Exhibit 10.7
VESSEL CONSTRUCTION CONTRACT
BY AND BETWEEN
BUILDER: LEEVAC SHIPYARDS, INC.
AND
OWNER: HOLLYWOOD CASINO SHREVEPORT
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS 1
ARTICLE 2 - SCOPE 4
ARTICLE 3 - DELIVERY 7
ARTICLE 4 - PAYMENT 8
ARTICLE 5 - CONSTRUCTION SCHEDULE 10
ARTICLE 6 - FORCE MAJEURE 10
ARTICLE 7 - LIQUIDATED DAMAGES AND BONUS PROVISIONS 12
ARTICLE 8 - CHANGES IN SPECIFICATIONS AND CONTRACT DRAWINGS 12
ARTICLE 9 - RISKS AND INSURANCE 13
ARTICLE 10 - WARRANTY 18
ARTICLE 11 - DEFAULT AND TERMINATION 20
ARTICLE 12 - APPLICABLE LAW 22
ARTICLE 13 - CONTRACT 22
ARTICLE 14 - INSPECTION, ACCESS, TESTS AND OFFICIAL CERTIFICATES 23
ARTICLE 15 - ASSIGNMENT; CONSTRUCTION FINANCING 24
ARTICLE 16 - COMPLIANCE WITH REGULATIONS 25
ARTICLE 17 - PATENTS 25
ARTICLE 18 - USE OF THE CONTRACT DRAWINGS AND SPECIFICATIONS 25
ARTICLE 19 - NOTICES AND COMMUNICATIONS 26
ARTICLE 20 - TITLE 26
ARTICLE 21 - INDEMNIFICATION 27
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ARTICLE 22 - DISPUTE RESOLUTION 28
ARTICLE 23 - GENERAL 29
LIST OF EXHIBITS
Exhibit A - Certificate of Completion & Delivery (Form)
Exhibit B - Schedule of Values Certificate (Form)
Exhibit C - Change Order (Form)
LIST OF SCHEDULES
Schedule 2.1 - Specifications and Contract Drawings
Schedule 13.1 - Builder's Bid
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VESSEL CONSTRUCTION CONTRACT
This Agreement is made as of the 16th day of July, 1999 (hereinafter, "this
Agreement"), between the Builder, Leevac Shipyards, Inc., a corporation
organized and existing under and by virtue of the laws of the State of Louisiana
(hereinafter, "Builder"), whose mailing address, is P. X. Xxx 0000, Xxxxxxx 00
X., Xxxxxxxx, XX 00000, and Owner, Hollywood Casino Shreveport, a general
partnership organized and existing under and by virtue of the laws of the State
of Louisiana (hereinafter "Owner"), whose mailing address is c/o HWCC-Louisiana,
Inc., Two Galleria Tower, Suite 2200, 00000 Xxxx Xxxx, XX 00, Xxxxxx, XX 00000.
The project is the construction of the Vessel at the Shipyards and at Owner's
facility in Shreveport, Louisiana. The price to be paid by Owner for the
construction of the Vessel is THIRTY-FOUR MILLION, THREE HUNDRED EIGHTY-SIX
THOUSAND ($34,386,000.00) DOLLARS as adjusted to reflect all agreed upon Change
Orders executed in accordance with the provisions of this Agreement (the
"Contract Sum").
The Vessel shall be assigned Builder's Hull Number 327.
The Builder and Owner agree as set forth below.
WITNESSETH:
ARTICLE 1 - DEFINITIONS
1.1 Agreement - As defined in the Preamble.
Application for Payment - As defined in Paragraph 4.1.
Builder - As defined in the Preamble.
Builder's Indemnitees - As defined in Paragraph 21.2.
Certificate of Completion and Delivery - As defined in Paragraph 3.1.
Change Order - As used herein, the term "Change Order" shall mean a written
instrument prepared by the Builder and signed by the Owner and Builder,
stating their agreement upon: (1) a change in the Work; (2) the amount of
the adjustment in the Contract Sum, if any; and (3) the extent of the
adjustment in the Contract Time and either of the Delivery Dates, if any.
Commencement Notice - As defined in Paragraph 2.8.
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Completed Vessel - As defined in Paragraph 3.1.
Completion Date - As used herein "Completion Date" is October 2, 2000,
assuming Owner issues the Commencement Notice on August 7, 1999. If Owner
fails to issue the Commencement Notice on or before August 7, 1999, such
date shall be extended by the number of days elapsing after August 7, 1999
through the date that the Commencement Notice is issued.
Components - As used herein, the term "Components" shall mean all parts and
components of the Vessel which are fabricated by Builder for the use of the
construction of the Vessel, which will, when so used, form a part of the
Vessel and the fabrication of which is commenced at any of the Shipyards.
Construction Schedule - As defined in Paragraph 5.1.
Contract - As defined in Paragraph 13.1.
Contract Documents - As defined in Paragraph 13.1.
Contract Time - As used herein, the term "Contract Time" is the time
elapsed between execution of this Agreement and the date of issuance of the
Delivery and Acceptance Certificate.
Completed Vessel - As defined in Paragraph 3.1.
Contract Sum - As defined in the Preamble.
Cut-Off Date - As defined in Paragraph 4.1.
Delivery and Acceptance - As defined in Paragraph 3.3.
Delivery and Acceptance Certificate - As defined in Paragraph 3.3.
Delivery Dates - As used herein, the term "Delivery Dates" are the
combination of the Site Delivery Date and the Completion Date.
Down Payment - As defined in Paragraph 4.1.1.
Extended Delivery Date - As defined in Paragraph 3.2.
Final Inspection - As defined in Paragraph 3.3
FF&E - As used herein, the term FF&E is furniture, fixtures and equipment.
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Force Majeure - As defined in Paragraph 6.1.
Good Shipbuilding Practices - As defined in Paragraph 2.6.
Hull Number - As used herein, the term "Hull Number" means the number
assigned to the Vessel by the Builder.
Invoice Due Date - As defined in Paragraph 4.1.
Louisiana Authorities - As used herein, the term "Louisiana Authorities"
shall mean the Louisiana Gaming Control Board and the Louisiana State
Police, Riverboat Gaming Division.
