EXHIBIT 10.53
FORMARITIMA LTD.
- AND -
MARITIMA PETROLEO E ENGENHARIA LTDA
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AMETHYST 7 LOCAL SERVICES AGREEMENT
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THIS AGREEMENT is made the day 5th of November,1998
BETWEEN:
1. FORMARITIMA LTD. a company incorporated in the British Virgin
Islands under and having its principal office at Arias Fabrega &
Fabrega Trust Co. BVI Limited, Omar Hodge Building, P.O. Box 985;
Wickham s Cay, Road Town, Tortola, British Virgin Islands,
(hereafter referred to as FORMARITIMA ), and
2. MARITIMA PETROLEO E ENGENHARIA LTDA, (formerly Maritima Navegaceo e
Engenharia Ltda., company incorporated in Brazil with its registered
office at Avenida Almirante Barroso 52, 3400 GR, 20031-000, Centro, Rio de
Janeiro, Brazil (hereafter referred to as MARITIMA ).
FORMARITIMA and MARITIMA are also hereinafter referred to collectively as
PARTIES and individually as PARTY .
WHEREAS:
A. Formaritima is a 50 / 50 joint venture company set up by Pride-Foramer
S.A. of France and Maritima Petroleo e Engenharia Ltda of Brazil for the
provision of services to operate drilling and workover rigs.
B. Maritima has been awarded a charter contract (hereinafter referred to as
the Charter ) by Petroleo Brasileiro S.A. (hereinafter referred to as
PETROBRAS ), each for the provision of a dynamically positioned
semi-submersible drilling rig (hereinafter referred to as the RIG )
pursuant to an invitation to bid. The obligations and rights under the
Charter have been assigned to Petrodrill Seven Limited (hereinafter
referred to as OWNER ).
C. The Owner has entered into a management agreement (hereinafter referred to
as the MANAGEMENT AGREEMENT ) with Formaritima for the management of the
Rig and the provision of certain technical services in order to assist the
Owner to perform its obligations pursuant to the Charter.
D. Maritima has been awarded by Petrobras a contract for supply of services,
pursuant to an invitation to bid (hereinafter referred to as the
CONTRACT ), for the supply of local services with respect to a Rig for
the duration of the Contract and will perform those services independently
of its obligations under the present agreement (hereinafter referred to as
the AGREEMENT ).
E. The Parties have decided that local services shall be provided by Maritima
to Formaritima as per the terms and conditions of the AGREEMENT.
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NOW THEREFORE in consideration of the mutual covenant and obligations hereafter
set forth, it is hereby agreed between the Parties as follows :
1. DEFINITIONS
Capitalized terms used herein but not otherwise defined shall have
the same meanings assigned to such terms in the Shareholders
Agreement for the Amethyst Financial Company Ltd. date of even date
herewith between Drillpetro Inc., Techdrill Inc. and Westville
Management Corporation.
2. OBJECT
The object of the Agreement is the supply by Maritima to Formaritima of
services such as, but not limited to, the services specified in Clause 4
of the Agreement.
3. TERM
3.1 The term of the Agreement shall be the same as the Management
Agreement. However:
3.1.1 This Agreement shall be terminated with respect to the Rig in the
event of the actual or constructive or compromised or arranged total
loss or requisition for title of such Rig on the date four months
after such total loss occurs or is agreed with Lenders (as the case
may be, or such other date as may be agreed).
3.1.2 The Agreement may by terminated by Formaritima at any time, (x) upon
a notice period of seven (7) days, if Formaritima is not satisfied
for sound reasons, with Maritima s performance, having given
Maritima notice of its deficiencies and the opportunity to correct
these within a period of 15 days or (y) immediately with respect to
the Rig upon termination or assignment of the Rig s Contract. In
such case, no payment shall become due by Formaritima to Maritima
for unperformed services.
3.1.3 It is agreed by the Parties that the effective performance of the
Agreement shall include, without limitation, sea trials and
mobilization of the Rigs to Brazil prior to the commencement of the
Contract, assistance to demobilize upon termination of the Contract
and the resolution of any outstanding unresolved contractual issues
at the end of the Contract.
3.2 NOT USED.
4. SCOPE OF SERVICES PROVIDED BY MARITIMA
The scope of services (the Local Services ) to be provided by Maritima
for the Rig is as set out in Appendix 1. Maritima covenants and agrees to
perform and comply with all of its obligations under each Contract.
