1
EXHIBIT 10(J)
BAREBOAT CHARTER
BETWEEN
TANTAWAN PRODUCTION B.V.
AND
TANTAWAN SERVICES, L L C
DATED
as of February 9, 1996
2
BAREBOAT CHARTER
TABLE OF CONTENTS
ARTICLE TITLE PAGE
1. TRANSPORTATION, INSTALLATION AND
COMMISSIONING
OF THE FPSO . . . . . . . . . . . . . . .-1-
2. FPSO TO BE CHARTERED. . . . . . . . . . .-2-
3. SERVICE . . . . . . . . . . . . . . . . .-2-
4. DURATION OF CHARTER . . . . . . . . . . .-2-
5. GUARANTEES. . . . . . . . . . . . . . . .-3-
6. REPRESENTATIONS AND WARRANTIES. . . . . .-4-
7. MAINTENANCE AND OPERATION . . . . . . . .-5-
8. INSPECTION. . . . . . . . . . . . . . . .-7-
9. COMPENSATION. . . . . . . . . . . . . . .-8-
10. CHANGE IN LAW . . . . . . . . . . . . . -10-
11. TAXES . . . . . . . . . . . . . . . . . -10-
12. CONFLICTS OF INTEREST . . . . . . . . . -10-
13. LIENS AGAINST THE FPSO. . . . . . . . . -11-
14. INVENTORY . . . . . . . . . . . . . . . -12-
15. GAS SALES AGREEMENT . . . . . . . . . . -12-
16. DOWNTIME. . . . . . . . . . . . . . . . -12-
17. INSURANCE . . . . . . . . . . . . . . . -13-
18. INDEMNITY . . . . . . . . . . . . . . . -00-
-x-
0
00. XXX-XXXXXX OF DEFAULTS; NON-RECOURSE. . -18-
20. FORCE MAJEURE . . . . . . . . . . . . . -18-
21. LAW AND ARBITRATION . . . . . . . . . . -19-
22. NOTICES . . . . . . . . . . . . . . . . -20-
23. PURCHASE OPTION . . . . . . . . . . . . -21-
24. REVENUES. . . . . . . . . . . . . . . . -22-
25. REDELIVERY OF FPSO. . . . . . . . . . . -23-
26. REQUISITION . . . . . . . . . . . . . . -23-
27. GENERAL AND PARTICULAR AVERAGE. . . . . -24-
28. SALVAGE . . . . . . . . . . . . . . . . -24-
29. AUDIT . . . . . . . . . . . . . . . . . -24-
30. DEFAULT . . . . . . . . . . . . . . . . -24-
31. REMEDIES. . . . . . . . . . . . . . . . -25-
32. MISCELLANEOUS . . . . . . . . . . . . . -27-
Appendix A TECHNICAL DESCRIPTION AND DESIGN BASIS
Appendix B-1 FORM OF JOINT VENTURER GUARANTEE AND INDEMNITY
Appendix B-2 FORM OF LESSOR PARENT COMPANY GUARANTEE AND INDEMNITY
Appendix C PURCHASE OPTION PRICE
-ii-
4
BAREBOAT CHARTER
This Bareboat Charter (this "Agreement"), made and entered into as of the 9th
day of February 1996, by and between Tantawan Production B.V., a Netherlands
corporation("Lessor"), and Tantawan Services, L L C, a Delaware limited
liability company ("Charterer"), acting through its Thai branch.
W I T N E S S E T H
WHEREAS, the Petroleum Authority of Thailand ("PTT") and Thaipo Limited, Thai
Xxxx Limited and The Sophonpanich Co., Ltd. have entered into that certain Gas
Sales Agreement dated November 7, 1995 (the "Gas Sales Agreement") in
connection with the Petroleum Concession Agreement No. 1/2534/36, dated August
1, 1991, covering block B8/32 offshore Thailand, awarded by the Ministry of
Industry to Maersk Oil (Thailand) Ltd., Thaipo, Limited and Thai Xxxx, Limited,
and Supplementary Petroleum Concession No. 1 to Petroleum Concession No.
1/2534/36, dated March 6, 1992, whereby The Sophonpanich Co., Ltd., entered
into Petroleum Concession No. 1/2534/36 (collectively, the "Concession
Agreement");
WHEREAS Thaipo Limited, Thai Xxxx Limited and Xxxxxx Thai Gulf Limited (as
successor in interest to The Sophonpanich Co. Ltd) are currently the
Concessionaires under the Concession Agreement (collectively "the
Concessionaires");
WHEREAS, Charterer desires to charter from Lessor on a bareboat basis a
Floating Production Storage and Offloading System known as the "Tantawan
Explorer" (the "FPSO"), for use in the Tantawan Field, Thailand;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Lessor and Charterer agree as follows:
1. TRANSPORTATION, INSTALLATION AND COMMISSIONING OF THE FPSO
Lessor shall be responsible for delivery (the "Delivery") of the FPSO to
Charterer in international waters offshore the yard at which the FPSO is
being converted (the "Delivery Site") as evidenced by a certificate of
delivery issued by Lessor and countersigned by Charterer. Prior to
Delivery, Lessor shall be fully responsible for and assume all risks with
respect to the FPSO. Charterer has hired an operator ("Operator")
pursuant to an Operating Agreement (the "Operating Agreement") to operate
the FPSO commencing with Delivery. Operator shall be responsible for
completing all work to be performed in respect of the FPSO until Field
Acceptance, as herein defined, has occurred, including transporting the
FPSO from the Delivery Site to the site in the Tantawan Field designated
by Charterer (the "Offshore Site"), hooking-up the FPSO on its anchoring
system and hydrostatic, electrical and instrumentation testing. Operator
shall also be responsible for commissioning the FPSO.
5
2. FPSO TO BE CHARTERED
Charterer hereby agrees to bareboat charter the FPSO as described in
Appendix A and its inventory from Lessor, for the period and upon the
terms and conditions stated herein. Lessor represents, undertakes and
warrants that at the time of Delivery the FPSO shall comply with the
requirements of the design basis set forth in Appendix A hereto (the
"Design Basis") and shall be properly documented and classed as ABS A1
Floating Production, Storage and Offloading System, with no
recommendations and as per the particulars of Appendix A. Lessor shall
before and at the time of Delivery make the FPSO seaworthy and in every
respect ready in hull, machinery and equipment for service hereunder.
3. SERVICE
Charterer shall have the full use of the FPSO at the Offshore Site and,
subject to Lessor's approval, at any other place in the world where its
operation is not prohibited by applicable law and/or regulations.
Charterer may subcontract to identified subcontractors certain of its
obligations hereunder, including, but not limited to, those relating to
the operation, maintenance and repair of the FPSO. However, such
subcontracts shall not relieve Charterer of such obligations.
4. DURATION OF CHARTER
4.1 The term (the "Initial Term") of this Agreement shall commence upon
Delivery. The Initial Term shall end on a date ten (10) years after
Hire Commencement Date (as defined in Article 9.1).
4.2 When the FPSO is hooked up at the Offshore Site and is ready to receive
hydrocarbons, when hydrostatic tests have been satisfactorily completed
and, to the extent possible, when electrical and instrumentation tests
have been satisfactorily completed, Charterer or its nominee will make
an inspection to determine whether such events have occurred. Within
twenty-four (24) hours of the inspection, Charterer will notify Lessor
in writing of whether or not such events have occurred. Lessor will
cause Operator to have available at the Offshore Site appropriate and
experienced staff to promptly correct all items found to be
unacceptable. When Charterer is satisfied that such events have
occurred ("Field Acceptance"), Charterer shall sign a certificate of
field acceptance to this effect. (If Charterer's affiliate shall fail
to perform or cause to be performed the work of installing pipeline end
manifolds ("PLEMs") and the anchoring of the mooring system for the FPSO
at the Offshore Site and such failure shall have directly and solely
prevented the occurrence of Field Acceptance, then Field Acceptance
shall be deemed to have occurred as of the date Field Acceptance would
have occurred but for Charterer's actions or failure to perform such
action.) Field Acceptance by Charterer shall not be construed as a
waiver or discharge of any of the representations, warranties or
undertakings of Lessor in or with respect to this Agreement or the FPSO.
-2-
6
4.3 Upon the expiration of the Initial Term, Charterer shall have the option
to terminate this Agreement, extend this Agreement on an annual basis at
prices to be agreed upon by Lessor and Charterer, or purchase the FPSO
pursuant to Article 23. The election of any such option may be
exercised by Charterer's giving Lessor notice thereof at least 360 days
prior to the expiration of the Initial Term. If no such notice is
received, Charterer shall be deemed to have exercised its option to
terminate this Agreement as of the end of the Initial Term. If
Charterer elects to extend this Agreement, then Charterer and Lessor
shall negotiate in good faith in an effort to reach agreement prior to
the end of the Initial Term on a Total Bareboat Rate for the subsequent
annual term. If no such agreement is reached, Charterer shall have the
additional option to purchase the FPSO as aforesaid by notice to Lessor
at least 180 days prior to the end of the Initial Term. If no agreement
on a Total Bareboat Rate for an extended term is timely reached and if
no notice of an election to purchase the FPSO is timely given, Charterer
shall be deemed to have exercised its option to terminate this Agreement
as of the end of the Initial Term. If an agreement on Total Bareboat
Rate for an extended term is reached, this Agreement shall be extended
until the first anniversary date of the end of the Initial Term and this
Article 4.3 shall apply at the end of said extended term mutatis
mutandis.
5. GUARANTEES
5.1 Simultaneously with the execution of this Agreement, Charterer shall
furnish to Lessor several guarantees limited to field percentage
interest (the "Joint Venturer Guarantees") of Charterer's performance
under this Agreement which shall be given by Thaipo Limited, Thai Xxxx
Limited and Xxxxxx Thai Gulf Limited (the "Joint Venturers") in the form
of Appendix B-1 hereto.
5.2 As security for payment of Hire (as hereinafter defined) and other
amounts due to Lessor hereunder, Charterer shall grant or cause the
Concessionaires to grant (to the extent permitted by Thai law) a
security interest to Lessor in all oil produced from the Tantawan Field
taken on board the FPSO and the proceeds thereof, such security interest
to be subordinate to royalties, taxes and field operating expenses and
granted on a pari passu basis, with all lenders financing the
development of the Tantawan Field. Charterer shall fully assist Lessor
in perfecting such a security interest, to the extent permitted by the
laws of the United States of America and the laws of Thailand.
Charterer shall not agree to permit such other lenders to perfect their
security interests if Lessor is unable or elects not to perfect its
security interest.
5.3 Lessor has delivered to Charterer a Guarantee and Indemnity Agreement
("Lessor Parent Company Guarantee") in the form of Appendix B-2 hereto,
executed by its ultimate corporate parent, IHC Caland N.V., guaranteeing
the performance by Lessor of its obligations hereunder.
-3-
7
6. REPRESENTATIONS AND WARRANTIES
6.1 Lessor represents and warrants to Charterer that:
a) Lessor is a corporation duly organized and in good standing under
the laws of the Netherlands; has all requisite corporate power and all
material governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted; and is qualified to do business and is in good
standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so
to qualify could be reasonably expected to have a material adverse
effect on its business.
b) Lessor has all necessary corporate power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance by Lessor of this Agreement has been duly
authorized by all necessary corporate action on its part; and this
Agreement has been duly and validly executed and delivered by Lessor and
constitutes its legal, valid and binding obligation, enforceable against
Lessor in accordance with its terms except to the extent such
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditor's rights and (ii) the application
of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
c) The execution and delivery of this Agreement and the consummation
of the transactions herein contemplated will not conflict with or result
in a breach of the articles of association (statuten) of Lessor or any
applicable law or regulation or any material agreement or instrument to
which Lessor is a party or by which it is bound or to which it is
subject or constitute a default under any such material agreement or
instrument.
d) All authorizations, approvals and consents of, and filings or
registrations with, any governmental or regulatory authority or agency,
as are at the date of Delivery necessary for the execution, delivery or
performance by Lessor of this Agreement and for the legality, validity,
or enforceability hereof, will have been obtained at such date and
thereafter will be maintained until the expiration or termination of
this Agreement.
6.2 Charterer represents and warrants to Lessor that:
a) Charterer is a corporation duly organized and in good standing under the
laws of the State of Delaware; has all requisite corporate power and all
material governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted; and is qualified to do business and is in good
standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so
to qualify could be reasonably expected to have a material adverse
effect on its business.
b) Charterer has all necessary corporate power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance
-4-
8
by Charterer of this Agreement has been duly authorized by all necessary
corporate action on its part; and this Agreement has been duly and
validly executed and delivered by Charterer and constitutes its legal,
valid and binding obligation, enforceable against Charterer in
accordance with its terms except to the extent such enforceability may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
similar laws of general applicability affecting the enforcement of
creditor's rights and (ii) the application of general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
c) The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach of the certificate of incorporation or by-laws of Charterer or
any applicable law or regulation or any material agreement or instrument
to which Charterer is a party or by which it is bound or to which it is
subject or constitute a default under any such material agreement or
instrument.
(d) All authorizations, approvals and consents of, and filings or
registrations with, any governmental or regulatory authority or agency,
as are at the date of Delivery necessary for the execution, delivery or
performance by Charterer of this Agreement and for the legality,
validity, or enforceability hereof, will have been obtained at such date
and thereafter will be maintained until the expiration or termination of
this Agreement.
(e) Charterer will not, for the duration of the charter term, engage in
significant activities or own substantial assets located in the United
States of America.
6.3 OTHER THAN AS SPECIFICALLY STATED IN THIS AGREEMENT NEITHER PARTY SHALL
BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE TITLE,
SEAWORTHINESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR
USE OF THE FPSO OR ANY PART THEREOF.
7. MAINTENANCE AND OPERATION
7.1 Lessor agrees that the FPSO shall, for the duration of the charter term,
be in the full possession and at the absolute disposal for all purposes
of Charterer and under its complete control in every respect. Subject
to Article 7.3, as necessary to meet and maintain requirements of the
American Bureau of Shipping ("ABS"), Charterer shall maintain the FPSO
in a good state of repair. In addition, Charterer shall maintain the
FPSO in efficient operating condition and in accordance with good
commercial maintenance practice, and shall keep the FPSO with valid,
unexpired classification of the class as indicated in Article 2, free of
recommendations and notations affecting class. Charterer shall furnish
Lessor with one duplicate original or certified true copy of all class
and flag certificates issued or notated during the duration of the
charter upon their issuance or notation. Lessor shall keep all Thai,
Bahamian (the "Country of Registry") and other required certificates
valid, up-to-date and in full force at all times. Charterer shall
maintain the following maintenance reports, records, surveys and
documents: Planned Maintenance System, Continuous Survey of Machinery
and such other reports, records, surveys and documents as Lessor shall
-5-
9
reasonably specify in writing. Charterer shall provide copies of such
documents to Lessor upon Lessor's request. Lessor shall provide
Charterer and Operator with all authorizations which Charterer may
reasonably require in order to accomplish the actions required or
permitted to Charterer under this Article 7.
