.1 Definitions: In this schedule, where the
context admits:
"Actuary" means a Fellow of the Institute of
Actuaries or of the Faculty of Actuaries or of
any successor body to such Institute or
Faculty;
"Sale Group" means all or any of the companies
listed in Schedule 3;
"Cessation Date" means the first day of the
first calendar month to commence after the
date which is 6 months after the Completion
Date (or such earlier date as the
Purchaser may by not less than one month's
notice in writing to the Vendor specify or
such later date as the Vendor and the
Purchaser may agree in writing);
"Interim Period" means the period from and
including Completion to but excluding the
Cessation Date;
"Merchant Navy Plans" means Scheme C, Scheme D
and Scheme E (or such one or more of them as
the context requires);
"Offshore Employee" at any time means an
individual whose services are provided to the
Sale Group under the terms of a crew
management contract or the like with Guernsey
Ship Management Limited or any other employing
company;
"Pension Scheme" means Scheme A and Scheme B
(or such one or other of them as the context
requires);
"Pensionable Employee" at any time means a
person who at that time is both an employee of
the Sale Group and is, or apart from being
absent from work would be, in pensionable
service under the Pension Scheme;
"Redundant Employee" means any employee of any
member of the Sale Group who was employed
prior to Completion and who is included in the
list of employees in Schedule 8 to the
Disclosure Letter whose employment is
terminated by reason of redundancy or notice
of such termination is given to him in either
case prior to 31 March 1998;
"Relevant Employee" means any present or past
employee of the Sale Group or of any
predecessor to all or any part of its business
and any present or past Offshore Employee;
"Scheme A" means the retirement benefits
scheme known as the Ocean Odyssey Pension
Scheme which was established by a trust deed
dated 30th September 1975 (or the trustees
from time to time of that scheme as the
context requires);
"Scheme B" means the retirement benefits
scheme known as the Ocean Nestor Pension
Scheme which was established by a trust deed
dated 31st December 1941 (or the trustees from
time to time of that scheme as the context
requires);
"Scheme C" means the retirement benefits
scheme known as the Merchant Navy Officers
Pension Fund (or the trustees from time to
time of that scheme as the context requires);
"Scheme D" means the retirement benefits
scheme known as the Merchant Navy Ratings
Pension Fund (or the trustees from time to
time of that scheme as the context requires);
"Scheme E" means the retirement benefits
scheme known as the Merchant Navy Officers
Pension Plan (or the trustees from time to
time of that scheme as the context requires).
1.2 Employees: References in this schedule to
employees includes directors.
1.3 Purchaser's Group Reorganisation: If during
the Interim Period any of the Pensionable
Employees are transferred from the employment
of the Sale Group to another company which is
an Affiliate of the Purchaser (the "New
Employer"), the Vendor shall, at the request
of the Purchaser, use all reasonable
endeavours to procure that the New Employer is
duly admitted to participation in the Pension
Scheme with effect from the date of such
transfer or if more than one such transfer
occurs with effect from the date of the first
such transfer. Subject to the New Employer
being so admitted, the New Employer and the
Sale Group shall be treated as one for the
purposes of Paragraph 2.
2. The Pension Scheme
2.1 Vendor's Undertakings: The Vendor undertakes
to the Purchaser for its own benefit and as
trustee and agent for the Sale Group;
(A) to procure that subject to the consent of
the Board of Inland Revenue being obtained
(which consent the Vendor shall use all
reasonable endeavours to procure) the
members of the Sale Group employing the
Pensionable Employees are permitted to
participate in the Pension Scheme
throughout the Interim Period;
(B) to procure that during the Interim Period
no power or discretion under the Pension
Scheme is exercised in a way calculated to
affect the Sale Group and/or all or any of
its employees save with the consent of the
Purchaser;
(C) to indemnify and to keep indemnified and
to hold harmless on a continuing basis the
Sale Group against all and any liability
to make any payment to or in connection
with the Pension Scheme (including, but
without limitation, the amount (if any)
the Actuary to the Pension Scheme
certifies pursuant to Sub-Paragraph 2.5)
other than to pay contributions pursuant
to Sub-Paragraph 2.2(A) and 2.2(B); and
(D) to procure that the Pension Scheme is
maintained in full force and effect and
does not cease to admit new members until
after the members of the Sale Group
employing the Pensionable Employees cease
to participate in the Pension Scheme.
