EXHIBIT 10.45
PETRODRILL SEVEN LIMITED
- AND -
FORMARITIMA LTD.
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AMETHYST 7 MANAGEMENT AGREEMENT
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THIS AGREEMENT is made as of the 5th day of November 1998,
BETWEEN:
1. PETRODRILL SEVEN LIMITED, a company incorporated in the British Virgin
Islands with its registered office located at Xxxxx, Xxxxxxx & Xxxxxxx,
X.X. Xxx 000, Xxxx Xxxxx Xxxxxxxx, Xxxxxxx s Cay, Road Town, Tortola,
British Virgin Islands.
hereafter referred to as Petrodrill ; and
2. FORMARITIMA LTD. a company incorporated in the British Virgin slands and
having its principal office at c/x Xxxxx, Fabrega & Fabrega Trust Co.,
Xxxx Xxxxx Building, Xxxxxxx s Cay, Road Town, Tortola, British Virgin
Islands
hereafter referred to as Manager .
Petrodrill and Manager are hereinafter also referred to individually as
Party and collectively as Parties .
WHEREAS:
A. Petrodrill will be the legal owner of a dynamically positioned
semi-submersible drilling vessel (hereinafter called the Vessel ) and
intends to carry out worldwide offshore drilling and workover operations
using the Vessel, subsequent to its delivery to appropriate Project
Companies pursuant to a contract for construction and sale between
Petrodrill and Daewoo Heavy Industries as amended from time to time ( the
Construction Contract ).
B. The Manager possesses the know-how and skilled personnel to enable it to
manage the operation and maintenance of the Vessel and to market the
Vessel world-wide.
C. The Manager will support and render services relevant to the mobilization
of the Vessel to Brazil and operations pursuant to a certain charter
agreement between Petroleo Brasileiro S.A. (hereinafter referred to as
PETROBRAS ) and Maritima Navegaco e Engenharia Ltda as novated and
assigned to Petrodrill (the CHARTER AGREEMENT ) and thereafter worldwide.
D. Manager has been provided with a copy of the aforesaid Charter Agreement
and Construction Contracts.
Petrodrill is desirous of contracting with the Manager for the provision
of the services in accordance with the terms and conditions set out
herein.
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NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. DEFINITIONS
Capitalized terms used herein but not otherwise defined shall have
the meanings assigned to such terms in Petrodrill s Shareholders
Agreement among Drillpetro Inc., Techdrill Inc. and Westville
Management Corporation.
2. TERM OF AGREEMENT
This Agreement shall take effect from the date hereof and shall continue
unless terminated pursuant to the provisions of Clause 7.
3. COMMENCEMENT AND PERFORMANCE
3.1 PRESENT CONDITION OF VESSEL: The parties acknowledge as at the date of
signing of this Agreement that the Vessel is to be constructed. Petrodrill
undertakes to provide the Manager with copies of all relevant
documentation in respect of the Vessel in the English language, including
detailed drilling equipment lists.
3.2 DELIVERY: This Agreement shall commence with respect to the Vessel prior
to commencement of sea trials under the relevant Construction Contract.
The Manager will furnish the relevant personnel and services to assist
during the sea trials.
3.3 PERFORMANCE BY MANAGER: The Manager shall at all times maintain proper and
adequate office and technical facilities and a competent and sufficient
staff for the performance of its duties, and shall, on behalf of
Petrodrill and at Petrodrill s risk and expense, manage and maintain the
Vessel in accordance with good oil industry practice, efficiently and
economically, to the best of its professional ability in regard to
performance, safety and shipshape appearance, and will arrange, at all
times, technical supervision to ensure that the Vessel is kept in a
seaworthy condition and with valid certificates.
Notwithstanding the foregoing, Petrodrill has, subject only to the
provisions of Clause 6, ultimate and complete responsibility for the
Vessel and shall indemnify the Manager in accordance with Clause 6.
4. OPERATIONAL DUTIES AND RESPONSIBILITIES OF THE MANAGER
4.1 MANAGER S PERSONNEL AND SERVICES TO BE RENDERED BY OTHER CONTRACTORS OF
PETRODRILL
4.1.1 The Manager shall provide a sufficient number of relevantly
qualified personnel in order to ensure that the operations of the
Vessel is at all times undertaken safely and in accordance with good
oil industry practice and in compliance with the lawful and proper
instructions of any client contracting for use of the services of
the Vessel and in accordance with the contract with such client and
any regulations from relevant regulatory bodies, authorities or
classification societies.
