EXHIBIT 10.25(G)
EXHIBIT 6 TO SECURITY AGREEMENT DOCUMENT 18
AMENDMENT NO. 1 TO
SEMI-SUBMERSIBLE DRILLING VESSEL CONSTRUCTION CONTRACT
BETWEEN
TDI-HALTER, LIMITED PARTNERSHIP
AND
PETRODRILL FOUR LIMITED
DATED APRIL 9, 1999
This Amendment No. 1 is entered into this 9th day of April, 1999,
between TDI-HALTER, LIMITED PARTNERSHIP ("Builder"), and PETRODRILL FOUR LIMITED
("Purchaser") to that Semi-Submersible Drilling Vessel Construction Contract
dated April 9, 1998 (Hull No. 1828) (the "Original Contract").
WHEREAS, the Original Contract was novated by PETRODRILL
OFFSHORE, INC. (formerly Petrodrill Construction Inc.) to Purchaser by
Novation Agreement dated as of December 9, 1998;
WHEREAS, on the Closing Date the Purchaser will issue its United
States Government Guaranteed Export Ship Financing Obligations, AMETHYST 4
Series (the "Obligations"), in order to finance the construction of the Vessel
which is the subject of the Original Contract;
WHEREAS, the United States of America, represented by the Secretary
of Transportation, acting by and through the Maritime Administrator, is
guaranteeing the payment of the outstanding principal of and interest on the
Obligations pursuant to Title XX xx xxx Xxxxxxxx Xxxxxx Xxx, 0000, as amended;
WHEREAS, the proceeds of the Obligations will be used for payment to
the Builder in accordance with the terms of this Contract; and
WHEREAS, the Purchaser and the Builder in order to induce the
Secretary to guarantee the Obligations, wish to amend the Original Contract as
detailed herein;
NOW THEREFORE, in consideration of these premises, the mutual
benefit set forth herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Purchaser and Builder
agree as follows:
1. INSPECTION BY THE SECRETARY'S REPRESENTATIVES. The Builder shall
permit inspection by, supply information to, and cooperate with representatives
of the Secretary at its yard where the assembly of the Vessel is now taking
place and at such other yards of the Builder, its affiliates and subcontractors
where parts of the Construction Contract or subcontracts may be performed.
Builder acknowledges that such cooperation may include, but is not limited, to
providing the Secretary 1) reasonable access to the Vessel and areas of the
Builder where work related to the Vessel is being performed by the Builder, its
contractors and subcontractors, at all reasonable times during normal working
hours to inspect performance of the Work and to observe trials and other tests,
2) copies of detailed production schedules for the Vessel along with changes to
such schedules as they occur, 3) reasonable access to contract plans and
specifications for the Vessel, 4) reasonable access to Builder's production
manager or supervisor, 5) information on the origination and source of
materials, and 6) reasonable access to progress payment and construction
milestone information for the purpose of verifying (i) completion in accordance
with the representations made to the Secretary, including, but not limited to,
representations concerning the Vessel's Actual Cost, as defined in the Security
Agreement, and (ii) compliance of the construction with the plans and
specifications and the other terms of the Construction Contract. In conjunction
with any such inspections by the Secretary, the Builder will furnish, on a
temporary basis, reasonable space at its yard for the Secretary representatives
and communication, copying and other facilities as appropriate. The Secretary's
access to the Vessel shall be at the Secretary's and Purchaser's sole risk. The
Builder assumes no responsibility save for its own gross negligence or
intentional acts, and Purchaser assumes full liability for any injury that the
Secretary or its representatives, agent or contractor may sustain on the Vessel
during its construction and the Purchaser hereby fully releases and discharges
the Builder from any liability with respect thereto.
2. CHANGES IN CONSTRUCTION CONTRACT. Notwithstanding anything to the
contrary contained in the Construction Contract, the Construction Contract shall
not be amended, modified or terminated after April 9, 1999, except in writing
duly signed by the Builder and Purchaser with the prior written consent of the
Secretary, provided that the Secretary's prior written consent shall not be
necessary, but written notice to the Secretary shall be given, for (a) any
mandatory change to the Construction Contract as a result of any requirements of
any governmental agency, or (b) any non-mandatory changes that Builder and
Purchaser desire to make which do not exceed, with respect to any item of the
Vessel's construction, one (1%) percent of the Vessel's Contract Price and which
do not, in the aggregate, cause the Vessel's Contract Price to be increased more
than five (5%) percent or the delivery and completion date of the Vessel to be
extended more than ten (10) days. Notwithstanding the foregoing, no change shall
be made in the general dimensions and/or characteristics of the Vessel which
would diminish the capacity of the Vessel to perform as originally intended by
the Construction Contract, without the prior written consent of the Secretary.
