EXHIBIT 10.70
MINUTES OF AGREEMENT RELATING TO THE PETROBRAS AMETHYST CONTRACTS
This Agreement is made the 2nd day of July 1998
BETWEEN:
(1) DRILLPETRO INC. ("Drillpetro")
(2) TECHDRILL INC. ("Techdrill") and
(3) WESTVILLE MANAGEMENT CORPORATION ("Westville")
The parties agree to procure that Petrodrill Offshore Inc. and/or any of the
Operating Companies owned by it (the relevant company, "Petrodrill"), as
appropriate, give effect to the following provisions, namely:
1) The parties agree that Drillpetro will be paid a lump sum fee of $5,000,000
as a non-accountable reimbursement of costs and expenses (including its legal
and travel costs) it incurred to date in connection with development of the
Amethyst project, the development of conceptual and design engineering,
related shipyard negotiations and technical negotiations with the client. The
lump sum fee will be allocated and paid in five installments as set out in
column 2 of schedule A hereunder within three days of receipt of the
corresponding mobilization payments under the relevant Petrobras contracts
or, in the event of no mobilization fee, within 45 days of delivery to and
acceptance of the rig by Petrobras.
2) In consideration for the assignment of the Petrobras contracts for the
Amethysts 2 and 3 (as amended for the rigs to be upgraded to 1,500m water
depth) and the Petrobras contracts for Amethysts 4, 5, 6 and 7 to the joint
venture or its nominee(s), and, further, in consideration for the increased
duties, obligations and related expenses to be undertaken by Drillpetro
throughout the firm contract periods, the parties agree to procure that
Petrodrill pay to Drillpetro the consultancy and management fees outlined in
columns 3 and 4 of Schedule A hereunder.
SCHEDULE A
LUMP SUM FEE % OF DAY RATE DAILY FEE
excluding bonuses when operating
Amethyst No. 2 $1,000,000 0 $4,000
Amethyst No. 3 $1,500,000 0 $4,000
Amethyst No. 4 $0 1.00% $2,000
Amethyst No. 5 $500,000 0 $2,000
Amethyst No. 6 $1,000,000 2.00% $4,000
Amethyst No. 7 $1,000,000 2.00% $4,000
The parties agree that the improved economic returns to be achieved from the
increased day rates, extended contractual commencement dates, and extended
firm periods are integral to the parties' agreement to procure that
Petrodrill pay to Drillpetro the amounts set out in Schedule A.
Consequently, the said consultancy and management fees and lump sum fees
are contingent upon Drillpetro achieving the rates, fees and contractual
durations as set out in Schedule B hereunder and further achieving the
contractual commencement dates for the rigs under the Petrobras contracts
that are compatible with the shipyard delivery dates, thereby alleviating
potential penalties for late delivery. The latter point is also of vital
importance for the successful raising of the bond financing.
SCHEDULE B
RIG MOB FEE DAY RATE BONUS TERM
YEARS
Amethyst No. 2 $4,000,000 $123,888 20% 7
Amethyst No. 3 $4,000,000 $123,888 20% 7
Amethyst No. 4 $0 $127,333 10% 6
Amethyst No. 5 $6,500,000 $108,000 0% 8
Amethyst No. 6 $0 $133,333 10% 7
Amethyst No. 7 $0 $143,333 10% 7
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All of the above fees, except the lump sum reimbursable fees which will be
governed by 1 above, will be payable to Drillpetro within three days of
receipt of corresponding amounts under the Petrobras contracts. No fees will
be due or payable on amounts not received by the joint venture from
Petrobras.
3) Notwithstanding anything contained herein to the contrary but subject to the
immediately following sentence, all payments hereunder shall be waived and
not paid unless and until such time as the Petrobras contracts for the
Amethyst No. 2 and the Amethyst No. 3 have been amended to increase the
dayrates from US$93,000 and US$97,000, respectively, to the amounts set forth
with respect to such contracts in Schedule B. In the event that the
contractual dayrates achieved in respect of the Amethyst No. 2 and Amethyst
No. 3 are less than the amount indicated in Schedule B, payments shall be
made hereunder with respect to each rig based on the achieved dayrates as
from such date in the amount of the product of (a) a fraction having a
denominator of 57,776 and a numerator equal to the difference between (i) the
sum of the dayrates achieved with respect to the Amethyst No. 2 and the
Amethyst No. 3 and (ii) 190,000 and (b) the amounts set forth in Schedule A
for each of the management and consultancy fees and lump sum fees.
Notwithstanding the fact that dayrates higher than those set forth in
Schedule B may be achieved for the Amethyst No. 2 and Amethyst No. 3, in no
event shall the management and consultancy fees and lump sum fees payable
hereunder exceed the amounts set forth for those fees in Schedule A.
4) This Agreement shall be governed by English law and any dispute arising
hereunder shall be referred to arbitration in London, England.
5) This Agreement constitutes the entire agreement among the parties in
connection with its subject matter and wholly supersedes and cancels all
previous negotiations, commitments or agreements in such respects.
6) Each party represents and warrants to the other parties that its performance
of the obligations under this agreement will not involve the payment or
giving of anything of value, either
directly or indirectly, to an official of a non-U.S. government for the purpose
of influencing an act or decision in his official capacity or inducing him to
use his influence with a non-U.S. government to assist any party, its affiliates
or any other company in obtaining or retaining business for or with any person
or directing business to themselves or any other person. Each party acknowledges
that the other parties are entering into an agreement in reliance upon such
representation and warranty, which representation survives for the term of this
Agreement. This agreement may be terminated by the non-offending party,
forthwith and without prior notice, in the event that the performance of either
party under this Agreement would result in a violation by any party or any of
its affiliates of the U.S. Foreign Corrupt Practices Act.
IN WITNESS WHEREOF this Agreement has been executed on the day and year first
above written.
/s/ Illegible
__________________________________
For Drillpetro
/s/ Illegible
__________________________________
For Techdrill
/s/ Illegible
__________________________________
For Westville
