Common use of Sale of DRILLSHIP Clause in Contracts

Sale of DRILLSHIP. (a) If BUILDER terminates this CONTRACT as provided in this Article XI and elects to sell the DRILLSHIP in its completed or uncompleted state, BUILDER shall be entitled to retain and apply any PAYMENT MILESTONE paid by BUYER to BUILDER on account of this CONTRACT and to apply the same in accordance with Article XI.4. Further, BUILDER shall have the full right and power either to complete or not to complete the DRILLSHIP as it deems fit but in any event shall use its reasonable endeavours to sell the DRILLSHIP (either in its complete or incomplete form) at public or private sale on such terms and conditions as BUILDER may determine without being responsible for any loss or damage. (b) In the event of the sale of the DRILLSHIP in its completed state, the proceeds of sale received by BUILDER (the “COMPLETED SALE PROCEEDS”) shall be applied as follows: firstly to payment of all costs and expenses attending such sale and otherwise incurred by BUILDER as a result of BUYER’s default, and secondly to payment of all unpaid PAYMENT MILESTONES and interest on such PAYMENT MILESTONES at the DEFAULT INTEREST RATE from the respective due dates thereof to the date of application (collectively, the “COMPLETED OUTSTANDING AMOUNT”). In the event the COMPLETED OUTSTANDING AMOUNT exceeds the sum of the COMPLETED SALE PROCEEDS, BUYER shall remit the difference to BUILDER, provided that, in no event shall such difference exceed the CONTRACT PRICE. In the event the COMPLETED SALE PROCEEDS exceeds the COMPLETED OUTSTANDING AMOUNT, then BUILDER shall remit the difference to BUYER. (c) In the event of the sale of the DRILLSHIP in its uncompleted state, the proceeds of sale received by BUILDER (the “INCOMPLETE SALE PROCEEDS”) shall be applied as follows: firstly to payment of all costs and expenses attending such sale and otherwise incurred by BUILDER as a result of BUYER’s default, secondly to payment of all costs of construction of the DRILLSHIP to date of termination of the CONTRACT less the PAYMENT MILESTONE(S) retained by BUILDER pursuant to Article XI.4(a) above and, thirdly to BUILDER’s reasonably estimated profit to which it would have been entitled to receive if the DRILLSHIP had been completed and DELIVERED (collectively, the “INCOMPLETE OUTSTANDING AMOUNT”). In the event the INCOMPLETE OUTSTANDING AMOUNT exceeds the sum of the INCOMPLETE SALE PROCEEDS plus any previously paid PAYMENT MILESTONES, BUYER shall remit the difference to BUILDER, provided that, in no event shall such difference exceed the CONTRACT PRICE. In the event the INCOMPLETE SALE PROCEEDS plus any previously paid PAYMENT MILESTONES exceeds the INCOMPLETE OUTSTANDING AMOUNT, then BUILDER shall remit the different to BUYER. (d) If BUILDER sells to a third party or utilizes for its other projects any portion of the DRILLSHIP that BUILDER intends to elect to sell in accordance with Article XI.4.(b) or (c) in its completed or uncompleted state, such sale price (or the purchase price of such re-used portion) shall be deducted from the COMPLETED SALE PROCEEDS or the INCOMPLETE SALE PROCEEDS (as the case may be).