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EXHIBIT 10.1
FIRST AMENDED AND RESTATED
DRILLING MAKE-READY AGREEMENT
This First Amended and Restated Drilling Make-Ready Agreement (the "Agreement")
is made and entered into this 29th day of November, 1996 at Houston, Texas by
and between: RIGCO North America, L.L.C., a limited liability company duly
organized and existing under the laws of Delaware, with office address at 000
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, hereinafter referred to as "COMPANY";
- and -
Schlumberger Technology Corporation (Sedco Forex Division), a corporation duly
organized and existing under the laws of Texas with office address at 0000
Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 hereinafter referred to as
"CONTRACTOR".
WITNESSETH:
WHEREAS, COMPANY, desires that CONTRACTOR render management, purchasing,
engineering and labor services in connection with the management of the
"DRILLING MAKE-READY", of the COMPANY'S drilling unit formerly known as the
Treasure Searcher, and renamed the FPS Xxxx Xxxxxxxxx, carrying a Bahamian flag
and having official number 366166 (the "FPS Xxxx Xxxxxxxxx");
WHEREAS, CONTRACTOR represents that it has the experience, organizational
structure, and support structure to carry out said services as required by the
Agreement;
WHEREAS, Deepwater Drillers, L.L.C., an affiliate of COMPANY ("Deepwater
Drillers"), and CONTRACTOR entered into the Drilling Make-Ready Agreement dated
as of June 1, 1996 (the "Original Make-Ready Agreement");
WHEREAS, Deepwater Drillers transferred the Vessel to COMPANY, and CONTRACTOR
and COMPANY wish to amend and restate the Original Make-Ready Agreement to,
among other things, reflect such change in ownership;
NOW, THEREFORE,
In consideration of the respective obligations hereinafter set forth, COMPANY
and CONTRACTOR (hereinafter referred to jointly as the PARTIES), have agreed as
follows:
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1. TERM.
The term of this Agreement will commence on the date that the last
signature to this Agreement has been obtained and the conditions set
forth in Article 13.N hereto have been satisfied and shall terminate
at the time when the unit has been fully tested and is technically
ready to commence operations as contemplated by Article 3.
Should the conditions set forth in Section 13.N hereto not be
satisfied, neither COMPANY nor CONTRACTOR shall have any obligation to
enter into this Agreement or have any obligation under any of the
terms of this Agreement; except COMPANY shall pay CONTRACTOR all out
of pocket costs that CONTRACTOR shall have incurred, if any, in
relation to the DRILLING MAKE-READY.
2. SUPPLY OF PERSONNEL
A. CONTRACTOR shall at all times be the sole employer of its
employees. CONTRACTOR shall have the sole responsibility for
the preparation of payroll and the payment of said employee's
wages and compensation, including but not limited to vacation
pay, sick leave, medical facilities, remittances, allowances,
insurance, termination pay, bonuses and taxes and in complying
with all applicable labor and taxation regulations.
B. All employees of CONTRACTOR shall be thoroughly screened and
qualified for the jobs to which they are assigned. Upon
COMPANY'S written request, CONTRACTOR shall provide
documentary evidence specifying the background and
qualifications of its personnel.
C. COMPANY may request CONTRACTOR at any time, by written notice,
to remove forthwith at its own cost and expense any employee,
and replace him immediately with a duly qualified employee, in
the following circumstances:
a) where the worker is guilty of misconduct, whether in
the course of his duties or otherwise, inconsistent
with the express or implied conditions of this
Agreement; or
b) incompetence in his/her duties; or
c) for negligence in the performance of his/her duties;
or
d) for neglect or disregard of applicable safety
requirements of CONTRACTOR or of a regulatory agency
having jurisdiction.
D. COMPANY shall not pay any fee, commission, rebate or anything
of value to, or for the benefit of, any employee of
CONTRACTOR.
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E. CONTRACTOR shall ensure all CONTRACTOR'S employees are
provided with personal safety items required by CONTRACTOR'S
policies and by law, including but not limited to hearing
protection, safety helmets, safety belts, safety glasses,
safety footwear and hand gloves necessary for the safe
performance of the work. CONTRACTOR'S employees shall at all
times perform this work in accordance with CONTRACTOR'S
corporate safety program which shall be in full compliance
with all U.S. regulatory standards and requirements.
