Exhibit 10.2
PLATFORM CONSTRUCTION AGREEMENT
This Agreement including the Exhibits attached hereto which are
incorporated by reference herein and made a part hereof (hereinafter referred to
as this "Contract"), entered into on the 30th day of April, 1997, by and between
▇▇▇▇▇▇ OFFSHORE INC., a corporation organized under the laws of the State of
Delaware (hereinafter referred to as "Buyer") and AMFELS, INC., a corporation
organized under the laws of the State of Texas (hereinafter referred to as
"Seller");
W I T N E S S E T H:
1. Description of Platform.
(a) Seller hereby agrees with Buyer to commence the construction of at
Seller's shipyard at Brownsville, Texas ("Seller's Yard"), to prosecute in
accordance with good shipyard practice to completion, and to deliver to Buyer by
April 30, 1999 (such date as the same may be extended under the terms of this
Agreement is referred to herein as the "Scheduled Delivery Date"), at Seller's
Yard a mobile, self-contained and elevating platform, being Seller's Yard No.
P-178, in accordance with (i) Seller's specifications therefor, dated April 30,
1997 and all related drawings, plans and data, whether now or hereafter prepared
by Seller (hereinafter referred to collectively as the "Specifications"), the
said Specifications having been (or shall be, in instances where specifications,
drawings, plans, and data are hereafter prepared) initialed by Seller and Buyer
as evidence of the accuracy thereof and being (and to be) hereby incorporated by
reference as part of this Agreement and (ii) the certain rules of the American
Bureau of Shipping (hereinafter referred to as the "ABS"), Rules for Building
and Classing Offshore Mobile Drilling Units, 1996, Part 3, Hull Construction and
Equipment, Sections 1 through 10 (provided that if the ABS enforces p-delta,
Seller's responsibility as to p-delta shall be limited to obtaining from
Seller's licensor ▇▇▇▇▇▇▇▇▇▇, Inc. ("▇▇▇▇▇▇▇▇▇▇") a set of new severe storm data
incorporating the effects of p-delta), which were in effect and enforced against
Seller by the ABS on April 1, 1997 and which are specified and limited in Part I
of the Specifications. For purposes of this Agreement, the mobile,
self-contained, and elevating platform to be constructed and delivered to Buyer
in accordance herewith shall be referred to as the "Platform". Buyer hereby
agrees with Seller to purchase the Platform from Seller, and to pay Seller for
same, all in accordance with the provisions of this Agreement.
(b) If any conflict or inconsistency shall arise between this Agreement
and the Specifications, this Agreement shall prevail. Similarly, if any conflict
or
inconsistency shall arise between the written Specifications and the
Specification drawings, the written Specifications shall prevail. In the event
of a dispute as to conformity with ABS classification requirements, the decision
of the ABS shall be final.
(c) Notwithstanding anything in this Agreement to the contrary, it is
expressly understood that the obligations of Seller under this Agreement are
subject to and conditioned upon the full and timely performance by ▇▇▇▇▇▇▇▇▇▇ of
its covenants, agreements, and undertakings and fulfillment of all subjects and
conditions under that certain License Agreement and Kit Construction Agreement
between Seller and ▇▇▇▇▇▇▇▇▇▇ dated April 30, 1997 (collectively the "▇▇▇▇▇▇▇▇▇▇
Agreements"), copies of which have been provided to Buyer. Seller shall have no
liability of any nature whatsoever, including damages (whether direct,
incidental, consequential, special, or otherwise) to Buyer if ▇▇▇▇▇▇▇▇▇▇ is
unable to or otherwise fails or refuses to fully and timely perform all of its
covenants, agreements, and undertakings under the ▇▇▇▇▇▇▇▇▇▇ Agreements or if
all subjects and conditions under the ▇▇▇▇▇▇▇▇▇▇ Agreements are not fully and
timely met. As used in this Agreement, "Package" and "Equipment" shall have the
meanings set forth in the ▇▇▇▇▇▇▇▇▇▇ Agreements. In the event ▇▇▇▇▇▇▇▇▇▇ is
unable to or otherwise fails or refuses to fully and timely perform all of its
covenants, agreements, and undertakings under the ▇▇▇▇▇▇▇▇▇▇ Agreements or if
all subjects and conditions under the ▇▇▇▇▇▇▇▇▇▇ Agreements are not fully and
timely met and as a result thereof Seller is delayed in the construction of the
Platform for ninety (90) days, Seller and Buyer shall each have the right to
terminate this Agreement without further liability of either party to the other
except that Seller shall retain all progress payments made pursuant to Paragraph
2(b) hereinbelow and shall be paid by Buyer for the price for that portion of
the Platform then constructed for which progress payments have not yet been made
and all work in process (including profit on all to Seller).
(d) In the event that any of the equipment or materials required to be
furnished by Seller in the performance of the work under this Agreement cannot
be timely procured or are in short supply, Seller may supply other materials and
equipment complying with the requirements of this Agreement and the
Specifications.
2. Contract Price.
(a) As consideration for Seller's construction of the Platform in
accordance with the terms of this Agreement, Buyer agrees to pay Seller the sum
of U.S. Dollars Fifty Seven Million Two Hundred Fifty Thousand ($57,250,000),
subject to adjustment as provided in this Agreement including Exhibit "A" hereto
(hereinafter referred to as
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the "Contract Price") at Seller's office at Brownsville, Texas or at such other
place as Seller may from time to time designate in writing to Buyer.
(b) The Contract Price shall be paid by Buyer to Seller in installments as
provided in Exhibit "A" attached to and made a part of this Agreement. Wire
transfer shall be made to Seller's account at Texas Commerce Bank as follows:
Texas Commerce Bank, Rio Grande Valley
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Officer: ▇▇▇ ▇▇▇▇▇▇▇
ACCOUNT NUMBER 06700278275
ABA NUMBER ▇▇▇▇▇▇▇▇▇
(c) Seller shall submit to Buyer invoices at least five (5) working days
prior to the date any payment is due under this Agreement.
(d) Any agreed lump sum change order (other than proposed Change Order No.
1 dealing with the matters described in Exhibit B attached hereto which shall be
paid as agreed by the parties hereto) shall be paid 50% of the change order
value upon confirmation of change order and the balance of 50% on the last
installment schedule as stipulated subparagraph (b) above. For change orders
performed on time and material basis, payments shall be made monthly based upon
percentage of completion of the change.
(e) All costs for ABS approvals for the Platform are for the Seller's
account with the exception of Buyer furnished equipment and materials.
(f) Prior to delivery of the Platform, the Seller shall furnish evidence
satisfactory to the Buyer showing that no liens, claims, security interests or
rights in rem of any kind have been or can be acquired against the Platform by,
through, or under Seller.
(g) All progress payments, payments for change orders, and other sums
owing by Buyer to Seller under this Agreement must be paid in full at the time
of delivery of the Platform under this Agreement and in any event prior to
departure of the Platform from Seller's Yard. If Buyer disputes in good faith
any sums claimed by Seller under or in connection with this Agreement, Buyer
shall provide to Seller a corporate surety bond from a first class U.S. Surety
acceptable to Seller in a form
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reasonable satisfactory to Seller. Such bond shall be in an amount equal to 150%
of the disputed sum. The bond must be executed and delivered to Seller at the
time of delivery of the Platform under this Agreement and in any event prior to
departure of the Platform from Seller's Yard.
(h) If within twelve (12) months from the date of this Agreement the
Seller or Keppel FELS Ltd. ("FELS") orders another kit from ▇▇▇▇▇▇▇▇▇▇ which
▇▇▇▇▇▇▇▇▇▇ agrees to sell to non-affiliated companies on behalf of the Buyer or
any other customer, the Seller shall promptly refund to the Buyer the U.S.
$2,000,000 portion of the Contract Price paid by the Buyer on May 30, 1997 and
used to reimburse the Seller for its payment of the transfer fee under the
License Agreement. The refund shall be made to Buyer when the $2,000,000 is
credited by ▇▇▇▇▇▇▇▇▇▇ to Seller.
(i) If the Seller contracts with the Buyer for the construction of a third
116-C ▇▇▇▇▇▇▇▇▇▇ mobile, self-contained and elevating platforms in addition to
the Platform, the Seller shall promptly refund to the Buyer U.S.$550,000 of the
Contract Price.
3. [Intentionally Omitted]
4. Representatives and Progress of Platform.
(a) Seller will furnish office space and parking facilities at the Yard
for Buyer's authorized representatives (the "Representative"), who will have
complete and unrestricted access to the Yard of Seller, or its subcontractors,
where the Platform under this Agreement is being constructed. The office
provided to Buyer will have telephone, telefax, and duplicating facilities.
