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Exhibit 10.20.2
PURCHASE AND SALE AND
JOINT VENTURE AMENDMENT AGREEMENT
This Purchase and Sale and Joint Venture Amendment Agreement
("Agreement") entered into as of July 23, 1997, by and between WELL SERVICES
(MARINE) LIMITED, a Trinidad and Tobago private company ("Well Services"), and
CLIFFS DRILLING TRINIDAD LIMITED, a Trinidad and Tobago private company
("Cliffs Trinidad").
R E C I T A L S
I. Well Services and Cliffs Trinidad (collectively the
"Partners") each own a fifty percent (50%) general partnership
interest in WEST INDIES DRILLING JOINT VENTURE, a Trinidad and
Tobago joint venture ("W.I. Drilling").
II. W.I. Drilling owns a xxxx-up drill rig known as Southwestern
Marine 4, which is currently under a 3-year drilling contract
with Trinmar Limited, a Trinidad and Tobago company
("Trinmar").
III. Well Services desires to sell, transfer and assign a further
49% interest in W.I. Drilling (the "Sold Interest") to Cliffs
Trinidad, and Cliffs Trinidad wishes to purchase and accept
the transfer of the Sold Interest.
NOW, THEREFORE, in consideration of the premises and of the respective
covenants, agreements, representations, and warranties hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
I. PURCHASE AND SALE; ASSUMPTION OF LIABILITIES
1.01. PURCHASE OF THE WELL SERVICES INTEREST. Subject to the terms
and conditions hereinafter set forth, the following actions concerning the
partnership interests in W. I. Drilling shall occur at the Closing (as defined
in Section 1.05 hereof):
(a) Well Services shall sell, transfer, assign, and deliver to
Cliffs Trinidad, and Cliffs Trinidad shall purchase from Well
Services, as of the Closing Date, the Sold Interest, free and
clear of any and all liens, claims and encumbrances.
(b) Cliffs Trinidad shall deliver to Well Services the Purchase
Price, as defined in Section 1.04 hereof, for such Sold
Interest, in immediately available funds by wire transfer to a
bank account to be designated by Well Services.
1.02. TERMINATION OF WELL SERVICES BENEFITS. As of the Closing
Date, upon transfer of the Sold Interest, all of Well Services' benefits,
rights and interests in, to and under the Sold Interest (the "Benefits")
pursuant to the provisions of the joint venture agreement between Cliffs
Trinidad and Well Services dated March 18, 1996, as amended by First Amendment
to Joint Venture Agreement dated April 1, 1996 (the "Venture Agreement") shall
immediately cease,
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except that the Partners hereby declare and agree that the remaining 1%
interest in W.I. Drilling owned by Well Services ("Remaining Interest") shall
retain a value of TEN DOLLARS ($10.00) ("Remaining Value"). Except for the
Remaining Value, Well Services shall have no further rights or benefits, under
the Venture Agreement, accruing to its Remaining Interest. The Purchase Price
(defined in Section 1.05 below) paid by Cliffs Trinidad will be in full and
final payment and satisfaction of all of the Sold Interest and the Benefits,
and Xxxxx Services will not be entitled to any further income, profits or
distributions whatsoever attributable to the Sold Interest from W.I. Drilling
or Cliffs Trinidad, except for any payments due under the Rig Management
Agreement defined below.
1.03. ASSUMPTION OF WELL SERVICES' LIABILITIES. In addition to the
Purchase Price to be paid by Cliffs Trinidad, subject to the provisions of
Sections 3.01 and 6.02, Cliffs Trinidad agrees to assume at the Closing, with
effect from the Closing Date, all liabilities and obligations of Well Services
to W. I. Drilling and to any third parties in connection with the ownership and
benefits of the Sold Interest ("Ownership Obligations"), except for Well
Services' obligations and duties as Rig Manager ("Manager") under the Rig
Management Agreement ("Rig Management Obligations").
