EXHIBIT 10.29
PETRODRILL SEVEN LIMITED
- AND -
PETRODRILL ENGINEERING N.V.
------------------------------------------------
AMETHYST 7 CONSTRUCTION MANAGEMENT AGREEMENT
------------------------------------------------
THIS AGREEMENT is made the 5th day of November 1998,
BETWEEN:
1. PETRODRILL SEVEN LIMITED., a company incorporated in the British Virgin
Islands with its registered office at Arias, Fabrega & Fabrega, P.O. Box
985, Omar Hodge Building, Wickhams Cay, Road Town, Tortola, British
Virgin Islands (such company or its assignee pursuant to a Construction
Contract Assignment hereinafter referred to as the Owner ); and
2. PETRODRILL ENGINEERING N.V., a company incorporated in the Netherlands
Antilles under registration number 77521 with its registered office at
Anthony Veder Building, Kaya Jacob Posner, Willemstad, Curacao,
Netherlands Antilles (hereinafter referred to as the Construction
Manager ).
The Owner and the Construction Manager are also hereinafter referred to
individually as Party and collectively as Parties .
WHEREAS:
A. The Owner has entered into a contract, (the SHIPBUILDING CONTRACT ) with
Daewoo Heavy Industries (the BUILDER ), for the construction and sale of
a dynamically positioning semi-submersible drilling unit (a VESSEL ).
B. The Owner appoints the Construction Manager and the Construction Manager
accepts the appointment in relation to the Vessels under the terms and
conditions set forth in this Agreement.
NOW IT IS AGREED as follows :
1. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
same meanings assigned to such terms in the Amethyst Financial Company
Ltd. s Shareholders Agreement among Drillpetro Inc., Techdrill Inc.
and Westville Management Corporation.
DELIVERY means in relation to the Vessel the date of the Protocol of
Delivery and Acceptance signed by the Builder and the Owner, pursuant to
the Shipbuilding Contract.
MANAGEMENT SERVICES means the construction supervision, managing,
accounting and budgeting, facilities and related services more
particularly described in this Agreement.
OWNER S PROJECT MANAGERS means the person appointed in writing by the
Owner to represent Owner in all dealings between the Owner and the
Construction Manager.
2
2. APPOINTMENT
2.1 With effect from the date hereof and continuing until terminated in
accordance with the provisions of this Agreement, the Owner hereby
appoints the Construction Manager and the Construction Manager hereby
accepts appointment in accordance with the provisions hereof.
2.2 The Construction Manager undertakes to provide the Management Services
specified in Clause 2.3 below with respect to the Rig on behalf of the
Owner in an efficient manner and to protect and promote the interests of
the Owner in all matters relating to the construction of the Vessel.
2.3 Prior to the commencement of construction of the Vessel under the
Shipbuilding Contract, the Construction Manager undertakes to perform the
following (non-exclusive) functions with respect to the Vessel:
2.3.1 informing itself of the provisions of the Shipbuilding Contract, a
copy of which has been provided to it;
2.3.2 liasing with the appointed design consultants (if any) in respect of
the Vessel s drawings and the basic design of the Vessel s
substructure in consultation with the Owner and the Owner s Project
Manager and the other contractors of the Owner, as instructed by the
Project Manager;
2.3.3 obtaining all necessary permissions, consents and authorisations in
respect of the Vessel s drawings from the relevant, Classification
Society and other relevant agencies;
2.3.4 submitting of documentation, information and drawings to the
Builder as provided in the Shipbuilding Contract;
2.3.5 liasing with the Builder during the entire period of the
construction of the Vessel in relation to any requests for
information/classification which he may have; and
2.3.6 making all necessary arrangements, in liaison with the Builder and
the Owner s Project Manager for effective performance of the
Shipbuilding Contract.
2.4 During the construction of the Vessel under the Shipbuilding Contract, the
Construction Manager will appoint, with respect to the Vessel, the Owner s
Representative (as referred to in the Shipbuilding Contract) and
undertakes to perform, with respect to the Vessel, the following
(non-exclusive) functions:
2.4.1 to notify the Builder without delay of any materials or workmanship
which do not conform to the requirements of the Shipbuilding
Contract and to oversee the satisfactory rectification by the
Builder of all defective materials or workmanship.