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5. COMPENSATION / REMUNERATION
5.1 All services are to be provided by Maritima to Formaritima on an open
book, at cost basis, duly justified by direct reference to industry
standards. For the supply of services forming the object of this
Agreement, Formaritima will pay Maritima the rates set out in Appendix 2.
All amounts received by Maritima pursuant to the Contracts shall only be
used to pay costs and expenses for providing the services described
herein. Any excess amounts shall be treated in accordance with Clause
5.2.2.
5.2 Formaritima will pay Maritima a management fee amounting to US$1,250 per
day for the Rig, commencing at the start of pre-delivery sea trials and
ending on the last day of drilling operations for the relevant Rig under
the Management Agreement or, subject to Clause 3.2, upon any prior
termination of the Agreement.
5.2.1 If Maritima s monthly income arising from the Contract is less than
the provisional monthly budgeted costs and the management fee,
calculated on a monthly basis, agreed in advance by Formaritima,
Formaritima will pay Maritima the documented shortfall within 30
days of receipt of written notice from Maritima.
5.2.2 If Maritima s monthly income arising from the Contract is greater
than the actual monthly costs plus the management fee, calculated on
a monthly basis, Maritima will pay Formaritima the difference
outstanding within 30 days of receipt from Petrobras of monies
arising from the Contract.
5.3 Maritima will be responsible for the provision of budgets associated with
the Local Services. The first operating budget concerning costs associated
with sea mob and mobilisation will be presented by Maritima to Formaritima
six months in advance of the anticipated date of arrival of each Rig at
Macae, Brazil or such other place as which may be notified by Petrobras.
The Parties will meet on a quarterly basis and Maritima will present to
Formaritima the provisional monthly budgets.
Formaritima will review the budgets and, if in agreement, will approve the
budgets. The said approval of the budgets for each quarterly period will
be given by Formaritima prior to 31st December, 31st March, 30th June and
30th September of each year, respectively, provided always that the said
budgets are presented by Maritima to Formaritima prior to 30th November,
28th February, 31st May and 31st August, respectively.
5.4 Maritima shall endeavour to maximise the payments of costs and expenses in
Reais and notably to substitute expenditures in Reais for expenditures in
US$ to the maximum extent possible.
5.5 In the case of a disputed invoice, Formaritima will advise Maritima of the
item under dispute specifying the complaint within fifteen (15) days of
receipt of such invoice but will pay the undisputed part. The disputed
item will be paid as may be mutually agreed.
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5.6 Payments shall be made to a bank account nominated on each invoice.
6. TAXES
Any taxes or charges applied by local authorities in Brazil which are due
under the Contract with Petrobras shall be for Maritima s account.
7. LIABILITIES
7.1 COMPLIANCE WITH LAW AND REGULATION
Maritima undertakes that in performance of its obligations under this
Agreement it will comply with all applicable laws and regulations in
Brazil and all governmental authority.
7.2 LIABILITIES BETWEEN THE PARTIES
7.2.1 Maritima shall hold harmless and indemnify Formaritima from and
against all claims, costs expenses or liabilities arising from or
connected with the performance of this Agreement in respect of:
death of or personal injury to any of the personnel of the Maritima
Group defined in Clause 7.2.4; loss of or damage to the property of
the Maritima Group; any consequential or economic loss or damage
suffered by the Maritima Group; howsoever arising and irrespective
of negligence or other breach of legal duty by the Formaritima
Group.
7.2.2 Formaritima shall hold harmless and indemnify Maritima from and
against all claims, costs, expenses or liabilities arising from or
connected with the performance of this Agreement in respect of:
death of or personal injury to any of personnel of the Formaritima
Group defined in Clause 7.2.3; loss of or damage to the property of
the Formaritima Group; and any consequential or economic loss or
damage suffered by the Formaritima Group; howsoever arising and
irrespective of negligence or other breach of legal duty by the
Maritima Group.
7.2.3 For the purposes of this Clause 7.2, the Formaritima Group means
Formaritima, its associated companies, its other sub-contractors and
suppliers, the Owner, Petrobras, and the officers, employees and
agents of any of them working under this Agreement.
7.2.4 For the purposes of this Clause 7.2 the Maritima Group means
Maritima, its associated companies, its other sub-contractors and
suppliers, and the officers, employees and agents of any of them
working under this Agreement.