2.2 Purchaser's Undertaking: The Purchaser shall
procure that the applicable members of the
Sale Group shall:
(A) pay to Scheme A and Scheme B respectively
employer contributions during the Interim
Period in respect of the Pensionable
Employees at the rate of:
(i) 6.35% of the basic salaries from time
to time of the Pensionable Employees
in the case of Scheme A; and
(ii) 10% of the basic salaries from time
to time of the Pensionable Employees
in the case of Scheme B;
(B) procure the payment to Scheme A and B
respectively of the contributions (if any)
payable during the Interim Period by the
Pensionable Employees; and
(C) comply in all other respects with the
provisions of the Pension Scheme during
the Interim Period.
2.3 Contracting-out in Interim Period: The Vendor
and the Purchaser undertake to co-operate with
each other with a view to procuring that the
employment of the Pensionable Employees is
contracted-out by reference to the Pension
Scheme at all applicable times during the
Interim Period.
2.4 Statutory Debt: The Vendor shall procure that
as soon as reasonably practicable after the
Cessation Date (and in any event within three
months from that date) the Actuary to the
Pension Scheme shall in accordance with all
applicable statutory requirements and
professional guidance, either certify in
writing:
(A) the amount which is due from the Sale
Group to the Pension Scheme pursuant to
s.75, Pensions Act 1995; or
(B) that no such amount is due.
The obligation on the Vendor contained in this
Sub-Paragraph 2.4 above shall include, if
necessary to comply with the prevailing
statutory requirements and professional
guidance then applicable, procuring that the
Pension Scheme carries out a minimum funding
valuation for the purposes of s.57(1)(a),
Pensions Act 1995.
3. Merchant Navy Plans
3.1 If:
(A) the winding-up of Scheme C and/or Scheme D
is commenced in accordance with their
respective trust deeds and rules within 18
months after the date of Completion; and
(B) as a consequence the Sale Group has any
direct or indirect liability under S.75 of
the Pensions Act 1995 or S.144 of the
Pensions Schemes Act 1993 or under the
rules of Scheme C and/or Scheme D or under
any contract or indemnity, to make a
payment to Scheme C and/or Scheme D or to
any other person (including without
limitation Guernsey Ship Management
Limited) in relation to any Relevant
Employee;
an amount equal to such liability shall:
(1) be taken into account for the
purposes of the threshold contained
in paragraph 2.2 of Schedule 11; and
:
(2) if (x) the threshold is at any time
exceeded (for any reason) and (y) the
amount of such liability exceeds
50,000 pounds sterling be paid
forthwith by the Vendor to the
Purchaser together with interest
(after as well as before judgement)
at LIBOR from the date such liability
arose until date of payment.
4. Pensions Act 1995
4.1 The Purchaser shall procure that:
(A) at the request of the Vendor the members
of the Sale Group participating in the
Pension Scheme will nominate, and not
withdraw such nomination, the Vendor (or
whoever the Vendor may reasonably
nominate) as the "appropriate person" as
the person to act for it for the purposes
of sub-section 21(9) of the Pensions Act
1995 (as to be inserted by paragraph
1(1)(g) of schedule 3 of the Occupational
Pension Schemes (Member-nominated Trustees
and Directors) Regulations 1996) in
relation to the Pension Scheme;
(B) at the request of the Vendor the members
of the Sale Group participating in the
Pension Scheme will nominate and not
withdraw such nomination, the Vendor (or
whoever the Vendor may reasonably
nominate) as representative for the
consultation required by section 35(5)(b)
of the Pensions Act 1995 by the Trustees
of the Pension Scheme with the employer in
relation to the written statement of
investment principles;
(C) at the request of the Vendor the members
of the Sale Group participating in the
Pension Scheme will nominate, and not
withdraw such nomination, the Vendor (or
whoever the Vendor may reasonably
nominate) as their representative for the
purposes of paragraph (a) of section 58(4)
of the Pensions Act 1995 (as to be amended
by paragraph 2 of schedule 5 to the
Occupational Pension Schemes (Minimum
Funding Requirement and Actuarial
Valuations) Regulations 1996) in relation
to the Pension Scheme;
(D) subject as is provided above, the members
of the Sale Group participating in the
Pension Scheme will if the Vendor so
requests and the Purchaser agrees (such
agreement not to be unreasonably withheld
or delayed) exercise and will not without
the agreement of the Vendor (such
agreement not to be unreasonably withheld
or delayed) exercise any right or
discretion under the Pensions Act 1995
referable to the Pension Scheme apart from
any right or discretion in connection
with:
(1) Occupational Pensions Regulatory
Authority;
(2) The Pensions Compensation Board;
(3) The Pensions Ombudsman;
(4) matters to which sections 42 to 46
(Employee Trustees) of the Pensions
Act 1995 apply;
(E) the members of the Sale Group
participating in the Pension Scheme will
generally co-operate with the Vendor with
regard to the introduction of the Pensions
Act 1995 (including, for the avoidance of
doubt, contracting-out).
