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EXHIBIT 10.25
FIRST AMENDED AND RESTATED
CHARTER
THIS FIRST AMENDED AND RESTATED CHARTER (the "Charter") is made as of the 29th
day of November, 1996, by and between:
RIGCO North America, L.L.C., a limited liability company organized under the
laws of Delaware, and having its registered office at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called "Owner") of the one part; and
Schlumberger Technology Corporation (Sedco Forex Division), a company
incorporated under the laws of Texas and having its registered office at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ hereinafter called "Charterer") of
the other part.
WHEREAS:
A. Owner is the owner of a semisubmersible drilling unit known as the FPS
▇▇▇▇▇▇ ▇▇▇▇▇▇ carrying a USA flag at time of delivery under this
Charter and subsequently changed to Bahamian flag, and having official
number 725001, together with all her engines, boilers, machinery,
masts, rigging, derricks, drawworks, blowout preventers, marine
drilling riser, lifeboats, boats, anchors, cables, chains, tackles,
cranes, fittings, tools, pumps, gear, equipment, apparel, furniture,
equipment, spare parts, top drive system and spare parts and all other
appurtenances thereto pertaining or belonging, whether on board the
Vessel or not and whether in transit or not, all as more fully
described in Schedule A (hereinafter called "Vessel");
B. Charterer and DeepFlex Production Partners L.P., an affiliate of Owner
("Deepflex Drillers"), entered into the Charter dated as of the 13th
day of October 1995 (the "Original Charter");
C. Deepflex transferred the Vessel to Owner, and Charterer and Owner wish
to amend and restate the Original Charter to, among other things,
reflect such change in ownership; and
D. Charterer desires to charter and the Owner desires to let the Vessel to
Charterer on the terms and conditions set out herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Charter, and for other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto covenant and agree
as follows:
ARTICLE I. - CHARTER PERIOD, DELIVERY AND REDELIVERY
1.1 Effective upon the termination date (the "Delivery Date") of that
certain Drilling Make-Ready Agreement dated October 13, 1995 (the
"Drilling Make-Ready Contract") between Charterer and DeepFlex, Owner
hereby lets and charters bareboat to Charterer, and Charterer hereby
hires bareboat, the Vessel until termination of this Charter. This
Charter shall terminate at such time as provided in Articles 1.3 and
11.1-11.5, such period being called "Charter Period" herein. References
in this Charter to "Client" shall mean Flextrend
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Development Company, L.L.C. ("Flextrend") or any other client under any
written contract with Charterer for drilling and or workover services
("Contract"). It is anticipated that the first Contract will be the
Flextrend Contract (hereinafter defined) between Flextrend and
Charterer commencing no earlier than 20 January 1996 and no later than
1 April 1996.
1.2 The Vessel shall be delivered to Charterer in USA waters on the
Delivery Date safely moored and secured at the shipyard/mooring
location where the Vessel was prepared for operations under the
Drilling Make-Ready Contract. Charter, with Owner's assistance and
cooperation, shall at all times obtain and maintain at Owner's cost and
risk all necessary import licenses, permits, authorizations,
certificates and the like necessary for the import and use of the
Vessel in the US Gulf of Mexico and state waters (if any) where the
Contract is performed ("Area of Operations" or "GOM").
Prior to the first date on which the Vessel is to commence operations
pursuant to this Charter pursuant to the first Contract related hereto:
A. the Vessel shall be surveyed, including video taped, by a
recognized commercial marine surveyor jointly selected by Owner
and Charterer, to determine the condition of the Vessel. The cost
of such survey shall be considered as an Operating expense as
defined under Article 3 and be charged to the Owner. A copy of
such report and video tape will be kept by Owner and Charterer.
B. Owner and Charterer shall enter into the Drilling Make-Ready
Contract under which Owner shall contract Charterer to prepare the
Vessel and her appurtenances for operations in the area of
operations to the satisfaction of the Certifying Authorities,
Owner, Charterer, and Client.
1.3 Except in the event of a Total Loss and subject to mutual agreement
otherwise, at the end of the Charter Period, the Vessel shall be
redelivered by the Charterer to Owner at the McDermott wharf at Harbor
Island, Texas, or such other nearest safe port if such port is not
accessible. Except as otherwise provided in Article 7, (i) any costs
related to redelivery will either be recovered from Client via
demobilization fees, or considered as Operating Expenses and paid for
by Owner, and (ii) in no case will these costs be borne by Charterer.
Prior to redelivery, the Vessel shall be surveyed, including video
taped, by a recognized commercial marine surveyor jointly selected by
Owner and Charterer, to determine the condition thereof. The cost of
such survey shall be considered as an Operating expense as defined
under Article 3 and be charged to the Owner. Such survey may be
commenced while the Vessel is under tow. A copy of each report and
video tape will be kept by Owner and Charterer.
ARTICLE II. - CONDITION OF OWNER'S VESSEL AND EQUIPMENT
Owner warrants that on the Delivery Date and, to its knowledge or except as
otherwise known to Charterer, the Vessel shall be seaworthy and able to float
safely and is fully licensed, permitted, certified and otherwise qualified to
operate in the GOM and that on delivery the Vessel is classed by ABS as ABS
Maltese Cross +Al and has a USCG Certificate of Inspection, with no outstanding
recommendations that would prevent the unit from operating; and that no dry
docking or cessation
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of operations during this Charter will be required as a result of any existing
condition to comply with any license, permits, classification, certification or
other requirements.
Owner agrees to assume all liability for claims, demands, losses, damages and
expenses arising directly out of a breach by Owner of the above warranties and
further agrees to defend, indemnify and hold Charterer harmless in this regard.
