Shell Exploration & Production Co. BITS Particle Drilling Technologies Inc. Outline Agreement No. 4610021484 Purchase Order No. 4900006232
Exhibit 10.1
Shell Exploration &
Production Co.
BITS
Particle
Drilling Technologies Inc.
Outline
Agreement No. 4610021484
Purchase
Order No. 4900006232
INDEX
SECTION I - GENERAL
CONDITIONS
|
3
|
DEFINITION OF BUYER NAME
|
3 |
CONTRACT
|
3 |
AFFILIATES AND SUBSIDIARIES
|
3 |
DURATION / APPLICABILITY OF
ORDER
|
3 |
CHANGES
|
4 |
TERMINATION
|
4 |
ETHICS
|
4 |
CODE OF CONDUC
|
4 |
UTILIZATION OF
E-PROCUREMENT
|
4 |
VOLUME OF BUSINESS
DISCLAIMER
|
4 |
EXHIBITS
|
4 |
ACCEPTANCE
|
5 |
SECTION II – SCOPE OF WORK
|
6 |
GENERAL
|
6 |
EXTRA WORK
|
6 |
REPAIR
|
6 |
LOST OR
DAMAGED-BEYOND-REPAIR
|
6 |
KEY PERFORMANCE INDICATORS
|
6 |
SECTION III – PRICING
|
7 |
GENERAL
|
7 |
APPLICABILITY OF PRICES AND
RATES
|
7 |
PRICE CHANGE
|
7 |
THIRD PARTY CHARGES
|
7 |
PERSONNEL CHARGE
|
7 |
TRAINEES
|
7 |
PERSONNEL CHARGES
|
7 |
ADDITIONAL PERSONNEL
|
7 |
SEVERE WEATHER CONDITIONS
|
8 |
SECTION IV - ADMINISTRATION
INSTRUCTIONS
|
8 |
INVOICING
|
8 |
Invoice Inquiry
|
8 |
Disputed Amounts
|
8 |
PAYMENT TERMS
|
10 |
SHIPPING AND TRANSPORT
|
10 |
RIGHT TO AUDIT
|
10 |
COMMUNICATIONS
|
11 |
SECTION V - HEALTH, SAFETY, AND
ENVIRONMENT
|
12 |
SAFETY REQUIREMENTS
|
12 |
HEALTH SAFETY ENVIRONMENT (HSE) – MANAGEMENT
SYSTEM REQUIREMENT
|
12 |
HAZARD COMMUNICATION
|
12 |
DISA
|
13 |
SUBSTANCE ABUSE POLICY FOR SERVICE
CONDITIONS
|
13 |
DRUGS, ALCOHOL, AND
FIREARMS
|
14 |
SECTION VI –ADDITIONAL TERMS AND
CONDITIONS
|
15 |
QUALITY ASSURANCE
|
15 |
TAXES
|
15 |
Louisiana Tax Status – Purchase of Tangible
Personal Property
|
15 |
Louisiana Tax Status – Taxability of
Services
|
16 |
Louisiana Tax Status - Equipment
Rental
|
16 |
Wyoming Sales and Use Tax
|
16 |
Texas Tax Status
|
16 |
COMPLIANCE
|
16 |
EXPORT CONTROL
|
16 |
BACKGROUND CHECKS
|
17 |
PUBLICITY
|
17 |
INFRINGEMENT
|
17 |
ASSIGNMENT AND
SUBCONTRACTING
|
17 |
WITHHOLDING AND ENFORCEMENT
|
17 |
EXCUSES
|
17 |
FORCE MAJEURE
|
18 |
OWNERSHIP OF WORK PRODUCT
|
18 |
PERFORMANCE
|
18 |
LIABILITY-INDEMNITY
|
18 |
A. PERSONAL INJURY
|
18 |
B. THIRD PARTY PERSONAL
INJURY
|
19 |
C. DAMAGE TO PROPERTY
|
19 |
D. POLLUTION LIABILITY
|
20 |
E. CONSEQUENTIAL DAMAGES
|
20 |
INSURANCE
|
20 |
USE OF PREMISES
|
21 |
BILLS AND LIENS
|
22 |
COMPETITIVENESS AND PRICE
WARRANTY
|
23 |
AGREEMENT RELEASES
|
23 |
SUSPENSION
|
23 |
CONFIDENTIAL INFORMATION
|
23 |
INDEPENDENT VENDOR
|
24 |
STATUTORY EMPLOYER PROVISION FOR SERVICES
PERFORMED IN LOUISIANA
|
24 |
LABOR RELATIONS FOR SERVICES AT BUYER’S
FACILITIES
|
24
|
MINORITY OWNED AND WOMEN OWNED BUSINESS
ENTERPRISES EXPENDITURES
|
24 |
HEADINGS
|
25 |
CONTINUING OBLIGATIONS
|
25 |
WAIVER
|
25 |
DELIVERIES
|
25 |
SEVERABILITY
|
26 |
ENTIRE
AGREEMENT
|
26 |
SECTION
I - GENERAL CONDITIONS
DEFINITION
OF BUYER NAME
BUYER as
referred to herein shall mean Shell and its affiliates and subsidiaries which
includes Shell Offshore Inc., also referred to as "SOI"; Shell Rocky Mountain
Production Company, also referred to as "SRMP”, Shell Frontier Oil & Gas
Inc., also referred to as "SFOGI"; SWEPI LP dba Shell Western E&P, Shell
Offshore Gas Pipelines LLC, Shell Gulf of Mexico, Inc. also referred to as
“SGOMI”, Shell Exploration and Production Company, also referred to as "SEPCo",
and their successors; all of which may collectively be referred to as "SHELL".
At the time of release or request for materials or services under this order,
BUYER shall identify the appropriate company for which the material or service
is being purchased.
VENDOR as
referred to herein shall mean Particle Drilling Technologies Inc., a Nevada
Corp.
CONTRACT
This
Agreement, when accepted by VENDOR in writing, constitutes the entire agreement
between VENDOR and BUYER concerning its subject matter; and neither any contrary
or additional conditions then specified by VENDOR nor any subsequent amendment
or supplement shall have any effect without BUYER’S prior written
approval.
1.
|
Section
I
|
General
Conditions
|
2. Section
II Scope
of Work
3. Section
III Pricing
4. Section
IV Administration
Instructions
5. Section
V Health,
Safety, and Environment
6. Section
VI Additional
Terms and Conditions
AFFILIATES
AND SUBSIDIARIES
Any BUYER
affiliate or subsidiary, as defined below, in countries legally recognized by
Federal law may use the terms and conditions herein in orders placed in the
United States of America, provided the BUYER affiliate or subsidiary agrees for
such orders to incorporate the terms and conditions of this
Agreement.
BUYER has
no obligation or liability under this Agreement for any BUYER
affiliate's/subsidiary's purchase orders, performance, or failure to
perform. If a BUYER affiliate/subsidiary fails its obligations,
VENDOR may terminate the BUYER affiliate's/subsidiary's right to place other
purchase orders. Such a termination will not affect BUYER or any
other BUYER affiliates or subsidiaries.
A BUYER
affiliate/subsidiary has obligations only with respect to orders placed by it
and has no obligation or liability for BUYER’S and other BUYER
affiliates'/subsidiaries' purchase orders, performance, or failure to
perform
These
definitions apply to the terms "BUYER’S affiliate" and "BUYER’S
subsidiary":
a)
"BUYER’S affiliate means BUYER and "Royal Dutch Shell plc and any BUYER which is
directly controlled by another BUYER or companies if the latter BUYER owns or
whose latter companies together own 50% or more of the voting rights attached to
the issued share capital of the first mentioned BUYER and
b) Any
BUYER which is managed or operated by a BUYER as defined in (a) above and/or has
a service agreement with BUYER and/or another BUYER as defined under (a) above
pursuant to which it pays on a cost sharing basis a proportion of the costs of
BUYER or such other BUYER
DURATION
/ APPLICABILITY OF ORDER
The
duration of this agreement is for period commencing on December 1, 2008 and
shall remain in effect through November 30, 2010, subject to the cancellation
provisions stated elsewhere herein.
Any work
started prior to the expiration date of this order that will continue past the
specified expiration date of the order shall be subject to the terms,
conditions, and pricing of the order until the work is completed, unless
mutually agreed otherwise, or BUYER advises VENDOR to terminate work as of the
expiration date.
3
CHANGES
No
changes in the Goods and/or Services under this Agreement or any BUYER Release
Document shall be made without the written agreement of both BUYER and
VENDOR.
TERMINATION
BUYER may
terminate this Agreement in whole or in part at any time with or without cause
(including, without limitation, default or breach by VENDOR) by written notice
to VENDOR. Upon receipt thereof, VENDOR shall (a) cease all
performance except as requested by BUYER; (b) at BUYER’S request, assign BUYER
all VENDOR’S rights or terminate to the extent possible all outstanding purchase
commitments and other third party agreements; and (c) take other actions as
reasonably requested by BUYER to effect termination. BUYER shall have
right to take possession of any portion of the Goods or Services in progress.
BUYER’S sole liability shall be to pay reasonable value (but in no event more
than the contract price) for such Goods or Services and/or VENDOR’S prior
performance and performance to effect termination. BUYER may, at its
option, complete performance of the Goods or Services. In the event
of BUYER termination for cause pursuant hereto, VENDOR shall be liable to BUYER
for all cost incurred by BUYER completing such performance in excess of the
contract price. Time is of the essence hereof, and BUYER’S right to
require any waiver, forbearance or course of dealing shall not affect strict
performance by VENDOR.
ETHICS
BUYER and
VENDOR will base their relationship on mutual respect, honesty, and
integrity. Neither party may accept or solicit gifts, entertainment,
or other social favors to influence business decisions. Courtesies of
nominal value and social invitations customary and proper under the
circumstances are not unethical as long as they imply no business obligation
whatsoever or do not involve significant or out-of-the-ordinary
expense.
CODE
OF CONDUCT
VENDOR
acknowledges receipt of a copy of Shell’s US Code of Conduct, which can be found
on the US Shell Website (xxx.xxxxx.xxx/xx), by
following the links on the left side of the screen: About Shell US à How we work à Shell in the US Code of
Conduct. VENDOR shall ensure that such Code is respected by VENDOR and its
contractors in relation to provision of Goods and Services under this
Agreement.
UTILIZATION
OF E-PROCUREMENT
BUYER and
VENDOR will co-operate in establishing a mutually acceptable and cost-effective
process for handling procurement transactions electronically, including, where
appropriate, agreeing to the choice of electronic exchange. Where the
agreed process involves the establishment of electronic catalogs or price files
to be held either within the VENDOR’S system, or within an electronic exchange
(BUYER has chosen to utilize the cc-hubwoo content exchange), or within BUYER’S
e-procurement system, VENDOR shall ensure that such catalogs and price files
will be in a format acceptable to the exchange and to BUYER, that the prices
quoted in the electronic price-files are fully in accordance with the commercial
structures and that the electronic price files are maintained and
up-dated.
VOLUME
OF BUSINESS DISCLAIMER
BUYER
does not guarantee any specific quantities or volumes throughout the duration of
the awarded agreement.
EXHIBITS
The
following exhibits hereto are incorporated into this order therein by
reference.