3. CONTRACTOR'S WORKSCOPE
CONTRACTOR AND COMPANY agree that the SCOPE OF CONTRACTOR'S obligation
related to the DRILLING MAKE-READY of the FPS Xxxx Xxxxxxxxx (also
called "workscope' or "work" or 'services") shall consist of:
A. Providing those services set forth in Appendix A.
B. Providing all management, rig crews, and engineering support
necessary or appropriate for the preparation of the FPS Xxxx
Xxxxxxxxx for return to drilling in accordance with industry
standards.
C. Equipping the FPS Xxxx Xxxxxxxxx for drilling with the
necessary tubulars.
D. Equipping the FPS Xxxx Xxxxxxxxx for drilling with the
necessary handling tools.
E. Equipping the FPS Xxxx Xxxxxxxxx for drilling with the
necessary Safety Equipment.
F. Equipping the FPS Xxxx Xxxxxxxxx for drilling with
miscellaneous equipment as required or appropriate for the
effective operation of the unit.
G. Engineering and supervision in connection with all
repairs/refurbishment to the satisfaction of DNV, USCG, MMS,
Bahamian Registry, or other governmental authority and
COMPANY.
H. Qualifying the existing Anchoring System or rental/purchase of
required equipment to the satisfaction of DNV, USCG, MMS,
Bahamian Registry, or other governmental authority and
COMPANY.
I. Repairing or qualifying the existing helideck to the
satisfaction of DNV, USCG, MMS, Bahamian Registry or other
governmental authority and COMPANY.
J. Coordinating all final DNV, USCG, MMS, Bahamian Registry or
other governmental authority and other regulatory body
approvals as required.
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K. Loading out the rig and equipping it with the necessary spares
in preparation for commencement of operations.
L. Function testing all rig systems and equipment in preparation
for commencing drilling operations; fully training all rig
crew and supervisory personnel for prudent, cost-effective
operations of the rig, its equipment and systems.
M. Implementing and maintaining a safety awareness program among
its rig crew aboard the FPS Xxxx Xxxxxxxxx.
N. Implementing and maintaining an inventory control system on
board rig.
O. Implementing and maintaining Standard Operating Procedures
comprised of the following procedures, controls and policies
which must be reasonably acceptable to COMPANY: preventive
maintenance; health, safety, environment and accident; and
marine operations, each in accordance with CONTRACTOR'S
policies.
P. Reporting to COMPANY weekly with regard to work progress,
schedule updates, costs/expenditures, budget forecasts, and
other information as deemed necessary by COMPANY for effective
schedule and cost control.
Q. Developing and implementing a suitable SPP/OSCP manual/program
meeting the requirements of federal and state pollution
regulations for offshore drilling rig operations.
R. Using commercially reasonable efforts to complete the
workscope at a cost to COMPANY less than or equal to the cost
estimates set forth in Appendix C.
CONTRACTOR shall perform the workscope with the CONTRACTOR personnel
provided by it pursuant to Appendix B; provided that CONTRACTOR may
utilize third party personnel to the extent necessary if COMPANY
consents in writing, which consent shall not be withheld unreasonably.
CONTRACTOR shall perform its services hereunder in a good, workmanlike
and economically efficient manner in accordance with all applicable
laws, rules and regulations and industry standards. CONTRACTOR shall
complete the workscope on or before March 18, 1997, including
satisfactory results of acceptance testing which shall be according to
the schedule outlined in Appendix D. Upon completion of the
acceptance testing pursuant to the schedule outlined in Appendix D, a
certificate of acceptance in the form shown in Appendix E shall be
executed by COMPANY and CONTRACTOR.
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4. COST REIMBURSEMENT
A. COMPANY shall reimburse CONTRACTOR for all reasonable
out-of-pocket costs CONTRACTOR incurs pursuant to Article 3 of
this Agreement except for the costs OF CONTRACTOR'S employees
which will be paid by COMPANY to CONTRACTOR as defined in
Article 5.B. Reimbursable costs include but are not limited to
the following:
i) Catering costs.
ii) Maintenance items.
iii) Fuel.
iii) Lubes.
iv) Spare parts.
v) Certifying Authority costs.
vi) Wharfage and shipyard costs.
vii) Third party inspection and repair costs.
viii) Capital expenditures including but not limited to
those pursuant to Article 3 above and for
miscellaneous equipment needed to complete the
workscope.
ix) Towing costs.
x) Trucking and handling costs.
xi) All third party services and rentals.
CONTRACTOR and COMPANY agree that above cost reimbursement
shall be based upon a mutually agreed AFE budget per Appendix
C, by which all cost commitments and expenditures shall be
based. CONTRACTOR further agrees to provide access to all
P.O. records to allow COMPANY representatives to monitor daily
cost control.
