(1) BP Exploration Operating Company Limited

EXHIBIT 10.3


Dated 8th September 1995


(1) BP EXPLORATION OPERATING COMPANY LIMITED


(2) READING & BATES (CALEDONIA) LIMITED


AGREEMENT for the sale and purchase of Semi-Submersible Emergency Support Vessel Iolair


Clause INDEX


1. DEFINITIONS AND INTERPRETATION 2. SALE AND PURCHASE 3. CONSIDERATION 4. COMPLETION 5. PAYMENTS 6. CONDITION OF THE VESSEL; RISK; TITLE 7. REPRESENTATIONS AND WARRANTIES 8. ANNOUNCEMENTS 9. ASSIGNMENT 10. COSTS AND STAMP DUTY 11. CONFIDENTIALITY 12. MISCELLANEOUS 13. CONTRACTS AND APPORTIONMENTS 14. NOTICES 15. GOVERNING LAW AND JURISDICTI0N/ARBITRATION


Schedule


1. THE MORTGAGE 2. THE DEED OF COVENANT 3. THE BILL OF SALE 4. THE PROTOCOL OF DELIVERY AND ACCEPTANCE 5. THE COMPLETION DOCUMENTS 6. THE PARENT COMPANY GUARANTEE 7. THE EQUIPMENT 8. THE EXCLUDED ITEMS


THIS AGREEMENT is made this 8th day of September 1995


BETWEEN:


(1) BP EXPLORATION OPERATING COMPANY LIMITED whose registered office is at Britannic House, 1 Finsbury Circus, London, EC2M 7BA ("the Seller"); and


(2) READING & BATES (CALEDONIA) LIMITED whose registered office is at Harman House, 1 George Street, Uxbridge, Middlesex UB8 1QQ ("the Buyer ").


WHEREAS:


(A) The Seller is the registered owner of the Vessel (as hereinafter defined);


(B) The Seller wishes to sell and the Buyer wishes to purchase the Vessel (as hereinafter defined);


(C) The parties hereto wish to set out herein the terms and conditions upon which the aforesaid sale and purchase shall take place:


NOW IT IS HEREBY AGREED:


1. DEFINITIONS AND INTERPRETATION


1.1 In this Agreement, the following expressions shall, except where the context otherwise requires, have the following respective meanings:


"Affiliate" means in relation to any Party, any company which is a subsidiary of such Party or a company of which such Party is a subsidiary or a company which is another subsidiary of a company of which such Party is a subsidiary; where "subsidiary" has the meaning given to it by Section 736 of the Companies Act 1985;


"Bill of Sale" means a bill of sale in respect of the Vessel substantially in the form set out in Schedule 3;


"Business Day" means a day on which banks are or, as the context may require, were generally open for business in London and Aberdeen, other than a Saturday or Sunday;


"Completion" the fulfillment by the Parties of their respective obligations pursuant to Clause 4.1;


"Completion Date" means the date and year first above written;


"Completion Documents" means documents substantially in the form set out in Schedule 5;


"Completion Venue" means the offices of the Seller, Farburn Industrial Estate, Dyce, Aberdeen AB2 OPB;


"Consideration" means the consideration for the sale of the Vessel as specified in Clause 3.1;


"Continuing Contracts" means:-


(a) Marine Management Agreement dated 1st January, 1989 between the Seller and Northern Marine Management Limited;


(b) Catering Services Agreement dated 13th September, 1991 between the Seller and Kelvin International Services Limited;


(c) Crane Operator and Ad-Hoc Maintenance Services Agreement dated 12th August, 1994 between the Seller and Specialist Maintenance Services Limited; and


(d) Services Agreement between the Seller and Gulf Offshore N.S. Limited dated 30th September, 1994;


as such agreements may from time to time have been
amended, novated, assigned or novated;


"Deeds of Covenant" means deeds of covenant between inter alia the Buyer and the Seller in substantially the form contained in Schedule 2;


"Delivery" means the delivery of the Vessel pursuant to this Agreement which shall be deemed to have occurred upon delivery of the Bill of Sale referred to in Clause 4.1 of this Agreement;