7.2 Subject to Article 7.3, Charterer shall take immediate steps to have all
necessary repairs done within a reasonable time.
7.3 Notwithstanding the terms of Articles 7.1 and 7.2, Major Repairs
necessary to meet and maintain ABS requirements and the Design Basis
shall be the responsibility of Lessor provided always that Charterer has
not caused the need for such repairs as a result of Charterer's gross
negligence or willful misconduct. "Major Repairs" shall mean all
repairs to the FPSO other than: (a) repairs resulting from corrosion
caused by a combination of carbon dioxide and water in the gas stream,
and (b) repairs costing less than U.S. $100,000 per incident. Such
Major Repairs shall be carried out by Lessor and Charterer shall provide
all necessary assistance.
7.4 In the event of any improvement, structural changes or new equipment
becoming necessary for the continued operation of the FPSO by reason of
new class requirements or compulsory legislation or in order to maintain
the FPSO in compliance with the Design Basis, then Lessor shall carry
out such work at its expense.
7.5 Charterer shall establish and maintain financial security of
responsibility in respect of oil or other pollution damage as required
by any government or other division or authority thereof, to enable the
FPSO, without penalty or charge, lawfully to enter and remain at the
Offshore Site in performance of this Agreement or in the case of removal
of the FPSO to another site as may be permitted by the terms hereof, at
such other site. Charterer shall make and maintain all arrangements by
bond or otherwise as may be necessary to satisfy such requirements at
Charterer's sole expense.
7.6 Charterer shall at its own expense and by its own procurement, except as
stated to the contrary elsewhere, man, victual, operate, supply, fuel
and repair the FPSO whenever required during the duration of this
Agreement and shall pay all charges and expenses of every kind and
nature whatsoever incidental to its use and operation of the FPSO under
this Agreement. The Master, officers, crew and production personnel of
the FPSO shall be the servants of Charterer for all purposes whatsoever.
7.7 Charterer shall comply with the regulations of the Country of Registry
and, to the extent applicable, the Kingdom of Thailand. Charterer will
cause the FPSO to comply at all times with all applicable laws, treaties
and conventions and with all rules and regulations issued thereunder and
to have on board, when required thereby, valid certificates showing
compliance therewith.
7.8 During the duration of this Agreement the FPSO shall retain her present
name and shall remain under and fly the Bahamian flag, provided,
however, that Charterer shall have the liberty to paint the FPSO in its
own colors, install and display its funnel insignia and fly its
-6-
10
own house flag. Painting and repainting, installment and re-instalment
shall be for Charterer's account.
7.9 (a) Subject to Article 7.4 and Lessor's approval, which shall not be
unreasonably withheld, Charterer shall have the right to add additional
equipment, modify existing equipment or connect additional production
facilities. Any such additions or modifications, including the
installation thereof, shall be at the sole cost, risk and expense of
Charterer. Such additions, modifications and connections so installed
shall, without necessity of further act, become part of the FPSO and the
property of Lessor; provided, however, that so long as no Event of
Default shall have occurred and be continuing, any such additions,
modifications and connections not required to be installed in order to
meet the requirements of Article 7.4 hereof and not installed as
replacements for property included on board the FPSO on the date of
Field Acceptance may be removed (so long as such removal can be
accomplished without damage to the FPSO) by Charterer, at its own
expense and risk, at any time during, or at the expiration of, the
Initial Term upon reasonable prior notice, whereupon such equipment
shall, without necessity of further act, become the property of
Charterer.
(b) Charterer may, in the ordinary course of maintenance, repair or
overhaul of the FPSO, remove any item of property constituting a part of
the FPSO; provided, however, that such item is replaced as promptly as
possible by an item of property which is free and clear of all liens,
encumbrances and rights of others and is in as good operating condition,
is as seaworthy and has a value and utility at least equal to the item of
property being replaced. Any item of property removed from the FPSO as
provided in the preceding sentence shall remain the property of Lessor
until replaced in accordance with the terms of such sentence, but shall
then, without further act, become the property of Charterer. Any such
replacement item of property shall, without further act, become the
property of Lessor and be deemed part of the FPSO as defined herein
for all purposes hereof.
7.10 Charterer shall have the use of all items of inventory, equipment and
spares being part of or on board the FPSO on the date of Delivery, which
Lessor undertakes to provide. Such inventory will be specified pursuant
to Article 14.
8. INSPECTION
8.1 Lessor shall have the right at any reasonable time to inspect or survey
the FPSO itself or to instruct a duly authorized third-party surveyor to
carry out such survey on its behalf to ascertain the condition of the
FPSO, and to satisfy itself that the FPSO is being properly repaired,
maintained and operated. Such inspections and surveys shall be for
Lessor's account. Charterer shall provide, free of charge to Lessor,
upon reasonable request by Lessor, transportation from the shore base to
the FPSO and vice versa on its regular flights and, to the extent
available, accommodations, catering and communication on board for such
inspectors or surveyors.
8.2 Charterer shall also permit Lessor to inspect the FPSO's log books
whenever requested and shall immediately furnish Lessor with full
information regarding any casualties or other accidents or damage to or
caused by the FPSO.
-7-
11
9. COMPENSATION
9.1 As full compensation for the performance by Lessor of its obligations
under this Agreement, Charterer shall pay Lessor a hire ("Hire"). Hire
shall accrue in accordance with this Article 9 commencing at 0001 hours
local time at the Offshore Site on the date ("Hire Commencement Date")
on which both (a) Field Acceptance, and (b) the earlier of (i) December
20, 1996 or (ii) the date on which hydrocarbons begin flowing through
the FPSO, shall have occurred.
Except as otherwise provided herein, Hire shall continue to accrue until
the date and hour when the FPSO is redelivered to Lessor under the terms
of this Agreement. Hire shall be paid at the rate of $55,000 per day
(the "Total Bareboat Rate"), subject to change pursuant to mutual
agreement of the parties, in the manner provided for in Article 24, and,
except as otherwise specifically provided herein, no other compensation
or reimbursement shall be due to Lessor for the performance of its
obligations hereunder.
9.2 Payment of Hire shall be made monthly in arrears, without any discount,
adjustment, set off or deduction, except as specifically set forth in
this Article 9 or otherwise in this Agreement. Lessor shall provide
invoices to Charterer covering each payment of Hire at least ten (10)
days before due. Payment of Hire shall be made to such U.S. Dollar
account or accounts with such European office of a first class bank as
Lessor shall designate in writing. Lessor shall not change such
designations without Charterer's consent, which consent shall not be
withheld unless Charterer determines that:
(i) such change would increase Charterer's costs; or
(ii) such change would expose Charterer to the risk of double payment.
The first payment of Hire shall be paid in same day funds before the
close of business at the place of payment on the first business day of
the calendar month beginning after the Hire Commencement Date. Except as
otherwise provided in this Agreement, subsequent payments of Hire shall
be paid in same day funds at the place of payment on the first business
day of each applicable calendar month during the Initial Term or an
extended term ("Hire Payment Date"). Hire shall accrue on a daily basis;
provided that Hire for any periods that constitute less than a calendar
day shall be a pro rata portion of Hire for such calendar day. If a Hire
Payment Date falls on a day which is not a banking day at the place of
payment, payment shall instead be made on the next succeeding day that is
a banking day at such place. Any Hire paid but not earned shall be
refunded on the next Hire Payment Date (or as otherwise provided under
this Agreement) to Charterer by Lessor.
9.3 Upon request by Charterer, Lessor shall promptly pay to Charterer, or at
the option of Charterer, at any time following an Event of Default by
Lessor hereunder or a default under the Lessor Parent Company Guarantee,
Charterer shall be entitled to deduct from the payments of Hire:
(i) actual or reasonably estimated disbursements, if any, for Lessor's
account;
-8-
12
(ii) any advances to the master of the FPSO (the "Master") or to Lessor's
affiliates, contractors, subcontractors, or agents for expenses or
disbursements for Lessor's account;
(iii) any previous overpayment of Hire, including payments made with respect
to periods of Downtime;
(iv) any sums due in respect of Lessor's failure to meet Lessor's performance
undertakings under this Agreement; and
(v) any other sums or credits to which Charterer is entitled under this
Agreement.
If a deduction is made based on an estimate, the next Hire payment shall
be adjusted, if necessary, to reflect any difference between such
estimate and the actual amount of deduction that Charterer is able to
verify. All deductions from Hire shall be verified by Charterer by
production of vouchers or supporting documentation corresponding to the
deductions within thirty (30) days after the applicable Hire Payment
Date.
9.4 Notwithstanding anything contained in this Article 9 to the contrary,
the final payment of Hire hereunder shall be made on the date of
redelivery of the FPSO to Lessor. Deductions, to the extent permitted
by Article 9.3, from said final payment shall be those reasonably
estimated by Charterer if the actual amounts have not been determined
and also less the amount estimated by Charterer to become payable by
Lessor for fuel and supplies on redelivery of the FPSO to Lessor as
provided in Article 25.
9.5 Should the FPSO become an actual total loss, Hire shall cease at the
time of her loss or, if such time is unknown, at the time when the FPSO
was last heard of. If the FPSO should become a constructive total loss,
Hire shall cease at the time of the casualty resulting in such loss.
Within ninety (90) days after Hire has ceased under this Article 9.5,
all monies owing to Charterer under the provisions of this Agreement at
the time Hire ceases under this Article 9.5 shall be paid to Charterer,
and likewise Lessor shall be paid the net amount of all sums due from
Charterer. If the FPSO shall have been missing for at least forty-eight
(48) hours when a payment of Hire would otherwise be due, such payment
shall be postponed until the safety of the FPSO is ascertained.
9.6 In the event Charterer fails to make any payment (including without
limitation any payment of Hire) due and owing to Lessor under this
Agreement, Lessor shall so notify Charterer. If Charterer fails to pay
amounts due and owing within five (5) business days after receipt of
such notice, Charterer shall pay to Lessor, in addition to all other
amounts then due and owing, a late fee at a rate equal to one-month
LIBOR plus two percent (2%) on the amounts then due and owing for the
period of said fifth (5th) day until paid without prejudice to any other
remedies under this Agreement.
9.7 All payments of Hire and other amounts due hereunder from one party to
the other shall be made in U.S. Dollars by interbank transfer. Except
as otherwise provided herein, all sums due by one party to the other
shall be paid within 30 days of receipt of invoice.
-9-
13
9.8 Charterer shall be responsible for obtaining and shall use all
reasonable efforts to obtain exchange control approval for payments
under this Agreement.
10. CHANGE IN LAW
10.1 The Total Bareboat Rate is based on the tax laws of Thailand and Holland
as of the date of this Agreement and assumes a tax burden of 1.1% of the
Total Bareboat Rate. In the event there are any changes in Thailand tax
laws or their interpretation which affect the cost to the Lessor of
chartering the FPSO, the Total Bareboat Rate shall be revised upwards or
downwards to take into account such change in costs; provided, however,
Charterer shall not be obligated to pay any Thai, Dutch or U.S. tax
burden up to a total amount equal to 2.2% of the Total Bareboat Rate and
further provided Lessor shall use all reasonable efforts to maintain its
present status under the tax treaty between Thailand and the Netherlands
and shall take all reasonable actions to prevent or minimize any such
increased expenses. Any increase in the total tax burden on the Total
Bareboat Rate in excess of 2.2% of the Total Bareboat Rate attributable
to any changes in Dutch tax laws shall be for Lessor's account. Any
adjustment of said compensation shall be effective as of the effective
date of the change in such tax burden; provided, Lessor shall furnish to
Charterer the necessary supporting documentation evidencing such changes
within a reasonable time.
10.2 The parties hereto do not believe that any U.S. taxes are applicable to
payments made under this Agreement. To the extent that U.S.
withholding taxes are assessed on Hire payable hereunder, Hire shall be
increased such that the net Hire received by Lessor hereunder shall not
be affected by such U.S. withholding taxes. Lessor agrees to use its
best efforts to promptly obtain a refund of any such U.S. income taxes
which have been withheld in excess of Lessor's U.S. tax obligations and
to promptly repay such refund to Charterer.
11. TAXES
Subject to Article 10, all taxes (including income and withholding
taxes) which are due with respect to the payment of the Total Bareboat
Rate pursuant to this Agreement shall be paid by Lessor or reimbursed to
Charterer by Lessor, except that Thailand value added taxes ("VAT"),
other Thailand sales/use taxes and Thailand customs and import duties
applicable to the FPSO, shall be paid by Charterer or reimbursed to
Lessor by Charterer. Charterer or its designee on the behalf of the
Concessionaires shall be designated as the importer of the FPSO and be
responsible for customs clearance and obtaining import licenses on
the FPSO.
12. CONFLICTS OF INTEREST
Neither Lessor nor any of its subcontractors shall pay any fee,
commission, rebate or other thing of value to, or for the benefit of,
any employee of Charterer, its principals or any of its or their
affiliates, nor shall Lessor do business with any company knowing that
the results thereof might benefit an employee of the Charterer, its
principals or any of its or their affiliates.
-10-
14
13. LIENS AGAINST THE FPSO
13.1 a) Neither Charterer nor the master of the FPSO nor any other person
shall have any right, power or authority to create, incur or permit
to exist upon the FPSO any lien, charge or encumbrance other than
Permitted Encumbrances. Lessor may fasten to the FPSO in a
conspicuous place and maintain during the term of this Agreement a
notice reading as follows:
Notice of Charter
This Vessel is mortgaged to _________________ , and is under charter
to Tantawan Services, L L C With the exception of such mortgage,
under the terms of said charter, neither the charterer, any
subcharterer, the master of this Vessel, nor any other person has the
right, power or authority to create, incur or permit to be placed or
imposed upon this Vessel, or its profits, any lien whatsoever, other
than liens for master's and crew's wages or salvage or as otherwise
provided under said charter.
b) Lessor warrants that it has not created and covenants that it will
not create or permit to exist, and shall indemnify, hold
harmless and defend Charterer against any loss which Charterer may
sustain by reason of, any Owner Encumbrances.
c) "Permitted Encumbrances" shall mean (i) the rights of Charterer
under this Agreement, (ii) the rights of Lessor under this
Agreement, (iii) during the Initial Term or any extended term, liens
for current master's and crew's wages and salvage, (iv) Lessor
Group's mortgage of the FPSO in favor of certain lending
institutions ("Lenders") provided Charterer shall have received
satisfactory assurances from the Lenders as to the exercise of
Charterer's rights under this Agreement in the absence of an Event
of Default by Charterer and the expiration of all cure periods
relevant thereto, and (v) liens arising in tort which are covered by
insurance; and "Permitted Encumbrance" shall mean any of the
foregoing.
d) "Owner Encumbrances" shall mean any liens, security interests or
encumbrances resulting from voluntary action by Lessor Group,
as hereinafter defined, taken without the prior written approval of
Charterer and not taken as the result of an Event of Default by
Charterer.