ARTICLE III. - CHARTERHIRE
3.1 During the term of this Charter, payments between Owner and Charterer
shall be as follows:
A. Prior to First Contract:
from the Delivery Date until the first date on which fees are
payable to Charterer under the Flextrend Contract or any other
Contract, Owner shall pay Charterer (i) a management fee of 2,800
United States Dollars ("USD") per day, (ii) personnel complement
costs in accordance with Schedule B, (iii) insurance payments set
forth in Article 4.1(D), and (iv) reimbursement for all reasonable
out-of-pocket expenses, third party engineering fees, demurrage,
wharfage, sales or value added taxes, Certifying Authority fees,
duties, fees and costs related to the maintenance, operation,
modification, transport and towing, stocking, insuring, fueling,
inspection, and, subject to the terms and conditions of this
Charter, capital expenditure and repair and replacement with
regard to the Vessel and equipment related to the Vessel.
Thereafter, Owner shall pay Charterer the fees provided in B. and
C. below. No charterhire shall be payable by Charterer to Owner.
B. Flextrend Contract and Dover Contract:
1) if Charterer and Flextrend enter into a Contract (the
"Flextrend Contract") for drilling on Garden Banks 117, any
lump sum collected for modification, mobilization,
demobilization or similar fees should be passed through
directly to Owner without regard to or any impact on the
arrangements set forth in 2) below;
2) Charterhire shall be the relevant dayrate, turnkey and
other amounts payable (collectively, the "Dayrate") under the
Flextrend Contract or, if applicable, the Contract between
Charterer and Dover Technology, Inc. covering the Belize
prospect (the "Dover Contract") received by Charterer LESS
Two Thousand Eight Hundred United States Dollars (2800 USD),
as adjusted pursuant to Article 3.3, per day and Charterer's
operating expenses. Operating expenses shall be defined in
this Article 3.1.B.2) as:
a) Personnel complement costs based on the costs in
Schedule B;
b) Charterer's in-house engineering support provided by
Charterer's Research and Engineering Department at a
cost of 800 USD per day, if consented to by Owner;
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c) Any reasonable out-of-pocket expenses, third party
engineering fees, demurrage, wharfage, sales or value
added taxes, Certifying Authority fees, duties, fees and
costs related to the maintenance, operation,
modification, transport and towing, stocking, insuring,
fueling, inspection, and, subject to the terms and
conditions of this Charter, capital expenditure and
repair and replacement with regard to the Vessel and
equipment related to the Vessel;
d) All other payments Owner is to pay Charterer pursuant to
this Charter, including, without limitation, the
insurance payments provided for in Article 4; and
e) "Shared Costs," being 5% of the difference between the
relevant Dayrate paid to Charterer and the amounts
described in a) through d) above.
C. Contracts covering any property in which an Owner Affiliate
(herein defined) directly or indirectly owns an interest:
1) Charterhire shall be the relevant Dayrate payable to
Charterer under each such Contract LESS Two Thousand Eight
Hundred Dollars (2800 USD), as adjusted pursuant to Article
3.3, per day and Charterer's operating expenses. Operating
expenses shall be defined in this Article 3.1.C.1) as:
a) Personnel complement costs based on the costs in
Schedule B;
b) Charterer's in-house engineering support provided by
Charterer's Research and Engineering Department at a
cost of 800 USD per day, if consented to by Owner;
c) All reasonable out-of-pocket expenses, third party
engineering fees, demurrage, wharfage, sales or value
added taxes, Certifying Authority fees, duties, fees and
costs related to the maintenance, operation,
modification, transport and towing, stocking, insuring,
fueling, inspection, and, subject to the terms and
conditions of this Charter, capital expenditure and
repair and replacement with regard to the Vessel and
equipment related to the Vessel;
d) Five percent (5%) of the gross day rate, turnkey or
similar fees (excluding add-ons, reimbursables and
similar items) payable to Charterer pursuant to the
relevant Contract;
e) All other payments Owner is required to pay Charterer
pursuant to this Charter, including, without limitation,
the insurance payments provided for in Article 4; and
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f) "Shared Costs," being 5% of the difference between the
relevant Dayrate paid to Charterer and the amounts
described in a) through e) above.
For purposes of this Charter, the terms:
"Owner Affiliate" means Owner, DeepTech International Inc. and
their Affiliates (herein defined) and any entity in which Owner,
DeepTech International Inc. or any of their Affiliates owns
(directly or indirectly) 20% or more of the interest therein.
"Affiliate" means, with respect to a relevant individual or
entity, any other individual or entity controlled by, controlling
or under common control with the relevant individual or entity; as
used herein, the term control (including its derivatives and
similar terms) means the power, directly or indirectly, to direct
or cause the direction of the management and policies of such
relevant individual or entity, by ownership of voting interest,
contract or otherwise.
D. Other Contracts not covered by B. and C. above:
1) Charterhire shall be the relevant Dayrate payable to
Charterer under each Contract LESS Two Thousand Eight Hundred
Dollars (2800 USD), as adjusted pursuant to Article 3.3, per
day and Charterer's operating expenses. Operating expenses
shall be defined in this Article 3.1.D.1) as:
a) Personnel complement costs based on the costs in
Schedule B;
b) Charterer's in-house engineering support provided by
Charterer's Research and Engineering Department at a
cost of 800 USD per day, if consented to by Owner;
c) All reasonable out-of-pocket expenses, third party
engineering fees, demurrage, wharfage, sales or value
added taxes, Certifying Authority fees, duties, fees and
costs related to the maintenance, operation,
modification, transport and towing, stocking, insuring,
fueling, inspection, and, subject to the terms and
conditions of this Charter, capital expenditure and
repair and replacement with regard to the Vessel and
equipment related to the Vessel;
d) Ten percent (10%) of the gross dayrate, turnkey or
similar fees (excluding add-ons, reimbursables and
similar items) payable to Charterer pursuant to the
relevant Contract;
e) All other payments Owner is to pay Charterer pursuant to
this Charter, including, without limitation, the
insurance payments provided for in Article 4; and
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f) "Shared Costs," being 5% of the difference between the
relevant Dayrate, payable to Charterer in the amounts
described in a) through e) above.
