Exhibit 10.6
Xxxxxx
Offshore
LLC
Xxxx X . Xxxxxxxxx
Senior Vice President and
Chief Financial Officer
December 18, 1997
Xx. Xxxx X. Xxxxxx
Vice President - Marketing
AMFELS, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Dear Xxxx:
Based on our further discussions and correspondence, enclosed, please
find a revised letter agreement to modify the terms of Xxxxxx' existing
option rig and an agreement to provide Xxxxxx with two further options to
build similar rigs at AMFELS.
Option
Rig No. 1: AMFELS agrees to modify Xxxxxx' existing option in
the contract for Rig No. 2 for one XxXxxxxxxx
Super 116, as outlined herein ("Option Rig No.
1"). The price for Option Rig No. 1 is $48.5
million (excluding the "Kit" but including the
design changes which have been contractually
agreed to-date on Rig No. 1 and 2) and the option
will expire on July 31, 1998 but will increase in
price by $1 million on April 30, 1998 unless the
option was previously exercised. AMFELS agrees
to deliver Option Rig. No. 1 on the date which is
the later of: (a) December 15, 1999 or (b) 20
months from the date of entering into a final
contract, subject to timely delivery and
acceptable price of the XxXxxxxxxx "Kit" (see
schedule below).
Option
Rig No. 2: AMFELS agrees to provide Xxxxxx with an option for
one sister rig ("Option Rig No. 2") by entering
into a contract for Option Rig No. 1. Option Rig
No. 2 has to be exercised prior to December 15,
1998. The price is fixed at $48.5 million
(excluding the "Kit" but including the design
changes which have been contractually agreed
to-date on Rig No. 1 and 2) through June 30, 1998
at which time the price of the rig will increase
by $1 million. AMFELS agrees to deliver Option
Rig. No. 2 on the date which is the later of: (a)
April 15, 2000 or (b) 20 months from the date of
entering into a final contract, subject to timely
delivery and acceptable price of the XxXxxxxxxx
"Kit" (see schedule below).
Option
Rig No. 3: AMFELS agrees to provide an option for one sister
rig ("Option Rig No. 3") as a result of Xxxxxx
entering into a contract for Option Rig No. 2.
Option Rig No. 3 has to be exercised prior to
March 31, 1999 and the pricing would be the best
price offered by AMFELS to any customer for a
XxXxxxxxxx Super 116 at the time for the first
available delivery position on a "first come -
first served" basis.
Contract Form: AMFELS and Xxxxxx agree to enter into an amendment
of the contract for Rig No. 2 substantially in the
form of Clause 31 of the contract, subject to any
and all changes necessary thereto in order to
reflect the terms of this agreement.
The form of contract and amendment shall among
other things provide for the ability to provide a
construction lender with a first preferred
security interest in the rigs during the
construction period.
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Exclusivity: Xxxxxx agrees that as long as any option described
above remains outstanding and in effect it shall
not order any similar premium jackup rigs at a
competing shipyard without first having received
AMFELS' approval in writing and AMFELS shall
supply the requirements of Xxxxxx for XxXxxxxxxx
premium jackup rigs as contemplated by this letter
agreement.
LeTourneaus "Kits"): The above options are based on the following
prices for XxXxxxxxxx Kits
Option 1 $22.50 million
Option 2 $24.75 million
Option 3 $27.20 million
If upon exercise of an option, the "Kit" price is
in excess of the respective amounts listed above,
Xxxxxx shall have the right to cancel the option
provided it concurrently exercises its next
option, if any.
If a "Kit" delivery is not available on a timely
basis making it impractical for AMFELS to comply
with the agreed upon delivery date as per the
specific option then Xxxxxx may either accept a
revised delivery schedule by mutual consent of
both parties or cancel the option and concurrently
exercise its next option, if any. The mechanism
for exercising the options shall be modified to
provide that Xxxxxx must exercise its options
after the receipt of the applicable quote from
XxXxxxxxxx, subject to qualifications set forth
herein, concerning price and delivery of the
applicable "Kit".
Should you accept this agreement it would allow Xxxxxx to immediately
start the process of raising expansion capital on the basis of the above
described options.
We hope that you find the above in form and substance acceptable.
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Very truly yours,
XXXXXX OFFSHORE LLC
/s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
Senior Vice President and
Chief Financial Officer
AGREED AND ACCEPTED THIS
18 DAY OF DECEMBER, 1997.
AMFELS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
-------------------------
Title: Vice President
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