Exhibit 10.52
SEVENTH AMENDING AGREEMENT TO THE
CONVERSION CONTRACT
DATED DECEMBER 3, 2002
(As amended to date)
between
DAVIE MARITIME, INC.
as Builder
and
TORCH EXPRESS L.L.C.
as Owner
April 7, 2004
This SEVENTH AMENDING AGREEMENT is made and entered into the 7th day
of April 2004, by and between DAVIE MARITIME, INC., a company organized and
existing under the laws of Canada whose registered office address is 00 Xxxxxx
X. Xxxxx Xx., Xxxxx, Xxxxxx X0X 0X0 in the city and judicial district of Quebec,
Province of Quebec, represented by Xx. Xxxxxxx Xxxxxxxx, duly authorized to act
hereunder, as he so states (the "Builder"), and TORCH EXPRESS L.L.C., a company
organized and existing under the laws of Louisiana whose registered office
address is 000 Xxxxxxx Xxx., Xxxxxx, XX 000000 XXX. (the "Owner"),
WHEREAS:
A. Builder and Owner entered into a Conversion Contract (the "Original
Contract") dated as of December 3, 2002 providing for the conversion
of the Midnight Express into an offshore multi-service cargo vessel
in accordance with a Specification and other Contractual Documents;
B. The Original Contract was subsequently amended by six Amending
Agreements, the Original Contract as so amended being herein called
the "Amended Contract";
C. Unless otherwise specified, capitalized terms and expressions used
in this Amending Agreement have the same meaning as those ascribed
to them by the Amended Contract and references to $ and Dollars are
to United States dollars unless specified otherwise;
1
D. Pursuant to the Amended Contract, Builder was obligated to
re-deliver the converted Ship on December 26, 2003 for a Contract
Price and otherwise on the terms and conditions contained in the
Amended Contract;
E. Builder did not re-deliver the converted Ship on December 26, 2003
and Owner took the position that, as a consequence of such
non-redelivery, Owner was entitled to Liquidated Damages of
approximately $4.3 million;
F. On December 8, 2003, Builder delivered to Owner a preliminary
Request for Equitable Adjustment (the "REA") in which Builder
claimed as of December 8th, 2003: (a) additional compensation in the
amount of $14.1 million, and (b) postponement of the Contractual
Re-Delivery Date until April 24, 2004, which claims were rejected by
Owner;
G. On or about February 11, 2004, Builder advised Owner that as a
result of new pending Change Order Requests, the value of Builder's
claim as expressed in the REA would be increased and a further
postponement of the Contractual Re-Delivery would be requested;
H. Builder has advised Owner that Re-Delivery of the converted Ship in
accordance with the requirements of the Amended Contract can be
accomplished by May 21, 2004, provided Owner is prepared to make
available certain funds by way of an increase to the Contract Price
and;
I. Owner is prepared to make such funds available on the terms and
conditions contained in this Amending Agreement.
WITNESSETH that the parties have agreed as follows:
1. BUILDER REPRESENTATIONS AND WARRANTIES
Builder represents and warrants to Owner, it being acknowledged by
Builder that Owner is relying on such representations and warranties to induce
it to enter into this Amending Agreement:
(a) that Builder, based on the information known to Builder at the time
of this Amending Agreement, has or will have available to it
sufficient working capital which, when aggregated with the amounts
payable by Owner, will be sufficient to fund the completion of the
Work and the Re-Delivery of the Ship not later than the Amended
Re-Delivery Date;
(b) Builder is not aware of the existence of any facts or circumstances
that, as at the date hereof, could give rise to a Change Order
Request or any claim, whether at law or in equity, that could result
in Owner being requested to pay any amount as part of the Contract
Price other than the balance set out in Exhibit A, together with any
amounts that may be payable with respect to the Outstanding Change
Order Requests listed in Exhibit B;
(c) Builder is not aware of Change Order Requests other than Change
Order Request No. 247 listed in Exhibit B bearing status "In
preparation" that could form the basis of a claim for Permissible
Delay which may have the result of extending the Re-Delivery Date
after May 21, 2004; and
(d) of the instalment of $3,600,000 paid on March 5, approximately
Cdn.$3,200,000 was applied to the payment of amounts owning and
payable to suppliers and subcontractors and being 100% of amounts
owing and payable to suppliers and subcontractors on the said date.