VENDOR’S
exhibits
Attachment
1: Letter Agreement between BUYER and VENDOR dated November 10,
2008
Excluding
terms and conditions that conflict with verbiage contained on the face, and or
documents referenced on the face, of this contract document.
4
ACCEPTANCE
By
signing below, each party signifies that it has carefully examined and agrees to
be bound by all terms and conditions that are contained in this Agreement. If
all the provisions hereinabove meet your approval, please promptly execute in
the space below and return this acceptance of the Agreement within two weeks to
the Authorized BUYER Representative specified below.
Authorized
BUYER Representative
Signature:
Name: Xxxxx
X Xxxxxx
Title: Supply
Chain Management
Date:
Authorized
VENDOR Representative
Signature:
Name: Xxxxxx
Xxxxxxxx
Title: Senior
Vice President
Date:
5
SECTION
II – SCOPE OF WORK
GENERAL
This
order shall constitute an agreement by VENDOR to furnish all tools and
equipment, materials (except BUYER-furnished material), software, labor and
supervision to provide particle-drilling services, as set forth in VENDOR’s
Attachment 1.
It shall
be the VENDOR’S responsibility to see that such activities are performed in such
a manner as to yield results in accordance with BUYER’S project
objectives.
EXTRA
WORK
In the
event VENDOR is required by BUYER to perform work not covered by these
specifications, a change in contract agreement must be executed and signed by an
authorized representative of both VENDOR and BUYER prior to performance of the
extra work. Any proposed changes to the existing contract agreement will be sent
to BUYER representative where an alteration to this agreement will be issued.
Minor change orders, but does not involve extra work, may be requested by VENDOR
or BUYER.
REPAIR
The
VENDOR shall manage the equipment refurbishment and repair process and shall
ensure that all equipment, materials and/or spares delivered for inspection,
repair, refurbishment or replacement are returned to the field fit for their
intended purpose, in good working condition and in accordance with the agreed
program and design specifications.
Following
approval of the claim for repairs, BUYER will advise VENDOR to have the
equipment/tools repaired and invoice BUYER. BUYER agrees to reimburse
VENDOR for actual, out-of-pocket costs incurred in making repairs to
equipment/tools in accordance with the above general
conditions. Xxxxxxxx for repair work performed must be supported by
sufficient detail (dates, inspection reports, photographs, hours, rates,
material charges, etc.).
LOST
OR DAMAGED-BEYOND-REPAIR
Lost or
damaged-beyond-repair equipment/tools, due to no fault of VENDOR of any sort or
the fault of any third person, will be charged to BUYER at actual replacement
cost less the depreciated value (as defined By the VENDOR using standard
practices) of the equipment/tool lost. Actual replacement cost is
defined as the net amount VENDOR paid for the equipment/tools after any and all
discounts have been applied (including but not limited to trade, distributor or
special discounts). For VENDOR’S manufacturing their own
equipment/tools, replacement cost will be determined by VENDOR’S actual
manufacturing cost (documented by date of manufacture and breakdown of labor,
materials and overhead) less the depreciated value of the lost or
damaged-beyond-repair equipment/tools.
In lieu
of approving the claim for lost or damaged equipment/tools, BUYER reserves the
right to replace the equipment/tools directly, with like kind subject to
VENDOR’S approval.
KEY
PERFORMANCE INDICATORS
VENDOR is
expected to deliver a certain minimum service level determined by a mutually
agreed upon Key Performance Indicators (KPIs).
|
ü
|
ZERO
HSE Incidents
|
|
ü
|
75%
on bottom drilling time per 24
hours
|
|
ü
|
<
3 degrees inclination
|
|
ü
|
Average
penetration rate exceeding 3x average ROP from previous three xxxxx for
same section
|
|
ü
|
Each
bit in hole 48 hours between trips
|
|
ü
|
Drilling
1.67days/1000’
|
6
SECTION
III – PRICING
GENERAL
All
prices and rates are stated in US dollars.
In the
event that BUYER requests lower technology equipment VENDOR provides higher
technology equipment or tools, then the lower technology equipment or tools
rates shall apply.
APPLICABILITY
OF PRICES AND RATES
Unless
specifically stated to the contrary, all prices and rates contained herein shall
be deemed to be inclusive of all costs incurred by the VENDOR in the performance
of the work and fulfilment of its obligations in accordance with the agreement,
including all direct labor costs, payroll burden, repair and maintenance costs,
training costs, insurance, financing, taxes, duties, onshore transport of
personnel to BUYER’S transport base or worksite, and any other associated costs,
burdens and the VENDOR’S profit. Pricing herein will remain firm through the
duration of this agreement from date of receipt of VENDOR’S acceptance by
BUYER. Billing against this agreement is authorized only at the rates
or prices stated hereon.
See
Attachment 1.
The
execution of this Agreement will be pending a successful financial evaluation
and HSE MS audit from BUYER.
PRICE
CHANGE
VENDOR
will invoice against this Agreement only at stated rates and
prices. Price changes require a written alteration, issued before the
effective date of the change.
VENDOR
will submit requests for price changes in writing, 60 days before the proposed
effective date. Requests should include current net price, proposed
new net price, net price change, and percentage of change. VENDOR
should include enough detail to allow BUYER to evaluate the proposed
change.
THIRD
PARTY CHARGES
Purchases
or sub-rentals made by VENDOR for BUYER’S account will be invoiced to BUYER at
VENDOR’S net cost inclusive of any discounts extended to VENDOR and with no
xxxx-up to BUYER. Charges associated with BUYER mandated inspections or repairs
should be invoiced to BUYER at VENDOR’S net cost.
PERSONNEL
CHARGE
Operator
charges per person per day or part thereof and shall be inclusive of travel and
lodging expenses excluding subsistence charges. No additional personnel Call-Out
charges shall be chargeable to BUYER due to additional personnel on site due to
periods of hand-over or crew change.
TRAINEES
Trainees
may work on BUYER locations in addition to normal crews with BUYER permission,
however trainees shall not be chargeable.
PERSONNEL
CHARGES
Day rates
shall commence when the personnel arrive at the BUYER rig site and ends when the
personnel leave the rig site. Day charges are per calendar day or part
thereof
ADDITIONAL
PERSONNEL
The
VENDOR shall provide additional personnel at no extra charge to cover periods of
absence of assigned engineers due to illness, leave or training.
7
SEVERE
WEATHER CONDITIONS
VENDOR
will suspend rental charges on all equipment and tools if BUYER’S operations are
interrupted due to severe weather (hurricane, tropical storms, etc.) conditions
which cause an evacuation of the location, lengthy suspension of normal
operations, and/or inflict damage on the rig site. Rental charges will resume
once the rig has begun normal operation. A BUYER representative will contact
VENDOR when to halt and resume the rental charges for the tools and equipment at
the affected rig location. BUYER will be responsible if VENDOR’S equipment is
lost or damaged while at the rig site during the evacuation
VENDOR
personnel forced to evacuate the rig site due to severe weather or unsafe
conditions (fire, blowouts, etc.) will charge BUYER according to the following
categories:
Emergency
Evacuation – Restricted Release
VENDOR’S
personnel will be evacuated from the rig site and wait at a nearby location to
return to the work site when notified by the BUYER representative. BUYER will be
charged according to the appropriate standby day rates stipulated in the
contract. VENDOR’S personnel will be responsible for their own expenses during
the evacuation period.
Emergency
Evacuation – Unrestricted release
VENDOR’S
personnel are evacuated from the rig site and released without restrictions by
BUYER. VENDOR will be compensated only for work performed at the rig site and
not during the evacuation period.
8
SECTION
IV - ADMINISTRATION INSTRUCTIONS
INVOICING
Unless
otherwise specified in the BUYER Release Document, VENDOR will prepare invoices
on its standard invoice form, and mail original invoice to location specified in
the invoice instructions. When any term or condition of VENDOR’S invoice
conflicts with this Agreement, this Agreement shall prevail unless otherwise
specifically agreed in writing in the BUYER Release Document.
A single
original of any invoice referencing a purchase order along with a single copy of
any supporting documentation should be mailed to one of the following invoice
scanning PO Boxes based on the applicable business area. A separate
invoice is required for each purchase order.
Invoice
Scanning Post Office Boxes:
Shell Oil
COMPANY
XX Xxx
000000
Xxxxxxx,
XX 00000-0000
Business
Area
Xxxxx XX Xxx
000000
Construction/Logistics/HSE/Production XX Xxx
000000
SURE PO Box
301442
Projects
– SIEP
Managed XX Xxx
000000
Support
Services – IT, Finance, Exploration, etc XX Xxx
000000
Xxxxxxxx
are required to include the following data:
a)
|
Shell’s
contract number and/or purchase order number
**
|
b)
|
Full
description of material/service ordered, quantity ordered, quantity
shipped, unit price, extended price, date of service, and purchase order
line item if multiple lines **
|
c)
|
Shell
legal entity’s name that contracted for the materials and/or services
**
|
d)
|
Invoice
number and date **
|
e)
|
Field,
block lease, well number or other applicable location
name
|
f)
|
Rig
name/number (if applicable)
|
g)
|
Account
coding (Work Order / Network Order
number)
|
h)
|
Requestor's
name & phone number
|
i)
|
VENDOR’S
“remit to” address **
|
j)
|
Invoice
payment terms, including discounts
|
k)
|
Itemized
sales and use tax, if applicable
|
l)
|
Supporting
documentation of third party
charges
|
m)
|
Service
invoices must include work tickets signed by the Shell representative
(with employee number if applicable)
**
|
**
Denotes critical data element
Complete
and accurate information is required for timely payment. Invoices that do not
include critical data elements will be returned for correction, will incur
payment delays, or in worst cases, preclude payment.
Invoices
that are for amounts higher that those specified on a Purchase Order will incur
payment delays.
Invoice
Inquiry
if there
are questions concerning the status of invoice payment, please contact SEPCo
Accounts Payable by one of the following methods:
Vendor
Inquiry: (000) 000-0000
Xxxxx-Xxxxxxxx@xxxxx.xxx
Disputed
Amounts
In the
event that the BUYER disputes with VENDOR any amounts, in whole or in part,
attributable to an invoice, or if an invoice is prepared or submitted
incorrectly or without proper supporting documents, BUYER shall not be obligated
to pay the disputed amount to VENDOR until said dispute is resolved in
accordance with this Article. BUYER will notify VENDOR
9
of the
amounts in dispute and /or the reason(s) the invoice is not acceptable and
request VENDOR to issue a credit invoice for the unacceptable amount of the
disputed invoice.
PAYMENT
TERMS
The
payment terms are Net 30 days. The payment due date will be calculated from he
date of receipt by BUYER of an invoice which is correct, proper, and prepared in
accordance with the stated terms.