Costs for long distance telephone calls, telefaxes, and duplication will be for
Buyer's account. Such authorized Representatives shall have the right to make
inspection of workmanship, material, equipment and supplies as the construction
of the Platform progresses and shall notify Seller in writing of any
deficiencies noted therein, and Seller will then take such steps as are
necessary to correct such deficiencies. Seller shall give notice to Buyer and
its Representative at least forty-eight (48) hours in advance of the date and
place of all tests, trials, and inspections. Inspections shall be made so as not
to impede the progress of the construction of the Platform and if defective or
non-conforming workmanship or material is rejected, rejection shall be made
promptly in order that Seller may minimize the expense and disruption of
construction. In the event Buyer's Representative shall fail to be present at
any properly notified test, trial, or inspection, the results thereof shall be
binding on Buyer. Buyer shall ensure that its Representative shall not in
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performing their inspections obstruct the construction schedule for the
Platform. If Buyer's Representative fails to promptly submit to Seller
notification of any non-conforming work discovered by Buyer's Representative,
Buyer shall be deemed to have approved such item and Buyer shall be precluded
from making demand for correction of such item, refusing to accept tender of
delivery of the Platform, or claiming such item as a warranty defect under
Seller's warranty set forth in Section 11 herein below.
(b) In all working hours during the construction of the Platform until
delivery thereof, the Representative and all assistants of the Representative
shall be given free and ready access to the Platform and to any other place
where construction of the Platform is being done or materials are being
processed or stored in connection with the construction of the Platform,
including the yards, workshops, stores and offices of Seller, and the premises
of subcontractors of Seller who are doing work for the Platform or storing
materials at such premises in connection with the Platform's construction.
(c) Seller shall appoint a project manager who shall be the direct
interface with the Buyer's Representative, with full authority to act for Seller
under this Agreement.
(d) Any difference in opinion between parties hereto which may arise
during the construction of the Platform concerning technical matters in respect
of the materials and workmanship covered by ABS rules, such difference in
opinion shall be referred to ABS whose opinion thereof shall be final and
binding upon both parties.
(e) Within thirty (30) days of the date of this Agreement the Seller shall
deliver to the Buyer a key event production schedule (the "Production Schedule")
showing planned construction progress of the Platform. The Production Schedule
shall be reasonably acceptable to the Buyer. The Seller shall develop an overall
Platform erection plan that integrates material delivery and assembly actions
needed to schedule work flow during all phases of construction. This plan shall
encompass sufficient planning data to assure that all phases of construction can
be adequately accomplished so as to deliver the Platform on or before the
Scheduled Delivery Date. The Platform erection/construction plan shall be
furnished to Buyer within sixty (60) days after the effective date of this
Agreement and shall, upon acceptance by Buyer, become by reference an integral
part of the Production Schedule. The Scheduled Delivery Date shall be extended
by any delay to Seller caused by act or omission of Buyer, failure to timely
deliver to Seller any Buyer Furnished Equipment, delays caused by ABS or any
governmental agency, changes, events of force majeure, or inability of or
failure or
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refusal of ▇▇▇▇▇▇▇▇▇▇ to fully and timely perform all of its covenants,
agreements, and undertakings under the ▇▇▇▇▇▇▇▇▇▇ Agreements or if all subjects
and conditions under the ▇▇▇▇▇▇▇▇▇▇ Agreements are not fully and timely met.
(f) Included in the Specifications is a list of tests and trials to be
performed by Seller in connection with the completion of the Platform. Buyer's
Representative shall be given the number of days of prior notice for each
applicable test or trial as set forth in the Specifications.
5. Changes and Additional Work.
(a) Buyer shall have the right, at any time or times, to request that
reasonable change or changes be made in any of the Specifications, and Buyer
shall issue to Seller a written change order to be executed by Buyer and Seller;
provided, however, if such requested change or changes in the aggregate would
materially increase the overall scope of work so as to adversely impact Seller's
other work or commitments or if ▇▇▇▇▇▇▇▇▇▇ refuses to agree to any requested
change with respect to the Package or the Equipment or if Seller and Buyer
cannot reach agreement as to a lump sum price or credit or change in the
Scheduled Delivery Date or other terms and conditions of this Agreement or the
Specifications, Seller shall have no obligation to Buyer to perform same. If any
change necessitates an increase or decrease in the quantity or quality of the
materials or the nature of the labor to be furnished by Seller for the Platform,
then the Contract Price shall be increased or decreased on a lump sum basis in
accordance with the mutual agreement of the parties. Seller shall be entitled to
make minor changes to the Specifications, if found necessary, for the
introduction of improved production methods or otherwise, subject to Buyer's
approval not to be unreasonably withheld.
(b) If any such change will prolong the time for completion of the
Platform, the Scheduled Delivery Date provided hereunder shall be extended
accordingly.
6. Buyer Furnished Equipment.
(a) Within forty five (45) days of the execution of this Agreement, Seller
shall furnish to Buyer a schedule of in-yard delivery dates of those items of
material, equipment, engineering data and information ("Buyer Furnished
Equipment"), as are set forth in the Specifications to be provided by Buyer. The
time for delivery of the Buyer Furnished Equipment as detailed on such delivery
schedule shall be such so as to not
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cause Seller to be delayed in the timely prosecution of the work in accordance
with the Production Schedule.
(b) Seller shall at its own cost install the Buyer Furnished Equipment.
Seller's scope of work includes all necessary foundations and supplies, such as,
but not limited to, electric power, air, fuel, steam, etc. All Buyer Furnished
Equipment shall be delivered by Buyer to Seller at Seller's Yard in their
assembled form, tested and in proper condition, ready for installation in or on
the Platform, in accordance with the Production Schedule. Seller will assist
Buyer in unloading all Buyer Furnished Equipment. Suitable storage will be
provided by Seller for all Buyer Furnished Equipment.
(c) In order to facilitate installation by Seller of the Buyer Furnished
Equipment on the Platform, Buyer shall furnish the Seller with all necessary
information including specifications, plans, drawings, instruction books,
manuals, test reports and certificates. Buyer, if so requested by Seller, shall
without any charge to Seller cause representatives of the manufacturers of the
Buyer Furnished Equipment to assist Seller in installation thereof in or on the
Platform and/or to carry out installation thereof by themselves or to make
necessary adjustments thereof at the Yard. Seller's scope of work under this
Agreement excludes any testing, adjustment of equipment, repair and modification
and supply of all inter-connecting parts.
(d) In the event of a delay in delivery of any Buyer Furnished Equipment,
then Buyer and Seller shall mutually agree on a new installation date of the
delayed Buyer Furnished Equipment. If no agreement is reached between both
parties within fifteen (15) days, then Seller shall have the right to proceed
with the construction of the Platform without installation thereof on the
Platform, without prejudice to Seller's other rights as hereinabove provided,
and Buyer shall accept and take delivery of Platform as so constructed.
(e) On delivery of each consignment of Buyer Furnished Equipment, Seller
shall assist Buyer in the inspection of the consignment delivered. Any and all
of the Buyer Furnished Equipment shall be subject to Seller's reasonable right
of rejection as and if they are found to be unsatisfactory or in improper
condition for installation. In such instances, Seller shall first give adequate
notice to Buyer before being entitled to reject the Buyer Furnished Equipment.
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(f) Should Buyer fail to timely deliver the Buyer Furnished Equipment as
provided in this Agreement and such delay results in increased costs to Seller,
Buyer shall reimburse Seller for such increased cost as and when incurred.
7. Liens.
Provided Seller is paid all amounts owing to Seller by Buyer under this
Agreement as and when due, Seller shall not place or create or permit to be
placed or created, any liens, charges, or encumbrances on, or security interests
as to, or pledges of, the Platform, and any lien, charge, encumbrance or
security interest so placed or created by or though Seller, its subcontractors
and suppliers, or any of them, shall be forthwith released by the Seller. The
Seller shall release and cause to be discharged any such lien, charge,
encumbrance or security interest. In the event Seller fails to secure the
discharge or release of any such lien, charge, encumbrance or security interest,
after notice to Seller the Buyer may secure the removal of same, in which event
the Seller shall reimburse the Buyer for its costs of securing such discharge or
release (which cost shall include any expenses incurred in connection therewith)
or at Buyer's sole option by deducting such sum from any payments due or to
become due the Seller's under this Agreement. In the event such cost is in
excess of the amount of any such reimbursement by deductions, the Seller further
agrees to pay the amount of such excess to the Buyer upon demand.