2
2. OWNER REPRESENTATIONS AND WARRANTIES
Owner represents and warrants to Builder, it being acknowledged by
Owner that Builder is relying on such representations and warranties to induce
it to enter this Amending Agreement; that Owner has made necessary arrangements
with and obtained assurances from its lenders to be in a position to make
payments to Builder in accordance with Exhibit C;
3. CONTRACT PRICE AND CONTRACTUAL RE-DELIVERY DATE
(a) Owner and Builder agree that as of the date hereof, after assessment
of all Builder's pending claims and Change Order Requests, save and
except for any amount that may become payable pursuant to the
Outstanding Change Order Requests listed in Exhibit B, the Contract
Price payable to Builder is to be increased by $9,350,000 (hereafter
referred to as "Increase in Contract Price") and consequently, save
and except for any amount that may become payable pursuant to the
Outstanding Change Order Requests listed in Exhibit B, the Contract
Price is $51,962,591 as reconciled in Exhibit A.
(b) Owner and Builder agree that, as of the date hereof, after
assessment of all Builder's claims and Change Order Requests, save
and except for Change Order Request No. 247 listed in Exhibit B
bearing status "In preparation" the Contractual Re-Delivery Date is
extended to May 21st, 2004 (the "Amended Re-Delivery Date"), which
date includes all periods of Permissible Delay;
(c) Builder acknowledges having received from Owner at the date hereof,
the following amounts totalling $5,689,534 as instalments on payment
of the Increase of Contract Price;
(i) $1,000,000 on January 29, 2004;
(ii) $489,534 on February 18, 2004;
(iii) $3,600,000 on March 4, 2004;
(iv) $600,000 on Xxxxx 0, 0000
(x) The balance of the Contract Price will be payable in accordance with
Exhibit C attached, it being understood and agreed that Builder
shall deliver to Owner as a condition of making all such payments a
"no-lien" certificate in the form prescribed and required by
paragraph 2 of the Fifth Amending Agreement forming part of the
Amended Contract.
4. RENUNCIATION AND RELEASE
(a) In consideration of Owner's agreement to pay the Increase of
Contract Price and in consideration of Owner's agreement to amend
the Contractual Re-Delivery Date as provided in paragraph 3(b)
hereabove, Builder hereby accepts such increase of Contract Price as
payment in full of all of Builder's claims (for increases in
Contract Price and/or postponement of Contractual Re-Delivery Date
and all Change Order Request impacts) which exist as of the date of
execution of the present Amending Agreement save and except for the
Outstanding Change Order Requests listed in Exhibit B and further
agrees that, except for the Outstanding Change Order Requests listed
in Exhibit B, it has at the time of entering the present Amending
Agreement, no other claims against Owner and is not aware of any
basis on which it would be entitled to make any such claim.
(b) In consideration of Builder's agreement to accept the Increase of
Contract Price as full and final compensation for Builder's
unsettled claims which exist as of the date of execution of the
present Amending Agreement (save and except for Outstanding Change
Order Requests listed in Exhibit B),
3
Owner acknowledges and agrees that it may become entitled to
Liquidated Damages only in the event that Re-Delivery occurs after
the Amended Re-Delivery Date and that Builder will benefit from the
seven-day grace period as provided in the Amended Contract prior to
any Liquidated Damages application.
5. NO LIEN CLAUSE
(a) Builder agrees that neither Builder nor any person acting through or
on behalf of Builder shall claim or assert any lien or encumbrance
against the Ship or its equipment or appurtenances (including any
items not on board the Ship which were acquired with the intent of
being incorporated in the Ship as part of the Work) at any time,
whether before or after completion of the Work or Re-Delivery,
provided however that:
(i) Owner shall have paid the balance of the Contract Price set out in
Exhibit A, together with all amounts payable in respect of Change
Order Requests approved in writing by Owner and Builder after the
date hereof;
(ii) Owner shall have signed the Re-Delivery Acceptance Certificate.