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3. INSURANCE.
a. Until each Vessel has been completed, physically delivered at the
place of delivery and accepted by Purchaser, Purchaser shall cause such Vessel
and all materials, outfitting, equipment and appliances to be installed in the
Vessel including all materials, outfitting, equipment and appliances provided by
the Builder or Purchaser and delivered to Builder for the construction of the
Vessel or in the construction thereof, to be insured under a full form Builder's
Risk Policy under the latest American Institute Builder's Risk Form in force and
effect at the time that the construction of the Vessel is commenced when the
Vessel's keel is laid, all at Purchaser's expense. Such policy(ies) shall name
the Builder, the Purchaser and the United States of America as assureds. The
policy(ies) shall provide that there shall be no recourse against the Builder
and the United States of America for payment of any premiums; provided, however,
the United States of America and Builder shall be subject to cancellation upon
30 days prior written notice as set forth below. The policy(ies) shall also
provide a 30 day prior written notice of cancellation or material change in the
policy to the Builder and the United States of America (U.S. Department of
Transportation, Maritime Administration 000 Xxxxxxx Xx. X.X., Xxxxxxxxxx X.X.
00000 Attention, Chief, Division of Marine Insurance). The amounts, terms and
conditions, deductibles and underwriters of the Builder's Risk Policy(ies) shall
at all times be satisfactory to the Builder and the Secretary.
b. The Builder's Risk policy(ies) shall provide that all losses in
excess of $500,000 shall be paid to the Secretary for distribution by him to
himself, the Builder and the Purchaser in accordance with the Security Agreement
between the Purchaser and the Xxxxxxxxx, XX-00000, dated April 9, 1999,
involving the Vessel and the Construction Contract.
c. Builder shall also purchase and maintain, at its expense, during
the life of the Construction Contract, Worker's Compensation Insurance at
statutory amounts, with Longshoreman & Harbor Workers Compensation Act coverage
endorsements and Employer's Liability Insurance in the amount of at least Two
Million Dollars ($2,000,000).
d. A satisfactory confirmation of insurance outlining the pertinent
terms and conditions of the Builder's Risk Policy(ies) referred to above shall
be provided to the Builder and the Secretary. The Purchaser shall be furnished a
certificate of insurance for all other policies required hereunder. The original
of the said Builder's Risk Policy shall be available in the Purchaser's office.
All of the policies of insurance and certificates referred to herein shall
contain a provision requiring the insurer at risk to give Purchaser, Builder and
the Secretary thirty (30) days' notice, in writing prior to cancellation of any
such insurance.
4. PROGRESS PAYMENTS. The Construction Contract shall contain
provisions for making periodic payments for the work performed based performance
milestones related to the construction of the Vessel, after such milestones are
certified by the Purchaser and the Builder, or as otherwise provided in Clauses
4.1 and 4.2 of the Construction Contract.
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5. CERTIFICATE OF NO LIENS. At the time of Closing, now scheduled for
April 9, 1999, and at the time of delivery of the Vessel and from time to time
as payments will be requested from amounts held in escrow by the Secretary or
from drawdowns from the Credit Facility established by the Credit Agreement, the
Builder agrees, on behalf of itself, or any party claiming through the Builder,
to execute certificates of no liens, in form and substance satisfactory to the
Secretary to the extent that the Builder has been paid for such items but with
exception for any liens, claims, security interests and encumbrances which may
have been placed thereon by Purchaser in favor of a third party other than the
Builder or its employees, and liens for non-delinquent payments arising in the
ordinary course of Builder's business which liens Builder hereby warrants will
be discharged by Builder when due, with respect to the applicable Vessel, hull
or component parts for which payment is requested and with respect to all work
that has previously been accomplished.
6. SUBORDINATION. The Builder agrees to, and does hereby fully
subordinate to the rights of the Secretary all liens and security rights and
remedies to enforce such rights which the Builder has or may have with respect
to (i) all work, materials and components, incorporated in, or to be
incorporated in the hull and the Vessel ("the Equipment") to which title has
passed to Purchaser, and (ii) the Equipment that has not been paid for by the
Purchaser only to the extent that such unpaid for Equipment has actually been
incorporated into other Equipment, part of which has actually been paid for by
Purchaser. Prior to the Closing Date, the Builder shall provide to the Secretary
either (1) the release or subordination of any claim to a security interest or
other encumbrance relating to the Equipment, and the remedies to enforce such
rights, held or claimed by any of the Builder's lenders (which release or
subordination shall be in form and substance satisfactory to the Secretary), or
(2) an officer's certificate that the Builder has no lenders with any claim to a
security interest or other encumbrance relating to the Equipment.