3
The Owner s Project Manager shall be kept promptly and fully
informed of all defects identified by the Construction Manager,
including details of the rectification thereof. The initial Owner s
representative will be Mr J.P. Durand.
Where the Construction Manager is required by the provisions of this
Agreement to notify or inform the Owner s Project Manager of any
matter, such notification shall be made in writing;
2.4.2 the Construction Manager shall promptly inform the Owner s Project
Manager of any change in existing laws, rules, regulations or
governmental requirements or Classification Society s requirements
which may require any alteration to the specifications or drawings
attached to the Vessel to ensure its compliance with such
requirements;
2.4.3 in the event of any alteration or modification which is necessary
under Clause 2.4.2 being accepted by the Owner s Project Manager,
the Construction Manager will advise him on any consequential
alterations in the Contract price and change in the Construction
schedule and/or Delivery of the Vessel;
2.4.4 to allow any reasonable substitution of materials which the Builder
wishes to make in accordance with the Shipbuilding Contract,
provided these are acceptable to the Classification Society or by
normal standards of marine construction practice. The Construction
Manager before making any such decision must inform the Owner s
Project Manager of proposed substitution and obtain his written
consent thereto;
2.4.5 in the event of the Vessel (including her machinery, engines or
materials appropriated to her) sustaining damages before Delivery,
to advise the Owner s Project Manager on the steps which in the
Construction Manager s opinion (subject to the approval of the
Classification Society Surveyors) need to be taken to make good such
damage with an estimate of the likely cost and any other
implications;
2.4.6 to advise the Owner s Project Manager of any amount to be paid to
the Builder in respect of any fuel, lubricating oils and consumable
stores remaining onboard the Vessel after Delivery by the Builder;
2.4.7 to advise the Owner s Project Manager and make recommendations as to
whether the Vessel has been completed in accordance with the
Specification, is fully commissioned and is ready for Delivery;
2.4.8 to procure as agent for and on behalf of the Owner the Owner
Furnished Equipment on terms previously agreed with the Owner. The
Construction Manager shall procure that any Owner Furnished
Equipment shall be marked as the Owner s property;
2.4.9 to check and verify with the Builder that the Owner Furnished
Equipment has been received in good condition, complete and
undamaged and in accordance with related purchase orders. Where
applicable, to immediately inform the Owner s Project Manager of any
damage to or deficiency in such equipment or any deviation from the
relevant purchase order;
4
2.4.10to prepare a cash requirement schedule for submission to the
Owner s Project Manager to obtain the necessary approval and
financing so that sufficient funds are available for procurement;
2.4.11to open and operate a disbursement account in the name of the Owner
for payment of Owner Furnished Equipment and other agreed
disbursements.
2.4.12the Construction Manager shall provide to the Owner s Project
Manager, as soon as possible a critical path analysis setting out
all tasks to be performed in connection with the construction of the
Vessel and the procurement of Owner Furnished Equipment;
2.4.13to procure any necessary equipment which is not budgeted for by the
Owner and to approve any change order without first referring to the
Owner s Project Manager PROVIDED THAT the cost of such
equipment/change order is below US$10,000.00 and/or the aggregate in
any one month is below US$100,000;
2.4.14in the event of delay in the Construction Schedule due to late
delivery of Owner Furnished Equipment, the Construction Manager
shall advise the Owner s Project Manager of any claim made by the
Builder for an extension of the Delivery;
2.4.15to immediately advise the Owner s Project Manager and copy to him
any notice which may be given by the Builder under the Shipbuilding
Contract;
2.4.16to submit to the Owner s Project Manager every fourteen days a
detailed construction-in-progress report covering all aspects of the
Vessel s construction and equipment. These reports must bring to the
attention of the Owner s Project Manager any problems or delay or
anticipated delay of which the Construction Manager is aware;
2.4.17to ensure that the Builder delivers to the Owner s Project Manager
all required certificates, upon Delivery, as specified in the
Shipbuilding Contract and Specification thereto;
2.4.18to observe all relevant tests and trials conducted by the Shipyard
on all Shipyard Furnished Equipment and report to the Owner s
Project Manager accordingly; and
2.4.19to sub-contract if so instructed by the Owner s Project Manager,
all functioning, commissioning and trial s to Formaritima N.V., the
Owner s Manager at least two months prior to anticipated date of
Delivery.
