EXHIBIT 10.16
SERVICE AND SECONDMENT AGREEMENT
This Agreement, entered into as of the 26 day of July , 2004, by and between
Transocean Offshore International Ventures Ltd. with offices at Xxxxx Xxxxx
Xxxxxxx Xxxxxxxx #0, Xxxxx #0 Xxxxx Xxxx, Xx. Xxxxxxx, Xxxxxxxx ("Company")
and Cliffs Drilling Trinidad Offshore Limited with offices located at
2 1/4 MM South Trunk Road, La Romain, Trinidad ("Contractor"),
W I T N E S S E T H:
WHEREAS, Company has entered into a contract with British Gas Trinidad and
Tobago Limited and British Gas International Limited ("Company's Client") for
the drilling, completing, and reworking oil and gas xxxxx offshore Trinidad and
Tobago(the "Drilling Contract"); and
WHEREAS, Company desires to acquire certain services and utilize certain
personnel of Contractor or its affiliates ("Work"); and
WHEREAS, Contractor is willing to provide such services;
NOW THEREFORE, in consideration of the mutual promises and obligations
herein contained, the parties agree as follows:
1. Administrative Services.
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During the term of the Drilling Contract, Contractor or its affiliates
will provide Company with certain facilities and administrative services
to facilitate Company's performance of the Drilling Contract. The
facilities and administrative services to be
provided (the "Work") are set forth in detail in Exhibit A, attached
hereto and made a part hereof.
2. Seconded Personnel.
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Contractor through its affiliates shall furnish to Company mutually
acceptable personnel of the classifications requested by Company for the
performance of work onboard Company's Drilling Unit (the "Seconded
Personnel"). Although such personnel shall be seconded to Company,
Contractor remains their legal employer and shall be responsible for
payment of their salaries and benefits. Company shall reimburse
Contractor's actual salary and benefit cost as well as any documented cost
(and any VAT required to be paid with respect to such reimbursement, if
applicable) incurred by Contractor or its affiliates in connection with
the Seconded Personnel for the period(s) during which each such person is
seconded to Company pursuant to this Agreement. Although the Seconded
Personnel shall remain the employees of Contractor while working for
Company pursuant to this agreement, the Seconded Personnel will work under
the direct supervision and control of Company.
3. INDEPENDENT CONTRACTOR.
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Contractor shall be an independent contractor with respect to the
performance of all Work for Company hereunder. Neither Contractor, its
principals, agents, partners, or subcontractors nor its or their employees
shall be servants, agents, or employees of Company. Company shall have no
direction or control of such parties, except for monitoring the results to
be obtained and in Company's general right of inspection to require that
the Work is being performed in accordance with this Agreement and any
applicable Work Order.
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4. COMPLIANCE WITH LAWS.
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Contractor shall comply and ensure that all of its subcontractors and its
employees and agents comply with all applicable laws, rules, and
regulations of any governmental authority which are now or may become
applicable to operations arising out of or in any way incident to
Contractor's Work.
5. DAYRATE AND PAYMENT.
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In consideration for the performance of the Work, Company shall pay
Contractor a daily rate of US$2,750 per day from the commencement date of
operations under the Company Drilling Contract with Company's Client in
Trinidad and ending on the date of termination of operations of the
Drilling Unit in Trinidad or on the date of termination of the Drilling
Contract. Company shall pay Contractor any documented costs associated
with the work other than for administrative and support work as detailed
in Exhibit A prior to the commencement date and after the date of
termination. On the commencement date hereof, Company shall advance
Contractor a mutually agreed amount that is sufficient to ensure that
Contractor will be working capital positive for the duration of the
contract. Company will increase the balance of advance payment into
working capital during the contract period as and when required by mutual
consent. Thereafter, Company shall pay invoices within thirty (30) days
after receipt. The Advance Payment will be credited against Contractor's
final payment hereunder. Any excess shall be repaid to Company concurrent
with delivery of such final invoice. In the event Company should dispute
any part of an invoice, undisputed portions thereof shall be paid; and
upon resolution of all disputed items, a supplemental invoice will be
submitted to Company for payment.