5. Warranties and Representations
5.1 The Vendor hereby warrants and represents to
and for the benefit of the Purchaser in the
following terms:
(A) No Other Arrangements - Save for the
Pension Scheme and the Merchant Navy Plans
no member of the Sale Group or of the
Vendor's Group is a party to or
participates in or contributes to any
scheme, agreement or arrangement (whether
legally enforceable or not) for the
provision of any pension, retirement,
death, incapacity, sickness, disability,
accident or other like benefits (including
the payment after cessation of employment
with the Sale Group of medical expenses)
for any Relevant Employee or for the
widow, widower, child or dependant of any
Relevant Employee.
(B) No Assurances etc - No member of the Sale
Group or of the Vendor's Group:
(1) has given any undertaking or
assurance (whether legally
enforceable or not) as to the
continuance, introduction,
improvement or increase of any
benefit of a kind described in Sub-
Paragraph 5.1(A) above, or
(2) is paying or has in the last two
years paid any such benefit
to (in either case) any Relevant Employee
or any widow, widower, child or dependant
of any Relevant Employee.
(C) All Details Disclosed - The following
details relating to the Pension Scheme and
the Merchant Navy Plans are contained in
or annexed to the Disclosure Letter
including:
(1) true and complete copies of the
following documents referable to the
Pension Scheme and Merchant Navy
Plans, viz:
(a) all deeds, rules and other
governing documents of current
effect;
(b) all announcements, booklets and
the like of current effect which
have been issued to any of the
employees of the Sale Group and
the Offshore Employees;
(c) the latest completed audited
accounts and any subsequent
accounts or draft accounts;
(d) an accurate list of all
Pensionable Employees and an
accurate list of Offshore
Employees who are in pensionable
service by reference to the
Merchant Navy Plans;
(2) details of all amendments (if any) to
the Pension Scheme and the Merchant
Navy Plans which have been announced
or in relation to the Pension Scheme
and the Merchant Navy Plans are
proposed but which have not yet been
formally made;
(3) details of all discretionary
increases (if any) to pensions in
payment or in deferment under the
Pension Scheme which have been
granted in the three years prior to
the date of this Agreement or which
are under consideration;
(4) details of all discretionary
practices (if any) which may have led
any person to expect additional
benefits in a given set of
circumstances (by way of example, but
without limitation, on retirement at
the behest of the Sale Group or in
the event of redundancy); and
(5) details of the rate at which and
basis upon which the Sale Group and
Vendor's Group currently contributes
to the Pension Scheme and the
Merchant Navy Plans in relation to
the Pensionable Employees and
Offshore Employees respectively, any
change to that rate and/or basis
which is proposed or which is under
consideration and all contributions
paid to the Pension Scheme and the
Merchant Navy Plans by the Sale Group
and the Vendor's Group in relation to
the Pensionable Employees and
Offshore Employees respectively in
the three years prior to the date of
this Agreement.
(D) Membership - Every Relevant Employee who
has at any time had the right to join, or
apply to join, the Pension Scheme and the
Merchant Navy Plans has been properly
advised of that right.
(E) Augmentation - No power under the Pension
Scheme or the Merchant Navy Plans has been
exercised in relation to any Pensionable
Employee or any Offshore Employee:
(1) to provide terms of membership of the
Pension Scheme or of the Merchant
Navy Plans (whether in either case as
to benefits or contributions) which
are different from those generally
applicable to members of the Pension
Scheme or of the Merchant Navy Plans;
(2) to provide any benefits which would
not but for the exercise of that
power have been payable under the
Pension Scheme or under the Merchant
Navy Plans; or
(3) to augment any benefits under the
Pension Scheme or under the Merchant
Navy Plans.