8. Insurance.
Seller shall obtain and maintain during all times hereunder the following
insurances:
(a) Worker's Compensation (including occupational disease), United States
Longshoremen and Harbor Workers, and employer's liability insurance in
accordance with the applicable statutory requirements of the jurisdiction in
which the Platform is constructed, with maritime and in rem, alternate employer,
and voluntary compensation coverages, with limits on the employer's liability
coverage of not less than U.S. $1,000,000 for bodily injury per person and with
excess liability limits of not less than U.S. $l,000,000 per occurrence.
(b) Broad Form Comprehensive General Liability Insurance covering all of
the operations of Seller, including Contractual Liability and Contractor's
Protective Liability with a combined single limit of not less than U.S.
$1,000,000 per occurrence
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for bodily injury and/or property damage, including products and completed
operations coverage, with excess liability limits of not less than U.S.
$1,000,000 per occurrence.
(c) Each of the foregoing insurance policies shall, either on the face
thereof or by appropriate endorsement name (except for the policies specified in
subparagraph (a) above) Buyer as an additional assured with respect to the
indemnities of Seller assumed under this Agreement, provide that the insurance
policy shall not be cancelled or coverage reduced except upon 30 days prior
written notice to Buyer, contain waivers of subrogation pursuant to which the
insurer waives all express or implied rights of subrogation against Buyer,
provide that Buyer shall not be liable for premiums or calls, and be retained in
full force and effect by Seller until the conclusion of the Platform hereunder
as provided below. Seller shall be responsible for all deductibles and self
insured retentions, to the extent the loss or claim would otherwise be covered
by Seller's indemnities contained in this Agreement. Concurrently with the
execution of this Agreement, Seller shall furnish to Buyer certificates or other
evidence satisfactory to the other of the insurance required hereunder.
(d) Until final delivery of the Platform, Seller shall its own cost and
expense, keep the Platform and all materials either delivered to the Yard or
being handled by Seller for the Platform or built into, or installed in or upon
the Platform fully insured under coverage and with underwriters satisfactory to
the Buyer and not more restrictive than the current form of London or American
Institute Clauses for Builder's Risks or equivalent form, including tests and
trials clauses. The Builder's Risks insurance shall include supplemental
coverage for war risks, strikes, lockouts, labor disturbances, riot or civil
commotion, earthquakes, and protection and indemnity risks. The amount of such
insurance coverage shall be in an amount at least equal to the Contract Price
and shall be increased from time to time to cover the cost of all changes,
alterations, or modifications.
(e) The Builders Risks policy shall be taken out in the joint names of
Seller and Buyer and all losses under such policy shall be payable to the Seller
and Buyer in accordance with their respective interests. The policies shall
provide that there shall be no recourse against the Buyer for the payment of
premiums or other charges and shall further provide that at least thirty (30)
days' prior written notice of any material alteration, cancellation, or
cancellation for the non-payment of premiums or other charges shall be given to
the Buyer by the insurance underwriters. Any deductible under this insurance
policy shall be for the account of Seller.
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9. Title and Risk of Loss.
(a) Title to the Platform, to the extent complete, including all materials
destined for incorporation therein, whether located at Seller's Yard or
elsewhere, shall immediately vest in Buyer when the same is paid for by Buyer,
whether prior to or after incorporation into the Platform. The vesting of title
shall not relieve Seller of its obligation to replace damaged or defective
materials at Seller's expense and to complete and deliver the Platform in
accordance with the provisions of this Agreement. Risk of loss of the Platform
shall pass to Buyer upon delivery and acceptance thereof in accordance with this
Agreement.
(b) If the Platform or any Buyer Furnished Equipment shall be damaged by
any insured cause whatsoever prior to acceptance thereof by Buyer and such
damage does not constitute an actual or a constructive total loss of the
Platform, Seller and/or Buyer shall apply the amount recovered under the
insurance policy referred to in Paragraph 8(d) of this Agreement to the repair
of such damage and Buyer shall accept the Platform under this Agreement if
completed in accordance with this Agreement and the Specifications. The
Production Schedule including the Scheduled Delivery Date shall be deemed
extended by the time necessary to repair such damage.
(c) In the event of an actual or constructive total loss of the Platform
prior to delivery, this Agreement shall automatically be deemed terminated, and
Seller shall retain all progress payments made pursuant to Paragraph 2(b)
hereinbelow and shall be paid by Buyer for the price for that portion of the
Platform then constructed for which progress payments have not yet been made and
all work in progress (including profit on all to Seller). In the event that the
actual or constructive total loss of the Platform results from the operation of
an insurable risk covered by insurance as required under Paragraph 8(d) of this
Agreement, all of the proceeds of such insurance payable as a result of such
loss shall be paid to the Buyer and the Seller as their interests may appear.
10. Delivery.
(a) Upon completion of the construction of the Platform and the tests and
trials as provided in the Specifications, Seller shall tender delivery of the
Platform to Buyer. Prior to tendering delivery, Seller shall have remedied at
Seller's sole cost and expense any defects discovered by Buyer or Seller in
Seller's workmanship or materials including installation of Buyer Furnished
Equipment or any other nonconformity of the Platform with the requirements of
the Specifications and performed any retests
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necessary to ensure that such items have been fully corrected. Buyer shall
accept such tender of delivery, and Buyer shall not have the right to refuse to
accept delivery of the Platform provided the same is substantially completed and
capable of being utilized by Buyer. Any remaining items shall be completed by
Seller following delivery and prior to departure of the Platform from Seller's
Yard, or Buyer and Seller may mutually agree on an appropriate reduction of the
Contract Price for such remaining items.
(b) On the Delivery Date, Buyer shall pay to Seller all amounts payable
under this Agreement and Seller and Buyer shall execute and deliver a Protocol
of Acceptance and Delivery acknowledging delivery of the Platform. Seller shall
further deliver to Buyer a ▇▇▇▇ of Sale confirming the conveyance of title to
the Platform to the Buyer, which ▇▇▇▇ of Sale shall (i) generally describe the
Platform as a mobile, self-contained and elevating platform, (ii) contain a
general warranty of title and freedom from liens (except as to matters arising
by, through, or under Buyer) in favor of the Buyer, and (iii) be deemed to
contain the additional warranties and covenants set forth in Section 11
hereinbelow without the necessity of making any reference to such warranties in
the ▇▇▇▇ of Sale. Seller shall also deliver to Buyer the remaining delivery
documents set forth in the Specifications.
(c) Seller shall deliver the Platform along side Seller's dock at the
Yard. Following delivery, Buyer shall have the right to dock the Platform at
Seller's Yard for a period not to exceed fourteen (14) days, after which time
the Platform must depart from Seller's Yard. During such post-delivery docking
period, Buyer shall pay to Seller its standard charges for shore power, potable
water, and security guard service. All such charges must be paid by Buyer to
Seller prior to departure of the Platform from Seller's Yard.
11. Warranty.
Seller hereby warrants to Buyer that (i) Seller's workmanship and materials
shall be free from material defects, (ii) that systems designed, supplied, and
installed by Seller will perform the functions intended by this Agreement and
the Specifications, and (iii) that the components of the Equipment manufactured
by ▇▇▇▇▇▇▇▇▇▇ shall be free from material defects in ▇▇▇▇▇▇▇▇▇▇'▇ workmanship
and material and shall perform in accordance with the Kit Construction Agreement
and the specifications attached thereto as Annex C in normal use and service.
The warranty set forth in the preceding sentence (hereinafter referred to as the
"Warranty") shall commence on the date of delivery of the Platform to Buyer and
expire twelve (12) months thereafter (provided, however, that if any of the
equipment of the Platform, including without limitation any cranes or
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winches, is put into service prior to said delivery, the twelve (12) months
warranty period shall begin with the commencement of such service or operation
insofar as such equipment is concerned) and shall be subject to the following
provisions:
(a) The Warranty shall not apply to any part of the Platform which (i) has
been misused or structurally repaired or altered by anyone other than Seller or
its duly authorized representative, or (ii) has been damaged because of it use,
or the use of any other materials or equipment, after Buyer (or any other person
or firm operating the Platform or its equipment) has knowledge of such defect.