72.5 For the express purposes of Clause 7 of this Agreement only,
Formaritima contracts on its own behalf and expressly as agent on
behalf of and as trustee for the benefit of all persons who are or
may be from time to time within the Formaritima Group (as defined in
Clause 7.2.3) and all such persons shall to this extent be deemed to
be parties to this Agreement.
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7.2.6 For the express purposes of Clause 7 of this Agreement only,
Maritima contracts on its own behalf and expressly as agent on
behalf of and as trustee for the benefit of all persons who are or
may be from time to time within the Maritima Group (as defined in
Clause 7.2.4) and all such persons shall to this extent be deemed to
be parties to this Agreement.
7.3 INDEMNITY FOR OPERATIONS
Save as is provided in Clause 7.2. above, Formaritima shall indemnify and
hold harmless and shall procure that Owner shall indemnify and hold
harmless Maritima from and against all actions, proceedings, claims,
demands or liabilities whatsoever that may be brought by any other person
against, or incurred by Maritima in relation to or in connection with its
performance of this Agreement with respect to the Rig unless same has
arisen from the gross negligence or wilful misconduct of Maritima, in
which event the liability of Maritima shall be limited to the aggregate of
the management fee received by Maritima in the preceding 12 months for the
Rig
8. CONFIDENTIAL INFORMATION
All information related to this Agreement, regardless of whether such
information concerns Formaritima, its clients, its associated companies,
or its contractors, shall be treated as confidential and shall not be
divulged by Maritima to any third party without the prior written consent
of Formaritima. The hereabove obligations shall survive termination of the
Agreement and shall remain in force for so long as the information covered
by confidentiality has not otherwise become public knowledge.
9. EMPLOYMENT OF PERSONNEL
No Maritima personnel shall be deemed to be employees, either temporary or
permanent of Formaritima and shall at all time be deemed employed by
Maritima.
Maritima shall have the sole responsibility for the preparation of payroll
and the payment of Maritima personnel, wages, compensation, remittance,
allowance, insurance and indemnities of whatever kind and in complying
with all applicable labor and local taxation regulations.
Both Parties agree to refrain from any and all actions, direct or
indirect, that may lead to employment by such Party of an employee of the
other Party, unless such party obtains the prior written approval of the
other Party, which approval shall not unreasonably be withheld.
10. INSURANCE
10.1 MARITIMA S INSURANCES
Maritima undertakes that it will take out all insurance policies to cover
its liabilities as set forth in Article 7 of this Agreement and as
required under the terms of the Contract, such insurances shall include
but not be limited to the following:
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Workman Compensation insurance and Employer s Liability insurance for
damage suffered by its personnel in amount not less than those required by
applicable laws in Brazil.
Comprehensive general liability insurance for its responsibility to third
parties in amount not less than those required for any one occurrence by
article 3.12.1 of the Contract.
All insurance policies as required to cover its equipment and/or materials
and those belonging to any service companies and for which Maritima is
responsible.
10.2 FORMARITIMA/OWNER INSURANCE
In addition, Formaritima will procure that insurance policies are taken
out to cover Formaritima s responsibilities including but not limited to
the responsibilities set out in Article 3.4.1. of the Management Agreement
between Formaritima and the Owner.
10.3 GENERAL PROVISIONS
For all insurance policies taken out :
Maritima shall comply with the insurance regulations in force in Brazil.
Formaritima shall bear the costs of the premiums, deductibles, fees and
expenses relative to all policies effected pursuant to the provisions of
this Agreement.
Each Party shall procure that the other party shall be named as co-assured
to the extent permitted so as to give effect to the provisions of Article
6 of this Agreement.
All of the insurance policies taken out shall state the underwriter s
waiver of subrogation to give effect to the provisions of Article 7 of
this Agreement.
Maritima shall on request by Formaritima, furnish copies of the insurance
policies it is bound to take out pursuant to Article 10 of this Agreement.
11. ASSIGNMENT OF CONTRACT
The Parties agree that, if requested by Formaritima, Maritima will
procure that the Contract will be assigned to Formaritima or its nominee.
12. AUDIT
Maritima shall keep and cause its contractor(s) and sub-contractor(s) to
keep the books, payrolls, receipts, vouchers, financial records,
personnel records and any document related to the work thereunder and
required for administration purposes for the term of the Agreement and
for a limited period of two (2) years after termination hereof.