E. For periods when the Vessel is not under Contract or is under
Contract but no Dayrate is payable to Charterer, no Charterhire
shall be payable by Charterer to Owner, and Charterer shall be
entitled to a fee from Owner of 2,800 USD/day, as adjusted
pursuant to Article 3.3, plus reimbursement of Charterer's
operating expenses defined in this Article 3.1 but excluding the
items described in B.2.(b) and (e), C.1.(b), (d), and (f) and
D.1.(b), (d) and (f), and Charterer shall be under no obligation
to provide services associated with the excluded items.
3.2 Except as provided in 3.3 below Charterer's management fee of 2,800
USD/day shall not be reduced if the Dayrate payable is less than
operating expenses plus the management fee.
3.3 In the event that Charterer is operating at Repair Rate as defined in
the Flextrend Contract or other Contract/s, Charterer's fee of Two
Thousand Eight Hundred United States Dollars (2800 USD) per day shall
be reduced as follows:
A. reduced by 25% for repair hours from 12-24 hours during any
calendar month.
B. reduced by 50% for repair hours from 24-48 hours during any
calendar month.
C. reduced by 75% for repair hours from 48-72 hours during any
calendar month.
D. reduced to Zero after 72 hours at repair rate during any calendar
month.
3.4 The daily management fee payable under this charter shall be prorated
to the nearest hour.
3.5 Charterer shall make payment of amounts due to Owner hereunder (i) as
soon as reasonably practicable (but not more than ten (10) days) after
Charterer receives payment pursuant to the Flextrend Contract and the
Dover Contract and (ii) ten (10) days after payment is due under any
Contract other than those described in (i) above.
In the event such amount is not paid to Owner when due, Charterer shall
pay interest on the same at the rate of 12% per annum from the due date
until paid.
For amounts due under 3.1A, and in the event no Dayrate is received as
described in articles 3.1.B., 3.1.C. or 3.1.D hereabove Charterer shall
invoice the Owner on the first day of each month, for amounts earned
during the previous month and for the reimbursable operating expense
items. Owner shall make payment of such invoices within thirty (30)
days of receipt of Charterer's invoice. In the event Owner wishes to
dispute the correctness of any invoice, Owner shall give Charterer
notice of dispute within ten (10) days of receipt of Charterer's
invoice. In such a case, Owner shall have the right to withhold payment
on such disputed invoices until settlement of the dispute. Owner shall
however pay undisputed portions of any invoice within the time
specified above.
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In the event any correctly prepared and undisputed portion of any
invoice is not paid within thirty (30) days of Owner's receipt of the
same, Owner shall pay interest on the same at the rate of 12% per annum
from the due date until paid.
During any period in which there is not Contract in effect, Charterer
shall have the right to require Owner to provide reasonable security
for Owner's payment obligations to Charterer during such period. Such
security shall be (i) in the form of a letter of credit, cash
pre-payments or other arrangements mutually acceptable to the parties
hereto and (ii) in a varying amount not less than the positive
difference, if any, between then existing amounts payable by Charterer
pursuant to this Charter to (x) third-parties and (y) Owner.
3.6 Increase in Charterer's Personnel
A. Under the terms of any Contract between Client/s and Charterer,
Client may, at any time, with Charterer's approval, require
Charterer to increase the number of Charterer's Personnel and the
day rates. In no such event shall Charterer increase Charterer's
personnel complement without receiving at least equal dayrate
compensation from Client. In the event of such increases in
personnel and costs, Charterer's Personnel Costs as defined in
Schedule B shall be adjusted accordingly with such costs being
passed on to Owner so long as such adjustments do not reduce the
amount payable hereunder to Owner.
B. Upon the occurrence and during the continuation of any material
event, circumstance or condition which is required to be remedied
pursuant to any applicable Contract, Charterer may increase the
number of Charterer's personnel complement to the extent
reasonably necessary to effect such remedy; provided, that
Charterer shall immediately provide Company with a detailed
written notice describing such event, circumstance or condition,
the proposed remedy (including timing and costs) and any other
relevant information. To the extent reasonably practicable,
Contractor shall coordinate and cooperate with Company to effect
such remedy using proposals and procedures most economically
beneficial to Company.
3.7 Variation of Rates
Since certain expenses related to the operation of the Vessel are
passed through to the Owner at cost, except for Personnel Costs which
are provided for in Schedule B, and certain insurance costs which are
provided for in Article 4, expenses subtracted from the Dayrate under
this Charter shall be varied as follows:
A. if Personnel Costs provided for in the Schedule B increase after 1
February 1996, including all payroll burden and benefits paid by
Charterer for its employees due to a corporate wage increase by
Charterer, then the rates provided for in Schedule B shall
increase a like amount no sooner than 1 February 1996 subject to
approval by Owner, which approval shall not be withheld
unreasonably.
B. if Client or Owner requires Charterer to increase the number of
Charterer's Personnel, then the rates provided for in Schedule B
shall, subject to 3.6, increase in relation thereto, including the
costs of including labor burden and benefits.
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C. if upon periodic review, which reviews shall occur at least
quarterly, by Owner and Charterer, the burdens and costs reflected
in Schedule B for ▇▇▇▇▇ Act liability insurance, travel, safety,
training, raises, bonuses, and relocation expenses are, in
reasonable, good faith, mutually agreed to be more or less than
the actual costs, then appropriate adjustments shall be made to
the burdens and actuals in Schedule B as mutually agreed, in
reasonable, good faith, by Owner and Charterer.
D. if at any time the management/shorebased personnel shown in
Schedule B are not committing, directly or indirectly, all or
substantially all of their business time to the Vessel, invoiced
personnel costs related thereto from Charterer to Owner pursuant
to this Charter shall be reduced accordingly to reflect work time
not chargeable to the Vessel. It being the intention of the
parties hereto that the Personnel Costs related to such
management/shorebased personnel are in exchange for such personnel
committing all or substantially all of their business time to the
Vessel.