(b) In the event that a Change Order Request, including an Outstanding
Change Order Request, has not been accepted by Builder and Owner on
or before the date on which Re-Delivery would otherwise occur,
Re-Delivery shall not be delayed by reason of any dispute as to the
value of the Change Order. Any such dispute shall be resolved after
Re-Delivery in accordance with Section 20 of the Amended Contract;
(c) Neither Builder nor any person acting through or on behalf of
Builder will interfere with Re-Delivery of the Ship in accordance
with Section 10 of the Amended Contract, if Owner shall have, (i)
signed the Re-Delivery Acceptance Certificate and (ii) at the time
of Re-Delivery, paid the undisputed unpaid balance of the Contract
Price to Builder and deposited the unpaid disputed amount of the
Contract Price in to an escrow account in accordance with Article
10.10 (b), as amended by this Amending Agreement, including all
amounts payable in respect of Change Order Requests approved in
writing by Owner and Builder after the date hereof. Provided that
such payment has been made, any dispute between Builder and Owner
shall be resolved after Re-Delivery in accordance with Section 20 of
the Amended Contract and Owner will not be required to post any
security in respect of any amount which is in dispute.
6. RESPONSIBILITY FOR NOMINATED SUBCONTRACTORS' CLAIMS
Owner will indemnify and save Builder harmless from and against any
claims by Nominated Subcontractor for additional compensation or
damages other than claims (a) resulting from wrongful acts or
omissions of Builder, (b) the non payment of Nominated Subcontractor
Invoices unless such invoices are being legitimately disputed by
Builder or (c) resulting from Builder having contracted, without
prior written approval of Owner, the performance of services or
supply of materials by Nominated Subcontractors outside of the scope
of work specified in the Nominated Subcontracts.
7. OTHER AMENDMENTS
(a) Article 2.5 found in the Amended Contract is hereby amended by
adding at the end thereof the following:
"In the event that any Certificate issued at the time of Re-Delivery
by the Classification Society or any other regulatory authority in
respect of the Ship is provisional or qualified by virtue of the
fact that it will not be possible to perform final stability or
inclining tests or any other final test until installation and
commissioning of OFE Equipment has been completed, or if any such
Certificate is
4
affected by a qualification pertaining to the performance of the
work covered by any Nominated Subcontract or a condition of the
Unconverted Ship, Builder shall have no obligation to do any work
required to obtain the issue of an unqualified Certificate or
Certificates except to provide all required engineering input in
relation to the stability testing of the converted Ship."
(b) Article 10.9 of the Amended Contract is hereby amended to read as
follows:
"If:
(a) within seven (7) days of receipt by Builder of Owner's written
notice under Article 10.7 Owner and Builder are unable to agree that
Owner's reason for refusing to issue a signed Re-Delivery Acceptance
Certificate constitutes a Conversion Deficiency and/or a Condition
Deficiency as specified in such notice, or
(b) Owner refuses to issue a signed Re-Delivery Acceptance Certificate
in respect of any purported Remedial Work carried out by Builder,
Owner shall pay Builder the undisputed amount of the Contract Price
remaining outstanding and the dispute shall be referred to
arbitration as provided in Article 20.2.";
(c) Article 10.10 (b) of the Amended Contract is hereby amended to read
as follows:
Where the operational capacity of the Ship is not impaired, after
giving prior written notice to Guarantor, after signing the
Re-Delivery Acceptance Certificate and after depositing in escrow
the balance of Contract Price, take repossession of the Ship, in
which case (i) the amount of Liquidated Damages, if any, would stop
accruing from the date of a repossession of the Ship and the risk of
loss and/or damage to the Ship shall automatically pass to Owner,
and (ii) Owner shall have the right to carry out the Remedial Work
and, if the outcome of the arbitration favours Owner, offset its
costs from the amount placed in the escrow account.