Except for the components of the Equipment manufactured by ▇▇▇▇▇▇▇▇▇▇ as
expressly set forth and as limited herein, equipment or other components of the
Platform sold to Buyer pursuant to this Agreement but not manufactured by Seller
are not warranted to any extent, but Seller shall assign (to the extent same are
assignable by Seller) to Buyer, without recourse, any warranties furnished to
Seller by the vendors of such equipment or other components. Buyer shall seek
performance or damages under such warranties only from such parties and not from
Seller. Seller shall use reasonable efforts to secure the best available
warranties available from such vendors and shall cooperate with Buyer in any
resulting dispute Buyer may have with such vendors.
(b) The extent of Seller's liability for any breach of the Warranty shall
be limited to (i) repairing or replacing (whichever of the two Seller, in its
sole discretion, shall elect) any material defects in Seller's workmanship or
materials, or causing the components of the Equipment manufactured by ▇▇▇▇▇▇▇▇▇▇
to perform in accordance with the Kit Construction Agreement and the
specifications thereto by repairing or replacing (whichever of the two Seller,
in its sole discretion, shall elect) any material defects in ▇▇▇▇▇▇▇▇▇▇'▇
workmanship or materials, as the case may be, at Seller's Yard or at any other
shipyard of Seller or its affiliates (hereinafter referred to as an "AMFELS
Yard"), with the Platform to be brought to an AMFELS Yard at Buyer's sole risk
and expense, or (ii) reimbursing Buyer for the cost of such repair or
replacement in accordance with the provisions of subparagraph (c) hereinbelow.
(c) Buyer, at its discretion, may elect to cause the necessary repairs or
replacements to be made at a non-AMFELS Yard. In such event, Seller's sole
obligation shall be to reimburse Buyer for the cost of such repairs or
replacements, provided, however, that in no event shall the sum to be paid to
Buyer by Seller exceed the cost that Seller would have borne, based on Seller's
normal rates, if the repairs or replacements had been made at the Seller's Yard.
If Buyer elects to proceed under the provisions of this subparagraph (c), Buyer
shall, as soon as possible after such election (but in any event prior to the
commencement of such repairs or replacements), notify
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Seller of the time, place, and estimated cost of such repairs and replacements.
Seller shall have the right to verify, at its sole cost and expense, by its own
representative, the nature and extent of the defects complained of prior to the
time that the repairs or replacements are made, and if in fact no breach of the
warranty made by Seller herein has occurred, Buyer shall pay to Seller a per
diem fee equal to Sellers then current labor rate schedule and the reasonable
expenses incurred by such representative.
(d) The REMEDIES provided in subparagraphs (b) and (c) hereinabove are
EXCLUSIVE. Buyer further agrees that in no event will Seller's liability to
Buyer for breach of the Warranty set forth in subparagraph (a) with respect to
the components of the Equipment manufactured by ▇▇▇▇▇▇▇▇▇▇ exceed such amount as
Seller may actually recover from ▇▇▇▇▇▇▇▇▇▇ for the same breach of warranty
under the Kit Construction Agreement. Such Warranty shall not include
transportation, towage, insurance, or other incidental expenses. In no event
shall the obligation of Seller to repair or replace (or to reimburse Buyer
pursuant to subparagraph (c) hereinabove for the cost of repairing or replacing)
defective workmanship or materials be construed to require Seller to repair or
replace more than the actual workmanship or material that is found to be
defective. The Platform as a whole or any other part thereof shall not be
construed to be "workmanship" or "material" for the purposes of the preceding
sentence and this Agreement.
(e) The Warranty shall not be effective unless Seller receives from Buyer
a written claim therefor (i) within thirty (30) days after the date of discovery
of such defect and (ii) prior to the expiration of the prescribed Warranty
period.
(f) Any work performed or materials furnished by Seller pursuant to the
Warranty shall be warranted for the remaining term of the original Warranty, and
nothing in subparagraph (b) or (c) shall extend the Warranty period beyond the
Warranty period specified in this Section 10.
(g) THE WARRANTY AS DEFINED HEREINABOVE IS IN LIEU OF ALL OTHER WARRANTIES
(EXCEPT OF TITLE), EXPRESS OR IMPLIED, STATUTORY OR AT COMMON LAW, AND ALL OTHER
LIABILITIES (AT COMMON LAW OR IN CONTRACT, TORT, OR OTHERWISE, RELATING IN ANY
WAY TO THE PLATFORM OR COMPONENTS THEREOF OR SERVICES TO BE PROVIDED UNDER THIS
AGREEMENT INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY AND NEGLIGENCE).
WITHOUT LIMITATION OF THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE,
SELLER EXPRESSLY DISCLAIMS AND NEGATES (i) ANY
13
IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS
WARRANTY OF CONFORMITY TO MODELS OR SAMPLES (iv) ANY IMPLIED OR EXPRESS WARRANTY
OF DILIGENCE, (v) ANY IMPLIED OR EXPRESS WARRANTY OF WORKMANLIKE SERVICE, (vi)
ANY IMPLIED OR EXPRESS WARRANTY OF SEAWORTHINESS, AND (vii) ALL OTHER LIABILITY,
AT COMMON LAW OR IN CONTRACT OR TORT OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, STRICT LIABILITY (WHETHER FOUNDED IN SECTION 402(A) OF THE
RESTATEMENT OF TORTS OR OTHERWISE) AND NEGLIGENCE, WHETHER OCCASIONED BY ACTS OR
OMISSIONS OF SOLE OR CONCURRENT NEGLIGENCE OF SELLER, ITS AFFILIATES AND/OR
OTHERS. SELLER DISCLAIMS LIABILITY FOR, AND IN NO EVENT WHATEVER SHALL BE LIABLE
FOR, ANY LOSS OF PROFITS OF BUYER OR OTHERS OR ANY OTHER INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.
(h) Seller's liability with respect to the Buyer Furnished Equipment shall
extend only to installation thereof in accordance with the certified equipment
drawings furnished by Buyer in those instances where such Equipment is actually
installed by Seller. In all other instances (including, without limitation,
those instances in which Buyer does not furnish certified equipment drawings to
Seller), the sole risk and responsibility for the proper installation of the
Buyer Furnished Equipment shall, as between Seller and Buyer, be borne by Buyer.
In all instances the sole risk and responsibility for the operability of the
Buyer Furnished Equipment shall, as between Seller and Buyer, be borne by Buyer.
(i) No employee or representative of Seller is authorized to change the
Warranty in any way or to grant any other warranty.
(j) Buyer understands and agrees that any modification to the design of
the Package or modification to the Equipment made by the Buyer are the
responsibility of Buyer and not the responsibility of Seller for any purpose
whatsoever, including claims for damages or other liability asserted by Buyer,
its customers or any third party. In the event such modifications require
regulatory approval, Buyer shall be responsible for obtaining such approval
unless Seller accepts the responsibility by executing a change order to perform
the work as additional work under this Agreement.
(k) Buyer understands and agrees that the information contained in the
Package and relating to the Equipment do not guarantee a fixed or variable
weight of
14
the Platform or designate the use of equipment other than the Equipment. The
fixed and variable weight of the Platform and the selection of equipment other
than the Equipment are decisions of the Buyer, including outfitting and
fabrication decisions. The weight information provided by Seller is for
information only and reflects historical information or estimated and
approximate data. Seller is unable to predict actual weights for the Platform to
be constructed by Seller. Seller does not warrant or represent that Seller's
sale or construction of a Platform will meet the historical or approximate data
supplied to Buyer.
(l) Buyer acknowledges that certain information to be provided by
▇▇▇▇▇▇▇▇▇▇ relate to a ▇▇▇▇▇▇▇▇▇▇ 116-C Class Platform rather than to an
Enhanced 116-C Platform. (See Annex C to the Kit Construction Agreement). Such
supplemental information shall be deemed to be part of the Package for all
purposes of this Agreement, including the provisions of the Confidentiality
Agreement referred to in Section 29 hereinbelow. Such supplemental information
is to be provided to Seller by ▇▇▇▇▇▇▇▇▇▇ approximately 120 days after the
Effective Date of the Kit Construction Agreement. During the term of this
Agreement, ▇▇▇▇▇▇▇▇▇▇ may provide other supplemental information to Seller
relating to an Enhanced 116-C which shall, at such time, become part of the
Package for purposes of this Agreement.