7. EQUIPMENT PROCEEDS.
a. In the event that prior to delivery of the Vessel, following the
occurrence or during the continuance of any default by Purchaser under any
agreements with the Secretary, including but not limited to the Security
Agreement (the "Secretary's Documents") or by the Builder under the Construction
Contract, the Secretary shall have the sole right to sell the Equipment,
provided that the Secretary complies with Section 7(c) of this Amendment. Any
proceeds the Secretary receives from the sale of the Equipment, after deducting
any fees or costs it incurs in connection with the enforcement of its rights
under the Secretary's Documents, shall be distributed promptly between the
Builder and the Secretary on a Pro Rata Basis (as defined below) based on the
"Amount Due" (as defined below) to the Builder and the Secretary.
b. For the purposes of this section, the "Amount Due" to the Builder
shall include all payments then due to the Builder for materials purchased or
work performed, provided, however, if the Builder is in material default under
the Construction Contract as amended, such "Amount Due" to the Builder shall be
zero. For the purposes of this section, the "Amounts Due" to the Secretary shall
include all amounts secured by the Secretary's Documents related to the
Equipment. For the purposes of this section, the share to be distributed to a
party under the Pro Rata Basis shall be the net amount realized from the sale of
the Equipment times a fraction equal to the Amount Due that party divided by the
sum of the Amount Due both parties.
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c. In the event of a Purchaser default and an enforcement of the
Secretary's Documents, the Secretary shall use reasonable efforts to expedite
the enforcement and foreclosure process for the enforcement of the Secretary's
Documents.
8. CONSENT OF BUILDER. The Builder will separately enter into a Consent
of Shipyard to the assignment by Purchaser to the Secretary, for purposes of
security, of all of Purchaser's right, title and interest in the Construction
Contract, and the proceeds thereof, if any such exist, or shall exist in the
future. Such proceeds include any amounts that may be due to be refunded to
Purchaser by the Builder or by any subcontractor or supplier to the Builder
arising out of the Construction Contract, as amended, and any subcontracts or
supply contracts into which the Builder has entered into or may enter into as a
part of construction process. In the event of a default of the Builder under the
Construction Contract, the Secretary may enforce Purchaser's rights hereunder.
In the event of any discrepancy between a position of the Secretary and a
position of the Purchaser, the Secretary's decision shall be binding on the
Purchaser.
9. DISTINCT OBLIGATIONS. Builder hereby agrees and acknowledges that
the obligations of Purchaser under the Construction Contract with regard to the
Vessel are separate, distinct and independent of any other obligation or
agreement of Purchaser and that a default by Purchaser under such other
obligation or agreement shall not in any way affect the obligations of Builder
under the Construction Contract with regard to the Vessel or permit Builder to
exercise any right of set-off or other remedy (all of which Builder expressly
waives and agrees not to assert) which could materially adversely affect the
Construction Contract, the Vessel or the construction thereof.
10. RIGHT TO CURE. Notwithstanding anything to the contrary contained in
the Construction Contract, Builder agrees to give the Secretary written notice,
concurrent with any notice given to the Purchaser under the Construction
Contract of any default by Purchaser and hereby grants the Secretary thirty (30)
days from the receipt of any such notice to cure any default under the
Construction Contract, and Builder agrees to take no action to enforce its
rights pursuant to the Construction Contract until the elapse of said thirty
(30) days.
11. SHIPYARD PLANS. Upon the delivery of the Vessel, or earlier if
feasible, upon the Secretary's request, Builder and Purchaser agree (at
Purchaser's expense) to submit to the Secretary one set of Builder plans, in
form and substance satisfactory to the Secretary, for the Vessel as built. The
Secretary shall not release the Plans to any third party unless required to do
so by court order; provided that the Secretary shall give notice to the
Purchaser and Builder of any request for such an order. Purchaser shall use its
best efforts to include a provision setting forth the terms of this Paragraph 11
in the Security Agreement between the Secretary and the Purchaser.