(F) Contributions - Contributions to the
Pension Scheme and the Merchant Navy Plans
are not paid in arrear and all
contributions and other amounts which have
fallen due for payment by the Sale Group
or by the Vendor's Group have been paid.
The Sale Group has (to the extent that it
will be required to do) discharged its
liability (if any) to pay or reimburse
(whether wholly or in part) to anyone who
has paid any costs, charges or expenses
which have been incurred by or in
connection with the Pension Scheme and the
Merchant Navy Plans.
(G) Obligations - The members of the Sale
Group employing the Pensionable Employees
and with respect to Offshore Employees
employed by Guernsey Ship Management
Limited:
(1) have been admitted to participation
in the Pension Scheme and the
Merchant Navy Plans on the same terms
as apply generally to other employers
participating in the Pension Scheme;
(2) have observed and performed those
provisions of the Pension Scheme and
the Merchant Navy Plans which apply
to them;
(3) are not indebted to the Pension
Scheme or the Merchant Navy Plans by
virtue of s.75, Pensions Act 1995;
(4) may (without the consent of any
person or further payment) terminate
their liability to contribute to the
Pension Scheme at any time subject
only to giving such notice (if any)
as is expressly provided for in the
documentation containing the current
provisions governing the Pension
Scheme; and
(5) have at all material times held or
been named in a contracting-out
certificates referable to the Pension
Scheme and the Merchant Navy Plans.
(H) Compliance - The Pension Scheme and the
Merchant Navy Plans:
(1) are exempt approved schemes; and
(2) as far as the Vendor is aware comply
with and have at all times been
administered in accordance with all
applicable laws, regulations and
requirements (including those of the
Board of Inland Revenue and of trust
law).
(I) Disputes - None of the Pension Scheme, the
Sale Group or any member of the Vendor's
Group is engaged or involved in any
proceedings which relate to or are in
connection with the Pension Scheme or the
benefits thereunder or the Merchant Navy
Plans or the benefits thereunder which may
affect the Relevant Employees and no such
proceedings are pending or threatened and
so far as the Vendor is aware there are no
facts likely to give rise to any such
proceedings. In this Sub-Paragraph
"proceedings" included any litigation or
arbitration and also includes any
investigation or determination by the
Pensions Ombudsman or the Occupational
Pensions Advisory Service and any internal
dispute resolution procedure established
in connection with the Pension Scheme.
6. Employment
6.1 On exchange the Vendor shall procure that the
Sale Group shall write to its employees in the
terms set out in Part A of Schedule 7.
6.2 On Completion the Purchaser shall write to the
employees of the Sale Group in the terms set
out in Part B of Schedule 7.
6.3 Subject to the terms of 6.4 below, the
Purchaser will procure that each member of the
Sale Group will honour as regards calculating
any redundancy payment to a Redundant Employee
either (i) where the Redundant Employee is
based outside the United Kingdom or Channel
Islands (other than as an expatriate) his
contractual entitlement on account of
redundancy or (ii) the terms of the Ocean
Group UK redundancy policy and the
discretionary redundancy guidelines thereto as
if it and they were not discretionary. Sample
examples of the application of said policy on
that basis are contained in Supplemental
Document 1/10, and a copy of the said policy
and such guidelines are set out in the Ocean
Group plc "Personnel Guidelines for Managers -
UK Redundancy Policy", issued on 16 June 1992
which form part of Document 28/3 referred to
in Schedule 1 of the Disclosure Letter.