Invoices
for completed goods and/or services shall be received within 90 days of
completing the work. For materials, completion is defined as the required
delivery date contained in the contract, or the acceptance of the material at
BUYER’S nominated delivery location, whichever is later. For services,
completion is defined as acceptance of the work by BUYER, or upon VENDOR’S
demobilization from the worksite. If VENDOR remains onsite to perform
other services, completion is defined as acceptance by BUYER of the specific
task or job defined in the project purchase order or job ticket. VENDOR’S final
invoice for data books, drawings, or retention shall be invoiced within the 90
days; however, BUYER shall not be obligated to pay VENDOR’S invoice in the event
BUYER has not received the required information. After 90 days from completion
of the work, BUYER shall not be obligated to pay VENDOR’S invoice
SHIPPING
AND TRANSPORT
VENDOR
must use BUYER’S land transportation program when shipping anything requiring
"oilfield hauling" equipment, e.g., Hotshot, 1 ton, mini-float, single axle, or
tandem trucks, to a BUYER location or to another vendor for BUYER’S
account. VENDOR must call BUYER’S coordinated trucking company for
the designated area and give appropriate information for pick up and delivery,
including, pick up time, delivery time, destination, charge code, and name of
person ordering. Items that can be shipped via UPS, U.S. Mail, motor
freight, air express or VENDOR’S own Truck (at no charge) is
exempt.
Gulf
of Mexico:
|
866-30-Shell
(307-4355)
|
Xxxxxxx
Shale:
|
000-000-0000
|
South
Texas:
|
000-000-0000
|
Wyoming:
|
000-000-0000
|
All
appropriate shipments not complying with the above instructions are for VENDOR’S
account and shall be subject to non-payment by BUYER.
All
packages must be marked with the BUYER purchase order number or order sheet
number and field location. Itemized packing slips must be on the outside of all
boxes. Packing slip must include purchase order or order sheet number and field
location. Non-compliance will result in the return of the material to supplier
at VENDOR’S expense. Boxed/package contents shall be protected from damage due
to water spray while goods/materials are in transit to an offshore
location. At a minimum, the goods/materials should be wrapped in
plastic and placed inside a box to prevent damage from salt-water
spray.
The
VENDOR shall ensure that all equipment, materials and/or spares are sufficiently
protected to prevent loss or damage during delivery to BUYER’S offshore worksite
or onshore worksite. BUYER is responsible for providing proper
pre-slung baskets/containers in which to ship VENDOR’S equipment to worksite at
VENDOR’S expense. VENDOR shall ensure that pre-transport checks have
been carried out on all equipment in accordance with VENDOR’S Quality Assurance
Procedures and BUYER’S specifications, if applicable. VENDOR shall
provide lift certification checklists and Certificates of Conformity as
necessary.
Where
VENDOR’S personnel are at the offshore or onshore WORKSITE they shall verify
receipt in accordance with packing list and confirm materials received in "Fit
for Purpose" condition and in accordance with the requirements of the plan.
Current certification, field operating instructions, rig manuals, assembly
drawings and procedure manuals shall accompany all mechanical equipment shipped
offshore or and be available at all times to the BUYER
Representative.
RIGHT
TO AUDIT
During
this Agreement and for four (4) years after completion, VENDOR will keep
accurate, auditable records of all associated charges. BUYER may
inspect and audit those records using its authorized
representatives.
VENDOR
will keep all these records:
10
A. Payroll
records that account for total time distribution for VENDOR’S employees working
full or part time on the Work (to permit tracing to payroll and related tax
returns), as well as cancelled payroll checks or signed receipts for payroll
payments in cash
B.
|
Invoices
for purchases, receiving and issuing documents, and all other unit
inventory records for VENDOR’S stores stocks or capital
items
|
C.
|
Paid
invoices and cancelled checks for purchased materials and subcontractor
and third-party charges
|
D.
|
Records
related to handling, hauling, and disposing of hazardous materials and/or
hazardous wastes
|
E.
|
Accurate,
auditable records of gifts, entertainment, or gratuities to individual
BUYER personnel
|
Overpayments
by BUYER resulting from invoicing errors, charges not authorized by written
agreement, and/or other unsupported invoice charges will be reimbursed to BUYER
by VENDOR. VENDOR will reimburse BUYER the amount of the overpayment
within thirty days of the error discovery or BUYER will short-pay current
invoices in an amount equal to the overpayment, at BUYER’S sole
option
COMMUNICATIONS
All
notices, requests, demands, and other communications to any party under this
Agreement shall be in writing (including facsimile or similar writing) and shall
be given to a party at the address or facsimile number specified for such party
below or such other address or number as such party shall at any time otherwise
specify by like notice to the other party. Each such notice, request,
demand, or other communication shall be effective (a) if given by facsimile, at
the time such facsimile is transmitted and the appropriate confirmation is
received (or, if such time is not during a business day, at the beginning of the
next business day); (b) if given by mail, five business days (or if to an
address outside the United States, ten calendar days) after such communication
is deposited in the United States mail with first-class postage prepaid; or (c)
if given by any other means, when delivered at the address pursuant
hereto. The address and facsimile number for each party for purpose
of notice are:
For
notices given to the BUYER:
Attention:
Xxxxx X Xxxxxx
Address:
0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000
Telephone:
000.000.0000
Facsimile:
303.305.7606
Email:
xxxxx.xxxxxx@xxxxx.xxx
For
notices given to the VENDOR:
Attention: Xxxxxx
X. Xxxxxxxx
Address:
0000 Xxxxxx Xxxxx, Xxxxxxx, XX 00000
Telephone:
000.000.0000
Facsimile:
713.224.6361
Email:
xxxxxxxxx@xxxxxxxxxxxxxxxx.xxx
11
SECTION
V - HEALTH, SAFETY, AND ENVIRONMENT
SAFETY
REQUIREMENTS
VENDOR
shall be solely responsible to comply with any applicable Federal, State, local
safety and health regulations, as well as safety and health requirement at its
own facilities, BUYER’S facilities or at any third party facility where services
hereunder are being performed.
BUYER is
committed to safety and safe work practices. Referenced is “A Safety &
Environmental Handbook For Employees of VENDORs of Shell Offshore
Companies.” VENDOR is solely responsible to comply and enforce the
provisions thereof.
BUYER
will not be charged for time spent securing (waiting for) the proper
personnel/protective equipment should the VENDOR’S employees arrive at BUYER’S
location without such equipment or with inadequate or otherwise unsatisfactory
protective equipment.
HEALTH
SAFETY ENVIRONMENT (HSE) – MANAGEMENT SYSTEM REQUIREMENT
VENDOR
must be able to demonstrate that they have a HSE management system (HSE-MS) that
is aligned with BUYER’S HSE management system and are prepared to participate in
review of HSE cases when applicable. VENDOR may obtain a copy of
BUYER’S minimum HSE-MS requirements by going to BUYER’S web site:
xxx.xxxxxxxxxxxxxxx.xxx, click on CSMP manual; choose part 11 (VENDOR Minimum
HSE requirements) beginning on page 34.
VENDOR
shall allow BUYER to formally audit VENDOR’S HSE-MS before and/or during the
performance of work/services by VENDOR. For example, VENDOR will allow BUYER to
audit
VENDOR to
monitor compliance with BUYER’S VENDOR safety management process (CSMP)
expectations. By monitoring VENDOR’S compliance, BUYER does not
assume any responsibility to direct, control or supervise VENDOR, its employees,
agents, or subcontractors.
VENDOR
agrees to provide BUYER the requested safety statistics annually (by
mid-February) directly to the designated CSMP focal point. VENDOR is also
expected to submit their safety statistics quarterly to the PEC/PREMIER or ISN
databases.
VENDOR
will abide by BUYER’S CSMP and the elements of the "stoplight process" (part 8
of the CSMP manual), which are herein incorporated by
reference. VENDOR will also monitor any 3rd party contractors as per
the CSMP guidelines.
Included
herein by reference and attached is BUYER’S publication, "CONTRACTOR HEALTH /
SAFETY / ENVIRONMENTAL (HSE) HANDBOOK; 2003; SHELL EXPLORATION AND PRODUCTION"
(ATTACHMENT D). VENDOR is responsible for obtaining this publication from
BUYER’S field personnel and is also responsible for complying with requirements
therein while working on BUYER’S property. Employees of VENDOR found not
complying with these requirements are subject to removal from BUYER’S property
and may not be allowed to return. VENDOR’S field supervisor will be held
accountable for the actions of the crew for which he/she is responsible. If
VENDOR is found to be not in compliance, then VENDOR is subject to dismissal and
contract termination.
HAZARD
COMMUNICATION
Both
VENDOR and BUYER agree to comply with the Occupational Safety and Health
Administration (“OSHA”) Hazard Communication Standard (“HCS”) - 29 CFR
1910.1200. The HCS requires employers to inform workers about the
hazards of workplace materials using a written hazard communication program,
labels, substance lists, Material Safety Data Sheets (“MSDS”), information, and
training. Both VENDOR and BUYER will also provide appropriate health
and safety information to those who handle, use, or may be exposed to chemical
substances.
VENDOR
will have an MSDS available at the job site for each chemical substance provided
to BUYER. If VENDOR leaves chemical substances in BUYER’S possession,
VENDOR will give BUYER’S representative at the location or field office the most
current MSDS.
12
VENDOR
will furnish only chemical substances listed in the Toxic Substances Control Act
(“TSCA”) Chemical Substance Inventory (maintained by the U.S. Environmental
Protection Agency). VENDOR will verify each chemical's inclusion on
the TSCA Inventory by sending BUYER a letter or an MSDS. If a
chemical substance is not on the TSCA Inventory, VENDOR will immediately notify
BUYER.
If VENDOR
deems a returned chemical substance unacceptable for credit, VENDOR will
segregate the returned chemical and immediately contact BUYER and request BUYER
to provide written instructions as to the handling of the
substance. VENDOR may never dispose of or sell these chemicals
without BUYER’S written permission.
DISA
All
VENDOR’S employees, including subcontractor that do any field operations work
for Shell Onshore Production, whether full-time, part-time, or intermittent,
shall be enrolled in one of the DISA Compliance Programs through their
employer.
SUBSTANCE
ABUSE POLICY FOR SERVICE CONDITIONS
Based on
the definitional criteria below, if all or part of the Services under this
Agreement is considered safety/environmentally sensitive, in addition to
standard requirements in Drugs, Alcohol, and Firearms section, in this
Agreement, VENDOR should have a complete substance abuse policy in place and
functioning. VENDOR’S policy should support BUYER’S objective to
ensure VENDOR’S personnel, working on BUYER’S premises or with BUYER’S
personnel, do not create a presence of substance abuse in the
workplace.
A
safety/environmentally sensitive VENDOR is any VENDOR and/or its subcontractor
that provide one or more individuals to perform Services for BUYER with job
responsibility that meets these criteria:
A.
|
Requires
exercise of independent action and results in direct and immediate
irreversible effects; and
|
B.
|
Creates
substantial risk of serious physical injury to fellow employees or the
general public, or significant environmental
damage.
|
If VENDOR
meets the requirements of a safety/environmentally sensitive VENDOR based on the
above criteria, VENDOR must have a comprehensive substance abuse policy and
practices that include these minimum elements:
a)
|
Substance
abuse prohibitions
|
b)
|
Employee
notification
|
c)
|
Substance
abuse deterrence and detection
|
|
1)
|
Testing
areas, substances, and cut-off levels at least comparable to BUYER’S (see
below)
|
|
2)
|
Appropriate
rehabilitation and ensured fitness for duty before permitting employees
with identified substance abuse problems to return to work on BUYER’S
premises
|
|
3)
|
Searches
|
Specifically,
VENDOR must perform testing with regard to all employees who do
safety/environmentally sensitive work, and their immediate supervisors, in the
areas below at the following 8-drug panel testing levels plus
alcohol.
a)
|
Testing
Areas
|
1) Pre-employment
2) For
cause
3) Post
rehabilitation/follow-up for four years after return to work
4) Random
b)
|
Testing
Cut-off Levels
|
|
1)
|
VENDOR
must test a urine sample for the following additional drugs at cut-off
levels no less stringent than those below. VENDOR should
perform an initial test via Enzyme Multiplied Immunoassay Technique
(“EMIT”), and where positive, follow up with a more precise test, Gas
Chromatography/Mass Spectrometry (“GC/MS”). The test should be
considered positive if there is a presence equal to or greater than the
following levels (“NG/ML”):
|
Drug EMIT C/MS
Amphetamines 1,000 500
Barbiturates
300
100
Benzodiazepines 300 100
Cocaine
300
150
Opiates 300
150
THC(cannabinoids
marijuana)
20
10
Methadone 300
100
PCP
25 25
13
VENDOR
should test for alcohol abuse, with results of 0.05 percent Blood Alcohol
Content considered positive.
