EXHIBIT 99.1
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement has been entered into on this 1st day
of July, 1997, (with effect as of 16th May, 1997) between Live Oak
Company Limited, Bermuda (hereinafter called the Sellers) and
Global Marine Drilling Company (hereinafter called the Buyers)
pertaining to the sale of the Semi Submersible Drilling Rig "MAERSK
VINLANDER" (hereinafter called the Rig).
SELLERS
Live Oak Company Limited, Xxxxxxx Xxxxxxxx, 00 Xxxxx Xxxxxx,
Xxxxxxxx XX00, Xxxxxxx.
BUYERS
Global Marine Drilling Company, 000 X. Xxxxxxxx Xxxx, Xxxxxxx,
X.X.X., or a company to be nominated by them.
Global Marine Drilling Company is however always to remain
responsible for the due fulfilment of this Agreement.
RIG
"MAERSK VINLANDER"
Type: Xxxx H-3.2 Semi-submersible
Built: 1983, Saint Xxxxx Shipbuilding
Class: DNV - Identification number 13420
Flag and Registry: Bermuda.
1. PURCHASE PRICE
USD 150,000,000.00 (United States Dollars One Hundred Fifty
Million) cash.
2. DEPOSIT
As security for the correct fulfilment of this Agreement the Buyers
shall pay a deposit of 10 % (ten per cent) of the Purchase Price
within 3 (three) banking days from the date this Agreement has been
signed by fax by both parties and all subjects in accordance with
Clause 19 hereof have been lifted by both parties. This deposit
shall be placed with Midland Bank plc., 00/00 Xxxxxxx, Xxxxxx XX0X
0XX, telephone x00 000 000 0000, telefax x00 000 000 0000, att.:
Shipping and Aerospace/Xxx. Xxxxxxxx Xxxxxxxxxx, and held by them
in a joint account for the Sellers and the Buyers, to be released
in accordance with written instructions of the Sellers and the
Buyers. Interest, if any, to be credited to the Buyers. Any fee
charged for holding the said deposit shall be borne equally by the
Sellers and the Buyers.
3. PAYMENT
The said Purchase Price shall be paid in full free of bank charges
to Midland Bank plc., 00/00 Xxxxxxx, Xxxxxx XX0X 0XX, telephone +44
000 000 0000, telefax x00 000 000 0000, att.: Shipping and
Aerospace/Xxx. Xxxxxxxx Xxxxxxxxxx, for credit to Live Oak Company
Limited, account no. 00000000 on delivery of the Rig against
Buyers' receipt of delivery documentation as per Clause 8 below and
transfer of title to the Rig but not later than 3 (three) banking
days after the Rig is in every respect physically ready for
delivery in accordance with the terms and conditions of this
Agreement and written or faxed Notice of Readiness has been given
in accordance with Clause 5.
4. INSPECTIONS
The Buyers shall have the right to physically inspect the Rig and
her class records.
It is however understood by the Buyers that the Rig is in full
working mode and presently operating for a major oil company in the
North Sea. The physical inspection must thus be performed by the
smallest possible team nominated by the Buyers together with
Sellers' representatives who will assist the Buyers'
representatives to any extent reasonably required and practically
possible. The Buyers will cooperate in respect of arranging the
inspections as promptly as practically possible and by having their
inspection team onboard the Rig for a minimum period of time.
The Buyers and the Sellers shall cooperate in planning the physical
inspection which is to be focused on inspection of major equipment,
steel structures, drilling equipment always without disrupting or
interfering with the current operation of the Rig. Prior to each
inspection, a list of equipment / areas to be inspected to be
prepared jointly by the Buyers and the Sellers.
In addition to the above, the Buyers shall have the right to peruse
and receive - to the extent same are relevant for the Buyers in
connection with this transaction - complete copies of all documents
and third party charter parties in order to ascertain back-to-back
charter party terms which require the Buyers' acceptance. The
Buyers will treat such documents as confidential and reasonably
restrict access.
With regard to acceptance or rejection please refer to Clause 19
below.
5. NOTICES, TIME AND PLACE OF DELIVERY
a) The Sellers shall keep the Buyers well informed of when they
intend to deliver the Rig. When the Rig is in all respects
physically ready for delivery in accordance with this
Agreement, the Sellers shall give the Buyers a written or
faxed Notice of Readiness for delivery.
b) Subject to the terms of this Agreement, the Rig shall be
delivered and taken over on an "as is where is" basis at the
Rig's location in the North Sea.