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12. NOTICES. Any, notice or other communication required or permitted to
the Secretary under shall be sent by (i) certified mail, postage prepaid, (ii)
by nationally recognized overnight courier service, (iii) or by facsimile
transmission, confirmed by certified mail postage prepaid or by nationally
recognized overnight courier service, addressed as follows:
United States Maritime Administration
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Office of Ship Finance
13. FURTHER AMENDMENTS TO CONTRACT. The Contract is further amended as
follows:
(a) REGISTRATION. The first sentence of Clause 2.8 is revised to
read as follows:
The Vessel shall upon delivery fly the flag of the
Commonwealth of The Bahamas and be registered in the Register of
Shipping in the Commonwealth of The Bahamas, all in accordance with
Purchaser's Modification Request number 1828-0001. The price for
this change order shall be determined in accordance with Clause 7 of
the Contract.
(b) PAYMENT SCHEDULE. The provisions relating to the Third through
Tenth Installments in Clause 4.1 are revised to read as follows:
THIRD INSTALLMENT:
Ten percent (10%) of the Contract Price, being Eight Million Four
Hundred Thousand U.S. Dollars (US$ 8,400,000), shall be paid within
three Banking Days from receipt by the Purchaser of a telefax notice
from the Builder attaching a Stage Certificate in the form of the
draft attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that Start of Fabrication has taken place,
which is defined as the welding together of the first two plates on
the basis that it is the start of a continuous production program.
FOURTH INSTALLMENT:
Fifteen percent (15%) of the Contract Price, being Twelve Million
Six Hundred Thousand U.S. Dollars (US $12,600,000), shall be paid
within three Banking Days from receipt by the Purchaser of a telefax
notice from the Builder attaching a Stage Certificate in the form of
the draft attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
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Xxxxxxxx), certifying that the keel laying for the pontoons has
taken place, which is defined as 200 tons of steel having been
erected which can either be in one or two pontoons.
FIFTH INSTALLMENT:
Ten percent (10%) of the Contract Price, being Eight Million Four
Hundred Thousand U.S. Dollars (US $8,400,000), within three Banking
Days from receipt by the Purchaser of a telefax notice from the
Builder attaching a Stage Certificate in the form of the draft
attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that 60% of the total 2400 tons for the
pontoons (or 1440 tons) of steel have been erected.
SIXTH INSTALLMENT:
Five percent (5%) of the Contract Price, being Four Million Two
Hundred Thousand U.S. Dollars (US $4,200,000), within three Banking
Days from receipt by the Purchaser of a telefax notice from the
Builder attaching a Stage Certificate in the form of the draft
attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that the Pontoons of the Vessel have
successfully been launched, which is defined as the pontoons being
afloat without any global structural damage having been incurred.
For the sake of clarification, localized structural damage shall not
constitute a reason for non-payment of the milestone.
SEVENTH INSTALLMENT:
Five percent (5%) of the Contract Price, being Four Million Two
Hundred Thousand U.S. Dollars (US $4,200,000), within three Banking
Days from receipt by the Purchaser of a telefax notice from the
Builder attaching a Stage Certificate in the form of the draft
attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that the main engines have been started, which
is defined as all engines having been started and run for a period
of at least 4 hours.
EIGHTH INSTALLMENT:
Ten percent (10%) of the Contract Price, being Eight Million Four
Hundred Thousand U.S. Dollars (US $8,400,000), within three Banking
Days from receipt by the Purchaser of a telefax notice from the
Builder attaching a Stage Certificate in the form of the draft
attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that
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the substructure and drillfloor has been installed on the deckbox,
which is defined as the drillfloor having been fitted upon its
supports, tacked in place and being ready for permanent welding.
NINTH INSTALLMENT:
Ten percent (10%) of the Contract Price, being Eight Million Four
Hundred Thousand U.S. Dollars (US $8,400,000), within three Banking
Days from receipt by the Purchaser of a telefax notice from the
Builder attaching a Stage Certificate in the form of the draft
attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that the deckbox has been launched and
successfully mated with the Pontoons and Columns, which is defined
as the deckbox having been fitted up, tacked in place and the rig
safely returned to the quayside with all barges removed and being
ready to start permanent welding of the deck box connections.
TENTH INSTALLMENT:
Seven and a half percent (7.5%) of the Contract Price, being Six
Million Three Hundred Thousand U.S. Dollars (US $6,300,000), within
three Banking Days from receipt by the Purchaser of a telefax notice
from the Builder attaching a Stage Certificate in the form of the
draft attached as Appendix V, countersigned by an Authorized
Representative (or, in default thereof, the Classification
Surveyor), certifying that Seatrials have commenced, which is
defined as the Vessel having left the quayside to commence trials at
sea.
