EXHIBIT 10.17
Dated 30 January 2003
GLOBALSANTAFE DRILLING COMPANY (NORTH SEA) LIMITED
as Lessor
- and -
SOGELEASE B.V.
as Lessee
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HEAD-LEASE AGREEMENT
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in respect of the xxxx-up drilling unit known as
"BRITANNIA"
XXXXXX, XXXXXX & XXXXXXXX
LONDON
INDEX
ITEM PAGE
1 DEFINITIONS 1
2 LEASING OF THE RIG 9
3 COMMENCEMENT OF LEASE PERIOD 10
4 PREMIUM 10
5 RENTALS AND PAYMENTS 10
6 SUB-LEASE 11
7 REPRESENTATIONS AND WARRANTIES 12
8 PROTECTION OF LESSEE'S INTERESTS 14
9 LIMITATION ON LIABILITY 15
10 TERMINATION 16
11 EVENT OF LOSS 16
12 RETURN OF THE RIG 16
13 SALE OF THE RIG 16
14 NET SALE PROCEEDS 17
15 RIGHTS AND WAIVER 18
16 ASSIGNMENT 18
17 NOTICES 18
18 LAW AND JURISDICTION 19
19 GENERAL 20
SCHEDULE 1 THE RIG 21
SCHEDULE 2 CERTIFICATE OF ACCEPTANCE 22
SCHEDULE 3 LESSOR'S CONDITIONS PRECEDENT 23
SCHEDULE 4 LESSEE'S CONDITIONS PRECEDENT 24
EXECUTION PAGE 26
THIS HEAD-LEASE AGREEMENT is dated 30 January 2003
BETWEEN:
(1) GLOBALSANTAFE DRILLING COMPANY (NORTH SEA) LIMITED a company incorporated
in England and Wales (with company number 00782373), having its registered
office at Lothing Depot, Xxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxxxxxxxx XX00 0XX
(the "LESSOR" which expression includes its successors, permitted assigns
and permitted transferees); and
(2) SOGELEASE B.V., a company incorporated in The Netherlands having its main
office at Xxxxxxxxx Xxxxx, Xxxxxxxxxxx 0, 0000 XX, Xxxxxxxxx, Xxx
Xxxxxxxxxxx (the "LESSEE" which expression includes its successors,
permitted assignees and permitted transferees).
WHEREAS:
In consideration of the Lessee agreeing to pay to the Lessor the Premium and the
Rental, the Lessor has agreed to let and the Lessee has agreed to take on lease
the Rig upon the terms and conditions contained in this Lease.
IT IS HEREBY AGREED as follows:
1 DEFINITIONS
1.1 In this Lease (including the recital) the following terms shall have the
meanings given below:
"AFFILIATE" means, in relation to a party, any other entity in which it
possesses directly or indirectly the power to direct or cause the
direction of the management and policies of the other person, whether
through ownership of voting shares, by contract or otherwise, or which is
under direct or indirect common control with, that party from time to
time;
"BANK" means Societe Generale, London Branch;
"BUSINESS DAY" means any day (other than a Saturday or a Sunday) on which
banks generally are open for business in London, New York and the
Netherlands;
"CERTIFICATE OF ACCEPTANCE" means a certificate in the form attached as
Schedule 2 hereto executed or to be executed by the Lessee and the Lessor;
"CHARTER" means the bareboat charter dated 1 November 2002 and entered
into between the Sub-Lessee and the Charterer in respect of the Rig as
that bareboat charter may be amended from time to time or, as the case may
be, any other bareboat charter which the Sub-Lessee or the Charterer may
enter into from time to time in substitution therefor in accordance with
the terms of the Sub-Lease;
"CHARTERER" means GlobalSantaFe Drilling U.K. Limited, a company
incorporated in Scotland with company number SC131375 having its
registered office at Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX00 0XX or,
as the case may be, any other person to whom the Sub-Lessee charters the
Rig pursuant to a Charter;
"COMPULSORY ACQUISITION" means requisition for title or other compulsory
acquisition, requisition, appropriation, expropriation, deprivation,
forfeiture or confiscation for any reason of the Rig by any Governmental
Entity or other competent authority, whether de jure or de facto, but
shall exclude requisition for use or hire not involving requisition for
title;
"DEFAULT RATE" means 2% per annum over LIBOR from time to time;
"DOLLARS" and "US$" means the lawful currency for the time being of the
United States of America;
"ENCUMBRANCE" means any mortgage, charge, assignment by way of security,
pledge, hypothecation, lien, right of set-off, retention of title
provision, trust or flawed asset arrangement (for the purpose of, or which
has the effect of, granting security) or any other security interest of
any kind whatsoever, or any agreement, whether conditional or otherwise,
to create, or which has the effect of creating, any of the same, or any
agreement to sell or otherwise dispose of any asset;
"ENVIRONMENT" means:
(a) any land including, without limitation, surface land and sub-surface
strata, sea bed or river bed under any water (as defined below) and
any natural or man-made structures;
(b) water including, without limitation, coastal and inland waters,
surface waters, ground waters and water in drains and sewers; and
(c) air, including air within buildings and other natural and man-made
structures above and below ground;
"ENVIRONMENT CLAIM" means any written or oral notice from any person
alleging any breach, contravention or violation of any Environmental Law
or the existence of any liability or potential liability arising from any
such breach, contravention or violation including, without limitation,
liability to conduct, pay for or for damages in respect of, any
investigation or audit, clean-up, redemption, administrative costs or
charge or expense, damage to the Environment or any natural resource,
property loss or damage, personal injury or any penalty, attaching or
relating to the presence, emission, release or leak of any Hazardous
Material in or to the Environment;
"ENVIRONMENTAL LAW" means any or all applicable law (whether civil,
criminal or administrative), common law, statute, statutory instrument,
treaty, convention, regulation, directive, by-law, demand, decree,
injunction, resolution, order or judgment (in each case having the force
of law) and codes of practice or conduct circulars and guidance notes
having legal or judicial import or effect, in each case of any
Governmental Entity (whether now existing or hereafter promulgated) in any
applicable jurisdiction relating to or concerning:
(a) pollution or contamination of the Environment;
(b) harm, whether actual or potential, to mankind and human sense, other
living organisms and ecological systems;
(c) the generation, manufacture, processing, distribution, use
(including abuse), treatment, storage, disposal, transport or
handling of Hazardous Materials; and
(d) the emission, leak, release, spill or discharge into the Environment
of noise, vibration, dust, fumes, gas, odours, smoke, steam,
effluvia, heat, light, radiation (of any kind), infection,
electricity or any Hazardous Material and any matter or
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thing capable of constituting a nuisance or any actionable tort or
breach of statutory duty of any kind in respect of such matters;
"ENVIRONMENTAL PERMITS" means, in relation to any person, all or any
permits, licences, consents, approvals, ruling, variance, exemption,
certificates, registrations and other authorisations and the filing of all
notifications, reports and assessments required under any Environmental
Law in connection with the conduct of such person's business and the
ownership, use, exploitation or occupation of all of its property and
assets;
"GOVERNMENTAL ENTITY" means and includes (whether having a distinct legal
personality or not) (i) any national government, political sub-division
thereof or local jurisdiction therein, (ii) any board, commission,
department, division, organ, instrumentality, court or agency of any
entity referred to in (i) above, however constituted and (iii) any
association, organisation or institution (international or otherwise) of
which any entity mentioned in (i) or (ii) above is a member or to whose
jurisdiction any of the foregoing is subject or in whose activities any of
the foregoing is a participant;
"GSF STANDARD" means the standards of operation, management and
maintenance which the members of the Guarantor's Group adhere to from time
to time in respect of drilling units comparable to the Rig which standards
are at all times comparable to the standards of a reasonably prudent
operator of oil rigs of the same type, age and condition as the Rig;
"GUARANTEE" means a guarantee and indemnity dated on or about the date
hereof provided by the Guarantor in favour of the Lessee in respect of the
obligations of the Lessor under this Lease and the other Lease Documents;
"GUARANTOR" means GlobalSantaFe Corporation, a company incorporated under
the laws of the Cayman Islands with its registered office c/o M&C
Corporate Services Limited, XX Xxx 000 XX, Xxxxxx House, South Church
Street, Xxxxxx Town, Grand Cayman, Cayman Islands and having an office at
00000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx
00000-0000, XXX;
"GUARANTOR'S GROUP" means the Guarantor and any of its Affiliates;
"HAZARDOUS MATERIAL" means any element or substance, whether natural or
artificial and whether consisting of gas, liquid, solid or vapour, whether
on its own or in any combination with any other element or substance,
which is listed, identified, defined or determined by any applicable law
to be, or to have been, or to be capable of either being, or becoming,
harmful to mankind or any living organism or damaging the Environment;
"INITIAL RENTAL" means the first instalment of rental payable under the
Sub-Lease;
"LEASE" means this Head-Lease Agreement and the words "herein",
"hereunder" and similar words and expressions shall be construed
accordingly;
"LEASE DOCUMENTS" means this Lease, the Certificate of Acceptance, the
Sub-Lease, the Certificate of Acceptance (as defined in the Sub-Lease),
the Support Letter, the Guarantee, the Lessor Payment Letter, the Lessee
Payment Letter and all other documents agreed in writing by the Lessor and
the Lessee to be Lease Documents.
