EXHIBIT 10.65
DRILLPETRO INC.
- AND -
TECHDRILL INC.
- AND -
WESTVILLE MANAGEMENT CORPORATION
________________________________________________________________________________
AMETHYST FINANCIAL COMPANY LTD.'S SHAREHOLDERS'
AGREEMENT
________________________________________________________________________________
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THIS AGREEMENT is made the 5th day of November 1998,
BETWEEN:
(1) DRILLPETRO INC.
A company incorporated in the Bahamas of
Saffrey Square
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇ ▇▇▇▇
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("DRILLPETRO")
(2) TECHDRILL INC.
A company incorporated in the Bahamas of
Saffrey Square
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇
("TECHDRILL")
(3) WESTVILLE MANAGEMENT CORPORATION
A corporation incorporated in the British Virgin Islands of
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
of ▇▇▇▇ ▇▇▇▇▇ Building
Wickhams Cay - Road Town Tortola
British Virgin Islands
("WESTVILLE")
DRILLPETRO, TECHDRILL and WESTVILLE shall hereinafter collectively be
known as "Shareholders" or "Parties" and individually as "Shareholder" or
"Party."
WHEREAS:
(A) The Parties have agreed to co-operate in the construction, ownership and
operation of six dynamically positioned semi-submersible drilling units
named or to be named "Amethyst II" through "Amethyst VII" (the "Vessels")
through the medium of Amethyst Financial Company Ltd., a corporation
registered in the British Virgin Islands (the "Holding Company") and its
six wholly owned subsidiaries (the "Operating Companies").
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(B) The Parties have agreed to enter into this Agreement for the purposes of
recording the terms and conditions of their joint venture and of
regulating their relationship with each other and certain aspects of the
affairs of and their dealings with the Holding Company.
NOW THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN, THE SHAREHOLDERS
AGREE TO THE RECITALS ABOVE AND AS FOLLOWS:
1. DEFINITIONS
"AFFILIATE" of a Party means a company which owns, or is owned by, or
which is owned by an entity which owns that Party; owns and owned mean in
this definition the ownership directly or indirectly of at least 30% of
the voting shares.
"AMETHYST II DESIGN" means the design purchased by BiGem from De Hoop that
will be used to construct the Vessels.
"BUILDER(S)" means the relevant shipyard which has been selected or will
be selected to construct each Vessel.
"CONSTRUCTION AND SALE CONTRACT" means the contract between the Holding
Company and each Builder for the construction and sale of the Vessel.
"CONSTRUCTION CONTRACT ASSIGNMENT" means, where applicable, the assignment
by the Holding Company to an Operating Company of all of the Holding
Company's rights under the Construction and Sale Contract, including title
to the Vessel.
"DAY" means a calendar day.
"EQUITY" means any and all risk bearing capital provided to the Holding
Company by its shareholders in the form of share capital, subordinated
loans or otherwise.
"FORAMER" means Pride-Foramer S.A.
"FORMARITIMA" means Formaritima Ltd., a company to be incorporated in the
British Virgin Islands, to be a 50/50 joint venture company to be formed
by Pride and Maritima for the provision of services to operate drilling
and workover rigs.
"HOLDING COMPANY" means Amethyst Financial Company Ltd., a company
incorporated in the British Virgin Islands, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Building, Wickhams Cay, Road Town, Tortola,
B.V.I.
"LENDERS" means the financial institutions or bond purchasers which may
finance up to 90% of the construction, equipping and mobilization cost of
each of the Vessels and includes their respective successors in title and
transferees.
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"LOAN AGREEMENT" means the pre-delivery and post-delivery loan contracts
and indentures between the Holding Company and the Lenders and any related
offering documents and prospectuses in respect of, inter alia, the
financing of the construction, equipping and mobilization of the Vessels.
"MARITIMA" means Maritima Petroleo e Engenharia Ltda., a company
incorporated under Brazilian Laws; of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇
▇▇, 20031-000 Centro, Rio de Janeiro, Brazil.
"OPERATING COMPANIES" means Petrodrill Two Limited, Petrodrill Three
Limited, Petrodrill Four Limited, Petrodrill Five Limited, Petrodrill Six
Limited and Petrodrill Seven Limited, each a corporation registered in the
British Virgin Islands and each a wholly owned subsidiary of the
Holding Company.
"THE PETROBRAS CHARTER" means the relevant Charter Agreement between
Maritima and Petroleo Brasileiro S.A. (hereinafter referred to as
Petrobras ) for the provision of each Vessel, as assigned or to be
assigned in respect of the rights and obligations to the relevant
Operating Company.
"PETRODRILL ENGINEERING" means Petrodrill Engineering N.V., a company
incorporated in the Netherlands Antilles under registration number 77521
with its registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Building, Kaya ▇▇▇▇▇ ▇▇▇▇▇▇,
Willemstad, Curacao, acting as construction manager on behalf of the
relevant Project Company during the period of construction of the Vessels.
"PROJECT" means all arrangements, including all financing arrangements
with the Lenders, by the Parties to have the Vessels constructed and
delivered to the Operating Companies for the purpose of performing the
Petrobras Charters.
"PROJECT COMPANIES" means the Holding Company and the Operating Companies.
"PROJECT GROUP" means the Holding Company, BiGem and Petrodrill
Engineering.
"RELATED AGREEMENTS" means all the following agreements with regard to
each Vessel:-
(i) Local Services Agreement between Maritima and Formaritima.
(ii) Management Agreement between Formaritima and the Holding Company
(the "Formaritima Management Agreement").
(iii) Technical Services Agreement between Foramer and Formaritima N.V.
(iv) Agreement between Scheepswerf De Hoop Lobith B.V. ("▇▇▇▇▇▇") and
BiGem Holdings N.V. ("BiGem").
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(v) Construction Management Agreement between the Holding Company and
Petrodrill Engineering B.V.
(vi) Shareholders Agreement for BiGem among Westville, Drillpetro and
Techdrill.