12. Indemnification Provisions.
A. SELLER INDEMNITIES
(A) SELLER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
BUYER, ITS CUSTOMERS, AND THEIR RESPECTIVE PARENT, HOLDING AND AFFILIATED
COMPANIES, AND THEIR EMPLOYEES, OFFICERS, DIRECTORS, AND AGENTS (COLLECTIVELY
THE "BUYER INDEMNITIES"), FROM AND AGAINST ALL LIABILITIES, LOSSES, CLAIMS,
DEMANDS OR CAUSES OF ACTION (COLLECTIVELY "CLAIMS"), BY SELLER OR ITS
SUBCONTRACTORS OF ANY TIER OR THEIR RESPECTIVE EMPLOYEES, OFFICERS AND AGENTS,
BASED ON ILLNESS, INJURY OR DEATH OR DAMAGE OR DESTRUCTION OR LOSS OF USE OF
PROPERTY THEREOF INCLUDING WITHOUT LIMITATION THE YARD, OCCURRING PRIOR TO THE
DELIVERY TO AND ACCEPTANCE BY BUYER OF THE PLATFORM, INCIDENT TO OR CONNECTED
WITH OR ARISING OUT OF OR IN ANY WAY RELATED DIRECTLY OR INDIRECTLY TO THE
PERFORMANCE OF THIS AGREEMENT OR BREACH HEREOF, REGARDLESS OF CAUSE, INCLUDING
THE SOLE OR CONCURRENT NEGLIGENCE OR
15
FAULT OF ANY OF SELLER OR THE BUYER INDEMNITIES OR THEIR OFFICERS, AGENTS,
EMPLOYEES, OR SUBCONTRACTORS OF ANY TIER OR THEIR EMPLOYEES OR AGENTS,
UNSEAWORTHINESS, STRICT LIABILITY, OR ANY OTHER EVENT OR CONDITION WHETHER OR
NOT ANTICIPATED BY ANY PERSON OR PARTY, REGARDLESS OF WHETHER PREEXISTING THE
EXECUTION OF THIS AGREEMENT.
(B) SELLER SHALL BE LIABLE FOR ALL COSTS, EXPENSES, AND REASONABLE
ATTORNEYS FEES INCURRED BY BUYER INDEMNITIES IN DEFENDING ANY COVERED CLAIMS AND
IN ASSERTING THE INDEMNITIES AS SET FORTH HEREIN AGAINST SELLER. SELLER SHALL BE
OBLIGATED TO BEAR THE EXPENSE OF THE INVESTIGATIONS AND EXPENSES OF ALL CLAIMS
ARISING THEREFROM AND TO PAY THE FULL AMOUNT OF ANY JUDGMENT OR SETTLEMENT
RENDERED AGAINST THE BUYER INDEMNITIES, IT BEING STIPULATED THAT ALL OBLIGATIONS
OF INDEMNITY ASSUMED HEREIN SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT,
REGARDLESS OF HOW SUCH TERMINATION IS AFFECTED. THE BUYER INDEMNITIES SHALL
PROVIDE REASONABLE ASSISTANCE TO SELLER IN RELATION TO THE DEFENSE OF CLAIMS
WHICH ARE SUBJECT TO INDEMNITY HEREUNDER.
B. BUYER INDEMNITIES
(A) BUYER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER
AND ▇▇▇▇▇▇▇▇▇▇ AND THEIR RESPECTIVE PARENTS, HOLDING AND AFFILIATED COMPANIES,
AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AND AGENTS AND THE
SUBCONTRACTORS OF ▇▇▇▇▇▇▇▇▇▇ AND THEIR SERVANTS (COLLECTIVELY THE "SELLER
INDEMNITIES"), FROM AND AGAINST ALL LIABILITIES, LOSSES, CLAIMS, DEMANDS, COSTS,
OR CAUSES OF ACTION (COLLECTIVELY "CLAIMS"), BY BUYER OR ITS SUBCONTRACTORS OF
ANY TIER OR THEIR RESPECTIVE EMPLOYEES, OFFICERS AND AGENTS, BASED ON ILLNESS,
INJURY OR DEATH OR DAMAGE OR DESTRUCTION OR LOSS OF USE OF PROPERTY OTHER THAN
THE PLATFORM, OCCURRING PRIOR TO THE DELIVERY TO AND ACCEPTANCE BY BUYER OF THE
PLATFORM, INCIDENT TO OR CONNECTED WITH OR ARISING OUT OF OR IN ANY WAY RELATED
DIRECTLY OR INDIRECTLY TO THE PERFORMANCE OF THIS AGREEMENT OR BREACH HEREOF,
REGARDLESS OF CAUSE, INCLUDING THE SOLE OR CONCURRENT NEGLIGENCE OR FAULT OF ANY
OF BUYER
16
OR THE SELLER INDEMNITIES OR THEIR OFFICERS, AGENTS, EMPLOYEES, OR
SUBCONTRACTORS OF ANY TIER OR THEIR EMPLOYEES OR AGENTS, UNSEAWORTHINESS, STRICT
LIABILITY OR ANY OTHER EVENT OR CONDITION WHETHER OR NOT ANTICIPATED BY ANY
PERSON OR PARTY, REGARDLESS OF WHETHER PREEXISTING THE EXECUTION OF THIS
AGREEMENT.
(B) BUYER SHALL BE LIABLE FOR ALL COSTS, EXPENSES, AND REASONABLE
ATTORNEYS FEES INCURRED BY SELLER INDEMNITIES IN DEFENDING ANY COVERED CLAIMS
AND IN ASSERTING THE INDEMNITIES AS SET FORTH IN PARAGRAPH (A) HEREINABOVE
AGAINST BUYER. BUYER SHALL BE OBLIGATED TO BEAR THE EXPENSE OF THE
INVESTIGATIONS AND EXPENSES OF ALL CLAIMS ARISING THEREFROM AND TO PAY THE FULL
AMOUNT OF ANY JUDGMENT OR SETTLEMENT RENDERED AGAINST THE SELLER INDEMNITIES, IT
BEING STIPULATED THAT ALL OBLIGATIONS OF INDEMNITY ASSUMED HEREIN SHALL SURVIVE
THE TERMINATION OF THIS AGREEMENT, REGARDLESS OF HOW SUCH TERMINATION IS
AFFECTED. THE SELLER INDEMNITIES SHALL PROVIDE REASONABLE ASSISTANCE TO BUYER IN
RELATION TO THE DEFENSE OF CLAIMS WHICH ARE SUBJECT TO INDEMNITY HEREUNDER.
C. AS USED HEREIN AND IN SECTIONS 14 AND 24 HEREINBELOW, "AFFILIATES" OR
"AFFILIATED COMPANIES" SHALL MEAN AN ENTITY WHICH, DIRECTLY OR INDIRECTLY,
THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY, OR IS UNDER
COMMON CONTROL WITH, THE PARTY IN QUESTION.
13. Patent Indemnity.
(a) Seller hereby agrees to defend any claim or suit and to indemnify and
save Buyer harmless from and against any damages (including the costs of the
suit and reasonable attorney's fees) awarded against Buyer in a suit arising out
of any infringement of any U.S. patent by reason of the incorporation into the
Platform in accordance with the Package of any Equipment components manufactured
by ▇▇▇▇▇▇▇▇▇▇; provided, however, that
(i) the indemnity contained in this Section 13 shall not apply to any
claim or suit arising out of the construction or use of (1) processes, devices,
apparatus, or equipment specified or furnished by Buyer or anyone else other
than Seller, for
17
which Buyer shall indemnify and defend Seller, and mounted upon or used in
connection with the Platform; and (2) any combination of and falling within
subparagraph (i)(1) hereof with the Equipment or the Platform; and
(ii) Buyer shall give Seller prompt written notice of any such claim
or suit and shall permit Seller to control settlement negotiations and any
litigation in connection therewith; provided, however, no settlement which
purports to acknowledge, on Buyer's behalf the validity of the patent involved
shall be entered into by Seller without Buyer's consent. As to any Equipment
components purchased by Seller, Seller shall assign (to the extent same is
assignable) to Buyer, without recourse, any patent indemnity coverage granted to
Seller by any vendor thereof Buyer shall seek performance of damages under such
warranties and Patent indemnities only from such parties and not from Seller.
(b) Seller makes no representations and extends no warranties that the
manufacture, construction, or commercialization of the Platform will not
infringe the claims of any United States or foreign Letters Patent that are not
included in Article II of the License Agreement, and Seller specifically
excludes any responsibility, liability, or obligation to defend Buyer or to hold
harmless and indemnify Buyer against charges, claims, or suits brought against
Buyer, its affiliates (an "affiliate" of Buyer being an entity which, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with Buyer), assigns, successors, agents, employees,
representatives, subcontractors, or independent contractors for infringement of
any United States or foreign Letters Patent not included in Article II of the
License Agreement. Buyer further agrees that in no event shall Seller's
liability to indemnify and hold harmless Buyer as provided herein exceed such
amount as Seller may actually recover from ▇▇▇▇▇▇▇▇▇▇ for the same obligation to
indemnify and hold harmless under the License Agreement.