"LEASE PERIOD" means the period of 5 years commencing on the Start Date
(or such shorter period as may be determined in accordance with the
provisions of this Lease);
"LEASING TERMINATION DATE" means the date on which the sub-leasing of the
Rig terminates in accordance with clause 12.2(b) of the Sub-Lease;
"LESSEE GROUP" means the Lessee Parent and any of its Affiliates from time
to time;
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"LESSEE PARENT" means Societe Generale, a French banking institution;
"LESSEE PAYMENT LETTER" means a letter from the Lessee to Atlas Lease
Management Limited pursuant to which the Lessee agrees to pay a sum of
Dollars to Atlas Lease Management in respect of certain fees and expenses;
"LESSEE'S ENCUMBRANCES" means any Encumbrance on the Rig to the extent
that it is solely attributable to or arises as a result of:
(a) claims against or affecting the Lessee (including any claim in
relation to any other rig or vessel of which the Lessee is the owner
or the lessee or demise charterer) and leased or chartered by it
otherwise than to the Lessor or any other member of the Guarantor's
Group) to the extent that it is not related to, or does not arise
directly or indirectly as a result of the transactions contemplated
by this Lease or any of the other Lease Documents but excluding any
such claim to the extent that it is solely attributable or arises as
a result of any actions, omission, failure or breach, negligent or
otherwise, of the Lessor or any other member of the Guarantor's
Group; or
(b) acts or omissions of the Lessee to the extent not contemplated,
required or permitted directly or indirectly as a result of the
transactions contemplated by this Lease or any of the other Lease
Documents but excluding any such act or omission to the extent that
it is solely attributable to or arises as a result of any action,
omission, failure or breach, negligent or otherwise of the Lessor or
any other member of the Guarantor's Group; or
(c) the non-payment of Taxes imposed upon the Lessee, other than those
Taxes the subject of any indemnity in favour of the Lessee under the
Lease Documents or where the liability to pay, or the amount of such
Taxes is being disputed by the Lessor in good faith or those which
are solely attributable or arise as a result of any actions,
omission, failure or breach, negligent or otherwise of the Lessor or
any other member of the Guarantor's Group; or
(d) any act or omission of the Lessee constituting a breach by the
Lessee of its obligations under this Lease or the other Lease
Documents to the extent that it is not solely attributable to or
does not relate or arise directly or indirectly as a result of any
action, omission, failure or breach, negligent or otherwise, of the
Lessor or any member of the Guarantor's Group; or
(e) any act or omission of the Lessee which constitutes the wilful
misconduct or recklessness with knowledge of the probable
consequences,
but excluding in any such case any Encumbrance which the Lessee is
contesting in good faith by appropriate proceedings so long as such
proceedings or the continued existence of the Encumbrance do not give rise
to any reasonable likelihood of the sale, forfeiture or loss of, or of any
interest in, the Rig (or any part thereof);
"LESSEE'S INTEREST" means the Lessee's interest under this Lease;
"LESSOR PAYMENT LETTER" means a letter from the Lessor to the Lessee
irrevocably instructing the Lessee to retain from the Premium an amount
equal to the Initial Rental;
"LIBOR" means in relation to any relevant period for which LIBOR is to be
determined, as appropriate:
(a) the rate for Dollar deposits for the number of months (rounded to
the nearest whole number) comprised in the relevant period
designated as the British Bankers
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Association's Interest Settlement Rate as quoted on the Dow
Xxxxx/Telerate Monitor as Telerate Page No. 3750 as at or about
11.00 a.m. (London time) on the date which falls two (2) London
Business Days prior to the date on which the relevant period
commences;
(b) if such rate is not determinable, the arithmetic mean rounded up to
five decimal places of the equivalent rates quoted to the Bank by
each of the Reference Banks as their offered rate for such deposits
for such periods as at or about 11.00 a.m. (London time) on the date
which falls two (2) London Business Days prior to the date on which
the relevant period commences;
(c) if neither (a) or (b) above is determinable, then the equivalent
rate determined by the Bank to be the rate of interest offered to it
as at or about 11.00 a.m. (London time) on the date which falls two
(2) London Business Days prior to the date on which the relevant
period commences by prime banks in the London Interbank Market for
such deposits for such periods;
"LONDON BUSINESS DAY" means any day (other than a Saturday or a Sunday) on
which banks generally are open for business in London;
"NET SALE PROCEEDS" means the Sales Proceeds minus:
(a) the costs and expenses of the sale of the Rig in accordance with
Clause 13 (Sale of the Rig); and
(b) VAT Irrecoverable on Sale;
"OPERATOR" means any Affiliate of the Guarantor which has the day to day
operational control of the Rig from time to time;
"PAYMENT ACCOUNT DETAILS" means in relation to any payment to be made
under or pursuant to this Lease or any Lease Document, the name, account
number, sort code, account location (being an account in the United
Kingdom) and other details specified by the payee and necessary to effect
payment (by electronic means of transfer) to the payee;
"PERMITTED ENCUMBRANCE" means:
(a) any Lessee Encumbrance;
(b) Encumbrances for Taxes for which the Lessor or the Sub-Lessee is
liable either not yet assessed or, if assessed, not yet due and
payable or being contested in good faith by appropriate proceedings
(and for the payment of which adequate reserves have been provided)
so long as any such proceedings do not involve any reasonable
likelihood of the sale, forfeiture or loss of, or of any interest
in, the Rig (or any part thereof);
(c) Encumbrances (other than Encumbrances for Taxes) arising out of
claims, judgments or awards against the Lessor or the Sub-Lessee
with respect to which at the time an appeal or proceeding for review
is being prosecuted in good faith (and for the payment of which
adequate reserves have been made or, when required in order to
pursue such proceeding, an adequate bond has been provided) and for
which there shall have been secured a stay of execution pending such
appeal or proceeding for review so long as any such judgment, award
or proceeding or the continued existence of such Encumbrance do not
involve any reasonable likelihood of the sale, forfeiture or loss
of, or of any interest in, the Rig (or any part thereof);
5
(d) any lien for salvage and any ship repairer's or outfitter's
possessory lien or any lien for general average or for officers' or
crew's wages not more than ten (10) Business Days outstanding
arising in the ordinary course of trading or any other Encumbrance
or contractual right of set-off arising by operation of law in the
ordinary course of trading and in respect of obligations which are
not overdue which in each case is not yet due and payable or is
being contested in good faith by appropriate proceedings (and for
the payment of which adequate reserves or an adequate bond have been
provided) so long as any such proceedings or the continued existence
of such Encumbrance do not involve any reasonable likelihood of the
sale, forfeiture or the loss of, or of any interest in, the Rig (or
any part thereof);
(e) the Lease Documents, the Charter and the Service Contract; and
(f) any Encumbrance, the creation of which has been expressly permitted
in writing by the Lessee;
(g) any Encumbrance in respect of claims which the Lessor demonstrates
to the Lessee's satisfaction are then covered by insurance, so long
as the same do not create a reasonable likelihood of the sale or
forfeiture or loss of, or of any interest in, the Rig (or any part
thereof);
"PREMIUM" means the amount of thirty seven million Dollars
(US$37,000,000);
"RELEVANT JURISDICTION" means in relation to each of the Lessor, the
Lessee or the Guarantor, any jurisdiction in which or where the Lessor,
the Lessee or the Guarantor respectively is incorporated, resident,
domiciled, has a permanent establishment, carries on or has a place of
business or which has jurisdiction over the Rig whether by virtue of its
location or the operation of the Rig.