Delivery of the Rig is to take place between 1st and 31st
July, 1997.
Date of cancelling (see Clauses 5 c) and 14): 30th September,
1997, in Buyers' option.
c) If the Sellers anticipate that, notwithstanding the exercise
of due diligence by them, the Rig will not be ready for
delivery by the cancelling date they may notify the Buyers in
writing stating the date when they anticipate that the Rig
will be ready for delivery and propose a new cancelling date.
Upon receipt of such notification the Buyers shall have the
option of either cancelling this Agreement in accordance with
Clause 14 within 7 running days of receipt of the notice or of
accepting the new date as the new cancelling date. lf the
Buyers have not declared their option within 7 running days of
receipt of the Sellers' notification or if the Buyers accept
the new date, the date proposed in the Sellers' notification
shall be deemed to be the new cancelling date and shall be
substituted for the cancelling date stipulated in Clause 5 b).
If this Agreement is maintained with the new cancelling date
all other terms and conditions hereof including those
contained in Clauses 5 a) and 5 c) shall remain unaltered and
in full force and effect. Cancellation or failure to cancel
shall be entirely without prejudice to any claims for damages
the Buyers may have under Clause 14 for the Rig not being
ready by the original cancelling date.
d) Should the Rig become an actual, constructive or compromised
total loss before delivery the deposit together with interest
earned shall be released immediately to the Buyers whereafter
this Agreement shall be null and void.
6. DRYDOCKING/DIVERS INSPECTION
After the Buyers' physical inspection and acceptance of the Rig and
her class records there shall be no drydocking or divers inspection
of the Rig prior to or in connection with the delivery.
7. SPARES, EQUIPMENT AND CONSUMABLES
The Sellers shall deliver the Rig to the Buyers in her entirety
with everything belonging to the Rig whether onboard, ashore or on
order including all broached or unbroached provisions, stores,
spare parts, spare equipment, and insofar it appears on the rig
inventory list as defined below all rig site inventory and shore
base spare parts, drawings and specifications, operating manuals
and all other documents.
All spare parts to include at least one spare anchor chain and
spare equipment belonging to the Rig at the time of inspection,
used or unused, whether on board or not shall become the Buyers'
property. Forwarding charges, if any, shall be for the Buyers'
account.
The Sellers are not required to replace any spare parts which are
taken out of spare and used as replacement prior to delivery, but
the replaced items shall be the property of the Buyers. If any item
at a cost of more than USD 25,000 is taken out of spare and used
prior to delivery, such item(s) to be replaced prior to delivery.
The Sellers have the right to take ashore crockery, plate, cutlery,
linen and other articles bearing the Sellers' flag or name,
provided they replace the same with similar unmarked items. Library
forms, etc., exclusively for use in the Sellers' rigs, shall be
excluded without compensation.
Rig personnel's personal belongings including slop chest to be
excluded from the sale, as well as any hired / leased or other
third party equipment.
All hull paint, pictures and paintings in Sellers' option, welfare
equipment, Safety Case and Risk Assessment, documents which have to
be returned to the authorities to be excluded. Rig's ship's xxxx to
be excluded, however, Sellers undertake to replace the same at
their cost.
Sellers warrant that the equipment list as per attachment A to this
agreement is identical to the equipment list attached to the
Bareboat Charter between The Maersk Company Limited, London and
Triton Holdings Limited, British Virgin Islands.
Any equipment belonging to the Sellers but removed from the Rig,
due to the bareboat charter with Triton Holdings Limited shall be
included in the sale. Subject to approval by Sedco Forex on their
behalf, any equipment left onboard by Triton Holdings Limited shall
become Buyers' property at no extra cost.
8. DOCUMENTATION
The documentary closing/transfer of title to the Rig is to take
place in London.
