-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Js1wbJeBXDjFpH78GwVVtTLTECYB/EMT73pcafKnHINqIruvMgI6JgxFrYHOQph6 s2S6IzMuCk2pf3x+At/RfA== 0000906280-97-000105.txt : 19970602 0000906280-97-000105.hdr.sgml : 19970602 ACCESSION NUMBER: 0000906280-97-000105 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970516 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970530 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIDEWATER INC CENTRAL INDEX KEY: 0000098222 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 720487776 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06311 FILM NUMBER: 97617288 BUSINESS ADDRESS: STREET 1: 1440 CANAL ST STE 2100 CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045681010 MAIL ADDRESS: STREET 1: 1440 CANAL STREET STREET 2: STE 2100 CITY: NEW ORLEANS STATE: LA ZIP: 70112 FORMER COMPANY: FORMER CONFORMED NAME: TIDEWATER MARINE SERVICE INC DATE OF NAME CHANGE: 19780724 8-K 1 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. EX-2 2 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
Registered/ Property Owner Tenure Unregistered Use Current Annual Rent Lettings by Owner 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
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: EX-99 3 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 -----END PRIVACY-ENHANCED MESSAGE-----