"RELEASE" means an emission, spill, release or discharge into or upon the
air, surface water, groundwater, or soils of any Hazardous Materials for
which the relevant person has any liability under Environmental Law,
except in accordance with a valid Environmental Permit.
"REFERENCE BANKS" means Lloyds TSB Group plc, Barclays Bank plc and The
Royal Bank of Scotland plc;
"RENTAL" means a rental of one hundred Dollars (US$100) per annum payable
in accordance with Clause 5 (Rentals and Payment);
"RENTAL PAYMENT DATE" means, subject to Clause 5.8 (Business Days), each
anniversary of the Start Date during the Lease Period;
"RIG" means the xxxx-up drilling unit known as "Britannia" and at the date
of this Lease working over the Skiff Platform in the Southern North Sea of
the United Kingdom continental shelf more fully described in Schedule 1,
together with all equipment, furniture, and all other appurtenances owned
by the Lessor in relation thereto (whether at the date of this Lease or
later) but excluding consumable stores and provisions, rented equipment
and equipment owned or rented by subcontractors and all replacements,
renewals, improvements and substitutions (whether pursuant to the terms of
the Sub-Lease or otherwise) and all additions and accessories thereto;
"SALES PROCEEDS" means the gross amount of the proceeds of sale of the
Lessor's interest as owner of the Rig plus the proceeds of sale of the
Lessee's Interest realised in accordance with Clause 13 (Sale of the Rig);
6
"SERVICE CONTRACT" means the service contract originally entered into
between Shell and the Lessor with a commencement date of 1 October 2001
(and novated from the Lessor to the Charterer by a novation agreement
dated 1 November 2002) in respect of the operation and employment of the
Rig as that contract has been and may further be amended from time to time
or any other service contract which the Charterer may enter into from time
to time in substitution therefor in accordance with the terms of the
Sub-Lease;
"SHELL" means Shell UK Limited (trading as "Shell UK Exploration and
Production");
"START DATE" means the date of execution of the Certificate of Acceptance
by both parties;
"SUB-LEASE" means the Sub-Lease Agreement dated the same date as this
Lease and made between the parties hereto in respect of the Rig;
"SUB-LEASE PERIOD" means the period for which the Rig is sub-leased by the
Lessee to the Sub-Lessee under the Sub-Lease, being a period of five (5)
years commencing on the Start Date, or such shorter period as may result
from any of the provisions of the Sub-Lease;
"SUB-LESSEE" means the Lessor in its capacity as sub-lessee of the Rig
under the Sub-Lease;
"SUPPORT LETTER" means the Support Letter issued or to be issued by the
Lessee Parent in favour of the Lessor in form and substance satisfactory
to the Lessor;
"TAXES" means all present and future taxes, levies, imposts, duties, fees
or charges of any kind whatsoever including, without limitation,
corporation, capital gains, income, gross receipt, franchise, transfer,
sales, use, business, occupation, transaction, purchase, excise, personal
property, real property, stamp, documentary, national insurance or other
taxes) or any amount payable on account of or instalment payments in
respect of or as security for any of the foregoing payable at the instance
of or imposed by any governmental, taxing or fiscal authority whatsoever
whether in the United Kingdom or elsewhere together with any penalties,
additions, fines or interest relating to any of them and "TAX" and
"TAXATION" and cognate expressions shall be construed accordingly.
"TERMINATION EVENT" means any of the events so specified in Clause 13.1
(Termination Events) of the Sub-Lease;
"TERMINATION SUM" means, with respect to any date, the amount calculated
for such date in accordance with paragraph 2 (Termination Payment) of the
Financial Schedule to the Sub-Lease;
"TOTAL LOSS" means:
(a) actual or constructive or compromised or arranged or agreed total
loss of the Rig; or
(b) the destruction or damage beyond economic repair of the Rig, or the
Rig being otherwise rendered or declared permanently unfit for
normal use for any reason whatsoever; or
(c) the Compulsory Acquisition or the requisition for hire (other than a
requisition for hire for a temporary period not exceeding one
hundred and ninety (90) days) of the Rig; or
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(d) the hijacking, theft, seizure, detention or disappearance of the Rig
resulting in loss of possession by the person authorised to have
possession of it for a period of ninety (90) consecutive days or
longer;
"VAT" means value added tax as provided for in the Value Added Tax Xxx
0000 and legislation (whether delegated or otherwise) supplemental to that
Act or in any primary or secondary legislation promulgated by the European
Union or any body or agency of the European Union, and any Tax similar or
equivalent to value added tax imposed by any country other than the United
Kingdom and any similar turnover Tax replacing or introduced in addition
to any of the same;
"VAT IRRECOVERABLE ON SALE" means VAT incurred by the Lessor in connection
with its sale of its interest as owner of the Rig and the Lessee's
Interest which is irrecoverable owing in whole or in part to the nature of
the service supplied by the Lessor in disposing of the Lessee's Interest;
and
"VOLUNTARY TERMINATION NOTICE" has the meaning ascribed to it in clause
13.5 of the Sub-Lease.