(c) Buyer agrees to defend any claim, suit, or proceeding brought against
Seller alleging that the construction or use by Seller, pursuant to this
Agreement, of any process, method of construction, construction equipment,
device, or apparatus (including, without limitation, Buyer Furnished Equipment)
specified or furnished by Buyer or mounted upon or used in connection with the
Platform constitutes infringement of any letters patent, and Buyer agrees to
indemnify and save Seller harmless from and against any judgment rendered
against Seller as a result of such claim, suit, or proceeding. Seller shall
promptly notify Buyer in writing of any such claim, suit, or proceeding and
shall permit Buyer to control the conduct and settlement of such claim, suit, or
proceeding, provided, however, no settlement shall be entered
18
into without Seller's consent which purports to acknowledge on Seller's behalf
the validity of any patent. Seller shall provide information and assistance to
Buyer, at Seller's expense, as may be reasonably necessary to aid in the conduct
and settlement of the claim, suit, or proceeding. Seller shall be entitled to
participate, at its own expense, in the conduct and settlement of such claim,
suit, or proceeding through its selected representatives and attorneys.
14. General Limitation of Liability.
IN NO EVENT SHALL SELLER OR ▇▇▇▇▇▇▇▇▇▇ OR THEIR AFFILIATES OR THE AGENTS,
OFFICERS, EMPLOYEES, INVITEES, OR REPRESENTATIVES OF SELLER OR ITS AFFILIATES OR
THE SUBCONTRACTORS OF ▇▇▇▇▇▇▇▇▇▇ OR THEIR SERVANTS BE LIABLE TO BUYER, ITS
AGENTS, OFFICERS, EMPLOYEES, REPRESENTATIVES, SUBCONTRACTORS, INDEPENDENT
CONTRACTORS, OR AFFILIATES, OR TO ANY THIRD PARTIES FOR ANY ECONOMIC LOSS,
PHYSICAL HARM, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS AND LOSS OF BUSINESS
OPPORTUNITIES), ARISING OUT OF, RESULTING FROM OR RELATING IN ANY WAY TO THIS
AGREEMENT OR THE ▇▇▇▇▇▇▇▇▇▇ AGREEMENTS OR ANY ACTIVITIES OR OMISSIONS OR DELAYS
IN CONNECTION HEREWITH OR THEREWITH INCLUDING, WITHOUT LIMITATION, THE
PERFORMANCE (WHETHER TIMELY OR NOT) OR THE NON-PERFORMANCE OF THIS AGREEMENT OR
THE ▇▇▇▇▇▇▇▇▇▇ AGREEMENTS, BREACH OF ANY WARRANTY, THE DESIGN OF THE PLATFORM OR
ANY PART THEREOF OR , OR THE LOSS OF OR LOSS OF USE OF THE PLATFORM OR ANY PART
THEREOF OR ANY OTHER EQUIPMENT, MATERIALS, OR PROPERTY), REGARDLESS OF CAUSE AND
REGARDLESS OF WHETHER SELLER, ▇▇▇▇▇▇▇▇▇▇ OR THEIR AFFILIATES, AND/OR THEIR
RESPECTIVE OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES, SUBCONTRACTORS, AND/OR
OTHERS MAY BE WHOLLY, PARTIALLY, OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT,
UNSEAWORTHINESS, STRICT LIABILITY, OR ANY DEFECT IN PREMISES, EQUIPMENT, OR
MATERIALS, OR ANY OTHER EVENT OR CONDITION WHETHER OR NOT ANTICIPATED BY ANY
PERSON OR PARTY, REGARDLESS OF WHETHER PREEXISTING THE EXECUTION OF THIS
AGREEMENT.
19
15. Force Majeure.
For purposes of this Agreement, events of "force majeure" shall be defined
to mean all causes beyond the reasonable control of the party asserting the
benefit of this Article, and shall include but not be limited to fire,
explosion, breakdown of machinery or equipment, shortage or unavailability of
materials or equipment, delay in transportation, government order, edict, or
other action, storms, abnormal weather that prevents blasting or painting,
strikes or other labor disturbances, destruction or damage to Seller's Yard or
equipment or any Buyer Furnished Equipment or the Platform or any part thereof
from any cause; acts of Buyer or the classification society or regulatory bodies
having or proporting to have jurisdiction including failure to give timely
approvals; late delivery of Buyer Furnished Equipment or failure to furnish in a
timely manner necessary information concerning the Buyer Furnished Equipment or
the performance of the work; and any other causes or accidents of the same or
similar nature which are beyond the control of the Seller or Buyer or any or
their respective subcontractors or suppliers. In case either party shall be
unable, wholly or in part, because of any such event of force majeure to carry
out its obligations under this Agreement, the time for performance, other than
the obligation to make payments, shall be extended by the period of such actual
delay due to force majeure for which notices are given as provided hereinbelow.
Performance of any obligations suspended while any force majeure is operative
shall be resumed as soon as possible after such force majeure is operative shall
be resumed as soon as possible after such force majeure ceases. The party
seeking benefit of this paragraph shall notify the other of the occurrence of
each event of force majeure within seven (7) days after commencement of such
event. Any increased costs to Seller as the result of events of force majeure
will be compensated to Seller by Buyer. After ninety (90) continuous days of
delay in the construction of the Platform due to force majeure, Seller and Buyer
shall each have the right to terminate this Agreement without further liability
of either party to the other except that Seller shall retain all progress
payments pursuant to Paragraph 2(b) hereinabove and shall be paid by Buyer for
the price for that portion of the Platform then constructed for which progress
payments have not yet been made and all work in process (including profit on all
to Seller).
16. Independent Contractor.
(a) Throughout the entire term of this Agreement, Seller shall be an
independent contractor with full power and authority to select the means,
methods and manner of performing its work hereunder.
20
(b) All operations shall be conducted in Seller's own name and as an
independent contractor and not in the name of, or as an agent for, Buyer. In the
event Seller shall sublet or subcontract any of the construction of the Platform
provided for herein, Seller nevertheless shall remain primarily responsible for
compliance with all of the provisions hereof and for the portion of the
construction of the Platform performed by the party to whom the work is sublet
or subcontracted, and Seller shall require such Seller and such Seller's
employees, agents and representatives to comply with all the agreements,
covenants, terms, conditions, and provisions on the part of Seller to be
performed hereunder insofar as applicable to the work to be performed by each
party.
17. Default.
A. Seller's Default
(a) Seller shall be in default of its obligations under this
Agreement if any of the following events occurs:
(i) The failure of the Seller to perform or breach of any of the
covenants, agreements, or undertakings on its part to be performed under this
Agreement, provided that the Buyer shall give notice to the Seller as to such
failure and the Buyer shall not, within thirty (30) days after being so
notified, commence and diligently prosecute remedial action to cure such failure
to perform or breach which shall in any event be cured within ninety (90) days
of the date of such notice from Buyer;
(ii) Seller goes into liquidation, whether voluntary or
compulsory, or enters into a scheme of arrangement, or makes a general
assignment of its assets for the benefit of its creditors, or a receiver or
receivers of any kind whatsoever, whether temporary or permanent, is appointed
for the property of Seller, or Seller institutes proceedings for its
reorganization or the institution of such proceedings by creditors and approval
thereof by the court, whether proposed by a creditor, a stockholder or any other
person whomsoever, or Seller suffers any execution against a major portion of
its assets which is not satisfied within seven (7) days, or Seller fails
generally, or admits in writing its inability, to pay its debts generally as
they become due.
(b) If any default by Seller occurs as defined in Subparagraph (a) of
this Paragraph 17(A), Buyer, at its election, may upon prompt notice to Seller
terminate this Agreement without prejudice and exercise all rights and remedies
21
available to Buyer at law, in admiralty, or in equity. Prior to exercise of any
remedy involving or which includes ant attempt to take control or possession of
the Platform or any components thereof or work in progress, directly or through
judicial process, if Seller disputes that it is in default, Buyer shall first be
required to post with Seller a corporate surety bond from a first class U.S.
Surety acceptable to Seller in a form reasonable satisfactory to Seller. Such
bond shall be in an amount equal to 150% of any sum claimed by Seller under this
Agreement.