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4.1.2 The Manager shall ensure at all times that it has an adequate pool
of qualified personnel available to cover vacancies due to leave
requirements, sickness, injury, replacement of personnel as
contemplated by the provisions of Clause 4.1.3 or for any other
reason whatsoever.
4.1.3 Should Petrodrill be dissatisfied with the performance of any of the
personnel provided by the Manager, Petrodrill shall notify the
Manager thereof, stating the reasons for its dissatisfaction. Should
the cause of Petrodrill s dissatisfaction remain unremedied for a
period of twenty days from the giving of Petrodrill s said notice,
Petrodrill shall have the right to request the replacement of the
personnel concerned and in such event the Manager shall, as soon as
practicable thereafter replace the personnel concerned.
4.1.4 The Manager shall:
(a) keep Petrodrill fully informed regarding incidents which give
or could give rise to claims by or against third parties
including damage to the Vessel or serious sickness of
personnel; and
(b) use all reasonable endeavours to protect Petrodrill s
interests with respect to claims by or against third parties,
including personnel employed aboard the Vessel.
4.2 MARKETING AND CONTRACT NEGOTIATIONS
To the extent required by Petrodrill;
4.2.1 The Manager shall, and as may be appropriate, conduct and ensure the
best possible world wide marketing of the Vessel and shall keep
Petrodrill regularly and fully informed as to all available suitable
work.
4.2.2 (a) Manager s responsibility to market the Vessel under
this Agreement shall include making commercial proposals
to all potential clients with the view to being awarded
contracts for the employment of the Vessel after release
from employment under their respective Charter
Agreements, all obligations to Petrobras having been
duly performed.
(b) The Manager shall, prior to making any commercial
proposal to a potential client, notify Petrodrill of the
terms and conditions of such commercial proposal. These
shall include a budget setting out an estimate of the
expenditure, whether of a capital or income nature, to
be incurred in connection with the performance of any
contract of employment of the Vessel that may result
from such commercial proposal, the revenue (including
mobilisation/demobilisation and day rates) expected to
arise therefrom and also any projected profit.
Petrodrill shall, within 5 working days (that is days,
other than Saturdays, Sundays and public holidays in
either Rio de Janeiro or Paris) ( Working Days ) from
the date of the giving of the notice concerned by the
Manager notify the Manager whether or not it
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agrees such proposal. If Petrodrill so notifies the
Manager that it agrees such proposal, it shall be
forthwith made to the potential client but if it so
notifies the Manager that it does not agree such
proposal, it shall not be made to the potential client.
If Petrodrill shall fail so to notify the Manager
whether or not it agrees the proposal within the period
aforesaid Petrodrill shall be deemed to have agreed the
proposal and the Manager shall thereupon make the same
to the potential client.
4.2.3 When seeking employment for the Vessel, the Manager shall not
give preferential treatment to other rigs under its
management. If the Manager shall wish to submit a competing
commercial proposal in respect of any other drilling unit
owned or managed by the Manager, it shall be entitled to do so
but shall notify Petrodrill of such intention immediately such
intention is formed. In the event that the Manager shall
intend to submit a competing commercial proposal in respect of
such a unit, Petrodrill shall be entitled itself to submit its
commercial proposal in respect of the Vessel to the potential
client and to conduct all negotiations in connection therewith
to the exclusion of the Manager, and without being under any
obligation to disclose to the Manager the details of the
commercial proposal or any variations thereof.
4.3 OPERATIONS EQUIPMENT MAINTENANCE
4.3.1 The Manager shall arrange for the operation of the Vessel and
all equipment used on or from the Vessel.
4.3.2 The Manager shall carry out all the functions which, in
accordance with good oil industry practice, would be performed
by persons conducting the operations of the Vessel.
4.3.3 The Manager is authorised to act, on behalf of Petrodrill, in
respect of all matters that may pertain to the everyday
operation of the drilling and workover services.
Notwithstanding the foregoing, where in connection with such
operation, the Manager will or is likely to incur expenditure
not contemplated by or greater than the amount specified in
respect thereof in any budget as is referred to in Clause
4.5.2 and where any such expenditure will or is likely to
exceed US$50,000 or, in any calendar month, sums which, in the
aggregate, are in excess of US$50,000. the Manager shall,
prior to incurring such expenditure, obtain the consent of
Petrodrill so to do. Nevertheless the Manager shall, in any
case where, in its reasonable opinion, it is necessary to take
immediate action to avert danger to life or health or loss or
damage to the Vessel or other property of Petrodrill, be
entitled and obligated to take such action without the prior
consent of Petrodrill but, in every such case, the Manager
shall promptly notify Petrodrill of the action so taken by it
and of the amount of expenditure incurred by it in so doing.