(vii) Marine and Nautical Services Agreement between the Holding Company
and a third party.
(viii) Supply Agreement between Petrodrill Engineering and Foramer.
(ix) Supply Agreement between Petrodrill Engineering and Maritima.
(x) Supply Agreement between Petrodrill Engineering and a third party.
(xi) Licencing Agreement between BiGem and the Holding Company together
with
(i) Shareholders Agreement for Petrodrill Engineering among Westville,
Drillpetro and Techdrill.
(ii) Shareholder s Agreement for Formaritima between Westville and
Maritima.
(iii) Matters Relating to the Petrobras Amethyst Contracts.
(iv) Agency Agreement between the Holding Company and Barrier Enterprise
and ▇▇▇▇▇▇▇▇▇ Investments Ltd.
"VESSEL(S)" means semi-submersible dynamically positioned drilling or
workover units to be owned by the Operating Companies for the purpose of
the Project and built using the ▇▇▇▇▇▇ Amethyst II Design licensed to the
Holding Company by BiGem.
2. EFFECTIVENESS
This Agreement shall be effective as at the date hereof
3. SCOPE AND PURPOSE
The Shareholders hereby enter into this Agreement for the purpose of
managing and operating their joint venture through the Holding Company,
the main objects being to ensure that the Holding Company purchases, owns
and operates the Vessels, directly or through the Operating Companies, for
not only the initial purpose of making them available for performance
under the Petrobras Charters, but also thereafter, always in the best
interests of the Holding Company.
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4. CAPITAL OF THE HOLDING COMPANY
4.1 Upon effectiveness the authorised share capital of the Holding Company
will be US$1,000 with US$1,000 paid up and divided into 1,000 ordinary
shares of US$1 each.
On Completion the Shareholders shall acquire, subscribe and pay up in full
for cash at par for shares in the Holding Company so that their respective
legal and beneficial ownership of ordinary shares shall be:
DRILLPETRO: a Fifty-five per cent (55%) interest in the Holding Company;
TECHDRILL: a Fifteen per cent (15%) interest in the Holding Company; and
WESTVILLE: a Thirty per cent (30%) interest in the Holding Company.
The appropriate share certificates shall be issued by the Holding Company
in favour of each of the Shareholders.
4.2 Any increase or decrease in the authorised or issued share capital of the
Holding Company shall be decided by the unanimous consent of the
Shareholders. Increases shall be contributed to by the Shareholders in
full and in cash, in the same proportions as they are required to
contribute to the initial issued capital of the Holding Company pursuant
to Clause 4.1 above, unless the Shareholders unanimously agree otherwise
in writing.
4.3 No capital as aforesaid shall carry interest for the Shareholders, nor
shall it be withdrawn by the Shareholders once deposited, except with the
unanimous written consent of the Shareholders and the approval by any
appropriate regulatory authority.
FINANCING OF THE HOLDING COMPANY
5.1 Each Shareholder shall contribute to the capital/operating budget of the
Holding Company, in proportion to its respective shareholding, those
amounts stipulated in Appendix 1 through Appendix 6 hereto. The
Shareholders undertake to advance such amounts on the dates/times
stipulated in the said Appendix, and in any event within ten (10) Days of
such date/time.
5.2 Each Shareholder shall also contribute to any overruns in the
capital/operating budget of the Holding Company as and when the same shall
become necessary, in the same manner as for the capital/operating budget
referred to in Clause 5.1 above, save that such contributions shall be
made within ten (10) Days of notice having been given by the Board of
Directors of the Holding Company of the amount required. In the event of a
failure of the Board of Directors to give such notice, the General
Assembly acting by simple majority, may issue the said notice.
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5.3 If each of the Parties complies with their obligations under Clauses 5.1
and 5.2 hereof on the dates and at the times specified therein then the
amounts advanced by each of the Parties shall be treated as subordinated
loans repayable only following amortisation of any outstanding amounts
owing to any applicable financing institutions PROVIDED ALWAYS THAT if one
or more of the Parties fails to comply with its obligations under Clause
5.1 or Clause 5.2 then any contributions made by the performing Parties
pursuant to the provisions of Clause 5.1 and Clause 5.2 above shall be
made in return for the issue of further shares in the Holding Company and
shall not be interest bearing.
5.4 In the event that one or more Parties fails to advance the amounts
required on the dates and at the times on which such contributions are
required to be made (or within the grace period referred to in Clause 5.1
or 5.2 hereof) then the Parties performing their obligations under this
Clause 5 shall be entitled within a further period of ten (10) Days to
contribute towards the outstanding amount in proportion to their
respective shareholding whereupon the number of shares which would have
been issued to the Party concerned shall be allocated to those Parties
performing their obligations under this Clause 5 in proportion to their
existing shareholding.
5.5 All amounts required by the Holding Company in respect of its capital and
operational needs, as approved from time to time by the Board of Directors
of the Holding Company shall be incorporated in the Budget.
6. PROFITS AND LOSSES
The profits or loss for each financial year of the Holding Company shall
be determined by audited financial statements drawn up in accordance with
US Generally Accepted Accounting Principles and practices (US GAAP) and
shall be submitted for approval by the Shareholders in Annual General
Meeting.
7. ACCOUNTS
7.1 Proper books of accounts of the Holding Company shall be maintained in
accordance with US GAAP approved by its auditors for the time being. All
such books of account shall be made available for inspection at all
reasonable times by a Shareholder or its authorised representative.
7.2 The financial year of the Holding Company shall run from January 1st
through to December 31st. The first financial year, however, shall
commence upon the date of incorporation of the Holding Company.
Financial statements (balance sheet and profit/loss account) shall be
prepared within three months of the end of each financial year. Forthwith
thereafter such statements shall be audited by the auditors for the
Holding Company and upon approval of the same by the Board of Directors
shall be submitted to the Shareholders in Annual General Assembly and upon
approval by the Shareholders become binding on the Shareholders (except
that
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a Shareholder shall be entitled to require the rectification of any
manifest error discovered therein within three months of the date on which
such accounts were certified by the auditors and submitted by the Board of
Directors to the Shareholders in Annual General Meeting).