A. Buyer's Default
(a) Buyer shall be in default of its obligations under this Agreement
if any of the following events occurs:
(i) In the event of failure by Buyer to pay to Seller any
installments which are properly payable pursuant to Paragraph 2(b) hereinabove
or the failure of the Seller to perform or breach of any of the other covenants,
agreements, or undertakings on its part to be performed under this Agreement,
provided that the Buyer shall give notice to the Seller as to such failure and
the Buyer shall not, within five (5) days in the case of failure to pay or to
take delivery of the Platform when completed under the terms of this Agreement
and thirty (30) days in the case of other defaults after being so notified, cure
such failure to perform or breach;
(ii) Buyer goes into liquidation, whether voluntary or
compulsory, or enters into a scheme of arrangement, or makes a general
assignment of its assets for the benefit of its creditors, or a receiver or
receivers of any kind whatsoever, whether temporary or permanent, is appointed
for the property of Buyer, or Buyer institutes proceedings for its
reorganization or the institution of such proceedings by creditors and approval
thereof by the court, whether proposed by a creditor, a stockholder or any other
person whomsoever, or Buyer suffers any execution against a major portion of its
assets which is not satisfied within seven (7) days, or Buyer fails generally,
or admits in writing its inability, to pay its debts generally as they become
due.
(b) If any default by Buyer occurs as defined in subparagraph (a) of
this Paragraph 17(B), Seller, at its election, may upon prompt notice to Buyer
suspend its performance under this Agreement and at any time thereafter may
terminate this Agreement without prejudice and exercise all rights and remedies
available to Seller at law, in admiralty, or in equity.
22
18. Litigation.
(a) Buyer and Seller agree that any legal suit, action, or proceeding
arising out of or relating to this Agreement may be instituted only in a state
or federal court in ▇▇▇▇▇▇ County, Texas, United States of America.
(b) Buyer hereby designates and appoints CT Corporation Systems Inc., ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("CT") as Buyer's authorized agent and
acknowledges on its behalf service of any and all process and, if through
reasonable efforts, service on CT has been unsuccessful, Buyer hereby designates
and appoints the Secretary of State, State of Texas, as Buyer's authorized agent
to accept and acknowledge on it behalf service of any and all process which may
be served in any such suit, action, or proceeding in any such State or federal
court in the State of Texas and agrees that service of process upon said agent
or the Assistant Secretary of State or any clerk having charge of the
corporation department of the office of said Secretary of State, at his office
in Austin, Texas, and written notice of said service to Buyer, mailed or
delivered to Buyer at the address specified for Buyer in Article 19 of this
Agreement shall be deemed in every respect effective service of process upon
Buyer in any suit, action, or proceeding and shall be taken and held to be valid
personal service upon Buyer, whether or not Buyer shall then be doing, or at any
time shall have done, business within the State of Texas, and that any such
service of process shall be of the same force and validity as if service were
made upon it according to the laws governing the validity and requirements of
such service in such State, and waives all claims of error by reason of any such
service.
(c) Seller hereby designates and appoints ▇▇▇▇▇ ▇▇▇▇▇▇▇, AMFELS, Inc.,
Highway 48, Port of Brownsville, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇") as Buyer's
authorized agent and acknowledges on its behalf service of any and all process
and, if through reasonable efforts, service on ▇▇▇▇▇▇▇ has been unsuccessful,
Seller hereby designates and appoints the Secretary of State, State of Texas, as
Seller's authorized agent to accept and acknowledge on it behalf service of any
and all process which may be served in any such suit, action, or proceeding in
any such State or federal court in the State of Texas and agrees that service of
process upon said agent or the Assistant Secretary of State or any clerk having
charge of the corporation department of the office of said Secretary of State,
at his office in Austin, Texas, and written notice of said service to Seller,
mailed or delivered to Seller at the address specified for Seller in Article 19
of this Agreement, shall be deemed in every respect effective service of process
upon Seller in any suit, action, or proceeding and shall be taken and held to be
valid personal service upon Seller, whether or not Seller shall then be doing,
or at any
23
time shall have done, business within the State of Texas, and that any such
service of process shall be of the same force and validity as if service were
made upon it according to the laws governing the validity and requirements of
such service in such State, and waives all claims of error by reason of any such
service.
19. Notice.
Any notice provided for under this Agreement must be given in writing, but
may be served by depositing same in the mail, addressed to the party to be
notified, postage paid, and registered or certified with return receipt
requested, or by delivering same in person to such other party, or by pre-paid
telegram, telex, facsimile confirmed by mail, or cable. For purposes of notice,
the addresses of the parties shall be:
If to Buyer: ▇▇▇▇▇▇ Offshore Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Seller: AMFELS, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇
Port of Brownsville
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Provided, however, that each party shall have the continuing right to change its
address of notice at any time or times by the giving of 10 days notice in the
manner hereinabove described. Notices shall be deemed given only upon receipt or
by facsimile confirmation.
20. Successors and Assigns.
This Agreement shall inure to the benefit of, and shall be binding upon,
the parties hereto, and their respective successors and assigns. It is expressly
understood and agreed that neither party shall assign any of its rights, title
and interest thereto
24
without the prior written consent of the other party; provided, however, that
Buyer shall have the right to assign this Agreement to any entity that is
controlled through ownership or contractual rights by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
provided that regardless of any such assignment Buyer shall remain primarily
liable to Seller for the performance of the obligations of Buyer under this
Agreement.
21. Governing Law.
This Agreement shall be deemed to have been made under, shall be construed
and interpreted in accordance with the laws of the State of Texas, excluding any
conflicts of law rule or law which might refer such construction and
interpretation to the laws of another state, republic or country; provided,
however, that all matters relating to the interpretation of any patent or patent
application will be decided in accordance with the laws of the county which
issued the patent to be interpreted or in which the patent applications to be
interpreted have been filed.
22. Modification or Waiver.
This Agreement, which incorporates all prior negotiations and
understandings relating to the subject matter thereof, sets forth the entire
agreement of the parties hereto and shall not be modified except by a written
instrument executed by the duly authorized representatives of Seller and Buyer.
The failure of either party to insist upon strict performance of any provision
hereof shall not constitute a waiver of or estoppel against asserting the right
to require such performance in the future, nor shall a waiver or estoppel in any
one instance, constitute a waiver or estoppel with respect to a later breach of
a similar nature or otherwise.
23. Reliance.
AS MORE FULLY SET FORTH IN OTHER PROVISIONS OF THIS AGREEMENT, SELLER AND
BUYER HAVE REACHED EXPRESS AGREEMENT WITH RESPECT TO THE LIMITATION OF THE
LIABILITY OF SELLER AND ▇▇▇▇▇▇▇▇▇▇ IN CONNECTION WITH THIS AGREEMENT AND THE
WAIVER REFERRED TO IN SECTION 24 HEREINBELOW. SELLER AND BUYER EXPRESSLY
RECOGNIZE THAT (A) THE PRICE FOR WHICH SELLER HAS AGREED TO PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT HAS BEEN PREDICATED ON THE AFORESAID LIMITATION
OF LIABILITY AND WAIVER (IT BEING ACKNOWLEDGED THAT BUYER COULD HAVE NEGOTIATED
WITH SELLER FOR MODIFICATIONS TO THE LIMITATION OF
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SELLER'S AND ▇▇▇▇▇▇▇▇▇▇'▇ LIABILITY AND THE WAIVER BUT THAT THE PRICE OF THE
PLATFORM WOULD HAVE BEEN INCREASED TO REFLECT SUCH MODIFICATIONS), AND (B)
SELLER, IN DETERMINING TO PROCEED WITH THE PERFORMANCE OF ITS OBLIGATIONS
PURSUANT TO THIS AGREEMENT, HAS EXPRESSLY RELIED ON SUCH LIMITATION OF LIABILITY
AND WAIVER AND WOULD NOT HAVE EXECUTED THIS AGREEMENT BUT FOR SUCH LIMITATION OF
LIABILITY AND WAIVER.