5
3. PAYMENT FOR SERVICES AND EXPENSES
The Owner shall pay to the Construction Manager for its services under
this Agreement only the actual expenses incurred by the Construction
Manager in rendering those services. Reasonable requests for cash advances
to ensure that aforesaid expenses are not required to be carried/financed
by the Construction Manager, shall be complied with by the Owner and upon
signature hereof the Owner will pay to the Construction Manager the sum of
US$100,000 (one hundred thousand US Dollars) for the Vessel, to be
accounted for by the Construction Manager on an IMPREST basis.
4. DUTIES OF THE CONSTRUCTION MANAGER
4.1 PERSONNEL
4.1.1 The Construction Manager shall procure and use sufficient qualified
personnel, in order to ensure that the construction supervision of
the Vessel is at all times undertaken effectively and safely and in
compliance with the instructions of the Owner s Project Manager(s),
and in accordance with any regulations from relevant regulatory
bodies, authorities or Classification Societies and the provisions
of the Shipbuilding Contract.
4.1.2 The Construction Manager shall:
(a) use all reasonable endeavours to protect the Owner s interests
with respect to claims by or against third parties, including
the personnel employed in connection with the Services to be
provided hereunder; and
(b) keep the Owner fully informed regarding incidents which give
rise to claims by or against third parties.
4.1.3 The Construction Manager shall ensure that it is entered as having a
noted interest in the Owner s insurance and shall procure that it
and Owner shall be so noted on the Builders policies.
4.1.4 Each Owner s Project Manager shall be entitled, upon serving notice
in writing on the Construction Manager, to require the Construction
Manager to remove any individual from his role within the
Construction Manager s supervision team if the relevant Owner s
Project Manager is of the opinion that such individual is
incompetent or unsuited to his assigned role.
4.2 INSURANCE
4.2.1 The Construction Manager in consultation with the Owner shall ensure
that, at all times during its construction, the Vessel is kept
adequately and appropriately insured with reputable underwriters.
6
4.2.2 The Construction Manager shall ensure that the insurance, where
appropriate and subject to the provisions of the Shipbuilding
Contracts, shall be maintained in the name of the Owner. However,
the Construction Manager, the Owner and the Builders shall be
listed as co-insured in all insurance policies. The Construction
Manager shall ensure that Builders insurance brokers, hull
underwriters and Protection and Indemnity representatives (if
applicable) shall provide full co-operation to the Owner s appointed
insurance brokers in connection with relevant insurance.
4.2.3 The Construction Manager shall arrange such additional insurance as
may from time to time instructed by any of the Owner s Project
Manager. The arrangement and maintenance of such additional
insurance shall not prejudice the arrangement or maintenance of any
insurance referred to in Clause 4.2.1.
4.2.4 The Construction Manager shall report as soon as practicable,
accidents or damage involving the Vessel and/or sickness or accident
of a serious nature, to any Owner s Project Manager and shall not
authorise or negotiate for repair or settle any claims in excess of
US$50,000 resulting from the same, without his written consent.
4.2.5 All insurance policies placed by the Owner or the Construction
Manager with respect to the Vessel shall provide for a waiver of
subrogation against the Construction Manager and the Owner.
5. BUDGETS
The Construction Manager shall prepare a budget for the Vessel on a
monthly basis and, not later than 7 days prior to the beginning of each
month, shall submit a draft budget for that month to the Owner s Project
Managers for approval.
6. CONSTRUCTION MANAGER S RIGHT TO SUB-CONTRACT
The Construction Manager shall not sub-contract any of its obligations
hereunder to a third party without the prior written consent of the
relevant Owner s Project Manager (such consent not to be unreasonably
withheld or delayed).
7. GENERAL ADMINISTRATION
7.1 The Construction Manager shall handle and settle all claims arising out of
the Management Services hereunder and keep each Owner s Project Manager
informed regarding any incident of which the Construction Manager becomes
aware which gives or may give rise to claims or disputes involving third
parties.
7.2 The Construction Manager shall, as instructed by the relevant Owner s
Project Manager, bring or defend actions, suits or proceedings in
connection with matters entrusted to the Construction Manager according to
this Agreement.