6.4 Subject to the Vendor being able to fulfil its
obligation under (B) below, the Purchaser
shall procure that, in relation to any
Redundant Employee who is a Pensionable
Employee immediately prior to the date of his
redundancy or, was a Pensionable Employee
immediately prior to the Cessation Date and
still has deferred benefits under the Pension
Scheme at the date of redundancy, the relevant
employing company in the Sale Group follows
the Vendor's Group's current practice with
regard to the provision of pension whether
immediate or deferred in lieu of part (or the
whole) of any redundancy payment including,
without limitation, where the Pensionable
Employee is over 50 years of age. To that end
any such employing company or the Purchaser
may in relation to any such Redundant Employee
at that employee's election pay an amount not
exceeding the amount which would have been
payable to such Redundant Employee pursuant to
paragraph 6.3 (the amount so paid being called
the "Relevant Amount") to the Vendor in which
event:
(A) the payment which would otherwise be
payable to the Redundant Employee pursuant
to 6.3 shall be reduced by an amount equal
to the Relevant Amount; and
(B) the Vendor shall procure that the benefits
payable to or in respect of such Redundant
Employee under the Pension Scheme are
augmented on the same basis and to the
same proportionate extent as applies under
the Vendor's Group practice as at the date
of this Agreement for augmenting benefits
under the Pension Scheme when a member
thereof is made redundant.
If the Purchaser makes a payment to the Vendor
pursuant to this paragraph 6.4 the payment
shall take effect by way of adjustment to the
consideration for the Sale Shares.
7. O.I.L. Limited and Pension and Life Assurance
Scheme
The Vendor covenants with the Purchaser as trustee
and agent for each member of the Sale Group to
indemnify and hold each member of the Sale Group
harmless in respect of all and any liability
howsoever or whatsoever arising out of or in
connection with the O.I.L. Limited Pension and Life
Assurance Scheme and the winding-up thereof insofar
as any such liability cannot be met out of the
funds, reserved by Prudential for this purpose.
SCHEDULE 11 : VENDOR'S PROTECTION
Vendor's Protections
1. Guarantee
The Purchaser shall use its best endeavours to
secure the release of the Vendor and each member of
the Vendor's Group from all guarantees and other
contingent liabilities of such person with respect
to any member of the Sale Group specifically
identified in Schedule 7 of the Disclosure Letter
for the purpose of this paragraph (offering its own
covenant in substitution if requested by the Vendor)
and shall in the meantime indemnify the Vendor (for
itself and as trustee for each member of the
Vendor's Group) and keep the Vendor's Group
indemnified against any liability (including costs
damages and expenses) thereunder or which may be
incurred in relation thereto.
2. Limitation of Liability
The provisions of this paragraph shall operate to
limit the liability of the Vendor under or in
connection with the Warranties and references in
this paragraph 2 to "such liabilities" shall be
construed accordingly. The parties agree as
follows:-
2.1 no claim may be made in respect of any such
liabilities unless the amount thereof exceeds
50,000 pounds sterling (a "qualifying claim")
and for this purpose a series of claims
arising out of or related to common facts or
the same cause of action shall, if the
Purchaser elects, be treated as a single
qualifying claim;
2.2 (subject as provided in sub-paragraph 2.5) no
such liabilities shall attach to the Vendor
unless the aggregate amount of (i) such
liabilities (consisting only of qualifying
claims) and/or (ii) the amount of liability of
the Vendor which is referred to in paragraph
3.1 of Schedule 10 shall exceed the total sum
of 3,280,000 pounds sterling but if such
liabilities shall exceed that sum the Vendor
shall (subject to the other provisions hereof
including sub-paragraph 2.1) be liable for the
whole of such liabilities and not merely for
the excess;
2.3 the aggregate amount of such liabilities shall
not exceed the sum of 328 million pounds
sterling as adjusted by Schedule 9 and as
reduced by a sum equal to the aggregate of all
amounts for which the Vendor has made payment
(i) under clause 14 in respect of any "Loss"
as therein defined; and (ii) under the
indemnities in any of the Schedules to this
Agreement;
2.4 the Vendor shall have no liability in respect
of the Warranties unless written particulars
thereof (giving reasonable details of the
specific matter or claim in respect of which
such claim is made so far as then known to the
Purchaser and detailing (so far as then
possible) the Purchaser's calculation of the
loss thereby alleged to have been suffered by
it) shall have been given to the Vendor:-
(A) in relation to the Warranties (other than
those contained in Schedule 8 or paragraph
2.12 of Schedule 5) within a period of
eighteen months from the Completion Date;
(B) in relation to the Warranties contained in
paragraph 2.12 of Schedule 5, within a
period of three years from the Completion
Date;
(C) in relation to the Warranties contained in
Schedule 8, within a period of seven years
from the Completion Date;
PROVIDED THAT this sub-paragraph 2.4 shall not
apply to a claim which (or delay in the
discovery of which) is the consequence of
fraud, wilful misconduct or wilful concealment
by the Vendor or any officer or employee, or
former officer or employee of the Vendor; and
PROVIDED FURTHER THAT the liability of the
Vendor in respect of any claim so notified
shall absolutely determine (if such claim has
not been previously satisfied, settled or
withdrawn) if legal proceedings in respect of
such claim shall not have been commenced
within one year of the service of such notice
and for this purpose proceedings shall not be
deemed to have been commenced unless they
shall have been properly issued and validly
served upon the Vendor;
2.5 no such liabilities shall attach to the Vendor
in respect of any claims made under or in
respect of paragraph 2.8(A)(1) of Schedule 5
unless the aggregate amount of such
liabilities (consisting only of qualifying
claims) shall exceed the total sum of 1
million pounds sterling but if such
liabilities shall exceed that sum the Vendor
shall (subject to the other provisions hereof
excluding sub-paragraph 2.2) be liable for the
whole of such liabilities and not merely for
the excess.