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4.3.4 Subject to Clauses 4.3.3 and 4.5.2 the Manager shall procure
the supply of all equipment and materials required in
connection with the operation and maintenance of the Vessel
including an adequate supply of spare parts, stock for stores
and catering, and generally so as to ensure that the Manager
will at all times be able to fulfil its obligations hereunder.
The Manager will use its best endeavours to ensure, that
materials and equipment procured by it are purchased on the
most economical terms available, as to price and payment, and
having regard to the quality and availability of the materials
and equipment concerned.
4.3.5 The Manager shall provide for technical supervision, repairs,
classification, customary maintenance and, in all other
respects, use its best endeavours so that, at all times and
subject to the provisions of clauses 4.6.2 and 4.6.3, the
Vessel is kept duly operational and seaworthy, and maintain
their certificates and permissions for maritime and drilling
and workover operations all in accordance with good oil
industry practice. Minimum personnel will be maintained during
periods of lay up in order to minimise cost to Petrodrill.
4.3.6 Petrodrill s representatives shall be entitled to board the
Vessel for the purpose of examining the Vessel and its
operations subject, at all times, to the consent of the client
where applicable.
4.3.7 The Manager will provide, if required by any client or
relevant authority, an internal control system (Quality
Assurance and Quality Control), which is approved by relevant
certifying authorities and regulating bodies.
4.3.8 The Manager will not by act or omission of Manager cause
Petrodrill to be in breach of any provision of the mortgage
registered over the Vessel and has been provided with a copy
of said mortgage and will provide such confirmation as may be
reasonably required by the Vessel s lenders.
4.4 INSURANCE
4.4.1 The Manager, on behalf of Petrodrill, shall ensure and provide
that the Vessel and all consumable, materials and equipment
thereof and the Manager's and Petrodrill's employees are at
all times adequately insured with reputable underwriters on
the best possible terms. Manager shall ensure that such
insurance shall be fully in compliance with the requirements
of the holder of the mortgage on the Vessel. Subject to the
foregoing, the following minimum insurance coverage will be
maintained by the Manager on behalf of Petrodrill at all
times:
(a) All Risks Hull and Machinery Insurance (including
underwater and in-hole equipment) against marine and war
risks, to the full market value of the Vessel; and
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(b) Full Protection and Indemnity Insurance, or equivalent,
in respect of liabilities of Petrodrill and/or the
Manager to third parties including but not limited to
pollution or contamination, removal of wreck and
recovery of equipment lost overboard.
4.4.2 Insurances in respect of the personnel (such as workmens'
compensation and employers liability) whether employed on board the
Vessel or not will be the responsibility of the employers of such
personnel.
4.4.3 The Manager, on behalf of Petrodrill, shall use its best endeavours
to arrange additional or alternative insurance coverage to those
specified in Clause 4.4.1 as may from time to time be required for
the fulfilment of any contract of employment entered into for the
employment of the Vessel.
The arrangement and maintenance of such additional or alternative
insurance coverage shall not prejudice the arrangement and
maintenance of any insurance referred to in Clause 4.4.1.
4.4.4 It is agreed that all deductibles paid under such insurances shall
be considered as Operating Costs.
4.4.5 It is further agreed and the Manager shall arrange that the
insurances effected on behalf of Petrodrill shall be endorsed with a
statement that the Manager is co-assured and that the underwriters
waive their rights of subrogation and/or recourse, whether express
or implied, against the Manager and/or its subcontractors and its
affiliated companies and against any party designated in writing by
the Manager with whom the Manager has entered into a hold harmless
agreement or otherwise in respect to the Vessel and operations
involving the Vessel. This Agreement shall be copied by Manager to
the relevant underwriters and their written approval that the
indemnities herein contained are acceptable as being normal in the
oil industry shall be obtained by the Manager.
4.4.6 Manager shall provide Petrodrill with copies of the relevant
policy(ies) of insurance and with evidence of the payment of the
relevant insurance premiums.
4.4.7 (a) In the event of an accident or incident which will or may
give rise to a claim the Manager shall immediately notify
Petrodrill and the relevant insurance underwriters.