1.04. CONSIDERATION. In consideration of the transfer of Sold
Interest to Cliffs Trinidad at the Closing, Cliffs Trinidad shall pay to Well
Services the amount of SIX MILLION AND NO/100 DOLLARS ($6,000,000) ("Purchase
Price") and shall assume all of the Ownership Obligations.
1.05. CLOSING PLACE AND DATE. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place with effect
from 10:00 A.M., Trinidad time, on August 1, 1997 (the "Closing Date").
II. TRANSFER OF WELL SERVICES INTEREST
2.01. TRANSFER OF VENTURE ASSETS. On the Closing Date, Well Services
shall transfer the Sold Interest to Cliffs Trinidad, free and clear of all
liens, claims and encumbrances, in exchange for the Purchase Price.
2.02. RIG MANAGEMENT AGREEMENT. After the Closing Date, the Rig
Management Agreement executed by W. I. Drilling, Viking Trinidad Limited
(which interest was previously assigned to Cliffs Trinidad) and Well Services,
dated as of May 1, 1996 ("Rig Management Agreement") shall continue in full
force and effect as written. After such date, Well Services' agrees to perform
and continue to perform all of the Rig Management Obligations and its duties
and obligations as Rig Manager under the terms of the Rig Management Agreement,
all of which terms and provisions shall survive the Closing.
2.03. AMENDMENT TO VENTURE AGREEMENT.
(a) All capitalized terms used but not defined herein shall have
the meaning given to them in the Loan Agreement. The Venture
Agreement is hereby amended with effect as of and from the
Closing Date, as follows:
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(i) By deleting all reference in the Venture Agreement to
"Viking Trinidad Limited", "Viking", "Viking Supply
Ships, A.S.", and "Viking Supply" and replacing such
names in each case with "Cliffs Drilling Trinidad
Limited" or "Cliffs", as appropriate, with the effect
that the two partners to the Venture Agreement, as of
and after the Closing Date, will be Cliffs Drilling
Trinidad Limited ("Cliffs") and Well Services.
(ii) By deleting in its entirety the last sentence of the
definition of "Percentage Interest" in Section 1.6 of
the Venture Agreement and replacing it with the
following:
"The Percentage Interests of the Partners
shall be as follows:
PARTNER PERCENTAGE INTEREST
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Cliffs 99%
Well Services 1%
; provided, however, that, with effect from
August 1, 1997, Well Services shall not be
entitled to any further income or profits and
shall not suffer or be subject to further
losses of the Firm."
(iii) By generally amending the Venture Agreement, wherever
relevant, to make it clear that, with effect from
August 1, 1997, notwithstanding any other provision
to the contrary therein contained, Well Services
shall have no further benefits or rights, and shall
be subject to no further losses or obligations under
the Venture Agreement, except that its Percentage
Interest shall retain a value of $10.00 but no more.
(iv) Section 5.2(a) shall be deleted in its entirety and
replaced by the following:
(a) The Management Committee shall be composed of
two (2) members appointed by Cliffs.
(v) By deleting any reference in Section 5.4 to Well
Services as the Firm Manager, amending such Section
to appoint Cliffs as Firm Manager in place of Well
Services and making conforming changes throughout the
Venture Agreement, if necessary, to reflect that
Cliffs is the Firm Manager as of the Closing Date.
(vi) By deleting Section 5.6 in its entirety.
(vii) By deleting Section 5.8 in its entirety and replacing
it with the following:
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The Firm Manager shall be Cliffs and the Firm shall
be and continue to be bound by the terms and
conditions of the Rig Management Agreement. The
Manager under the Rig Management Agreement shall be
Well Services until terminated by the Firm Manager.
(viii) The references to Viking and the Viking addresses in
Section 10.3 are amended to read as follows:
CLIFFS DRILLING TRINIDAD LIMITED
c/o Xxxxxxxxx Xxxx
Pollonais & Blanc
00 Xxxxxxxxx Xxxxxx
Port of Spain
Trinidad, West Indies
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
CLIFFS DRILLING COMPANY
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xx Xxxxxxx
(b) The remainder of the Venture Agreement not amended or
supplemented hereby remains in full force and effect as
written.
