MASTER EQUIPMENT PURCHASE AND
SALE AGREEMENT
1 st day of September, 2009, Nicosia,
Cyprus.
THIS MASTER
EQUIPMENT PURCHASE AND SALE AGREEMENT (this “
Agreement ”) is made by and between KEY ENERGY
Pressure Pumping Services, LLC , a company incorporated in
Texas, United States, whose registered office is at 1301 McKinney,
Suite 1800, Houston, Texas 77010 (“ Seller
”), in the person of Newton W. “Trey” Wilson,
President acting on the basis of company consent,
GK DRILLING
TOOLS LEASING COMPANY LTD , a limited liability company incorporated in
Cyprus, whose registered office is Prodroumu, 75, ONEWORLD PARKVIEW
HOUSE, 4 th
floor, P.C. 2063, Nicosia, Cyprus
(“ Buyer ”) in the person of director George
Hadjipavlou acting on the basis of Memorandum and Articles of
Association. Each of Seller and Buyer are referred to individually
as a “ Party ”, and, collectively, as the "
Parties ” have concluded this master equipment
purchase and sale agreement (hereinafter referred as the
“Agreement”) on the following:
1. SUBJECT OF THE
AGREEMENT
1.1. The Parties will agree, deliver and execute
an Addendum setting forth, among other things, a description of
each of the equipment packages to be purchased by Buyer
(“Equipment”). Seller shall sell to Buyer the
Equipment, pursuant to the Addenda that provides for: the quantity,
descriptions, dimensions, purchase price, financing terms (if any),
and other essential parameters provided in each Addendum to this
Agreement.
1.2. The Buyer shall pay for the Equipment the
purchase price specified in each Addendum to this Agreement,
instruct Seller on shipment and specify the place of delivery;
receive the Equipment and use it for its intended
purpose.
2.1. The purchase price of each Equipment to be
sold by Seller shall be specified in an individual Addendum
containing the name and quantity and time of delivery of the
Equipment to be delivered under the Agreement. Any adjustment to
the purchase price will be mutually settled and agreed to by Buyer
and Seller in written form and subsequently set forth in a
commercial invoice.
2.2. The Equipment purchase price will include
the cost of, packing, marking, preservation as well as all expenses
related to development of permitting and registration documents by
Seller required for Equipment export from the country of its
location (USA), excluding any documentation for import or
intra-Russian Federation (“RF”) transportation pursuant
to free on board “FOB” (Incoterms 2000)
terms.
2.3. For the Equipment identified in Addenda
Nos. 1,2,3,4,5,6 and 7 (attached hereto), the Parties have agreed
to an Earnest Money amount of 11,313,331.22 Euros pursuant to the
invoice (“Invoice”) issued by Seller attached hereto as
Exhibit 1. The Invoice shall be due and payable as therein
provided and by wire transfer to the bank account designated by
Seller therein.
3. TERMS AND CONDITIONS OF
PAYMENT
3.1. Terms and conditions of payment are
specified as follows:
3.2. The Buyer shall pay Seller the purchase
price of the Equipment in full, unless otherwise agreed to in the
relevant Addendum and clause 3.3.
3.2.1. The purchase price due and payable by
Buyer shall be first credited against any Earnest Money paid by
Buyer to Seller as it is specified in clause 3.3. and relevant
Addendums. Within no later than 30 days after each shipment of
Equipment, the Buyer and Seller shall reconcile all credits and
determine the current balance amount of the Earnest
Money.
3.2.2 Any additional detailed terms and
conditions of payment shall be described in each Addendum to the
Agreement.
3.2.3. Payment by Buyer to Seller in cash shall
be made within three (3) days from upon the presentation by
Seller of the following documents:
commercial invoice (facsimile copy is
acceptable) issued in accordance with this Agreement and the
relevant Addendum.
copy of bill of lading of sea vessel (for FOB
Houston terms); and
surveyor report (conclusion on quantity of
Equipment).
3.3. The purchase price for the equipment will
be paid as set forth in the relevant Addendum in the combination of
the following:
3.3.1. by Cash (via wire transfer to the bank
designated by Seller) and
3.3.2. by Promissory Note (hereinafter —
the “PN”) in general, issued in USD, at an interest
rate of 3% per year; payable within approximately 5 and half years
from the date of its issue in equal annual payments with any
outstanding balance thereunder due on the sixth anniversary
(hereinafter — the “Due Payment”), pursuant to
terms mutually agreed to by Buyer and Seller.