"Equipment" means the Vessel's engines, machinery, boats, tackle, outfit, spare gear, belongings and appurtenances whether on board or onshore and shall include the equipment referred to in Schedule 7 but shall not include the Excluded Items;


"Excluded Items" means the items to be excluded from the sale and purchase to be completed hereunder and specified as such in Schedule 8;


"Mortgages" means mortgages over the Vessel by the Buyer in favour of inter alia the Seller in substantially the form contained in Schedule 1;


"Opinion Letters" means opinion letters by Richards, Laden & Finger PA, 1 Rodney Square, PO Box 551, Wilmington, Delaware, USA to the Seller in a form reasonably acceptable to the Seller;


"Owners Data" means all documents, classification, inspection and other certificates, technical and operating manuals relating to the Vessel and owned by the Seller including those held on behalf of the Seller by BP Shipping Limited, WS Atkins and Lloyds Register (at its Aberdeen and Fenchurch Street, London offices);


"Parent Company Guarantees" means guarantees by Reading & Bates Corporation in favour of inter alia the Seller in substantially the form contained in Schedule 6;


"Party" means the Seller or the Buyer and "Parties" means both of them;


"Protocol of Delivery and Acceptance" means the protocol of delivery and acceptance in respect of the Vessel substantially in the form set out in Schedule 4;


"Reference Interest Rate" means eight per cent (8%) per annum;


"Seller's Account" means Account Number 03099806 at Citibank, 336 Strand, London in the name of "BP Exploration Operating Company Limited - Operations";


"Time of Delivery and Acceptance" means the time stated in the Protocol of Delivery and Acceptance;


"the Vessel" means the semi-submersible Emergency Support Vessel Iolair, registered in Dundee, United Kingdom, Registered Number 376461 together with the Equipment and the Owner's Data but excluding the Excluded Item;


"US Dollars" means the lawful currency of the United States of America;


"Value Added Tax" means Value Added Tax as provided for in the Value Added Tax Act 1983 and legislation (whether purported legislation and whether delegated or otherwise) supplemental thereto or in any primary or subordinate legislation promulgated by the European Community or any official body or agency thereof or any tax similar or equivalent to Value Added Tax imposed by any Country other than the United Kingdom and any similar or turnover tax replacing or introduced in addition to any of the same.


1.2 All references to Clauses, Recitals and Schedules are,
unless otherwise expressly stated, references to
clauses of and recitals and schedules to this
Agreement.


1.3 The headings in this Agreement are inserted for
convenience only and shall be ignored in construing
this Agreement.


1.4 Any reference to any statute or statutory instrument
in this Agreement shall be a reference to the same as
amended, supplemented or re-enacted from time to time.


1.5 Unless the context otherwise requires, reference to
the singular shall include the plural and vice versa,
reference to any gender shall include all genders, and
references to persons shall include natural persons,
bodies corporate, unincorporated associations and
partnerships.


2. SALE AND PURCHASE


Subject as herein provided the Seller with full title guarantee hereby agrees to sell the Vessel to the Buyer for the Consideration and the Buyer agrees to purchase the Vessel free from all charters, encumbrances, mortgages and maritime liens or any other debts or liens whatsoever.


3. CONSIDERATION


3.1 The Consideration payable by the Buyer for the Vessel
shall be Twelve Million Five Hundred Thousand US
Dollars ($12,500,000) to be payable as follows and in
accordance with Clause 4.4:


3.1.1 Two Million Five Hundred Thousand US Dollar
($2,500,000) payable at Completion;


3.1.2 Two Million Five Hundred Thousand US Dollars
($2,500,000) together with interest accrued thereon at
the Reference Interest Rate between the Completion
Date and the date of payment (both dates inclusive)
payable on 6th September 1996;


3.1.3 Seven Million US Dollars ($7,000,000) together with
interest accrued thereon at the Reference Interest
Rate between the Completion Date and the date of
payment (both dates inclusive) payable on 6th
September, 1998;