1.2 CONSTRUCTION OF TERMS. In this Lease, unless the contrary intention
appears, a reference to:
(a) (i) an "AMENDMENT" includes any supplement, novation or re-enactment and
"AMENDED" is to be construed accordingly;
"ASSETS" includes present and future properties, revenues and rights
of every description;
"ASSIGNEE" or "ASSIGNS" of a person shall include any person who has
assumed all or some of the rights and/or obligations of the relevant
person, whether by assignment, novation or otherwise;
"AUTHORISATION" includes any authorisation, consent, approval,
resolution, licence, permit, exemption, filing and registration;
"INCLUDING" and "IN PARTICULAR" shall be construed as being by way
of illustration or emphasis only and shall not be construed as, nor
shall they take effect as, limiting the generality of the foregoing
words;
"OTHER" and "OTHERWISE" shall not be construed ejusdem generis with
any foregoing words where a wider construction is possible;
a "PERSON" includes any individual, company, corporation, firm,
association, trust, unincorporated organisation or body of persons
(including a partnership, joint venture or consortium), government
(including any agency, department or political sub-divisions
thereof), state, agency, international organisation, European Union
institution, committee, department or authority or other entity
whether having distinct legal personality or not or any association
or partnership of two or more of the foregoing and its successors
(whether of the same name or another name) and permitted assignees;
a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any
governmental, inter-governmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or
organisation;
"WINDING-UP" of a person also includes the amalgamation,
reconstruction, re-organisation, administration, dissolution,
liquidation, merger or consolidation of
8
that person, and any equivalent or analogous procedure under the law
of any jurisdiction in which that person is incorporated, domiciled
or resident or carries on its business or has assets;
(ii) in this Lease, unless the contrary intention appears, a provision of
law is a reference to that provision as amended or re-enacted;
(iii) in this Lease reference to a Clause, a paragraph, a sub-paragraph,
or a Schedule is, unless specified a reference to a clause, a
paragraph, a sub-paragraph of or a schedule to this Lease as from
time to time amended in accordance with the provisions of this
Lease;
(iv) a Lease Document or another document is a reference to that Lease
Document or other document as amended or substituted from time to
time;
(b) the index to and headings in this Lease are for convenience only and are
to be ignored in construing this Lease; and
(c) in this Lease words importing the singular shall include the plural and
vice versa.
2 LEASING OF THE RIG
2.1 OBLIGATIONS OF THE LESSOR. The obligation of the Lessor to lease the Rig
to the Lessee under this Lease shall be subject to:
(a) receipt by the Lessor of the Premium less any amounts deducted pursuant to
the Lessor Payment Letter;
(b) each of the representations and warranties of the Lessee contained in
Clause 7 (Representations and Warranties) being true and accurate on the
Start Date as if given on that date by reference to the facts and
circumstances then existing;
(c) satisfaction of each condition precedent listed in Schedule 3 (Lessor's
Conditions Precedent); and
(d) evidence that the sub-leasing of the Rig pursuant to the Sub-Lease will
commence immediately following the commencement of its leasing under this
Lease.
2.2 BENEFIT OF THE LESSOR. The conditions specified in Clause 2.1 are for the
sole benefit of the Lessor and may be waived in whole or in part with or
without conditions by the Lessor.
2.3 OBLIGATIONS OF THE LESSEE. The obligation of the Lessee to take the Rig on
lease from the Lessor under this Lease shall be subject to:
(a) a valuation report from Xxxxxxx Xxxx Limited showing the market value of
the Rig to be an amount not less than the Premium;
(b) each of the representations and warranties of the Lessor contained in
Clause 7 (Representations and Warranties) being true and accurate on the
Start Date as if given on that date by reference to the facts and
circumstances then existing;
(c) the Rig not having become a Total Loss and no event having occurred which,
with the giving of notice, lapse of time, making of a declaration or
satisfaction of any other applicable condition, might lead to the Rig
becoming a Total Loss;
9
(d) no Termination Event, nor any event which, with the giving of notice,
lapse of time or satisfaction of any other applicable condition, would
constitute a Termination Event having occurred and being continuing;
(e) satisfaction of each condition precedent listed in Schedule 4 (Lessee's
Conditions Precedent); and
(f) evidence satisfactory to the Lessee that the Sub-Lessee has
unconditionally and irrevocably agreed sub-leasing of the Rig pursuant to
the Sub-Lease will commence immediately following the commencement of the
leasing of the Rig under this Lease.
2.4 BENEFIT OF THE LESSEE. The conditions specified in Clause 2.3 are for the
sole benefit of the Lessee and may be waived in whole or in part with or
without condition by the Lessee.
2.5 Immediately upon satisfaction (or waiver in writing by the Lessee) of the
conditions specified in Clauses 2.1 and 2.3, the Lessee and the Lessor
shall execute the Certificate of Acceptance in relation to the Rig.
2.6 QUIET ENJOYMENT. The Lessor irrevocably warrants and undertakes that the
Lessee will, subject only to the Lessee not breaching any of its express
obligations and liabilities under this Lease and the other Lease Documents
to which it is a party, throughout the Lease Period, be entitled peaceably
to hold and use the Rig without interference from the Lessor or any person
acting through the Lessor.
2.7 AGREEMENT TO LEASE. Subject to and in accordance with the terms of this
Lease, the Lessor agrees to let the Rig to the Lessee and the Lessee
agrees to take the Rig on lease from the Lessor for the Lease Period.
3 COMMENCEMENT OF LEASE PERIOD
3.1 CERTIFICATE OF ACCEPTANCE. The Lease Period shall commence on the Start
Date. Delivery of the Rig by the Lessor to the Lessee, and acceptance
thereof by the Lessee under this Agreement shall be deemed to take place
immediately upon execution of the Certificate of Acceptance by duly
appointed representatives of the Lessor and the Lessee and such execution
shall be conclusive evidence that the Lessee shall have unconditionally
accepted the Rig for the purposes of this Lease.
3.2 RISK. Notwithstanding acceptance of the Rig by the Lessee, all risk of
loss of or damage to the Rig shall, as between the Lessor and the Lessee,
remain with the Lessor throughout the Lease Period.
4 PREMIUM
In consideration of the Lessor leasing the Rig to the Lessee, the Lessee
shall pay the Premium (less any amounts which the Lessee deducts pursuant
to the Lessor Payment Letter) to the Lessor on the Start Date.
5 RENTALS AND PAYMENTS
5.1 RENTALS. In consideration of the Lessor leasing the Rig to the Lessee, the
Lessee shall, following receipt of an invoice from the Lessor, pay a
Rental to the Lessor annually in advance to the Lessor's bank account, as
notified from time to time in writing by the Lessor to the Lessee, on the
Start Date and on each Rental Payment Date. All payments of Rentals shall
be made without any set-off or counterclaim.
5.2 PAYMENTS. If any payment due from either party to the other party under
this Lease is not paid on the due date, the defaulting party shall,
without prejudice to the other party's
10
other rights and remedies, pay on demand interest thereon at the Default
Rate (as well after as before judgment) from and including such due date
to but excluding the date of actual payment or reimbursement. Such
interest shall accrue on a daily basis, assuming a year of three hundred
and sixty (360) days, and be compounded monthly.
5.3 VAT. All payments due to the Lessor under this Lease are calculated
without regard to VAT which, if applicable, will be added at the
appropriate rate. If any VAT is due, the Lessee shall pay to the Lessor
such VAT together with any interest and penalties thereon on demand by the
Lessor, such demand to be made no earlier than such date as shall be
reasonably necessary to enable the VAT to be paid on the last date for the
payment of such VAT to avoid incurring interest and penalties. The Lessor
shall promptly provide to the Lessee a valid VAT invoice or invoices (in
relation to the supplies which it makes hereunder for VAT purposes) and
any such invoice shall comply with all relevant laws and regulations
relating to VAT (and, in particular, Part III of the Value Added Tax
Regulations 1995 (as amended)).
5.4 INCORRECT VAT. If the Lessee pays the Lessor an amount in respect of VAT
under Clause 5.3 (VAT) and HM Customs and Excise ("CUSTOMS") rules that
all or part of it was not properly chargeable (an "INCORRECT VAT CHARGE")
the party receiving the ruling shall immediately notify the other of it
and, the Lessor shall pay to the Lessee no later than five (5) Business
Days after such notification an amount equal to that incorrect VAT charge
together with any interest paid by Customs in respect of such Incorrect
VAT Charge.
