EXHIBIT 10.21
DATED 10 June 1997
BETWEEN
HLS OFFSHORE L.L.C.
-and-
MANNAI MARINE CO. LIMITED
-and-
RANA S.r.l
(in concordato preventivo)
______________________________
SETTLEMENT AGREEMENT
______________________________
Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx
Xxxxxxx
XX00 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
Ref: SRC/IMG/101271.0001
THIS AGREEMENT is made the tenth day of June 1997
BETWEEN
(1) HLS OFFSHORE L.L.C. of 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
XXX ("HLS");
(2) MANNAI MARINE COMPANY LIMITED of XX Xxx 0000, Xxxx, Xxxxx ("Mannai"); and
(3) RANA S.R.L (in concordato preventivo) of Xxx X. Xxxxxx, 0-0X000 Xxxxxx xx
Xxxxxxx, Xxxxx ("RANA").
HLS, Mannai and RANA are hereinafter collectively referred to as the "Parties"
WHEREAS:
(A) In April 1996 Mannai successfully bid for a contract to perform certain
construction and pipelay works (the "Project Works") set out in an
invitation to Tender, GTC 104/96, by Qatar General Petroleum Corporation
("QGPC"); it was agreed that certain aspects of the Project Works (the
"Subcontract Works") would be performed by RANA as subcontractor employing
its pipelay barge "ODS Mariner" (the "Vessel");
(B) By a Memorandum of Agreement dated 3 April 1996 (the "MOA") Mannai agreed
that it would subcontract the Subcontract Works to RANA who agreed, subject
to a formal subcontract, to perform the same;
(C) Mannai issued a letter of intent dated 19 April 1996 to RANA in respect of
the Subcontract Works (the "LOI") and authorized RANA to undertake the
Project Works;
(D) As RANA was not in a position to mobilise the Vessel and also to provide a
bank guarantee in accordance with the LOI, Mannai and RANA entered into an
agreement dated 23 May 1996 (the "23 May Agreement") in terms of which
Mannai agreed to provide an advance and also to waive the obligations to
provide the bank guarantee and, as security for the above, RANA agreed to
create a charge on the Vessel; no charge was in fact ever created.
(E) On 31 July 1996 HLS and RANA entered into agreements (respectively the
"Purchase Agreement" and the "Assignment Agreement") whereby (i) HLS agreed
to purchase and RANA agreed to sell the Vessel for US$3.8 million and (ii)
RANA agreed, subject to the terms of the Purchase Agreement, to assign to
HLS its rights and obligations under the MOA and LOI; the purchase price
for the Vessel has not yet been paid by HLS;
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(F) On 11 August 1996 HLS, Mannai and RANA entered into an agreement (the "11
August Agreement") whereby RANA assigned to HLS all of its rights and
obligations under the MOA, LOI and the 23 May Agreement to the extent only
of the pipelay aspects of the Subcontract Works and HLS and RANA agreed
with Mannai that they would upgrade the Vessel at their expense in order to
perform the pipelay works. Under the 11 August Agreement HLS agreed to
provide a performance bond for Qrs 3.2 million in favour of Mannai for the
pipelay portion of the sub-contract works. By a letter dated 15 August
1996 (the "15 August Letter") HLS gave a right to place a lien on the
vessel if HLS was not in a position to secure the performance bond by 29
August 1996. RANA disputes HLS' entitlement to grant such a right to place
a lien on the Vessel. HLS failed to provide the performance bond to Mannai
as required by the 15 August letter.