13.2 Charterer agrees that if a libel or a complaint in admiralty (for
purposes of this Article 13.2 called a "claim") shall be filed against
the FPSO, or if the FPSO shall be otherwise levied upon or taken into
custody or detained or sequestered by virtue of proceedings in any court
or tribunal or by any government or other authority because of any claim
(excluding a claim against Lessor), Charterer shall at its own expense
within 15 days thereafter cause the FPSO to be released and each such
claim to be discharged (except to the extent that the same shall be
contested by Charterer in good faith by appropriate proceedings and
shall not affect the continued use of the FPSO). Charterer agrees
forthwith to notify Lessor by telegram or
-11-
15
telex, confirmed by letter, of each such claim involving amounts in
excess of $500,000 and of the release and discharge of each such claim.
Charterer agrees to advise in writing at least once in each three-month
period as to the status and merits of all such claims not released and
discharged within 15 days as provided above, which either are not bonded
or affect the ability of Charterer to use the FPSO in the ordinary
course of its business. Charterer agrees to indemnify, hold harmless
and defend Lessor against any loss which Lessor may sustain by reason of
any liens, security interests or encumbrances resulting from voluntary
action by Charterer Group taken without the prior written approval of
Lessor and not taken as the result of an Event of Default by Lessor.
14. INVENTORY
A complete inventory of the FPSO's entire outfit, equipment (including
vessel equipment and supplies, cabin, crew and galley equipment),
furniture, furnishings, appliances, spare and replacement parts and all
unbroached consumable stores, fuel and lubricants onboard shall be
jointly taken within thirty (30) days following Field Acceptance by
representatives of Lessor and Charterer or by an independent outside
firm as may be mutually agreed upon. A similar inventory shall be taken
and mutually agreed upon at the time of Redelivery.
15. GAS SALES AGREEMENT
Charterer and Lessor recognize that compliance with the terms of the Gas
Sales Agreement will be required by the parties thereto, and Lessor and
Charterer will generally cooperate in facilitating such compliance by
the parties thereto.
16. DOWNTIME
16.1 Downtime shall mean any calendar day on which the FPSO is unable to
process sufficient gas so as to deliver (and actually deliver) into the
export pipeline the lesser of (i) 150 million cubic feet ("Mmcf") of gas
or (ii) the amount of gas that Charterer, its affiliates and designees
are capable of delivering to the FPSO, as determined in good faith by
Charterer on the basis of demonstrated measured data; provided that any
shortfall in gas delivery on a given calendar day may be made up so as
to avoid Downtime hereunder over the three succeeding calendar days.
Downtime shall also mean any calendar day on which the FPSO is unable to
process and deliver into the FPSO storage tanks the lesser of (i) 40,000
barrels of liquids or (ii) the amount of liquids that Charterer, its
affiliates and designees are capable of delivering to the FPSO, as
determined in good faith by Charterer on the basis of demonstrated
measured data; provided, however, that no Downtime shall be deemed to
have occurred pursuant to this sentence if the FPSO's inability to
process the liquids so required results solely from the FPSO's inability
to process the quantity of gas required by the immediately preceding
sentence. Downtime shall also mean any calendar day on which the FPSO
is unable to offload into shuttle tankers the oil stored on the FPSO,
other than for adverse weather conditions as specified in the Terminal
Regulations Manual, as defined in the Operating Agreement and in
Charterer's reasonable opinion this adversely affects the normal
operation of the fields served by the FPSO. For purposes of this
Article 16.1,
-12-
16
"process" shall be interpreted to mean the processing on board the FPSO
of gas and liquids having the properties given in the Design Basis in
circumstances which conform to the design criteria given in the Design
Basis.
16.2 Downtime shall occur notwithstanding the fact that maintenance or
repairs (including Major Repairs but excluding those resulting from
Charterer's gross negligence or willful misconduct) are occurring.
Downtime shall not occur during the period that Charterer is adding or
modifying equipment or connecting additional facilities pursuant to
Article 7.9 hereof.
16.3 Lessor shall give Charterer sixty (60) days' prior notice of any Major
Repairs to the FPSO.
16.4 Downtime shall be deemed not to occur during an event which is a Force
Majeure event hereunder.
16.5 A Downtime Penalty Period shall mean any year based upon a historical
rolling year beginning after the earlier of (i) February 28, 1997 or
(ii) the Contractual Delivery Date, as defined in the Gas Sales
Agreement. If Charterer desires to fix the commencement of the Downtime
Penalty Period by reference to a Contractual Delivery Date based on
completion of the seventy two (72) hour test ("Test") referred to in
clause 6.3 of the Gas Sales Agreement, Charterer shall be required to
obtain confirmation from Lessor prior to commencement of the Test that
the FPSO is able to process and deliver Sales Gas, as defined in the Gas
Sales Agreement, consistent with the PTT nomination made pursuant to
said clause 6.3. During any Downtime Penalty Period (i) Charterer shall
not be obligated to pay Lessor the Total Bareboat Rate in respect of any
Downtime occurring after the first thirty (30) days of Downtime and (ii)
if the first thirty (30) days of Downtime are consecutive, in addition
to the foregoing, Charterer shall not be obligated to pay Lessor the
Total Bareboat Rate for said first thirty (30)-day period (and if
Charterer has previously paid any or all of the Total Bareboat Rate in
respect of said first thirty (30) day period, Lessor shall promptly
refund such amount to Charterer).
17. INSURANCE
17.1 Lessor shall maintain in force or shall cause one of its affiliates to
maintain during the term of this Agreement the following insurance
coverages. Deductibles for insurance obtained pursuant to Article 17.1
a), b) and c) shall be shared equally by Charterer and Lessor; all other
deductibles shall be for the account of Lessor.
a) Hull and Machinery and Increased Value Insurance on the FPSO in the
amount of one hundred twenty percent (120%) of the estimated value of
the FPSO on the London Institute Hull Clauses, or equivalent, including
Collision Liability to the extent not provided under Article 17.1 (d)
below.
b) Confiscation and Expropriation Insurance on the FPSO in the amount of
one hundred twenty percent (120%) of the estimated value of the FPSO.
-13-
17
c) War Risk Insurance on the FPSO subject to London Institute Hull War Risk
and Strikes Clauses, or equivalent, in the amount of one hundred twenty
percent (120%) of the estimated value of the FPSO, and War Risk
Protection and Indemnity Clauses with a limit of one hundred twenty
percent (120%) of the estimated value of the FPSO.
d) Protection and Indemnity Insurance on the FPSO, subject to the rules of
a Protection and Indemnity Club who are members of the International
Group of P & I Clubs. The P & I entry to include that proportion, if
any, of Collision Liabilities not covered under Article 17.1 (a) above.
e) Workmen's Compensation and Employer's Liability Insurance covering
Lessor Group's (as hereinafter defined) employees for statutory benefits
as set out and required by local law in the area of operation or any
area in which Lessor Group may become legally obligated to pay benefits.
Appropriate maritime coverage shall be included.
f) Comprehensive General Liability and Automobile Liability Insurance
covering premises and operations, independent contractors and
contractual liability, as well as all owned, hired and non-owned
vehicles. Minimum policy limits for personal injury and property damage
shall be:
i) Comprehensive General Liability: US$25,000,000 single limit per
occurrence;
ii) Automobile Liability: US$1,000,000 single limit per occurrence or
such greater amount as required by applicable law.
g) Pollution Insurance for the FPSO for US$300 million per occurrence,
subject to market availability.
17.2 Before commencing performance of this Agreement, Lessor shall furnish
Charterer with Certificates of Insurance indicating:
a) the kinds and amounts of insurance as required;
b) the insurance company or companies providing the aforesaid coverages;
c) the effective and expiration dates of policies;
d) that Charterer will be given thirty (30) days' (7 days for War Risk
insurance policy) written advance notice of any material change,
non-renewal or cancellation of any policy;
e) the territorial limits of all policies; and
f) that Charterer Group (as hereinafter defined) has been named as an
additional insured on all policies referred to in Article 17.1 (except
Article 17.1e)) with waivers of subrogation on the policies in Article
17.1.
-14-
18
17.3 Charterer shall maintain in force during the term of this Agreement the
following insurance coverages. Deductibles shall be for the account of
Charterer.
a) Xxxxxxx'x Compensation and Employer's Liability Insurance covering
Charterer Group's employees for statutory benefits as set out and
required by local law in the area of operation or area in which
Charterer Group may become legally obligated to pay benefits.
Appropriate maritime coverage shall be included.
b) Comprehensive General Liability and Automobile Liability Insurance
covering premises and operations, independent contractors and
contractual liability, as well as all owned, hired and non-owned
vehicles. Minimum policy limits for personal injury and property damage
shall be:
i) Comprehensive General Liability: US$25,000,000 single limit per
occurrence; and
ii) Automobile Liability: US$1,000,000 single limit per occurrence or
such greater amount as required by applicable law.
c) Seepage and Pollution Insurance on normal industry terms for the
reservoir and oil field installations for US$50 million per occurrence.
17.4 Charterer shall furnish Lessor with Certificates of Insurance
indicating:
a) the kinds and amounts of insurance as required;
b) insurance company or companies providing the aforesaid coverages;
c) effective and expiration dates of policies;
d) Lessor will be given thirty (30) days' written advance notice of any
material change, non-renewal or cancellation of any policy;
e) the territorial limits of all policies; and
f) that Lessor Group has been named as an additional insured on all
policies referred to in Article 17.3 b) and c) with waivers of
subrogation on the policies in Article 17.3.
Charterer shall use reasonable efforts to obtain an agreement from PTT
to indemnify Lessor Group and Charterer Group for losses and damages
resulting from operations of shuttle tankers used or hired to transport
oil from the FPSO.
17.5 Except as specifically provided above in this Article 17, Lessor and
Charterer shall work toward establishing insurance values, amounts,
coverages and deductibles on forms and with insurers which are
compatible and consistent with the standards of prudent owners and
operators of vessels of similar type, size, age, location and activity
as the FPSO.
-15-
19
18. INDEMNITY
18.1 Charterer Group shall have no liability or responsibility whatsoever for
injury, illness or death of or property loss or damage (including to the
FPSO) sustained by Lessor and its affiliates, associates, co-venturers,
subcontractors at all levels, sub-suppliers, lenders and their
respective shareholders, officers and employees and agents and the
Master and crew of the FPSO (hereinafter all such persons and companies
called "Lessor Group") howsoever caused or arising. Lessor shall
protect, defend, indemnify and hold harmless Charterer and its
affiliates, associates, co-venturers, co-venturers of subsidiaries and
affiliates, and subcontractors at all levels and their respective
shareholders, officers, employees and agents (hereinafter all such
companies and persons called "Charterer Group") from and against any
loss, damage, claim, expense, suit or liability (including attorneys'
fees and legal costs) as a result of such injury, illness or death or
property loss or damage.
18.2 Lessor Group shall have no liability or responsibility whatsoever for
injury, illness or death or property loss or damage (including oil and
gas reservoirs, pipelines and platforms in which Charterer Group has an
interest) sustained by Charterer Group, howsoever caused or arising,
including the unseaworthiness of the FPSO or otherwise. Charterer shall
protect, defend, indemnify and hold harmless Lessor Group from and
against any loss, damage, claim, expense, suit or liability (including
attorneys' fees and legal costs) as a result of such injury, illness or
death or property loss or damage.
18.3 Subject to the provisions of Articles 18.5, 18.6 and 18.9, with respect
to claims by third parties (which shall exclude Charterer Group and
Lessor Group) to the extent arising out of Lessor Group's negligence,
Lessor agrees to indemnify, defend and save Charterer Group harmless
from and against any and all losses, claims, demands, liabilities,
damages, suits or actions in rem or otherwise (including expenses and
attorneys' fees) for loss or damage to or injury, illness or death of
such third parties.
18.4 Subject to the provisions of Articles 18.5, 18.6 and 18.9, with respect
to claims by third parties (which shall exclude Charterer Group and
Lessor Group) to the extent arising out of Charterer Group's negligence,
Charterer agrees to indemnify, defend and save Lessor Group harmless
from and against any and all losses, claims, demands, liabilities,
damages, suits or actions in rem or otherwise (including expenses and
attorneys' fees) for loss or damage to or injury, illness or death of
such third parties.
18.5 From and after Field Acceptance, Charterer shall be solely responsible
for (i) seepage or pollution from reservoirs, pipelines, platforms and
other property related thereto owned or leased by Charterer Group while
such property is in Charterer Group's custody and control, including
cost of cleanup of same, and (ii) with respect to amounts in excess of
$10,000,000 per occurrence, pollution from the FPSO (including its
risers). Charterer agrees to indemnify, defend and save Lessor Group
harmless from and against any and all losses, claims, demands,
liabilities, damages, suits or actions in rem or otherwise (including
expenses and attorneys' fees) for loss or damage to Lessor Group arising
out of the seepage or pollution described in clause (i) and the
pollution (for amounts in excess of $10,000,000 per occurrence)
described in clause (ii). With respect to said pollution from the FPSO,
Charterer shall conduct cleanup operations and Lessor shall provide all
reasonable
-16-
20
assistance; ultimate financial responsibility for the cost of such
cleanup (to the extent less than $10,000,000) will be allocated by
mutual agreement of the parties or pursuant to applicable law. If
Charterer causes crude oil or gas described in this Article 18.5 to be
insured, Charterer shall cause Lessor Group to be named as co- insured
in such policy as their interests may appear.
18.6 a) Notwithstanding Article 18.5, Lessor shall be solely responsible for
all liabilities, costs, expenses, penalties and/or fines arising
from or caused by any pollution originating in or above the surface
of the water from (i) spills of fuels, bunkers, slop tanks,
lubricants, motor oils, pipe dope, paints, solvents, ballast, bilge,
garbage and sewage in Lessor Group's possession or control
(including the FPSO) and (ii) any property or equipment (other than
the FPSO) owned, leased or provided by the Lessor Group while such
equipment is in a member of Lessor Group's custody and control,
including costs of cleanup of same.
b) Notwithstanding Article 18.5, Charterer shall be solely responsible
for all liabilities, costs, expenses, penalties and/or fines
arising from or caused by any pollution originating in or above the
surface of the water from (i) spills of fuels, bunkers, slop tanks,
lubricants, motor oils, pipe dope, paints, solvents, ballast,
bilge, garbage and sewage in Charterer Group's possession or
control (other than the FPSO) and (ii) any property or equipment
owned, leased or provided by the Charterer Group (other than the
FPSO) while such equipment is in a member of Charterer Group's
custody and control, including costs of cleanup of same.