(c) WELL SERVICES HEREBY SPECIFICALLY RELEASES AND RELINQUISHES
ANY RIGHTS AND BENEFITS IT MAY HAVE IN THE MANAGEMENT OF W.I.
DRILLING AND AS FIRM MANAGER OF W. I. DRILLING AND AGREES THAT
IT HAS RECEIVED ADEQUATE CONSIDERATION FOR THE RELEASE AND
RELINQUISHMENT OF RIGHTS AND BENEFITS HEREBY GIVEN AND FOR THE
REDUCTION OF ITS PERCENTAGE INTEREST UNDER THE VENTURE
AGREEMENT FROM 50% TO 1% WITH NO FURTHER RIGHT TO PARTICIPATE
IN PROFITS OR LOSSES. Well Services gives this release and
relinquishment of rights voluntarily.
2.04. OPTION TO PURCHASE REMAINING INTEREST. Well Services hereby
grants Cliffs Trinidad the absolute, irrevocable and unfettered right to
purchase the Remaining Interest for a purchase price of Ten Dollars
(U.S.$10.00) ("Final Payment"), exercisable by notice in writing from Cliffs
Trinidad to Well Services at any time after the Closing. The purchase of the
Remaining Interest shall be completed and closed, and the necessary transfer of
the Remaining Interest executed and delivered to Cliffs Trinidad by Well
Services, within five (5) days after receipt by Well Services from Cliffs
Trinidad of (a) the notice from Cliffs Trinidad exercising its option herein
granted (b) and the Final Payment (certified as having been received by
messenger or courier service or by receipt returned to Cliffs Trinidad through
the Trinidad
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and Tobago postal service) ("Cliffs Closing Documents"). If, after proof in
the manner set forth above of receipt by Well Services of the Cliffs Closing
Documents, Well Services fails to respond to the exercise of the option to
purchase by Cliffs Trinidad or fails to complete the sale of the Remaining
Interest within the time limit above specified, the transfer and assignment of
the Remaining Interest shall be deemed to occur immediately upon deposit by
Cliffs Trinidad in the Trinidad and Tobago mails, of the Final Payment,
addressed to Well Services at its address set out in the Venture Agreement.
Upon closing of this purchase option, however same occurs, Well Services shall
immediately cease to be a Partner with a 1% Percentage Interest in the Venture.
III. REPRESENTATIONS AND WARRANTIES
3.01. REPRESENTATIONS AND WARRANTIES OF WELL SERVICES. Well
Services represents and warrants to Cliffs Trinidad as of the date of this
Agreement and on the Closing Date, as follows:
(a) Organization, Good Standing, Power. Well Services is a
company duly organized, validly existing, and in good standing
under the laws of Trinidad and Tobago with all requisite
corporate power and authority to enter into and perform its
obligations under this Agreement.
(b) Authorization. The execution, delivery, and performance of
this Agreement have been duly authorized by all requisite
corporate action of Well Services. This Agreement is a legal,
valid, and binding obligation of Well Services, enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, and similar laws
affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law).
(c) Title. Well Services shall transfer to Cliffs Trinidad at
Closing, title to the Sold Interest, free and clear of all
liens, pledges, encumbrances, charges, claims, security
interests, and any other adverse claims.
(d) No Conflicts. Neither the execution, delivery, or performance
of this Agreement by Well Services, nor the consummation of
the transactions contemplated hereby by Well Services (i) will
constitute a violation of or default under, or conflict with,
any note, bond, mortgage, indenture, deed of trust, lease,
license agreement, or other instrument or obligation to which
Well Services is a party or by which Well Services is bound,
or constitute a violation of, or conflict with, any provision
of Well Services' Memorandum and Articles of Association or
any order, writ, injunction, decree, statute, rule, or
regulation of any governmental, administrative, or regulatory
body applicable to Well Services or (ii) will require any
consent, approval, notice, or filing with respect to any of
the foregoing.