CONTRACTOR further agrees that no expenditure commitment shall
be made without COMPANY approval which exceeds the AFE line
item budget by the greater of 10% or $10,000 for any given
item or when added to AFE exceeds the total budget by 10% or
$10,000.
B. COMPANY shall pay CONTRACTOR interest calculated at 12% per
annum on all amounts not paid within the time specified.
5. COMPENSATION
A. COMPANY shall make advance payments to CONTRACTOR for the
express purpose of allowing Contractor to begin making
financial commitments to undertake and perform the workscope
under this Agreement. CONTRACTOR shall deposit such payments
into a non-commingled account set up solely for the
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purpose of administering this Agreement. Balances in such
account shall accrue interest for COMPANY'S benefit at the
Nassau Daily Time Deposit Rate (being the Federal Funds rate
in effect from time to time less one-half of one percent
(0.5%)) in effect from time to time. Advance payments shall
be made by OWNER to CONTRACTOR based on the following schedule
at COMPANY'S option:
PROJECTED SCHEDULE OF CASH COMMITMENTS
Cumulative
Commitment Date $ $
---------- ---- --------- ----------
REQUIRED COMMITMENTS:
---------------------
1 6/1/96 730,000 730,000
2 7/17/96 1,500,000 2,230,000
3 8/31/96 1,000,000 3,230,000
4 9/30/96 7,100,000 10,330,000
5 10/12/96 3,350,000 13,680,000
6 10/26/96 1,600,000 15,280,000
7 11/9/96 2,500,000 19,980,000
8 11/23/96 2,900,000 30,680,000
9 12/7/96 1,600,000 22,280,000
10 12/21/96 1,900,000 24,180,000
11 1/4/97 2,400,000 26,580,000
12 1/18/97 1,700,000 28,280,000
13 2/2/97 3,400,000 31,680,000
14 2/18/97 1,700,000 33,380,000
15 3/4/97 3,521,000 36,901,000
Subtotal 36,901,000 36,901,000
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CONTINGENCY COMMITMENTS:
------------------------
16 3/4/97 1,550,000 38,451,000
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Total with $ 38,451,000 $ 38,451,000
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Contingency
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At the end of each calendar month, Contractor shall prepare an
invoice for COMPANY documenting invoices paid, personnel
assigned, management fees earned, etc., with the top-drive
system being invoiced separately, and present the
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same to COMPANY. CONTRACTOR shall be authorized to draw such
invoiced amount from the advance payment account. COMPANY
shall within 30 days review such invoices and advise
CONTRACTOR if it is in agreement with such invoiced amounts.
If COMPANY and CONTRACTOR do not agree on such invoiced
amounts they shall meet to resolve such differences. At the
end of the workscope when all CONTRACTOR invoices and costs
have been invoiced (which invoicing shall be done as soon as
practicable) to COMPANY and COMPANY has paid all such
undisputed invoices, if there is an account balance remaining,
CONTRACTOR shall immediately return such money to COMPANY
including any accrued interest. If the account balance does
not cover all of CONTRACTOR'S invoices to OWNER, OWNER shall
pay CONTRACTOR such amounts within 15 days from receipt of
invoice. CONTRACTOR shall not have the right to apply or
withhold any portion of the deposit (including interest) with
respect to payments which COMPANY is disputing in good faith.
If advance payments are not made by Owner within 5 business
days from the due dates above, then CONTRACTOR shall be
entitled to stop work until such payments are made. In the
event no advance payments are made within 15 business days
then CONTRACTOR shall be entitled to terminate this Agreement.
Notwithstanding the foregoing, if CONTRACTOR'S cumulative
dollar commitment amount lags the Schedule of Advance Payments
set forth above by two weeks or more, then COMPANY shall have
the right to defer additional advance payments until the
CONTRACTOR'S cumulative dollar commitment amount equals the
cumulative advance payment amount.
B. In consideration of CONTRACTOR providing the COMPANY with the
services specified in this Agreement the COMPANY shall pay to
CONTRACTOR a daily management fee of $2,800.
C. In consideration of the provision of its employees specified
in this Agreement COMPANY shall pay to the CONTRACTOR the
daily personnel rates for personnel assigned at the rates
defined in Appendix B.