Ninety percent (90%) of the profits shown in an audited profit and loss
account and available for distribution shall unless otherwise required by
loan covenants of the Holding Company be distributed to the Shareholders
following approval by the Holding Company's auditors of the relevant
audited accounts and 10% shall not be distributed. The Shareholders
recognise that until the Lenders have been repaid under the Loan
Agreements no distribution shall be made to the Shareholders.
7.3 BANK ACCOUNTS
Bank accounts shall be opened in London and elsewhere as decided by the
Management Committee and pursuant to a Resolution of the Board of
Directors and maintained in the name of the Holding Company in which shall
be placed all sums received by the Holding Company and from which all
disbursements on behalf of the Holding Company shall be made.
The signatories to the accounts shall be appointed by the Board of
Directors and all financial transactions above such amount as may from
time to time be specified by the Board of Directors will require 3
authorised signatories, one to be appointed by each of the Shareholders.
Closing of bank accounts shall take place exclusively pursuant to a
decision to that effect by the Management Committee and a Resolution of
the Board of Directors.
8. AUDITORS
The auditors of the Holding Company shall be a firm of accountants of
international standing decided upon by the Management Committee and
appointed by the Board of Directors.
9. GENERAL ASSEMBLY
Any Shareholder holding a 5% or greater interest in the Holding Company
may require a Shareholders Meeting at any time to be held by providing 7
days prior written notice of same. A unanimous written resolution of the
Shareholders shall be as effective as a resolution adopted at a meeting of
the Shareholders. No business shall be transacted at any General Assembly
Meeting of the Shareholders nor shall any resolutions be passed there
unless one representative of each of the Shareholders is present PROVIDED
ALWAYS that if the absence of one or more representatives of each
shareholder prevents the passing of any resolution, then those
representatives present may reconvene the meeting in question at the same
location and on a date falling not earlier than 10 days nor
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later than 30 days after the date of the failed meeting and shall give
notice of such reconvened meeting to all the shareholders and of the
agenda, proposed therefor, including all resolutions proposed for adoption
at such meeting which shall be the same as the resolutions proposed for
passing at the failed meeting. At such reconvened meeting the members
present shall be entitled to deal with all items of business on the agenda
and pass the resolutions proposed for such reconvened meeting provided
that the members representing the majority of the issued shares in the
Holding Company vote in favour of such resolution.
10. OVERALL SUPERVISION AND CONTROL
10.1 Subject as herein otherwise provided, the Shareholders shall delegate to
the Board of Directors the overall supervision and control of the Holding
Company and all the powers requisite and necessary to enable the said
Board of Directors to carry out its duties in that regard. The Board shall
meet at least once every two months during the construction of the Vessel
and at least once every three months thereafter.
Subject to Clause 10.2 decisions in respect of the supervision and control
of the Holding Company shall be shall be taken by way of a simple majority
of the shares held in the Holding Company as voted by the holding
shareholder.
In the event of a disagreement concerning a matter proposed by one or more
shareholder(s) constituting a majority of the shares in the Holding
Company and provided that the matter does not require unanimity of the
Board of Directors per Clause 10.2 below, then the matter will be resolved
in the following order:
1. The Parties will further discuss and use their best efforts to reach
a consensus the matter within 5 business days; or
2. Failing agreement under 1 above, the Party or Parties proposing the
matter for decision will withdraw the proposal and/or modify it to
the satisfaction of the disagreeing Party; or
3. Failing resolution after 2 above within a period of 5 business
days, any disagreeing Party will, at its option, either accept
the proposed matter or have the right to exercise a put option
over its interest in the Holding Company to the Party or Parties
proposing the matter whereupon the Party or Parties proposing the
matter will be obliged to purchase the disagreeing Party's or
Parties' interest. The put option price will be the aggregate of
(a) the amount paid by the disagreeing party for its shares in
the Holding Company and (b) the principal amount outstanding
under any shareholders loan of the disagreeing Party to the
Holding Company and (c) 12% interest per annum accrued on (a) and
(b).
For the avoidance of doubt, any dispute regarding the financing of the
construction of the Vessel shall be dealt with under this Clause 10.1.
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10.2 The Shareholders shall exercise all voting rights and other powers of
control available to them in relation to the Holding Company so as to
procure (insofar as they are able by the exercise of such rights and
powers) that the Holding Company shall not, without the unanimous consent
of the Board of Directors:
(a) enter into or agree to any variation, amendments, cancellation or
termination to the Related Agreements or any of them or the
Petrobras Charters;
(b) create any fixed or floating charge or debenture, lien (other than a
lien arising by operation of law) or other encumbrance over the
whole or any part of the undertaking, property or assets of the
Holding Company except for the purpose of securing the indebtedness
of the Company to its bankers/lenders for sums borrowed in the
ordinary course of business or in connection with the initial
financing of the construction of the Vessels;
(c) borrow any sum (except from the Holding Company's bankers in the
ordinary and proper course of business or in connection with the
initial finance of the construction of the Vessels) in excess of a
maximum aggregate sum outstanding at any time of US$500,000;
(d) give any guarantee or indemnity to secure the liabilities or
obligations of any person other than in the ordinary course of
business;
(e) sell, transfer, lease, assign or otherwise dispose of a material
part of the undertaking, property and/or assets of the Holding
Company or contract so to do;
(f) engage any new employees at remuneration which could exceed the rate
of US$125,000 per annum;
(g) alter any rights attaching to any class of share in the capital of
the Holding Company;
(h) consolidate, sub-divide or convert any of the Holding Company's
share capital or in any way alter the rights attaching thereto;
(i) issue renounceable allotment letters or permit any person entitled
to receive an allotment of shares to nominate another person to
receive such allotment except on terms that no such renunciation or
nomination shall be registered unless the renounces or person
nominated is approved by the Board of Directors; or
(j) create, acquire or dispose of any subsidiary or of any shares in
any subsidiary;
(k) enter into any partnership or profit sharing agreement with any
person;
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(l) do or permit to be done any act or thing whereby the Holding Company
may be wound up (whether voluntarily or compulsorily) save as
otherwise expressly provided for in this Agreement;
(m) issue any securities convertible into shares or debentures or any
share warrants or any options in respect of shares;
(n) acquire, purchase or subscribe for any shares, debentures, mortgages
or securities (or any interest therein) in any company, trust or
other body;
(o) appoint or dismiss any Director but without prejudice to the rights
conferred on each of the Shareholders pursuant to Clause 10.3 to
appoint and remove Directors;
(p) create any contract or obligation to pay money or money's worth to
any Shareholder or to any Affiliate of such Shareholder or to any
other subsidiary of such Affiliate or to any person as a nominee or
associate of any such Shareholder (including any renewal thereof or
any variation in the terms of any existing contract or obligation);
(q) issue any shares, options, warrants, rights of pre-emption or any
similar rights otherwise than pursuant to the provisions of Clause
5;
(r) carry on any business or activity other than the construction,
ownership, chartering and operation of the Vessel;
(s) make any loans; or
(t) pass any resolutions altering the Holding Company's Statutes.