5.5 AMOUNTS PAYABLE BY LESSOR. All amounts payable under this Lease by way of
indemnity or reimbursement of any costs, expenses, Taxes and the like
incurred or suffered by either party are payable in the currency in which
the cost, expense, Tax or other like amount was incurred or suffered.
5.6 CURRENCY. All other amounts payable under this Lease are, except as
otherwise provided in this Lease, payable in Dollars and shall be made for
value on the due date.
5.7 PLACE AND PAYMENT MECHANICS. Wherever in this Agreement provision is made
for the payment by one party to the other, such payment shall be effected
by crediting the account specified in the Payment Account Details of the
party entitled to payment in immediately available cleared funds on or
before the due date for payment. All payments shall be made without any
set-off or counterclaim.
5.8 BUSINESS DAYS. If a payment under this Lease is due on a day which is not
a Business Day, the due date for that payment shall instead be the next
Business Day in the same calendar month (if there is one) or the preceding
Business Day (if there is not).
6 SUB-LEASE
6.1 RECOGNITION OF SUB-LEASE AND ITS TERMS. The Lessee covenants with the
Lessor and the Lessor acknowledges that throughout the Lease Period, the
Rig will be on sub-lease to the Sub-Lessee pursuant to the terms of the
Sub-Lease unless and until the Sub-Lease Period shall expire or terminate
for whatever reason. Accordingly, throughout the Sub-Lease Period, the Rig
will be required by the Lessee to be operated, maintained and insured by
the Sub-Lessee in accordance with the terms of the Sub-Lease.
6.2 PERFORMANCE BY LESSEE OF ITS SUB-LEASE OBLIGATIONS. The Lessee
acknowledges and agrees that throughout the Sub-Lease period it shall duly
and punctually perform its obligations under the Sub-Lease and shall not
take any action other than as permitted or contemplated by the Sub-Lease
which would cause the Sub-Lessee or any operator to be incapable of
performing its obligations in relation to the operation, maintenance and
insurance of the Rig.
11
6.3 PERFORMANCE BY SUB-LESSEE OF ITS SUB-LEASE OBLIGATIONS. It is agreed that,
by entering into the Sub-Lease, the Lessee is deemed to have complied with
any and all of its obligations, duties or liabilities (express and
implied) as a bailee of the Rig and shall have no further obligations,
duties or liabilities (other than the payment of Rental and the Premium
and any other express obligations relating to the Rig in this Lease).
7 REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES BY EACH PARTY. Each of the parties hereto
represents and warrants to the other party (on behalf of itself only) on
the date hereof, on the Start Date and on each Rental Payment Date that:
(a) STATUS: it is duly incorporated, as to the Lessor, under the laws of
England and Wales and as to the Lessee, under the laws of the Netherlands,
and has power to own its assets and carry on its business as it is now
being conducted;
(b) POWERS AND AUTHORITY: it has power to execute, deliver and perform its
obligations, and to carry out the transactions contemplated by, this Lease
and the other Lease Documents to which it is or will be a party in
whatever capacity and all necessary corporate and other action has been or
will be taken to authorise the execution, delivery and performance of the
same;
(c) BINDING OBLIGATIONS: its obligations under this Lease and the other Lease
Documents to which it is or will be a party in whatever capacity
constitute its valid and binding obligations enforceable in accordance
with their terms except as enforcement may be limited by any relevant
bankruptcy, insolvency, administration or similar laws affecting
creditors' rights generally and by general principles of equity and
subject to any relevant qualifications material in any of the legal
opinions to be delivered pursuant to this Lease or the Sub-Lease;
(d) CONTRAVENTIONS: the execution, delivery and performance by it of this
Lease and the other Lease Documents to which it is or will be a party in
whatever capacity does not:
(i) contravene any applicable law or regulation or any order of any
governmental Entity to which it is subject in any Relevant
Jurisdiction or, so far as it is aware, any judgment, order or
decree of any court having jurisdiction over it;
(ii) conflict with, or result in any breach of any of the terms of, or
constitute a default under, any agreement or other instrument to
which it is a party or any licence or other authorisation to which
it is subject or which is binding upon it; or
(iii) contravene or conflict with its constitutional documents;
(e) INSOLVENCY: it has not taken any action nor, so far as it is aware, have
any steps been taken or legal proceedings been started against it for
winding-up, dissolution or re-organisation or any analogous procedures in
any other jurisdiction, or for the appointment of a liquidator, receiver,
administrative receiver, or administrator, trustee or similar officer or
any analogous officer in any other jurisdiction of it or of any of its
assets;
(f) AUTHORISATIONS: no authorisations, approvals, licences, consents, filings,
registrations, payment of duties or Taxes or notarisations are required in
any Relevant Jurisdiction:
(i) for the performance and discharge of its obligations under this
Lease and the other Lease Documents to which it is or will be a
party in whatever capacity; and
12
(ii) in connection with the execution, delivery, validity, enforceability
or admissibility in evidence of this Lease and the other Lease
Documents to which it is or will be a party in whatever capacity;
(g) ADVICE: it has taken its own professional advice as to the transactions
consummated by the Lease Documents and tax and accounting implications
thereof and acknowledges that, save as expressly set out in the Lease
Documents, no condition, warranty or representation of any kind whatsoever
is or has been given by it or on its behalf in respect of such tax and
accounting implications.
7.2 FURTHER REPRESENTATIONS OF LESSOR. The Lessor further represents and
warrants to the Lessee that on the date hereof and on the Start Date:
(a) OWNERSHIP OF RIG: it has such title, right and interests in and to the Rig
as would entitle it to sell or otherwise dispose of the Rig with full
title guarantee;
(b) ENCUMBRANCES: there are no Encumbrances on the Rig, other than Permitted
Encumbrances;
(c) THE RIG: the Rig:
(i) is not a fixture under English law;
(ii) is in good and safe condition and is operating in accordance with
the GSF Standard; and
(iii) is currently working over the Skiff Platform in the Southern North
Sea of the UKCS;
(d) NO ENVIRONMENTAL CLAIM: no Environmental Claim in excess of one million
Dollars (US$1,000,000) has been made, or if made, has not yet been
settled, in respect of the Rig and, to the best of the knowledge and
belief of the Lessor after due enquiry, (i) no event which, with the
giving of notice, lapse of time, making of a declaration or satisfaction
of any other applicable condition could reasonably be expected to lead to
an Environmental Claim in respect of the Rig has occurred and (ii) no
Environmental Claim in respect of the Rig is threatened;
(e) NO RELEASE no Release from the Rig has occurred which could reasonably be
expected to result in an Environmental Claim in excess of one million
Dollars (US$1,000,000);
(f) ENVIRONMENT:
(i) the Lessor, its Affiliates, the Charterer, any Operator or (to the
best of its knowledge without obligation to make any specific
enquiry outside the normal course of their business) Shell are in
compliance with all Environmental Laws applicable to them in respect
of the Rig (including, without limitation, obtaining and complying
with all required Environmental Permits required from time to time
and all requirements relating to xxxxxxx, submission of oil spill
response plans, designation of qualified individuals) which could
reasonably be expected to, or failure to comply with or maintain
could reasonably be expected to, have a material adverse effect on
the rights or interests of the Lessee or on the ability of the
Lessor or, as the case may be, the Sub-Lessee to fulfil their
respective obligations (in any capacity) under the Lease Documents;
(ii) neither the Lessor nor any of its Affiliates has received notice of
any revocation, suspension, amendment, variation, withdrawal or
refusal to grant any Environmental Permit or any requirement
relating to xxxxxxx, submission of oil spill response plans or
designation of qualified individuals which could
13
reasonably be expected to have a material adverse effect of the
nature referred to in paragraph (i) above.