D. When CONTRACTOR deems it is necessary to bring in engineering
support from CONTRACTOR'S affiliated companies in France to
assist with the engineering for the DRILLING MAKE-READY, such
engineers will be charged to the COMPANY at a rate of
$800/day/man including travel time to and from the worksite
and for the cost of business class airplane tickets to and
from their offices in Paris, France. When such engineers are
performing assignments away from the rig, COMPANY shall be
obligated to reimburse CONTRACTOR for air fare related
thereto, but not for any related meals, lodging or other
travel expenses. All CONTRACTOR personnel shall be housed and
fed on the FPS Xxxx Xxxxxxxxx during the term of this
Agreement; provided, however, that
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when rig-based personnel are performing assignments off-site,
COMPANY shall reimburse CONTRACTOR for reasonable
out-of-pocket travel, lodging and meal expenses in connection
therewith.
E. At the end of each calendar month, CONTRACTOR shall submit to
the COMPANY its invoices, with supporting documents and
supporting time sheets for payment and the COMPANY shall pay
the invoiced amount in US Dollars not later than thirty (30)
days from the date of receipt of the invoice.
F. COMPANY shall pay CONTRACTOR interest calculated as 12% per
annum on interest amounts not paid within the time specified
in E. above.
G. In the event that the COMPANY is unable to pay to Contractor
the costs and expenses necessary to finalize the DRILLING
MAKE-READY, CONTRACTOR shall have the option to fund such
costs and expenses by making purchases of capital equipment on
the FPS Xxxx Xxxxxxxxx that is readily removable from the FPS
Xxxx Xxxxxxxxx (the "Capital Equipment"). The COMPANY may
purchase any of such Capital Equipment for an amount equal to
the amount paid by CONTRACTOR to the COMPANY for such Capital
Equipment plus 15% per annum through the earlier of (i) the
date of purchase of the Capital Equipment or (ii) the
termination of this Agreement. CONTRACTOR shall retain title
and full rights of ownership of the Capital Equipment and the
Capital Equipment shall not become part of the FPS Xxxx
Xxxxxxxxx unless and until COMPANY purchases from CONTRACTOR
the Capital Equipment as set forth herein.
H. Payment of monies due to CONTRACTOR hereunder shall be to
CONTRACTOR'S account via wire transfer as follows:
Xxxxxx Guaranty Trust Company of New York
New York, New York
ABA No. 000-000-000
For Credit to: Schlumberger Technology
Corporation (Sedco Forex Division)
Acct # 000-00-000
6. PROCUREMENT
A. Where practical CONTRACTOR shall utilize its affiliated
purchasing facility, International Chandlers Inc. (better
known as JAWS), located on 54 acres at Channelview, Texas, to
purchase equipment, materials and supplies in fulfilling its
obligation hereunder. By utilizing this facility, equipment,
services and supplies purchased may qualify for the discounts
negotiated with suppliers, based
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on JAWS world wide purchasing volume. Orders placed through
JAWS will be invoiced to COMPANY as set forth in Article 4
above at cost plus a handling fee as follows:
$15.00 for each P.O. and fees of:
(i) 6% of invoices valued at less than $20,000;
(ii) 3% of invoices valued between $20,00 to $
50,000; and
(iii) 1% of invoices valued above $50,000.
B. CONTRACTOR shall use reasonable efforts to obtain and utilize
all reasonable discounts related to the procurement of
materials and services provided in connection with this
Agreement.
C. CONTRACTOR may use related parties to provide materials and
services in connection with this Agreement if the arrangement
therewith is on terms and conditions no less favorable to
CONTRACTOR and/or COMPANY than could be obtained in an
arms-length transaction with unrelated parties.
7. PERFORMANCE BONUS
A. COMPANY and CONTRACTOR agree that COMPANY shall pay CONTRACTOR
a performance Bonus if CONTRACTOR comes in both under budget
and on schedule, based on the following formula:
B =.20 (AFE - Actual) where:
B = Bonus payable to CONTRACTOR.
AFE = Agreed budget amount for total workscope per
Appendix C (excluding contingency).
Actual = Actual cost for such total workscope.
The performance against budget shall be determined at such time as the
FPS Xxxx Xxxxxxxxx is fully tested and technically ready to commence
operations (including acceptance testing), which date shall be no
later than March 18, 1997, with all classification and regulatory
approvals in-hand/in-writing even if the FPS Xxxx Xxxxxxxxx has not
yet commenced a drilling contract. Under no circumstances shall the
Bonus be negative.
8. INDEMNIFICATION
A. Compliance with Law
CONTRACTOR'S performance hereunder shall comply with all
applicable laws and regulations of any governmental authority
having jurisdiction.