3.8 Payments to Owner shall be paid into the following bank account or to
such other bank account as Owner may designate from time to time with
thirty (30) days prior notice:
Hibernia National Bank
New Orleans, Louisiana
ABA No. ▇▇▇-▇▇▇-▇▇▇
For Credit to:
RIGCO North America, L.L.C.
Receivables Collateral Account
Account No. 812378783
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Payments to Charterer shall be paid into the following bank account or
to such other bank account as Charterer may designate from time to time
with thirty (30) days prior notice:
▇▇▇▇▇▇ Guaranty Trust Company of New York
New York, New York
ABA No. ▇▇▇-▇▇▇-▇▇▇
For Credit To: Schlumberger Technology
Corporation (Sedco Forex Division)
Account No. ▇▇▇-▇▇-▇▇▇
All payments are to be in US Dollars.
3.9 Charterer shall, and shall cause each of its subcontractors, vendors
and other representatives to, keep complete and accurate records of all
costs, expenses and expenditures in connection with this Charter. To
the extent necessary or appropriate to verify the amounts billed to
Owner pursuant to this Charter and for a period of two years after the
termination of this Charter, Owner or its designated representatives,
after ten (10) days' prior written notice to Charterer, shall have the
right during normal business hours to audit or examine all such books
and records relating to such transactions.
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ARTICLE IV. - INSURANCE
4.1 Charterer agrees to carry insurance or, to the extent permitted by law,
self insure at Charterer's option at least equal to the following:
A. On its employees, Employers Liability and Worker's Compensation
Insurance required by law, including all applicable endorsements,
including endorsements for claims under the ▇▇▇▇▇ Act, providing
limits of liability as required under law or as applicable for no
less than 1,000,000 USD per occurrence.
B. Comprehensive Third Party Liability Insurance, including Marine
Liability Insurance, covering Charterer's liability. Such
insurance shall have a limit of no less than 1,000,000 USD
combined single limit per occurrence, irrespective of the
foregoing.
C. Charterer shall carry excess liability insurance in amounts not
less than 50,000,000 USD per occurrence in addition to and in
excess of all primary liability coverage carried by Charterer,
including, but not limited to insurance required under Articles
4.1.A-B above.
D. During the Charter Period, Charterer agrees to provide insurance
coverage set forth in Articles 4.1.B. - C. above at a cost to
Owner of 100 USD/day.
4.2 Owner agrees at its sole cost and expense to maintain insurance
coverage at least equal to the following:
A. On its employees, Employer's Liability and Worker's Compensation
Insurance required by law, including all applicable endorsements,
including endorsements for claims under the ▇▇▇▇▇ Act.
B. Comprehensive Third Party Liability Insurance, including Marine
Liability Insurance, covering Owner's Liability. Such Insurance
shall have a limit of no less than 1,000,000 USD combined single
limit per occurrence.
C. All Risk Marine Hull and Machinery Insurance including Collision
Liability covering the Vessel and other equipment belonging to the
Vessel and owned by Owner for the full value thereof but not less
than 75,000,000 USD with a deductible not to exceed 500,000 USD.
Owner shall be named as the insured and sole loss payee of such
policy and all proceeds related thereto shall be paid directly to
Owner.
D. Removal of Wreck Insurance for the Vessel and Machinery not less
than a limit of 25,000,000 USD with a deductible not to exceed
50,000 USD.
4.3 Each party shall further cause the insurances provided by them
hereunder to be endorsed to provide that the policies will not be
canceled or changed for any reason whatsoever unless at least thirty
(30) days prior written notice has been given to the other party,
except in the event of war risk, in which case a seven (7) day notice
shall apply.
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4.4 The insurances provided by 4.1 and 4.2 (A) and (B) shall be endorsed to
provide to the effect that the underwriters waive all rights of
subrogation against the other party and that the other party and its
owners, parent, affiliated and subsidiary companies shall be named as
additional insureds on the policies (except Employer's Liability and
Worker's Compensation) to the extent of the contractual obligations
created herein.
The insurances provided by 4.2 (C) and (D) shall be endorsed to provide
the effect that the underwriters waive all rights of subrogation
against Charterer and Client and that Charterer and its owners, parent,
affiliated and subsidiary companies shall be named as additional
insureds on the policies.
4.5 Each party agrees that it will not cancel or voluntarily permit or
allow to be done any act by which any insurance provided by it may be
suspended, impaired or canceled. Each party shall, furnish the other
with certificates of the policies evidencing the insurance required
herein.
4.6 Charterer shall promptly furnish Owner with full information regarding
any casualty or other accident or damage to the Vessel.
4.7 Each party agrees to carry (at its expense) insurance adequate to cover
its indemnity obligations pursuant to this Charter.
ARTICLE V. - OPERATION OF THE VESSEL
5.1 Charterer shall during the Charter Period:
A. have the exclusive dominion, possession, control and command of
the Vessel and the Owner hereby relinquishes to Charterer all
dominion, possession, control and command of the Vessel;
B. except as otherwise provided in this Charter, man, victual,
navigate, operate, supply and fuel the Vessel, personnel costs and
other operating costs to be paid by Owner as provided in Article
3; and
C. operate the Vessel in a good and workmanlike manner, as a prudent
operator and in a manner consistent with accepted domestic
practice and practices exercised by Charterer with regard to its
own fleet.
5.2 Charterer shall keep the Vessel and her appurtenances in a good state
of repair and in efficient operating condition.
5.3 Charterer shall keep the Vessel seaworthy and able to float safely and
otherwise qualified to operate in the GOM and classed ABS as ABS
Maltese Cross +A1, and shall maintain the USCG Certificate of
Inspection and/or USCG Letter of Compliance and Bahamian flag
certificates and other required certificates in force with Owner's
cooperation at all times. If any temporary approval from ABS and/or the
USCG is in place on Delivery Date, Owner shall be responsible for any
costs related to retaining ABS class and or USCG issuance of necessary
replacement Certificate of Inspection.