Materials - As used herein, the term "Materials" shall mean all materials,
all items of machinery, and all items of equipment, including any Owner
furnished equipment, including but not limited to, engines and gears which
are purchased or acquired for use in the construction of the Vessel which
will, when so used, form a part of the Vessel and which have been delivered
to any of the Shipyards.
Modification - As defined in Paragraph 13.1.
Other Authorities - As used herein, the term "Other Authorities" whether
used singularly or together, shall mean all such entities promulgating
regulations or standards applicable to the Work, including but not limited
to those identified in the Contract.
Owner - as defined in the Preamble.
Owner's Indemnitees -As defined in Paragraph 21.1.
Owner's Representative - As defined in Paragraph 14.3.
Payment Due Date - As defined in Paragraph 4.1.2.
Regulatory Agencies or Bodies - As used herein, the term "Regulatory
Agencies or Bodies" whether used singularly or together, shall mean the
United States Coast Guard and any successor thereto.
Schedule of Values - As defined in Paragraph 4.3.
Shipyards - As used herein, the term "Shipyards" shall mean Builder's yards
in Xxxxxxxxx Xxxxx Parish, St. Mary's Parish and at any temporary yard in
Bossier or Caddo Parish used by Builder in connection with construction of
the Vessel.
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Site Delivery Date - As used herein, the term "Site Delivery Date" shall
mean June 15, 2000, assuming Owner issues the Commencement Notice on
August 7, 1999. If Owner fails to issue the Commencement Notice on or
before August 7, 1999, such date shall be extended by the number of days
elapsing after August 7, 1999 through the date that the Commencement Notice
is issued.
Site Delivery Point - As used herein, the "Site Delivery Point" is within
Owner's cofferdam on the Red River, north of the Texas Street Bridge,
Shreveport, Louisiana.
Specifications and Contract Drawings - As used herein, the term
"Specifications and Contract Drawings" shall mean the specifications and
contract drawings attached as Schedule 2.1.
Subcontractor - As used herein, the term "Subcontractor" shall mean any
subcontractor of Builder who performs any of the Work.
Vessel -As used herein, the term "Vessel" shall mean the casino gaming
vessel to be constructed by Builder at the Shipyards and the Site Delivery
Point in accordance with the Work.
Warranty Deficiency - As defined in Paragraph 10.5.
Work - As used herein, the term "Work"shall mean, in the case of a Vessel
having a keel, the keel, and in the case of a Vessel not having a keel, the
bottom plates, and all Materials, machinery, equipment, Components, and
fabrications, including, but not limited to, engines and gears forming a
part of the Vessel when permanently installed in place and all such others
labor, Materials, Components, equipment and services provided or to be
provided by Builder at the Shipyards or the Site Delivery Point to fulfill
the Builder's obligations under the Contract.
Working Drawings - As defined in Paragraph 2.10.
ARTICLE 2 - SCOPE
2.1 For the Contract Sum, Builder agrees, at its own risk and expense, to
build, complete and deliver to Owner, as hereinafter provided, the Vessel
having overall hull dimensions of 242 x 114 x 14 feet, constructed,
outfitted and tested in accordance with the Builder's Bid attached hereto
as Schedule 13.1 and the Specifications and Contract Drawings labeled as
follows:
Specifications
For the construction of a Casino Vessel
Prepared by: Xxxxxx X. Xxx & Associates
Project
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Rev. 2
Contract Drawings
Outboard Profile
Hold Arrangement
Main Deck Arrangement
2/nd/ Deck Arrangement
3/rd/ Deck Arrangement
The Specification and Contract Drawings are hereby made a part of this
Agreement.
2.2 Builder agrees to furnish suitable locations at the Shipyards and all
labor, tools, equipment, materials, services and fees necessary for the
Work, except as otherwise indicated herein or in the other Contract
Documents.
2.3 Builder shall comply with all laws, rules, regulations and requirements of
any Regulatory Agencies or Bodies affecting the Work and shall procure at
its own expense such permits from the United States, state and local
authorities as may be necessary in connection with beginning or carrying on
to completion of the Work and shall at all times comply with all United
States, state and local laws in any way effecting the Work. Builder has
conducted a detailed and thorough review of the Specifications and Contract
Drawings and is unaware of any item which does not comply with the
requirements of any RegulatoryAgencies or Bodies. In the event Builder
becomes aware that any portion of any of the Contract Documents violate or
do not comply with any rule or regulation of any Regulatory Agencies or
Bodies promulgated after execution of this Agreement ("Enforced Change"),
Builder shall immediately notify Owner of said Enforced Change prior to the
implementation of same which Enforced Change shall not be made absent the
prior written consent of Owner. If Owner does not give its prior written
consent to such Enforced Change, then either party shall have the right to
terminate this Contract on written notice to the other. In the event of
such termination, (a) Builder shall discontinue all Work and use its best
efforts to cancel all orders for Materials and Components which have not
been delivered to any of the Shipyards; (b) Owner shall pay Builder for all
Work performed and Materials and Components purchased by Builder to
complete the Vessel; (c) Builder shall deliver to Owner at the Shipyards
the Materials and Components; and (d) within thirty (30) days after such
delivery, Owner shall remove all such Materials and Components from such
Shipyards.
2.4 Builder will provide and/or install ready for use all parts, equipment and
appurtenances shown in the Contract Documents (including Owner furnished
items, except those items to be installed by Owner or its separate
contractors and not Builder or its subcontractors). Builder shall store,
safe keep and handle Owner's equipment and supplies, including Owner
furnished items, that are to be installed by Builder both prior to and
after placement on the Vessel.
2.5 Builder will allow Owner and/or its representatives at all reasonable times
to examine the Work during construction.