(G) HLS thereafter refurbished the Vessel in anticipation of performance of the
pipelay works and in October 1996 the Vessel was mobilised by HLS to
perform the pipelay works;
(H) The Vessel was rejected by QGPC/Mannai in December 1996 after they had
repeatedly advised that the Vessel was not in conformity with the technical
specifications for the performance of the Project Works, as a result of
which HLS demobilised the Vessel;
(I) Mannai has since commenced proceedings in Sharjah (Petition Number 35/96;
Suit 3/97) against HLS and RANA claiming alleged losses in the approximate
sum of DHS 22,625,000 arising from alleged breaches by HLS and RANA of the
11 August Agreement (the "Sharjah Proceedings") and in support of such
claims has obtained a provisional Order from the Sharjah Courts dated 30
December 1996 detaining the Vessel in Sharjah and a further Order dated 5
April 1997 restraining the removal from the Vessel of equipment and
materials fixed or ancillary to the Vessel (together the "Attachment
Orders"): HLS and RANA denies such claims;
(J) HLS has asserted claims against RANA arising out of or in connection with
its failure to transfer title to the Vessel to HLS in accordance with the
Purchase Agreement, alleged breaches of, and misrepresentations in relation
to, the Assignment Agreement and claims a possessory lien over and in
respect of the Vessel by reason of the monies expended on the refurbishment
of the Vessel (the "Possessory Lien"); RANA denies such claims;
(K) On or about 16 October 1996 RANA applied to the Tribunal of Ravenna, Italy
(the "Ravenna Court") in order that the proceedings of "concordato
preventivo" be permitted; by Decree dated 23 October 1996 the Ravenna Court
ordered that the proceedings be commenced;
(L) By order dated 24 December 1996 the Ravenna Court approved the sale of the
Vessel by RANA to HLS for US$3,306,804 and by decree dated 15 January 1997
the Director General of the Ministry of Transport and Navigation authorised
the sale of the Vessel by RANA to HLS;
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(M) The parties now wish to settle the claims in the Sharjah Proceedings and
all outstanding claims and liabilities arising between them under or in
connection with each of the agreements and matters referred to above to
enable the Attachment Orders to be lifted and the Vessel to be released
from Sharjah and for the sale of the Vessel by RANA to HLS to be completed
subject to the terms and conditions hereinafter appearing.
NOW THEREFORE IT IS AGREED AS FOLLOWS:
1. Sale of the Vessel
1.1. Upon execution of this Agreement by all parties, the Purchase Agreement and
the Assignment Agreement shall be deemed terminated by HLS and RANA by
mutual consent. RANA and HLS shall thereupon be deemed to have entered into
a replacement agreement for the sale and purchase of the Vessel on terms
set out in Appendix A hereto. Pursuant to such replacement agreement (the
"Sale Agreement") RANA will deliver and transfer title, with vacant
possession and free of all claims, debts, liens, charges and encumbrances,
to the Vessel to HLS (or an Italian or other company registered in the
European Union nominated by HLS bearing the name "Atlantide Crociere" or
"HLS Italy") at the shipyard in Sharjah of International Marine Services
(or other place as may be agreed between them) on the terms and conditions
set out in Appendix A.
1.2. Under the terms of the Sale Agreement, payment for the Vessel is to be made
by an Initial Instalment of US$300,000 payable upon and following Departure
as set out in Clause 1.5 below and by Subsequent Instalments totaling
US$3,000,000 payable in three equal instalments no later than the first,
second and third anniversary respectively of Departure. Payment of all of
the Instalments shall be unconditionally and irrevocably guaranteed by a
first class Italian bank reasonably acceptable to RANA in the terms of the
draft attached hereto as Appendix B, which guarantee (the "Sale Agreement
Guarantee") is to be delivered by HLS to RANA within 14 days of the date of
execution of this Agreement.
1.3. Upon delivery of the Vessel and subject (a) to the prior delivery by HLS to
RANA of the Sale Agreement Guarantee as aforesaid and (b) the provisions of
Clause 3 hereof, all present and future claims, demands and liabilities of
any nature whatsoever (other than pursuant to this Agreement) arising as
between HLS and RANA and all of their respective affiliated and/or
associated and/or subsidiary companies under, or in connection with, the
XXX, XXX, 00 May Agreement, 11 August Agreement (the "Project Agreements")
or any of them, the Purchase Agreement, the Assignment Agreement and the
Possessory Lien or howsoever otherwise shall be fully and finally
compromised and settled. In circumstances in which HLS shall nominate
another company to take delivery of the Vessel pursuant to Clause 1.1
hereof, HLS shall be deemed to have contracted as trustee on its own behalf
and on behalf of such company of the benefit of the aforesaid compromise
and settlement.
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1.4. In consequence of the above, RANA shall forthwith upon delivery to it of
the Sale Agreement Guarantee discontinue and withdraw all applications or
other process made in the Sharjah Proceedings on terms that no party hereto
shall be responsible for the payment to any other of any costs of such
proceedings and shall obtain as soon as practicable the discharge of all
orders or other directions granted on applications made by RANA in or
ancillary to the Sharjah Proceedings. HLS shall, however, reimburse to
RANA its properly documented legal costs arising out of or in connection
with the Sharjah Proceedings or the negotiation and execution of this
Agreement to the extent that the same have been reasonably incurred but in
any event not exceeding US$40,000.