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6. RECORDS RETENTION; AUDIT.
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Contractor shall support all invoices a summary statement each month.
Contractor agrees to retain all applicable documentation and records for a
period of not less than two (2) years after completion of the Work.
Company or any party with which Company is rendering services or under
contract shall be entitled to audit and examine all documents and/or
records necessary to verify the correctness of charges contained in any
invoice. The payment of an invoice shall not preclude Company's right to
audit any charge during said two-year period.
7. TAXES.
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Except to the extent Company is required to reimburse Contractor for such
costs pursuant to Clause 2, above, or Exhibit A attached hereto, each
party shall pay all taxes, duties, licenses, and fees levied, assessed,
and/or incurred by it directly or indirectly with respect to its
operations which are imposed on it by any governmental authority. VAT,
Municipal or other revenue based taxes incurred by Contractor in
connection with reimbursable expenses shall be for the account of Company.
8. INSURANCE.
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During the term of this Agreement, Contractor shall maintain at its sole
expense the minimum insurance coverage specified in Exhibit "B" with
underwriters acceptable to Company, and under the terms of coverage
specified, all of which is adopted herein. Except as provided by law, the
limits specified therein shall in no way limit liabilities or obligations
of Contractor for claims arising from performance of this Agreement.
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9. ACCIDENTS.
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Contractor shall report to Company as soon as possible all accidents or
occurrences resulting in injuries to or property damage of any third
party, Company, Contractor, and/or their employees or agents arising out
of or incident to Work furnished pursuant to this Agreement. Contractor
shall furnish Company with copies of all reports submitted to Contractor's
insurer.
10. SAFETY.
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Contractor shall comply, notify, and require its subcontractors and its
and their employees, invitees, and agents to comply with Company's safety
rules and procedures, including its Corporate Policy Directive (Exhibit
"D") which prohibits possession of contraband items in work areas.
11. FORCE MAJEURE.
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Each party hereto shall be excused from performance under this Agreement
for so long as such performance is hindered or impeded by a force majeure
event (other than payment of amounts due hereunder). As used in this
Agreement, a "force majeure" event includes riots, strikes, wars,
terrorist acts, civil disturbances, governmental authority (whether such
authority be actual or assumed), fires, floods, storms, other acts of God,
or such other causes which are reasonably beyond the control of the party
affected. Any party to this Agreement which is unable, in whole or in
part, to carry out its obligations under this Agreement due to force
majeure shall promptly give written notice to that effect to the other
party stating in reasonable detail the circumstances underlying such force
majeure. Any party to this Agreement claiming force majeure shall
diligently use all reasonable efforts to remove the cause of such force
majeure, shall promptly give written notice to the
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other party of the termination of such force majeure and shall resume
performance of any suspended obligations as soon as reasonably possible
after termination of such force majeure. If any such force majeure delay
extends beyond a period of ten (10) days, Company may, at its sole option,
terminate this Agreement by notice thereof to Contractor.
12. TERMINATION.
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Company may terminate this Agreement by providing thirty (30) days prior
written notice to Contractor . Such termination shall not relieve either
party of obligations accrued, including compensation for services
performed hereunder prior to the time such termination becomes effective.
13. INDEMNITY.
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A. Contractor shall defend, release, indemnify and hold harmless
Company, and Company's Client, their parents, subsidiaries,
affiliates, officers, directors, agents or employees, from and
against all liens, claims, demands, causes of action, costs,
expenses or losses (including but not limited to attorneys' fees)
pertaining to, for or on account of injury to, illness or death
of employees (other than Seconded Personnel), or agents of
Contractor, or anyone brought onto Company's work site by
Contractor, its affiliates and subcontractors, or loss or damage
to property of Contractor, its affiliates and subcontractors
which arise from, are incident to or result directly or
indirectly from the performance of the Work, the presence of the
above individuals at any job or work site, or transportation to
or from such locations, performance of this Agreement, or breach
hereof.