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B. Property and Equipment
1) CONTRACTOR shall release, protect, defend, indemnify
and hold harmless COMPANY and its owners, parent and
affiliates and sub-contractors, and its and their
directors, officers, employees and representatives
("Company Representatives") from and against any and
all losses, costs, expenses and causes of action,
including attorney's fees and court costs, for any
damage or destruction of any kind to property or
equipment owned or leased by CONTRACTOR and its
owners, parent and affiliates and sub-contractors,
and its and their directors, officers, employees or
representatives ("Contractor Representatives")
(excluding property and equipment provided hereunder
as part of or to become part of the workscope and to
which title is vested in COMPANY) howsoever caused,
whether or not the damage or destruction is caused in
whole or in part by unseaworthiness of the FPS Xxxx
Xxxxxxxxx or the negligence of the indemnified party,
arising out of, incident to or in connection with any
and all services under this Agreement except to the
extent arising from or related to the Gross
Negligence (herein defined) or wilful misconduct of
such indemnified party.
2) COMPANY shall release, protect, defend, indemnify and
hold harmless each Contractor Representative from and
against any and all losses, costs, expenses and
causes of action, including attorney's fees and court
costs, for any damage or destruction of any kind to
property or equipment (including but not limited to
the FPS Xxxx Xxxxxxxxx) owned or leased by any
Company Representative howsoever caused, whether or
not the damage or destruction is caused in whole or
in part by the unseaworthiness of the FPS Xxxx
Xxxxxxxxx or the negligence of the indemnified party,
arising out of, incident to or in connection with any
and all services under this Agreement except to the
extent arising from or related to the Gross
Negligence or wilful misconduct of such indemnified
party.
Title in property and equipment provided by
CONTRACTOR hereunder as part of or to become part of
the workscope shall pass to COMPANY and risk of loss
shall pass to COMPANY under this Clause once such
property or equipment is located on the FPS Xxxx
Xxxxxxxxx or at the shipyard which is the site of the
work.
C. Personnel
1) CONTRACTOR shall release, protect, defend, indemnify
and hold harmless each Company Representative from
and against any and all losses, costs, expenses and
causes of action, including attorney's fees and
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court costs, for injuries (including death) to any
Contractor Representative and howsoever caused,
whether or not such injuries or deaths are caused in
whole or in part by the unseaworthiness of the FPS
Xxxx Xxxxxxxxx or the negligence of the indemnified
party, arising out of, incident to or in connection
with any and all service performed under this
Agreement except to the extent arising from or
related to the Gross Negligence or wilful misconduct
of such indemnified party or breach of this Agreement
by Company.
2) COMPANY shall release, protect, defend, indemnify and
hold harmless each Contractor Representative from and
against any and all losses, costs, expenses and
causes of action, including attorney's fees and court
costs, for injuries (including death) to any Company
Representative howsoever caused whether or not such
injuries or deaths are caused in whole or in part by
the unseaworthiness of the FPS Xxxx Xxxxxxxxx or the
negligence of the indemnified party, arising out of,
incident to or in connection with any and all
services performed under this Agreement except to the
extent arising from or related to the Gross
Negligence or wilful misconduct of such indemnified
party or breach of this Agreement by CONTRACTOR.
D. Claims and Liens by CONTRACTOR'S Subcontractor
All amounts due from CONTRACTOR to its employees (including
but not limited to, social benefits, termination pay or any
other benefits), suppliers, subcontractors or other third
parties for services rendered or supplies used in connection
with this Agreement by the CONTRACTOR shall be promptly paid
by CONTRACTOR. CONTRACTOR shall not create, incur or permit
to exist any liens or claims on the FPS Xxxx Xxxxxxxxx or
property or equipment provided by CONTRACTOR as part or to
become part of the work scope.
E. Disclaimer
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, CONTRACTOR
CANNOT AND DOES NOT WARRANTY OR GUARANTEE THE SERVICES
PERFORMED BY IT, ITS EMPLOYEES OR SUBCONTRACTORS NOR THE
CONDITION NOR SUITABILITY FOR PURPOSE OF ANY EQUIPMENT,
MATERIALS AND SUPPLIES PROVIDED UNDER THIS AGREEMENT. EXCEPT
AS EXPRESSLY PROVIDED IN THIS AGREEMENT, COMPANY AGREES
CONTRACTOR SHALL NOT BE LIABLE UNDER ANY GUARANTEE OR
WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR BY OPERATION OF
LAW OR OTHERWISE.