3. Conduct of Litigation
(A) Upon the Purchaser becoming aware of any
claim, action or demand against it or any
member of the Sale Group or any matter
which it considers does or is likely to
give rise to a qualifying claim in respect
of the Warranties, the Purchaser shall and
shall procure that the appropriate member
of the Sale Group shall to the extent not
already provided for in this Agreement and
subject as provided in sub-paragraph (C)
below:-
(1) forthwith notify the Vendor by
written notice as soon as it appears
to the Purchaser that the Vendor is
or may become liable under the
Warranties or that any assessment or
claim of a third party received by or
coming to the notice of the Purchaser
may result in a qualifying claim
under the Warranties but any failure
to give such notice shall not affect
the rights of the Purchaser except to
the extent that the Vendor is
materially prejudiced by such
failure;
(2) take such action, give such
assistance and give such information
and access to personnel, premises,
chattels, documents and records to
the Vendor and its professional
advisers as the Vendor may reasonably
request and which shall not
unreasonably interfere with the Sale
Group's operations in order to avoid,
dispute, resist, mitigate, settle,
compromise, defend or appeal any
claim in respect thereof or
adjudication with respect thereto;
(3) at the request of the Vendor, allow
the Vendor at its own expense to take
the sole conduct of such actions as
the Vendor may deem appropriate in
connection with any such assessment
or claim in the name of the Purchaser
or the appropriate member of the Sale
Group and in that connection the
Purchaser shall give or cause to be
given to the Vendor all such
assistance as the Vendor may
reasonably require in avoiding,
disputing, resisting, settling,
compromising, defending or appealing
any such claim and at the Vendor's
expense shall instruct such
solicitors or other professional
advisers as the Vendor may nominate
to act on behalf of the Purchaser or
the appropriate member of the Sale
Group, as appropriate, but to act in
accordance with the Vendor's sole
instructions;
(4) make no admission of liability,
agreement, settlement or compromise
with any third party in relation to
any such claim or adjudication
without the prior written consent of
the Vendor.
(B) The Vendor shall not be entitled at any
stage to settle any third party assessment
or claim as is referred to in sub-clause
(A) (other than solely for a cash sum in
respect of which the Purchaser shall be
entitled to be reimbursed by the Vendor
under the Warranties) without the prior
written consent of the Purchaser (which
shall not be unreasonably withheld or
delayed).
(C) The provisions of sub-paragraphs (2), (3)
and (4) of paragraph 3(A) shall not
apply:-
(1) unless the Vendor has first
acknowledged and agreed in writing to
the Purchaser that (subject to any of
the provisions of paragraph 2 above)
the Vendor shall be liable to the
Purchaser under the Warranties in
respect of the matter notified to it
and the consequences of the
litigation assumed by the Vendor
under or pursuant to sub-paragraph
(3);
(2) unless the Purchaser (and any other
relevant member of the Sale Group) is
indemnified against all reasonable
costs, claims and expenses
(including, without limit, reasonable
professional costs and expenses)
incurred in acting in accordance with
the provisions of sub-paragraph (3);
and/or
(3) if the Purchaser considers in good
faith that the goodwill of it or any
member of the Sale Group is likely to
be materially prejudiced in
consequence thereof.