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2.6 The Builder accepts the relationship of trust and confidence established
between him and the Owner by this Agreement. Builder agrees to perform the
Work in accordance with the Contract, and all materials and equipment shall
be in accordance with the Contract. Builder acknowledges that the subject
Vessel is being constructed as a riverboat gaming vessel for the carriage
of passengers in the tourism/gaming industry. Additionally, Builder agrees
to perform the Work in accordance with Good Shipbuilding Practices in order
to meet the appropriate standards of construction and levels of finish for
the class and type of vessel required herein and by any Regulatory Agencies
or Bodies. Builder agrees to cooperate with the Owner in furthering the
interests of the Owner. Builder agrees to furnish efficient business
administration and superintendence and to make all reasonable efforts to
furnish at all times an adequate supply of workmen and materials, and to
perform the Work in a manner consistent with the interests of the Owner and
with Good Shipbuilding Practices. "Good Shipbuilding Practices" for
purposes of the Contract means the construction of a ship or vessel, with
due consideration to standard of high quality, incorporating the specified
components in order to meet requirements of the Contract, utilizing
construction and testing methods to insure that the completed Vessel will
conform to the intended design required for use in the tourism/gaming
industry.
2.7 All portions of the Work that Builder does not perform shall be performed
under subcontracts or by other appropriate agreement with Builder. Nothing
contained in the Contract shall create any contractual relationship
between Owner and any Subcontractor. Builder shall furnish to Owner a copy
of each subcontract it enters into in connection with the Work within ten
(10) days after execution of such subcontract.
2.8 Builder shall not commence Work of any nature or cause any Subcontractor to
commence Work of any nature until such time as Builder has received from
Owner written instructions to commence construction (the "Commencement
Notice).
2.9 Builder shall include in all written agreements it enters into with any
Subcontractor for the performance of any portion of the Work a clause
providing that, if this Contract is terminated for any reason, such
contract with a Subcontractor shall be, by its terms, at Owner's sole
option and election, assigned to and assumed by Owner or a person
designated by Owner, without any need for action by Builder or such
Subcontractor or materialman, and such Subcontractor or materialman shall
continue to be bound by the terms and conditions of such contract. This
provision shall survive the termination of the Contract.
2.10 Upon delivery by Owner or Owner's representative of any Owner furnished
documents, materials and equipment as called for by the Contract, Builder
shall take possession of such items and adequately and properly store and
maintain those items. Any costs of repair to or replacement of such items
necessitated by any damage to or loss of such items which occurs after
delivery by the Owner of the items to Builder and which is not covered by
the Builder's Risk Policy required in Paragraph 9.1.1 shall be borne
entirely by Builder, provided that the damage or loss is not solely caused
by an error or omission of Owner.
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2.11 Based on the Specifications and Contract Drawings and any further
adjustments in the scope of quality of the Work authorized by Owner, and in
accordance with the Construction Schedule, Builder shall prepare and revise
as appropriate, for approval by the Owner, working drawings consisting of
drawings and specifications setting forth in detail the final requirements
for the construction of the Vessel (the "Working Drawings").
2.12 Except for those matters and areas for which Builder is responsible as
described in the Specifications and Contract Drawings, Owner or his design
agents, shall be responsible for the adequacy and accuracy of the
Specifications and Contract Drawings with regard to compliance with any
requirements or classifications mandated by the U.S. Coast Guard or any
other governmental or regulatory body for the intended or actual use of the
Work.
ARTICLE 3 - DELIVERY
3.1 Builder agrees, subject to the other provisions of this Agreement, to
deliver the Vessel to Owner in a structurally complete condition, free and
clear of all known liens, claims and encumbrances, and Owner agrees to
accept delivery to Owner's satisfaction at the Site Delivery Point on or
before the Site Delivery Date. Thereafter Builder shall complete all
necessary Work, including Owner's FF&E for which Builder is responsible, so
that the Vessel is substantially complete and ready for gaming operations
by the Completion Date (the "Completed Vessel"). Upon delivery by Builder
to Owner of the Completed Vessel, Builder shall issue a Certificate of
Completion and Delivery which shall state (i) that the Vessel has been
completed; (ii) that all trials and tests have been satisfactorily
completed, (iii) that the Vessel complies with the Contract, and is free
from defects in materials and workmanship; (iv) that there are no liens or
claims upon said Vessel or Materials, Components, equipment or labor for
said Vessel, except those created or incurred by the Owner, its
subcontractors, vendors or employees.
3.2 Builder agrees to deliver the Vessel to Owner safely afloat at Site
Delivery Point in accordance with the Contract on or before the Site
Delivery Date specified, or on or before such later date as may be required
by reason of any Change Order executed in accordance with the provisions of
this Agreement or by reason of Force Majeure delays as that term is defined
in Article 6 (the "Extended Delivery Date".)
3.3 Upon completion of all Work relating to the Vessel, including, but not
limited to, Specification-required tests and trials, witnessed and accepted
by Owner's Representative, and approved by the United States Coast Guard, a
final inspection of the Vessel shall be performed by Owner (the "Final
Inspection"). If the Final Inspection discloses any of the Work as being
unsatisfactory or incomplete, Owner will so advise Builder in writing.
Builder immediately shall take appropriate action to correct or complete
the Work in accordance with the Contract. When all physical work and clean-
up relating to the Vessel, including all punch list work, is found by Owner
(or Owner's Representative) to be completed to the satisfaction of the
Owner and the Builder has furnished releases of liens acceptable to the
Owner, a delivery and acceptance certificate (the "Delivery and Acceptance
Certificate") shall be issued by Owner ("Delivery and Acceptance").
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3.4 Builder shall furnish Owner on Delivery and Acceptance of the Vessel: a
Xxxx of Sale and a Builder's Certificate, together with whatever other
documents may be required by law or by any Regulatory Agencies or Bodies in
order for Owner to document the Vessel with the United States Coast Guard.
Builder will also assist Owner, or its agent, in acquiring all required
information to enable Owner to obtain all documentation necessary to
operate the Vessel as intended by Owner. It is understood that Builder
shall furnish any and all required U.S. Coast Guard approved drawings
(i.e., "as built" drawings) based on the Specifications and Contract
Drawings and other Contract Documents, which drawings are the sole
responsibility of the Builder. Any Coast Guard fees in connection with
documentation of the Vessel shall be the responsibility of Owner. Within
thirty (30) days after Delivery and Acceptance of the Vessel, Builder shall
furnish Owner with a complete set of as-built drawings of the Vessel and on
Autocad 14 or such other format as shall be subsequently in use by Builder.