(e) No Defaults. Well Services is not in violation of any term or
provision of the Joint Venture Agreement or the Rig
Management Agreement; has performed its duties and obligations
under the Rig Management Agreement and as Firm Manager in a
professional and responsible manner; and has operated the
Vessel
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and performed its duties as Firm Manager in compliance with
all applicable laws, rules and regulations (including, but not
limited to, the environmental and pollution laws of Trinidad
and Tobago, the United States of America and all jurisdictions
where the Vessel has been operated by Well Services as Firm
Manager on behalf of W. I. Drilling).
(f) Environmental Claims; Other Claims. There are, and Well
Services has received, no outstanding notices of or processes
concerning any claims, fines, penalties, adverse
determinations, rulings or judgments, concerning the operation
of the Vessel or the Venture business, from any court,
tribunal, ministry or governmental or other regulatory
authority with respect to (i) pollution of the air, water or
environment, (ii) personal injury or death of any person,
(iii) any loss or claims for property damage, or (iv) any
other claim whatsoever, any of which would or could have a
material adverse effect on the Vessel or W. I. Drilling's
business. "Material adverse effect" for the purposes of this
Agreement shall mean an uninsured lien, claim, cost or loss in
excess of $100,000.
(g) Taxes. Well Services has paid or caused to be paid on behalf
of W. I. Drilling, and as of the Closing Date will have paid,
all taxes, fees and penalties due and owing on the Sold
Interest, the Vessel and the W. I. Drilling's operations.
(h) Insurance, Vessel Operations. Well Services has caused and as
Rig Manager will continue to cause (i) the Vessel to be
adequately insured for all perils and risks (including but not
limited to hull damage, pollution, personal injury and
property damage) which is normal and customary for a Vessel of
this kind and (ii) the Vessel to be properly and regularly
inspected by the appropriate regulatory authorities and as of
the Closing Date the Vessel will have in effect a valid ABS
+A1 Column Stabilized Drilling Unit Classification
Certificate, or other equivalent certificate, with no material
requirements or exceptions.
3.02. REPRESENTATIONS AND WARRANTIES OF CLIFFS TRINIDAD. Cliffs
Trinidad represents and warrants to Well Services as of the date of this
Agreement and as of the Closing Date, as follows:
(a) Organization, Good Standing, Power. Cliffs Trinidad is a
company duly organized, validly existing and in good standing
under the laws of Trinidad and Tobago with all requisite
corporate power and authority to enter into and perform its
obligations under this Agreement.
(b) Authorization. The execution, delivery, and performance of
this Agreement have been duly authorized by all necessary
corporate action of Cliffs Trinidad. This Agreement is a
legal, valid, and binding obligation of Cliffs Trinidad,
enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, insolvency, and
similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding
in equity or at law).
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(c) No Conflicts. Neither the execution, delivery, or performance
of this Agreement by Cliffs Trinidad, nor the consummation of
the transactions contemplated hereby by it, will constitute a
violation of or default under, or conflict with, any note,
bond, mortgage, indenture, deed of trust, lease, license,
agreement, or other instrument or obligation to which Cliffs
Trinidad is a party or by which Cliffs Trinidad is bound or
constitute a violation of or conflict with any provision of
Cliffs Trinidad's Memorandum and Articles of Association, or
similar corporate document, or any order, writ, injunction,
decree, statute, rule, or regulation of any governmental,
administrative or regulatory body applicable to Cliffs
Trinidad or will require any consent, approval, notice, or
filing with respect to the foregoing.