4. No liability if Loss is Otherwise Compensated For
(A) (1) The Purchaser and those deriving
title from the Purchaser on or after
Completion shall not be entitled to
recover damages or otherwise obtain
reimbursement or restitution more
than once between them in respect of
any individual breach of the
Warranties.
(2) The Vendor shall not be liable for
breach of any of the Warranties to
the extent that the subject of the
claim has been or is made good or is
otherwise compensated for without
cost to the Purchaser or to any
member of the Sale Group.
(B) The Purchaser shall not be entitled to
make a claim for breach of any of the
Warranties to the extent that the subject
matter thereof has been provided or
reserved for in the Net Assets Statement.
(C) If, in respect of any matter which would
give rise to a breach of the Warranties,
any member of the Sale Group is entitled
to claim under any policy of insurance
then no such matter shall be the subject
of a claim under the Warranties unless and
until the appropriate member of the Sale
Group shall have made a claim against and
so does recover from its insurers and any
such claim under the Warranties shall
(subject as provided below) then reduce
(or be extinguished) by the amount so
recovered Provided that the Purchaser
shall be liable for any increased premium
arising on renewal of such policy by
reason of such claim and shall be entitled
to recover the same from the Vendor
accordingly.
(D) If the Vendor pays at any time to the
Purchaser an amount pursuant to a claim in
respect of the Warranties and the
Purchaser or a member of the Sale Group
subsequently recovers from some other
person any sum in respect of any matter
giving rise to such claim, the Purchaser
shall forthwith repay to the Vendor so
much of the amount paid by the Vendor to
the Purchaser as does not exceed the sum
recovered from such other person less all
reasonable costs, charges and expenses
incurred by the Purchaser or the relevant
member of the Sale Group recovering that
sum from such other person.
(E) No claim may be made under the Warranties
and no breach of the Warranties shall be
deemed to have occurred in respect of any
liability arising from a claim to any non
UK taxation (to include any assessment,
notice, demand or other communication or
action taken by any person, authority, or
body responsible for the assessment
collection or recovery or taxation) which
claims:
(1) payment of taxation;
(2) to deprive any member of the Sale
Group or the Purchaser of any relief;
or
(3) to nullify or cancel any right to the
repayment of taxation
(and in this paragraph, "UK taxation"
"tax" and "taxation" have the meanings set
out in paragraphs 1.7 and 1.10 of Schedule
8).
5. Acts of the Purchaser
No claim shall lie against the Vendor under the
Warranties to the extent that such claim is
attributable to:-
(1) any voluntary act, omission,
transaction or arrangement carried
out pursuant to a request in writing
or with the consent in writing of the
Purchaser before Completion; and
(2) any voluntary act, omission,
transaction or arrangement carried
out by the Purchaser or any member of
the Sale Group or by persons deriving
title from the Purchaser on or after
Completion outside the ordinary
course of business after the
Completion Date and which the
Purchaser (or relevant member of the
Sale Group) knows or ought reasonably
to have known would give rise to a
claim under the Warranties.
6. Mitigation
The Purchaser shall take and shall procure that all
members of the Sale Group shall take all reasonable
steps to mitigate any loss or liability which is or
might become a subject of a claim for breach of the
Warranties.
7. Liability for Contingent or Non-Quantifiable
Claims
If any breach of the Warranties arises by reason of
some liability of a member of the Sale Group which,
at the time such breach is notified to the Vendor,
is contingent only or otherwise not capable of being
quantified, then the Vendor shall not be under any
obligation to make any payment in respect of such
breach unless and until such liability ceases to be
contingent or becomes capable of being quantified,
as the case may be. So long as such claim shall
have been notified to the Vendor in accordance with
sub-paragraph 2.4 above, as appropriate, then the
second proviso to such sub-paragraph shall be
amended in relation to such claim so as to require
that legal proceedings be commenced within one year
from the date on which the said liability ceases to
be contingent or becomes capable of being
quantified, as the case may be, in order for the
liability of the Vendor in respect of such claim not
to determine.
8. Retrospective legislation
No liability shall arise in respect of any breach of
any of the Warranties to the extent that liability
for such breach occurs or is increased as a result
of any legislation not in force at the date hereof
which takes effect retrospectively.