(b) The Manager, on behalf of Petrodrill, shall liaise with
Petrodrill s insurers, underwriters, agents, surveyors, loss
adjusters and/or as may be required and prepare all
documentation necessary in connection therewith.
(c) The responsibility of making a claim shall be that of the
Manager on behalf of Petrodrill.
(d) The Manager shall not authorise repairs or settle any claims
without first obtaining Petrodrill s consent.
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Petrodrill and the Manager agree to cooperate to the fullest possible
extent in order to speed up insurance claims processing.
4.4.8 The Manager shall take out and maintain all statutory employer s
liability insurance to cover the Manager s employees in compliance
with applicable laws. To ensure that the actions of such personnel
are insured at all times while working on or in relation to the
Vessel, Petrodrill, if possible, shall be entered as co-assured in
the Manager s insurances.
4.4.9 The premiums payable by Manager in respect of all insurance effected
shall be for the account of Petrodrill.
4.5 ADMINISTRATION AND ACCOUNTS
4.5.1 The Manager will prepare and submit to Petrodrill at least sixty
days prior to the Vessel being delivered to the Manager a budget of
operating income and expenditure for the period of twelve calendar
months following that delivery. At least sixty days prior to each
anniversary of the date of aforesaid delivery, the Manager shall
prepare and submit to Petrodrill a budget of operating income and
expenditure and any contemplated capital expenditure, for the
following twelve months.
Each budget shall contain sufficient detail of likely expenditure as
will enable Petrodrill to check actual costs when they are incurred
against estimates. All assumptions shall be clearly stated. The
budgets shall be subject to Petrodrill s approval but when approved,
Petrodrill shall promptly notify the Manager thereof. Petrodrill
will provide details of costs in respect of personnel and any other
services to be provided by Petrodrill.
In addition to the aforesaid budgets the Manager will prepare and
submit to Petrodrill budgets referred to in Clause 4.2.2.
4.5.2 Quarterly reports and accounts shall be presented to Petrodrill as
soon as reasonably possible after the end of each three month period
following the delivery referred to in 4.5.1. but no later than 40
calendar days after the end of such period.
The quarterly report shall contain the following:
Brief marketing status and work prospects
Major repairs/capital investments
The accounts/financial reports shall contain the following in a
format to be mutually acceptable to both parties, Petrodrill from
time to time to provide the Manager with a copy of its preferred
format:
Quarterly actual and year to date results compared with the
budget
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Description/analysis of variances actual/budget
Cash flow/fund requirements
Estimates for the year
In addition, the Manager shall provide Petrodrill with a copy of the
monthly report from the Vessel containing a brief summary on safety,
client relationship, invoices and revenue.
4.5.3 Subject to the provisions of Clause 4.3.3. the Manager shall utilise
funds credited to or standing in the Disbursement Account (defined
in 4.5.4) to meet the following expenses and disbursements inter
alia, hereinafter referred to as the Operating Costs:
Cost of Manager provided personnel;
Travel costs for Petrodrill and Manager provided personnel;
Purchases of materials, supplies, equipment, parts and storage,
transport and assembling thereof, and cost of subcontractors in
connection with specific assignments;
Expenses incurred for keeping the Vessel in line with certification
and classification requirements (This will apply for Annual surveys
only. Expenses for Special Periodic survey are not included in
Operating Costs but will be shown in each relevant budget submitted
under the provisions of this Agreement);
Professional services for all analysis or technical assistance
required to the extent that such services qualitatively cannot be
performed by the Manager or the Manager s own employees;
Direct Internal Quality and Safety audit costs when carried
out on board the Vessel;
Shore base expenses including payroll and payroll related expenses
to shore base staff, storage, transportation, office and warehouse
upkeep at shore base site including mobilization and demobilization
of the same;
Expenses for catering;
Customs duties, corporate taxes, withholding taxes, and other taxes
of whatsoever nature levied on Petrodrill of an Operating Company
and arising solely from contracts entered into in respect of the
Vessel and levied in jurisdictions where the Vessel is located from
time to time and/or in connection with this Agreement;
Budget approved brokerage, commission and agency fees to third
parties, if any;
All other reasonable expenses and costs of similar nature which are
budgeted and such other reasonable costs and expenses that the
Manager in its discretion
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considers to be necessary to ensure the safety of the personnel on
the Vessel or the Vessel itself as well as mitigation of non-
performance under the Charter Agreements subject to a limitation of
US$250,000; and
Insurance costs including deductibles.