Upon
BUYER’S request, VENDOR will provide BUYER the following information in
writing:
a)
|
Assurance
that VENDOR’S policy and practices are consistent with the minimum
requirements.
|
b)
|
Records
BUYER may review to ensure adherence to the practices of the stated VENDOR
policy.
|
DRUGS,
ALCOHOL, AND FIREARMS
BUYER’S
policy on illegal drugs, alcohol, and firearms, as it relates to VENDORs, is set
forth below. VENDOR agrees to communicate such policy to VENDOR’S
personnel and agrees to cooperate with BUYER in implementing such policy on the
jobsite(s) covered by this Agreement.
The use,
possession, transportation, promotion, or sale of illegal drugs or drug
paraphernalia, and/or otherwise legal but illicitly used substances by anyone
while on BUYER’S premises is absolutely prohibited. Except where
specifically authorized, the use, possession, or transportation of alcoholic
beverages, firearms, live ammunition, explosives, or weapons is also
prohibited. VENDOR’S personnel who are found in violation of these
prohibitions will not be allowed on BUYER’S premises and may be referred to law
enforcement agencies for their action.
The term
"BUYER’S premises" in this Article is used in the broadest sense and includes
all land, property, buildings, structures, installations, boats, planes,
helicopters, cars, trucks, and all other means of conveyance owned by or leased
to BUYER or otherwise being utilized in BUYER’S business.
Entry
onto BUYER’S premises constitutes consent to and recognition of the right of
BUYER and its authorized representatives to search the person, vehicle, and
other property of individuals while on BUYER’S premises. Such
searches may be initiated by BUYER without prior announcement and will be
conducted at such times and locations as deemed appropriate. VENDOR’S
personnel who refuse to cooperate with searches will not be allowed on BUYER’S
premises.
VENDOR is
required to take whatever steps it deems necessary (including adopting its own
drug control program, if necessary) to ensure that involvement with drugs on the
part of VENDOR’S personnel working on BUYER’S premises or with BUYER’S personnel
does not create a presence of drug-related problems in the work place. VENDOR
may conduct contraband searches and drug testing of VENDOR’S personnel on
BUYER’S premises in areas where VENDOR is performing work. VENDOR
shall notify and obtain approval of BUYER’S location management prior to
conducting such searches or testing.
14
SECTION
VI –ADDITIONAL TERMS AND CONDITIONS
QUALITY
ASSURANCE
Goods. VENDOR
warrants to BUYER that the Goods will: (a) be free from all defects in design,
workmanship and materials; (b) be new, unless specified otherwise herein or in
the BUYER Release Document; (c) be fit for use for their ordinary intended
purpose as well as any special purpose specified herein or in the BUYER Release
Document; (d) not constitute infringement or contributory infringement of any
patent or any copyright or trademark, or violation of any trade secret when sold
or used in their ordinary intended purpose as well as any special purpose
specified herein or in the BUYER Release Document; and (e) be in strict
conformance with this Agreement or the BUYER Release Document. VENDOR
will also pass through any applicable manufacturer’s warranty to the benefit of
BUYER. Goods shall at all times be subject to BUYER’S
inspection. If, in BUYER’S opinion, the Goods fail to conform to this
Agreement or the BUYER Release document or are otherwise defective, VENDOR
shall, at BUYER’S sole option, promptly repair or replace them at VENDOR’S
expense.
Services. VENDOR
warrants that any Service provided will be free of defects in workmanship and
materials. VENDOR Services will be competent and any recommendations
of its representatives will reflect their professional knowledge and
judgment. If any Service fails to conform to this warranty any time
within twelve (12) months after completion of the Service, VENDOR will provide
Services to the same extent as under the original Agreement at VENDOR’S
expense. VENDOR’S standard warranty period applies if longer than 12
months.
Goods
and/or Services. Neither BUYER’S inspection nor failure to
inspect shall relieve VENDOR of any obligation hereunder. No
acceptance or payment by BUYER shall constitute a waiver of the foregoing; and
nothing herein shall exclude or limit any warranties implied by
law. The remedies stated herein shall be cumulative of any other
remedies available in law or equity and shall extend to BUYER, its successors,
assigns, and customers.
TAXES
BUYER
shall pay to VENDOR, in addition to the prices provided for herein, any foreign
or domestic duty, sales or use tax, fee, or other tax or charge (“Tax”) that
VENDOR may be required by any municipal (including special taxing authority),
state, federal or foreign government law, rule, regulation or order to collect
or pay with respect to the sale, transportation, storage, delivery, installation
or use of the Goods and/or Services delivered hereunder.
VENDOR
shall indemnify BUYER against any liability and expense in excess of the amount
of Tax due that is incurred by BUYER by reason of VENDOR’S failure properly to
remit said Tax to the proper government agency. In the event that
VENDOR recovers a refund of, or credit for, any Taxes paid to VENDOR by BUYER
with respect to the sale of the Goods and/or Services herein described or of any
taxes measured by the price of such Goods or Services or the gross receipts from
such sale, then VENDOR agrees to refund to BUYER the full amount of such refund
or credit. Further, BUYER shall be under no obligation to share with,
or refund to, VENDOR any duty drawback recovered by BUYER as a result of the
export of the Goods purchased hereunder.
Notwithstanding
the above, VENDOR shall not collect, and BUYER shall not pay, any such Tax for
which BUYER furnishes to VENDOR a properly completed exemption certificate or a
direct payment permit certificate or for which VENDOR may claim an available
exemption from Tax, such as exemption for export. BUYER shall be
responsible for any Tax, penalty, and interest if such exemption certificate or
direct payment permit certificate is later held by any proper authority to be
invalid. Further, VENDOR shall not collect, BUYER shall not pay, and
VENDOR shall indemnify BUYER against any liability for any Tax, fee or other
charge based on or measured by the net income or net worth of VENDOR, or any
employment related Tax, fee, or charge (including without limitation,
withholdings for W-2, Social Security, Medicare, or unemployment compensation
benefits).
This
Agreement shall not be construed to establish a joint venture, partnership or
other formal business organization. Furthermore, the Parties agree
that this Agreement does not constitute a partnership for tax
purposes. In the event that it is so construed, however, the Parties
agree to be excluded from the provisions of Subchapter K of the United States
Internal Revenue Code of 1986, as amended.
Louisiana
Tax Status – Purchase of Tangible Personal Property
For
purchase of tools/equipment/supplies, VENDOR must request location of ultimate
use from BUYER. If for use in federal OCS waters, identify the exact location
(field, block and lease numbers) on purchase order, on blanket order releases,
and on invoices. BUYER should be charged 0% Louisiana sales/use tax. If for use
in Louisiana state waters,
15
charge 4%
Louisiana sales/use tax and the appropriate parish rate(s). BUYER’S Louisiana
tax registration number is (SOI) 3871308-001 o/s.
Louisiana
Tax Status – Taxability of Services
Charge
for installation or other services, such as those associated with engineering,
consulting, operating and supervisory personnel are non-taxable. Such charges
should be separately stated on VENDOR’S invoices.
Louisiana
Tax Status - Equipment Rental
VENDOR
must request location of ultimate use of the rental equipment from BUYER. If for
Federal OCS waters, identify field, block and lease numbers on Purchase Order,
on Blanket Order releases and purchases, and on invoices. Do not
charge Louisiana Sales/use tax. If in Louisiana state waters, charge
4% Louisiana sales/use tax and the appropriate parish rates(s). Regardless of
the location of use, charges for damages or replacement of rental equipment, if
allowed under terms of this agreement, are non-taxable.
Wyoming
Sales and Use Tax
Where
VENDOR is acting in the capacity of the prime or general VENDOR (hereafter
“Prime VENDOR”) on projects taking place in the state of Wyoming. If the Prime
VENDOR herein utilizes contractors that are not residents of Wyoming, then Prime
VENDOR agrees to abide by all Wyoming sales/tax requirements for non-resident
VENDORs including, but not limited to, registering the project with the Wyoming
Department of Revenue prior to beginning construction, reporting to the Wyoming
Dept. of Revenue all resident and non-resident contractors and withholding 4% of
the contract amount form non–resident VENDORs or contractors. The Prime VENDOR
herein agrees to hold Shell harmless and indemnify Shell form any liability to
the State of Wyoming in connection with utilizing non-resident VENDORs or
contractors.
Texas
Tax Status
Do not
xxxx Texas state and local taxes. BUYER agrees to accrue and pay taxes that may
be due directly to the State. Direct payment Authorization No.
3-200240252-0.
COMPLIANCE
In
performance hereunder and every activity connected therewith, VENDOR shall
comply fully with all applicable laws, ordinances, rules and regulations, and
when requested, shall furnish evidence satisfactory to BUYER of such
compliance. Without limiting the foregoing, VENDOR warrants that (a)
all articles and Goods furnished were and shall be produced and all Services
performed in compliance with the Fair Labor Standards Act of 1938 as amended and
(b) VENDOR shall notify BUYER if VENDOR or anyone performing services under this
Agreement is a former employee of a Federal agency who is prohibited from
receiving compensation under 41 U.S.C. 423. In its performance
hereunder, VENDOR shall not employ, contract or subcontract with persons or
entities that have or are suspected of having connections with organized crime,
international terrorism, or interests in illicit drug or other internationally
condemned activities. VENDOR, as a contractor under U.S. Government
contracts, hereby certifies and confirms that VENDOR is and will remain in
compliance with all Executive Orders and laws and the regulations issued
thereunder required of contractors under U.S. government contracts, including,
but not limited to the following which, as applicable, are incorporated herein
by reference:
Executive
Order 11246, as amended; Section 402 of the Vietnam Era Veterans Readjustment
Assistance Act of 1974, as amended; Section 503 of the Rehabilitation Act of
1973, as amended; Executive Order 11625, as amended; Executive Order 12138, as
amended; Small Business Act, as amended; Anti-Kickback Enforcement Act of 1986;
Drug-Free Workplace Act of 1988; Clean Air Act, as amended; Clean Water Act, as
amended; Executive Order 11738, as amended. VENDOR will promptly
furnish such further certificates and assurance of compliance with the foregoing
as may from time to time be requested.