18.7 All excuses from liability for one party and all indemnities given by
one party to the other party or to the other party's Group pursuant to
this Agreement, including but not limited to the indemnities in this
Article 18, shall apply regardless of the sole or concurrent negligence
or gross negligence or breach of duty or strict liability of the parties
to be indemnified but shall not apply in the case of willful misconduct.
18.8 As used herein, "affiliate" shall mean any company or legal entity which
(i) controls either directly or indirectly a party hereto, (ii) which is
itself effectively controlled directly or indirectly by such party or
(iii) is directly or indirectly effectively controlled by a company or
entity which directly or indirectly controls such party. "Control"
means the right to exercise forty percent (40%) or more of the voting
rights in the appointment of the directors of the company concerned.
18.9 In no event shall either party's Group be liable for any loss of
production, loss of oil or gas, loss of revenue or profit, loss of
commercial advantage, demurrage, or any consequential or indirect losses
or damages suffered by the other party's Group as a result of any act or
omission or negligence, unseaworthiness of the FPSO or otherwise, and
each party shall protect, defend, indemnify and hold harmless the other
party's Group with respect to its Group's losses in this regard.
18.10 The provisions of this Article 18 are intended to specifically allocate
certain liabilities between the parties hereto in the events described
in this Article 18 but shall not be
-17-
21
interpreted to waive or excuse performance by any party of its
representations, warranties and covenants set forth in this Agreement.
19. NON-WAIVER OF DEFAULTS; NON-RECOURSE
19.1 Any failure by either party at any time, or from time to time, to
enforce or require the strict keeping and performance of any of the
terms or conditions of this Agreement, or to exercise a right hereunder,
shall not constitute a waiver of such terms or conditions.
19.2 Notwithstanding any provision herein to the contrary, Lessor's recourse
in the event of occurrence of any Event of Default hereunder shall be
as provided in Article 31 hereof, provided that Lessor shall have no
recourse to the assets of Charterer (other than its rights with respect
of the FPSO), but shall be permitted to exercise any and all rights
under and with respect to the guarantees and collateral referred to in
Article 5 .
20. FORCE MAJEURE
20.1 Any loss or damage or delay in, or failure of performance of either
party shall not constitute default hereunder or give rise to any claims
for damages if and to the extent that such loss, damage, delay or
failure is caused by "Force Majeure."
20.2 In this Agreement "Force Majeure" shall denote any event the happening
of which could not be prevented even though a person against whom it
happened or threatened to happen were to take such appropriate care as
might be expected of a Reasonable and Prudent Operator, as hereinafter
defined. "Reasonable and Prudent Operator" when used to describe the
standard of care to be exercised by a party in performing its
obligations means the degree of diligence and prudence and foresight
reasonably and ordinarily exercised by experienced operators engaged in
the same line of business under the same or similar circumstances and
conditions and when used to determine the action that would be required
of a party means the action an experienced commercial operator engaged
in the same line of business under the same or similar circumstances and
conditions would take in the exercise of such due diligence, prudence
and foresight. Notwithstanding Article 20.1, Force Majeure shall not
release either party from any obligation to give a notice or make any
payment (including, in particular, any payment of Hire) under this
Agreement except where the making of a payment is prevented by a Force
Majeure event affecting the transfer of monies by the payor. Any
payments which are so prevented from being made by reason of Force
Majeure shall, upon the cessation of the Force Majeure event, be made as
soon as practicable thereafter in addition to any other amounts which
may then be payable by such party under this Agreement.
20.3 Events which may, subject to Article 20.2, be considered Force Majeure
events shall include but not be limited to acts of government, strikes,
lock-outs, acts of public enemy, wars whether declared or undeclared,
blockades, insurrection, riots, epidemics, landslides, lightning,
earthquakes, fires, storms, floods, washouts, civil disturbances,
explosions, breakage or accident to machinery or lines of pipe, freezing
of xxxxx or lines of pipe, partial
-18-
22
or entire failure of xxxxx, inability to obtain necessary materials or
supplies due to changes in laws and regulations, material changes in the
obligations of the concessionaire under the Concession Agreement, as
herein defined, imposed unilaterally by the Government of Thailand, and
inability of PTT to accept delivery of natural gas delivered to PTT
under the Gas Sales Agreement where such inability constitutes an event
of Force Majeure under the Gas Sales Agreement which has been declared.
20.4 A party claiming relief on account of Force Majeure shall:
(i) as soon as practicable give notice to the other party of the happening
said to constitute Force Majeure, such notice to include full
information about the circumstances and a statement of the steps and
time believed necessary to remedy the failure but neither party shall be
obligated to settle or prevent any strike or other industrial action
except on terms which, in its sole judgment, are acceptable to it; and
(ii) proceed as a Reasonable and Prudent Operator at its own expense to
remedy the failure as rapidly as possible.
21. LAW AND ARBITRATION
21.1 This Agreement shall be construed and governed in accordance with the
maritime law of the United States of America and, to the extent such law
is inapplicable, with the laws of the State of New York excluding any
conflict of law rules. In connection with the interpretation of any
exhibit hereto, the choice of law of this Agreement shall prevail.
21.2 Any dispute arising under or in connection with this Agreement shall be
settled by arbitration in New York City under the rules of the American
Arbitration Association, except as provided herein. The party
requesting arbitration shall be entitled to have arbitration of the
dispute consolidated with any other pending dispute under this Agreement
or with any dispute arising under the Operating Agreement. The party
requesting arbitration shall serve upon the other party a written demand
for arbitration with the name and address of the arbitrator appointed by
it, and such other party shall, within ten (10) days thereafter, appoint
an arbitrator, and the two arbitrators so named, if they can agree,
shall appoint a third, and the decision or award of any two shall be
final and binding upon the parties. In no event shall any dispute or
consolidated group of disputes be determined by more than three
arbitrators. Should the party upon whom the demand for arbitration is
served fail or refuse to appoint an arbitrator within ten (10) days, the
single arbitrator shall have the right to decide alone, and his decision
or award shall be final and binding upon the parties. The arbitrator(s)
shall have the discretion to impose the cost of the arbitration
proceedings, including reasonable attorney's fees upon the losing party,
or divide it between the parties on any terms which may appear just.
Any decision or award rendered hereunder may be made and entered as a
rule or judgment of any Court, in any country having jurisdiction.
21.3 Judgment upon the arbitration award rendered may be entered in any Court
having either personal or in rem jurisdiction, or application may be
made to such Court for a judicial acceptance of the award and an Order
of Enforcement, as the case may be.
-19-
23
22. NOTICES
22.1 Notices or other communications required to be given by either party
pursuant to this Agreement shall be written in English and sent in
letter form or by telex or facsimile to the address of the other party
set forth in Article 22.2 below, or to such other address as may from
time to time be designated by the other party through notification of
such party. The dates on which notices shall be deemed to have been
effectively given shall be determined as follows:
22.1.1 Notices given by personal delivery shall be deemed effectively given
on the date of personal delivery;
22.1.2 Notices given in letter form shall be deemed effectively given on the
seventh day after the date mailed (as indicated by the postmark) by
registered airmail, postage prepaid, or the third day after delivery
to an internationally recognized courier service;
22.1.3 Notices given by telex shall be deemed effectively given on the first
business day following the date of transmission, as indicated on the
document in question; and
22.1.4 Notices given by facsimile shall be deemed effectively given on the
first business day following the date of transmission, as indicated on
the document in question.
22.2 Except as otherwise provided in Article 22.1, the parties shall give all
notices and send all invoices and communications under this Agreement
to:
22.2.1 If to Lessor:
Tantawan Production B.V.
557's - Xxxxxxxxxxxxxx
0000 XX Xxxxxxxx
Xxx Xxxxxxxxxxx
Attention: R. Smulders
00-00-0000000 (ph)
00-00-0000000 (fax)
-20-
24
22.2.2 If to Charterer:
Tantawan Services, L.L.C.
c/o Pogo Producing Company
0 Xxxxxxxx Xxxxx, Xxxxx 0000 P.O. Box 2504
Houston, TX 77046-0504 Houston,TX 77252-2504
Attention: Vice President - Operations
(000) 000-0000 (ph)
(000) 000-0000 (fax)
22.3 All references in this Agreement to a business day shall refer to a day
when both parties are open for business or, in the case of payments
under Article 9, a day when banks at the place of payment are open for
business.
23. PURCHASE OPTION
Provided that an Event of Default by Charterer under Article 30 of this
Agreement is not existing, Charterer shall have the right to exercise an
option (the "Purchase Option") to purchase the FPSO (including its
on-board spare parts) from Lessor free from all encumbrances (except
encumbrances created by Charterer), (i) at the expiration of the Initial
Term for a price of five million dollars ($5,000,000) or (ii) at any
time during the Initial Term or during an extended term at a price to
be determined by reference to Appendix C less any amounts due from
Lessor under this Agreement which have been established at the time of
such purchase; provided, the FPSO shall not be moved to operate in
another field outside of Thailand or, if within Thailand, (i) to a field
in which a current or future member of the Charterer Group (as defined
in Article 18.1) does not have an interest, or (ii) unless pursuant to
the Concession Agreement. Any Thailand sales or transfer taxes
attributable to the sale will be paid by Charterer. Charterer must
notify Lessor of its intent to exercise the Purchase Option as provided
in Article 4.3, or if not so provided, 360 days prior to the date of
purchase. Upon notification by Charterer of its intent to exercise the
Purchase Option, Lessor shall use due diligence to cause the release of
all liens (except liens caused or created by Charterer Group) on the
FPSO to be effective not later than closing of the sale.
In the event the Purchase Option is exercised, unless agreed otherwise
between Charterer and Lessor, Lessor shall sell the FPSO and Charterer
shall purchase the FPSO "as is," safely afloat, at the time and place of
redelivery of the FPSO pursuant to Article 25, at which time:
a) Lessor shall deliver to Charterer:
(i) A certificate signed by a duly authorized executive of Lessor to
the effect that the FPSO is free from all encumbrances (except
encumbrances created by Charterer),
(ii) A certificate signed by the appropriate government official of
the Country of Registry showing Lessor as the sole owner of the
FPSO and no liens of record other than encumbrances to be
satisfied out of the FPSO's sales proceeds,
-21-
25
(iii) One or more bills of sale executed by duly authorized officers
of Lessor on behalf of Lessor conveying full title of the FPSO
to Charterer in suitable form for recording or registering
title,
(iv) Copies of class and trading certificates (where relevant to its
class) for the FPSO valid at the time of re-delivery,
(v) All government approvals necessary to transfer the FPSO to
Charterer and, if requested by Charterer, to delete the FPSO
from registry in the Country of Registry and any country
claiming jurisdiction over Lessor's power to sell the FPSO,
(vi) Copies of all log books, classification certificates, manuals
and other documents in the Lessor's or Lessor's manager's
possession related to the FPSO's operation and maintenance, and
(vii) Physical possession of the FPSO.
b) On delivery Charterer shall pay the purchase price to Lessor or its
designee by transfer to Lessor's account then designated for receipt of
Hire payments.
c) Each party shall deliver to the other party such additional
documentation or take such additional action as such other party may
reasonably request or as may be customary at the time with respect to
the sale of vessels registered in the Country of Registry and which is
not in conflict with the provisions of this Agreement, provided that
Lessor shall not be required to arrange or pay for a drydocking or
inspection of the FPSO for purposes of said sale and purchase.
24. REVENUES
It is contemplated that Lessor and Charterer will enter into an escrow
agreement ("Escrow Agreement") on terms mutually and reasonably
acceptable to Lessor and Charterer pursuant to which PTT will be
directed to pay all revenues due under the Gas Sales Agreement and any
oil and condensate sales contracts with respect to the Tantawan Field,
to the extent permitted by the Gas Sales Agreement, to an escrow
account in a mutually acceptable bank located in Bangkok, Thailand
(which direction will not be changed without the prior written consent
of Lessor) for conversion to U.S. Dollars (to the extent applicable,
after payment of royalties, taxes and field operating expenses
denominated in Thai Baht (including payments to Operator under the
Operating Agreement and excluding exploration expenses and expenses to
drill exploration xxxxx) applicable to the Concession Agreement and
operations related thereto) and transfer to, for deposit with, a bank
mutually acceptable to Lessor and Charterer ("Escrow Agent") to be
distributed each month by the Escrow Agent: first, to remaining
royalties and taxes , second to field operating expenses (including
payments to Operator under the Operating Agreement and excluding
exploration expenses and expenses to drill exploration xxxxx) applicable
to the Concession Agreement and operations related
-22-
26
thereto; third, to Hire hereunder; ; and fourth, to the
Concessionaires in their respective field percentage interests or
as they may direct.
25. REDELIVERY OF FPSO
The FPSO shall at the expiration or termination or as provided in
Article 31.2 (b) of this Agreement (unless lost or a constructive total
loss or under requisition or purchased by Charterer) be redelivered to
Lessor at the Offshore Site (the "Redelivery"), as is - where is, in
accordance with the following conditions. The FPSO shall be redelivered
to Lessor properly documented and in class with no recommendations, fair
wear and tear not affecting class excepted. Charterer shall have
discharged substantially all free crude oil (other than tank bottoms)
from the FPSO. Any expenses of degassing or demucking conducted within
12 months of Redelivery shall be borne by Charterer. The FPSO shall
upon Redelivery have her class certificates valid. Charterer will
render the FPSO available to Lessor at the time of Redelivery for
survey, inspection, testing and inventory check at Lessor's expense.
Charterer at its expense shall meet its Redelivery obligations and the
charter period shall be extended for the period necessary to make any
deficiencies good. During any such period the compensation payable
under Article 9 before Redelivery shall not be so payable provided
Charterer's obligations herein are met promptly and expeditiously.
Prior to and during the Redelivery of the FPSO, Charterer shall provide
such reasonable assistance to Lessor as Lessor requests in order to
effect taking Redelivery of the FPSO, including but not limited to
temporary office facilities onshore and transportation from Charterer's
shore base to the FPSO and vice versa for Lessor's personnel and
supplies as is reasonable under the circumstances. On Redelivery,
Lessor shall be free (i) to cut and either remove or abandon the anchor
chains, the risers, buoyancy tanks and the control umbilicals (but so as
to leave no hazard to shipping and to avoid damage to Charterer's xxxxx,
wellheads, pipelines, PLEMS or other equipment) and to remove the FPSO
from the Offshore Site but without having any obligation to remove
subsurface equipment or materials including piling or any other
obligation to clear the Offshore Site and (ii) to remove any free crude
oil not previously removed by Charterer at Charterer's expense.