1.5. Subject to, but immediately following, the performance (a) by RANA of its
obligations under Clauses 1.1 and 1.4 hereof and (b) by Mannai of its
obligations under Clause 2.6 below, HLS shall at its expense arrange for
the Vessel to leave the territorial waters of Sharjah under tow. The point
in time at which the Vessel shall thereafter leave Sharjah territorial
waters shall be referred to herein as "Departure". Provided, however, that
HLS shall have no obligation under this Clause to secure Departure of the
Vessel where this is impeded or prevented by any arrest or detention of the
Vessel or any other legal process brought in respect of the claims of any
third party howsoever arising.
1.6. The parties hereto agree to co-operate in order to achieve the objectives
set out in this Agreement.
2. Settlement of Claims
2.1. Subject to, and conditional upon, delivery of the Vessel as aforesaid, and
in consideration of the withdrawal of the Sharjah Proceedings and the
Attachment Orders and the settlement of all claims between the parties
referred to in Clause 2.5, HLS shall pay to Mannai upon and following
Departure the sum of US$4,925,000 (Four Million Nine Hundred and Twenty
Five Thousand United States Dollars) (the "Settlement Sum"). Payment of
the Settlement Sum shall be made by instalments (the "Mannai Instalments")
as detailed in Clause 2.2 below to such account or accounts as Mannai shall
direct in writing.
2.2. Subject to Clause 3 below, the first Mannai Instalment, which shall be in
the amount of US$500,000, is to be paid upon Departure. HLS shall
thereafter pay the balance of the Settlement Sum in forty-eight monthly
instalments commencing on the first day of the month which falls five
months after Departure. In the calendar year commencing on that date, HLS
shall pay the amount of $1,275,000 (the "First Calendar Year Payment") in
ten equal instalments of US$104,166, followed by an instalment of
US$129,166 and by one final instalment of US$104,174, all payable on the
first day of each month. In each of the second, third and fourth calendar
years, HLS shall pay the amount of US$1,050,000 (the "Second. Third and
Fourth Calendar Year Payments" respectively) in 12 equal instalments of
US$87,500, all payable on the first day of each month of each year
respectively. In the event that any instalment becomes due on a day which
is not a "Banking Day", the instalment shall
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be due on the next Banking Day. A "Banking Day" for these purposes is a day
on which ordinary banking transactions are undertaken in New York and
Qatar.
2.3. No interest shall accrue or be payable on the Mannai Instalments.
2.4. HLS shall arrange for the payment of each of Mannai's instalments through
an irrevocable and unconditional Letter of Credit (the "Claims L/C") issued
by a first class international bank acceptable to Mannai in the terms of
the draft attached hereto as Appendix C.
2.5. Subject to and conditional upon the delivery to Mannai of the Claims L/C
and withdrawal of the Sharjah Proceedings and the Attachment Orders, all
present and future claims, demands and liabilities of any nature whatsoever
(save and except any claims made in proceedings arising upon the
termination of this Agreement, including proceedings for the arrest or
detention of the Vessel) arising as between Mannai, HLS and RANA and all of
their respective affiliated and/or associated and/or subsidiary companies
under or in connection with the Project Agreements or any of them or
howsoever otherwise are hereby fully and finally compromised and settled.
Without limiting the foregoing, the Settlement Sum shall in particular
encompass all claims by either party for principal, interest and costs
(including any costs orders already made) in the Sharjah Proceedings. In
circumstances in which HLS shall nominate another company to take delivery
of the Vessel pursuant to Clause 1.1 hereof, HLS shall be deemed to have
contracted as trustee on its own behalf and on behalf of such company of
the benefit of the aforesaid compromise and settlement.
2.6. In consequence of the above, Mannai shall forthwith upon receipt of (i) the
Claims L/C and (ii) letters from each of HLS' solicitors, Xxxxxx Xxxxx
Xxxxxxx, and RANA's solicitors, Ince and Co., confirming that the Vessel
has been sold by RANA to HLS, discontinue and withdraw the Sharjah
Proceedings on terms that neither party shall be responsible for the
payment to the other of any costs of such proceedings and obtain as soon as
practicable the discharge of all orders or other directions granted on
applications made by Mannai in or ancillary to the Sharjah Proceedings,
including the Attachment Orders.
