THIS CONTRACT AMENDMENT NUMBER THREE is made on 19 November
1999
BETWEEN:
(1) GLOBAL MARINE INTERNATIONAL DRILLING CORPORATION ("GMIDC")
for and on behalf of NELSTAR LEASING COMPANY LIMITED a
company incorporated under the laws of England and Wales
and having its registered office at 00 Xxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX (the "Owner"); and
(2) XXXXXXX AND XXXXX SHIPBUILDING AND HEAVY INDUSTRIES LIMITED a company
incorporated under the laws of Northern Ireland having its registered
office at Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx Xxxxxxx, XX0 0XX (the
"Builder")
WHEREAS:
(A) By a shipbuilding contract dated 27 February 1998 (as subsequently
varied, amended and/or supplemented, the "Shipbuilding Contract") and
originally made between the Builder and GMIDC, the Builder agreed to
construct and deliver a deep water drillship designated hull number
1739.
(B) The parties to this Agreement now wish to make certain amendments to
the Shipbuilding Contract on the terms set out below.
(C) The Builder has made claims in excess of Pounds-Sterling 130 million
under the Shipbuilding Contract and the equivalent contract for Hull
No. 1740 in respect of (i) certain alleged breaches by the Owner and the
owner of Hull No. 1740, (ii) the costs associated with alleged changes to
the Specifications to the Shipbuilding Contract and the equivalent
contract for Hull No. 1740 and (iii) increases in steel weight of the
Vessel and Hull No. 1740, all of which claims are denied by the Owner,
the owner of Hull No. 1740 and GMIDC.
(D) The parties have agreed that, to the extent that these cannot be
settled amicably, the aforesaid claims shall be determined by
arbitration proceedings in London in accordance with the provisions of
the Shipbuilding Contract and the equivalent contract for Hull No.
1740.
(E) The Owner is prepared, entirely without prejudice to any issues of
liability, to make a payment on account of the portion of aforesaid
claims asserted against it and to procure the release of the Letter of
Credit against the provision by the Builder and Xxxx Xxxxx Energy ASA
of certain undertakings and guarantees with regard to the completion
of the Vessel as hereinafter set forth or referred to.
IT IS AGREED AS FOLLOWS:
1 DEFINITIONS
1.1 "Agreement" means this Contract Amendment Number Three.
1.2 Terms defined in the Shipbuilding Contract shall have the meaning given
therein when used in this Agreement unless otherwise defined or unless
the context otherwise requires.
1.3 "Claims" shall mean such part of the claims referred to in paragraph (C)
above as are pursued by the Builder in the arbitration proceedings
referred to in paragraph (D) above.
1.4 "Hull 1740 Agreement" means an agreement of even date between the owner
of Hull No. 1740 and the Builder on terms equivalent to this Agreement.
1.5 "FOE Agreement" means an agreement entered into or to be entered into
between Xxxx Xxxxx Energy ASA and the Owner in respect of the Shipbuilding
Contract.
1.6 "Further Amount Amendment" means the amendment to the Shipbuilding
Contract to be made by Clause 2.1(a).
1.7 Clause headings are for ease of reference only and shall not affect the
construction of this Agreement.
2 AMENDMENTS TO THE SHIPBUILDING CONTRACT
2.1 The parties agree that, subject to satisfaction of the conditions set out
in Clause 3 below, the Shipbuilding Contract shall be amended:
(a) by the insertion of a new paragraph at the end of Clause 8.3 as follows:
"The Owner shall in addition pay an aggregate amount of
Pounds-Sterling 29,000,000 on account of the Claims (as defined in
the Contract Amendment Number Three dated 19 November 1999) by
instalments, at the times and in the amounts set out in the
Seventeenth Schedule without deduction or withholding. All amounts
paid by the Owner pursuant to the previous sentence shall, as the
Builder acknowledges, be made on a without prejudice basis and
subject to the right of the Owner to recover all or any part of
such payment following an arbitration pursuant to this Contract.
"If a final arbitration award (not subject to appeal or, in case of
appeal, upon final determination of the appeal) made in favour of
the Builder values the Claims (and any further claims by the
Builder) in an amount less than the aggregate amount paid pursuant
to this paragraph, the Builder shall be liable to pay to the Owner
an amount equal to the difference plus interest at such rate as
the arbitrator may award in his discretion. However, if a final
arbitration award (not subject to appeal or, in case of appeal,
upon final determination of the appeal) made in favour of the
Builder values the Claims (and any further claims by the Builder)
in an amount more than the aggregate amount paid pursuant
to this paragraph, the Owner shall be liable to pay to the Builder
an amount equal to the difference plus interest at such rate as the
arbitrator may award in his discretion. The amount payable by one
party to the other shall be paid within three business days of a
final arbitration award being made in respect of the Claims (and
any further claims by the Builder) and the equivalent claims for
Hull No. 1740 and, if there is more than one arbitration in respect
of the Claims (and any further claims by the Builder) and the
equivalent claims for Hull No. 1740, within three business days
after the latest such final arbitration award. Notwithstanding
the previous provisions of this paragraph the amount payable by
one party to the other shall be a net amount determined by
reference to the liability in respect of the Vessel and Hull No.