EXPORT
CONTROL
VENDOR
acknowledges that it is familiar with and will comply with all applicable
regulations of the United States Department of Commerce and other government
agencies concerning restrictions on participation in unsanctioned foreign
boycotts and/or the export or re-export of United States origin goods, software
and technical data, or the direct product thereof, to unauthorized persons or
destinations. Where appropriate, VENDOR will assure that the export
privileges of its employees, agents, and contractors have not been denied,
suspended, or revoked, in whole or in part, and that such party is not listed on
any restricted parties list published by the US government. Unless
otherwise agreed by the parties, VENDOR will be responsible for obtaining any
required U.S. government authorization, including but not limited to export
licenses. Where appropriate, VENDOR will provide BUYER the Export
Control Classification Number (ECCN) with any product
shipment. VENDOR agrees to abide by all applicable regulations in
respect of information supplied by or on
16
behalf of
BUYER, including but not limited to releases of technical data or software
source code to foreign nationals located in the United States.
BACKGROUND
CHECKS
VENDOR,
and its contractors, if any, will perform an appropriate background
investigation of its employees before entry onto BUYER premises. Such
background investigation should include, but is not necessarily limited to,
criminal record reports, Social Security traces, driving record reports,
employment verification, and education verification, in accordance with federal,
state and local laws.
PUBLICITY
VENDOR,
its employees, agents, and contractors shall not prepare photographs, articles,
press releases, or speeches about the existence of, scope of, or Work to be
performed under this Agreement or any generalities or details about BUYER’S
facilities or business plans without BUYER’S prior written
consent. Applications for approval must be submitted to BUYER in
writing and outline the intended uses thereof. Neither VENDOR nor
BUYER will use the name or trademark of the other in any material prepared for
public announcement, general publication or distribution to any third party
without obtaining prior written permission of the other
party. Notwithstanding the foregoing, either party may distribute a
copy of this Agreement or disclose the existence thereof to any subsidiary,
affiliate, agent, government agency, or contractor for purposes of performance
hereunder, or as may be required by law.
INFRINGEMENT
VENDOR
shall indemnify and defend BUYER against all claims, suits, liability and
expense on account of alleged infringement of any patent, copyright or
trademark, resulting from or arising in connection with the manufacture, sale,
normal use or other normal disposition of any article or material furnished
hereunder or with the performance of any service provided
hereunder. BUYER may participate in the defense of any claim or suit
without relieving VENDOR of any obligation hereunder.
ASSIGNMENT
AND SUBCONTRACTING
Neither
this Agreement nor any claim against BUYER arising directly or indirectly out of
or in connection with this Agreement shall be assignable by VENDOR or by
operation of law; provided, however, that BUYER shall have the right to assign
to a successor in interest without consent of VENDOR.
VENDOR
shall not subcontract any obligations hereunder without BUYER’S prior written
consent. BUYER’S consent to any subcontracting shall, however, (a)
not constitute a waiver of any right of BUYER to reject Goods and/or Services
which are not in conformance with this Agreement or any BUYER Release Document;
(b) not create any contractual relationship between BUYER and any contractor
with respect to the Goods and/or Services to be provided hereunder or under any
BUYER Release Document; or (c) not relieve VENDOR of its responsibility for all
acts or omissions of its contractors in performance hereunder or under any BUYER
Release Documents.
In
performing Services hereunder, VENDOR will maintain complete control over and
have full responsibility for its employees and agents and will have full
responsibility for the performance of its contractors. BUYER reserves
no right to direct, supervise or control the operations, employees or
contractors of VENDOR. Services under this Agreement must meet
BUYER’S approval and are subject to the general right of inspection that allows
BUYER to ensure satisfactory completion of the Services.
WITHHOLDING
AND ENFORCEMENT
BUYER
shall have the right to withhold any money ever payable by it hereunder and
apply the same to payment of any obligations of VENDOR to BUYER or to any other
parties arising in any way out of this Agreement or its
performance. Each party hereto agree it shall reimburse for
reasonable attorneys’ fees and other legal and court costs to the prevailing
party of any court proceeding brought to enforce the obligations under this
Agreement.
EXCUSES
Either
VENDOR or BUYER shall be excused from performance of the obligations hereunder
when and to the extent that such performance is delayed or prevented (and, in
BUYER’S case, its need for the articles, Goods or Services is reduced or
eliminated) by any circumstances reasonably beyond its control, or by fire,
explosion, acts of terrorism, any strike or
17
labor
dispute or any act or omission of any Governmental authority or any group
purporting to have authority. To be so excused, the affected party
must provide prompt notice and undertake reasonable efforts to mitigate the
conditions
FORCE
MAJEURE
Any
delays in or failure of performance by VENDOR or BUYER shall not constitute
default hereunder if and to the extent such delays or failures of performances
are caused by occurrences beyond the control of VENDOR or BUYER and result from:
(i) an act of God; (ii) an act of war, rebellion, civil commotion, or sabotage,
or damage resulting there from; (iii) a fire, flood explosion, accident; (iv) a
riot, or strike, or (v) a federal or state law, or a rule regulation or order of
any public body or official exerting or purporting to exercise authority or
control concerning the operations covered hereby (except that VENDOR'S failure
to obtain any necessary applicable federal, state, or local permits shall not be
considered force majeure hereunder if the cause or failure to receive such
permits was the result of VENDOR'S negligence or other fault).
During
the existence of such force majeure conditions, no payments shall be due by
BUYER to VENDOR when services are not being performed except payments for goods
and services that were provided prior to the existence of the force majeure
event. Appropriate steps shall be promptly taken to remedy force
majeure event. Notice of force majeure occurrences and the details
constituting them shall be given to the other party in writing.
OWNERSHIP
OF WORK PRODUCT
VENDOR
hereby assigns all right, title and interest in and to the Goods provided or any
work produced as a result of Services hereunder (“Work Product”) to
BUYER. For purposes hereof, Work Product shall include all tangible
Work Product prepared for or provided to BUYER by VENDOR in performance of this
Agreement. The Work Product shall be the sole and exclusive property
of BUYER and may be used for any purpose BUYER desires without additional fee or
cost. VENDOR and BUYER agree that all Work Products not generally
available to the public shall be treated as Confidential Information of
BUYER. Any drawings, specifications, or other data furnished by BUYER
to VENDOR shall remain the property of BUYER and shall be promptly returned to
BUYER upon completion of the Work unless VENDOR is otherwise instructed in
writing by BUYER. Work Product as defined herein shall never mean any
patents, pending patents, or other intellectual property owned by VENDOR or any
such improvement thereof developed during the term of this Agreement that relate
directly or indirectly to particle impact drilling and to the services and/or
scope of work provided pursuant to this Agreement and all such intellectual
property shall, to the extent it is developed by or on behalf of VENDOR, remain
the property of VENDOR.
PERFORMANCE
VENDOR
shall perform all Services diligently, carefully and in a good and workmanlike
manner; shall furnish all labor, supervision, machinery, equipment, materials
and supplies necessary therefore; shall obtain and maintain all building and
other permits and licenses required by public authorities in connection with
performance of the Services; and, if permitted to subcontract, shall be fully
responsible for all Services performed by contractors. VENDOR shall
conduct all operations in VENDOR’S own name and as an independent VENDOR, and
not in the name of, or as agent for BUYER. Any provisions in this
Agreement which may appear to give BUYER the right to direct VENDOR as to
details of performing the Services herein covered, or to exercise a measure of
control over the Services shall be deemed to mean that VENDOR shall follow the
desires of BUYER in the results of the Services only.
LIABILITY-INDEMNITY
VENDOR
shall be solely responsible for all materials, tools, equipment and services
until the Services are completed to BUYER’S satisfaction.
Indemnity
A.
PERSONAL INJURY
1. VENDOR
VENDOR,
INCLUDING ITS PARENT COMPANIES, SUBSIDIARIES, AFFILIATES, JOINT VENTURE PARTIES,
CONTRACTORS AND INSURERS SHALL HOLD HARMLESS, RELEASE, DEFEND AND INDEMNIFY
BUYER, ITS DIRECTORS, EMPLOYEES, INSURERS, STOCKHOLDERS, PARENT, SUBSIDIARY AND
AFFILIATED COMPANIES AND ANY PARTIES TO ANY JOINT OPERATING AGREEMENTS WITH
BUYER (INCLUDING THEIR PARENT, SUBSIDIARY AND AFFILIATED COMPANIES) TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE
18
LAW, FROM
AND AGAINST ANY AND ALL LOSSES, DAMAGES, CLAIMS, SUITS, LIABILITIES, JUDGMENTS,
CAUSES OF ACTION AND EXPENSES (INCLUDING ATTORNEYS' FEES AND OTHER COSTS OF
LITIGATION AS WELL AS ANY FEES AND COSTS TO ENFORCE THE PROVISIONS OF THIS
ORDER) CAUSED BY, ARISING OUT OF, IN CONNECTION WITH OR INCIDENTAL TO ANY
OPERATIONS CONDUCTED PURSUANT TO THIS ORDER, OR RESULTING FROM OR IN ANY WAY
RELATED TO THE WORK PERFORMED HEREUNDER, INCLUDING BUT NOT LIMITED TO VESSEL AND
CARGO OPERATIONS, FOR BODILY/PERSONAL INJURY, DISEASE OR DEATH OF VENDOR’S
EMPLOYEES, WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE SOLE OR
CONCURRENT NEGLIGENCE, FAULT OR STRICT LIABILITY WITHOUT FAULT OF VENDOR, BUYER
OR OF ANY PARTY OR PARTIES, INCLUDING BUT NOT LIMITED TO ANY CLAIM(S) BASED ON
THE WARRANTY OF SEAWORTHINESS, AND ANY PRE-EXISTING CONDITION.
2. BUYER
BUYER
SHALL HOLD HARMLESS, RELEASE, DEFEND AND INDEMNIFY VENDOR, ITS DIRECTORS,
EMPLOYEES, INSURERS, STOCKHOLDERS, PARENT, SUBSIDIARY AND AFFILIATED COMPANIES
AND ANY PARTIES TO ANY JOINT OPERATING AGREEMENTS WITH VENDOR (INCLUDING THEIR
PARENT, SUBSIDIARY AND AFFILIATED COMPANIES) TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, CLAIMS, SUITS,
LIABILITIES, JUDGMENTS, CAUSES OF ACTION AND EXPENSES (INCLUDING ATTORNEYS' FEES
AND OTHER COSTS OF LITIGATION AS WELL AS ANY FEES AND COSTS TO ENFORCE THE
PROVISIONS , OF THIS ORDER) CAUSED BY, ARISING OUT OF, IN CONNECTION WITH OR
INCIDENTAL TO ANY OPERATIONS CONDUCTED PURSUANT TO THIS ORDER, OR RESULTING FROM
OR IN ANY WAY RELATED TO THE WORK PERFORMED HEREUNDER, INCLUDING BUT NOT LIMITED
TO VESSEL AND CARGO OPERATIONS, FOR BODILY/PERSONAL INJURY, DISEASE OR DEATH OF
BUYER’S EMPLOYEES, INCLUDING EMPLOYEES OF ANY PARENT, SUBSIDIARY OR AFFILIATE OF
BUYER, WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE SOLE OR CONCURRENT
NEGLIGENCE, FAULT OR STRICT LIABILITY WITHOUT FAULT OF BUYER, VENDOR OR OF ANY
PARTY OR PARTIES, INCLUDING BUT NOT LIMITED TO ANY CLAIM(S) BASED ON THE
WARRANTY OF SEAWORTHINESS, AND ANY PRE-EXISTING CONDITION.