8 PROTECTION OF LESSEE'S INTERESTS
8.1 RESPONSIBILITY OF THE LESSOR. It is agreed that as between the Lessor and
the Lessee, the Lessor:
(a) has been solely responsible for selecting the Rig, relying on its own
skill and judgment; and
(b) will be solely responsible for maintaining and insuring the Rig.
The Lessor acknowledges that the Lessee was not involved in the selection,
installation or specification of the Rig and will not be involved in the
operation or any future installation of the Rig.
8.2 TITLE TO THE RIG. The Lessor covenants that it will continue (subject to
Permitted Encumbrances and subject to any transfer in compliance with
Clause 16.2 (Assignment by Lessor)) throughout the Lease Period to have
such title, rights and interests in and to the Rig as would entitle it to
sell or otherwise dispose of the Rig with full title guarantee.
8.3 NO AUTHORITY TO CREATE ENCUMBRANCES. The Lessor will not and will procure
that each of the Charterer and any other Operator will not:
(a) pledge the credit of the Lessee or any member of the Lessee Group for the
repair of the Rig or otherwise;
(b) create, purport to create or, subject to Clause 8.4 (Arrest and
detention), permit to subsist any Encumbrance on, or over or with respect
to the Rig (other than Permitted Encumbrances);
(c) sell, attempt to sell or, otherwise dispose of, the Rig or any interest
therein, or purport so to do without the previous written consent of the
Lessee or unless the requirements of Clause 16.2 (Assignment by Lessor)
are satisfied; or
(d) part with possession of the Rig other than in accordance with the
Sub-Lease or any other sub-lease or sub-charter permitted by the Sub-Lease
and except as may be required for repair and maintenance.
8.4 ARREST AND DETENTION. If the Rig is at any time during the Lease Period:
(a) arrested, seized, taken into custody or otherwise detained by any person
or by any court or other tribunal or by any Governmental Entity (other
than by a Compulsory Acquisition or any requisition for hire or by reason
of a Lessee's Encumbrance); or
(b) subjected to distress or other legal proceedings by reason of any process,
claim, the exercise of any rights conferred by an Encumbrance or by any
other action whatsoever (other than by reason of a Lessee's Encumbrance),
the Lessor shall procure the release of the Rig from such arrest, seizure
or detention within twenty-one (21) days of receiving notice thereof by
providing bail or otherwise as the circumstances may require. The Lessor
acknowledges and accepts that the Lessee shall, unless and until a
Termination Event shall have occurred which is continuing, have the sole
right to contest any litigation, arbitration or administrative proceedings
in respect
14
of the foregoing subject to and in accordance with clause 14.4 (Defence of
claims) of the Sub-Lease, mutatis mutandis.
8.5 EXCLUDED REPRESENTATIONS. It is agreed that no term, condition, warranty
or representation of any kind whatsoever (express or implied) is or has
been given by or on behalf of the Lessee in respect of the Rig (or any
part thereof). All terms, conditions, warranties and representations
(express or implied and whether statutory, collateral hereto or otherwise)
relating to the Rig, its specification, age, quality, description,
seaworthiness, satisfactory quality or as to its fitness for any purpose
are hereby expressly excluded.
8.6 LESSEE'S ENCUMBRANCES. The Lessee will not create, purport to create or,
subject to Clause 8.7 (Arrest following a Lessee's Encumbrance), permit to
subsist any Lessee's Encumbrance on, or over or with respect, to the Rig.
8.7 ARREST FOLLOWING A LESSEE'S ENCUMBRANCE. If the Rig is at any time during
the Lease Period:
(a) arrested, seized, taken into custody or otherwise detained by any person
or by any court or other tribunal or by any Governmental Entity by reason
of a Lessee's Encumbrance; or
(b) subjected to distress or other legal proceedings by reason of any process,
claim or the exercise of any rights conferred by a Lessee's Encumbrance,
the Lessee shall procure the release of the Rig from such arrest, seizure
or detention within twenty-one (21) days of receiving notice thereof by
providing bail or otherwise as the circumstances may require.
9 LIMITATION ON LIABILITY
9.1 NO LIABILITY FOR LOSS. The Lessee shall not be liable (in contract, tort
or otherwise) for any claim, damage, liability or loss (including
consequential loss) or expense of any kind arising directly or indirectly
in connection with the Rig (or any part thereof) or from any defect or
deficiency in, or inadequacy or unsuitability of, the Rig (or any part
thereof) or its use, performance, operation, maintenance, overhaul or
repair provided that nothing contained herein shall exclude any liability
of the Lessee except:
(a) in respect of any claim, damage, liability or loss arising solely as a
result of the wilful misconduct or negligence of the Lessee; or
(b) for death or personal injury caused by the Lessee's negligence to the
extent that such exclusion is prohibited by statute.
9.2 LIMITATION ON OPERATIONAL LIABILITY. The Lessor acknowledges that the
Lessee shall itself have no liability to the Lessor whatsoever under this
Lease in respect of:
(a) the operation, maintenance and insurance of, or any other matter or thing
in relation to, the Rig;
(b) any failure by the Sub-Lessee to comply with the requirements of the
Sub-Lease as regards operation, maintenance and insurance of the Rig or
otherwise;
9.3 NO OBLIGATION TO REPLACE. The Lessee shall have no obligation to supply to
the Lessor any replacement for the Rig if the Rig is, either on delivery
or thereafter, defective, lost, damaged, unusable or unavailable for any
reason.
9.4 DUE CONSIDERATION. The Lessor acknowledges that Clauses 9.1 (No liability
for loss), 9.2 (Limitation on operational liability) and 9.3 (No
obligation to replace) (the "IDENTIFIED CLAUSES") have been the subject of
full and free discussion and negotiation between the
15
parties, the Lessor fully understands the provisions of the Identified
Clauses and the implications thereof and the Premium and Rental and other
amounts payable under this Lease have been calculated in the light of such
discussion and negotiation and taking in to full account the terms of the
Identified Clauses. The Lessor further acknowledges and accepts that the
provisions of the Identified Clauses are fair and reasonable to be
included in this Lease having regard to the terms and conditions of this
Lease generally, the transactions contemplated by the Lease Documents as a
whole and the circumstances which were, or ought reasonably to have been
in the contemplation of the Lessee and the Lessor at the time this Lease
was entered into.
10 TERMINATION
10.1 TERMINATION. Where the Sub-Lease Period is to terminate in accordance with
the provision of the Sub-Lease on the Leasing Termination Date by reason
of the service of a Termination Notice or a Voluntary Termination Notice
the Lessor and the Lessee agree that they shall each offer for sale their
respective interests in the Rig in accordance with Clause 13 (Sale of the
Rig).
10.2 NO LESSEE PAYMENTS ON TERMINATION. Save only and to the extent that the
Lessee is obliged to account to the Lessor or the Sub-Lessee for any
amounts out of Net Sales Proceeds on the applications of such sum in
accordance with the provisions of the Lease Documents, no payment shall be
required to be made by the Lessee to the Lessor on any termination of the
Lease Period. The leasing of the Rig and the Lease Period shall each
continue until the Leasing Termination Date, whereupon they shall
terminate.
11 EVENT OF LOSS
The Lease period shall terminate automatically following the occurrence of
a Total Loss in respect of the Rig, such termination to occur at the same
time as termination of the Sub-Lease Period in accordance with the terms
of the Sub-Lease.