ARTICLE 4 - PAYMENT
4.1 Owner agrees to pay Builder according to the following payment schedule for
the Work (the "Payment Schedule"):
4.1.1 Within one (1) business day of Owner's delivery of the
Commencement Notice, Owner will pay to Builder an amount equal to
Three Million Four Hundred Thirty-Eight Thousand Six Hundred
($3,438,600.00) Dollars, representing an initial payment of the
Contract Sum (the "Down Payment").
4.1.2 Builder shall submit an application for payment in a form
satisfactory to Owner (an "Application for Payment") to Owner monthly
for unbilled Work by the Builder through the cut-off date which shall
be the Twenty-Fifth (25th) day of each month (individually, a "Cut-
Off Date"). An Application for Payment prepared through a particular
Cut-Off Date must be received by Owner no later than the First (1st)
day of the following month (individually, an "Invoice Due Date"). An
Application for Payment through a particular Cut-Off Date shall cover
the period commencing on the day following the immediately preceding
Cut-Off Date and ending on the Cut-Off Date for such Application for
Payment. All Applications for Payments for Work properly executed by
Builder which are submitted to Owner by the relevant Invoice Due Date,
together with the lien waivers in a form satisfactory to Owner from
all Subcontractors and any others requested by Owner, shall be paid by
Owner on or before the Twentieth (20th) day of the calendar month
following the calendar month in which the Cut-Off Date for the
submitted Application for Payment occurs (the "Payment Due Date").
The lien waivers shall encompass all previous Applications for Payment
which have been paid and shall also include a waiver of statutory
claims, liens and privileges for the amount included in the
Application for Payment submitted therewith which shall be contingent
and effective only upon receipt by Builder of such payment.
Applications for Payments unpaid thirty (30) days after the date
payment is due thereon shall bear interest at the rate of twelve
percent (12%) per annum from the date due until paid.
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4.1.3 The amount due under each Application for Payment shall be
reduced by $245,614.28, representing 1/14 of the Down Payment (each a
"Down Payment Reduction").
4.1.4 Other than the Down Payment, Owner shall retain ten (10%)
percent of the sum of such payment to Builder plus the Down Payment
Reduction through the date that 50% of the Work has been completed and
five (5%) per cent of the sum of each such payment plus the Down
Payment Reduction thereafter. The retainage shall be released upon
Delivery and Acceptance, except for such amount mutually agreed to by
Builder and Owner necessary to complete all punch-list items or, if a
dispute arises, under the provisions of Article 22.
4.3 The Builder shall furnish a schedule of values ("Schedule of Values") with
each Application for Payment which shall state (i) the percentage of
completion of each portion of the Work; (ii) that the Work completed
complies with the Contract; and (iii) that there are no liens or claims,
including those of any Subcontractor upon the Work for labor, Materials,
Components or equipment for the Work, except those created by Owner, its
subcontractors, vendors or employees. The Schedule of Values shall be
executed and certified by the President or Assistant Secretary/Treasurer of
Builder. If a lien exists on the Work, Owner shall not be obligated to
make payment in the amount of such lien until such lien is discharged or
bonded to Owner's reasonable satisfaction.
4.4 If Owner objects upon receipt of the Schedule of Values on grounds that any
of the Work described therein has not been performed, or for any other
reason, the dispute will be submitted to dispute resolution pursuant to
Article 22 hereof.
4.5 It is agreed that time is of the essence of this Contract and that the
failure of Owner to timely pay to Builder the sums of money agreed to be
paid hereunder, at the times and in the manner above set forth, shall
automatically extend the agreed Delivery Dates by the number of days equal
to the number of days from the Payment Due Date to the actual date of
payment, provided Builder has complied with Paragraph 4.1.2.
4.6 In the event that Owner does not object to a Schedule of Values as provided
in Paragraph 4.7 and fails to timely make the payment and such default
shall not be cured within twenty (20) days' notice thereof, then in such
event, Builder, in addition to any other legal remedies and recourse
available at the time, at its option, may terminate and cancel the Contract
by giving Owner written notice thereof.
4.7 If the Work as contemplated by the Construction Schedule falls behind more
than three (3) days beyond that anticipated (as adjusted by reason of
Change Orders and Force Majeure), Builder shall immediately provide a
revised Construction Schedule (as defined hereinafter) to Owner. If the
revised Construction Schedule evidences that completion of the Work prior
to the Completion Date will not occur, Builder shall, within three (3) days
thereafter, provide a plan to Owner, which plan must set forth a revised
Construction Schedule with a resequencing and/or
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acceleration of elements of the Work in order to complete the Work in the
shortest possible time.
4.8 The making of any payment with respect to the Work shall not stop, impair
or otherwise preclude the Owner from thereafter asserting any right or
remedy accruing to it because of the failure of the Builder to deliver the
completed Vessel in accordance with the terms of the Contract.
4.9 For purposes of this Agreement, wire transfer to Builder in accordance with
instructions delivered to Owner shall constitute payment hereunder or as
otherwise mutually agreed to by the parties.
ARTICLE 5 - CONSTRUCTION SCHEDULE
5.1 Within fifteen (15) days after execution of this Agreement, Builder shall
submit for Owner's approval a detailed construction schedule (the
"Construction Schedule") for completion of the Work prior to the Site
Delivery Date, the Completion Date and the other milestone dates set forth
therein. Such Construction Schedule shall indicate dates for commencement
and completion of the various parts of the Work. All points of interface
between Owner and Builder (i.e., all instances where performance of
Builder's Work depends upon Owner or its subcontractors) and appropriate
restraints shall be included in the Construction Schedule. In particular,
but not by way of limitation, the required delivery date of each item of
Owner furnished material and equipment shall be included.
5.2 When reasonably requested by Owner, the Construction Schedule shall be
revised to show the current progress of the Work and shall be submitted to
Owner. The Construction Schedule, as revised, also must be provided with
each monthly Application for Payment.