26. REQUISITION
26.1 If the FPSO is seized, expropriated, confiscated, nationalized or
requisitioned by any authority (other than the government, or any
department, commission or agency thereof, of the Country of Registry,
whether a legally constituted governmental authority or otherwise), and
such seizure, expropriation, confiscation, nationalization or
requisition has continued for a period of at least 30 consecutive days,
this Agreement, at the option of Charterer, may continue in force or may
be terminated at any time during the period of seizure, expropriation,
confiscation, nationalization or requisition, provided that in the event
Charterer elects to terminate, notice shall be given to Lessor by
Charterer and compensation, as specified in Article 9, shall cease as of
the date occurring 30 days prior to the date of notice of termination
and the FPSO shall be deemed to have been Redelivered to Lessor by
Charterer. If Charterer has previously paid any or all of such
compensation in respect of such 30 day period, Lessor shall promptly
refund such amount to Charterer.
-23-
27
26.2 In the event the FPSO is seized, expropriated, confiscated, nationalized
or requisitioned by the government, or any department, commission or
agency thereof, of the Country of Registry, whether a legally
constituted governmental authority or otherwise, this Agreement shall be
deemed terminated and compensation, as specified in Article 9.1, shall
cease as of the date of seizure, expropriation, confiscation,
nationalization or requisition, and the FPSO shall be deemed to have
been redelivered to Lessor by Charterer.
26.3 In the event any seizure, expropriation, confiscation, nationalization
or requisition of the FPSO occurs, Lessor shall use its best efforts to
arrange the release of the FPSO therefrom (including, without
limitation, changing the Country of Registry of the FPSO) and shall
afford Charterer the opportunity to join in any such action.
27. GENERAL AND PARTICULAR AVERAGE
General average if any shall be adjusted according to the York-Antwerp
Rules 1994 or any subsequent modification thereof current at the time of
the casualty.
28. SALVAGE
All salvage and towage shall be for Lessor's benefit and the cost of
repairing damage occasioned thereby shall be borne by Lessor.
29. AUDIT
Lessor shall maintain its records which pertain to Articles 9 and 11
hereof in accordance with generally accepted international accounting
principles and will keep copies of all applicable documents, forms and
third-party invoices, etc., and will permit Charterer to inspect such
records at any time upon request during regular business hours.
30. DEFAULT
The following events by either party hereto or any guarantor
("Guarantor") under a Joint Venturer Guarantee or Lessor Parent Company
Guarantee (any such Guarantee being defined as a "Guarantee") shall
constitute an Event of Default:
a) failure to observe any material covenant, condition or agreement to
be performed or observed by said party hereunder or any Guarantor
under the Guarantees; or
b) any representation or warranty made herewith or pursuant hereto or
pursuant to any of the Guarantees shall prove to be incorrect at any
time in any material respect; or
c) said party or Guarantor shall become insolvent or bankrupt or
consent to the appointment of a trustee or receiver, or a trustee or
receiver shall be appointed for
-24-
28
said party or for a substantial part of its property without its
consent and shall not be dismissed for a period of thirty (30)
days, or bankruptcy, reorganization or insolvency proceedings shall
be instituted by or against said party and, if instituted against
said party, shall not be dismissed for a period of thirty (30) days,
and at any time thereafter so long as the same shall be continuing;
or
d) an Event of Default with respect to that party or its Guarantor
shall have occurred under the Operating Agreement (for purpose of
this paragraph d) only, an Event of Default by Operator under the
Operating Agreement shall be deemed an Event of Default by Lessor
hereunder); or
e) A Force Majeure Event shall have occurred preventing payment by
either party and such failure to pay continues unremedied for a
period of 60 consecutive days.
31. REMEDIES
31.1 Upon the occurrence of an Event of Default by Lessor or its affiliate
and at any time thereafter so long as the same shall be continuing,
Charterer may, at its option, upon ninety (90) days' notice thereof to
Lessor, declare this Agreement to be in default; and, at any time
thereafter, so long as Lessor shall not have remedied or have commenced
and at all times thereafter diligently acted to remedy all outstanding
Events of Default, Charterer (a) may terminate this Agreement,
compensation as specified in Article 9.1 shall cease as of the date of
termination and Charterer shall redeliver the FPSO to Lessor as if the
FPSO were being redelivered pursuant to Article 25 hereof, or (b)
accelerate its right to exercise the Purchase Option at a price to be
determined by reference to Appendix C (offsetting any damages which have
been established at the time of such purchase against the purchase price
of the FPSO) and terminate compensation under Article 9.1. Lessor shall
be liable for any and all damages to Charterer resulting from
termination of this Agreement and for all legal fees and any other costs
and expenses whatsoever incurred by Charterer by reason of the
occurrence of any Event of Default or by reason of the exercise by
Charterer of any remedy hereunder, including, without limitation, any
costs and expenses incurred by Charterer in connection with Redelivery
of the FPSO. Notwithstanding the remedies available to Charterer under
this Article 31, the provisions of Article 18.9 shall apply so as to
limit the damages of Charterer and any guarantors of Charterer's
obligations hereunder, provided that if Lessor shall breach its
obligation other than for reasons wholly outside its control to sell the
FPSO to Charterer if Charterer exercises its Purchase Option under
sub-clause (b) above, Lessor shall be liable to such guarantors for
direct damages to the guarantors or any of their affiliates which are
parties to the Gas Sales Agreement arising under Articles XV or XVIII of
the Gas Sales Agreement. To the extent that such guarantors (and such
affiliates) claim direct damages under the Gas Sales Agreement as
provided in the preceding sentence, such guarantors and affiliates must
use their reasonable efforts to mitigate their damages. Charterer must
use reasonable efforts to mitigate its damages.
31.2 Upon the occurrence of an Event of Default by Charterer or its affiliate
(provided that such Event of Default did not arise out of or result from
actions, or omissions to act, of Operator under the Operating Agreement)
and at any time thereafter so long as the same shall be
-25-
29
continuing, Lessor may, at its option, upon ninety (90) (or, in the case
of an Event of Default based on a failure to pay money when due
(including a failure by reason of Force Majeure), thirty (30)) days'
notice thereof to Charterer, declare this Agreement to be in default;
and, at any time thereafter, so long as Charterer shall not have
remedied or (except as to an Event of Default based on a failure to pay
money when due) have commenced and at all times thereafter diligently
acted to remedy all outstanding Events of Default Lessor may do, and
Charterer shall comply with, one or more of the following, as Lessor in
its sole discretion shall so elect, to the extent permitted by, and
subject to compliance with any mandatory requirements of applicable law
then in effect. Lessor must use reasonable efforts to mitigate its
damages and shall apply any amounts received from the sale or re-charter
(for a period equal to the remainder of the term of this Agreement) of
the FPSO (after deducting Lessor's direct out-of-pocket expenses of
making the FPSO ready for sale or re-charter) to reduce the amount of
any charter hire and other amounts payable by Charterer to Lessor
pursuant to the last paragraph of this Article 31.2. To the extent that
Charterer fails to maintain in force any insurance coverage described in
Article 17.3 and is not diligently acting to replace such coverage,
Lessor shall be entitled to obtain such insurance for the account of
Charterer.
a) Lessor may terminate this Agreement.
b) Upon written demand, Lessor may cause Charterer to, and Charterer hereby
agrees that it will, redeliver the FPSO to Lessor within a reasonable
period of time not to exceed 45 days and in the same manner and in the
same condition as if the FPSO were being redelivered pursuant to Article
25 hereof; or Lessor or its agent, at Lessor's option, may, but shall be
under no obligation to, retake the FPSO irrespective of whether
Charterer or any other person may be in possession of the FPSO, upon 24
hours prior notice but without prior demand and without legal process,
and for that purpose Lessor or its agent may take possession thereof.
c) Lessor or its agent may sell the FPSO at public or private sale, with
notice to Charterer, or otherwise may dispose of, hold, use, operate,
charter (whether for a period greater or less than the balance of what
would have been the charter period for the FPSO in the absence of the
termination of Charterer's rights to the FPSO) to others or keep idle,
all on such terms and conditions and at such place or places as Lessor
may determine.
In addition, Charterer shall be liable for and shall pay to Lessor
within thirty days after Lessor takes redelivery or possession of the
FPSO a lump sum equal to any and all additional Hire payable during the
Initial Term and for all legal fees and any other costs and expenses
whatsoever incurred by Lessor by reason of the occurrence of any Event
of Default or by reason of the exercise by Lessor of any remedy
hereunder, including, without limitation, any costs and expenses
incurred by Lessor in connection with the Redelivery or retaking of the
FPSO.
31.3 Each party's remedies referred to in this Article 31 are intended to
be the exclusive remedies of such party under this Agreement; provided,
however, that either party may enforce performance of these remedies by
all legal or equitable means.
-26-
30
31.4 No express or implied waiver by either party of any Event of Default
shall be in any way, or be construed to be, a waiver of any further or
subsequent Event of Default.
32. MISCELLANEOUS
32.1 a) All terms and conditions of this Agreement shall be binding upon
and shall enure to the benefit of the parties hereto and their
respective successors and permitted assigns. Any purported
assignment in contravention of this Article 32 shall be null and
void.
b) Charterer shall be entitled to assign its rights, duties and
obligations hereunder to an affiliate without the consent of Lessor
provided that Lessor receives simultaneously with such assignment
guarantees from the Joint Venturers in respect of such assignee's
obligations in the terms set out in Article 5 hereof.
c) Any party having rights under this Agreement shall be entitled to
pledge and/or assign its rights and, to the extent possible, and if
requested, its duties and obligations under this Agreement by way of
security to any lending institution providing financing for the
transactions contemplated hereby or related to the development of
the Tantawan Field or a collateral agent on their behalf provided
that any such pledge or assignment does not release the assignor or
any guarantor of the assignor's obligations hereunder, from any of
their respective obligations to the Lessor or the Charterer as the
case may be.
d) Charterer shall not subcharter the FPSO to any party including an
affiliate without the prior written consent of Lessor such consent
not to be unreasonably withheld.
Save as specifically provided above, neither party hereto shall be
entitled to assign any rights or obligations under this Agreement
without the prior consent of the other party, not to be unreasonably
withheld.
[The Remainder of This Page is Intentionally Blank]
-27-
31
32.2 This Agreement may be executed in one or more counterparts, all of
which, taken together, shall constitute one original document.
32.3 Except as specifically provided herein to the contrary, each party
hereto intends that this Agreement shall not benefit or create any right
or cause of action to any person other than parties hereto or their
permitted assignees.
32.4 The making, execution and delivery of this Agreement by the parties
hereto have been induced by no representation, statements, warranties or
agreements other than those herein expressed or set forth in the
attached exhibits or schedules. This Agreement and such exhibits or
schedules embody the entire understanding of the parties, and there are
no further or other agreements or understandings, written or oral, in
effect between the parties relating to the subject matter hereof, unless
expressly referred to by reference herein.
32.5 This Agreement may be amended or modified and any condition herein
specified may be waived by mutual consent of the parties by a written
instrument executed on behalf of the parties.
32.6 The captions contained in this Agreement are for convenience of
reference only and do not form a part of this Agreement and shall not
affect the interpretation hereof.
32.7 If any portion of this Agreement shall be deemed by an arbitration
tribunal or a court of competent jurisdiction to be unenforceable, the
remaining portions shall be valid and enforceable only if, after
excluding the portion deemed to be unenforceable, the remaining terms
hereof shall provide for the consummation of the transactions
contemplated herein in substantially the same manner as originally set
forth at the date this Agreement was executed.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate as of the 9th day of February, 1996.
TANTAWAN PRODUCTION B.V. TANTAWAN SERVICES, L L C
By: THAILAND FINANCE
COMPANY, its Managing
Member
By: /s/ X. XXXXXXXXXXXXXXX By: /s/ XXXX X. XXXXXXXXX
Name: X. Xxxxxxxxxxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Managing Director Title: Vice President & Treasurer
-28-
32
APPENDIX A
33
FPSO FOR POGO, TANTAWAN FIELD (HI 39040)
TECHNICAL DESCRIPTION
INTRODUCTION
POGO Producing Company, an affiliate of THAIPO Ltd., on behalf of its Joint
Venture Partners, plans to develop hydrocarbon reserves from its Gulf of
Thailand Block B8/32 Tantawan Field. This field is located in 240 feet
waterdepth, approximately 265 miles south of Bangkok, Thailand. Initially the
Tantawan field will be developed through two fixed drilling/production
platforms with integrated flowlines connecting the platforms to a Floating
Production Storage and Offloading (FPSO) system. Process facilities will be
installed on the platforms to separate the wellhead production into high
pressure gas, intermediate pressure gas and low pressure liquid streams. Three
flowlines will transport production from each individual platform to a subsea
tie-in skid from where the total production is transported to an import Pipe
Line End Manifold (Plem) providing the connection with the FPSO via flexible
risers and a Single Point Turret mounted on the vessel's bow.
Following on-board processing, crude oil will be regularly offloaded from the
FPSO by means of tandem moored offloading tankers while the produced gas will
be compressed and transported through flexible risers to an export PLEM
connected to an export gas sales pipeline which connects to a trunkline to
shore.
TANKER CONVERSION
The selected tanker the "Tantawan Explorer" as detailed in Appendix A will be
converted to an FPSO by adding equipment and modifying existing configuration
generally as follows:
1.0 Design Life
The design life for the vessel conversion, refurbishment, process
equipment and turret mooring system is ten (10) years.
2.0 Oil and Gas Production Facilities
An oil and gas production facility shall be installed, comprising of
gas/oil separation, oil dehydration, gas compression, gas dehydration,
sales gas metering, produced water treatment modules, fuel gas and
other utilities.
Design Throughput:
Capacities:
Oil/condensate 50,000 bpd
Gas 150 MMscfd
Produced Water 25,000 bpd
Produced Liquids 50 bpd (Oil, condensate & Water)
Page 1
34
Product Specifications:
Oil RVP Less than 11 psi
Oil Maximum BS&W 1.0% by volume
Max Water content Export Gas 7.0 lb/mmscf
Oil in Overboard Water Less than 20 ppm
Below follows a brief description of the main process systems.
Gas/Oil Separation
Bulk production arrives from the wellhead platforms in three 12"
nominal diameter flow lines, respectively dedicated to HP gas service,
IP gas service and LP liquid service. The process system consists of
an HP separator, an IP separator, an LP separator, heat exchangers,
and a treater / coalescer / degasser. Design oil treating capacity is
50000 bpd; gas processing capacity is 150 mmscfd. High pressure gas is
routed to the HP separator, intermediate pressure gas is routed to the
IP separator and the low pressure unstabilized oil and condensate is
routed to the LP separator.