12 RETURN OF THE RIG
On expiry or termination of the Lease Period (other than by reason of a
Total Loss) the Lessee shall be deemed to have redelivered the Rig to the
Lessor and the Lessor shall be deemed to have accepted such redelivery
without further action on the part of either party by virtue of redelivery
of the Rig by the Sub-Lessee to the Lessor at the direction of the Lessee
in accordance with Clause 12.1 of the Sub-Lease. Such deemed redelivery
will be in "as is, where is" condition and the Lessee shall have no
obligation to take any step or incur any expense without being indemnified
by the Lessor to its satisfaction in advance of taking such steps or
incurring such expense.
13 SALE OF THE RIG
13.1 SALE. In circumstances referred to in Clause 10.1 (Termination):
(a) the Lessor and the Lessee shall each offer for sale their respective
interests in the Rig with the intent that such sale shall be completed by
the Lessor and the Lessee as soon as reasonably practicable after such
termination; and
(b) the Lessor shall be entitled to act as agent for sale of the Lessee for
the purposes of disposing of the Lessee's Interest on the following basis
(unless otherwise agreed by the Lessee):
(i) either the Lessee has received all amounts then due and payable
under the Sub-Lease or the Lessee is satisfied that following the
sale of the Rig it will receive such amounts;
16
(ii) that the interest of the Lessor and the Lessee's Interest in the Rig
shall be sold to the same person;
(iii) that the price at which the Lessee's Interest in the Rig is sold
shall be subject to the approval of the Lessee, such approval not to
be unreasonably withheld or delayed and not to be withheld if such
price is supported by a valuation of the Rig obtained from an
independent valuer selected by the Lessor;
(iv) that the Lessee shall not be required to give any warranty to any
purchaser of the Lessee's Interest save that such interest is free
of Lessee's Encumbrances;
(v) the Lessor shall be entitled, subject to the foregoing, to select
the means, timing and terms of the disposal of the Rig and the
Lessee's Interest and in particular whether to sell by public
auction or tender or by private treaty;
(vi) all Net Sale Proceeds shall be paid to the Lessor for application by
it in accordance with this Lease and the other Lease Documents.
13.2 LESSEE'S INTEREST. The sale of the Rig shall take place subject to this
Lease and the Lessee's Interest but on the basis that the leasing of the
Rig under this Lease shall terminate in accordance with Clause 10.2
(Termination) on the Leasing Termination Date. The Lessee's entitlement to
a portion of the Net Sale Proceeds in accordance with Clause 14.2
(Application of Net Sale Proceeds) is to compensate the Lessee for
agreeing to the sale of the Rig and the termination of its right to take
the Rig on lease under this Lease on the Leasing Termination Date.
14 NET SALE PROCEEDS
14.1 CURRENCY OF SALE OF RIG. If the Rig is sold in a currency other than
Dollars the Sales Proceeds shall be the amount of Dollars which the Lessor
is able to purchase with the foreign currency which it receives in respect
of such foreign currency when it receives it or as soon thereafter as
foreign exchange transactions are able to be made in the City of London.
14.2 APPLICATION OF "NET SALE PROCEEDS". The Lessor and the Lessee agree that
any Net Sale Proceeds will be applied as follows:
(a) first an amount equal to the aggregate of the Termination Sum payable
under the Sub-Lease and any other amounts due and payable to the Lessee
under clause 13.6 (Payments on Termination) of the Sub-Lease shall be paid
to the Lessee and applied in or towards settlement of such amount (the
"TOTAL TERMINATION SUM");
(b) secondly, where there is any balance of Net Sale Proceeds after the
application referred to in sub-paragraph (a) above, an amount equal to:
(i) the Net Sale Proceeds less the Total Termination Sum; multiplied by:
(ii) the fraction a/b,
where "a" is the length of the unexpired residue of the Lease Period
at the time of the termination of the leasing of the Rig under the
Sub-Lease (expressed in days); and "b" is the Lease Period
(expressed in days),
shall be paid to the Lessee and applied by the Lessee in accordance
with clause 12.3 (Sub-Lessor's Disposal Proceeds) of the Sub-Lease;
and
(c) thirdly, the balance (if any) shall be paid to the Lessor.
17
15 RIGHTS AND WAIVER
15.1 RIGHT OR REMEDY. No right or remedy conferred upon either party by this
Lease shall be exclusive of any right or remedy provided by law, and all
rights and remedies conferred upon either party by this Lease shall be
cumulative with, and in addition to, its rights under general law and, in
particular, shall be without prejudice to the relevant party's rights to
claim damages.
15.2 WAIVER. The exercise of any power or remedy or the enforcement of any
right by either party shall not be construed as a waiver of the right to
exercise any other power or remedy or to enforce any other right. Any
forbearance or indulgence granted by a party shall not constitute a waiver
of the right or remedy of such party in respect of which such forbearance
or indulgence is granted and such party shall be entitled to exercise such
right or remedy at any time thereafter.
16 ASSIGNMENT
16.1 NO ASSIGNMENT BY LESSEE. The Lessee may not assign or otherwise transfer
its rights and/or obligations under this Lease without the prior written
consent of the Lessor.
16.2 ASSIGNMENT BY LESSOR. The Lessor may assign or otherwise transfer all (but
not part only) of its rights and obligations under this Lease to another
Affiliate of the Guarantor which is incorporated in either England and
Wales or Scotland (the "TRANSFEREE") PROVIDED THAT in connection with and
as a condition to such transfer:
(a) the Transferee also acquires ownership of the Rig and (by novation or
otherwise) all the rights and obligations of the Sub-Lessee under the
Sub-Lease;
(b) the obligations of the Transferee are guaranteed by the Guarantor on the
terms of the Guarantee, mutatis mutandis;
(c) the Lessee receives such evidence of due corporate authorisation by the
Lessor, the Transferee and the Guarantor in relation to the matters
outlined above and such favourable legal opinions as it shall require, in
such case acting reasonably.
Any assignment or transfer of all or any part of the Lessor's rights or
obligations under this Lease, otherwise than in accordance with the
foregoing provisions of this Clause 16.2, shall require the prior written
consent of the Lessee.
17 NOTICES
17.1 WRITTEN FORM. Any demand, notice or other communication to be given under
or in connection with this Lease shall be given in writing in English and,
unless otherwise provided, shall be made by fax or letter in writing and
sent by first class prepaid letter post, by fax or delivered by hand to
the addressee at its address set out below.
17.2 ADDRESS. Any notice or other communication to be given by one party to
another under this Lease shall (unless one party has by fifteen (15) days'
notice to the other party specified another address) be given to that
other party at the respective addresses given below.
17.3 DETAILS. The addresses and fax numbers of the Lessor and the Lessee are:
Lessor:
GlobalSantaFe Drilling Company (North Sea) Limited
Langlands House
00
Xxxxxx Xxxxxx
Xxxxxxxx XX00 0XX
Xxxxxxxx
Fax: + 00 0000 000000
Attention: Legal Department
with a copy to:
GlobalSantaFe Corporation
00000 Xxxxxxxx Xxxxx
Xxxxxxx
Xxxxx 00000
XXX
Fax: + 000 000 0000
Attention: Legal Department
the Lessee:
Sogelease B.V.
Xxxxxxxx Xxxxx
Xxxxxxxxxxx 0
0000 XX
Xxxxxxxxx
Xxx Xxxxxxxxxxx
Fax: + 00 00 0000 000
Attention: Head of Lease Administration
17.4 NOTICE. Any notice or other communication given by one party to the other
shall be deemed to have been received:
(a) if sent by fax, when a positive transmission report is received;
(b) in the case of a written notice given by hand, on the day of actual
delivery to the addressee; and
(c) if posted, on the second Business Day following the day on which it was
despatched by first class mail postage prepaid,
provided that a notice given in accordance with the above but received on
a day which is not a Business Day or after normal business hours in the
place of receipt shall only be deemed to have been received on the next
Business Day.