ARTICLE 6 - FORCE MAJEURE
6.1 All agreements of the Builder contained in this contract respecting the
Delivery Dates shall be subject to extension by reason of "Force Majeure,"
which term is hereby declared to be any delay caused by nature forces,
fire, explosion, or person not under the control of Builder and not caused,
or contributed to, by Builder or any Subcontractor, including non-delivery
of Owner furnished equipment, subject to the further terms hereinafter set
forth.
6.2 Delays in receiving supplies, Materials, Components and equipment shall not
be considered Force Majeure unless (a) caused by strikes or lockouts of
workmen or (b) Builder establishes to the reasonable satisfaction of Owner
that (1) Builder timely ordered such supplies, Materials, Components and
equipment and (2) Builder exercised due diligence to obtain delivery and
(3) no other source of supply was reasonably available (relative price
being a factor to be considered). Notwithstanding the foregoing, delays in
receiving supplies, Materials, Components and equipment, the vendor of
which is expressly set forth in the Specifications, shall be considered
Force Majeure, as long as (1) Builder timely ordered such supplies,
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Materials, Components and equipment and (2) Builder exercised due diligence
to obtain delivery. Shortages of skilled labor shall not be considered
Force Majeure.
6.3 Delays caused by late receipt of Owner furnished equipment shall not be
considered Force Majeure if Builder has failed to notify Owner of the date
by which each such item of Owner furnished equipment must be delivered to
the Shipyard in time to allow Owner by exercise of due diligence to cause
timely delivery. Builder shall provide Owner with a schedule indicating
the latest on-site arrival date for each Owner furnished component.
6.4 Delays caused by weather conditions shall not be Force Majeure except where
caused by lightning, flood, windstorm, hurricane, tornado or extraordinary
rains which prevent the Work from being performed for three (3) consecutive
days. Delays due to non-navigable waterways (low or high water), lock
closures and river closures shall be considered Force Majeure hereunder.
6.5 Builder shall have no responsibility for Force Majeure delays, other than
to inform the Owner of the occurrence of a Force Majeure within three (3)
business days of its occurrence and to include with that notice (i) a
description of the event and (ii) its expected duration. Failing such
notice Builder shall not have the benefit of the Force Majeure clause for
said event. Builder shall inform Owner of the end of a Force Majeure event
within five (5) business days of its cessation and include an estimate of
the delay to the Delivery Dates, if any, caused by that event. Failure of
Builder to provide notice of the cessation of the Force Majeure event shall
not effect the benefit to Builder of such Force Majeure event. The Builder
shall maintain records of such delays and allow Owner to inspect same upon
request at all reasonable times. In the event of Force Majeure, the
Delivery Dates shall automatically be extended by a period of time equal to
the total number of days of said delay relating to the Vessel unless the
Owner, within ten (10) days after receiving the aforesaid notice of a
Force Majeure event, shall state its objection in writing to treating same
as a Force Majeure event, in which case, the dispute will be submitted to
dispute resolution pursuant to Article 22 hereof.
6.6 Should Builder seek to extend either of the Delivery Dates for three (3) or
more days in the aggregate for reasons related to Force Majeure events
(excluding Force Majeure events recognized by Paragraph 6.3, above and any
other cause of delay solely attributable to Owner), the Owner, in its sole
option and discretion, shall have the right to terminate the Contract by
giving seven (7) days' prior written notice to Builder of Owner's intent to
terminate under this Paragraph 6.6. In such event, Owner will pay Builder
for the portion of the Contract Sum allocable to the Work completed as of
the effective date of termination, less the aggregate of previous payments.
Owner shall not under any circumstances be responsible or liable to
Builder, or any suppliers or Subcontractor, for any incidental,
consequential or special damages or expenses of any type or kind,
including, but not limited to, loss of time, loss of profit or earnings, or
losses related to detrimental reliance upon the existence of the Contract,
whether or not such losses directly or indirectly arise out of the
Contract, or from any actions taken by Owner at any time to terminate the
Contract.
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6.7 Owner shall provide Builder with access for Builder's employees, Materials
and Subcontractors at the Site Delivery Point in order for Builder to
complete the Vessel. Failure to provide such access shall extend the
Completion Date on a day for day basis. Builder acknowledges that, after
delivery of the Vessel to the Site Delivery Point, Builder shall have
limited access to the Site Delivery Point, little or no nearby parking for
Builder's employees and Subcontractors' employees and little or no space
for the Materials.
ARTICLE 7 - LIQUIDATED DAMAGES
7.1 In the event Builder does not deliver the Vessel as provided herein on
either of the Delivery Dates, Builder shall pay to Owner as liquidated
damages in the form of a reduction in the Contract Sum the amount of Fifty
Thousand ($50,000.00) Dollars per day for each and every day that the
actual applicable Delivery Date is exceeded. The maximum Builder shall pay
as liquidated damages under this Agreement is Six Hundred Thousand
($600,000.00) Dollars.
7.2 In the event that Builder fails to perform in accordance with the
Construction Schedule for a period of fourteen days, Builder shall be in
default and in addition to the liquidated damages, if any, due, Owner may
terminate this Contract under Article 11.
7.3 Owner and Builder agree that the Delivery Dates shall be adjusted to
reflect (i) any and all agreed upon Change Orders executed in accordance
with the provisions of this Agreement or (ii) any event of Force Majeure as
provided in Article 6 of this Agreement.
ARTICLE 8 - CHANGES IN SPECIFICATIONS AND CONTRACT DRAWINGS
8.1 Owner reserves the right to make any deductions from or additions to the
Work on giving due notice in writing to Builder, the cost of any such
changes to be agreed upon in advance by Owner and Builder, and added to, or
deducted from the total Contract Sum. If any such change shall delay the
completion of the Work, and increase the Contract Time, Builder shall be
allowed reasonable additional time sufficient to cover such delay, if any.
A statement of the increased or reduced amount of the Contract Sum, and/or
any Contract Time required, as aforesaid, shall be submitted in Change
Order form to Owner by Builder, and must be approved by Owner in writing
before any such change is made. Said Change Order shall be acted upon by
Owner within five (5) business days of Owner's receipt of Builder's
submittal. The Change Order form to be utilized is attached hereto as
Exhibit "C".