B.
THIRD PARTY PERSONAL INJURY
VENDOR
AND BUYER SHALL EACH CONTRIBUTE IN PROPORTION TO THE AMOUNT OR PERCENTAGE OF
FAULT ATTRIBUTED TO EACH FOR ANY LOSSES, DAMAGES, CLAIMS, SUITS, LIABILITIES,
JUDGMENTS, AND CAUSES OF ACTION WHEN BROUGHT BY THIRD PARTIES NOT OTHERWISE
PROVIDED FOR IN A ABOVE OR NOT PARTY TO THIS AGREEMENT FOR BODILY/PERSONAL
INJURY, DISEASE OR DEATH) CAUSED BY, ARISING OUT OF, IN CONNECTION WITH OR
INCIDENTAL TO ANY OPERATIONS CONDUCTED PURSUANT TO THIS ORDER, OR RESULTING FROM
OR IN ANY WAY RELATED TO THE WORK PERFORMED HEREUNDER, INCLUDING BUT NOT LIMITED
TO VESSEL AND CARGO OPERATIONS. FOR THE PURPOSES OF THIS PROVISION A THIRD PARTY
SHALL INCLUDE OTHER VENDORS OF VENDOR WHICH ARE NOT CONTRACTORS FOR THE PURPOSES
OF WORK OR SERVICES PERFORMED UNDER THIS AGREEMENT AND ANY OTHER PARTY WHO IS
NOT IN CONTRACTUAL PRIVITY WITH VENDOR OR BUYER FOR ANY WORK OR SERVICES
PERFORMED PURSUANT TO THIS AGREEMENT.
C.
DAMAGE TO PROPERTY
1.
VENDOR
VENDOR,
INCLUDING ITS PARENT COMPANIES, SUBSIDIARIES, AFFILIATES, JOINT VENTURE PARTIES,
CONTRACTORS AND INSURERS SHALL HOLD HARMLESS, RELEASE, DEFEND AND INDEMNIFY
BUYER, ITS DIRECTORS, EMPLOYEES, INSURERS, STOCKHOLDERS, PARENT, SUBSIDIARY AND
AFFILIATED COMPANIES AND ANY PARTIES TO ANY JOINT OPERATING AGREEMENTS WITH
BUYER (INCLUDING THEIR PARENT, SUBSIDIARY AND AFFILIATED COMPANIES) TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, FROM AND AGAINST ANY AND ALL LOSSES,
DAMAGES, CLAIMS, SUITS, LIABILITIES, JUDGMENTS, CAUSES OF ACTION AND EXPENSES
(INCLUDING ATTORNEYS' FEES AND OTHER COSTS OF LITIGATION AS WELL AS ANY FEES AND
COSTS TO ENFORCE THE PROVISIONS OF THIS ORDER) CAUSED BY, ARISING OUT OF, IN
CONNECTION WITH OR INCIDENTAL TO ANY OPERATIONS CONDUCTED PURSUANT TO THIS
ORDER, OR RESULTING FROM OR IN ANY WAY RELATED TO THE WORK PERFORMED HEREUNDER,
INCLUDING BUT NOT LIMITED TO VESSEL AND CARGO OPERATIONS, FOR DAMAGE TO PROPERTY
OF VENDOR RELATED TO THE WORK PERFORMED UNDER THIS AGREEMENT OR WITHIN A 500
METER RADIUS OF THE SITE, WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE
SOLE OR CONCURRENT NEGLIGENCE, FAULT OR
19
STRICT
LIABILITY WITHOUT FAULT OF VENDOR, BUYER OR OF ANY PARTY OR PARTIES, INCLUDING
BUT NOT LIMITED TO ANY CLAIM(S) BASED ON THE WARRANTY OF SEAWORTHINESS, AND ANY
PRE-EXISTING CONDITION.
2.
BUYER
BUYER
SHALL HOLD HARMLESS, RELEASE, DEFEND AND INDEMNIFY VENDOR, ITS DIRECTORS,
EMPLOYEES, INSURERS, STOCKHOLDERS, PARENT, SUBSIDIARY AND AFFILIATED COMPANIES
AND ANY PARTIES TO ANY JOINT OPERATING AGREEMENTS WITH VENDOR (INCLUDING THEIR
PARENT, SUBSIDIARY AND AFFILIATED COMPANIES) TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, CLAIMS, SUITS,
LIABILITIES, JUDGMENTS, CAUSES OF ACTION AND EXPENSES (INCLUDING ATTORNEYS' FEES
AND OTHER COSTS OF LITIGATION AS WELL AS ANY FEES AND COSTS TO ENFORCE THE
PROVISIONS , OF THIS ORDER) CAUSED BY, ARISING OUT OF, IN CONNECTION WITH OR
INCIDENTAL TO ANY OPERATIONS CONDUCTED PURSUANT TO THIS ORDER, OR RESULTING FROM
OR IN ANY WAY RELATED TO THE WORK PERFORMED HEREUNDER, INCLUDING BUT NOT LIMITED
TO VESSEL AND CARGO OPERATIONS, FOR DAMAGE TO PROPERTY OF BUYER RELATED TO THE
WORK PERFORMED PURSUANT TO THIS AGREEMENT OR PROPERTY OF BUYER WITHIN A 500
METER RADIUS OF THE SITE WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE
SOLE OR CONCURRENT NEGLIGENCE, FAULT OR STRICT LIABILITY WITHOUT FAULT OF BUYER,
VENDOR OR OF ANY PARTY OR PARTIES, INCLUDING BUT NOT LIMITED TO ANY CLAIM(S)
BASED ON THE WARRANTY OF SEAWORTHINESS, AND ANY PRE-EXISTING
CONDITION
D.
POLLUTION LIABILITY
VENDOR,
INCLUDING ITS PARENT COMPANIES, SUBSIDIARIES, AFFILIATES, JOINT VENTURE PARTIES,
CONTRACTORS AND INSURERS SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS BUYER
FOR ANY CLEAN UP COSTS AND DAMAGES CAUSED IN WHOLE OR IN PART BY ANY POLLUTION
EMANATING FROM ANY WORK PERFORMED BY VENDOR INCLUDING ANY PRODUCTS TOOLS OR
EQUIPMENT OWNED BY OR IN THE POSSESSION AND CONTROL OF VENDOR ARISING OUT OF OR
IN ANY WAY RELATED TO ANY WORK OR SERVICES PERFORMED BY VENDOR UNDER THIS
AGREEMENT REGARDLESS OF THE NEGLIGENCE, FAULT OR STRICT LIAIBLITY OF VENDOR,
BUYER OR ANY OTHER PARTY.
Any
provisions shall not limit the obligations, indemnities, and liabilities assumed
by VENDOR under this agreement or limits of insurance required below and shall
survive the termination of this Agreement.
If it is
judicially determined that any of the indemnity obligations under this Agreement
are invalid, illegal or unenforceable in any respect, said obligations shall
automatically be amended to conform to the maximum monetary limits and other
provisions in the applicable law for so long as the law is in
effect.
E.
|
CONSEQUENTIAL
DAMAGES
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Notwithstanding
anything to the contrary contained elsewhere herein, neither VENDOR nor BUYER
shall be liable to the other for any consequential, incidental, indirect or
punitive damages of any kind or character, including, but not limited to, loss
of use, loss of profit, loss of revenue, loss of product or production,
reservoir damage, or loss of hole damage due to blowout or cratering, whenever
arising under this Agreement or as a result of, relating to or in connection
with the work hereunder, and no claim shall be made by either VENDOR or BUYER
against the other or their subcontractors of any tier, other VENDORS, or
insurers and REGARDLESS OF WHETHER SUCH CLAIM IS BASED OR CLAIMED TO BE BASED ON
NEGLIGENCE WHETHER ACTIVE, PASSIVE, SOLE, JOINT, ACTIVE, PASSIVE, CONCURRENT OR
GROSS NEGLIGENCE), UNSEAWORTHINESS, UNAIRWORTHINESS, FAULT, BREACH OF WARRANTY,
BREACH OF AGREEMENT, STATUTE, STRICT LIABILITY OR OTHERWISE.
INSURANCE
VENDOR
shall at its own expense provide insurance as required herein in the minimum
amounts as indicated.
|
A.
The term BUYER in this article shall include its parent, subsidiaries,
affiliates, any joint venture party with BUYER, and any of the directors,
officers and employees of BUYER.
|
|
B.
With respect to policies, terms, amendments and endorsements set forth
herein.
|
|
1)
|
An
asterisk (*) indicates coverage is required if VENDOR conducts operations
which are performed on, over or adjacent to navigable waters or which
involve maritime workers.
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20
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2)
|
A
double asterisk (**) indicates coverage is required if VENDOR conducts
Professional Services for a fee. Professional Services are
defined as including, but not limited to, architectural and engineering
services, legal, accounting, data processing, consulting, real estate,
investment advisory services, medical, geologic and seismic consulting
services.
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|
3)
|
A
triple asterisk (***) indicates coverage is required when
VENDOR uses aircraft in its operations. Aircraft is defined as
a landplane, seaplane, amphibian or rotorcraft used by VENDOR whether it
be owned, hired or leased.
|
|
C.
Any references to VENDOR or obligations of VENDOR hereunder shall include
and be applicable to contractors of
VENDOR.
|
|
D.
VENDOR shall at the request of BUYER provide certificates of insurance
evidencing the insurance requirements
herein.
|
The
following shall apply to all policies:
A.
|
BUYER
shall be included as an additional insured on VENDOR’S policies (except
Workers’ Compensation and Professional Liability
coverage). VENDOR’S policies shall contain a waiver of
subrogation in favor of BUYER.
|
B.
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Thirty
days advance written notice must be given to BUYER in the event of
cancellation or material change in VENDOR’S
policies.
|
C.
|
VENDOR
maintains insurance at VENDOR’S sole cost including deductibles or
self-insured retentions.
|
D.
|
Coverage
under all insurance required to be carried by VENDOR shall be primary
insurance and underlying to any other existing valid and collectible
insurance available to BUYER.
|
E.
|
All
policies described below shall have adequate territorial and navigation
limits for the location of the work, including operations in the Gulf of
Mexico and Alaska.
|
F.
|
If
this agreement is subject to anti-indemnity statutes in jurisdictions,
including, but not limited to, Texas, Louisiana or Wyoming, the following
will apply:
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G.
|
VENDOR
shall have BUYER billed directly by VENDOR’S insurance agent or broker in
the amount required for BUYER to be named an additional insured which
shall be the actual cost of the insurance for such
coverage.
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H.
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BUYER
shall have VENDOR billed directly by BUYER’S insurance agent or broker in
the amount required for VENDOR to be named an additional insured which
shall be the actual cost of the insurance for such coverage. In
the alternative, should BUYER choose to be self-insured, then BUYER shall
charge VENDOR that sum which represents the cost for the coverage to
VENDOR as an additional insured which shall be the actual cost for such
coverage.
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I.
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BUYER’S
Acceptance of VENDOR’S certificates of insurance or other forms of
evidencing insurance shall not constitute acceptance of the adequacy of
coverage or imply VENDOR is in compliance with the requirements of the
Agreement or an amendment to the
Agreement.
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J.