4.5.4 The Manager shall be required, pursuant to its duties under this
Agreement, to open and keep a separate bank account in the name of
Petrodrill ( the Disbursement Account ) and books, records and
accounts relating to the management of the operation and maintenance
of the Vessel in accordance with internationally accepted applicable
accounting principles and in the English language. All such books,
records, accounts and other related documents mentioned above shall
be available to Petrodrill or its appointees for inspection at all
reasonable times. In addition to the reports referred to in Clause
4.5.3. the Manager shall furnish to Petrodrill all information
(financial or otherwise) reasonably required throughout the year by
Petrodrill for its own accounts or audits and any assistance
required to be given to its auditors.
4.6 BANK ACCOUNTS AND FLOW OF FUNDS
Subject always to such other instructions as Petrodrill may give to the
Manager pursuant to arrangement with the holder of the mortgage over the
Vessel, or otherwise:
4.6.1 Petrodrill undertakes to transfer a sum of US$1,000,000 (the
minimum working capital ) into the Disbursement Account within 30
days prior to commencement of the services by Manager under this
Agreement.
The Manager undertakes to procure that income (and other revenue
items) payable to Petrodrill in connection with the Vessel is
credited without set-offs or deduction, other than those set-offs
and deductions compulsorily imposed on amounts received by the
Manager according to applicable laws in the country where the Vessel
is employed, to the Disbursement Account.
4.6.2 The Manager will provide Petrodrill not less than seven working days
prior to the end of each month with a statement of its working
capital requirements in respect of the Vessel and the Manager s
obligations hereunder for the next month.
If the funds received from the Vessel s operations are insufficient
at any time to meet the Manager s costs, as listed under 4.5.4. and
5 or any other expenditure rightfully incurred, the Manager shall
notify Petrodrill of its cash requirements by giving at least ten
Working Days notice.
Petrodrill is obliged, at all times, to ensure that the Manager s
request for adequate working capital is met within the said notice
period of 10 Working Days and to maintain that the minimum working
capital balance is maintained in the Disbursement Account.
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4.6.3 Any funds credited to the Disbursement Account in excess of
necessary working capital to meet expenses listed under Clauses
4.5.3. and 5. shall be promptly paid over to such account as
Petrodrill may specify from to time unless. Petrodrill requests the
Manager to temporarily administer such spare funds in consultation
with Petrodrill.
4.6.4 The Manager will provide Petrodrill on a monthly basis with copies
of all Disbursement Account statements.
4.6.5 Any interest earned/or payable in respect of the Disbursement
Account shall be for the credit of the Disbursement Account.
4.6.6 Under no circumstances shall the Manager, without the prior written
approval of Petrodrill (which approval may be withheld at
Petrodrill s sole discretion), be entitled to borrow funds or enter
into any agreement to borrow funds in such a manner as to bind
Petrodrill PROVIDED ALWAYS that a requirement for funds to meet a
safety obligation shall supersede this provision.
5. MANAGEMENT FEE
5.1 With effect from start of pre-delivery sea trials of the Vessel, the
Manager shall be paid a fee (the Fee ) of US$1,250 per day for the
duration of this Agreement. The Fee shall be paid against invoice to
Petrodrill such invoice to be rendered by the tenth day of the month
following the month in which the Fee was earned.
5.2 In the event of a sale of theVessel and termination of this
Agreement with respect to the Vessel pursuant to Clause 7.6 and the
purchaser not accepting an assignment of the rights and obligations
of Petrodrill under this Agreement, the Fee shall be deemed earned
by the Manager and shall be paid as compensation to the Manager in
respect of the aggregate number of days of management fee lost with
respect to the Vessel each day between date of sale and the final
day of the firm term of the relevant Charter Agreement discounted at
ten per cent (10%) per annum.
5.3 In the case of a disputed invoice, Petrodrill will advise the
Manager of the item under dispute specifying the complaint within
fifteen (15) days of receipt of such invoice but will pay the
undisputed part. The disputed item will be paid as may be mutually
agreed.
6. INDEMNITIES
6.1 Except to the extent that the Manager would be liable under Clause
6.2, Petrodrill hereby undertakes to keep the Manager indemnified
and to hold the Manager harmless against all actions, proceedings,
claims, demands or liabilities whatsoever which may be brought
against or incurred by the Manager in relation to any act or thing
done or caused to be done as aforesaid, and against all costs,
damages and expenses which the Manager may suffer or incur in
defending or settling the same.