8.2 Changes in the Work shall be performed under applicable provisions of the
Contract Documents, and Builder shall proceed promptly on those, unless
otherwise provided in the Change Order.
8.3 When Owner and Builder agree on adjustments in the Contract Sum and
Contract Time, or otherwise reach agreement upon the adjustments, such
agreement shall be effective immediately and shall be recorded by
preparation and execution of an appropriate Change Order.
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8.4 If Builder wishes to make a claim for an increase in the Contract Sum for
any part of the Work, he shall give Owner written notice thereof in the
form of a proposed Change Order. This proposed Change Order shall be given
by Builder before proceeding to execute the relevant portion of the Work.
No such claim shall be valid unless so made, and approved in writing by the
Owner, in advance of the commencement of said portion of the Work, in the
form of an approved Change Order. If Owner and Builder cannot agree on the
amount of the adjustment in the Contract Sum, the dispute will be submitted
to dispute resolution pursuant to Article 22 hereof.
8.5 Cost of any change considered an addition or a deletion shall be on a labor
and Materials basis, unless some other pricing has been previously agreed
by Builder and Owner. Cost of any change considered a substitution shall
be the difference between the cost of addition and cost of deletion.
8.6 For purposes of Paragraph 8.5 only "Labor" is agreed to mean the hourly
rates set forth in Schedule 13.1 to the particular task and "Materials"
means the actual cost of materials, plus freight charges, plus the markup
set forth in Schedule 13.1 for obtaining such materials.
8.7 Changes required by the U.S. Coast Guard shall be subject to the same
Change Order procedure, provided they are not based on laws, rules or
regulations of the U.S. Coast Guard in force prior to date of execution of
this Agreement.
8.8 Notwithstanding anything to the contrary herein, no change in the Work
under this Agreement, whether by way of alteration or addition to the Work,
shall be the basis of an addition to the Contract Sum or a change in the
Contract Time unless and until such alteration or addition has been
authorized by a Change Order executed and issued in accordance with and in
strict compliance with the requirements of the Contract.
ARTICLE 9 - RISKS AND INSURANCE
9.1 BUILDER'S RISK AND LIABILITY INSURANCE
9.1.1 Until Delivery and Acceptance of the Vessel, Owner shall, at its own
expense, insure the Vessel and all Materials, Components and
equipment to be used therein, and the Owner furnished Materials,
Components and equipment from time to time delivered to either of
the Shipyards. The amount of insurance, shall be at least equal to
the Contract Sum plus the value of all Owner furnished Materials,
Components and equipment.
The Builder and each Subcontractor shall purchase and maintain
insurance covering the type of claims set forth below which may
arise out of or result from the Builder's operations under the
Contract, whether such operations be by Builder or by any
Subcontractor or by anyone directly or indirectly employed by any of
them or by anyone for whose acts any of them may be liable:
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9.1.1.1 Claims under workers' or Worker's Compensation, disability
benefit and other similar employee benefit acts which are
applicable to the Work to be performed.
9.1.1.2 Claims for damages because of bodily injury occupational
sickness or disease, or death of the Builder's employees;
9.1.1.3 Claims for damages because of bodily injury, sickness or
disease, or death of any person other than the Builder's
employees;
9.1.1.4 Claims for damages insured by usual personal injury liability
coverage which are sustained (1) by a person as a result of
an offense directly or indirectly related to employment of
such person by the Builder, or (2) by another person;
9.1.1.5 Claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property including loss
of use resulting therefrom;
9.1.1.6 Claims for damages because of bodily injury, death of a
person or property damage arising out of ownership,
maintenance or use of a motor vehicle;
9.1.1.7 Claims involving contractual liability insurance applicable
to the Builder's obligations under Article 21.
9.1.1.8 Claims involving damage to the Work itself.
9.1.2 All insurance policies obtained by Builder pursuant to its
obligations under this Article 9, shall contain waivers of subrogation
in favor of the Owner and Owner's Indemnitees, and in the event that
Owner obtains financing, any lender or lenders, all without liability
for the payment of any premium and shall name Owner, Owner's
Indemnitees and Owner's lender or lenders as additional assureds.
9.1.3 The insurance required by this Article 9 hereof shall include the
following types and amounts of insurance.
9.1.3.1 Builder's Risk
Until the Vessel has been completed, physically delivered and
Delivery and Acceptance by Owner has occurred, the Vessel and all
Materials, Components, outfitting, equipment, and appliances to
be installed in the Vessel, including all Materials, Components,
outfitting, equipment and appliances provided by Owner and
delivered to any of the Shipyards for and to be used in the
construction thereof, shall be declared under the Builder's Risk
Policy in force and effect at the time the Vessel's keel or
bottom plate is laid, with an assigned value equal to the
Contract Sum plus the value of all such Owner furnished
Materials, Components and equipment.
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Such Builder's Risk Policy shall be on a form substantially
similar to AIG's all risk form including hull and machinery
and protection and indemnity with limits of $25,000,000,
including United States longshoreman and harbor workers and
Xxxxx Act with a deductible not greater than $25,000,
including movement of the Work between the Shipyards and the
Site Delivery Point.
Builder and its Subcontractors shall be named as additional
assureds under the Builder's Risk Policy, with waivers of
subrogation. The Builder's Risk Policy shall not provide
coverage to Builder's or Subcontractors' machinery, tools or
equipment.
Any loss insured under Owner's Builder's Risk Policy or any
other property insurance shall be adjusted by Owner as
fiduciary and made payable to Owner as fiduciary for any
insured thereunder, as their interests appear. Any dispute as
to Owner's adjustment or intended payment shall be resolved
in accordance with Article 22.
9.1.3.2 Other Insurance
The Builder shall be responsible for initiating, maintaining
and supervising all safety precautions and programs in
connection with the performance of the Contract.