8. CONTRACT CONFIRMATION
Except as otherwise provided by this Amending Agreement, the Amended
Contract is hereby in all respects confirmed including, but not
limited to, its provisions pertaining to Alteration and Modification
(Article 11) and Arbitration (Article 20) all of which apply to the
Outstanding Change Order Requests listed in Exhibit B and to any
future Change Order Request issued by Builder or Owner in compliance
with the provisions of Article 11 of the Amended Contract related to
changes to the scope of Work subsequent to the date hereof.
9. CONDITIONALITY
This Amending Agreement shall not become the unconditional
obligation of Builder and Owner unless and until:
(a) Owner's lenders have delivered a consent in the form attached as
Exhibit D; and
(b) Investment Quebec has consented, in the form attached as Exhibit E,
to the increased Contract Price as required by the provisions of
Section 11.5 of the Amended Contract.
IN WITNESS WHEREOF the parties have caused this Amending Agreement
to be signed by their duly authorized signatories the day, month and year first
above written.
DAVIE MARITIME INC.
By: __________________________________
Xxxxxxx Xxxxxxxx
TORCH EXPRESS L.L.C.
By: __________________________________
Xxxx Xxxxxxxxxx
5
EXHIBIT A
CONTRACT PRICE RECONCILIATION
[SEE EXHIBIT A ATTACHED]
6
EXHIBIT B
CHANGE ORDER REQUESTS
[SEE LIST ATTACHED]
7
EXHIBIT C
PAYMENTS
2. For payment purposes, the Contract Price balance comprises three segments:
(a) Balance of original Contract Price $1,952,569
(b) Change Orders 408,126
(c) Increase of Contract Price 8,319,126
3. The balance of the original Contract Price will be payable in accordance
with the applicable provisions of the Amended Contract.
4. The Change Orders amount will be payable in accordance with the applicable
provisions of the Amended Contract.
5. The Increase of Contract Price will be payable as follows:
Advances (already paid) $5,689,534
April 16 instalment $1,129,592
Re-Delivery Date instalment (subject to Ship being in the condition $1,500,000
required by the Specification and being free of all liens and claims for
lien except mortgage in favour of Owner's lenders)
8
EXHIBIT D
LENDERS' CONSENT
TO: Torch Express L.L.C. ("Owner")
Torch Offshore Inc. ("Torch")
Davie Maritime, Inc. ("Builder")
Investment Quebec ("IQ")
Reference is made to the Seventh Amending Agreement to the Conversion Contract
dated December 3, 2002 (the "Amending Agreement") and to the Consent dated as of
April ____ 2004 pursuant to the Performance Bond issued by IQ. In consideration
of Builder entering into the Amending Agreement and IQ delivering such Consent,
each of the undersigned Lenders hereby consents to the execution by Owner of the
Amending Agreement
Dated as of April 7th 2004.
REGIONS BANK
By: ___________________________________
EXPORT DEVELOPMENT CORPORATION
By: ___________________________________
0
XXXXXXX X
XXXXXXXXXX XXXXXX CONSENT
TO: Torch Express L.L.C. ("Owner")
Torch Offshore Inc. ("Torch")
Davie Maritime, Inc. ("Builder")
Regions Bank and Export Development Corporation ("Lenders")
Reference is made to the Seventh Amending Agreement to the Conversion
Contract dated December 3, 2002 (the "Amending Agreement") and to the
Consent dated as of April ____ 2004 executed by the Lenders. In
consideration of Builder entering into the Amending Agreement and the
Lenders executing the Consent, the undersigned hereby (a) consents to
the increase in the Contract Price as provided in the Amending
Agreement and as required by the provisions of Section 11.5 of the
original Conversion Contract dated December 3, 2002, and (b) confirms
that the Performance Bond issued by the undersigned on May 9th, 2003 is
in full force and effect in accordance with its terms.
Dated as of April 7th, 2004.
INVESTMENT QUEBEC
By: _____________________________
10