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6.2 Subject to Clause 6.4. below, Petrodrill indemnifies and holds
harmless the Manager against all liability whatsoever, whether in
law, tort or in contract or otherwise, and Petrodrill shall be
solely liable for any damage, loss or claim of whatsoever nature and
howsoever arising, whether relating to the Vessel, its hirers and
users (including, without prejudice to the generality of the
foregoing, for damage to or loss of property, including the Vessel,
and all direct and consequential loss) unless the same is proved to
have resulted solely from the gross negligence or wilful default of
the Manager, its employees, agents or subcontractors in which case
the Manager s liability during any one year of the term of this
Agreement shall not exceed the aggregate of the Fee received by the
Manager in the preceding twelve months with respect to the Vessel.
6.3 The Manager shall be under no liability whatsoever in respect of any
consequential loss (including without prejudice to the generality of
the foregoing liability due to detention of or delay of theVessel or
otherwise) arising out of or in connection with the management
and/or operation of the Vessel.
6.4 LIABILITIES BETWEEN THE PARTIES
6.4.1 The Manager shall hold harmless and indemnify Petrodrill from and
against all claims, costs expenses or liabilities arising from or
connected with the performance of this Agreement in respect of:
(i) death of or personal injury to any of the personnel of
the Manager s Group;
(ii) loss of or damage to the property of the Manager s Group;
(iii) any consequential or economic loss or damage suffered by the
Manager s Group;
howsoever arising and irrespective of negligence or other breach of
legal duty by Petrodrill s Group.
6.4.2 Petrodrill shall hold harmless and indemnify the Manager from and against
all claims, costs, expenses or liabilities arising from or connected with
the performance of this Agreement in respect of:
(i) death of or personal injury to any of personnel of
Petrodrill s Group;
(ii) loss of or damage to the property of Petrodrill s Group; and
(iii) any consequential or economic loss or damage suffered by
Petrodrill s Group;
howsoever arising and irrespective of negligence or other breach of
legal duty bY the Manager s Group.
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6.4.3 For the purposes of this Clause 6.4, Liabilities Between the
Parties, Petrodrill s Group means Petrodrill, its associated
companies, its other sub-contractors and suppliers, Petrobras, and
the officers, employees and agents of any of them.
6.4.4 For the purposes of this Clause 6.4, Liabilities Between the
parties, the Manager s Group means the Manager, its associated
companies, its sub-contractors and suppliers and the officers,
employees and agents of any of them.
6.4.5 For the express purposes of Clause 6.4, Liabilities Between the
Parties, of this Agreement only, Petrodrill contracts on its own
behalf and expressly as agent on behalf of and as trustee for the
benefit of all persons who are or may be from time to time within
Petrodrill s Group and all such persons shall to this extent be
deemed to be parties to this Agreement.
6.4.6 For the express purposes of Clause 6.4, Liabilities Between the
Parties, of this Agreement only, the Manager contracts on its own
behalf and expressly as agent on behalf of and as trustee for the
benefit of all persons who are or may be from time to time within
the Manager s Group and all such persons shall to this extent be
deemed to be parties to this Agreement.
6.5 INDEMNITY FOR OPERATIONS
Save as is provided in Article 5.4 above, Petrodrill shall
indemnify and hold harmless the Manager from and against all
actions, proceedings, claims, demands or liabilities whatsoever
that may be brought by any other person against, or incurred by the
Manager in relation to or in connection with its performance of
this Agreement with respect to each Rig unless same has arisen from
the gross negligence or wilful misconduct of the Manager, in which
event the liability of the Manager shall be limited to the
aggregate of the management fee received by the Manager in the
preceding 12 months with respect to each Rig.
7. TERMINATION
7.1 Petrodrill may terminate this Agreement at any time if:
7.1.1 Petrodrill is dissatisfied, with sound reasons, with the
performance of Manager on account of incompetence of the
Manager or unsatisfactory performance of its duties and
obligations hereunder as a result of causes reasonably within
the Manager s control, and the Manager, after having been
given, by Petrodrill, written notice in which Petrodrill
shall have specified in detail the grounds for its
dissatisfaction, shall fail to take effective steps to remedy
the matters complained of within thirty days after the giving
of the said written notice. Petrodrill shall, if its right to
terminate shall arise as aforesaid, have the right to
terminate this Agreement effective ninety (90) days after a
date specified by Petrodrill without any further compensation
to the Manager other than any money due and owing at date
this Agreement is to terminate.
