Exhibit 10.14
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 5th day of August, 1997, by and between
XXXXXX OFFSHORE LLC, a limited liability company 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");
WITNESSETH:
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
September 10, 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. P179, in accordance with (i) Seller's specifications No. 9701 Revision
2 therefor, dated May 21, 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 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 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 Seller's Licensor XxXxxxxxxx, Inc.
("XxXxxxxxxx'') 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 XxXxxxxxxx dated August 1, 1997
(collectively the "XxXxxxxxxx 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 XxXxxxxxxx is unable to or otherwise fails or refuses to fully and
timely perform all of its covenants, agreements, and undertakings under the
XxXxxxxxxx Agreements or if all subjects and conditions under the XxXxxxxxxx
Agreements are not fully and timely met. As used in this Agreement, "Package"
and "Equipment" shall have the meanings set forth in the XxXxxxxxxx Agreements.
In the event XxXxxxxxxx is unable to or otherwise fails or refuses to fully and
timely perform all of its covenants, agreements, and undertakings under the
XxXxxxxxxx Agreements or if all subjects and conditions under the XxXxxxxxxx
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 Sixty Two Million Four Hundred Thousand, ($62, 400,000.00)
subject to adjustment as provided in this Agreement including Exhibit "A" hereto
(hereinafter referred to as 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:
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Texas Commerce Bank, Rio Grande Valley
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx 00000
Officer: Xxx Xxxxxxx
ACCOUNT NUMBER 6700278275
ABA NUMBER000000000
(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
scheduled installment 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 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) All amounts owing to Seller by Buyer hereunder shall bear interest at
the lesser of the highest lawful rate or the rate of eighteen percent (18%) per
annum from the date notice of failure to pay is received by Buyer and Buyer
fails to pay same within thirty (30) days until paid in full.
3. [Intentionally Omitted]
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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
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) If any difference in opinion between parties hereto shall arise during
the construction of the Platform concerning technical matters in respect of the
materials and workmanship covered by the ABS rules, such difference in opinion
shall be referred to ABS whose opinion thereof shall be final and binding upon
both parties.
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(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 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 major, or inability of or failure or refusal of
XxXxxxxxxx to fully and timely perform all of its covenants, agreements, and
undertakings under the XxXxxxxxxx Agreements or if all subjects and conditions
under the XxXxxxxxxx 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 XxXxxxxxxx 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.
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(c) Seller and Buyer recognize that the Contract Price set forth
hereinabove is based upon the scope of work for the platform designated as
Seller's Yard No. P178 and that the license agreement from XxXxxxxxxx is
specifically limited to the XxXxxxxxxx Super 116 design. Accordingly, the
parties agree that the Platform will be built as a Super 116 and that the
Specifications will be amended and changed to accommodate same at such time as
XxXxxxxxxx supplies the drawings and other information for the Super 116 design
and that this change will be reflected as Change Order No. 2. If this mandatory
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 on a lump sum basis in accordance
with the mutual agreement of the parties. Seller will provide Buyer with
Seller's estimate of the change in the Contract Price within forty five (45)
days of receipt of all information and drawings from XxXxxxxxxx related to
Change Order No. 2. Buyer will within thirty (30) days thereafter advise Seller
in writing whether Buyer accepts or rejects such change in the Contract Price
and if rejected then Buyer's notice of rejection shall include Buyer's estimate
of the change in the Contract Price. In the event of rejection by Buyer, the
parties shall negotiate in good faith in an effort to reach resolution of the
dispute. In the event the parties, despite good faith negotiations, are unable
to agree to the lump sum price for this change, then Seller shall be entitled to
equitable and reasonable compensation (including profit) for performing same and
the amount of this compensation shall be determined by final and binding
arbitration utilizing in accordance with the Construction Industry Rules of the
American Arbitration Association. The arbitration shall be held in Houston,
Texas. Each of the parties shall nominate their own party arbitrator and the two
party arbitrators shall select the third arbitrator. In the event the party
arbitrators shall be unable to agree to the third arbitrator within ten (10)
days, the third arbitrator shall be appointed by the American Arbitration
Association. All arbitrators shall be commercial persons (and not attorneys)
with at least ten (10) years experience in the construction of mobile offshore
jackupdrilling rigs. The third arbitrator shall have no prior or current
business relationship to either party or their counsel of record. The decision
of the majority of the arbitrators shall be final, binding and enforceable in
any court of competent jurisdiction and the Parties agree that there shall be no
appeal from the arbitrators' decision. The arbitrators shall render their
decision within ninety (90) days after selection of the third arbitrator, but in
any event prior to delivery of the Platform.. The arbitrators must select either
Seller's or Buyer's price and shall have no authority to determine any other
figure for compensation to Seller for this mandatory change.