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CONTRACTOR'S only liability under this Agreement with regard
to defects is to promptly repair or replace defective work
performed by the personnel and, as regards defects in work
performed by its and equipment, materials and supplies
provided by its subcontractors, to assign to COMPANY only
warranties or guarantees obtained from those subcontractors.
CONTRACTOR'S above obligation regarding defects in the work of
its employees shall continue for a period of one year from the
date the FPS Xxxx Xxxxxxxxx has been tested and is technically
ready to commence operations and the acceptance certificate
described in Article 3 has been delivered. It shall be
COMPANY'S obligation, when necessary, to retrieve and
transport any defective work to CONTRACTOR at COMPANY'S
expense.
F. Consequential Damages
Notwithstanding anything to the contrary in this Agreement, a
party's damages resulting from a breach or violation of any
representation, warranty, covenant or condition contained
herein shall be limited to actual direct damages, and shall
not include any other damages, including, without limitation,
indirect, special, consequential, incidental or punitive
damages.
X. Xxxxx Negligence and Related Matters
For purposes of Articles 8.B and 8.C, the term "Gross
Negligence" shall have the meaning ascribed to it in the
jurisprudence of the applicable jurisdiction (i.e. in Texas,
such term is currently interpreted as meaning, among other
things, conduct that is so shocking to common sensibility that
it would support belief that the act or omission complained of
was a result of conscious indifference to the right or welfare
of the person affected by it. 53 Tex. Jr.3d, Negligence
Section 55fn.).
The indemnities provided for above apply without regard to the
cause or causes thereof including, without limitation, breach
of contract, representation or warranty, or simple negligence,
whether active, passive, sole or concurrent, even if on the
part of the party seeking the benefit of the indemnity,
whether an action is founded on statute, common law, maritime
law or theory of strict liability.
Each party agrees to carry (at its expense) insurance adequate
to cover its indemnity obligations pursuant to this Agreement.
9. INSURANCE
A. CONTRACTOR shall at its sole cost and expense procure and keep
in force throughout the life of this Agreement all relevant
personnel insurance required by local laws governing
CONTRACTOR'S operations under this Agreement,
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including but not limited to Workmen's Compensation and
Employer's liability insurance or equivalent insurance
(Personal Accident Insurance) for covering adequately the
liabilities of CONTRACTOR.
B. COMPANY shall at its sole cost and expense procure and keep in
force throughout the life of this Agreement all relevant
personnel insurance required by local laws governing COMPANY'S
operations under this Agreement, including but not limited to
Workmen's Compensation and Employers liability insurance or
equivalent insurance (Personal Accident Insurance) for
covering adequately the liabilities of COMPANY.
C. COMPANY shall keep the FPS Xxxx Xxxxxxxxx fully insured for
all risks for the fair market value of the FPS Xxxx Xxxxxxxxx.
Without its obligations to fully insure its liabilities, each
of CONTRACTOR and COMPANY shall maintain comprehensive general
liability insurance (including contractual liability) in an
amount not less than $1,000,000. Such insurance shall name the
other party as an additional insured to the extent of
liabilities assumed by the insured party in this Agreement.
On request the insured party shall provide the other party
with a certificate from the insurers certifying that the
insured party has effected the above coverage, that the other
party is named as an additional assured to the above extent,
that the insured party's insurers have waived subrogation
against the other party thereunder and that insurer will
provide 30 days advance written notice to the other party.
10. LICENSES, PERMITS, ACCOUNT REPORTING, TAXES, ETC.
A. Each of COMPANY and CONTRACTOR shall be responsible for all
matters in connection with any license, permit, accounting and
reporting requirement, and the like in connection with its
employees including making and submitting reports to the
proper agencies and withholding taxes, social security system,
workmen's compensation and Medicare premiums and submitting
the same to the proper authorities. Any payments resulting
from the above responsibilities will be for the account of
COMPANY or CONTRACTOR, as applicable.
B. Each of COMPANY and CONTRACTOR shall be responsible for all
taxes levied on its personnel and/or invoices.
11. INDEPENDENT CONTRACTOR
It is clearly understood by both the COMPANY and the CONTRACTOR that
CONTRACTOR in the performance of this Agreement is an independent
CONTRACTOR and that neither it nor its employees or its subcontractors
are employees or agents of the COMPANY.