In exchange for payment of the Purchase Price the Sellers shall
furnish the Buyers with delivery documents, namely:
a) Legal Xxxx of Sale (one original and two verified copies of
the original) in the Body Corporate form, warranting that the
Rig is free from all encumbrances, mortgages and maritime
liens or any other debts or claims whatsoever, duly notarially
attested and legalized by the consul of the country in which
the Buyers are to register the Rig or other competent
authority.
b) Current Certificate of Registration issued by the competent
authorities of the flag state of the Rig, showing the
ownership of the Rig and that the Rig is free from mortgages
or other rights.
c) Confirmation of Class issued within 72 hours prior to
delivery.
d) Unless otherwise mutually agreed between Buyers and Sellers,
Certificate of Deletion of the Rig from the Rig's registry
stating that the Rig at the time of deletion was free from
mortgages or other rights, or other official evidence of
deletion appropriate to the Rig's registry at the time of
delivery, or, in the event that the registry does not as a
matter of practice issue such documentation immediately, a
written undertaking by the Sellers to effect deletion from the
Rig's registry forthwith and furnish a Certificate or other
official evidence of deletion to the Buyers promptly and
latest within 4 (four) weeks after the Purchase Price has been
paid and the Rig has been delivered.
e) The agreement as referrred to in Clause 18.2.
f) Any such additional documents as may reasonably be required by
the competent authorities for the purpose of registrering the
Rig, provided the Buyers notify the Sellers on any such
documents as soon as possible after the date of this
Agreement.
At the time of delivery the Buyers and Sellers shall sign and
deliver to each other a Protocol of Delivery and Acceptance
confirming the date and time of delivery of the Rig from the
Sellers to the Buyers.
At the time of delivery the Sellers shall submit to the Buyers the
classification certificate(s) as well as all plans etc., which are
on board the Rig. Other certificates which are on board the Rig
shall also be handed over to the Buyers unless the Sellers are
required to retain same, in which case the Buyers to have the right
to take copies. Other technical documentation which may be in the
Sellers' possession shall be promptly forwarded to the Buyers at
their expense, if they so request. The Sellers may keep the Rig's
log books but the Buyers to have the right to take copies of same.
9. ENCUMBRANCES
The Sellers warrant that the Rig, at the time of delivery, is free
from all encumbrances, mortgages and maritime liens or any other
debts whatsoever. The Sellers hereby undertake
to indemnify the Buyers against all consequences of claims made
against the Rig which have been incurred prior to the time of
delivery.
10. TAXES, ETC.
Any taxes, fees and expenses in connection with the purchase and
registration under the Buyers' flag shall be for the Buyers'
account, whereas similar charges, including sales tax, if any, in
connection with the closing of the Sellers' register shall be for
the Sellers' account.
11. CONDITION ON DELIVERY
The Rig with everything belonging to her shall be at the Sellers'
risk and expense until she is delivered to the Buyers, but subject
to the terms and conditions of this Agreement she shall be
delivered and taken over in substantially the same condition as she
was at the time of inspection, fair wear and tear excepted.
However, the Rig shall be delivered with her present class
maintained free of condition/recommendations and free of damages
affecting class.
The Rig shall be delivered with her present trading certificates
valid on the date of delivery. A list of present certificates is to
be furnished to the Buyers latest at the time of inspection.
12. NAME/MARKINGS
Upon delivery the Buyers undertake to change the name of the Rig,
and as soon as practicably possible to change the blue hull color
of the Rig.
13. BUYERS' DEFAULT
Should the deposit not be paid in accordance with Clause 2, the
Sellers have the right to cancel this Agreement, and they shall be
entitled to claim compensation for their losses and for all
expenses incurred together with interest at the rate of 8% per
annum, if such are due to the proven negligence of the Buyers.
Should the Purchase Price not be paid in accordance with Clause 3,
the Sellers have the right to cancel the Agreement, in which case
the deposit together with interest earned shall be forfeited to the
Sellers. If the deposit does not cover Sellers' losses, they shall
be entitled to claim further compensation for their losses and for
all expenses incurred together with interest at the rate of 8% per
annum, if such are due to the proven negligence of the Buyers.
14. SELLERS' DEFAULT
Should the Sellers fail to give Notice of Readiness in accordance
with Clause 5 a) or fail to be ready to validly complete a legal
transfer or to deliver the Rig with everything belonging to her in
the manner and within the time specified herein by the date
stipulated in Clause 5 b) the Buyers shall have the option of
cancelling this Agreement provided always that the Sellers shall be
granted a maximum of 3 banking days after Notice of Readiness has
been given to make arrangements for the documentation set out in
Clause 8. If after Notice of Readiness has been given but before the
Buyers have taken delivery, the Rig ceases to be physically ready
for delivery and is not made physically ready again in every respect
by the date stipulated in clause 5 b) and new Notice of Readiness
given, the Buyers shall retain their option to cancel. In the event
that the Buyers elect to cancel this Agreement the deposit in full
together with interest earned shall be released to them immediately.