10.3 COMPOSITION
Unless and until the Shareholders shall otherwise unanimously agree to the
contrary, the Board of Directors shall consist of four (4) persons of whom
two shall be appointed by Drillpetro and one each shall be appointed by
and represent Techdrill and Westville. Each Shareholder may at any time
and from time to time by notice in writing to the others revoke the
appointment of the Director(s) appointed by it and appoint another person
in his place, and the Shareholders agree to use all their votes in General
Meeting to procure such appointment or revocation in accordance herewith.
10.4 MEMBERS AND OFFICERS
The first members of the Board of Directors of the Holding Company under
this joint venture shall be appointed by the Shareholders within 15 days
of the signing hereof
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10.5 ALTERNATES
Each of the Shareholders may appoint any person (including a person who is
already a Director) to be the alternate of a Director appointed by it.
An alternate who is also a Director in his own right shall be entitled
when acting as an alternate to a separate vote on behalf of the Director
whom he represents in addition to his own vote. A Shareholder may at any
time revoke the appointment of an alternate appointed by it and appoint
another person in his place. An alternate shall cease to be an alternate
upon the revocation of the appointment of the Director for whom he acts as
alternate.
10.6 APPOINTMENT AND REVOCATION
All appointments and revocations of appointment of Directors and their
alternates shall be notified in writing by the Shareholder(s) making or
revoking the same to the other Shareholders.
10.7 MEETINGS
The Board of Directors shall meet at least once in every financial year.
The Board shall be convened by the President (or his alternate) either on
his own initiative or at the request of any other member of the Board of
Directors or a Shareholder on 7 days written notice to all Directors.
Meetings shall be held at the principal place of business of the Holding
Company or at such other place or places as the Board of Directors shall
decide. The meeting of the Board of Directors shall be chaired by a
Director nominated by Drillpetro. The Board shall keep and maintain in
writing minutes of its meetings and a record of all decisions taken
thereat, which, minutes shall be signed by the President and those
Directors or their alternates who attended the meeting.
The language used in the meeting of the Board of Directors shall be
English and all minutes and covering letters shall be written in English.
The Directors/Officers of the Holding Company shall, unless otherwise
agreed in writing, be entitled to no remuneration or fees and shall not be
entitled to charge the Holding Company with any travelling, accommodation
and other expenses incurred by them in connection with the meetings of the
Holding Company.
10.8 QUORUM
Every Director for the time being shall be entitled to receive 7 days
written notice of and to attend any meeting of the Board of Directors
unless notice is waived in writing by all the Directors entitled to attend
and vote. No such meeting shall be validly held unless attended by all
four Directors or their alternates.
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10.9 VOTES
A decision of the Board of Directors shall be by resolution of the
Directors passed (unless the provisions of Clause 10.10 shall apply) at a
duly constituted Board Meeting. A meeting for which the 7 days notice
period has not been observed (whether waived in writing in accordance with
Clause 10.8 or not) but at which all Directors either personally or
through their alternates are present may pass valid resolutions. However,
a Director, or an alternate thereof, shall not be eligible to vote at a
meeting of the Board of Directors until and unless the Shareholder whom he
represents has contributed in full that amount of other capital
contribution from time to time required to be deposited by such
Shareholder pursuant to the provisions of this Agreement.
Subject to the provisions of Clause 10.2 above, a resolution of the Board
of Directors shall be valid if the majority of the votes validly cast on
such resolution at the meeting are in favour thereof after following the
procedures set forth in Clause 10. 1.
10.10 WRITTEN RESOLUTION
Without the Directors meeting as provided in Clause 10.9 above, an
unanimous resolution confirmed in writing by all the Directors or their
alternates shall be as effective as a resolution adopted at a meeting of
the Board of Directors.
11. MANAGEMENT COMMITTEE
11.1 The Shareholders may form a management committee (the "Management
Committee") to supervise the operations in connection with the
construction of the Vessel and subsequent operations. Each Party will
appoint one representative to the Management Committee and each
representative will have one vote. The Management Committee will meet at
least once every two months during the construction of the Vessel and once
every six months during the duration of the Petrobras Charter and
subsequent drilling contracts. All decisions of the Management Committee
shall be unanimous. In the event of deadlock in the Management Committee
the matter will be referred to the board of the Holding Company for
determination.