7.3 The Construction Manager shall be entitled to obtain legal, technical or
other expert advice in relation to the handling and settlement of claims
and disputes or all other matters affecting the interests of the Owner in
respect of the construction of the Vessels Provided that in circumstances
where the claim or dispute is more than US$10,000 the Manager shall first
obtain the relevant Owner s Project Manager s written consent.
7
7.4 Any costs properly incurred by the Construction Manager in carrying out
its obligations under this Clause 7 shall be reimbursed by the Owner.
7.5 The Owner shall be entitled at all times during the period of this
Agreement to have audited the Construction Manager s accounts in respect
of all purchases of Owner Furnished Equipment and all disbursements
incurred with regard to this Agreement.
8. RATIFICATION OF ACTS OF CONSTRUCTION MANAGER AND INDEMNITIES
8.1 The Owner hereby ratifies, confirms and undertakes at all times to ratify
and confirm whatever may be done or caused to be done lawfully and
properly by the Construction Manager in the course of or in the provision
of the services hereby undertaken to be performed.
8.2 The Owner shall indemnify and hold harmless and the Construction Manager
shall indemnify and hold harmless its sub-contractors and their personnel
from and against all actions, proceedings, claims, demands or liabilities
whatsoever that may be brought against or incurred by its sub-contractors
or their personnel in relation to any matters arising out of such
sub-contracts unless the same has arisen from the gross negligence or
wilful misconduct of its sub-contractors or their personnel, in which
event the liability of such sub-contractor shall be limited to the
aggregate amount of the management fee received by such sub-contractor(s)
in the preceding 12 months.
8.3 LIABILITIES BETWEEN THE PARTIES
8.3.1 The Construction Manager shall hold harmless and indemnify the Owner
from and against all claims, costs expenses or liabilities arising
from or connected with the performance of this Agreement in respect
of:
(i) death of or personal injury to any of the personnel of the
Construction Manager s Group;
(ii) loss of or damage to the property of the Construction
Manager s Group;
(iii) any consequential or economic loss or damage suffered by the
Construction Manager s Group;
howsoever arising and irrespective of negligence or other breach of
legal duty by the Owner s Group.
8.3.2 The Owner shall hold harmless and indemnify the Construction Manager
from and against all claims, costs, expenses or liabilities arising
from or connected with the performance of this Agreement in respect
of:
(i) death of or personal injury to any of personnel of the
Owner s Group;
(ii) loss of or damage to the property of the Owner s Group; and
8
(iii)any consequential or economic loss or damage suffered by
the Owner s Group;
howsoever arising and irrespective of negligence or other breach of
legal duty by the Construction Manager s Group.
8.3.3 For the purposes of this Clause, the Owner s Group means the
Owner, its associated companies, its other sub-contractors and
suppliers, Petrobras, and the officers, employees and agents of any
of them.
8.3.4 For the purposes of this Clause the Construction Manager s Group
means the Construction Manager, its associated companies, its
sub-contractors and suppliers and the officers, employees and agents
of any of them.
8.3.5 For the express purposes of this Clause 8.3, Liabilities Between the
Parties, of this Agreement only, the Owner 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 Owner s Group and all such persons shall to this extent be
deemed to be parties to this Agreement.
8.3.6 For the express purposes of this Clause 8.3, Liabilities Between the
Parties, of this Agreement only, the Construction Manager contracts
on its own behalf and expressly as agent on behalf of and as trustee
for the benefit of all persons who are or may be from time to time
within the Construction Manager s Group and all such persons shall
to this extent be deemed to be parties to this Agreement.
9. COMPLIANCE WITH LAW AND REGULATIONS
The Construction Manager will not do or permit anything to be done which
might cause any breach or infringement of the laws and regulations of any
relevant jurisdiction.
10. DURATION OF THE AGREEMENT
10.1 Save as provided below, this Agreement shall come into effect with respect
to the Vessel on the date hereof and shall continue for one year after the
Delivery of the Vessel. Thereafter, it shall continue until terminated by
either party giving to the other notice of termination, in which event the
Agreement shall terminate upon the expiration of a period of three months
from the date upon which such notice is given.
10.2 Notwithstanding Clause 10.1 above, this Agreement may be terminated by a
Party if the other Party commits a material breach of its obligations
under this Agreement.