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B. Except as provided in paragraph A, above, Company shall defend,
release, indemnify and hold harmless Contractor, its parents,
subsidiaries, affiliates, officers, directors, employees and
agents from and against all liens, claims, demands, causes of
action, costs, expenses or losses (including but not limited to
attorneys' fees) pertaining to, for or on account of injury to,
illness or death of any person, including without limitation,
employees (including Seconded Personnel), or agents of Company,
Company's Client, their affiliates or other contractors, or loss
or damage to property of any person, including without
limitation, Company, Company's Client, their affiliates or other
contractors, or Seconded Personnel which arise from, are incident
to or result directly or indirectly from the performance of the
Drilling Contract, the presence of the above individuals at any
job or work site, or transportation to or from such locations,
performance of this Agreement, or breach hereof.
D. All indemnities under this Agreement (I) shall be supported by
equal amounts of available liability (or other appropriate)
insurance to be carried by the indemnifying party at its own
expense and (ii) shall survive and not be affected by termination
of this Agreement or completion of the Work. If it is judicially
determined that the monetary limits of insurance required
hereunder or the indemnities or releases assumed under this
Agreement exceed the maximum monetary limits or scope permitted
under applicable law, it is agreed that said insurance
requirements or indemnities or releases shall automatically be
amended to conform to the maximum monetary limits or scope
permitted under such law.
E. THE ALLOCATIONS OF RISK CONTAINED IN THIS AGREEMENT SHALL APPLY
NOTWITHSTANDING THE SIMPLE, GROSS, SOLE, JOINT OR CONCURRENT
NEGLIGENCE OF ANY PERSON OR PARTY
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(REGARDLESS OF WHETHER SUCH PERSON OR PARTY IS AN INDEMNITEE OR
NOT), THE UNSEAWORTHINESS OR OTHER FAULT OF ANY VESSEL, "RUIN," OR
STRICT LIABILITY, LIABILITY IMPOSED BY STATUTE, DEFECTS IN PREMISES,
EQUIPMENT OR MATERIAL, OR ANY OTHER EVENT OR CONDITION WHETHER
ANTICIPATED OR UNANTICIPATED AND REGARDLESS OF WHETHER PRE-EXISTING
THIS AGREEMENT.
14. LIMITATION OF DAMAGES.
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IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES RESULTING FROM OR ARISING FROM REPAIR OR
REPLACEMENT OF THE WORK PERFORMED BY CONTRACTOR, INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFIT OR BUSINESS INTERRUPTIONS, HOWEVER SAME MAY BE
CAUSED.
15. ASSIGNMENT.
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This Agreement shall be binding upon the parties, their successors, and
assigns; provided, however, that Contractor shall not assign this
Agreement or any part of any Work for Company without Company's prior
written consent. The subcontracting of any portion of the Work to be
provided by Contractor shall not relieve Contractor from any of its
obligations to perform in accordance with this Agreement, or relieve
Contractor of any other obligations under the contract.
16. GOVERNING LAW.
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THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE GENERAL MARITIME LAW AND STATUTES OF THE UNITED STATES WHERE
APPLICABLE, EXCLUDING, HOWEVER, ANY
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CONFLICTS OF LAW RULES THAT WOULD APPLY THE LAWS OF ANY OTHER
JURISDICTION. IF GENERAL MARITIME LAW DOES NOT APPLY, THIS CONTRACT WILL
BE INTERPRETED UNDER THE LAWS OF TEXAS. VENUE OF ANY LITIGATION SHALL BE
XXXXXX COUNTY, TEXAS. BOTH PARTIES HEREBY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN HOUSTON, TEXAS.
SERVICE ON THE SECRETARY OF STATE MAY BE MADE BY ANY MEANS PERMITTED AS IF
ANOTHER AGENT HAD BEEN APPOINTED IN TEXAS.
17. ENTIRE AGREEMENT.
----------------
This Agreement and the exhibits contain the entire agreement between the
parties relating to the subject work hereof and supersede any previous
undertakings, considerations, writings, specifications, or commitments,
whether oral or in writing. No amendment, modification, or waiver of this
Agreement shall be effective unless it is in writing and signed by an
officer of Company and a duly authorized representative of Contractor.