The HP and IP separator are two phase, the LP separator is three
phase. Liquids from the HP separator are cascaded down through the IP
separator to the LP separator then to the treater / degasser where it
is dehydrated to sales quality. All flash gas produced by the
decreasing liquid pressure systems is compressed and sent to the gas
sales system.
Gas Compression and Export Metering
Compression is provided to bring the gas to export pressure. Two 75
mmscfd gas dehydration trains are provided to dry the gas prior to
exporting.
At the 150 mmscfd design rate, gas from the HP separator and the IP
compressors will be compressed by means of three of the four 50 mmscfd
reciprocating gas engine driven compressors. Gas from the IP separator
and the LP compressors will be compressed by two of the three 25 mmscfd
reciprocating gas engine driven compressors.
Finally the flash gas from the LP separator and treater / degasser
will be compressed in a three stage reciprocating gas engine driven LP
compressor. This brings the total number of compressors to eight (4 x
HP, 3 x LP and 1 x LP).
Gas will be dehydrated prior to sales gas compression by means of two
75 mmscfd glycol dehydration trains.
The gas will finally be fiscally metered by a sales gas metering
system prior to export via the pipeline.
Facilities have been designated to provide for 100% backup of the
guaranteed minimum daily gas sales volume of 75 mmscfd.
Produced Water Treatment
Produced water from the LP separator will be routed to a hydrocyclone
oil / water separation package. The reject oil stream from the
hydrocyclone will be returned to the LP separator. The water will flow
to a degassing drum prior to discharge overboard. Recovered skimmed
oil from the degassing drum will be pumped back to the LP separator.
Page 2
35
Overboard water will be automatically monitored to ensure its oil
content is less than 20 ppm. If it exceeds 20 ppm it will be
automatically diverted to a large dedicated 'off-spec' water tank in
the FPSO. This tank allows further water treating to ensure that all
overboard water contains less than 20 ppm oil in water.
Page 3
36
Modules
The following skids and modules will be installed as process equipment on the
tanker:
HP/IP SEPARATOR & GAS METERING MODULE
- HP separator
- IP separator
- Gas Metering Skid
GLYCOL DEHYDRATION MODULE
- Glycol reboilers
- Still columns
- Glycol-glycol heat exchangers
- Electric motor driven glycol circulation pumps
- Gas-glycol-hydrocarbon separators
- Glycol filters-element type
- Glycol filters-activated charcoal type
- Glycol contactors
- Gas inlet/filter separators
- Gas/glycol heat exchangers
LP SEPARATOR/TREATER/DEGASSER MODULE
- LP separator
- Crude oil electrostatic heater treater / degasser vessel
- Oil cross exchanger
- Crude oil cooler
LP COMPRESSOR SKID
- LP compressor with engine associated auxiliaries, coolers and
scrubbers
WATER TREATMENT SKID
- Produced water hydrocyclones
- Produced water flash vessel
- Produced water circulation pumps
FUEL GAS SKID
- Fuel gas heaters
- Fuel gas KO drum
- Fuel gas filters
Page 4
37
INSTRUMENT AIR SKID
- Instrument air compressor
- Instrument air cooler
- Instrument air after cooler
- Instrument air separator
- Instrument air pre-filters
- Instrument air after-filters
- Instrument air dryer
- Instrument air receiver
CHEMICAL INJECTION SKID
- Chemical injection tanks
- Chemical injection pumps
SALES GAS/IP COMPRESSOR SKID
- Three IP compressor skids, complete with interstage coolers
and scrubbers
- Four sales HP gas compressor skids, complete with interstage
coolers and scrubbers
FLARE SCRUBBER SKID
- HP flare scrubber
- LP flare scrubber
- Scrubber transfer pumps
DRAIN SUMP SKIDS
- Closed drain sump skid
LP PIG RECEIVER SKID
- LP pig receiver
- FPSO inlet manifold
FLARE TIP PACKAGE
- HP Flare tip assembly
- LP Flare tip assembly
MCC MODULE
- 440V MCC
- Transformers and panel boards for small power and lighting
supply
- UPS
- SCADA terminal
- Emergency lighting panel powered from emergency generator panel
The modules/equipment skids will be installed on raised steel
structures above the main deck.
Page 5
38
3.0 Turret Mooring System
A Bow Mounted Turret Mooring System shall be installed for mooring the
FPSO and connecting the import and export flexible risers to the
PLEMs. This system shall also incorporate the HP and IP pipeline pig
receivers.
The mooring system consists of a fixed external turret provided with 6
catenary chain anchor legs which will be attached to anchor piles.
Each Mooring Chain will be comprised of a combination of 5 1/2" and
5 1/4" ORQ + 10% anchor chain.
Product Swivel
The product swivel has a total number of five 12" nominal bore paths.
The LP import swivel is piggable. The HP and IP riser are piggable to
below the swivels and gas export swivels and risers are not piggable.
Details of the product swivel are as follows:
Number of Paths 5 off 2 x Export - 12" NB Sch 140 - 10.75" ID
3 x Import - 12" NB Sch 120 / 60 Varies
Design Pressure
Swivel 2220 psig
Import Lines 3 x 1420 psig
Export Lines 2 x 2220 psig
Design Temperature 145 Deg F
Pigging
LP Liquid Phase
Import - In Line Piggable through swivel
HP & IP Gas
Import Piggable to pig receivers below swivel
Export No Pigging Facilities Designed
Page 6
39
4.0 Vessel modifications
The two main boilers shall be modified for duel firing capability
using both liquid fuel and/or natural gas. These modifications shall
include the installation of new burners, burner management system,
combustion controls and fuel gas piping.
A helideck deigned for a Super Puma helicopter and helicopter fuelling
system shall be installed on the xxxxx of the vessel.
The vessel shall be outfitted with the following additional
equipment:-
1) In the engine room:-
o Freshwater distilling plant
o Process cooling pumps
o Diesel Transfer pumps
o Fresh water transfer pumps
o Turbo Alternator
o Marine Growth Prevention System
2) On the deck:-
o Deck crane
o Cargo Stripping Pump
o Cargo Tank Gauging, temperature monitoring and high
level alarm.
o Two new lifeboats and davits
o Helideck
o Oil and Production Facilities
o Tandem Mooring and Offloading Equipment.
o Diesel Generator.
The installation of this equipment shall require hull structural
modifications and modifications for the associated utilities (e.g.
power, air, cooling water, etc.).
Fire Protection/Safety Systems
The existing fire protection and safety systems on the vessel shall be
modified to incorporate the additional modifications for the FPSO
conversion including a helideck foam system, Fire and Gas system,
two diesel driven fire water pumps and fire water piping, emergency
shutdown systems and alarms, and a jockey pump.
Electrical systems
The electrical system shall be upgraded/modified to satisfy the
additional loads, and shall include installation of new switchgear,
new navigation lights, new deck floodlighting, new public
address/alarm system, external communication systems, installation of
power cabling from the engine room to the production facility and
modifications to the power distribution system.
Page 7
40
Accommodation Upgrade
The accommodation shall be upgraded to provide a total of 70 berths,
all associated services to meet this requirement will be modified as
required (e.g. air conditioning, domestic fresh water, laundry and
mess room facilities).
Corrosion Protection
A corrosion protection system designed for a 10 year service shall be
installed, incorporating hull anodes, tank anodes and impressed
current cathodic protection.
5.0 Environmental Conditions
The environmental conditions applied for the design of the FPSO are
provided in "The Design Basis For The Tantawan Field Development"
prepared for POGO Producing Company, by INTEC Engineering, Document No
E-013.1-XXX-03-001 Rev B 10-95.
Page 8
41
APPENDIX A
Main Particulars of the converted Vessel
GENERAL DATA
Size 136,960 DWT
Year Built 0000
Xxxxxxx XXX, Xxxx, Xxxxxxx
Class Germanischer Xxxxx
100 A5 Oil Tanker
Mach Class MC Aut Inert
CONVERSION INFORMATION
Year 1996
Class American Bureau Of Shipping
A1 - FPSO Floating Production and Offloading
System
PRINCIPLE DIMENSIONS
LOA 284.06 M
LBD 272.68 M
Breadth 43.4 M
Depth 20.6 M
Draft 15.7 M - Summer
TONNAGE
Tonnage 66,914 Gross
50,432 Net
MACHINERY
Boilers 2 x 36 XXX, 00 Bar - Boilers converted for
diesel fuel/heavy fuel oil/gas combustion
operations
AC Generators
Main 1 x 1860 Kw - Steam Turbine
Standby 2 x 900 Kw - Diesel
Emergency 1 x 165 Kw - Diesel
Voltage 440V - 60 Hz
Cargo Pumps 4 x 3000 MT/Hr at 150 M
with Vac Strip
Ballast Pump 1 x 2200 MT/Hr at 40 M
Propulsion HDW 24,000 SHP steam turbine (Decommissioned
on location)
HULL / SHIP'S EQUIPMENT
Accommodation 70 men
Mess facilities For two shifts
Stores
Dry/refrigerated 30 days (100 cu-m approx)
Refuse Disposal Garbage Compactor and Incinerator
Life Boats 2 x 70 man
Rescue Boat 1 x 30 man
Page 9
42
HELIDECK
Design Super Puma
Location Xxxxx
TANK CAPACITY
Cargo Capacity 980258 bbls with heating coils
Produced Water Cap 32889 bbls
Ballast Capacity 18,176 cu-m
Diesel Oil 1500 cu-m
Heavy Fuel Oil 1520 cu-m
XXXXX OFFLOADING
Offloading Rate 24,000 BOPH - Max
Storage Temp 135 Deg F - Max
100 Deg F - Min
PROCESS FACILITIES
As described in Section 0
XXXXXXXX X
XXXX Xxxxxxx Xxxx XX00000 DF9708 C2
Page 10
43
APPENDIX B-1
(Joint Venturer - Bareboat Charter)
GUARANTY AND INDEMNITY
This GUARANTY (the "Guaranty") is made as of the 9th day of February,
1996 by _____________________, a ______________ organized under the laws of
___________, (the "Guarantor") to Tantawan Production B.V. ("Lessor").
PRELIMINARY STATEMENT. Tantawan Services, L L C, a Delaware limited
liability company ("Charterer") and Lessor are parties to that certain
Bareboat Charter, dated as of February 9, 1996 ("Bareboat Charter"). The
Guarantor is an affiliate of Charterer and the Guarantor expects to derive
substantial benefit from the Bareboat Charter. It is a condition precedent to
the effectiveness of the Bareboat Charter that the Guarantor shall have
executed and delivered this Guaranty to Lessor. Terms not defined herein shall
have the meanings given to them in the Bareboat Charter.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lessor to execute and deliver the Bareboat Charter, the Guarantor hereby
agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally and
irrevocably (a) guarantees the punctual performance when due and the punctual
payment when due, whether at stated time of performance or maturity, by
acceleration, by prepayment or otherwise, of any and all liabilities and/or
obligations of Charterer to Lessor pursuant to the terms of the Bareboat
Charter and subject to all defenses, set offs and counterclaims of Charterer
thereunder now or hereafter existing of whatever kind or nature, whether in
respect of representations, warranties, agreements or covenants or for
principal, interest, expenses, taxes, costs, losses, compensation, hire, the
purchase price in exercise of the purchase option, reimbursements or any other
amount payable to Lessor and (b) agrees to pay any and all costs and expenses
(including, without limitation, reasonable counsel fees and expenses) incurred
by Lessor in enforcing any rights under this Guaranty (all of the above being
hereinafter called the "Guaranteed Obligations"). Within five (5) business
days of demand, the Guarantor hereby agrees to perform and/or pay the
Guaranteed Obligations then due in the currency provided in the Bareboat
Charter. Notwithstanding any provision herein to the contrary, the maximum
aggregate liability of the Guarantor under this Guaranty shall be limited to
_______% (or such other percentage provided in Section 17) of each of the
Guaranteed Obligations, and the Guarantor shall not be obligated (but in its
sole discretion may elect) to perform or pay any remaining percentage of such
Guaranteed Obligation which another guarantor of the Guaranteed Obligation has
failed to perform or pay.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be performed and paid strictly in accordance with
the terms of any agreement or instrument executed in connection therewith,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Lessor
44
with respect thereto. The liability of the Guarantor under this Guaranty shall
be absolute and unconditional irrespective of and shall not be discharged or in
any way affected, reduced or extinguished by any circumstance or event (whether
or not known to the Guarantor) including without limitation:
(a) any lack of validity or enforceability of or defect or deficiency
in any agreement or instrument executed in connection with the Guaranteed
Obligations;
(b) any change in the time, manner, terms or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or extension or termination of or any consent
to departure from any agreement or instrument executed in connection
therewith;
(c) any sale, exchange, release or non-perfection of any property
standing as security for the liabilities hereby guaranteed or any
liabilities incurred directly or indirectly hereunder or any setoff against
any of said liabilities, or any release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, or otherwise limit recourse to Charterer
or any other individual, partnership, joint venture, corporation,
association, trust or other enterprise ("Person") that is a party to any
agreement or instrument (including any guarantor) in respect of the
Guaranteed Obligations;
(e) the winding up, liquidation, bankruptcy or similar proceeding by
or against the Charterer; or
(f) any change in the name or the ownership of Charterer.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any performance or payment of any of the Guaranteed
Obligations is canceled, suspended, rescinded or must otherwise be returned by
Lessor upon the receivership, insolvency, bankruptcy, liquidation, dissolution
or reorganization of Charterer, or any other guarantor or otherwise, all as
though such payment had not been made. The obligations of the Guarantor under
this Guaranty shall not be affected by any performance or payment by Charterer
(other than the full and final performance and payment of all of the Guaranteed
Obligations), allocation by Lessor of any repayment, any compromise or
discharge of the Guaranteed Obligations, any application, release or
substitution of collateral or other security therefor, release of any
guarantor, surety or other person obligated in connection with any agreement or
instrument, or any advances to Charterer, or for any other reason.
SECTION 3. Continuing Guaranty. This is a continuing Guaranty, and
all extensions of credit and financial accommodations heretofore, concurrently
herewith or hereafter
-2-
45
made by Lessor to Charterer and all obligations and indebtedness of Charterer
now owned or hereafter acquired by Lessor shall be conclusively presumed to
have been made or acquired in acceptance hereof.