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7.1.2 The Manager shall go into liquidation (otherwise than
voluntarily for the purpose of reorganization or
reconstruction), make an assignment for the benefit of
creditors, make an arrangement, composition or compromise
with its creditors or have a receiver or administrator
appointed in respect of the whole or any part of its assets
or shall otherwise be unable to pay its debts as and when
they become due.
7.1.3 The Manager ceases or threatens to cease to carry on its
business.
7.2 This Agreement shall be terminated with respect to the Vessel in
the event of the actual or constructive or compromised or arranged
total loss or requisition for title of the Vessel on the date four
months after such total loss occurs or is agreed with insurance
underwriters (as the case may be, or such other date as may be
agreed).
7.3 (a) In the event of the termination of this Agreement
pursuant to Clause 6.1 or 6.2 of this Agreement,
Petrodrill shall pay to the Manager all such amounts to which
the Manager may be entitled pursuant to the provisions of
Clause 5.1 as and when such amounts fall due for payment;
(b) In addition, Petrodrill shall pay such amounts (if any)
as the Manager (notwithstanding the Manager s best efforts to
minimize the effects to any such termination) may become
legally liable to pay under any contract of employment or by
reason of any regulation or legislation for employee
protection to personnel who may have been employed by the
Manager or its group companies on the Vessel to perform any
part of the services to be provided under this Agreement and
who shall become redundant as a result of such termination.
Petrodrill s exposure under this Clause 7.4 is limited to a
maximum of three months salary per employee in the employ of
the Manager at the time of receipt of notice of termination.
Petrodrill is only responsible for any redundancy payments or
equivalent for the period of time the Manager s personnel have
been employed on the Vessel from the date of this Agreement
and provided timely notice is issued to all affected
personnel, Manager shall make its best efforts to assist and
support Petrodrill or Petrodrill s nominee in procuring the
services of such employees or sub-contractors as Petrodrill
may wish to employ.
7.4 If the Vessel is sold, Petrodrill shall be entitled to terminate
this Agreement with respect to the Vessel by giving notice to the
Manager, such notice to expire on such date as Petrodrill may
specify.
7.5 If Petrodrill fails to pay the remuneration payable to the
Manager within thirty days of the due date, the Manager may at any
time thereafter terminate this Agreement by thirty calendar days
prior written notice to Petrodrill.
In the event that Petrodrill fails to make payment on due date to
the Manager of any moneys owing to the Manager under this
Agreement, Petrodrill agrees that the amount unpaid for the time
being shall bear interest at a rate of two percentage point units
above the three months LIBOR rate as quoted in the Financial Times
on the due date.
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7.6 Termination of this Agreement under any circumstances shall be
without prejudice to any outstanding claims hereunder which either
Petrodrill or the Manager may have against the other.
7.7 Upon any termination of this Agreement with respect to the Vessel,
the Manager shall use its best endeavours to assist in a smooth
transfer of the Vessel to any new manager and/or Petrodrill.
8. ASSIGNMENT AND SUBCONTRACTING
8.1 The rights and obligations of a party hereunder may not be
assigned without the prior written consent of the other party (such
consent not to be unreasonably withheld).
8.2 Either party may however assign such rights to any subsidiary,
affiliate or other group company designated by it PROVIDED THAT
such Party effecting the assignment shall remain responsible for
the proper performance of this Agreement.
8.3 The Manager may, wherever necessary, engage subcontractors on an
arms length basis for the performance of specific assignments,
without thereby in any way being relieved of its responsibility for
the performance, administration and direction of these services.
The indemnity as contained in 6 above shall, as between Petrodrill
and the Manager, apply in respect of actions or omissions of
aforesaid sub-contractors and may be passed on to the
sub-contractor in the discretion of the Manager.
9. FORCE MAJEURE
9.1 Each Party to this Agreement shall be relieved from complying with
any term of this Agreement to the extent that, and only so long as,
such compliance is prevented or delayed by force majeure, which is
defined as civil or labour disturbances, riots, strikes (other than
a strike limited to the employees of either Party), wars (declared
or undeclared), military actions, insurrections, rebellion, acts of
any governmental or military agency under actual or assumed
authority, action of elements, floods, storm or other acts of God
or any cause beyond the control of either Party, whether or not
similar to the matters herein specifically enumerated and provided
that the event shall not have been caused by the action or
negligence of either of the Parties, and that the Party and/or the
Parties affected shall do its, or their, utmost to remedy the above
circumstances.