18. FOREIGN CORRUPT PRACTICES ACT.
-----------------------------
THE PARTIES TO THIS AGREEMENT EACH AGREE THAT THEY WILL AT ALL TIMES
COMPLY WITH THE PROVISIONS OF THE FOREIGN CORRUPT PRACTICES ACT OF 1977,
AS AMENDED, AND IT AND ITS EMPLOYEES AND AGENTS WILL NOT PAY, OFFER OR
PROMISE TO GIVE, OR AUTHORIZE THE GIVING OF ANY SERVICES OR ANYTHING ELSE
OF VALUE, EITHER DIRECTLY OR THROUGH A THIRD PARTY, TO ANY OFFICIAL OR ANY
EMPLOYEE OF ANY GOVERNMENT OR OF ANY GOVERNMENTAL INSTRUMENTALITY, OR TO
ANY POLITICAL PARTY OR OFFICIAL THEREOF OR TO ANY CANDIDATE FOR POLITICAL
OFFICE FOR THE PURPOSE OF (a) INFLUENCING ANY ACT OR DECISION OF THAT
PERSON IN HIS OFFICIAL CAPACITY OR INDUCING SUCH PERSON TO DO ANY ACT IN
VIOLATION OF THE LAWFUL DUTY OF SUCH PERSON, OR (b) INDUCING SUCH
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PERSON TO USE HIS INFLUENCE WITH SUCH GOVERNMENT OR INSTRUMENTALITY TO
AFFECT OR INFLUENCE ANY ACT OF DECISION THEREOF, IN ORDER TO PROMOTE OR
ASSIST IN THE PERFORMANCE OF CONTRACTOR'S OR SUBCONTRACTOR'S OBLIGATIONS
HEREUNDER OR TO OBTAIN OR RETAIN BUSINESS.
19. MODIFICATION.
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In the event any provision of this Agreement is inconsistent with or
contrary to any applicable law, rule, or regulation, said provision shall
be deemed to be modified to the extent required to comply with said law,
rule, or regulation; and as so modified, said provision and this Agreement
shall continue in full force and effect.
20. NOTICES.
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All notices, invoices, and payments shall be sent to the addresses shown
herein above.
21. AUTHORITY.
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Company represents and warrants that it has full and complete authority to
enter into and to perform this Agreement. Contractor represents and
warrants that it has full and complete authority to enter into and to
perform this Agreement. Each person who executes this Agreement on behalf
of Company or Contractor represents and warrants that he or she has full
authority to do so and that Company will be bound thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year herein above first written.
Transocean Offshore International Cliffs Drilling Trinidad
Offshore Ltd. Ventures Ltd.
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxx Xxxxxxx
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Name: Xxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxxx
Title: Vice President Title: Director
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EXHIBIT A-1
Description of Personnel, Facilities and Services to be provided by Contractor
in Trinidad.
Seconded Offshore Personnel
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Contractor will be the legal employer and is responsible for hiring, , training
and coordinating the movements of Offshore Personnel as requested by
Company. Company is responsible for any Human Resources related services
pertaining to Labor and Union issues. Such additional personnel shall be
furnished to Company as Seconded Personnel.
Company shall reimburse Contractor for Seconded personnel at Contractor's
documented cost
Seconded Onshore Personnel
--------------------------
Contractor will be the legal employer and is responsible for hiring and training
additional Onshore Personnel, as mutually agreed between Company and Contractor,
if Company's requirements are such that they cannot be fulfilled with
Contractor's existing staff without compromising Contractor's core business in
Trinidad
Company shall reimburse Contractor for Seconded personnel at Contractor's
documented cost
Office Facilities
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Contractor shall provide Company with office space at Contractor's main offices
in San Romaine, Trinidad furnished and equipped as follows:
Office furniture, including but not limited to chairs, desks, shelves, internet
connection, fixed and mobile phones, fax facility, stationary, other materials
and supplies normally associated with offices.