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5.4 All repair, maintenance, classification and certification which is not
specified for Charterer's account herein, shall be for Owner's account.
Charterer is authorized to procure such repair, maintenance,
classification and certification on Owner's behalf and Owner shall
reimburse Charterer its costs on demand, failing which Charterer may
withhold same from amounts it owes Owner.
5.5 No individual expenditure, or aggregate expenditures, in excess of
25,000 USD shall be committed to or made without Owners' prior written
consent except to the extent of reasonable expenditures made in good
faith by Charterer as required to protect lives of personnel and
serious damage to equipment and the Vessel; in which case, Charterer
shall immediately notify Owner of each such expenditure individually.
Charterer shall not enter into or offer to enter into any Contract or
other agreement or arrangement related to or affecting the Vessel
without Owner's prior written consent, which consent may be granted or
withheld in Owner's sole discretion. Charterer agrees to timely enforce
all of its rights and remedies and perform in an efficient and
workmanlike manner all of its obligations under each Contract.
5.6 Charterer shall use commercially reasonable efforts to ensure that the
costs of operating the Vessel are equal to or less than the amounts set
forth in the Daily Drilling/Operating Costs Budget set forth in
Schedule C.
ARTICLE VI. - TAXES
6.1 Each of Owner and Charterer shall be responsible for all matters in
connection with any license, permit, accounting and reporting
requirement, and the like in connection with its employees including
making and submitting reports to the proper agencies and withholding
taxes, social security system, workmen's compensation and Medicare
premiums and submitting the same to the proper authorities. Any
payments resulting from the above responsibilities will be for the
account of Owner or Charterer, as applicable.
6.2 Each of Owner and Charterer shall be responsible for all taxes levied
on its personnel and/or invoices.
ARTICLE VII. - LIABILITIES
7.1 Except to the extent resulting from the Gross Negligence (herein
defined) or wilful misconduct of any indemnified party, Charterer
agrees to release, defend, indemnify and hold each of Owner and its
owners, parent, affiliates, contractors and sub-contractors, and its
and their directors, officers, employees and representatives excluding
any hereinafter defined Charterer Representative ("Owner
Representatives") harmless from and against any claims, loss, damages
and liability, including all cost and expenses of defense, attorney's
fees and court costs ("Losses"), in respect of:
A. any death or injury suffered by any of Charterer and its owners,
parent, affiliates, contractors and sub-contractors, and its and
their directors, officers, employees or representatives
("Charterer Representatives"); and
B. any loss of or damage to property owned by any Charterer
Representative.
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7.2 Except to the extent resulting from the Gross Negligence or wilful
misconduct of any indemnified party and subject to Article 4.1(C.),
Owner agrees to release, defend, indemnify and hold each Charterer
Representative harmless from, any Losses in respect of:
A. death or injury suffered by any Owner Representative; and
B. loss of or damage to and removal of wreck of the Vessel or any
property owned or provided by Owner or owned and provided by any
Owner Representative.
7.3 Each party's liability towards third parties shall be settled in
accordance with the applicable law, except as otherwise provided in
this Charter.
7.4 The indemnities provided for in 7.1 and 7.2 above apply without regard
to the cause or causes thereof including, without limitation, breach of
contract, representation or warranty, or simple negligence, whether
active, passive, sole or concurrent, even if on the part of the party
seeking the benefit of the indemnity, whether an action is founded on
statute, common law, maritime law or theory of strict liability.
7.5 Notwithstanding anything to the contrary in this Charter, a party's
damages resulting from a breach or violation of any representation,
warranty, covenant or condition contained herein shall be limited to
actual direct damages, and shall not include any other damages,
including, without limitation, loss of profit and other indirect,
special, consequential, incidental or punitive damages.
7.6 For purposes of Articles 7.1 and 7.2, the term "Gross Negligence" shall
have the meaning ascribed to it in the jurisprudence of the applicable
jurisdiction (i.e. in Texas, such term is currently interpreted as
meaning, among other things, conduct that is so shocking to common
sensibility that it would support belief that the act or omission
complained of was a result of conscious indifference to the right or
welfare of the person affected by it. 53 Tex. Jr.3d, Negligence ?
55fn.).
ARTICLE VIII. - USE OF EQUIPMENT AND SPARES
Charterer shall be entitled to use, without additional payment to Owner, all
furniture, fittings, and other equipment on board and forming part of the
Vessel, provided that at the end of the Charter Period, the same shall, without
prejudice to 5.2 and 7.2 be returned to the Owner, or replaced in the same good
order and condition as received, fair wear and tear excepted.
ARTICLE IX. - CHANGE, ALTERATIONS, REPLACEMENTS
9.1 Charterer shall make no structural changes or alterations to the Vessel
unless prior written approval has been obtained from the Owner. Owner
agrees that Charterer shall have the right to make any emergency
repairs or replacements reasonably required to safeguard the Vessel and
the personnel and equipment thereon. Such replacements shall be for
Owner's account and such repairs shall be for Owner's or Charterer's
account as specified in Article 5.
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All structural changes or alterations made under this Article 9.1 shall
comply with the Vessel's classification society's requirements and the
requirements of the USCG and/or Bahamian Registry.
9.2 Unless otherwise agreed in writing between Owner and Charterer, any
installations or addition to the Vessel paid for by Charterer and not
reimbursed by Owner, which can be removed at the end of the term of
this Charter without damage to the Vessel, shall remain the property of
the Charterer and Charterer shall remove all such installations or
additions prior to or as soon as possible after redelivery and, subject
to 5.2 and 7.2 and fair wear and tear, shall restore the Vessel to its
original condition.
9.3 Charterer shall not change the name or markings of the Vessel without
the prior written consent of the Owner.