24. Waiver of Consumer Rights and Representations of Buyer
BUYER HEREBY WAIVES THE SPECIAL RIGHTS AND PROTECTION PROVIDED BY THE
PROVISION OF THE TEXAS DECEPTIVE TRADE PRACTICE ACTS-CONSUMER PROTECTION,
CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN
SECTION 17.555 WHICH IS NOT WAIVED), VERNON'S TEXAS CODES ANNOTATED, BUSINESS
AND COMMERCE CODE. TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, BUYER HEREBY
REPRESENTS AND WARRANTS TO SELLER THAT BUYER (a) IS IN THE BUSINESS OF SEEKING
OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR BUSINESS
USE AND IS ACQUIRING THE GOODS AND SERVICES COVERED BY THIS AGREEMENT FOR
COMMERCIAL OR BUSINESS USE, (b) HAS ASSETS OF $5,000,000 OR MORE ACCORDING TO
ITS MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPALS, (c) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL
AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE
TRANSACTIONS CONTEMPLATED HEREBY, (d) IS NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION; AND (e) IS REPRESENTED BY LEGAL COUNSEL IN THIS TRANSACTION
WHICH WAS NOT IDENTIFIED, SUGGESTED OR SELECTED BY SELLER. Buyer's
representations and warranties shall survive the performance of all work in
connection with this Agreement and shall remain effective
regardless of any investigation at any time made by or on behalf of Seller or
any information Seller may have with respect thereto. Buyer hereby agrees to
protect, indemnify, and hold Seller, ▇▇▇▇▇▇▇▇▇▇, and their respective Affiliates
free and harmless from and against any and all losses, costs (including, without
limitation, the cost of the suit and reasonable attorneys' fees), claims, causes
of action, and liabilities arising out or resulting from, or relating in any way
to the breach of the aforesaid representations and warranties.
26
25. Export Laws.
In accordance with the Export Administration Regulations issued by the
United States Department of Commerce to enforce the Export Administration Act of
1979, as amended from time to time, Buyer hereby gives written assurance to
Seller that neither the Equipment nor the direct product thereof (including,
without limitation, the Platform) nor any technical data is intended to be
shipped, directly or indirectly, to any country, person, or other entity
contrary to any laws, regulations or administrative orders of the United States
or other jurisdiction applicable to a transaction affecting this Agreement
and/or the ▇▇▇▇▇▇▇▇▇▇ Agreements. Buyer further acknowledges that Seller, in
determining to execute this Agreement and perform its obligations under this
Agreement, has expressly relied on the written assurance contained in the
immediately preceding sentence.
26. Licenses.
Notwithstanding anything in this Agreement to the contrary, it is expressly
understood that the obligations of Seller hereunder are subject to and
conditioned upon the timely issuance of all required consents, approvals,
rulings, licenses (including, without limitation, export licenses and reexport
licenses), and order in form and substance satisfactory to Seller from all
agencies, governments, or other bodies having or purporting to have jurisdiction
or control over any matters covered by or arising out of this Agreement or the
▇▇▇▇▇▇▇▇▇▇ Agreements. Seller shall have no liability (including, without
limitation, any liability for damages, whether special, incidental,
consequential, or otherwise) if Seller is unable to obtain, or is delayed in
obtaining, any such required consent, approval, ruling, license, or order.
27. Computation of Time.
All periods of time shall be computed by including Saturdays, Sundays and
holidays except that if such period terminates on a Saturday, Sunday or holiday
it shall be deemed extended to the business day next succeeding. All references
in this Agreement to days shall mean calendar days.
28. Severability.
This Agreement shall cease and terminate if for any reason any of the terms
and conditions of Sections 11(g) and 14 of this Agreement (hereinafter
collectively referred to as the "Limitation of Liability Clauses") are held by
any court of competent
27
jurisdiction to contravene or to be invalid under the laws of any political body
having jurisdiction over the subject matter hereof or thereof; provided,
however, that notwithstanding the termination of this Agreement, Seller shall
retain all progress payments then made and Buyer shall be obligated to pay to
Seller the price for that portion of the Platform then constructed for which
progress payments have not yet been made and all work in process (including
profit on all to Seller) on or before such termination. Buyer and Seller agree
not to take any action either on their own behalf, or by way of providing
assistance to or cooperating with any third party for the purpose of
invalidating any of the Limitations of Liability Clauses. If any of the terms
and conditions of this Agreement other than the terms and conditions referred to
in this Section 26 are held by any court of competent jurisdiction to contravene
or to be invalid under the laws of any political body having jurisdiction over
the subject matter hereof, such contravention or invalidity shall not invalidate
the entire Agreement, but, instead, this Agreement shall be construed as if not
containing the particular provision or provisions held to be invalid and the
rights and obligations of the parties shall be construed and enforced
accordingly and this Agreement shall thereupon and thereafter remain in full
force and effect.
29. Confidentiality and Ancillary Agreements.
For and in consideration of the mutual covenants and provisions hereof,
Buyer and Seller shall contemporaneously with the execution of this Agreement
execute and deliver to the other a Confidentiality Agreement and Ancillary
Agreement in the forms attached hereto as Exhibits "C" and "D".
30. Construction.
The parties to this Agreement having been represented by legal counsel of
their own choosing in connection with the negotiation and drafting of this
Agreement, this Agreement shall be construed and interpreted for all purposes
without regard to the author of any specific language appearing herein. The
headings contained in this Agreement are for reference purposes only and shall
not affext in any way the meaning or interpretation of this Agreement.
31. Option Platform.
(a) Seller hereby grants to Buyer an option (the "Option") to have Seller
construct and sell to Buyer a mobile, self contained and elevating platform with
the
28
same specifications as the Platform (the "Option Platform") for a fixed purchase
price (without the ▇▇▇▇▇▇▇▇▇▇ kit) as follows:
(i) if the Option is exercised between April 30, 1997 and July 31,
1997- U.S. $42,200,000;
(ii) if the Option is exercised between August 1, 1997 and November
30,1997- U.S. $42,620,000; and
(iii) if the Option is exercised between December 1, 1997 and
April 29,1998- U.S. $43,050,000.
(b) The purchase price excluding the ▇▇▇▇▇▇▇▇▇▇ kit for the Option
Platform shall be paid on the following schedule:
(i) Contract Signing- 15%
(ii) Start Fabrication/2000 tons of steel delivered- 15%
(iii) Lay keel- 20%
(iv) Install 3rd spud can- 20%
(v) Launch- 20%
(vi) Delivery- 10%
The above milestone payments mentioned above shall become due upon completion of
each event.
(c) The Option shall be exercised by Buyer by written notice delivered to
the Seller as provided in Section 19 hereinabove by the dates set forth in
Section 31(a) above.
(d) The Option Platform shall be constructed by Seller and purchased by
Buyer pursuant to a Platform Construction Contract containing the terms of
Section 31(a) above as to price, the terms of Section 31(b) above as to the
payment schedule, and the terms and conditions of this Agreement as to other
provisions other than scheduled delivery which shall be agreed by Buyer and
Seller. The obligations of Seller
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to construct and sell the Option Platform and the obligations of Buyer to
purchase and accept the Option Platform as provided herein are expressly subject
to and conditioned upon agreement to the scheduled delivery date in the sole
discretion of such parties.
(e) Buyer's obligation to purchase the Option Platform after exercise of
the Option and Seller's obligation to construct and sell the Option Platform to
Buyer after exercise of the Option shall be subject and conditioned upon:
(i) Presentation by Seller within thirty (30) days of the exercise of
the Option of written price and delivery schedule for a
▇▇▇▇▇▇▇▇▇▇ kit for the Option Platform (provided ▇▇▇▇▇▇▇▇▇▇ will
commit to a firm price and delivery).
(ii) Commitment in writing by Seller within thirty (30) days of the
exercise of the Option of a revised purchase price for the Option
Platform based on the ▇▇▇▇▇▇▇▇▇▇ kit price and any other changes
to the Option Platform requested by Buyer.
(iii) Notice by Buyer that within the thirty (30) day period
referred to in (i) above that after review of the revised
price and delivery schedule that referred to in (i) above
Buyer wishes to proceed with the Option. If Buyer fails to
give such notice within the required time or notifies Seller
that it does not wish to proceed with the Option, the Option
shall terminate and Buyer shall have no further rights in or
to the Option Platform.
(iv) The negotiation and execution of contracts between Seller and
▇▇▇▇▇▇▇▇▇▇ including an ancillary Agreement and confidentiality
agreement, in form and substance satisfactory to Seller, Buyer,
and ▇▇▇▇▇▇▇▇▇▇.
(v) Performance by ▇▇▇▇▇▇▇▇▇▇ under the ▇▇▇▇▇▇▇▇▇▇ Agreements.
(f) As used herein, the ▇▇▇▇▇▇▇▇▇▇ kit shall mean the elevating units, leg
material, cranes, skidding systems, and raw water tower elevating system for a
▇▇▇▇▇▇▇▇▇▇ 116-C platform.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on their behalf by their respective duly authorized representatives on the date
first shown above.
AMFELS, INC.
By: /s/ [Illegible]
-------------------------------
Title: President
▇▇▇▇▇▇ OFFSHORE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: President & CEO
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