18 LAW AND JURISDICTION
18.1 LAW. This Lease is governed by and shall be construed in accordance with
English law.
18.2 JURISDICTION. The parties agree that the courts of England shall have
exclusive jurisdiction to settle any disputes which may arise in
connection with this Lease. By its execution and delivery of this Lease,
the Lessee:
19
(a) hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts;
(b) waives any objections on the grounds of venue or forum non conveniens or
any similar grounds and agrees that legal proceedings in anyone or more
jurisdictions shall not preclude legal proceedings in any other
jurisdiction; and
(c) agrees that final judgment against it in any action or proceedings shall
be conclusive and may be enforced in any other jurisdiction within or
outside England by suit on the judgment, a certified copy of which shall
be conclusive evidence of the fact and of the amount of its indebtedness.
18.3 APPOINTMENT OF PROCESS AGENT. The Lessee hereby appoints the London office
for the time being of Societe Generale to receive, for and on behalf of
itself, service of process in England in any legal proceedings with
respect to this Lease. Should Societe Generale cease to have an office in
London during the period of this Lease, the Lessee shall, in a timely
manner, appoint another agent for service of process in England and
confirm the same to the Lessor.
19 GENERAL
19.1 ILLEGALITY. If any provision of this Lease is or becomes illegal, invalid
or unenforceable in any respect in any jurisdiction neither the legality,
validity or enforceability of:
(a) such provision in any other jurisdiction; or
(b) any other provision hereof in such or any other jurisdiction shall in any
way be affected or impaired.
19.2 RIGHTS OF THIRD PARTIES. No term of this Lease is enforceable under the
Contracts (Rights of Third Parties) Xxx 0000 by a person who is not party
to this Lease.
19.3 COUNTERPARTS. This Lease may be executed in any number of counterparts and
this will have the same effect as if the signatures on the counterparts
were on a single copy of this Lease.
AS WITNESS the hands of duly authorised representatives of the parties hereto
the day and year first above written.
20
SCHEDULE 1
THE RIG
Type: Xxxx-Up Drilling Unit
Overall Dimensions: 224 by 200 by 25 feet
Legs (4): 324 ft. long triangular
Design: Xxxxx Engineering
Year of Build: 1968
Class: ABS
21
SCHEDULE 2
CERTIFICATE OF ACCEPTANCE
Certificate of Acceptance dated [-] January 2003 pursuant to a Head-Lease
Agreement dated [insert date] January 2003 (the "LEASE") between (1)
GlobalSantaFe Drilling Company (North Sea) Limited as Lessor and (2) Sogelease
B.V., as Lessee.
Terms used in this Certificate of Acceptance shall have the meaning given to
such terms in the Lease in accordance with the terms thereof.
The Lessor and the Lessee hereby confirm that:
(a) the Rig has been delivered by the Lessor to the Lessee and accepted by the
Lessee from the Lessor under the Lease subject to the provisions of Clause
2.6 (Quiet enjoyment) of the Lease;
(b) in the case of the Lessor, the conditions set out in Clause 2.1
(Obligations of the Lessor) of the Lease have been satisfied or waived;
and
(c) in the case of the Lessee, the conditions set out in Clause 2.3
(Obligations of the Lessee) of the Lease have been satisfied or waived.
This Certificate of Acceptance is a Lease Document.
SIGNED
by
for and on behalf of
GLOBALSANTAFE DRILLING COMPANY (NORTH SEA) LIMITED
SIGNED
by
for and on behalf of
SOGELEASE B.V.
22
SCHEDULE 3
LESSOR'S CONDITIONS PRECEDENT
The obligation of the Lessor to lease the Rig to the Lessee under this Lease
shall (in addition to the other matters set out in Clause 2.1 (Obligations of
the Lessor) of the Lease) be subject to receipt by the Lessor, in form and
substance satisfactory to the Lessor of:
1 A copy, certified by an appropriate officer of the Lessee, to be a true,
complete and up-to-date copy, of the constitutional documents of the
Lessee.
2 A certified copy of a resolution of the Lessee's Board of Directors
authorising entry by the Lessee into this Lease and the other Lease
Documents to which it is a party (or such other evidence of due
authorisation as the Lessor shall agree).
3 A certified copy of any power of attorney of the Lessee pursuant to which
any of the Lease Documents are executed by the Lessee.
4 An extract of the Register of the Chamber of Commerce in respect of the
Lessee.
5 A certified copy of the power of attorney of the signatories appointed for
and on behalf of the Lessee Parent to execute the Support Letter.
6 The Sub-Lease and the other Lease Documents to which the Lessee is a party
duly executed by the Lessee.
7 The Support Letter duly executed by the Lessee Parent.
8 An acknowledgment from the agent for service of process appointed by the
Lessee for the purpose of this Lease and the other Lease Documents
confirming that it has accepted its appointment.
23
SCHEDULE 4
LESSEE'S CONDITIONS PRECEDENT
The obligation of the Lessee to take the Rig on lease from the Lessor under this
Lease shall (in addition to the other matters set out in Clause 2.3 (Obligations
of the Lessee) of the Lease) be subject to receipt by the Lessee, in form and
substance satisfactory to the Lessee of:
1 A copy certified by a Director or the Secretary of the Lessor, to be a
true, complete and up-to-date copy, of the Certificate of Incorporation
and the Memorandum and Articles of Association of the Lessor.
2 A copy, certified by an appropriate officer of the Guarantor, to be a
true, complete and up-to-date copy, of the Memorandum and Articles of
Association of the Guarantor and a copy of a certificate of goodstanding
of the Guarantor.
3 A certified copy of a resolution of the Lessor's Board of Directors
authorising entry by the Lessor into this Lease and the other Lease
Documents to which it is party (or such other evidence of due
authorisation as the Lessee shall agree).
4 A certified copy of a resolution of the Guarantor's Board of Directors
authorising entry by the Guarantor into the Guarantee (or such other
evidence of due authorisation as the Lessee shall agree).
5 A certified copy of any power of attorney of the Lessor or the Guarantor,
respectively, pursuant to which any of the Lease Documents are executed by
the Lessor or the Guarantor.
6 Any documentation which is required from the Lessor by the Lessee (and
notified by the Lessee to the Lessor within a reasonable time before the
Start Date) for the purposes of its compliance with the FSA "Know Your
Customer" requirements.
7 The Sub-Lease duly executed by the Sub-Lessee.
8 The other Lease Documents to which the Lessor is a party duly executed by
the Lessor.
9 The Guarantee duly executed by the Guarantor.
10 Evidence that the insurances referred to in Clause 10 (Insurance) of the
Sub-Lease are in place in accordance with that Clause or are otherwise
acceptable to the Lessee.
11 A favourable legal opinion from Xxxxxx & Xxxxxx in relation to relevant
matters of Cayman Islands law in respect of the Guarantor, including the
due authorisation and execution by the Guarantor of the Guarantee.
24
12 A favourable legal opinion from Xxxxx & Overy in relation to relevant
matters of English law.
25
EXECUTION PAGE
SIGNED for and on behalf of )
GLOBALSANTAFE DRILLING ) /s/ Xxxxxx Xxxxxx Xxxxx
COMPANY (NORTH SEA) LIMITED )
by Xxxxxx Xxxxxx Xxxxx )
Witness to the above signature:
X. Xxxxx
................................
SIGNED for and on behalf of )
SOGELEASE B.V. ) /s/ Xxxx Xxxxxxx
by Xxxx Xxxxxxx )
Witness to the above signature:
Xxxxx Xxxxxxxxx
...............................
26