Formaritima, through its duly authorised representatives, shall have free
access with 15 days notice with no restriction, to such information,
whenever required by Formaritima, and it shall also have the right, at
any time subject to previous notification to Maritima, to perform the
audits it deems necessary of the aforementioned books, payrolls,
receipts, vouchers, records and files in general.
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Formaritima reserves the right to audit Maritima s activities as deemed
necessary and/or appropriate by Formaritima, in order to check the
contents and compliance with the terms herein.
Notwithstanding the foregoing, in no event shall Formaritima s right of
audit be construed as a release or waiver of any of Maritima s
obligations under the Agreement.
13. MISCELLANEOUS
13.1 FORCE MAJEURE
13.1.1 Each Party to this Agreement shall be relieved from complying with
any term of this Agreement to the extent that, and only so long as,
such compliance is prevented or delayed by force majeure, which is
defined as civil or labor disturbances, riots, strikes (other than
a strike limited to the employees of either Party), wars (declared
or undeclared), military actions, insurrections, rebellion, acts of
any governmental or military agency under actual or assumed
authority, action of elements, floods, storm or other acts of God
or any cause beyond the control of either Party, whether or not
similar to the matters herein specifically enumerated and provided
that the event shall not have been caused by the action or
negligence of either of the Parties, and that the Party and/or the
Parties affected shall do its, or their, utmost to remedy the above
circumstances.
13.1.2 Any Party claiming force majeure shall promptly notify the other
Party, with the evidence of the occurrence of such event.
13.1.3 If either Party hereto is prevented from or delayed in performing
all or any of its obligations thereunder as a direct result of
force majeure, such non performance shall not be considered as a
breach of this Agreement and that Party shall be relieved from such
obligation which shall suspend payment by the other Party for the
duration of such force majeure.
13.1.4 Notwithstanding the foregoing to the extent that the event claimed
as force majeure impacts upon or would impact upon the performance
of the Contract, such event must be recognised as a force majeure
event in terms of the Contract before it can qualify as a force
majeure event hereunder.
13.2 BANKRUPTCY OR ABANDONMENT OF OPERATIONS
Should Maritima become insolvent or enter into any arrangement with or for
the benefit of its creditors or become unable or refuse or neglect to
perform its obligations hereunder or if Maritima s equipment is seized or
taken in execution, Formaritima may, by notice in writing to Maritima,
terminate this Agreement without thereby affecting in other respects the
obligations or liabilities of Maritima.
13.3 ASSIGNMENT OF AGREEMENT
Neither Party may assign the Agreement, either wholly or in part, except
with the prior written authorisation of the other Party, which
authorisation may not be unreasonably withheld.
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14. NOTICE
All notices, invoices and other communications required pursuant to this
Agreement shall be in writing and deemed to have been sufficiently given
or made if delivered by hand of send by fax to the addressee at the
address set out below;
in the case of Formaritima to: and with a copy to:
FORMARITIMA LTD. John O Leary
Arias Fabrega & Fabrega Pride International, Inc.
Trust Co. BVI Limited 5847 San Felipe,
P.O. Box 985 Suite 3300
Wickham s Cay, Road Town Houston, TX 77057-3011
Tortola, British Virgin Islands Tel: (713)789-1400
Tel: (284) 494-4977 Fax: (713)784-3702
Fax: (284) 494-4980
in the case of Maritima to:
MARITIMA PETROLEO E ENGENHARIA LTDA,
Avenida Almirante Barroso 52
3400 GR
20031-000 Centro
RIO DE JANEIRO
BRAZIL
Tel: 011-55-21-262-5055
Fax: 011-55 21 220 6566
or to such other address as the relevant Party may from time to time
notify to the other.
15. GOVERNING LAW AND ARBITRATION
15.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of England.
15.2 Any dispute or difference arising in connection with this Agreement shall
if possible be settled by mutual amicable agreement.
15.3 If any dispute should arise in connection with the interpretation and
fulfilment of this Agreement the same shall be decided by arbitration in
the city of London and shall be referred to a single Arbitrator to be
appointed by the Parties hereto. If the Parties cannot agree upon the
appointment of the single Arbitrator the dispute shall be settled by three
Arbitrators, each party appointing one Arbitrator, the third being
appointed by the Chairman for the time being of the London Maritime
Arbitrators Association.