Builder shall also purchase and maintain, at its expense,
during the performance of Builder's obligation under the
Contract, Workmen's Compensation Insurance, at statutory
amounts, with Longshoreman & Harbor Workers Compensation Act
coverage endorsement, Employer's Liability Insurance in the
amount of at least One Million ($1,000,000.00) Dollars and
Commercial General Liability Insurance against property
damage, death, personal injury and maintain completed
operations coverage, in the amount of not less than One
Million ($1,000,000.00) Dollars per occurrence, endorsed to
provide specific coverage for the Builder's obligations to
Owner under the Contract, including but not limited to those
under Article 21 of the Agreement and any "watercraft
exclusion" for non-owned vessels deleted.
Each Subcontractor shall also purchase and maintain, at its
expense, during the performance of Builder's obligation under
the Contract, Workmen's Compensation Insurance, at statutory
amounts, with Longshoreman & Harbor Workers Compensation Act
coverage endorsement, Employer's Liability Insurance in the
amount of at least One Million ($1,000,000.00) Dollars and
Commercial General Liability Insurance against property
damage, death, personal injury and completed operations
coverage in the amount of not less than One Million
($1,000,000.00) Dollars per occurrence, endorsed to provide
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specific coverage for the Builder's obligations to Owner
under the Contract, including but not limited to those under
Article 21 of the Agreement and any "watercraft exclusion"
for non-owned vessels deleted .
Additionally, Builder shall purchase and maintain at its
expense, during the performance of the Contract the
following:
(a) Protection and Indemnity Insurance only as to Builder's
vessels, including Xxxxx Act coverage, with a limit of
no less than One Million ($1,000,000.00) Dollars;
(b) Automobile Liability Insurance covering the use of all
owned, non-owned and hired vehicles with a bodily
injury and property limit of no less than One Million
($1,000,000.00) Dollars;
(c) Pollution Liability Insurance with a limit of no less
than Five Million ($5,000,000.00); and
(d) Umbrella Liability coverage with a limit of not less
than Fifty Million ($50,000,000.00) Dollars excess over
and above the primary insurance limits stated above.
All umbrella coverage will include blanket contractual
liability - all written and oral contracts; premises
operations liability; explosion, collapse; personal
injury liability; independent contractors coverage;
broad form property damage liability; cross-liability
coverage and products and operations coverage with
watercraft exclusion removed.
Additionally, each Subcontractor shall purchase and maintain
at its expense, during the performance of the Contract the
following:
(a) If furnishing any vessel, Protection and Indemnity
Insurance, including Xxxxx Act coverage, with a limit
of no less than One Million ($1,000,000.00) Dollars;
and
(b) Automobile Liability Insurance covering the use of all
owned, non-owned and hired vehicles with a bodily
injury and property limit of no less than One Million
($1,000,000.00) Dollars;
9.1.3.3 Insurers' Form and Proof
(i) Certificates of Insurance acceptable to Owner shall be
delivered to Owner prior to the commencement of the
Work. These Certificates and the insurance policies
required by this Article 9 shall contain a provision
that the coverages afforded under the policies will not
be canceled or
16
allowed to expire until at least thirty (30) days
written notice has been given to the Owner. If any of
the foregoing insurance coverages are required to
remain in force after final payment and are reasonably
available, an additional certificate evidencing
continuation of such coverage shall be submitted.
Information concerning reduction of coverage shall be
furnished by the Builder with reasonable promptness.
(ii) The Owner and the Builder shall cooperate in connection
with the collection of any insurance monies that may be
due in the event of loss and the Owner and the Builder
shall execute and deliver such proofs of loss and other
instruments which may be required for the purpose of
obtaining recovery of any such insurance monies.
9.1.3.4 Subcontractor Insurance
Builder shall additionally require that (i) Subcontractors
whose contracts are valued at Two Million ($2,000,000.00)
Dollars or more carry commercial general liability insurance
in the amount of Five Million ($5,000,000.00) Dollars and
(ii) Subcontractors whose contracts are valued at less than
Two Million ($2,000,000.00) Dollars carry no less than One
Million ($1,000,000.00) in commercial general liability
insurance.
9.1.5 Maintenance of insurance by the Builder as specified in this
Article 9 shall in no way be interpreted as relieving the
Builder of any responsibility whatever and the Builder may
carry, at his own expense, such additional insurance as it
deems necessary.
9.2 PERFORMANCE BOND AND PAYMENT BOND
9.2.1 Within three (3) business days after Owner's receipt of the proceeds
of the financing necessary to construct its riverboat casino complex
in Shreveport, Builder shall deliver to Owner a payment and
performance bond of a surety company licensed to do business in the
State of Louisiana, conditioned on completion of the Work in
accordance with the contract, free and clear of all mechanics and
other liens. Such bond shall be written to 100% of the Contract Sum,
executed on a form and by such company as Owner shall approve. The
cost of the bond shall be included in the Contract Sum. The Builder
shall furnish the bond to Owner. Upon the request of any person or
entity appearing to be a potential beneficiary of such bond, the
Builder shall promptly furnish a copy of the bond or permit a copy
to be made.
9.3 Notwithstanding any of the provisions of this Agreement with respect to any
contractual obligation of the Builder and any Subcontractor to provide
insurance on behalf of Owner, any other insurance maintained by Owner shall
be excess and non-contributing with such insurance required by Builder and
any Subcontractor.
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9.4 The Owner reserves the right to change the insurance program if the Owner
deems such change to provide more coverage and/or be more cost effective.
The Owner may determine a prearranged insurance program, in which the Owner
provides all insurance, to be most efficient. If a prearranged insurance
program is deemed most efficient, the Owner will request that the
Contractor and each Subcontractor deduct the insurance costs required by
this Article Nine from their respective bids. In order to make this
determination, the Contractor shall supply an itemization of its insurance
costs and require its Subcontractors to do likewise. The Owner reserves the
right to verify such costs.
9.5 All insurance specified in this Article 9 shall be limited in scope,
coverage and amount to the liabilities and risk specifically assigned and
assumed by each party and, where applicable, the "additional assureds" and
"waiver of subrogation" endorsements shall be subject to, limited by and
shall afford no coverage greater than that required by the indemnification
contained in Article 21.