Yard Space
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Contractor shall provide Company with open and enclosed storage space at its
yard in La Romain Trinidad for storage of Company's equipment and use of
Contractors existing equipment and facilities for movement of equipment and
materials within the yard.
Administration Services
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Contractor will perform the following Administration Services for Company to the
extent feasible with Contractor's existing staff:
o Coordination of Company's 3rd party services, including but not
limited to catering, import/export, visa and work permit, shipping
and logistics, travel etc.
o Secretarial services
o Procurement of materials and supplies as requested by Company
o Logistics support, including but not limited to equipment packaging,
expediting, etc.
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o Travel support, including but not limited to local transportation,
airline ticket reservations & bookings.
o QHSE support.
o IT support and assistance, including but not limited to
internet/intranet access at Contractor's facilities.
o Communications support, including but not limited to mail, courier
services, mobile and fixed phones, fax facilities.
o Finance support, including accounts payable, but excluding accounts
receivables, controlling and rig accounting
o Support for Company's expatriate resident staff, including but not
limited to assistance in obtaining housing, relocation support, car
rental and/or purchase and sale.
o Any other support and services as mutually agreeable between Company
and Contractor
Company shall reimburse Contractor for such materials, supplies or services
acquired at Company's request at Contractor's documented cost or in the absence
of documentation at mutually agreed rates based on the market. (We may have the
materials in our possession and therefore not be acquiring them from a third
party).
Contractor Inventory
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If Company purchases Drilling Unit supplies or equipment from Contractor's
inventories, Company shall pay Contractor for such inventory at the documented
CIF cost.
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EXHIBIT "B"
INSURANCE REQUIREMENTS
Throughout the term of this Agreement Contractor shall maintain the following
insurance unless waived in writing and shall instruct its underwriters to
forward a Certificate of Insurance to, and to provide Company thirty (30) days
advance notice of changes, nonrenewal, or cancellation of such insurance whether
by Contractor or by underwriters. Contractor will ensure that all subcontractors
engaged by it in the performance of this Agreement shall, if not covered by
Contractor's Insurance, secure and maintain all applicable Insurance included
herein. All insurance policies shall contain a waiver of subrogation in favor of
Company, its affiliated companies, and any third parties to whom or for which
Company is under contract or rendering services and/or its and their employees
and agents. All insurance policies, except Worker's Compensation, shall name all
such parties as additional assureds. All such policies shall be endorsed to
provide that additional assureds shall not be liable for premiums and that such
policies shall be primary as to additional assureds, regardless of any "excess"
or "other insurance" clauses therein. The coverage extended an additional
assured shall not be less than that provided to the Contractor. All policies
will cover investigation and defense of claims. All policies will include
contractually assumed liability coverage. Self-insured retention and deductibles
in all Contractor policies shall be for the account of Contractor.
COVERAGE LIMITS OF LIABILITY
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A) Worker's Compensation(1) Statutory Limits
B) Employer's Liability(1)
Bodily Injury
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1. Onshore Operations $1,000,000 each person
$1,000,000 each occurrence
Bodily Injury
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2. Over Water Operations $1,000,000 each person
$1,000,000 each occurrence
C) Comprehensive General Liability
Bodily Injury & Property Damage
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1. Onshore Operations $1,000,000 each occurrence
Combined Single Limit
Bodily Injury & Property Damage
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2. Over Water Operations(2) $1,000,000 each occurrence
Combined Single Limit
D) Automotive Liability Bodily Injury
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(includes coverage for $1,000,000 each person
owned, nonowned and hired $1,000,000 each occurrence
vehicles)
Property Damage
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$1,000,000 each occurrence
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Bodily Injury & Property Damage
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G) Excess Umbrella Liability
All underlying coverages required herein, except Workers Compensation
and Hull and Machinery, to be scheduled under Excess policy
1. Onshore Operations $1,000,000 Combined Single Limit
2. Over Water Operations $5,000,000 Combined Single Limit
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(1) These policies (including occupational disease) shall have the following
endorsements: borrowed servant, voluntary compensation, and alternative
employer. If the Work is performed over water, the policies shall be
endorsed to include coverage for transportation, wages, maintenance and
cure, Xxxxx Act, Death on the High Seas Act and general maritime law claims,
USL&H, including its extension by the Outer Continental Shelf Lands Act, in
rem, territorial extension for all work and transportation areas, and diving
operations.