15.4 If either of the appointed Arbitrators refuses or is incapable of acting,
the Party who appointed him shall appoint a new Arbitrator in his place.
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15.5 If one of the Parties fails to appoint an Arbitrator, either originally or
by way of substitution, for two weeks after the other Party having
appointed his Arbitrator has sent the Party making default notice by mail
or facsimile to make the appointment, the Party appointing the third
Arbitrator shall, after application from the Party having appointed his
Arbitrator, also appoint an Arbitrator on behalf of the Party making
default.
15.6 The award rendered by the Arbitration Court shall be final and binding
upon the Parties and may if necessary be enforced by the Court or other
competent authority in the same manner as a judgment in the Court of
Justice.
15.7 Performance under this Agreement shall, if reasonably possible, continue
during the arbitration proceedings.
IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the
Parties hereto the day and year first above written.
Signed in two duplicate originals in
SIGNED by )/s/ JOHN O'LEARY
for and on behalf of )
FORMARITIMA LTD. )
in the presence of: ) /s/ FRIDA A. MARTINEZ
SIGNED by )/s/ GERMAN EFROMOVICH
for and on behalf of )German Efromovich
MARITIMA PETROLEO ENGENHARIA LTDA )/s/ MARCELO VIOLLAND
in the presence of: )Marcelo Violland
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APPENDIX 1
SCOPE OF SERVICES PROVIDED BY MARITIMA
Maritima will procure services in Brazil (hereinafter referred to as the LOCAL
SERVICES )to Formaritima. The Local Services to include but not be limited to
the provision of:
Logistics
Local rig personnel (as per the personnel and payment schedule attached in
Appendix 2).
Local base personnel (as per the personnel and payment schedule as attached in
Appendix 3).
Local base and yard space and services required for such spaces.
Commercial services.
Offices.
Customs clearance for rig, equipment and spare parts.
Accounting and cost control with presentation of accounts by Maritima to
Formaritima in a US GAAP format or other format to be agreed with Formaritima.
Provision of monthly budgets on a semi-annual basis. Reconciliation of actual
local monthly costs against monthly budgets proposed, in a format required by
Formaritima Area Manager.
Provision of local insurance. Settling of local insurance disputes.
Assistance with administration of the Contract and the Central Bank of Brazil
administration.
Local freight forwarding.
Local purchase of parts, services and supplies.
Administration of invoicing for the Contract.
Consularisation and assistance to complying with Brazilian laws and procedures.
Marketing advice and service.
If required by Formaritima, the provision of a bank account in Maritima s name
to be used and operated exclusively by Formaritima s Area Manager who will have
the joint signatory powers concerning the said bank account with his deputy.
Visas, work permits application and formalities.
Legal assistance concerning rig and base operational health, safety and
environmental issues.
Assistance and advice to minimise the impact of customs duties and import taxes.
FORMARITIMA WILL HAVE THE RIGHT TO REFUSE SUB-CONTRACTORS PROPOSED BY MARITIMA
AND TO NOMINATE OTHER SUB-CONTRACTORS IN THEIR PLACE.
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APPENDIX 2
MARITIMA NAVEGACAO E ENGENHARIA LTDA
WAGES REF. OCT 97
OPERATION OF DP SEMISUBMERSIBLE
TOTAL US$/
FUNCTION MAN ON BOARD
STOREKEEPER/MATERIALSMAN 238,00
SAFETY MAN 353,00
NURSE 183,00
RADIO OPERATOR 202,00
BARGE ENGINEER 499,00
BCO/BOSUN 454,00
TOOL PUSHER/DRILL ENGINEER 827,00
TOOL PUSHER/DRILL ENGINEER 547,00
DRILLER 521,00
ASS. DRILLER 315,00
DERRICKMAN 199,00
FLOORMAN 152,00
ROUSTABOUT 95,00
CRANE OPERATOR 222,00
DECK FOREMAN/AUX TECH./ENGINEER JR 261,00
ELECTRICIAN/MECHANIC 274,00
CHIEF MECHANIC/ELECTRICIAN 479,00
WELDER 202,00
CHIEF PAINTER 105,00
PAINTER 95,00
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Prices include salaries, all overheads and allowances, and Brazilian social
charges but exclude travel/accommodation from point of origin to the rig. The
salary component is indicative only based upon 1997 rates and shall be revised
annually based upon actual market costs of personnel.
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APPENDIX 3
LOCAL BASE PERSONNEL
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