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12. FORCE MAJEURE
Each party to this Agreement shall be excused from complying with the
terms and conditions of this Agreement (except for the payment of
moneys when due), and neither party to this Agreement shall be liable
for failure to perform under the terms of this Agreement and for so
long as such performance is hindered or impeded by Force Majeure,
which is defined as civil or labor disturbances, riots, wars,
(declared or undeclared), military actions, insurrection, rebellion,
terrorist or any Government acts, acts of any Governmental or military
agency under actual or assumed authority, actions of elements
(excluding adverse sea and weather conditions), floods, storms or
other acts of nature, or any cause beyond the control of either party.
In an event of force majeure as described above, the affected party
within twenty-four (24) hours thereof shall take such steps as may be
possible to overcome or mitigate the effects of such event.
13. MISCELLANEOUS
A. Assignments and Subcontractors
Either party hereto (including a transferee of a party hereto)
may assign, alienate or otherwise transfer all or any portion
of its rights, title and interest and delegate any of its
obligations arising pursuant to this agreement. Unless
otherwise agreed to by the parties hereto (including a
transferee of a party hereto), both the transferor and the
transferee (other than a mortgagee, pledgee or other holder of
a security interest) shall be jointly and severally
responsible and primarily liable for the full and timely
performance of all covenants, agreements and other
obligations, and the timely payment and discharge of all
liabilities, costs and other expenses, arising (directly or
indirectly) pursuant to this agreement. Intermediary
transferees shall not be relieved of any obligations as a
result of a subsequent transfer to another individual or
entity. Upon transfer of all or any portion of its rights,
title and interest in and to this agreement, the transferor
shall promptly provide the other parties hereto with a copy of
such transfer document.
B. CONTRACTOR agrees that it shall enter into written agreements
with each subcontractor, vendor or other party providing
services or materials in connection with this Agreement, and
each such agreement shall allow CONTRACTOR (and CONTRACTOR
shall) assign any warranty or similar rights to COMPANY upon
COMPANY'S request. CONTRACTOR shall use commercially
reasonable efforts to obtain rights against such vendors,
contractors and other parties with respect to the quality and
condition of the services and materials provided.
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C. Heading
All headings used in this Agreement are inserted for
convenience only and are not intended to control the
interpretation hereof.
D. Non-waiver
Failure by either party to exercise any or all of its rights
hereunder, or any partial exercise thereof, shall not act as a
waiver of such rights granted hereunder or by general law.
E. Severability
If one or more of the provisions hereof shall be invalid,
illegal or unenforceable in any respect under any applicable
law or decision, the validity, legality and enforceability of
the remaining provisions contained herein shall not be
affected or impaired in any way. In any such case, the
parties agree to execute such additional documents or
amendments as may be required in order to give effect to the
intent of any provision hereof which is determined to be
invalid, illegal or enforceable.
F. Parties
Except as otherwise provided, this Agreement is not made for
the benefit of third parties, and no employees, servants,
agents or creditors of one party shall acquire any claim or
demand against the other party as a result of the provisions
hereof.
G. Entire Agreement
This Agreement embodies the entire understanding of the
parties hereto relating to the subject matter hereof and
supersedes all prior (oral or written) or oral contemporaneous
proposals or agreements, all previous negotiations and all
other communications or understandings between the parties
hereto with respect to the subject matter hereof.
H. Amendments
No amendments, supplements or modification of this Agreement
shall be valid or binding upon the parties hereto unless made
in writing and signed by an authorized representative of each
of the parties hereto.
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I. Survival
Any provision of this Agreement which reasonably requires a
party to act or forbear subsequent to the termination of this
Agreement shall be deemed to survive the termination of this
Agreement.
J. Records Inspection Rights
Contractor shall, and shall cause each of its subcontractors,
vendors and other representatives to, keep complete and
accurate records of all costs, expenses and expenditures in
connection with this Agreement. To the extent necessary or
appropriate to verify the amounts billed to Company pursuant
to this Agreement and for a period of two years after the
termination of this Agreement, Company or its designated
representatives, after ten (10) days' prior written notice to
Contractor, shall have the right during normal business hours
to audit or examine, all books and records maintained by
Contractor relating to such costs.
K. Governing Law and Arbitration
TO THE EXTENT THE LAW OF ANOTHER JURISDICTION IS NOT REQUIRED
TO BE APPLIED, (I) THE INDEMNITY PROVISIONS OF THIS AGREEMENT
SHALL BE GOVERNED AND INTERPRETED IN ACCORDANCE WITH FEDERAL
MARITIME LAWS AND (II) THE REMAINDER OF THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT UNDER, AND SHALL BE CONSTRUED,
INTERPRETED AND GOVERNED BY AND ACCORDING TO, THE LAWS OF THE
STATE OF TEXAS; IN THE CASE OF (I) AND (II) ABOVE, EXCLUDING
ANY CONFLICT OF LAWS PRINCIPLE WHICH, IF APPLIED, MIGHT PERMIT
OR REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION. VENUE FOR ANY LEGAL PROCEEDING, ARISING FROM OR
RELATING TO THIS AGREEMENT SHALL BE HOUSTON, XXXXXX COUNTY,
TEXAS.