9.4 Capital expenditures and modifications shall be for Owner's account if
approved in writing by Owner, including, without limitation, the
modifications pre-approved by Owner as shown in the Long Term
Maintenance and Capital Expenditure Program set forth in Schedule D,
which program shall be mutually reviewed and adjusted by Owner and
Charterer at least annually.
ARTICLE X. - LIENS
10.1 Charterer agrees and warrants that it will not allow any lien arising
out of Charterer's failure to pay its debts when due or any liability
or claim incurred or made against Charterer or for which Charterer
accepts responsibility under this Charter to attach to the Vessel.
Charterer further agrees that neither Charterer, nor the master of the
Vessel nor any other person shall have the right, power or authority
to, and Charterer shall not allow any such party to, create, incur, or
permit to exist on the Vessel any lien or encumbrance whatsoever.
Charterer shall indemnify and hold harmless the Owner and Lender
against any such liens upon the Vessel.
10.2 Charterer agrees to carry a copy of this Charter, and on demand to
exhibit the same to any person having business with the Charterer which
might give rise to any lien or encumbrance thereon, other than liens
for crew's wages and salvage.
10.3 Should the Vessel be arrested by reason of debt, liability, or claim
incurred by or made against Charterer or for which Charterer assumed
responsibility under this Charter, Charterer shall at its cost take all
reasonable steps to secure release of the Vessel within a reasonable
period of time.
ARTICLE XI. - TERMINATION OF CHARTER PERIOD
11.1 At any time after April 1, 1996, either Charterer or Owner shall have
the right to terminate this Charter (without any payment to the other
except for amounts already payable through the termination date), in
its sole discretion, by giving the other party at least 60 days prior
written notice if at the time such notice is delivered there is no
Contract then in effect requiring use of the ▇▇▇▇▇▇.
▇▇
▇▇
11.2 This Charter shall automatically be terminated upon the earlier to
occur of (i) October 1, 1997 unless the parties hereto agree in writing
to extend the term of this Charter; or (ii) the time of a total loss of
the Vessel, whether actual, constructive or compromised (such as
capture, seizure, terrorist acts, war, nationalization or inability to
export) as determined by the Vessel's underwriters; provided, however,
that Owner shall have the right to terminate this Charter to allow
Owner to proceed with converting the Vessel into a floating production
system upon at least 60 days prior written notice delivered on or after
August 1, 1996. In any case, the Charterer shall continue for the time
required to complete any Contract in effect and demobilize the Vessel.
11.3 This Charterer may be terminated in accordance with any provision in
this Charter expressly providing for termination rights.
11.4 If any material defect or deficiency in the Vessel or her appurtenances
affects the continued safe operation and use of the Vessel or her
appurtenances and the repair or replacement required to remedy the
defect or deficiency is Owner's responsibility and for Owner's account
hereunder, Charterer shall be entitled to request Owner to repair or
otherwise remedy such condition. If Owner has not commenced any such
necessary repair or remedy procedures within sixty (60) days of receipt
of such written request, Charterer may terminate this Charter and shall
have no obligation to pay Owner any amounts other than amounts of
Charterhire already earned.
11.5 In the event of termination under Article 11.2(ii) above, termination
shall take effect immediately and no payments or other action by
Charterer shall be due to Owner after that date except for payment of
Charterhire already earned. In the case of termination other than under
Article 11.2(ii) above, Charterer shall as soon as reasonably possible
after termination tow the Vessel to the stack location at the ▇▇▇▇▇▇▇▇▇
wharf at Harbor Island, Texas. In the event the ▇▇▇▇▇▇▇▇▇'▇ facility is
not available is not accessible, then to the nearest safe port. Except
to the extent provided in Article 7, (i) any costs related to
redelivery will either be recovered from Clients via demobilization
fees, or considered as Operating Expenses and paid for by Owner, and
(ii) in no case will these costs be borne by Charterer.
ARTICLE XII. - ASSIGNMENT AND SUBCHARTERING
12.1 Owner (including a transferee thereof) may assign, alienate or
otherwise transfer all or any portion of its rights, title and interest
and delegate any of its obligations arising pursuant to this Charter.
12.2 Charterer agrees not to assign, transfer or otherwise alienate any of
its rights, title, interest or obligations under this Charter or to
subcharter the Vessel to any individual or entity other than an
affiliate or subsidiary of Charterer which remains an affiliate or
subsidiary of Charterer without the prior written consent of Owner,
which consent shall not be unreasonably withheld.
12.3 Unless otherwise agreed to by the parties hereto (including a
transferee of a party hereto), both the transferor and the transferee
(other than a mortgagee, pledgee or other holder of a security
interest) shall be jointly and severally responsible and primarily
liable for the full
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and timely performance of all covenants, agreements and other
obligations, and the timely payment and discharge of all liabilities,
costs and other expenses, arising (directly or indirectly) pursuant to
this Charter. Upon transfer of all or any portion of its rights, title
and interest in and to this Charter, the transferor shall promptly
provide the other parties hereto with a copy of such transfer document.
ARTICLE XIII. - CONDITIONS PRECEDENT [Intentionally omitted]
ARTICLE XIV. - CHOICE OF LAW AND NOTICES
14.1 TO THE EXTENT THE LAW OF ANOTHER JURISDICTION IS NOT REQUIRED TO BE
APPLIED, (i) THE INDEMNITY PROVISIONS OF THIS CHARTER SHALL BE GOVERNED
AND INTERPRETED IN ACCORDANCE WITH FEDERAL MARITIME LAWS AND (ii) THE
REMAINDER OF THIS CHARTER SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS; IN THE CASE OF (i) AND
(ii) ABOVE, WITHOUT REGARD TO ANY CONFLICT OR CHOICE OF LAW RULES OR
PROCEDURES WHICH IF APPLIED MIGHT PERMIT OR REQUIRE THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
14.2 Notice shall be deemed properly given if delivered in writing in person
to the named Representative of the other party or by telex or by
telefax to the numbers below, or by registered mail to the addresses
below:
FOR THE OWNER:
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
RIGCO North America, L.L.C.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone ▇▇▇ ▇▇▇-▇▇▇▇
Telefax 713 224-7574
FOR THE CHARTERER:
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Schlumberger Technology Corporation (Sedco Forex Division)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Telefax ▇▇▇ ▇▇▇-▇▇▇▇
ARTICLE XV. - DEFAULT
15.1 If at any time a party (i) shall fail to pay any amount when due and
payable hereunder, (ii) shall be in default of any of the material
terms, conditions or provisions of this Charter, or (iii) shall be
dissolved or be adjudged a bankrupt, or shall file or have a petition
in bankruptcy filed against it, or shall make a general assignment for
the benefit of creditors,
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or if a receiver shall be appointed for said party, the other party
may, without prejudice to any other rights which it may have under this
Charter, exercise any one or more of the alternatives provided for
herein.