12. COVENANTS AND UNDERTAKINGS OF THE SHAREHOLDERS
12.1 Each Shareholder warrants its power and authority to enter into this
Agreement and agrees and undertakes with the other Shareholders that:
12.1.1Save as may otherwise be agreed in writing between the Shareholders
or specifically provided in this Agreement, it will not without the
prior written approval of the other Shareholders, sell, mortgage,
charge, assign, transfer or otherwise dispose of its interests in
this Agreement or in the Holding Company.
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12.1.2Notwithstanding the provisions of Clause 12.1.1 hereof, a
Shareholder may transfer to an Affiliate all of its rights duties
and obligations under and pursuant to this Agreement provided that
the assigning Shareholder shall throughout the duration of this
Agreement remain primarily liable for proper performance by its
Affiliate.
12.2 The Shareholders shall keep strictly secret and confidential and shall not
disclose or communicate to any third party whatsoever any technical,
economic, financial, commercial or other information whether or not
acquired in an official manner from the other Shareholders or from the
Holding Company except if the disclosure of such information is expressly
permitted by this Agreement or required by law.
The Shareholders also undertake not to use for themselves or for other
activities the information obtained from the other Shareholder(s) or from
the Holding Company without the prior written approval of the Party from
whom the information was obtained and each of the Shareholders undertakes
to obtain from their employees having access to such information any
undertaking to respect the same secrecy obligation.
The secrecy obligations arising from this Clause 12.2 do not apply to
information which is or which may become public or which was already known
to the Shareholder(s) when the information was transmitted or which has
been received by a third party having power to disclose it.
The secrecy obligations provided hereinabove will apply after the expiry
or the termination of this Agreement for any reason whatsoever during the
period of 5 years under the same conditions as those applying during the
term of this Agreement.
12.3 The Shareholders shall use their best endeavours to develop the activities
of the Holding Company and to further its goodwill within the framework of
the laws and regulations applicable to the Holding Company and in the
spirit of co-operation which forms the basis of this Agreement.
12.4 CROSS UNDERTAKINGS BY SHAREHOLDERS
Each shareholder (the "Non Performing Shareholder") agrees to indemnify
the other Shareholder or Shareholders ("the Performing Shareholder(s)") in
the event of nonperformance or partial performance by the Non Performing
Shareholder of any obligation undertaken towards the Lenders under any
guarantee if the other shareholder or shareholders voluntarily or by
virtue of any counter indemnity or counter guarantee given by it or them
to the Lenders performs the obligation on behalf of the Non Performing
▇▇▇▇▇▇▇▇▇▇▇.
▇▇
▇▇. EXIT MECHANISM
13.1 The Parties agree that one or a combination of the following exit
mechanisms could apply for the realisation of their investments in the
Holding Company:
(a) the sale of any Vessel and/or all the shares in the Holding Company
to a third party.
(b) the purchase by Westville or its nominee of the interests of
Drillpetro and Techdrill in any Vessel or in the Holding Company,
(c) the flotation of the Holding Company on a public market; and/or
(d) the exchange of the interests held in the Holding Company by
Drillpetro and Techdrill for shares in Pride International at terms
to be agreed and based on industry practice.
The exit mechanisms to come into effect as and from September 2001. In the
event, of a difference of opinion as to the optimum exit strategy, the
Parties agree to appoint Jefferies and Company, Inc., investment bankers,
to provide advice on the various alternatives in order to maximise each of
the Shareholders short term return on investment giving priority to
liquidity. Except as otherwise provided herein and unless otherwise
advised by Jefferies and Company, Inc., disposition or reduction by a
Shareholder of its interest in the Holding Company shall not affect the
rights and obligations of any party to the Formaritima Management
Agreement.
13.2 Notwithstanding anything contained herein to the contrary, Foramer and
Maritima shall at all times each have preemption purchase rights to
purchase the others or the others Affiliates direct or indirect
interests or beneficial interests in the Project Companies and the Joint
Venture in accordance with the procedure in Clause 14.
14. TRANSFER OF SHARES PROCEDURE
14.1 Save where the transfer of shares and quasi equity (the Interest is not
authorized pursuant to Clause 12 for a given period as defined therein,
any Shareholder may be authorized to seek to dispose of all its Interest -
and not only part of it - to a non Affiliate, by the remaining
Shareholders under the following conditions and procedure.
FIRST, the Shareholder wishing to dispose of all its Interest must have
received from a bona fide non Affiliate an offer to buy all of its
Interest in the Holding Company together with an acceptance to be bound by
all the terms and conditions of this Agreement including where relevant
the performance of any guarantee or other outstanding obligation, which is
due by the Shareholder wishing to sell by way of substitution of guarantee
or Counter Guarantee Indemnity (if approved by the Lenders).
15
SECOND, upon receipt of such offer the Shareholder wishing to sell shall
inform forthwith the Holding Company and each Shareholder in writing
("Transfer Notice") of its intention to dispose of all its Interest in the
Holding Company together with the sale price and conditions of sale, the
name and particulars of the non Affiliate ready to purchase and request
authorisation to do so.
THIRD, the other Shareholders shall have a period of 21 days to consider
the proposed sale of Interest. At the expiry of the said 21 days period,
each of the other Shareholders shall notify to the Shareholder wishing to
sell their decision either approving the sale, in which case the sale
shall proceed subject to the non Affiliate entering into a Deed of
Adherence in the agreed form given in Appendix 2, or disapproving the sale
to the non Affiliate.
FOURTH, in the case where all of the other Shareholders disapprove of the
sale, these other Shareholders shall be obliged to purchase all of the
Interest of the disposing Shareholder at the conditions specified in the
offer of the non Affiliate - the sale to the remaining shareholders shall
be done prorata with their existing Interest in the Holding Company.
Should not all of the other Shareholders accept to purchase the offered
Interest, it shall be sold to the accepting Shareholder in exchange for
payment of the sale price in full.
However, should the accepting Shareholder not be prepared to take all of
the offered Interest, the offering Shareholder will be permitted to sell
all of its Interest only to the non Affiliate who made the original bona
fide offer.