SECTION 4. Covenants. Until the Guaranteed Obligations have been
irrevocably paid and discharged in full and except as expressly permitted by
this Guaranty, the Guarantor hereby covenants:
(a) not to seek payment of, or take security for, or exercise any
right of setoff or accelerate or assign or transfer any intercompany loan or
advance owed to it by Charterer or exercise any rights of contribution against
any guarantor of the Guaranteed Obligations;
(b) not to take any action on its part to cancel or terminate in
whole the Concession Agreement (other than by reason of a voluntary surrender
of acreage pursuant thereto) or the Gas Sales Agreement;
(c) not to contest or vary the order of priority of payments referred
to in Article 24 of the Bareboat Charter;
(d) to maintain in full force and effect all applicable
authorizations and consents necessary for performance of its obligations under
this Guaranty;
(e) to provide to the Lessor a copy of the summary annual reserve
report provided by Xxxxx Xxxxx Engineers with respect to the Tantawan Field,
subject to Lessor's execution of a Confidentiality Agreement reasonably
satisfactory to Guarantor.
SECTION 5. Waiver. This is an absolute Guaranty of performance and
of payment and not of collection, and the Guarantor hereby waives (a)
promptness, diligence, notice of acceptance, presentment, demand, protest,
notice of protest and dishonor, notice of intent to accelerate, notice of
acceleration and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty; (b) any requirement that Lessor protect, secure,
perfect or insure any security interest or lien on any property subject thereto
or exhaust any right or take any action against Charterer or any other Person
or any collateral or that Charterer or any other Person be joined in any action
hereunder. Should Lessor seek to enforce the obligations of the Guarantor
hereunder by action in any court, the Guarantor waives any necessity,
substantive or procedural, that a judgment previously be rendered against
Charterer or any other Person, or that any action be brought against Charterer
or any other Person, or that Charterer or any other Person should be joined in
such cause. Such waiver shall be without prejudice to Lessor at its option to
proceed against Charterer or any other Person, whether by separate action or by
joinder.
SECTION 6. Several Obligations. The obligations of the Guarantor
hereunder are several from Charterer or any other Person, and are primary
obligations concerning which the Guarantor is the principal obligor. The
Guarantor agrees that this Guaranty shall not be discharged except by complete
performance of the obligations of Charterer in respect of the
-3-
46
Guaranteed Obligations and under any agreement or instrument executed in
connection therewith and the obligations of the Guarantor hereunder. The
obligations of the Guarantor hereunder shall not be affected in any way by any
receivership, insolvency, bankruptcy or other proceedings affecting Charterer,
Lessor or any other guarantor of the Guaranteed Obligations or any of
Charterer's assets, or the release or discharge of Charterer from the
performance of any obligation contained in any agreement or other instrument
issued in connection with, evidencing or securing any obligation guaranteed by
this instrument, whether occurring by reason of law or any other cause, whether
similar or dissimilar to the foregoing.
SECTION 7. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation, reimbursement or indemnity under
this Guaranty, by any performance or payment made hereunder or otherwise, until
all the Guaranteed Obligations shall have been performed and paid in full. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all the Guaranteed Obligations shall not have been performed
and paid in full, such amount shall be held in trust for the benefit of Lessor
and shall forthwith be paid to Lessor to be applied to the Guaranteed
Obligations in such order as Lessor shall select. If (a) the Guarantor shall
perform and shall make payment to Lessor of all or any part of the Guaranteed
Obligations and (b) all the Guaranteed Obligations shall be performed and paid
in full, Lessor will, at the Guarantor's request, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
any interest in the Guaranteed Obligations resulting from such performance and
payment by the Guarantor.
SECTION 8. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor has received, or will receive, direct or indirect
benefit from the making of this Guaranty.
(b) Save as has been obtained or will be obtained as and when
required, no authorization or approval or other action by, and no notice to or
filing with, any court, agency, authority, department or instrumentality of any
nature of any governmental or quasi-governmental unit ("Governmental
Authority") is required for the due execution, delivery and performance by the
Guarantor of this Guaranty and the other documents and instruments executed in
connection therewith, all of which have been duly obtained or made and are in
full force and effect.
(c) This Guaranty is, and all other documents and instruments
executed in connection therewith, when delivered will be, legal, valid and
binding obligations of the Guarantor, enforceable against the Guarantor in
accordance with their respective terms, except as such enforceability may be
(i) limited by the effect of any applicable bankruptcy, insolvency or similar
laws affecting creditor's rights generally and (ii) subject to the effect of
general principles of equity.
-4-
47
(d) The Guarantor's execution, delivery and performance of this
Guaranty do not require the consent or approval of any other Person save as has
been obtained.
(e) Neither the execution and delivery of this Guaranty nor the
performance of the transactions contemplated hereby will result in any
violation of, or conflict with nor constitute a default under, or result in the
creation of any encumbrance, lien or security interest over any asset of the
Guarantor pursuant to (i) any provision of its constituent governing documents,
(ii) any agreement or instrument to which the Guarantor is a party, or (iii)
any applicable law or regulation to which the Guarantor is subject.
(f) As of the date hereof, the Guarantor is a holder of ________% of
the Tantawan production area as designated in that certain letter dated August
23, 1995 from the Department of Mineral Resources to Thaipo, Inc. [sic]
("Tantawan Field") included in the concession guaranteed by the Petroleum
Concession Agreement No. 1/2534/36, dated August 1, 1991, covering block B8/32
offshore Thailand, awarded by the Ministry of Industry to Maersk Oil (Thailand)
Ltd., Thaipo Limited and Thai Xxxx Limited, and Supplementary Petroleum
Concession No. 1 to Petroleum Concession No. 1/2534/36, dated March 6, 1992,
whereby The Sophonpanich Co., Ltd. entered into Petroleum Concession No.
1/2534/36.
SECTION 9. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by
Lessor and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 10. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
facsimile or cable communication) and mailed, telegraphed, telexed,
transmitted, cabled or delivered, if to the Lessor, at its address at 557's
Xxxxxxxxxxxxxx, 0000 XX Xxxxxxxx, Xxx Xxxxxxxxxxx Attention: R. Smulders,
Telecopy No. 31-10.473 1434; if to Guarantor at its address at
_____________________________________,, Telecopy No. ___________________, or,
as to each party, at such other address as shall be designated by such party in
a written notice to the other party. The dates on which notices shall be
deemed to have been effectively given shall be determined as follows:
(a) Notices given by personal delivery shall be deemed effectively
given on the date of personal delivery;
(b) Notices given in letter form shall be deemed effectively given on
the seventh day after the date mailed (as indicated by the postmark) by
registered airmail, postage prepaid, or the third day after delivery to an
internationally recognized courier service;
(c) Notices given by telex shall be deemed effectively given on the
first business day following the date of transmission, as indicated on the
document in question; and
-5-
48
(d) Notices given by facsimile shall be deemed effectively given on
the first business day following the date of transmission, as indicated on the
document in question.
SECTION 11. No Waiver; Remedies. No failure on the part of Lessor
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 12. Right of Setoff. Upon the occurrence and during the
continuance of any default by Charterer in the performance of any of its
obligations to Lessor or by the Guarantor hereunder, Lessor is hereby
authorized at any time and from time to time, without notice to the Guarantor
(any such notice being expressly waived by the Guarantor) to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Lessor to or for the credit or the account of
the Guarantor against any and all of the obligations of the Guarantor now or
hereafter existing under this Guaranty, irrespective of whether or not Lessor
shall have made any demand under this Guaranty and although such obligations
may be contingent and unmatured. Lessor agrees promptly to notify the
Guarantor after any such setoff and application made by Lessor provided that
the failure to give such notice shall not affect the validity of such setoff
and application. The rights of Lessor under this Section 12 are in addition
to other rights and remedies (including, without limitation, other rights of
setoff) which Lessor may have.
SECTION 13. Costs, Expenses and Taxes. The Guarantor agrees to pay,
and cause to be paid, on demand all costs and expenses actually incurred by
Lessor in connection with the filing, recording and administration of this
Guaranty and any of the documents or instruments evidencing the Guaranteed
Obligations and any other agreements or documents delivered in connection with
any of the Guaranteed Obligations, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for Lessor with respect
thereto and with respect to advising Lessor as to its rights and
responsibilities under this Guaranty, and all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement of this Guaranty. The Guarantor agrees to pay interest on any
expenses or other sums due to Lessor hereunder that are not paid when due at a
rate per annum equal to the lesser of (a) the highest lawful rate permitted by
applicable law or (b) one-month LIBOR plus two percent (2%). In addition, the
Guarantor shall pay any and all stamp and other taxes payable or determined to
be payable in connection with the execution and delivery of this Guaranty and
agrees to save Lessor harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes.
The agreements of the Guarantor contained in this Section 13 shall survive the
payment of all other amounts owing hereunder or under any of the other
obligations.
SECTION 14. INDEMNITY. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE GUARANTOR AGREES TO INDEMNIFY, PROTECT AND SAVE
-6-
49
HARMLESS LESSOR FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES AND LIABILITIES
GROWING OUT OF OR RESULTING FROM THIS GUARANTY (INCLUDING, WITHOUT LIMITATION,
ENFORCEMENT OF THIS GUARANTY), EXCEPT CLAIMS, LOSSES OR LIABILITIES RESULTING
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR, PROVIDED THAT IT IS
THE INTENTION OF THE GUARANTOR TO INDEMNIFY LESSOR AGAINST THE CONSEQUENCES OF
ITS OWN NEGLIGENCE.
SECTION 15. Separability. Should any clause, sentence, paragraph,
subsection or Section of this Guaranty be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating
or voiding the remainder of this Guaranty, and the parties hereto agree that
the part or parts of this Guaranty so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such part or parts had never been included
herein.
SECTION 16. Captions. The captions in this Guaranty have been
inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Guaranty.
SECTION 17. General Provisions. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until performance and
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty, notwithstanding the lawful termination or cancellation of
the Bareboat Charter; (b) be binding upon the Guarantor, its successors and
permitted assigns, except that the Guarantor may not assign any of its rights
or obligations under this Guaranty without the prior written consent of Lessor
not to be unreasonably withheld; and (c) inure to the benefit of and be
enforceable by Lessor and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), Lessor may assign or
otherwise transfer the benefit of this Guaranty to any other Person and such
other Person shall thereupon become vested with all the rights and benefits in
respect thereof granted to Lessor herein or otherwise.
Notwithstanding the foregoing clause (b), Guarantor may assign all or any part
of its interest in the Tantawan Field to any Other Guarantor (as hereinafter
defined) without the prior consent of Lessor. In such event, the Guarantor
shall assign its rights and obligations hereunder to such Other Guarantor to
whom the Guarantor assigns its interest. Upon such an assignment and the
assumption by such Other Guarantor of a percentage of Guarantor's
obligations hereunder equal to the percentage of the Guarantor's interest in
the Tantawan Field assigned to such Other Guarantor, the Guarantor shall be
automatically released from the same percentage of its obligations hereunder as
shall be assumed by such Other Guarantor.
In the event that the Guarantor acquires all, or a percentage of, the interest
of any Other Guarantor in the Tantawan Field, the Guarantor will assume (in
addition to its percentage already guaranteed hereunder) such percentage of
the Other Guarantor's obligations under its guarantee
-7-
50
of the Charterer's obligations under the Bareboat Charter as is equal to the
percentage of such Other Guarantor's interest in the Tantawan Field acquired by
the Guarantor.
As used in this Section 17 "Other Guarantor" means either of the other
parties at the date hereof to the Joint Operating Agreement relating to the
Tantawan Field.
SECTION 18. Limitation by Law. All rights, remedies and powers
provided in this Guaranty may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the
provisions of this Guaranty are intended to be subject to all applicable
mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Guaranty invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
SECTION 19. Arbitration. Any dispute arising under this Guaranty
shall be settled by arbitration in New York City under the rules of the
American Arbitration Association, except as provided herein. The party
requesting arbitration shall be entitled to have arbitration of the dispute
consolidated with any other pending dispute under this Guaranty or with any
dispute arising under the Bareboat Charter. The party requesting arbitration
shall serve upon the other party a written demand for arbitration with the name
and address of the arbitrator appointed by it, and such other party shall,
within ten (10) days thereafter, appoint an arbitrator, and the two arbitrators
so named, if they can agree, shall appoint a third, and the decision or award
of any two shall be final and binding upon the parties. In no event shall any
dispute or consolidated group of disputes be determined by more than three
arbitrators. Should the party upon whom the demand for arbitration is served
fail or refuse to appoint an arbitrator within ten (10) days, the single
arbitrator shall have the right to decide alone, and his decision or award
shall be final and binding upon the parties. The arbitrator(s) shall have the
discretion to impose the cost of the arbitration proceedings, including
reasonable attorney's fees, upon the losing party, or divide it between the
parties on any terms which may appear just. Any decision or award rendered
hereunder may be made and entered as a rule or judgment of any Court, in any
country having jurisdiction. Judgment upon the arbitration award rendered may
be entered in any Court having either personal or in rem jurisdiction, or
application may be made to such Court for a judicial acceptance of the award
and an Order of Enforcement, as the case may be.
SECTION 20. GOVERNING LAW. THIS GUARANTY AND INDEMNITY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 21. TAXES. All payments by the Guarantor under this
Guaranty shall be made in full and without deduction for or on account of any
Dutch, Thai or United States taxes, except to the extent that the Guarantor is
required by law to make payment subject to any Dutch, Thai or United States
taxes. If any such tax or amounts in respect of such tax exceed the amount
contemplated to be paid or suffered by Lessor pursuant to the Bareboat Charter,
and must
-8-
51
be deducted from any amounts payable or paid by the Guarantor under this
Guaranty, the Guarantor shall pay such additional amounts as may be necessary
to ensure that the Lessor receives a net amount equal to the full amount which
it would have received under the Bareboat Charter with respect to the
Guarantor's percentage of the Guaranteed Obligations had payment not been made
subject to such additional tax.
[ The Remainder of This Page Is Intentionally Blank ]
-9-
52
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed by an officer of Guarantor thereunto duly authorized, as of the date
first above written.
By:
Name:
Title:
-10-
53
APPENDIX B-2
(IHC Caland N.V. - Bareboat Charter)
GUARANTY AND INDEMNITY
This GUARANTY (the "Guaranty") is made as of the 9th day of February,
1996 by IHC Caland N.V., a Dutch corporation (the "Guarantor") to Tantawan
Services , L L C, a Delaware limited liability company ("Charterer").
PRELIMINARY STATEMENT. Tantawan Production B.V., a Dutch corporation
("Lessor") and Charterer are parties to that certain Bareboat Charter, dated as
of January February 9, 1996 ("Bareboat Charter"). The Guarantor is the
ultimate corporate parent of Lessor and the Guarantor expects to derive
substantial benefit from the Bareboat Charter. It is a condition precedent to
the effectiveness of the Bareboat Charter that the Guarantor shall have
executed and delivered this Guaranty to Charterer. Terms not defined herein
shall have the meanings given to them in the Bareboat Charter.