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
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Equipment as detailed on such delivery schedule shall be such so as to not 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 of the delayed Buyer
Furnished Equipment 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.
(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.
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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 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. $1,000,000 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 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
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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 Buyer and all losses under such policy shall be payable to the Seller
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.
9. Title and Risk of Loss.
(a) Title to the Platform, to the extent completed and 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) To the extent that title to any part of the Platform or the materials
destined for incorporation in the Platform has passed from Seller to Buyer or
Buyer otherwise obtains any rights therein, whether now owned or hereafter
acquired, Buyer as debtor hereby grants to Seller as a secured party a security
interest and lien upon same and all right, title, and interest of Buyer thereto
and the proceeds and products thereto, to secure the performance of Buyer
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under this Agreement and the payment to Seller of all required to be paid by
Buyer to Seller under this Agreement; provided, however, the security interest
granted to the Seller by this Section 9 (b)shall be subordinate to any liens or
security interests granted by Buyer to its lenders on Buyer's interest in this
contract and the Platform. In connection herewith, Seller shall upon Buyer's
default under this Agreement have all rights and remedies of a secured party
under the Uniform Commercial Code of Texas. The security interest and lien
granted to Seller hereunder and the rights and remedies of Seller herein shall
be deemed cumulative and in addition to the rights and remedies otherwise
available to Seller at law or in equity or in contract, including without
limitation the rights of Seller under Article 2 of the Texas Uniform Commercial
Code which shall not be subordinate to any liens or security interests granted
by Buyer to its lenders.
(c) 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.
(d) 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 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
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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 Xxxx of Sale confirming the conveyance of title to
the Platform to the Buyer. which Xxxx 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 Xxxx 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 XxXxxxxxxx shall be free from material defects in XxXxxxxxxx'x 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 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
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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 XxXxxxxxxx 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 XxXxxxxxxx
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 XxXxxxxxxx'x
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 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 XxXxxxxxxx exceed such amount as
Seller may actually recover from
12
XxXxxxxxxx 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 11.
(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 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.
13
(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 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
XxXxxxxxxx relate to a XxXxxxxxxx 116-C Class Platform rather than to a Super
116 Platform. (See Annex C to the Kit Construction Agreement). Since the
Platform is to be built as a Cypre Platform pursuant to Article 5, XxXxxxxxxx
shall supply supplemental information relating to Super 116 designs to Seller
which 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. During the term of this Agreement, XxXxxxxxxx may
provide other supplemental information to Seller relating to a Super 116 which
shall, at such time, become part of the Package for purposes of this Agreement.
14
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 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
XXXXXXXXXX AND THEIR RESPECTIVE PARENTS,
15
HOLDING AND AFFILIATED COMPANIES, AND THEIR RESPECTIVE EMPLOYEES, OFFICERS,
DIRECTORS, AND AGENTS AND THE SUBCONTRACTORS OF XXXXXXXXXX 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 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.
16
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 XxXxxxxxxx; 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 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) herewith of 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 XxXxxxxxxx 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
17
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 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 XXXXXXXXXX OR THEIR AFFILIATES OR THE AGENTS,
OFFICERS, EMPLOYEES, INVITEES, OR REPRESENTATIVES OF SELLER OR ITS AFFILIATES OR
THE SUBCONTRACTORS OF XXXXXXXXXX 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 XXXXXXXXXX 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 XXXXXXXXXX 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, XXXXXXXXXX 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.
18
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 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.
(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
19
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 1 7(A), Buyer, at its election, may upon prompt notice to Seller
terminate this Agreement without prejudice and exercise all rights and remedies
available to Buyer at law, in admiralty, or in equity. Prior to exercise of any
remedy involving or which includes and 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.
B. Buyer's Default
20
(a) Buyer shall be in default of its obligations under this Agreement if
any if 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.
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 Xxxxxx County, Texas, United States of America.
(b) Buyer hereby designates and appoints CT Corporation Systems Inc., 000
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 ("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,
21
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 Xxxxx Xxxxxxx, AMFELS, Inc.,
Highway 48, Port of Brownsville, Xxxxxxxxxxx, Xxxxx 00000 ("Xxxxxxx") as Buyer's
authorized agent and acknowledges on its behalf service of any and all process
and, if through reasonable efforts, service on Xxxxxxx 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 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: Xxxxxx Offshore LLC
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Attention: Xxxxxxx X. Xxxxxx
22
If to Seller: AMFELS, Inc.