3.1.4 Five Hundred Thousand US Dollars ($500,000) together
with interest accrued thereon at the Reference
Interest Rate between the Completion Date and the date
of payment (both dates inclusive) payable on 6th
September, 2000:


PROVIDED THAT the Buyer may at its sole discretion elect to pre-pay the outstanding balance of the Consideration in full (but not in part) at any time before it becomes due by giving not less than fourteen days notice in writing to the Seller and paying the amount of such outstanding balance together with interest accrued thereon at the Reference Interest Rate between the Completion Date and the date of payment (both dates inclusive) in accordance with Clause 4.4.


3.2 The following events shall be deemed to be Events of
Default namely if:-


3.2.1 the Buyer fails to pay when due any sum due and
payable from it to the Seller under this Agreement and
not remedied in five (5)Business Days of notice being
given by the Seller to the Buyer of such failure; or


3.2.2 an order is made or a resolution (whether requiring
confirmation or not) is passed for the winding up of
the Buyer; or


3.2.3 an execution or arrest or diligence or distress is
levied on, sued out upon or enforced against any asset
of the Buyer and is not paid and discharged within
thirty (30) days; or


3.2.4 the Buyer suspends payment of its debts, becomes
unable or admits in writing its inability to pay its
debts, makes a general assignment for the benefit of
or enters into any composition or arrangement of any
kind with its creditors, ceases or threatens to cease
to carry on business or disposes of all or (without
the prior written consent of the Seller) a substantial
part of its assets; or


3.2.5 a receiver, administrator, administrative receiver or
trustee is appointed to the Buyer over all or
substantially all of its assets; or


3.2.6 there occurs any of the events specified in Clauses
3.2.2 to 3.2.5 or any event analogous thereto in
relation to Reading & Bates Corporation; or


3.2.7 the Vessel is lost (whether such loss is an actual or
constructive total loss or a compromise or arranged or
agreed total loss) abandoned, captured, seized,
confiscated compulsorily, acquired or requisitioned
for title; or


3.2.8 the Buyer fails to make a payment of any other
indebtedness when due or any event, act or condition
occurs or exists under any document under which any
such indebtedness is created or evidencing the terms
thereof if the effect thereof is to cause the same to
become due or permit any person to declare the same
due prior to its normal maturity or to create or
crystallise any encumbrance over the whole or any part
of the undertaking, property, assets or revenues of
the Buyer; and on the happening of any such Event of
Default the full amount outstanding under this
agreement together with any interest of the Reference
Interest Rate accrued thereon between the Completion
Date and the date of payment (both dates inclusive)
shall become immediately due upon demand being made by
the Seller.


4. COMPLETION


4.1 Completion of the sale and purchase of the Vessel
shall take place on the Completion Date at the
Completion Venue when:-


(a) the Buyer shall:-


(i) deliver to the Seller a copy, certified as
a true and up to date copy by an officer
of the Buyer, of a resolution of the Board
of Directors of the Buyer evidencing
approval of this Agreement and all
obligations of the Buyer hereunder,
authorising the appropriate representive
to execute and deliver this Agreement, the
Mortgages, the Deeds of Covenant, the
Completion Documents and such other
documentation as shall be necessary in
connection with the transaction
contemplated hereby and to give all
notices and take all other action on
behalf of the Buyer under or for the
purposes of this Agreement;


(ii) deliver to the Seller the Deeds of
Covenant, duly and validly executed;


(iii) deliver to the Seller the Mortgages duly
and validly executed;


(iv) deliver to the Seller the Parent Company
Guarantees and Opinion Letters, duly and
validly executed;


(v) pay that part of the Consideration payable
to the Seller terms of Clause 3.1.1 in
accordance with Clause 4.4;


(b) the Seller shall:-


(i) deliver to the Buyer a certificate signed
by the Company Secretary of the Buyer that
the transaction contemplated in terms of
this Agreement has been duly authorised;


(ii) deliver to the Buyer the Bill of Sale duly
and validly executed;


(iii) table the Completion Documents duly and
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