1740 as if, for these purposes, the Owner and the owner of Hull
No. 1740 were the same person. If, as a result of the foregoing,
a net amount is payable by the Builder that amount shall be payable
in accordance with the joint written directions of the Owner and
the owner of Hull No. 1740.";
(b) by the insertion of a new clause 15.1.6 as follows:
"If at any time Xxxx Xxxxx Energy ASA ("FOE") defaults in the due
and punctual performance of any of its obligations under an
agreement dated 19 November 1999 entered into between FOE and the
Owner.",
and by replacing the full stop at the end of clause 15.1.5 with ";or";
(c) by deleting all references to the Letter of Credit; and
(d) by the addition of a Seventeenth Schedule in the form of the Schedule
hereto.
2.2 Any amounts paid by the Owner to the Builder pursuant to Clause 2.4 of
the FOE Agreement shall be paid and recoverable on the same basis as
amounts paid pursuant to the Further Amount Amendment and shall form part
of the final determination of what is owed to whom under the Further
Amount Amendment. The Owner undertakes with the Builder to make payments
subject to and in accordance with the provisions of Clause 2.4 of the FOE
Agreement, provided that the aggregate liability of the Owner to the
Builder and FOE in respect of breach of Clause 2.4 of the FOE Agreement
shall not exceed the amount determined in accordance with Clause 2.4(b) of
the FOE Agreement..
2.3 The Owner's obligation to make any payments pursuant to the Further Amount
Amendment or the FOE Agreement is conditional upon FOE not being in breach
of its obligations under the FOE Agreement.
2.4 The Owner agrees:
(a) that there shall be no further requests for adjustments or variations to
the Specifications or changes in the scope of works remaining to be
undertaken in respect of the Vessel;
(b) not to exercise its rights under Clause 15.2 of the Shipbuilding Contract
unless:
(i) FOE is in breach of its obligations under the FOE Agreement; and/or
(ii) Delivery of the Vessel has not taken place by 31st March 2000 as
such date shall be extended by all periods of Permissible Delay or
Owner's default under the Shipbuilding Contract arising after the
date of this Agreement, such circumstance being deemed to be a
Builder's default under Clause 15.1 (it being understood
that this provision shall not alter the Contract Delivery Date under
the Shipbuilding Contract); and
(c) that the delivery instalment for the Contract Price for the Vessel shall
be paid in full in accordance with the Contract and without deduction in
respect of liquidated damages for late delivery (but without prejudice to
the Owner's right to bring the Builder's liability for liquidated damages
into account in arbitration proceedings).
2.5 Subject to the performance by the Owner of its obligations under Clause
8.3 of the Shipbuilding Contract, the Builder waives any right to assert
a lien, right of arrest or other security against the Owner, its property
(including the Vessel) or any other party or its property in respect of
any potential arbitration award or court judgment in favour of the Builder
pursuant to the Shipbuilding Contract. Such waiver shall not,
however, extend to any claim by the Builder in respect of (i) the balance
of the Contract Price originally agreed under the Shipbuilding Contract
(ii) the amount of any agreed adjustments or variations to the
Specifications and (iii) any other amounts found due to the Builder in
arbitration proceedings pursuant to the Shipbuilding Contract.
This Clause shall operate without prejudice to the proviso to Clause 9.1
of the Shipbuilding Contract.
2.6 The Builder agrees that any further claims (in addition to the Claims)
which it may make before Delivery shall be made subject to and in
accordance with the applicable provisions of the Shipbuilding Contract and
shall not be publicised to any third party or among the Builder's
workforce.