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If
it is judicially determined that any of the insurance obligations under
this Agreement are unenforceable in any respect under applicable law, said
obligations shall automatically be amended to conform to the maximum
limits and other provisions in the applicable law for so long as the law
is in effect. The liability and indemnity provisions contained in this
Agreement shall not limit these insurance
requirements.
|
K.
|
VENDOR
shall require its contractors to comply with these insurance coverage
requirements, and any deficiency thereof shall not relieve VENDOR of its
responsibility to satisfy BUYER’S
requirements.
|
VENDOR
shall maintain the following policies, terms, amendments and
endorsements:
A)
Workers’ Compensation and Employer’s Liability, to include:
1)
Statutory Workers’ Compensation for State of Hire/Operation,
2)
Employer’s Liability,
3) * U.S.
Xxxxxxxxx and Harbor Workers’ Compensation Act Coverage,
4) *
Outer Continental Shelf Lands Act,
5) * Gulf
of Mexico Territorial Extension,
6) *
Maritime Employer’s Liability Including Transportation, Wages, Maintenance and
Cure,
7) * “In
Rem” Endorsement,
8) *
Death on the High Seas Act, and
9) *
Xxxxx Act.
B)
Commercial General Liability, to include but not limited to:
1) Bodily
Injury and Property Damage,
2)
Products/Completed Operations,
3)
Contractual Liability,
21
4) Sudden
and Accidental Pollution Endorsement,
5)
*Non-Owned Watercraft Coverage Without Restrictions on Operations,
and
6) * “In
Rem” Endorsement.
C)
Automobile Liability, to include but not limited to:
1) Owned
Vehicles,
2)
Non-Owned Vehicles,
3) Hired
Vehicles, and
4) MCS-90
coverage endorsement where hazardous material transportation is
involved.
D) *Hull
and Machinery, to include but not limited to:
1) * Full
Tower’s Liability If Towing Vessel, and
2) *
Deletion of Any “As Owner” Clause and Other Language That Limits Coverage to the
Liability of an Insured “As Owner of the Vessel”.
E)
*Protection and Indemnity Insurance (or equivalent) subject to:
|
1)
* Deletion of Any “As Owner” Clause and Other Language That Limits
Coverage to the Liability of an Insured “As Owner of the Vessel”,
and
|
|
2)
* Third Party Bodily Injury and Property Damage Pollution
Liability.
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F)
***Aircraft Liability, to include but not limited to:
1) ***
Owned Aircraft,
2) ***
Non-Owned Aircraft,
3) ***
Hired Aircraft,
4) ***
Passenger Liability,
5) ***
Contractual Liability, and
6) ***
Fixed Wing/Rotary Aircraft.
G)
**Professional Liability (Errors and Omissions):
H)
VENDORs Pollution Liability, to include but not limited to:
1) Sudden
and accidental releases,
2)
Gradual releases, and
3)
Clean-up cost.
Each
of the policies, which VENDOR is required to carry, shall contain the following
minimum limit.
REQUIRED INSURANCE
COVERAGE:
|
Minimum
limits
|
Workers’
Compensation Statutory Employer’s Liability
|
$1,000,000
|
*
Maritime Employer’s Liability
|
$1,000,000
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Commercial
General Liability, Bodily Injury & Property Damage
|
$5,000,000
|
Automobile
Liability, Bodily Injury & Property Damage
|
$5,000,000
|
*
Hull & Machinery
|
Replacement
Vessel Value
|
*
P&I – Collision/Towers
|
$150,000,000
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VENDOR’S
Pollution Liability
|
$5,000,000
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***
Aircraft Liability
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$150,000,000
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**
Professional
Liability
$1,000,000
Construction
All Risk (“CAR”) Insurance.
BUYER
reserves the right to purchase CAR insurance for an individual capital
expenditure project that will automatically include coverage for
VENDOR. If BUYER purchases CAR insurance, then a special CAR
insurance exhibit will be added to this agreement describing the CAR Program,
VENDOR’S obligations under the CAR program, amendments to the insurance
requirements in this Article 13, and related adjustments to insurance
charges.
USE
OF PREMISES
VENDOR
shall perform all Services in such manner as to cause minimum interference with
the operations of BUYER and of other VENDORs on the premises, and shall take,
and cause VENDOR’S and every contractor's employees, agents, licensees, and
permittees to take, all necessary precautions (including those required by
BUYER’S safety regulations) to protect the premises and all persons and property
thereon from damage or injury. VENDOR confirms that safety shall
be
22
a primary
consideration in its performance of Services hereunder, and shall meet with
appropriate BUYER personnel to review all site-specific safety regulations prior
to the performance of Services. VENDOR shall investigate accidents
(and/or cooperate with BUYER in conducting investigations of accidents) that
arise out of VENDOR’S Services hereunder and provide copies of non-privileged
accident reports it produces in response to any such
investigations. Upon completion of the Work, VENDOR shall leave the
premises clean and free of all equipment, waste materials and
rubbish.
BILLS
AND LIENS
VENDOR
shall pay promptly all indebtedness for labor, materials and equipment used in
performance of the Services. VENDOR shall not be entitled to receive final
payment from BUYER, until VENDOR furnishes evidence satisfactory to BUYER of
full payment of such indebtedness. VENDOR shall not permit any lien
or charge to attach to the Services or the premises; but if any does so attach,
VENDOR shall promptly procure its release, and indemnify BUYER against all
damage and expense incident thereto.
COMPETITIVENESS
AND PRICE WARRANTY
VENDOR
warrants that it shall remain competitive in terms of the pricing, quality,
capacity, and delivery of Goods and Services provided to BUYER
hereunder. VENDOR also warrants that the prices for Goods or Services
are no less favorable than those extended by VENDOR to any of its other
customers for the same or similar Goods or Services in similar
quantities. VENDOR further warrants that if it reduces its prices to
other customers for the same or similar Goods or Services during the term
hereof, VENDOR shall reduce its prices to BUYER
correspondingly. BUYER shall have the right to audit or review
VENDOR’S competitiveness at any time during the term of this
Agreement. Should BUYER determine in good faith that VENDOR has
failed to remain competitive, and VENDOR fails to cure said lack of
competitiveness within a reasonable time, not to exceed thirty (30) days, then
BUYER may immediately terminate this Agreement for cause pursuant to Article
7.
AGREEMENT
RELEASES
No
substitutions of any kind (design, material etc.) are acceptable without written
prior approval from appropriate BUYER representative.
|
BUYER
representatives may issue releases for Goods and/or Services against this
Agreement using:
|
|
a)
|
Verbal
request with a follow-up written
confirmation;
|
|
b)
|
Written
Release Document; or
|
|
c)
|
Computer-generated
Release Document (e.g., Electronic Data Interchange or
“EDI”).
|
Authorized
BUYER VENDORs may also purchase Goods and/or Services against this Agreement for
BUYER’S end-use. Referencing this Agreement number will facilitate
application of the proper pricing.
This
Agreement does not commit BUYER to make any purchases or request any Goods or
Services hereunder. All orders are subject to acceptance or rejection
by VENDOR.
All terms
and conditions of this Agreement apply to all releases unless the BUYER Release
Document specifically states otherwise.
SUSPENSION
BUYER may
require VENDOR to suspend Work hereunder for such period as BUYER may
direct. In the event of such suspension, the parties shall confer and
mutually agree as to the period by which the scheduled completion date and price
are to be adjusted.
CONFIDENTIAL
INFORMATION
VENDOR
and BUYER will not, without the prior written consent of the other, either (a)
disclose the other’s proprietary or commercially sensitive information
(“Confidential Information”) to anyone other than those officers, employees,
agents, or contractors who need to know it in connection with performance of
this Agreement and have agreed to be bound by these obligations of
confidentiality or (b) use the other’s Confidential Information for any purpose
other than performance of this Agreement. For purposes of this
Agreement, all data, maps, reports, drawings, specifications, records, technical
information, and computer programs/software concerning BUYER’S operations,
processes or equipment that are provided
23
by BUYER
and/or acquired or handled by VENDOR in connection with this Agreement shall be
deemed Confidential Information of BUYER.
Where
VENDOR and BUYER have entered into an Information Technology (“IT”) Security
Agreement, VENDOR employees who have been authorized in writing by BUYER to use
and/or access BUYER IT resources (“Authorized Users”) will have the right to
access and use those BUYER IT resources as may be provided by BUYER for VENDOR
to fulfil its obligations hereunder. Each Authorized User’s use and
access to the BUYER IT resources shall be in accordance with BUYER’S
“Information Technology Security Policy Statement” and the IT Security
Agreement. Failure of an Authorized User to comply with such
requirements may, at BUYER’S sole discretion, result in the immediate
termination of this Agreement or in the termination of use and access rights of
VENDOR’S employees to BUYER’S IT resources. BUYER, at its own
expense, shall have the right to audit VENDOR’S use of BUYER’S IT system and
resources. VENDOR shall cooperate with BUYER in performing such
audits.
INDEPENDENT
VENDOR
Except as
otherwise expressly set forth herein, neither VENDOR nor anyone it employs shall
ever be considered BUYER’S employee, agent, servant, or representative in
performing Services under this Agreement. VENDOR’S personnel will not
be eligible to participate in any of BUYER’S employee benefit plans or to
receive any benefits under those plans. In the event that any federal
or state court or agency holds VENDOR to be an employee of BUYER for any
purpose, VENDOR expressly waives any right to participate in or claim any
benefits from any such plans of BUYER.
To the
maximum extent permitted by law, VENDOR shall defend, indemnify and hold
harmless BUYER, its parent, affiliates, and subsidiary companies, coventurers,
and directors, employees and agents of such companies against any loss, damage,
claim, suit, liability, judgment and expense (including but not limited to
attorneys' fees and other costs of litigation), and any fines, penalties,
assessments, arising out of any claim of coverage or eligibility under any of
BUYER’S benefit plans, including without limitation, benefits under any employee
pension benefit plans or employee welfare benefit plans, as defined under the
Employee Retirement Act of 1974, as amended from time to time, or any fringe
benefit plans or any other benefits extended to employees of BUYER and/or its
parent, affiliates and subsidiary companies, which claim of coverage or
eligibility is made directly or indirectly by any of VENDOR’S employees,
contractors or agents.
VENDOR
shall be an independent VENDOR with respect to the performance of work or
services under this agreement. Neither VENDOR nor its contractors
shall be deemed for any purpose to be the agent or representative of BUYER for
any work or services performed herein. BUYER further reserves no
right to supervise or control the details of the work or services provided by
VENDOR or its contractors.
STATUTORY
EMPLOYER PROVISION FOR SERVICES PERFORMED IN LOUISIANA
BUYER and
VENDOR agree that while VENDOR and any of its employees, agents, or contractors
are performing Services under this Agreement in Louisiana such work in whole or
in part is a part of the trade, business or occupation of BUYER and is an
integral part of and essential to the ability of BUYER to generate its goods,
products, and services. BUYER or any of its subsidiaries or
affiliates involved in the Services performed hereunder in Louisiana shall be
considered a Statutory Employer within the meaning set forth in La. Rev. Stat.
23:1061 of those employees, agents, and contractors of VENDOR performing
Services hereunder in Louisiana and such employees, agents, and contractors
shall be considered Statutory Employees as the meaning is set forth in La. Rev.