ELEVENTH INSTALLMENT:
Seven and a half percent (7.5%) of the Contract Price, being Six
Million Three Hundred Thousand U.S. Dollars (US $6,300,000),
together with any increase or any decrease of the Contract Price
arising from the provisions of Clauses 4.8, 6, and 16 below, shall
be paid upon delivery.
(c) BONUS SCHEDULE. A new Clause 4.8 is added to read as
follows:
If the Vessel is delivered prior to the Contractual Delivery
Date (as amended by this Amendment No. 1 and as extended by
Permissible Delays), the Purchaser shall pay to Builder Sixty
Thousand U.S. Dollars ($60,000) for each day that the Vessel is
delivered before the Contractual Delivery Date (as amended by this
Amendment No. 1 and as extended by Permissible Delays).
(d) FOURTH INSTALLMENT. Not withstanding any other provision of the
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Contract, the parties agree that the Fourth Installment shall be due April
11, 1999 and that the Builder will not exercise its right to rescind the
Contract under Clause 18.3, prior to April 11, 1999.
(e) LIGHTSHIP WEIGHT. With respect to Clause 6, the Purchaser will
at its own cost and expense engineer the detailed design of blisters as a
contingency measure. The size of each blister will be as large as possible
with the existing constraints of the Vessel such that it does not
significantly effect the Vessel's motion characteristics or operational
performance. In the event that such blisters are required to be installed,
Purchaser will not exercise its rights to rescind the Contract by reason
of delay for the fabrication, installation or testing of the blisters
under Clause 16.3 for an additional period of ninety (90) days, beyond the
date that Builder is in default under Clause 16.3 of the Contract provided
that Builder has otherwise completed its scope of work for the Vessel
except for the fabrication, installation or testing of the blisters, and
except as a result of any scope of work that cannot be completed as a
result of the need to install the blisters, such as sea trials.
(f) DELIVERY. The first sentence of Clause 14.1 of the contract is
revised to read as follows:
The Vessel shall be delivered by the Builder to the Purchaser
at the Shipyard (or other place as may be agreed with unrestricted
access to the open sea) on 9th June, 2000, except that, in the event
of Permissible Delay as defined in Clause 15.4 hereof, the
aforementioned date shall be postponed accordingly.
(g) LIQUIDATED DAMAGES. The first two sentences of Clause 16.2 are
revised to read as follows:
If the delivery of the Vessel is delayed, then, in such event,
beginning at twelve o'clock midnight on the Contractual Delivery
Date, the Builder shall pay to the Purchaser as agreed liquidated
damages and not by way of penalty, the following amounts:
a. 1- 30 days of delay USD $20,000 per day
b. 31-to actual delivery USD $40,000 per day
It being understood that in no event shall the Builder's obligations
for such liquidated damages exceed USD $2,000,000.
(h) ENGINEERING. The Purchaser shall use its best efforts to assist
the Builder in the completion of Builder's engineering, and to advise
Builder of preferred solutions, all in order to expedite the engineering
process in as efficient a manner as possible.
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Builder and Purchaser agree to address these issues in a separate Teaming
Agreement.
14. DEFINITIONS. As used in this Amendment No. 1:
"Secretary" means the Secretary of Transportation or any
official or official body from time to time duly authorized to
perform the duties and functions of the Secretary of Transportation
under Title XI of the Act (including the Maritime Administration,
the Acting Maritime Administrator, and to the extent so authorized,
the Deputy Maritime Administrator and other officials of the
Maritime Administration).
"Security Agreement" means the security agreement, Contract No.
MA-13505, with respect to the Vessel, executed by the Purchaser and
the Secretary.
Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Security Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 as of the date set forth above.
WITNESS: TDI-HALTER, LIMITED PARTNERSHIP
Builder
BY: MARITIME HOLDINGS, INC.,
ITS GENERAL PARTNER
/s/ XXXXXXXXX X. XXXXXXX By: /s/ XXXXX XXXXXX
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Vice President
WITNESS: PETRODRILL FOUR LIMITED
Purchaser
/s/ XXXXXX X. XXXXXXX By: /s/ XXXX X. XXXXXX
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Secretary Treasurer
AGREED AND APPROVED:
Secretary of Transportation
Maritime Administrator
By: /s/ XXXX X. XXXXXXX
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Secretary
Maritime Administration
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