X.X. Xxx 0000
Xxxxxxx 00
Port of Brownsville
Xxxxxxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (210) 831 ~220
Attention: Xxxx Xxxx
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 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, management, or
contractual rights by Xxxxxxx X. Xxxxxx, 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
23
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 XXXXXXXXXX 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 SELLER'S AND XXXXXXXXXX'X
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
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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.
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 XxXxxxxxxx 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 orders 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
XxXxxxxxxx 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.
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28. Severability.
This Agreement shall cease and terminate if for any reason any of the terms
and conditions of Sections 11(9) and 14 of this Agreement (hereinafter
collectively referred to as the "Limitation of Liability Clauses") 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 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 28 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 affect in any way the meaning or interpretation of this Agreement.
31. Option Platform.
(a)Seller hereby grants to Buyer an option (the "Option"), subject to and
conditioned upon no prior commitment of the production resources of Seller to
other customers before Buyer notifies Seller of its exercise of the Option, to
have Seller construct and sell to Buyer a
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mobile, self contained and elevating platform with the same specifications as
the Platform (the "Option Platform") for a fixed purchase price (without the
XxXxxxxxxx Kit) of (i) USD $47,000,000.00 (the "Fixed Purchase Price") if the
Option is exercised by December 1, 1997 and XxXxxxxxxx commits to deliver the
Kit for the Option Platform not later than June 30, 1999 and with a scheduled
delivery date no later than February 28, 2000 (the "Scheduled Delivery Date").
If either the Option is exercised after December 1, 1997 or XxXxxxxxxx commits
to deliver the XxXxxxxxxx Kit for the Option Platform after June 30, 1999 or the
components of the XxXxxxxxxx Kit are delivered by XxXxxxxxxx out of sequence
with Seller's construction schedule, the Fixed Purchase Price shall escalate by
one (1 ) percent per month or part thereof for the period of delay and the
initial Scheduled Delivery Date should be extended by the same number of days.
In consideration for the granting of this Option to Buyer, Buyer hereby agrees
that it will not seek to purchase or have constructed another XxXxxxxxxx 116
platform from any other source (not including Seller's affiliated companies)
during the period of the Option. Buyer may terminate this obligation not to
construct or purchase another XxXxxxxxxx 1 16 platform at any time after
December 1, 1997 by notice to Seller, but the Option shall thereupon lapse
automatically.
(b) The purchase price excluding the XxXxxxxxxx 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 20%
The above milestone payments mentioned above shall become due upon completion of
each event. The price for the XxXxxxxxxx Kit for the Option Platform shall be
paid by Buyer to Seller in immediately available funds as and when Seller is
obligated to make payment therefor to XxXxxxxxxx.
(c) The Option must be exercised by Buyer by written notice delivered to
the Seller as provided in Section 19 hereinabove by July 31, 1998 or the same
shall automatically terminate. The Option is further subject to and conditioned
on XxXxxxxxxx'x commitment to a delivery date for the XxXxxxxxxx Kit of not
later than March 1, 2000 and ability of Seller due to lack of prior commitments
to deliver the Option Platform before October 31, 2000 and if either or both
condition is not fulfilled, the Option shall automatically terminate.
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(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 and scheduled delivery date, the terms of
Section 31(b) above as to the payment schedule, and the terms and conditions of
this Agreement as to other provisions.
(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 fifteen (15) days of the exercise
of the Option of written price and delivery schedule for a XxXxxxxxxx Kit for
the Option Platform (provided XxXxxxxxxx will commit to a firm price
and delivery).
(ii) Commitment in writing by Seller within fifteen (15) days of the
exercise of the Option of a revised purchase price for the Option Platform based
on the XxXxxxxxxx Kit price and any other changes to the Option Platform
requested by Buyer.
(iii) Notice by Buyer that within the fifteen (15) day period
referred to in (i) above that after review of the revised price and delivery
schedule 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
XxXxxxxxxx including an ancillary agreement and confidentiality agreement, in
form and substance satisfactory to Seller, Buyer, and XxXxxxxxxx.
(v) Performance by XxXxxxxxxx under the XxXxxxxxxx Agreements.
(f) As used herein, the XxXxxxxxxx Kit shall mean the elevating units, leg
material, cranes, skidding systems, and raw water tower elevating system for a
XxXxxxxxxx Super 116 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/ X.X. Xxx
Name: X.X. Xxx
Title: Exec. Vice-President
XXXXXX OFFSHORE LLC
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President
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