NOW, THEREFORE, in consideration of the premises and in order to
induce Charterer to execute and deliver the Bareboat Charter, the Guarantor
hereby agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally and
irrevocably (a) guarantees the punctual performance when due and the punctual
payment when due, whether at stated time of performance or maturity, by
acceleration, by prepayment or otherwise, of any and all liabilities and/or
obligations of Lessor to Charterer pursuant to the terms of the Bareboat
Charter and subject to all defenses, set offs and counterclaims of Lessor
thereunder now or hereafter existing of whatever kind or nature, whether in
respect of representations, warranties, agreements or covenants or for
principal, interest, expenses, taxes, costs, losses, compensation,
reimbursements or any other amount payable to Charterer, and (b) agrees to pay
any and all costs and expenses (including, without limitation, reasonable
counsel fees and expenses) incurred by Charterer in enforcing any rights under
this Guaranty (all of the above being hereinafter called the "Guaranteed
Obligations"). Within five (5) business days of demand, the Guarantor hereby
agrees to perform and/or pay the Guaranteed Obligations then due in the
currency provided in the Bareboat Charter.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be performed and paid strictly in accordance with
the terms of any agreement or instrument executed in connection therewith,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Charterer with
respect thereto. The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of and shall not be discharged or in
any way affected, reduced or extinguished by any circumstance or event (whether
or not known to the Guarantor) including without limitation:
54
(a) any lack of validity or enforceability of or defect or
deficiency in any agreement or instrument executed in connection with the
Guaranteed Obligations;
(b) any change in the time, manner, terms or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or extension or termination of or any consent
to departure from any agreement or instrument executed in connection
therewith;
(c) any sale, exchange, release or non-perfection of any property
standing as security for the liabilities hereby guaranteed or any
liabilities incurred directly or indirectly hereunder or any setoff
against any of said liabilities, or any release or amendment or waiver of
or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, or otherwise limit recourse to
Lessor or any other individual, partnership, joint venture, corporation,
association, trust or other enterprise ("Person") that is a party to any
agreement or instrument (including any guarantor) in respect of the
Guaranteed Obligations;
(e) the winding up, liquidation, bankruptcy or similar proceeding by
or against the Lessor; or
(f) any change in the name or the ownership of Lessor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any performance or payment of any of the Guaranteed
Obligations is canceled, suspended, rescinded or must otherwise be returned by
Charterer upon the receivership, insolvency, bankruptcy, liquidation,
dissolution or reorganization of Lessor, or any other guarantor or otherwise,
all as though such payment had not been made. The obligations of the Guarantor
under this Guaranty shall not be affected by any performance or payment by
Lessor (other than the full and final performance and payment of all of the
Guaranteed Obligations), allocation by Charterer of any repayment, any
compromise or discharge of the Guaranteed Obligations, any application, release
or substitution of collateral or other security therefor, release of any
guarantor, surety or other person obligated in connection with any agreement or
instrument, or any advances to Lessor, or for any other reason.
SECTION 3. Continuing Guaranty. This is a continuing Guaranty, and
all extensions of credit and financial accommodations heretofore, concurrently
herewith or hereafter made by Charterer to Lessor and all obligations and
indebtedness of Lessor now owned or hereafter acquired by Charterer shall be
conclusively presumed to have been made or acquired in acceptance hereof.
-2-
55
SECTION 4. Waiver. This is an absolute Guaranty of performance and
of payment and not of collection, and the Guarantor hereby waives (a)
promptness, diligence, notice of acceptance, presentment, demand, protest,
notice of protest and dishonor, notice of intent to accelerate, notice of
acceleration and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty; (b) any requirement that Charterer protect,
secure, perfect or insure any security interest or lien on any property subject
thereto or exhaust any right or take any action against Lessor or any other
Person or any collateral or that Lessor or any other Person be joined in any
action hereunder. Should Charterer seek to enforce the obligations of the
Guarantor hereunder by action in any court, the Guarantor waives any necessity,
substantive or procedural, that a judgment previously be rendered against
Lessor or any other Person, or that any action be brought against Lessor or any
other Person, or that Lessor or any other Person should be joined in such
cause. Such waiver shall be without prejudice to Charterer at its option to
proceed against Lessor or any other Person, whether by separate action or by
joinder.
SECTION 5. Several Obligations. The obligations of the Guarantor
hereunder are several from Lessor or any other Person, and are primary
obligations concerning which the Guarantor is the principal obligor. The
Guarantor agrees that this Guaranty shall not be discharged except by complete
performance of the obligations of Lessor in respect of the Guaranteed
Obligations and under any agreement or instrument executed in connection
therewith and the obligations of the Guarantor hereunder. The obligations of
the Guarantor hereunder shall not be affected in any way by any receivership,
insolvency, bankruptcy or other proceedings affecting Lessor, Charterer or any
of Lessor's assets, or the release or discharge of Lessor from the performance
of any obligation contained in any agreement or other instrument issued in
connection with, evidencing or securing any obligation guaranteed by this
instrument, whether occurring by reason of law or any other cause, whether
similar or dissimilar to the foregoing.
SECTION 6. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation, reimbursement or indemnity under
this Guaranty, by any performance or payment made hereunder or otherwise, until
all the Guaranteed Obligations shall have been performed and paid in full. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all the Guaranteed Obligations shall not have been performed
and paid in full, such amount shall be held in trust for the benefit of
Charterer and shall forthwith be paid to Charterer to be applied to the
Guaranteed Obligations in such order as Charterer shall select. If (a) the
Guarantor shall perform and shall make payment to Charterer of all or any part
of the Guaranteed Obligations and (b) all the Guaranteed Obligations shall be
performed and paid in full, Charterer will, at the Guarantor's request, execute
and deliver to the Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of any interest in the Guaranteed Obligations
resulting from such performance and payment by the Guarantor.
SECTION 7. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
-3-
56
(a) The Guarantor has received, or will receive, direct or indirect
benefit from the making of this Guaranty.
(b) Save as has been obtained or will be obtained as and when
required, no authorization or approval or other action by, and no notice to or
filing with, any court, agency, authority, department or instrumentality of any
nature of any governmental or quasi-governmental unit ("Governmental
Authority") is required for the due execution, delivery and performance by the
Guarantor of this Guaranty and the other documents and instruments executed in
connection therewith, all of which have been duly obtained or made and are in
full force and effect.
(c) This Guaranty is, and all other documents and instruments
executed in connection therewith, when delivered will be, legal, valid and
binding obligations of the Guarantor, enforceable against the Guarantor in
accordance with their respective terms, except as such enforceability may be
(i) limited by the effect of any applicable bankruptcy, insolvency or similar
laws affecting creditor's rights generally and (ii) subject to the effect of
general principles of equity.
(d) The Guarantor's execution, delivery and performance of this
Guaranty do not require the consent or approval of any other Person save as has
been obtained.
(e) Neither the execution and delivery of this Guaranty nor the
performance of the transactions contemplated hereby will result in any
violation of, or conflict with nor constitute a default under, or result in the
creation of any encumbrance, lien or security interest over any asset of the
Guarantor pursuant to (i) any provision of its constituent governing documents,
(ii) any agreement or instrument to which the Guarantor is a party, or (iii)
any applicable law or regulation to which the Guarantor is subject.
SECTION 8. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by
Charterer, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
facsimile or cable communication) and mailed, telegraphed, telexed,
transmitted, cabled or delivered, if to the Guarantor, at its address at
557's-Gravelandseweg, 3119 XT Schiedam, The Netherlands, Attention: R.
Smulders, Telecopy No. 00-00-000 1434 ; if to Charterer, at its address at c/o
Pogo Producing Company, 0 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000,
Attention: Vice President-Operations, Telecopy No. (000) 000-0000, or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other party. The dates on which notices shall be deemed
to have been effectively given shall be determined as follows:
-4-
57
(a) Notices given by personal delivery shall be deemed effectively
given on the date of personal delivery;
(b) Notices given in letter form shall be deemed effectively given
on the seventh day after the date mailed (as indicated by the postmark) by
registered airmail, postage prepaid, or the third day after delivery to an
internationally recognized courier service;
(c) Notices given by telex shall be deemed effectively given on the
first business day following the date of transmission, as indicated on the
document in question; and
(d) Notices given by facsimile shall be deemed effectively given on
the first business day following the date of transmission, as indicated on the
document in question.
SECTION 10. No Waiver; Remedies. No failure on the part of
Charterer to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 11. Right of Setoff. Upon the occurrence and during the
continuance of any default by Lessor in the performance of any of its
obligations to Charterer or by the Guarantor hereunder, Charterer is hereby
authorized at any time and from time to time, without notice to the Guarantor
(any such notice being expressly waived by the Guarantor) to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Charterer to or for the credit or the account
of the Guarantor against any and all of the obligations of the Guarantor now or
hereafter existing under this Guaranty, irrespective of whether or not
Charterer shall have made any demand under this Guaranty and although such
obligations may be contingent and unmatured. Charterer agrees promptly to
notify the Guarantor after any such setoff and application made by Charterer
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of Charterer under this Section 11 are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which Charterer may have.
SECTION 12. Costs, Expenses and Taxes. The Guarantor agrees to pay,
and cause to be paid, on demand all costs and expenses actually incurred by
Charterer in connection with the filing, recording and administration of this
Guaranty and any of the documents or instruments evidencing the Guaranteed
Obligations and any other agreements or documents delivered in connection with
any of the Guaranteed Obligations, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for Charterer with
respect thereto and with respect to advising Charterer as to its rights and
responsibilities under this Guaranty, and all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement of this Guaranty. The Guarantor agrees to pay interest on any
expenses or other sums due to Charterer
-5-
58
hereunder that are not paid when due at a rate per annum equal to the lesser of
(a) the highest lawful rate permitted by applicable law or (b) one-month LIBOR
plus two percent (2%). In addition, the Guarantor shall pay any and all stamp
and other taxes payable or determined to be payable in connection with the
execution and delivery of this Guaranty and agrees to save Charterer harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes. The agreements of the Guarantor
contained in this Section 12 shall survive the payment of all other amounts
owing hereunder or under any of the other obligations.
SECTION 13. INDEMNITY. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE GUARANTOR AGREES TO INDEMNIFY, PROTECT AND SAVE HARMLESS
CHARTERER FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES AND LIABILITIES GROWING
OUT OF OR RESULTING FROM THIS GUARANTY (INCLUDING, WITHOUT LIMITATION,
ENFORCEMENT OF THIS GUARANTY), EXCEPT CLAIMS, LOSSES OR LIABILITIES RESULTING
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CHARTERER, PROVIDED THAT IT
IS THE INTENTION OF THE GUARANTOR TO INDEMNIFY CHARTERER AGAINST THE
CONSEQUENCES OF ITS OWN NEGLIGENCE.
SECTION 14. Separability. Should any clause, sentence, paragraph,
subsection or Section of this Guaranty be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating
or voiding the remainder of this Guaranty, and the parties hereto agree that
the part or parts of this Guaranty so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such part or parts had never been included
herein.
SECTION 15. Captions. The captions in this Guaranty have been
inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Guaranty.
SECTION 16. General Provisions. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until performance and
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty, notwithstanding the lawful termination or cancellation of
the Bareboat Charter; (b) be binding upon the Guarantor, its successors and
permitted assigns, except that the Guarantor may not assign any of its rights
or obligations under this Guaranty without the prior written consent of
Charterer not to be unreasonably withheld; and (c) inure to the benefit of and
be enforceable by Charterer and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), Charterer may
assign or otherwise transfer the benefit of this Guaranty to any other Person
and such other Person shall thereupon become vested with all the rights and
benefits in respect thereof granted to Charterer herein or otherwise.
-6-
59
SECTION 17. Limitation by Law. All rights, remedies and powers
provided in this Guaranty may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the
provisions of this Guaranty are intended to be subject to all applicable
mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Guaranty invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
SECTION 18. Arbitration. Any dispute arising under this Guaranty
shall be settled by arbitration in New York City under the rules of the
American Arbitration Association, except as provided herein. The party
requesting arbitration shall be entitled to have arbitration of the dispute
consolidated with any other pending dispute under this Guaranty or with any
dispute arising under the Bareboat Charter. The party requesting arbitration
shall serve upon the other party a written demand for arbitration with the name
and address of the arbitrator appointed by it, and such other party shall,
within ten (10) days thereafter, appoint an arbitrator, and the two arbitrators
so named, if they can agree, shall appoint a third, and the decision or award
of any two shall be final and binding upon the parties. In no event shall any
dispute or consolidated group of disputes be determined by more than three
arbitrators. Should the party upon whom the demand for arbitration is served
fail or refuse to appoint an arbitrator within ten (10) days, the single
arbitrator shall have the right to decide alone, and his decision or award
shall be final and binding upon the parties. The arbitrator(s) shall have the
discretion to impose the cost of the arbitration proceedings, including
reasonable attorney's fees, upon the losing party, or divide it between the
parties on any terms which may appear just. Any decision or award rendered
hereunder may be made and entered as a rule or judgment of any Court, in any
country having jurisdiction. Judgment upon the arbitration award rendered may
be entered in any Court having either personal or in rem jurisdiction, or
application may be made to such Court for a judicial acceptance of the award
and an Order of Enforcement, as the case may be.
SECTION 19. GOVERNING LAW. THIS GUARANTY AND INDEMNITY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 20. Taxes. All payments by the Guarantor under this
Guaranty shall be made in full and without deduction for or on account of any
Dutch or Thai taxes, except to the extent that the Guarantor is required by law
to make payment subject to any Dutch or Thai taxes. If any such tax or amounts
in respect of such tax exceed the amount contemplated to be paid or suffered by
Charterer pursuant to the Bareboat Charter, and must be deducted from any
amounts payable or paid by the Guarantor under this Guaranty, the Guarantor
shall pay such additional amounts as may be necessary to ensure that the
Charterer receives a net amount equal to the full amount which it would have
received under the Bareboat Charter had payment not been made subject to such
tax.
-7-
60
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed by an officer of Guarantor thereunto duly authorized, as of the date
first above written.
I H C CALAND N.V.
By:
Name:
Title:
-8-
61
APPENDIX C
PERIODS (END OF) US$ 000
Year 0 120,000
Year 1 108,000
Year 2 98,000
Year 3 88,000
Year 4 78,000
Year 5 66,000
Year 6 55,000
Year 7 43,000
Year 8 30,000
Year 9 20,000
Year 10 5,000
NOTES: 1. Purchases other than at year end will be calculated on a
pro-rata basis.
2. For any extended Term, the price will be as negotiated by the
parties.