FIFTH, the sale to the incoming Shareholder shall only be registered in
the Register of Shareholders of the Holding Company when payment has been
made in full and the Deed of Adherence entered into and the documentation
relating to outstanding obligations of the disposing Shareholder have been
transferred to the acquiring Shareholder and have been completed and are
in force.
14.2 Provided always that where the Loan Agreements restricts in any way and
whatever form such transfer of Interest, the Shareholders shall not (i)
transfer their Interest without prior written approval from the Lenders
and (ii) do anything which may cause an Event of Default under the Loan
Agreement.
15. TERMINATION FOR BANKRUPTCY, RECEIVERSHIP, ADMINISTRATION OR LIQUIDATION
If at any time any Shareholder shall become bankrupt or go into
receivership, administration or liquidation whether compulsory or
voluntary or enter into any scheme of arrangement or composition with its
creditors (except for the purpose of a bona fide reconstruction or
amalgamation) then its interest in the Holding Company shall be disposed
of in accordance with the procedure set out in Clause 14 unless that
procedure cannot, in law, be followed.
16
16. DEADLOCK
16.1 This Clause shall apply in any case where a matter relating to the affairs
of the Holding Company has been considered by the Board of Directors but
the Board of Directors is unable to reach a unanimous decision where
required by Clause 10.2, on the matter or in the event that a meeting of
the Board of Directors has been convened in accordance with 10.7 herein
and no quorum in accordance with 10.8 has been achieved at said meeting or
subsequent reconvened meeting called within the next 10 Days. Any such
case is hereinafter referred to as a "deadlock". For purposes of this
Clause 16, Drillpetro and Techdrill shall be deemed to be one Shareholder
for as long as they are under common control.
16.2 In any case of deadlock, each of the Shareholders shall within seven (7)
Days of such deadlock having arisen or become apparent, cause its
appointees on the Board of Directors to prepare and circulate to the other
Shareholders and other Directors a memorandum or other form of statement
setting out its position on the matter in dispute and its reasons for
adopting such position. Each such memorandum or statement shall be
considered by the Managing Director (or equivalent officer) of each
Shareholder then holding office who shall respectively use their
reasonable endeavours to resolve such dispute. If they agree upon a
resolution or disposition of the matter they shall jointly execute a
statement setting forth the terms of such resolution or disposition and
the Shareholders shall exercise the voting rights and other powers of
control available to them in relation to the Holding Company to procure
that such resolution or disposition is fully and promptly carried into
effect.
16.3 If the dispute has not been resolved in accordance with the provisions set
out above within fifteen (15) Days after delivery of the memorandum or
statement mentioned herein or such longer period as the Shareholders may
agree in writing then any Shareholder (the "Offeror") may serve a notice
in writing (the "Offer Notice") on both of the other Shareholders (the
"Offerees") of its desire to resolve the position by offering to sell its
Shares (the "Offerors Shares") to the Offerees pro-rata to each of the
Offerees participation in the Holding Company or, failing which, to
purchase one or both of the Offerees, Shares at the same price.
16.4 The Offer Notice shall be expressed to:
(i) constitute an offer, open for acceptance by each Offeree for 90 Days
from the date of service of the Offer Notice ("Offeree Purchase
Period") by the Offeror to sell at a specified price (the "Sale
Price") (but on no other conditions) all (but not some only) of the
Offeror's Shares to each of the Offerees pro-rata to the Offerees
participation in the Holding Company;
(ii) constitute an Offer by the Offeror to purchase all (but not some
only) of each of the Offeree's Shares at the Sale Price in
accordance with the provisions of this paragraph on the business day
(as defined in Clause 20.3) falling 30 Days after the
17
end of the Offeree Purchase Period provided that such Offeree has
not exercised its right to purchase the Offerors Shares before the
end of the Offeree Purchase Period; and
(iii) be irrevocable without the written consent of all Shareholders.
16.5 Each Offeree may at any time before the expiry of the Offeree Purchase
Period serve notice in writing upon the Offeror of its desire to purchase
all (but not some only) of the Offeror's Shares offered to it at the Sale
Price (the "Offeree Purchase Notice") which may not be expressed to be
subject to the fulfillment of any conditions whatsoever. Upon service of
an Offeree Purchase Notice on the Offeror, the Offeror shall be bound to
sell, and the Offeree shall be bound to purchase, all the Offerors Shares
offered to it at the Sale Price, which the Offeror shall transfer free
from all claims, equities, liens and encumbrances together with all rights
attached thereto,
16.6 If either Offeree does not serve an Offeree Purchase Notice before the
expiry of the Offeree Purchase Period, it shall be deemed to have declined
the offer constituted by the Offer Notice to sell the Offeror Shares to
the Offeree and such Offeree shall be bound to sell, and the Offeror shall
be bound to purchase, all such Offeree's Shares at the Sale Price and
which such Offeree shall transfer free from all claims, equities, liens,
charges and encumbrances together with all rights attached thereto.
16.7 Completion of any sales and purchases contemplated by this Clause 16 shall
take place within fourteen Days of such sale and purchase obligation
becoming binding as above written and the selling party(ies) shall deliver
to the purchasing party(ies) executed transfer(s) and documents of title
in exchange for a banker's draft drawn on a first class U.S. bank for an
amount equal to the relevant Sale Price. Each of the Shareholders appoints
the other Shareholders irrevocably and by way of security for the
performance of their respective obligations under this Clause 16 its
attorney to execute any necessary document required to be executed by it
under the provision of this Clause 16.
16.8 In the event that more than one Offer Notice is served, the notice first
served shall prevail. In the event that more than one Offer Notice is
served simultaneously, then the Offer Notice with the higher Sale Price
shall prevail.
16.9 In the event that, at the time of any failure to find a resolution or
disposition in accordance with sub-clause 16.3 above, there are only two
Shareholders, the provisions of this Clause 16 shall apply mutatis
mutandis.