L. Notices
Notice shall be deemed properly given if delivered in writing
in person to the named representative of the other party or by
telex or by telefax to the numbers below, or by registered
mail to the addresses below:
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FOR THE COMPANY:
Attention: Xxxxxx Xxxxxxxx
RIGCO North America, L.L.C.
000 Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone 000 000-0000
Telefax 713 224-7574
FOR THE CONTRACTOR:
Attention: Xxxx Xxxxxx
Schlumberger Technology Corporation (Sedco Forex Division)
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone 000 000-0000
Telefax 000 000-0000
M. Offer to Purchase
In the event that the COMPANY defaults on any obligation and
such default would result in a creditor's right to foreclosure
on the FPS Xxxx Xxxxxxxxx, the Company agrees to provide to
CONTRACTOR as soon as reasonably practicable, but in no event
later than five days after such default, a written offer to
sell the FPS Xxxx Xxxxxxxxx to CONTRACTOR at a price equal to
the sum of $30 million plus any costs, fees and expenses
associated with the DRILLING MAKE-READY and paid by the
COMPANY at the time of the default; including, without
limitation, (i) any monies advanced to CONTRACTOR for the
DRILLING MAKE-READY, and (ii) any monies drawn on the interim
construction loan to fund the DRILLING MAKE-READY. Further,
the COMPANY agrees that it shall use any monies received by it
from CONTRACTOR for the purchase of the FPS Xxxx Xxxxxxxxx to
repay any outstanding loans to the extent such loans are
secured by the FPS Xxxx Xxxxxxxxx and CONTRACTOR is authorized
to pay such sums directly to any such secured creditor on
behalf of COMPANY pursuant to the COMPANY'S instructions.
Notwithstanding the foregoing, in the event COMPANY cures such
default prior to receiving written notice of CONTRACTOR'S
acceptance of the offer, such offer shall be deemed void and
of no further effect.
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N. Payment to Restrictive Account
On or before the later of December 16, 1996 at 1700 hours
Houston, Texas time or the date of the signing of the Amoco
Canada contract at 1700 hours Houston, Texas time, COMPANY
shall have a minimum total funds in the Xxxxxx Commercial
Paper Inc. bank syndicate construction fund collateral account
available for deposit, upon request by Contractor in
accordance with the Projected Schedule of Cash Commitments set
forth in Article 5, in the restrictive account described in
Articles 5.A. and 5.H of this Agreement, in an amount equal to
the difference between (a) $34,270,000 less (b) any payments
theretofore made under this Agreement plus (c) $2,631,000 by
March 4, 1997 plus (d) by March 4, 1997, any further
adjustments necessary to cover contingency and cost over runs.
Amounts deposited in such restrictive account shall be made
available to fund payments as they are due under this
Agreement.
[The remainder of this page is intentionally left blank.]
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This Agreement is made into four copies in English. Each party hereto shall
possess two copies having the same legal value.
FOR COMPANY FOR CONTRACTOR
RIGCO NORTH AMERICA, L.L.C., SCHLUMBERGER TECHNOLOGY CORPORATION
(SEDCO FOREX DIVISION)
By: By:
---------------------------------- --------------------------------------------
Printed Name: Printed Name:
---------------------------------- --------------------------------------------
Title: Title:
---------------------------------- --------------------------------------------
APPENDIX A: Contractor Detailed Workscope
APPENDIX B: Personnel Costs
APPENDIX C: Cost Estimate for Drilling Make-Ready
APPENDIX D: Acceptance Testing Schedule
APPENDIX E: Form of Certificate of Acceptance
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APPENDIX A
CONTRACTOR DETAILED WORKSCOPE
See attached.
X-0
00
XXXXXXXX X
PERSONNEL COSTS
See attached.
B-1
22
APPENDIX C
COST ESTIMATE FOR DRILLING MAKE-READY
See attached.
C-1
23
APPENDIX D
ACCEPTANCE TESTING SCHEDULE
See attached.
X-0
00
XXXXXXXX X
FORM OF CERTIFICATE OF ACCEPTANCE
See attached.
E-1