IV. DISCLAIMER OF OTHER WARRANTIES
4.01. WELL SERVICES INTEREST AND ASSETS. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.01, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF TITLE TO, AND OF NO LIENS, LIABILITIES OR CLAIMS ON
THE SOLD INTEREST, THE SOLD INTEREST IS TRANSFERRED BY WELL SERVICES WITH NO
WARRANTY OR REPRESENTATION OF ANY OTHER KIND WITH RESPECT THERETO OR WITH
RESPECT TO THE VESSEL.
V. CONDITIONS TO CLOSING
The Closing, sale and transfer of the Sold Interest to Cliffs Trinidad
is subject to the following conditions:
5.01. WELL SERVICES' CORPORATE DOCUMENTS. Well Services shall
provide Cliffs Trinidad with the following corporate documentation:
a. A certified copy of resolutions of the Well Services' Board of
Directors, authorizing the sale of the Sold Interest at the
Purchase Price stated above to Cliffs Trinidad, further
ratifying the execution and delivery of this Agreement and
authorizing specified officers of Well Services to sign the
documents listed above and all other necessary documents
required by this Agreement.
b. A Certificate of Incumbency for the authorized signatories
issued by the Secretary of Well Services.
c. A certificate of ownership and encumbrance from the Liberian
Bureau of Maritime Affairs showing no liens or encumbrances
over the Vessel except in favor of Citibank N.A. ("Lender").
5.02. CLIFFS TRINIDAD'S CORPORATE DOCUMENTS. Cliffs Trinidad shall
provide Well Services with the following documentation:
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a. A certified copy of resolutions of its Board of Directors,
authorizing the acceptance of the transfer of the Vessel, the
purchase of the Sold Interest at the Purchase Price stated
above and the assumption of the Liabilities, ratifying the
execution and delivery of this Agreement and authorizing
specified officers of Cliffs Trinidad to sign the documents
listed above and all other necessary documents required by
this Agreement.
b. A Certificate of Incumbency for the authorized signatories
issued by the Secretary of Cliffs Trinidad.
5.03. OTHER DOCUMENTS AND MATTERS.
Cliffs Trinidad shall deliver or cause to be delivered a
release of the Guaranty dated May 2, 1996, as amended, executed by
Well Services in connection with a loan in the original face amount
of $8,500,000 from the Lender to W.I. Drilling, secured by a mortgage
("Mortgage") of the Vessel ("Citibank Loan").
5.04. PURCHASE PRICE. Cliffs Trinidad shall pay and deliver the
Purchase Price to Well Services.
VI. MISCELLANEOUS
6.01. TAXES, ETC. Any taxes, fees and expenses connected with the
sale of the Well Services Interest and all transfer, stamp, sales, use, value
added or other taxes of any nature whatsoever imposed by the Trinidadian
government or any other governmental entity prior to or at the time of Closing
shall be borne by Cliffs Trinidad.
6.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY. THE
REPRESENTATIONS AND WARRANTIES OF WELL SERVICES GIVEN IN THIS AGREEMENT SHALL
SURVIVE THE CLOSING. FURTHERMORE WELL SERVICES AGREES TO INDEMNIFY, DEFEND AND
HOLD HARMLESS CLIFFS TRINIDAD AND W. I. DRILLING FOR A PERIOD OF TWELVE MONTHS
FROM AND AFTER THE CLOSING DATE FROM AND AGAINST, AND SHALL PROMPTLY PAY TO
CLIFFS TRINIDAD OR W.I. DRILLING, AS APPROPRIATE, THE FULL AMOUNT OF, ANY LOSS,
CLAIM, DAMAGE, TAXES, AMOUNT OR EXPENSE, (INCLUDING ATTORNEYS' FEES) INCURRED
BY CLIFFS TRINIDAD OR W.I. DRILLING, EITHER DIRECTLY OR INDIRECTLY, FROM (a)
ANY BREACH OF OR INACCURACY IN THE REPRESENTATIONS AND WARRANTIES OF WELL
SERVICES CONTAINED IN THIS AGREEMENT; AND (b) ANY LIABILITY, CLAIM, DEBT,
OBLIGATION OR LOSS WHATSOEVER, ARISING OUT OF ANY INACCURACY OR CLAIM IN
RESPECT OF THE MATTERS REFERENCED IN SECTION 3.01 ABOVE. IN ADDITION ALL
REPRESENTATIONS, WARRANTIES, INDEMNITIES AND OBLIGATIONS OF WELL SERVICES AS
RIG MANAGER UNDER THE RIG MANAGEMENT AGREEMENT, SHALL CONTINUE TO BIND WELL
SERVICES UNTIL THE RIG MANAGEMENT AGREEMENT TERMINATES ACCORDING TO ITS TERMS.