2.7. In consideration of HLS entering into this Agreement, Mannai shall ensure
that the Vessel is not prevented from departing from Sharjah territorial
waters by reason of any and all claims of International parts, Equipment
and Trading Company of Doha in relation to the Vessel howsoever arising and
shall, following Departure, settle such claims, providing HLS with written
confirmation of the same.
3. Termination
3.1 Notwithstanding any other provision of this Agreement, it is expressly
agreed and understood that, if the Vessel has not departed from Sharjah
territorial waters for any reason whatsoever by midnight local time on 20
July 1997, Mannai shall be entitled to give notice in writing to RANA and
HLS that the provisions of Clause 2.5 hereof are to be treated as null
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and void, in which event the same, together with the provisions of Clause
1.3 hereof, shall cease to be binding on any party hereto and any steps
taken by any of the parties pursuant to or arising out of this Agreement
shall be deemed to be without prejudice to any and all of the parties'
rights in relation to the Project Agreements, the Purchase and Assignment
Agreements, the Sharjah Proceedings and the Possessory Lien. Mannai shall
in such circumstances be entitled to take such action as it considers
appropriate to attach or arrest the Vessel and in such event, HLS shall
pay to Mannai its documented costs up to a maximum sum of US$75,000
incurred by the latter in obtaining the Attachment Orders in the Sharjah
proceedings;
3.2. It is furthermore expressly agreed and understood that, if the Vessel has
not departed from Sharjah territorial waters for any reason whatsoever by
midnight local time on 3 August 1997, this Agreement (including the
mutual release of claims set out in Clauses 1.3 and 2.5 above and the
choice of law and jurisdiction in Clause 4) shall become null and void as
if the same had never been concluded and any steps taken by any of the
parties pursuant to or arising out of this Agreement shall be deemed to
be without prejudice to any and all of the parties' rights in relation to
the Project Agreements, the Purchase and Assignment Agreements, the
Sharjah Proceedings and the Possessory Lien. In such event-
3.2.1. The Xxxx of Sale to be executed by RANA in favour of HLS and placed in
escrow with their solicitors, Ince and Co. pending Departure shall,
subject to the prior return by RANA to HLS of the Sale Agreement
Guarantee, be returned to RANA by Ince and Co;
3.2.2. HLS shall pay to Mannai its documented costs up to a maximum sum of
US$75,000 incurred by the latter in obtaining the Attachment Orders in
the Sharjah proceedings (but less any such sums paid pursuant to Clause
3.1 above);
3.2.3. Subject to satisfaction, either by or on behalf of HLS, of the obligation
contained in Clause 3.2.2 hereof, the Claims L/C shall forthwith be
returned by Mannai to HLS.
4. Law and Jurisdiction
4.1. This Agreement shall be governed by English law and all disputes and
differences arising out of or in connection with this Agreement shall be
subject to the exclusive jurisdiction of the English High Court of
Justice in London. For the purposes of any proceedings hereunder the
parties hereby irrevocably appoint the following agents for the service
of process:
HLS
Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx
0
Xxxxxxx
XX00 0XX
Telephone no: (00) 000 000 0000
Telefax no: (00) 000 000 0000
Ref: SRC/IMG
Mannai
Mannai Investment Co Ltd
Xxxxxxxxx Xxxxx
0xx Xxxxx,
00 Xxxxxxxxx
Xxxxxx
Xxxxxx
XX0X 0XX
Telephone no: (00) 000 000 0000
Telefax no: (00) 000 000 0000
Ref: Managing Director
XXXX
Xxxx and Co
Xxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxx
XX0
Telephone no: (00) 000 000 0000
Telefax no: (00) 000 000 0000
Ref: 38
5. Confidentiality
5.1 The terms of this Agreement shall be kept strictly confidential to the
parties and their legal advisors.
6. Recitals
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6.1. The recitals shall form an integral part of this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement by their
respective duly authorised representatives the day and year first above written.
/s/ Xxxxxx Xxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxx Xxxxxxx
As solicitors and agents only
for and on behalf of
HLS OFFSHORE, L.L.C.
/s/ Sylen X. Xxxxxxxx,
-------------------------------------
Sylen S. Nawalker, Corporate Vice-President and duly authorised attorney
For and on behalf of
MANNAI MARINE COMPANY LIMITED
/s/ V. Marigri
-------------------------------------
V Marigri
Duly authorised officer
For and on behalf of
RANA S.R.L
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All appendices have been omitted
from this filing and will be furnished
to the Commission's staff upon request
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