4. TERMS AND CONDITIONS OF
DELIVERY,
4.1. Seller shall deliver each Equipment free on
board “FOB” (Incoterms 2000) at the Port of Houston,
Texas, United States (or such other location, if specified in the
relevant Addendum), with Seller assuming the role of
“seller” and Buyer the role of “buyer” as
such terms are used in the Incoterms 2000 unless otherwise agreed
in relevant Addendum. Seller shall prepare Equipment for shipment
to the agreed place of delivery pursuant to FOB terms (unless
otherwise agreed to in the relevant Addendum), which may include
the following:
4.1.1. — prepare Equipment for loading on
trucks, railcars or other type of transportation including assembly
works at Seller’s factory related to Equipment disassembling
and packing, marking and preservation providing Equipment integrity
in the course of transportation by trucks, railcars, marine vessels
or any other type of transport, as well as during Equipment
reloading from one type of transport to another;
4.1.2. — deliver the Equipment at the port
of shipment and load and put on board of the vessel nominated by
Buyer.
4.1.3. — deliver the paper work related to
all shipping documents,;
4.1.4. — electronic notification of Buyer
or Buyer’s Agent on Equipment availability for shipment prior
10 (ten) days before shipment; and
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4.1.5. — involvement of specialized
freight/carrier companies and signing agreements with them on the
part of Seller to ship the Equipment to the place of delivery
agreed by the Parties.
4.2. In accordance with the provision 4.1. of
the Agreement the delivery date shall be the date specified in Bill
of Lading
4.3. Title to and risk of loss of the Equipment
is transferred from Seller to Buyer from the time the Equipment
passes the ship’s rail at the named port of shipment as it is
stipulated in the FOB INCOTERMS 2000 basis of delivery.
4.4. Buyer shall procure at its expense and
maintain with reputable insurers all-risk cargo and/or transit
insurance to cover the physical loss or damage to the Equipment
while in transit with a minimum limit equivalent to the replacement
cost of the shipment including warehouse-to-warehouse coverage for
Equipment until it reaches final destination as applicable.
Insurance should include coverage for war risks, strikes, riots and
civil commotion.
The Buyer will
use its best commercial efforts to have appropriate insurance
program.
The board of directors of Buyer’s parent company will agree
and pass a resolution on the appropriate insurance
program.
Buyer shall
promptly notify Seller, of any claim made or likely to be made
under the insurance policy and ensure that Seller, is kept fully
informed of any developments concerning such claim. Seller shall at
its sole option have the right to participate in and/or make
representations in relation to the claim and Buyer shall allow
Seller, full opportunity to do so. Buyer shall ensure that their
insurers forward all claim proceeds directly to Seller, as their
interest may appear.
4.5 Buyer must obtain (at its own risk and
expense) any import license or other official authorization and
carry out all customs formalities for the import and transit
through the R.F.
4.6 Buyer must take delivery of the Equipment
once they have been delivered to the nominated vessel.
4.7 Buyer must bear the cost of the contract of
carriage for the Equipment from the port of shipment.
4.8 Buyer must pay all costs relating to the
Equipment from the time they have passed the ship’s rail at
the named port of shipment; and any customs duties, taxes and
charges upon import of the goods and transit through any
country.
5. PRE-ACCEPTANCE
PROVISIONS
5.1. Within the agreed period Seller shall
prepare the Equipment for shipment, notify Buyer electronically or
in writing on readiness to inspect Equipment quantity, integrity
and completeness witnessed by both Parties or their designated
agent.
5.1.1. On successful inspection of Equipment in
accordance with Clause 5.1 of this Agreement verified with a report
of external compliance and industrial safety examination (that is,
a rig- up and performance test to insure proper operating
standards), Seller will perform Equipment packing, marking and
preservation, prepare and attach a package of technical, shipping
and operation documentation in accordance with technical
specifications and regulatory technical documents of the assembly
factories applicable to products manufactured for operation in
European countries (and specially for Russia, if possible), and
will notify Buyer or its agent on the shipment fulfilled with a fax
message not later than one (1) working day from the time of
shipment.
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5.2. Seller shall prepare and provide Buyer with
the documents specified in Clause 3.2 above by registered mail
within as soon as practical, and by facsimile within 24 hours after
shipping.
5.3. Seller shall provide Buyer with Equipment
certifications (where applicable), Equipment passports, Equipment
technical
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