16.10 In the event that a Party, pursuant to the provisions of this Clause 16 or
those of Clause 14 (Transfer of Shares), has disposed or is disposing of
the whole of its interest in the Holding Company (the "Disposing Party"),
then if the Disposing Party has during the course of its participation in
the joint venture been required to provide to any Lender or Lenders
guarantee(s) of the performance by the Holding Company of any of its
obligations under any loan or security documentation executed in favour of
such
18
Lender(s) or any counter indemnities in favour of any third party(ies) and
such guarantee(s) or counter indemnities is/are still outstanding and in
full force and effect at the time of the disposition by the Disposing
Party of its interest in the Holding Company, then at the option of the
Disposing Party and having regard to the requirements of any Lender(s),
either:-
(i) the acquirer of such interest from the Disposing Party or the
remaining Shareholder(s) shall issue replacement
guarantee(s)/counter indemnities in favour of and satisfactory to
such Lender(s)/third party(ies) on the same terms as those
guarantee(s)/counter indemnities originally provided to such
Lender(s)/third party(ies) by the Disposing Party whose
guarantee(s)/counter indemnities shall then be deemed terminated;
or
(ii) the acquirer of such interest or the remaining Shareholder(s) shall
be obliged to procure the issue of an indemnity in favour of the
Disposing Party and its Affiliate(s) in respect of such
guarantee(s)/counter indemnities by a company of substance or
reputable bank or lending institution acceptable to the Disposing
Party and in a form reasonably satisfactory to the Disposing Party.
16.11 In the event that a Party, has pursuant to the provisions of this Clause
16 or those of Clause 14, disposed of the whole of its Interest in the
Holding Company, that Party shall be entitled to receive for the benefit
of its relevant Affiliate from the acquirer or acquirers of aforesaid
interest an early termination fee for termination of management (if that
occurs) equal to the aggregate of the number of Days of management fee
lost between date of transfer of sale of shares and the final date of the
firm term of the Charter discounted at ten per cent (10%) per annum.
17. DISSOLUTION OF THE HOLDING COMPANY
17.1 Upon the dissolution of the Holding Company pursuant to this Agreement the
Shareholders shall each forthwith account to the Holding Company for any
unpaid capital or other indebtedness owing by them to the Holding Company
and the assets of the Holding Company shall be applied and distributed in
the following manner and order of distribution:
17.1.1 To the payment of all debts and liabilities (if any) of the
Holding Company exclusive of capital contributions of the
Shareholders.
17.1.2 To the repayment to the Shareholders rateably of the net amount
of capital contributed by the Shareholders and which has not
already been withdrawn; and
17.1.3 The surplus, if any, of the assets then remaining shall be
divided between the Shareholders in accordance with the
proportions in which they contributed to the capital at the time
immediately prior to liquidation.
19
17.1.4 All accounting decisions and accounting of termination shall be
in accordance with US GAAP approved or adopted by the auditors
for the time being of the Holding Company.
17.1.5 Nothing in this Clause 17 shall be deemed a satisfaction, waiver
or discharge of any claims or causes of action by one Shareholder
against the others except to the extent that the same may have
been agreed as having been taken into account in any computation
or adjustment made pursuant to this Clause.
18. FREEDOM OF ACTION
Nothing contained in this Agreement shall be construed as constituting the
Shareholders the partners of each other, nor as restricting the
Shareholders (or any of them) in the conduct of their separate businesses.
19. FEES AND EXPENSES
19.1 The Shareholders shall each bear all legal fees and other expenses
incurred by them in negotiating this Agreement.
19.2 During the construction of the Vessel each Shareholder shall invoice the
Holding Company at an agreed rate of US$150,000 per annum (pro rated for
partial years) in respect of its internal administration costs etc in
relation to its support to the Holding Company.
20. NOTICE
Any notice or communication required pursuant to this Agreement shall be
in writing and shall be deemed to have been sufficiently given or made:
20.1 On the next business day after the same shall have been delivered by hand
to the relevant Shareholder(s) against receipt at the addresses specified
below or immediately if sent by fax:
The addresses for service shall be as follows:
(a) in the case of DRILLPETRO
Saffrey Square
Suite ▇▇▇
▇▇▇▇ ▇▇▇▇
▇ ▇ ▇▇▇ ▇▇▇▇▇
Nassau Bahamas
Fax: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
20
(b) in the case of TECHDRILL
Saffrey Square
Suite ▇▇▇
▇▇▇▇ ▇▇▇▇
▇ ▇ ▇▇▇ ▇▇▇▇▇
Nassau Bahamas
Fax: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
(c) in the case of WESTVILLE WITH A COPY TO:
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ Pride International, Inc.
▇▇▇▇ ▇▇▇▇▇ Building President
Wickhams Cay ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tortola Fax: ▇ ▇▇▇ ▇▇▇ ▇▇▇▇
British Virgin Islands
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
20.2 A Shareholder may from time to time notify to the others within five Days
prior notice of a change of address and/or fax. Any notice sent by fax
shall also be promptly confirmed by prepaid registered mail.
20.3 For the purpose of Clause 20.1 "business day" shall be a day on which
Banks and similar financial institutions are open for business in the
United States of America, England, France and Brazil.
21. MISCELLANEOUS
21.1 The Shareholders may waive specifically but only in writing, any breaches
of this Agreement, but no such waiver shall be deemed to constitute a
waiver of similar, subsequent or other breaches.
21.2 No alterations to the provisions of this Agreement shall be effected
unless made in writing duly executed by or on behalf of each of the
Shareholders.
21.3 Each Shareholder shall at all times execute such further documents and
carry out such further actions as may be requisite for giving full effect
to the provisions of this Agreement.
21.4 The clause and other headings contained in this Agreement are for
reference only and shall not affect its interpretation.
21.5 The provisions of this Agreement shall prevail over any provision of the
constitution of the Holding Company and each Shareholder undertakes to do
whatever is required to give effect to that intention.