9
10.3 In the event of termination of this Agreement with respect to the Vessel,
the Owner shall pay to the Construction Manager such amounts (if any) as
the Construction Manager (notwithstanding its best efforts to minimise the
effects of any such termination) may become legally liable to pay under
any contract of employment or by reason of any regulation or legislation
for employee protection to personnel who may have been employed by the
Construction Manager to perform any part of the services to be provided
under this Agreement and who shall become redundant as a result of such
termination.
10.4 If this Agreement is terminated for any reason whatsoever with respect to
any Vessel the Construction Manager hereby undertakes as follows:-
(a) to return to the relevant Owner s Project Manager all budgets,
forecasts and other documents relating to the construction of each
Vessel which it acquired during its appointment as Construction
Manager hereunder; and
(b) not to disclose to any person any confidential information regarding
the construction of each Vessel or concerning the Owner.
11. NOTICES
11.1 Any notice, demand or other communication to be made or delivered by the
amu Project Manager to the Construction Manager pursuant to this Agreement
shall (unless the Construction Manager has by 15 days written notice to
it specified another address) be made or delivered to the Construction
Manager at its registered office for the time being which is at present at
Petrodrill Engineering N.V. Anthony Veder Building, Kaya Jacob Posner,
Willemstad, Curacao, Netherlands Antilles (Fax 599 9461 6491) - marked for
the attention of the Managing Director.
11.2 Any notice, demand or other communication to be made or delivered by the
Construction Manager to the Owner s Project Manager pursuant to this
Agreement shall be made or delivered to the Owner at Petrodrill Seven
Limited c/o Arias, Fabrega & Fabrega, P.O. Box 985, Omar Hodge Building,
Wickham s Cay, Road Town, Tortola, British Virgin Islands, marked for the
attention of the Technical Director.
11.3 All notices shall be sent by telefax and a copy of each shall be sent to
the addressee by prepaid express registered airmail. Change of address
shall be notified at least five calendar days in advance.
12. ASSIGNMENT
The rights and obligations of the Parties hereunder may not be assigned
without the prior written consent of the other Party.
13. FORCE MAJEURE
A Party shall not be liable to the other for any failure to perform any or
all of its obligations under this Agreement (other than an obligation to
make payment) resulting directly or indirectly from a cause beyond the
reasonable control (force majeure) of that Party. In the event of any of
the foregoing the Party seeking to rely on the same shall use all
reasonable endeavours to find a mutually acceptable solution to the cause
of such event of force majeure with a view to resuming performance of its
obligations hereunder as soon as possible.
10
14. LAW AND ARBITRATION
14.1 This Agreement shall in all respects be governed, construed and
interpreted in accordance with English law.
14.2 Any dispute or difference arising in connection with this Agreement shall
if possible be settled by mutual amicable agreement.
14.3 Any dispute between the Parties shall be settled by arbitration in London
in accordance with the provisions of the Arbitration Acts 1950-1996 and
any statutory modifications or re-enactments thereof for the time being in
force and shall be referred to a single arbitrator (an Arbitrator ) to be
appointed by the Parties hereto. If the Parties cannot agree upon the
appointment of the single Arbitrator the dispute shall be settled by three
Arbitrators, each Party appointing one arbitrator, the third being
appointed by the Chairman for the time being of the London Maritime
Arbitrators Association.
14.4 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.
14.5 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.
14.6 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.
14.7 Performance under this Agreement shall, if reasonably possible, continue
during the Arbitration proceedings.
15. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the Parties hereto
and supersedes all prior negotiations, representations or agreements
relating to the subject matter of this Agreement whether written or oral.
No changes, alterations or modifications to this Agreement shall be
affected unless in writing and signed by the Parties hereto.
16. COUNTERPARTS
This Agreement may be executed simultaneously in any number of
counterparts each of which, when so executed, shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement.
IN WITNESS WHEREOF the Parties have executed this Agreement the day and year
first above written.
11
SIGNED by )/s/ Illegible
for and on behalf of )German Efromovich
PETRODRILL SEVEN LIMITED )/s/ Illegible
in the presence of: )Illegible
SIGNED by )/s/ Illegible
for and on behalf of )Illegible
PETRODRILL ENGINEERING N.V. )/s/ Frida A. Martinez
in the presence of: )Frida A. Martinez
12