9.2 Any Party claiming force majeure shall promptly notify the other
Party, with the evidence of the occurrence of such event.
9.3 If either Party hereto is prevented from or delayed in performing
all or any of its obligations thereunder as a direct result of
force majeure, such non
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performance shall not be considered as a breach of this Agreement
and that Party shall be relieved from such obligation which shall
suspend payment by the other Party for the duration of such force
majeure.
9.4 Notwithstanding the foregoing to the extent that the event
claimed as force majeure impacts upon or would impact upon the
performance of any Charter Agreement, such event must be
recognised as a force majeure event in terms of such Charter
Agreement before it can qualify as a force majeure event
hereunder.
10. LAW AND ARBITRATION
10.1 This Agreement shall be governed by and construed in all respects
in accordance with the laws of England.
10.2 Any dispute or difference arising in connection with this Agreement
shall if possible be settled by mutual amicable agreement.
10.3 If any dispute should arise in connection with the interpretation
and fulfilment of this Agreement the same shall be decided by
arbitration in the city of London and shall be referred to a single
arbitrator (an Arbitrator ) to be appointed by the Parties hereto.
If the Parties cannot agree upon the appointment of the single
Arbitrator the dispute shall be settled by three Arbitrators, each
Party appointing one Arbitrator, the third being appointed by the
Chairman for the time being of the London Maritime Arbitrators
Association.
10.4 If either of the appointed Arbitrators refuses or is incapable of
acting, the Party who appointed him shall appoint a new Arbitrator
in his place.
10.5 If one of the Parties fails to appoint an Arbitrator, either
originally or by way of substitution, for two weeks after the other
Party having appointed his Arbitrator has sent the Party making
default notice by mail or facsimile to make the appointment, the
Party appointing the third Arbitrator shall, after application from
the Party having appointed his Arbitrator, also appoint an
Arbitrator on behalf of the Party making default.
10.6 The award rendered by the Arbitration Court shall be final and
binding upon the Parties and may if necessary be enforced by the
Court or other competent authority in the same manner as a judgment
in the Court of Justice.
10.7 Performance under this Agreement shall, if reasonably possible,
continue during the Arbitration proceedings.
11. NOTICES
11.1 All communications and notices in relation to this Agreement and
obligations to be performed hereunder shall be in writing and
delivered by fax or by hand and if given to Petrodrill addressed
to:
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PETRODRILL SEVEN LIMITED
X/X XXXXX, XXXXXXX & XXXXXXX
XXXX XXXXX BUILDING
XXXXXXX S CAY
ROAD TOWN, TORTOLA
BRITISH VIRGIN ISLANDS
Fax: 0 000 000 0000
with a copy to:
PRIDE INTERNATIONAL, INC. MARITIMA
ATTENTION: PRESIDENT ATTN: XXXXXX XXXXXXXXXX
5847 SAN XXXXXX, SUITE 0000 XXXXXXX XXXXX XXXXXXX
XXXXXXX, XXXXX 00000 00 XX 0000
X.X.X. XXXXXX XX, XXXXXX
Fax: 0 000 000 0000 Fax: 00 00 000 0000
and if given to the Manager addressed to:
FORMARITIMA LTD.
x/x Xxxxx, Xxxxxxx & Xxxxxxx
Xxxx Xxxxx Xxxxxxxx
Xxxxxxx s Cay
Road Town, Tortola
British Virgin Islands
Fax: 0 000 000 0000
11.2 Either party may give reasonable notice to the other parties of any
change of address at any time.
11.3 A notice by fax shall be deemed to have been received at the time
of dispatch provided that if the day of dispatch is not a Working
Day in the country of the addressee or if the time of dispatch is
after close of business in the country of the addressee, it shall
be deemed to have been received at the opening of business on the
next such Working Day.
12. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior negotiations, representations or
agreements relating directly to the subject matter of this
Agreement whether written or oral. No changes, alterations or
modifications to this Agreement shall be affected unless in writing
and signed by the Parties hereto.
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
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SIGNED by )/s/ XXXXXX XXXXXXXXXX
for and on behalf of )Xxxxxx Xxxxxxxxxx
PETRODRILL SEVEN LIMITED )/s/ XXXXXXX XXXXXXXX
in the presence of: )Xxxxxxx Xxxxxxxx
SIGNED by )/s/ XXXX X'XXXXX
for and on behalf of )
FORMARITIMA LTD. )/s/ XXXXX X. XXXXXXXX
in the presence of: )
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