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6.03. ARBITRATION. If any dispute (whether in contract or tort)
should arise in connection with the interpretation, fulfillment and performance
of this Agreement, the sale and delivery of the Vessel, the Sold Interest or
other Assets, the assumption of the Ownership Obligations and the performance
of other acts and delivery of other documents required hereby, same shall be
decided by arbitration in Houston, Texas in accordance with commercial
arbitration rules of the American Arbitration Association ("AAA") and shall be
referred to a single arbitrator to be appointed by AAA. All awards of the
arbitrator shall be final and binding.
The award tendered by the arbitrator shall be final and binding upon
the parties and may, if necessary, be enforced by any court of competent
jurisdiction or any other competent authority in the same manner as a judgment
or order of such court or authority. The arbitrator may render an award for
damages or specific performance, may award interest and attorneys' fees if so
requested and may grant or order preliminary or injunctive relief to either
party, as he or she sees fit. The arbitrator's and the AAA's fees and expenses
shall be borne equally by the parties.
This Agreement and all arbitration proceedings shall be governed,
construed and interpreted by the rules of the AAA, laws of Trinidad and Tobago,
and to the extent not inconsistent therewith, the common law of England,
absent any conflicts of law rules which would require the laws of some other
jurisdiction to be applied.
The parties hereto agree that this Agreement and the performance of
the parties hereunder is commercial in nature and any award of the arbitrator
may be recognized and enforced against the losing party in any state or federal
court of competent jurisdiction.
6.04. SEVERABILITY. If any provision hereof is or becomes illegal,
invalid or unenforceable under applicable law, such provision shall be fully
severable, and the remaining provisions hereof shall continue in full force and
effect.
6.05. BINDING AGREEMENT; ASSIGNMENT. This Agreement is binding upon
and inures to the benefit of each party and its respective successors and
assigns; provided that Well Services may not assign any of its rights or
obligations hereunder without the prior written consent of Cliffs Trinidad.
6.06 EXPENSES. Cliffs Trinidad and Well Services shall each pay
their own attorneys fees and expenses in connection with the negotiation,
preparation and execution of this
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Agreement and all other agreements and documents executed and delivered in
connection herewith.
6.07. ADDRESS FOR NOTICES. All notices shall be given by next day
courier, receipt confirmed, or facsimile telecommunication, receipt verified,
as follows:
Sellers: WELL SERVICES (MARINE) LIMITED
Otaheite Industrial Park
South Oropouche
Trinidad, West Indies
Attn: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Buyers: CLIFFS DRILLING TRINIDAD LIMITED
x/x Xxxxxxxxx & Xxxxx
00 Xxxxxxxxx Xx.
Xxxx xx Xxxxx
Trinidad, W.I.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxxxx Xxxx
with a copy to: CLIFFS DRILLING COMPANY
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxx Xxxxxxx
All notices shall be deemed to have been received as of the date set
forth on the verification receipt.
6.08. COUNTERPARTS. This Agreement may be signed by the parties in
one or more counterparts each of which shall constitute an original and all of
which when read together shall constitute one and the same instrument.
Executed as of the 23rd day of July, 1997.
CLIFFS DRILLING TRINIDAD LIMITED
By: /s/ Xxx X. Xxxx
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Xxx X. Xxxx
Director
WELL SERVICES (MARINE) LIMITED
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
Chairman
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