Stat. 23:1061.
LABOR
RELATIONS FOR SERVICES AT BUYER’S FACILITIES
VENDOR
will promptly inform BUYER about any labor disputes, expected labor disputes, or
requests or demands from labor organizations that could reasonably affect
Services under this Agreement at BUYER’S facilities. During
negotiation, before making any commitments, VENDOR will advise BUYER about
agreements or understandings with local or national labor organizations that
could affect the Services.
BUYER
reserves the right to restrict VENDOR’S hiring more workers, and to suspend or
terminate work, in situations where a labor dispute may adversely affect work
progress.
MINORITY
OWNED AND WOMEN OWNED BUSINESS ENTERPRISES EXPENDITURES
VENDOR
acknowledges that BUYER sets goals and tracks goods/services purchased from
Minority and Women-owned Business Enterprises (“M/WBE”). VENDOR
agrees to use its best efforts to support M/WBE purchasing and support BUYER
goals as follows:
24
A.
|
VENDOR
will establish spend targets associated with the purchase of material and
services from M/WBE vendors or actionable goals that will be used in
assessing VENDOR performance of this Agreement. Vendor agrees to make good
faith efforts to place/award a mutually agreed percentage of the total
dollar amount of the VENDOR’S Agreement related purchases of services and
materials from qualified M/WBEs. The M/WBE spend or actionable targets
will be mutually agreed upon by BUYER and VENDOR based upon potential
opportunity. Upon BUYER’S request, VENDOR shall provide
information supporting M/WBE spend or actionable targets and M/WBE
certification status associated with the vendors utilized in performance
of the Agreement
|
B.
|
VENDOR
is expected to substantiate ownership status of utilized M/WBEs through a
certification process. M/WBEs with subcontracted materials and
services totaling $100,000 or greater annually must be certified through
one of the approved certification agencies listed
below.
|
If the
vendor being utilized is a certified M/WBE, a current copy of the certification
must be available upon BUYER’S request. If the vendor is not yet
certified as a Minority-owned Business Enterprise or Women-owned Business
Enterprise, the VENDOR will accept certification through either the National
Minority Supplier Development Council (for minority-owned businesses) or the
Women's Business Enterprise National Council (for women-owned businesses) and
their affiliates.
Alaska
Residents
BUYER
encourages employing qualified Alaska residents for work under this agreement.
VENDOR should submit a local employment-staffing plan for this work, describing
the planned mix of Alaska residents and non-residents. An Alaska resident is a
person domiciled in Alaska who intends to continue as such. VENDOR agrees to
keep employment records during this agreement, and for a reasonable time after
completion, and to make the records available to VENDOR each quarter and on
completion of the work
HEADINGS
The
article headings in this Agreement are solely for convenience and shall not be
considered in its interpretation. Unless the context clearly
indicates otherwise, words used in the singular include the plural and words in
the plural include the singular.
CONTINUING
OBLIGATIONS
All
warranty, withholding and enforcement, liability, indemnity, intellectual
property, confidentiality, audit, and dispute resolution obligations and
responsibilities assumed by the parties during the term of this Agreement shall
survive the termination or expiration hereof.
WAIVER
Except as
expressly provided for, no waiver shall be deemed to have been made by either
party unless expressed in writing and signed by the waiving
party. The failure of either party to insist in any one or more
instances upon strict performance of any of the terms or provisions of this
Agreement, or to any option or election herein contained, shall not be construed
as a waiver or relinquishment for the future of such terms, provisions, option
or election. No waiver by any party of any one or more of its rights
or remedies under this Agreement shall be deemed to be a waiver of any prior or
subsequent rights or remedies hereunder or at law. All remedies
afforded in this Agreement shall be taken and construed as cumulative; that is,
in addition to every other remedy available at law or in equity.
DELIVERIES
Unless
otherwise specified, all deliveries shall be in strict accordance with this
Agreement or any BUYER Release Documents. If delivery dates cannot be
met, VENDOR shall promptly inform BUYER in writing of any anticipated or actual
delay, the reasons for the delay and the actions being taken to overcome or to
minimize the delay. If BUYER does not approve alternate delivery
dates, BUYER shall have the right to cancel this Agreement without further
liability, purchase elsewhere, and hold VENDOR accountable for all direct
damages resulting from VENDOR’S failure to meet the original delivery
dates. Upon delivery to BUYER, VENDOR shall convey clear title to the
Goods, free of any lien, encumbrance or security interest.
When this
Agreement is applied to purchases in the United States for use outside the
United States in countries legally recognized by federal law, the BUYER will be
responsible for all additional direct costs for export. Indirect
additional costs
25
will be
negotiated on an individual basis. The parties will abide by all
applicable export control regulations of the United States Department of
Commerce and other agencies concerning the export or re-export of United States
source technical data or software, or the direct product thereof, to
unauthorized destinations.
SEVERABILITY
If any of
the provisions of this Agreement shall be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate or render unenforceable the
entire Agreement, but rather the entire Agreement shall be construed as if not
containing the particular invalid or unenforceable provision or provisions, and
the rights and obligations of each party shall be construed and enforced
accordingly.
ENTIRE
AGREEMENT
This
Agreement, its attachments and the BUYER Release Documents entered into
hereunder set forth the entire agreement between BUYER and VENDOR with respect
to the supply of the Goods and Services by VENDOR to BUYER from the Effective
Date and supersede and replace any other agreement or understanding in respect
of such subject matter whether in writing or otherwise, entered into or existing
prior to the Effective Date. Neither this Agreement nor any BUYER
Release Document hereunder shall be altered, amended or modified except in
writing duly signed by both parties.
26
Attachment
1
February
4, 2009
Via
email: X.Xxxxxxx@xxxxx.xxx
Xxxx.xxxx@xxxxx.xxx
Xx.
Xxxxxxxxxxx Xxxxxxx
Shell
Rocky Mountain Production, LLC
0000 X.
Xxxxxx Xx. Xxxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000
Re: Proposed
Letter of Intent
Particle
Impact Drilling (PID) Bit Development Program & Commercial Field
Trial
Xxxxxxxxx
County, New Mexico
Dear Xx.
Xxxxxxx:
Confirming
our recent meeting, this letter sets forth framework for a proposed agreement
between
Shell Rocky Mountain Production,
LLC and/or its affiliates ("Shell") and Particle Drilling
Technologies Inc. ("PDT") for
the purposes set forth herein. Accordingly, in consideration of the
mutual
benefits to be recognized by the parties to this agreement, PDT proposes the
following
business
arrangement:
l. This
agreement shall have an initial term of two (2) years;
2. The
purpose of this agreement is to develop a new size drill bit for Particle
Impact
Drilling
("PlD") and to conduct a PID field trial operation at Shell`s drilling area
in
Xxxxxxxxx
County, New Mexico, or such other area as may be mutually agreed
upon
(the
"Project Area") in an endeavor to improve drilling efficiency, improve well
bore
verticality
and decrease cost. The key criteria that will be evaluated for PID
performance
are set forth below:
|
a.
Improve / maintain verticality of the well
bore
|
|
b.
Increase drilling penetration rates
|
|
c.
Improve PID productive drilling
time
|
|
d.
Improve length of bit runs
|
3. PDT
shall design, test and manufacture four (4) PID Bits. It is anticipated these
bits
will
consist of two (2) separate designs, unless one is inherently preferable. The
bits
will
range in size from 6" to 6.5" as determined by Shell.
4. PDT
shall conduct a trial at the Project Area for drilling an interval (the
"Target
Interval")
as will be mutually agreed upon for applying the PID operation. The
trial
shall
include making two (2) to four (4) PID Bit runs;
27
Xx.
Xxxxxxxxxxx Xxxxxxx
Shell
— Particle Drilling
November
I0, 2008
Page
2 of 3
5. In
connection with the cost estimates set forth in the PID Bit development and
field
trial
budget set forth in Exhibit A, Shell elects to contribute funding to PDT for
the
initial
amount of $400,000 for Field Trial l as follows:
a. two
hundred thousand dollars ($200,000.00) upon submittal and
presentation
of
technical progress review;
b. one
hundred fifty thousand dollars ($150,000.00) upon delivery of the
field
bits
prior to mobilization for the field trial, and
c. up
to fifty thousand dollars ($50,000) within thirty business days
following
the
completion of the field trial based on key performance indicators
per
Section
II of Agreement 4610021484
6. At
the end of Field Trial 1 above, Shell and PDT will determine whether further
field
trials
are needed. At Shell discretion, field trials (Field Trial 2 & 3) may be
planned at
the
following Field trial costs:
a. Estimated
twenty eight thousand dollars ($28,000.00) per bit developed
b. seventy
five thousand dollars ($75,000.00) upon delivery of the field bits
prior to
mobilization for the field trial
c. up
to fifty thousand dollars ($50,000.00) within thirty business days
following
the completion of the field trial based on key performance
indicators
per Section II of Agreement 4610021484
7. Prior
to conducting the field operation at the Project Area, PDT shall meet
with
personnel
from Shell on a periodic basis or as may be reasonably requested by Shell
to
provide
progress updates and/or technical review;
8. At
any time within two years following completion of the PID field trial
contemplated
herein,
Shell will have the right to either:
a. Enter
into a renewal of this agreement or another non-binding joint
development
agreement with PDT whereby Shell would provide additional
funding
to PDT and PDT providing further PID development work in
coordination
with Shell towards the commercialization of the PID
technology.
ln this event, PDT agrees to provide up to another two (2) field
trial
operations at cost, as more particularly defined in Exhibit B;
and/or
b. Have
first call on PDT equipment and services relative to the first two
(2)
systems
built and deployed on a commercial basis for a period of two (2)
years.
BUYER holds right to use VENDORS equipment/services at cost
plus 10%
for duration of Agreement 4610021484
28
Xx.
Xxxxxxxxxxx Xxxxxxx
Shell
— Particle Drilling
November
I0, 2008
Page
3 of 3
i. In
the event Shell does not utilize or plan to utilize a PID system
fifty
percent
(50%) or more of the time during two (2) or more
consecutive
months, PDT shall have the right to offer its PID
equipment
and services to other clients.
For the
purpose of this agreement, PDT’s cost as outlined on Exhibit B is
an
estimate
only and the actual costs may be more or less. PDT shall provide
Shell
detail of all such actual charges during the term of this agreement;
or
c. Terminate
this agreement, thereafter there being no further obligations on
the
part of
either party.
9. All
intellectual property, patents and pending patents owned by PDT at the time of
this
agreement
and all such property that may be further developed by either party
during
the term
of this agreement, to the extent it pertains to the particle impact bit
and/or
particle
impact system, shall be the property of PDT.
10. For
the purpose of defining field trial operations conducted pursuant to this
agreement
("PID
operations"), it is understood such operation will deemed to have commenced
at
such time
the PID bit is tripped in the hole and ready to drill and during such time
PDT
is
conducting PID drilling, including subsequent PID bit runs. PID operations will
be
deemed to
have terminated at such time the decision is made by Shell or PDT
to
terminate
the PID operation and the PID bit is tripped out of the hole.
Please
advise if these terms are acceptable or if you would like to discuss the
proposal in more
detail.
Sincerely,
Particle
Drilling Technologies Inc.
Xxxxxx X.
Xxxxxxxx
Senior
Vice President, Corporate Development
29