21
22. LAW AND ARBITRATION
22.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of England,
22.2 Subject to the provisions of Clause 5 and Clause 16 hereof any dispute or
difference arising in connection with this Agreement shall if possible be
settled by mutual amicable agreement.
22.3 Should such settlement not be possible the dispute or difference shall be
referred to Arbitration in London in accordance with the provisions of the
Arbitration ▇▇▇ ▇▇▇▇ 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, with Drillpetro appointing
one Arbitrator and Westville appointing one Arbitrator and the third being
appointed by the Chairman of the London Maritime Arbitrators Association.
22.4 If any of the appointed Arbitrators refuses or is incapable of acting, the
Party who appointed him shall appoint a new Arbitrator in his place.
22.5 If a Party or parties fails to appoint an Arbitrator, either originally or
by way of substitution, for two weeks after the other party or parties
having appointed its/their Arbitrators have sent the party(ies) making
default notice by mail or facsimile to make the appointment, the non
defaulting Party(ies) may apply to the Chairman for the time being of the
London Maritime Arbitrators Association to appoint an Arbitrator on behalf
of the Party(ies) making default.
22.6 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.
22.7 Performance under this Agreement shall, as far as is reasonably possible,
continue during the Arbitration proceedings.
23. PREVAILING AGREEMENT
If there is a conflict between any of the terms of this Agreement, and the
terms of the Articles of Incorporation and By-Laws of the Holding Company,
the terms of this Agreement shall prevail as between the Shareholders, and
the Shareholders shall take all such action as shall be necessary for the
purpose of this Clause to ensure that the terms of this Agreement prevail.
Notwithstanding the foregoing or anything else contained herein or in any
other Related Agreement, the Shareholders acknowledge that they and their
respective Affiliates will jointly participate with representatives of the
Lenders in the negotiation and preparation of the Loan Agreement. If and
to the extent there are any
22
discrepancies or conflicts between the terms of this Agreement or other
Related Agreements and Statements made in the Loan Agreement, then the
Loan Agreement will control.
24. ANNOUNCEMENTS
No public announcement or communication (other than to the extent required
by law or by any other regulation) concerning the transactions referred to
in this Agreement shall be made or issued by any Party to this Agreement
without the prior written consent of all the Parties but such approval
shall not be unreasonably withheld or delayed.
25. INVALIDITY
If at any time any one or more of the provisions of this Agreement is or
becomes invalid, illegal or unenforceable in any respect under any law or
regulation, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not as a result be in any way affected
or impaired.
26. CONDITION PRECEDENT
It is a condition precedent to the coming into effect of this Agreement
and the Related Documents that Drillpetro shall have procured the
assignment to the Holding Company of the Petrobras Agreement.
27. FCPA
The Parties recognize that Westville and Foramer are both subsidiaries of
the U.S. Holding Company, Pride International, Inc. All parties are
familiar with the U.S. Foreign Corrupt Practices Act ("FCPA") and its
purposes. In particular, all parties are familiar with FCPA's prohibition
of the payment of or the giving of anything of value, either directly or
indirectly, by a United States Company or any of its subsidiaries to an
official of a foreign government for the purpose of influencing an act or
decision in his official capacity, or inducing him to use his influence
with a foreign government to assist a company in obtaining or retaining
business for or with or directing business to any person.
If there is reason to believe that any monies being paid by or on behalf
of the Joint Venture are being used for improper purposes, including, but
not limited to, direct or indirect payments to a government official, any
member of a ruling family, political party, government official or
employee or agent of a government controlled oil company for the purposes
of influencing any act which may result in any of the Project Companies or
the Project Group obtaining or retaining business, the non-offending
Parties shall have the right to sell or otherwise dispose of all or a part
of their interest in the Project Company and/or any of the Project Group
to the offending Party or Parties or any third party, subject to the
pre-emption provisions in the Related Agreements, and any cost or expenses
created by a forced sale or the early sale of such interest in order to
avoid any
23
claim for violation of the FCPA shall be for the account of the offending
Party or Parties or any third party transferee.
IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the
Parties hereto the day and year first above.
SIGNED by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ )
for and on behalf of )
DRILLPETRO INC. /s/ Illegible )
in the presence of: )
SIGNED by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ )
for and on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ )
TECHDRILL INC. /s/ Illegible )
in the presence of: )
SIGNED by /s/ Illegible )
for and on behalf of )
WESTVILLE MANAGEMENT CORPORATION )
in the presence of: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
24
APPENDIX 1
PETRODRILL SEVEN LIMITED
I. BUDGET PROJECTION:
(Amounts
SOURCES OF FUNDS in Thousands)
Net Proceeds from Issuance of the Notes
Equity Contribution
Investment Earnings
Mobilization Fees
TOTAL SOURCES OF FUNDS
USES OF FUNDS
Completion and Delivery Costs(1)
Shipyard Costs
Owner-Furnished Equipment
Basic Design Engineering
Insurance
Mobilization Costs
Total Interest Expense During Completion and Delivery(2)
Spare Parts, Manuals and Training
Contingency
Total Completion and Delivery Costs
Development Costs and Fees
Debt Service Reserve
TOTAL USES OF FUNDS
II. SHAREHOLDER CONTRIBUTIONS:
DRILLPETRO (55%)
TECHDRILL (15%)
WESTVILLE (30%)
TOTAL CONTRIBUTION
________
1 Assumes no late delivery penalties will be payable on delivery of the Rigs to
Petrobras, either against the mobilization or otherwise. 2 Assumes a weighted
average interest rate of 10.15% per annum.
25
III. OVERRUNS:
Notwithstanding Clause 5.2 of the Agreement, the Shareholders agree
that in the event of any overruns in the capital/operating budget, each
Shareholder shall immediately contribute their pro-rata share of any such
overrun amount up to US$50,000,000 without any further action by the Board
of Directors or General Assembly, subject only to the other conditions of
Clause 5 of the Agreement.
26