2.7 For the avoidance of doubt, the Builder agrees that in the Put Option
Agreement dated 9 December 1998 between the Builder, the Owner and Global
Marine X.X. Xxxxx Limited (the "Put Option Agreement"), references to the
"New Contract" shall be construed as references to the Old Contract (as
defined in the Put Option Agreement) as amended and novated to the New
Owner (as defined in the Put Option Agreement) by the Novation Agreement
(as defined in the Put Option Agreement), as amended and modified by this
Agreement and as from time to time further amended and modified by all
other amendments to such New Contract which may have been made prior to
the date hereof or which may hereafter from time to time be made to the
New Contract in accordance with the terms thereof
3 CONDITIONS PRECEDENT
The effectiveness of the amendments to the Shipbuilding Contract set
out in clause 2.1 and the other matters set out in clause 2 is
conditional upon the Owner and the Builder respectively confirming that
it has received the documents and evidence set out below (which of the
Owner or Builder is to receive the applicable documents being
indicated in brackets) in form and substance satisfactory to the
applicable party on or before Friday, 19th November 1999;
(a) an Agreement (the "FOE Agreement") entered into by Xxxx Xxxxx Energy
ASA ("FOE") whereby FOE gives certain undertakings in favour of the
Owner (Owner);
(b) evidence of the due authorisation and execution by FOE of the FOE
Agreement including a Norwegian legal opinion (Owner);
(c) evidence (in the form of a secretarial certificate and a clean company
search) that the Builder is not subject to any receivership,
administrative receivership, administration, voluntary arrangement,
liquidation or other insolvency proceedings (Owner);
(d) a confirmation from Xxxxxxx and Xxxxx Holdings plc of its guarantee of
the Shipbuilding Contract as amended by this Agreement (Owner);
(e) release of the Letter of Credit (Builder);
(f) a guarantee by Global Marine Inc. of the obligations of the Owner in
respect of the Claims as determined by a final arbitration award
pursuant to the Shipbuilding Contract or a final judgement of a court
of competent jurisdiction (Builder);
(g) evidence of the due authorisation and execution by Global Marine Inc of
the guarantee referred to in sub-clause (f) above (Builder);
(h) the execution by the applicable parties of the Hull 1740 Agreement and
the satisfaction of the conditions referred to in clause 3 thereof
(Builder and Owner);
(i) evidence that the conditions set out in clause 6 have been fulfilled
(Builder and Owner).
4 GENERAL
4.1 The provisions of Clauses 12.1 to 12.4 and 13 of the Novation Agreement in
respect of the Shipbuilding Contract shall apply to this Agreement with
any necessary changes.
4.2 This Agreement is without prejudice to the position of either party in
relation to actual or alleged defaults under the Shipbuilding Contract.
4.3 Save as amended or varied by this Agreement the Shipbuilding Contract shall
continue in full force and effect.
4.4 In the event of any conflict between the provisions of this Agreement and
those of the Shipbuilding Contract, the provisions of this Agreement shall
prevail.
4.5 This Agreement may be executed in several counterparts so that such
counterparts taken together and executed by both parties shall constitute
the same document.
5 LAW AND ARBITRATION
Clause 20 of the Shipbuilding Contract shall apply to this Agreement as if
set out in full with any necessary amendments.
6 SUBJECTS
The effectiveness of the Agreement is conditional upon on or before
Friday, 19th November 1999:
(a) the approval of the Board of Directors of GMIDC;
(b) the approval of the Board of Directors of Xxxxxxx & Xxxxx Holdings plc; and
(c) the approval of the Owner.
It is acknowledged that this Agreement has been entered into by GMIDC and
the Builder in anticipation of the approvals referred to above but without
liability of GMIDC, the Owner or the Builder if those approvals (or any of
them) are not given on or before the date referred to above.
7 AMENDMENTS TO PUT OPTION AGREEMENT
The Builder agrees with the Owner that promptly following the receipt by
it of any joint request from the Owner and GMIDC, it will enter into an
agreement with the Owner and GMIDC making such amendments as the Owner and
GMIDC may jointly stipulate to the circumstances in which the Owner is
entitled to serve a "Put Notice" under Clause 3.2 of the Put Option
Agreement.
SIGNED by the representatives of the parties.
SIGNED by )
Xxxxx Xxxxxx ) /s/ Xxxxx Xxxxxx
for and on behalf of GLOBAL )
MARINE INTERNATIONAL )
DRILLING CORPORATION )
acting on behalf of )
NELSTAR LEASING COMPANY )
LIMITED )
SIGNED by )
X. Xxxxxx ) /s/ X. Xxxxxx
for and on behalf of XXXXXXX )
AND XXXXX SHIPBUILDING )
AND HEAVY INDUSTRIES )
LIMITED )
SCHEDULE
DATE AMOUNT (POUNDS-STERLING)
NOVEMBER 22, 1999 10,000,000
NOVEMBER 26, 1999 12,000,000
DECEMBER 17, 1999 7,000,000