15.2 Upon the occurrence of an event of default, including those described
above, and at any time thereafter so long as the same shall be
continuing, the non-defaulting party may, by written notice at its
option, declare the other party to be in default, and:
A. If not cured within 15 days after receipt of said notice, declare
all earned and unpaid amounts, and other sums payable hereunder to
be immediately due and payable; and
B. Without prejudice to other rights to terminate set out in this
Charter, the defaulting party may terminate this Charter by giving
at least 15 days advance written notice of the breach, provided
that this Charter shall not terminate if the defaulting party
remedies the breach within said 15 days, but no such termination
shall release or relieve defaulting party from any of its
obligations or liabilities under this Charter.
ARTICLE XVI. - REPRESENTATIONS
16.1 Charterer represents, warrants, covenants, and agrees to and with Owner
that (a) Charterer is a corporation duly organized, validly existing,
and in good standing under the laws of the country or state of its
incorporation, with the corporate power to own its property and assets,
and is duly qualified in each jurisdiction where the nature of its
operations requires such qualification; (b) the execution, delivery,
and performance of this Charter (i) are within Charterer's power, (ii)
have been duly authorized by all necessary corporate action, including
any necessary board of directors or shareholders' action, (iii) do not
contravene Charterer's articles or certificate of incorporation or
by-laws, and (iv) do not contravene any law, any order of any court or
other agency of government, or any agreement or instrument or
contractual restriction binding on or affecting any of its property, or
constitute a default thereunder.
16.2 Owner represents, warrants, covenants, and agrees to and with Charterer
that (a) Owner is a limited partnership duly organized, validly
existing, and in good standing under the laws of the country or state
of its formation, with the partnership power to own its property and
assets, and is duly qualified in each jurisdiction where the nature of
its operations requires such qualification; (b) the execution,
delivery, and performance of this Charter (i) are within Owner's power,
(ii) have been duly authorized by all necessary corporate action,
including any necessary board of directors, shareholders' or other
appropriate body action, (iii) do not contravene Owner's articles or
certificate of incorporation or by-laws or other organizational
documents, and (iv) do not contravene any law, any order of any court
or other agency of government, or any agreement or instrument or
contractual restriction binding on or affecting any of its property, or
constitute a default thereunder.
16.3 EXCEPT AS EXPRESSLY PROVIDED IN THIS CHARTER, EACH OF CHARTERER AND
OWNER EXPRESSLY DISCLAIM, WAIVE AND NEGATE ANY AND ALL REPRESENTATIONS
OR WARRANTIES, INCLUDING,
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WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS AND TITLE.
ARTICLE XVII. - FORCE MAJEURE
17.1 The term "Force Majeure" as used in this Charter shall mean any act,
event, cause or occurrences which are unforeseeable and unavoidable
rendering a party unable to perform its obligations on account of
strikes, riots, war (declared or undeclared) or warlike operations,
terrorist acts, insurrection, fire, storm (or other natural
catastrophe), any unavoidable delay in obtaining supplies or materials
(other than action or delay caused by Charterer or Owner), any act of
any government authority or any other cause whether or not similar to
the causes herein specified which is not within the reasonable control
of the Party claiming relief under this Clause;
17.2 If any party is rendered unable, wholly or in part by Force Majeure to
perform its obligations under this Charter other than financial
obligations, it is agreed that performance of such obligations by such
party, so far as they are affected by Force Majeure, shall be excused
from the inception of such inability until it is corrected, but for no
longer period. The party claiming an inability to perform shall, as
soon as possible after the occurrence of the Force Majeure event,
notify the other party of such event and its inability to perform. The
party claiming inability to perform shall promptly use all due
endeavors to overcome the Force Majeure event.
17.3 Should the Force Majeure event last for more than thirty (30) days,
either party shall be entitled to terminate this Charter.
ARTICLE XVIII. - CONFIDENTIALITY
18.1 All information acquired by one party regarding the business or
operations of the other party, other than information which either:
- is part of the public domain,
- becomes part of the public domain other than through the fault of
the parties,
- is already known by the Parties at the same time of disclosure,
- is required to be disclosed to third parties according to
applicable law, is to be treated as confidential and not to be
used or discussed by either party for any other purpose than for
the performance of this Charter for the maximum enforceable period
allowed by applicable law relative to such undertakings.
ARTICLE XIX. - CHARTERER'S CONTINUING OBLIGATIONS
19.1 Charterer shall be obligated under this Charter to operate the Vessel
in a fashion consistent with (i) all applicable laws, rules,
regulations and orders, (ii) the standards of a prudent operator in the
offshore drilling industry and (iii) how Charterer would operate one of
his own Vessels. Charterer shall use his best efforts to secure
additional work for the Vessel
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through a marketing effort within the Area of Operations. Owners shall
be timely consulted and kept aware of future work prospects for the
Vessel.