(2) These policies shall include endorsements for in rem, removal of watercraft
exclusion and "care custody and control/rented - occupied property"
exclusion, territorial extension for all work and transportation areas, and
diving operations. Whenever in the context of a particular claim, the
anti-indemnity provisions of the Xxxxxxxxx & Harbor Workers Compensation
Act, 33U.S.C.A. sec. 905(b), are or might be applicable, the parties
expressly agree and intend that the liability insurance provided and carried
by the Contractor shall name and treat Company (including for this purpose
any Company affiliate, subsidiary, subcontractor, client, agent or employee
which might be treated as a vessel under that statute) as an additional
named insured, shall be primary with respect to any other insurance
available to Company, and shall waive subrogation as to Company, its
subsidiaries, affiliates, clients, or any party as to which Company is
contractually or legally obligated to provide indemnity, their respective
employees and their insurers.
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EXHIBIT "C"
CORPORATE POLICY DIRECTIVE
POSSESSION OF CONTRABAND ITEMS
It is the policy of Company to maintain a safe work environment for its
employees. To this end, the possession of any illegal drug, drug paraphernalia,
alcoholic beverage, explosive, weapon or any other similar item or substance
which could cause or contribute to injury to Company personnel or damage to its
property ("contraband") is strictly prohibited at work locations or other
business premises ("work areas") of Company. This policy may be implemented by
such reasonable means as may from time to time be determined appropriate,
including searches of the person and personal effects of any person.
Compliance with this policy is a condition of employment of Company and
employees who decline to be searched or who are otherwise found in violation of
this policy will be subject to immediate termination. Non-employees who decline
to be searched or are otherwise found in violation of this policy or Company's
Substance Abuse Policy will be excluded from Company work areas. Attached is a
Notice outlining Company's Substance Abuse Policy.
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NOTICE
DRUGS, ALCOHOL, FIREARMS, SEARCHES
Company is concerned about the effects of the use of illegal drugs and the abuse
of alcohol on the health and safety of its employees. We recognize that
alcoholism and the illegal use of drugs leads to increased accidents and medical
claims, and can lead to the destruction of an employee's health, and adversely
affect his or her personal life. Employees who abuse drugs and alcohol are a
danger not only to themselves, but also to their fellow employees. In addition,
the medical costs incurred by employees with drug or alcohol problems are much
higher than those of other employees, and the decreased productivity of these
individuals can adversely affect a company's ability to operate competitively.
To help prevent substance abuse among our employees, Company has a policy and
practice of testing applicants, employees, and others that may regularly work in
or on Company premises. Applicants for employment will be required to undergo a
drug-screening test as part of consideration for employment. Employees and
others will be required, under certain circumstances, to cooperate with drug
testing procedures and drug searches.
Accordingly, the unauthorized possession or use of illegal, drugs, narcotics,
alcohol and firearms is not permitted on any Company property or job site that
is not Company property, and the use of, possession of, and/or distribution of
such items by any person on any Company installations, property, or facilities
poses a serious threat to the safety of our employees, other personnel and
operations.
SEARCHES, INSPECTIONS, AND ANALYSES
We reserve the right, at all times, to have authorized personnel conduct
reasonable searches or inspections on Company property of personal effects,
lockers, baggage, vehicles, and quarters of employees and other personnel for
the purpose of determining if any such persons are in possession of any illegal
or unauthorized items. These searches will be conducted in cases where the
Company receives reliable information indicating that reasonable cause exists to
conduct a search.
Any Company employee who refuses to submit to a search, urinalysis, blood
test, or who is found in possession of any such illegal or unauthorized items
without an explanation satisfactory to us will be subject to disciplinary action
up to and including immediate discharge.
When appropriate, such items discovered through these Company searches may be
taken into custody and may be turned over to the proper law enforcement
authorities.
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