Should the Sellers fail to give Notice of Readiness by the date
stipulated in Clause 5 b) or fail to be ready to validly complete
a legal transfer as aforesaid they shall make due compensation to
the Buyers for the losses caused to the Buyers by failure to execute
a legal transfer or to deliver the Rig in the manner and within the
time specified herein, if such are due to the proven negligence of
the Sellers.
15. BUYERS' REPRESENTATIVES
After this Agreement has been signed by both parties and deposit
lodged by the Buyers, the Buyers shall, at their option, be allowed
to have two of their senior officers working on the Rig upto date
of delivery. Buyers representatives will be paid by Buyers but
follow Sellers' instructions. It is understood that all practical
arrangements in this respect are subject to mutual agreement
between the Buyers and the Sellers and also subject to the approval
by the Bareboat Charterers and the oil company, for whom the Rig is
working at the time. The Sellers will have no liability or
responsibility whatsoever for any possible loss, injury or death to
Buyers' representatives and Buyers will hold Sellers harmless for
all claims arising hereof irrespective of Buyers' acts and
omissions.
16. ARBITRATION
This Agreement shall be governed by and construed in accordance
with English law and any dispute arising out of this Agreement
shall be referred to arbitration in London in accordance with the
Arbitration Act 1996 or any statutory modification or re-enactment
thereof for the time being in force, one arbitrator being appointed
by each party. On the receipt by one party of the nomination in
writing of the other party's arbitrator, that party shall appoint
their arbitrator within fourteen days, failing which the decision
of the single arbitrator appointed shall apply. If two arbitrators
properly appointed shall not agree they shall appoint an umpire
whose decision shall be final. All arbitrators to be members of
London Maritime Arbitrators Association.
17. CONFIDENTIALITY
This Agreement shall be confidential between the parties and no
information concerning this agreement should be released by
either party or their employees or agents.
18. ASSIGNMENT OF BAREBOAT CHARTER
18.1 It is noted and agreed that the Rig is subject to the
following bareboat charters:
a) A bareboat charter ("BAREBOAT CHARTER A") between the
Sellers as Owners and the Maersk Company Limited, London as
Charterers; and
b) A bareboat charter ("BAREBOAT CHARTER B") between The Maersk
Company Limited, London as Disponent Owners and Triton
Holdings Limited, British Virgin Islands as Charterers.
18.2 The sale of the Rig is subject to the Buyers, with effect from
delivery, taking over all the benefits of the disponent owners
under BAREBOAT CHARTER B and agreeing to perform and observe
all the obligations of the disponent owners thereunder. The
Buyers hereby confirm that they have reviewed the terms of the
BAREBOAT CHARTER B and approve the same.
18.3 The Sellers shall ensure that any amounts due in connection
with either of the two referred bareboat charter parties have
been settled between those parties at the time of the delivery
and transfer of title to the Rig to the Buyers. And Sellers
hereby confirm that all representations and warranties given
under BAREBOAT CHARTER B by The Maersk Company Limited, London
are true and correct as when given.
18.4 Any broker commission which may become payable to Normarine
Shipping Consultants, Oslo for the optional period(s) under
the BAREBOAT CHARTER B is to be paid by the Buyers.
18.5 The Sellers undertake not to, and to procure that The Maersk
Company Limited does not, agree any amendment, variation or
extension to BAREBOAT CHARTER B without the prior approval of
the Buyers, and the Sellers hereby certify that the attached
copy of BAREBOAT CHARTER B as attachment B is the entire
agreement between the Maersk Company Limited, London and
Triton Holdings Limited, British Virgin Islands as at the date
hereof, and there are no supplements, amendments or variations
in existence.
19. SUBJECTS
This agreement is subject to:
a) The Buyers' prompt physical inspection og the Rig respectively
her classification records, with Buyers' declaration within
23rd May, 1997, of whether the Rig and her records have been
accepted or rejected.
b) The Buyers' perusal of relevant documents/contents of charter
parties related to this transaction which is to be performed
as quickly as posible with Buyers' declaration within 23rd
May, 1997, of whether the relevant documents/charter parties
have been accepted or rejected.
For the Sellers: For the Buyers:
/s/ Xxxx Xxxxxxxxx /s/ Xxxx X. Xxxx
Xxxx Xxxxxxxxx Xxxx X. Xxxx
Live Oak Company Limited Global Marine Drilling Company