9. Property
None of the Warranties other than those contained in
paragraph 2.8(G) to(N) of Schedule 5 shall
constitute (or be deemed to constitute) directly or
indirectly a Warranty in respect of immoveable
property and the Purchaser acknowledges and agrees
that the Vendor gives no warranties and makes no
representations as to immovable property other than
those set out in paragraph 2.8(G) to (N) of
Schedule 5.
10. Payment of Claim to be Reduction in Purchase
Price
Any payment made by the Vendor in respect of any
claim under the Warranties shall be deemed to be a
reduction in the consideration payable hereunder for
the Sale Shares.
11. Vendor's indemnity
(A) Subject as provided in paragraph 11(B) the
Vendor shall be responsible for and hereby
undertakes to the Purchaser (for itself
and as trustee for each member of the Sale
Group) to indemnify and keep indemnified
each of them from and against all and any
costs, charges, claims, expenses, damages,
demands, actions and liabilities arising
after Completion directly or indirectly
from any entitlement of any employee of
any member of the Sale Group who is a
Redundant Employee (which term shall in
this paragraph have the meaning ascribed
to it in Schedule 10) to (i) a period of
notice to terminate employment (or a
payment in lieu thereof) and/or (ii) any
payment to be made in the event of a
termination of employment by reason of
redundancy in excess of, as the case may
be, the period of notice and/or the amount
of any payment set out with respect to
such employee in the list of employees
appearing as Schedule 8 to the Disclosure
Letter (the "Indemnified Costs"). For the
avoidance of doubt, where such list does
not refer to an employee who subsequently
proves to be entitled to receive a payment
under the Ocean Group UK Redundancy Policy
or does not specify any entitlement to
notice and/or the amount of any such
payment, the entitlements of such
employees will be taken to be in excess of
those stated by the full amount thereof.
(B) The Vendor shall be liable to the
Purchaser under paragraph 11(A) above only
to the extent that the aggregate amount of
the Indemnified Costs and all amounts
which, being obliged pursuant to paragraph
6.3 of Schedule 10 to do so, members of
the Sale Group pay to Redundant Employees
exceeds 2,610,694 pounds sterling.
12. Physical Condition of Vessels
No liability shall attach to the Vendor in respect
of any claim under the Warranties in respect of any
matter to the extent that the event, circumstance,
act or omission giving rise to such claim relates to
the physical condition of any of the Vessels.
13. Environmental
The Purchaser shall not be entitled to claim under
this Agreement in relation to pollution,
contamination or other matters relating to the
protection of the environment except for (i) the
warranties in paragraph 2.12 of Schedule 5; and (ii)
the indemnity in Clause 14 of this Agreement.
SIGNED by
duly authorised for and on behalf
of OCEAN GROUP plc in the
presence of:
SIGNED by
duly authorised for and on behalf
of TIDEWATER INC. in the
presence of:
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
- ----------------------
TIDEWATER INC. ACQUIRES O.I.L. Ltd.
NEW ORLEANS, May 16, 1997 - Tidewater Inc. (NYSE:TDW) announced today
that it has completed the previously reported acquisition of O.I.L. Ltd. from
Ocean Group plc of the United Kingdom.
The 328 million pound sterling (approximately $535 million) purchase
has been approved by Ocean Group's shareholders and United Kingdom regulatory
authorities. It is being financed by way of a $600 million line of credit
arranged through Tidewater's principal lenders.
With the transaction, Tidewater, owner and operator of the world's
largest fleet of vessels serving the offshore oil and gas industry, adds
approximately 100 vessels to its fleet, which now numbers about 750.
The additon of the O.I.L. fleet, according to William C. O'Malley,
Tidewater's chairman, president and chief executive officer, will "allow
Tidewater to provide greater service to its customers on a worldwide basis,
particularly at a time when international offshore activity is continuing
to increase."
Continuing, he said, "The acquisition will especially strengthen
Tidewater's already meaningful presence in the West African, Southeast Asian
and Brazilian supply and anchor handling towing supply markets and will
complement Tidewater's existing fleet."
In addition to its worldwide maring fleet, Tidewater also owns one of
the largest rental fleets of compressors in the United STates, serving natural
gas producers.
Contact: Tidewater, Inc.
Ken C. Tamblyn, 504-568-1010