19.2 During the Charter Period, Charterer shall use all reasonable efforts
to give Owner at least ninety (90) days prior written notice before
conducting any marketing in the US Gulf of Mexico of any equipment that
is competitive with the Vessel, the semisubmersible drilling rig the
FPS ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, official number 366166 (the "▇▇▇▇ ▇▇▇▇▇▇▇▇▇")
(provided such rig continues under the management of Charterer), or any
other drilling rig owned by Owner or any affiliate or subsidiary of
Owner and managed by Charterer. It is expressly understood and agreed
that in the event of the acquisition of existing equipment in the Gulf
of Mexico by Charterer, Charterer may not be able to, and will not be
required to, give such notice.
ARTICLE XX. - MISCELLANEOUS
20.1 This Charter and the other agreements executed pursuant hereto, if any,
constitute the entire agreement and supersede all prior (oral or
written) or oral contemporaneous proposals or agreements, all previous
negotiations and all other communications or understandings between the
parties hereto with respect to the subject matter hereof.
20.2 All amendments, supplements and modifications to this Charter shall be
in writing and signed by all of the parties hereto.
20.3 This Charter may be executed in multiple counterparts, each of which,
when executed, shall be deemed an original, and all of which shall
constitute but one and the same instrument.
20.4 All personal pronouns used in this Charter, whether used in the
masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and vice versa. Articles,
sections and other titles or headings are for convenience only, and
neither limit nor amplify the provisions of the Charter itself, and all
references herein to articles, sections or subdivisions thereof shall
refer to the corresponding article, section or subdivision thereof of
this Charter unless specific reference is made to such articles,
sections or subdivisions of another document or instrument.
20.5 All exhibits, schedules and the like contained herein are integrally
related to this Charter, and are hereby made a part of this Charter for
all purposes.
20.6 Subject to the terms and conditions set forth in this Charter, each of
the parties hereto agrees to use all reasonable efforts to take, or to
cause to be taken, all actions, and to do, or to cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Charter. In case, at any time after the execution
of this Charter, any further action is necessary or desirable to carry
out its purposes, the proper officers or directors of the parties
hereto shall take or cause to be taken all such necessary action.
20.7 Each of the parties hereto shall pay all costs and expenses incurred or
to be incurred by such party in negotiating and performing the
transactions contemplated by this Charter.
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20.8 Any term or provision of this Charter that is invalid or unenforceable
in any jurisdiction shall be ineffective as to such jurisdiction, to
the extent of such invalidity or unenforceability, without rendering
invalid or unenforceable the remaining terms and provisions of this
Charter or affecting the validity or enforceability of any terms and
provisions of this Charter in any other jurisdiction. If any provision
of this Charter is so broad as to be unenforceable, each provision
shall be interpreted to be only so broad as is enforceable. A
bankruptcy or similar trustee must accept or, to the extent permitted
by law, reject this Charter in its entirety.
20.9 This Charter shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors, assigns and
personal representatives.
20.10 Neither action taken (including, without limitation, any investigation
by or on behalf of any party) nor inaction pursuant to this Charter,
shall be deemed to constitute a waiver of compliance with any
representation, warranty, covenant or agreement contained herein by the
party not committing such action or inaction. A waiver by any party
hereto of a particular right, including, without limitation, breach of
any provision of this Charter, shall not operate or be construed as a
subsequent waiver of that same right or a waiver of any other right.
20.11 The rights, obligations and remedies created by this Charter are
cumulative and in addition to any other rights, obligations or remedies
otherwise available at law or in equity. Nothing herein shall be
considered an election of remedies. Without being subject to the
limitations required by common law, any party may enforce this Charter
by an injunction or specific performance. In addition, any successful
party is entitled to costs related to enforcing this Charter,
including, without limitation, attorneys' fees, court costs and
settlement and arbitration expenses.
20.12 Except as expressly provided in this Charter, nothing contained in this
Charter shall be construed to confer any right, benefit or interest
upon any person or entity other than the parties hereto.
20.13 Time is of the essence with respect to any notice requirements and
payment obligations contained herein.
20.14 Subject to the terms and conditions of this Charter, the parties hereto
agree and acknowledge that Charterer is independent from and of Owner's
control, and Charterer hereby agrees to act pursuant to the provisions
of this Charter. Charterer is and agrees to maintain such independent
status and relationship. Any provisions of this Charter that may appear
to give Owner a measure of control over the details of the Charterer's
operations shall be deemed to mean that Charterer shall follow the
general desires of Owner but Charterer shall have authoritative control
as to the details of performing the such operations. Neither Charterer
nor any Charterer Representative shall be deemed to be the agents,
representatives or employees of Owner. Nothing herein is intended to,
or shall, create a partnership, joint venture, agency or other
relationship creating fiduciary or quasi fiduciary duties or similar
duties and obligations or otherwise subject the parties hereto joint
and
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several or vicarious liability or to impose any duty, obligation or
liability that would arise therefrom with respect to either or both of
the parties hereto.
20.15 The parties hereto agree to act in good faith to undertake the
restructuring of this Charter and the First Amended and Restated
Charter Agreement, dated as of even date herewith, between Owner and
Charterer relating to the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with the intent of arriving
at a mutually agreeable Master Agreement, relating to the Vessel and
the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, within six months of delivery of the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
under a drilling contract.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Owner and Charterer have executed this Charter as of the
day and year first above written.
(Owner) (Charterer)
RIGCO NORTH AMERICA, L.L.C. SCHLUMBERGER TECHNOLOGY
CORPORATION
(SEDCO FOREX DIVISION)
By: By:
------------------------------ ------------------------------
Title:
SCHEDULE A: VESSEL DESCRIPTION
SCHEDULE B: PERSONNEL COSTS
SCHEDULE C: DAILY DRILLING/OPERATING COSTS BUDGET
SCHEDULE D: LONG TERM MAINTENANCE AND CAPITAL EXPENDITURE PROGRAM
SCHEDULE E: WAIVER OF ON-HIRE SURVEY - ARTICLE 1.2.A.
SCHEDULE F: CERTIFICATE OF DELIVERY AND ACCEPTANCE
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