ARTICLE 10 - WARRANTY
10.1 The Builder warrants to the Owner that all Materials, Components,
equipment and the Work will be of good and sound quality, free from faults
and defects and in conformance with the Contract. Builder warrants that the
Vessel will meet the requirements of the Regulatory Agencies and Bodies
relating to vessels.
10.2 With respect to Builder's failure to construct the Vessel in accordance
with the Contract, Builder will make appropriate modifications to the
Vessel to bring it into compliance with this warranty at no cost to the
Owner. If Builder is not able to modify the Vessel so that it meets the
requirements of the Contract, the Owner, at its sole discretion, may
negotiate a reduction in the Contract Sum or may require the Builder to
refund to the Owner all payments made to the Builder and cancel the
Contract provided Owner conveys to Builder title to the Vessel free and
clear of all liens and encumbrances created by Owner.
10.3 Builder warrants that the Work done will be done in accordance with the
Specifications and Contract Drawings and Good Shipbuilding Practices, and
that all labor and installations made shall meet the requirements and
standards described in the Contract, and all Materials and Components used
by the Builder shall be of the quality set forth in the Contract and all
such Materials and Components will be free from defects.
10.4 In addition to the warranty being provided by Builder hereunder on the
Vessel and the Work, including but not limited to the Materials and
Components, but not in lieu thereof, the Builder shall use all reasonable
efforts to obtain warranties from its Subcontractors equivalent in scope
and duration to the warranty being provided by Builder. All such
warranties shall be made for the benefit of the Owner and the Builder.
10.5 With respect to the warranties made by Builder under this Contract, such
warranties shall be effective for a period of twelve (12) months after
Delivery and Acceptance of the Vessel.
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Accordingly, if at any time within twelve (12) months after Delivery and
Acceptance of the Vessel, any nonconformity, defect, weakness, deficiency,
failure, breaking down or deterioration shall appear or occur or be
discovered in the Vessel, including, but not limited to, the Materials or
Components, or any failure whatsoever of the Vessel due to the Vessel not
being constructed in accordance with the Contract (any of the foregoing
each being referred to as the "Warranty Deficiency"), then the Builder
shall correct or cause to be corrected such Warranty Deficiency at
Builder's sole cost and expense. Furthermore, in the event that design or
engineering performed by Builder under this Contract shall fail to meet the
Contract, Builder shall, at no cost to Owner, re-design such changes as are
necessary to remedy any defect, including, but not limited to, the
replacement of the defective or damaged Materials or Components.
10.6 Warranty work pursuant to this Article 10 will be performed at a location
of the Owner's choice. All travel expenses, inspection fees and/or
surveying costs that are required to determine whether a Warranty
Deficiency exists shall be the responsibility of Owner provided, however,
that if it is determined that a Warranty Deficiency does exist, then
Builder shall reimburse Owner for such travel expenses, inspection fees and
surveying costs incurred to make such a determination.
10.7 It is understood and agreed by the parties hereto that except as set forth
in the Contract, no other warranty, express or implied, shall be deemed to
have been made by Builder.
10.8 It is understood and agreed by the parties hereto that Builder shall not in
any way be liable or responsible for any incidental or consequential
damages of any kind or nature, including but not limited to loss of profits
and loss of use of the Vessel from any cause of action of any kind or
nature, including but not limited to negligence, contract, warranty or any
other causes of actions, arising out of or in connection with or pertaining
to the Work. The elimination of incidental and consequential damages as
provided herein is an essential condition of this Contract and Owner
acknowledges that Builder would not have entered into this Contract without
said elimination of incidental or consequential damages for the
consideration set forth herein.
ARTICLE 11 - DEFAULT AND TERMINATION
11.1 If any one of the following occurs during the performance by Builder:
11.1.1 There is filed by or against Builder in any court a petition in
bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of
Builder's property, and a discharge of Builder;
11.1.2 Builder makes an assignment for the behalf of creditors or petitions
for or enters into an agreement or agreements with its creditors,
and by reason of any of these events Builder's obligations under the
Contract are assigned to or are to be are performed by a person
other than Builder;
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11.1.3 The Builder fails to make prompt payment to any Subcontractors or
for Materials, Components, equipment or labor used in the Vessel;
11.1.4 The Builder performs defective work and fails to promptly and
properly correct such defective work;
11.1.5 Builder fails to execute the Work in accordance with the Contract;
11.1.6 Builder fails to cause the removal or bonding of any liens or
privileges filed against the Work;
11.1.7 Builder disregards laws, ordinances, rules, regulations or orders of
any Regulatory Agencies or Bodies or Other Authorities having
jurisdiction over the Work; or,
11.1.8 Builder without limitation, fails to perform or comply with
provision of the Contract; then Owner, by giving five (5) days'
written notice of any such default to Builder, in addition to and
without prejudice to any other remedies it may have, may terminate
the Contract. Any termination of the Contract made pursuant to the
provisions of this Article 11 shall not relieve Builder from any
accrued obligations hereunder due and owing Owner at the time of
such termination and Builder shall be liable for any and all
damages, expenses, losses, costs, including but not limited to,
attorney's fees, subject to the limitations set forth in Paragraph
10.8, which may be sustained by Owner as a result of said default.
In the event of default by Builder, which default is not cured
within five (5) days after written notice thereof, the Owner, or its
nominee, may, but shall not be obligated to, take over the Work,
Vessel, Materials and Components to be incorporated into the Vessel
and Builder's contracts with any Subcontractors, and either (a)
complete the performance of the Contract, or (b) sell the partially
completed Work, Materials, Components and Vessel. If Owner elects to
complete the performance of the Contract, Owner shall be entitled to
do so in Builder's Shipyards, at no additional cost to Owner, or at
Owner's option, move the Work, Materials, Components and Vessel to
another location for completion. If Owner elects to sell the
partially completed Work, Materials, Components and Vessel, Owner
shall be entitled to leave the Work, Materials, Components and
Vessel in Builder's Shipyards for a period not to exceed one hundred
twenty (120) days while it pursues the sale, in which case Builder
agrees to permit prospective buyers access to its Shipyards at
reasonable times to inspect the Work, Materials, Components and
Vessel, or at Owner's option, Owner may remove the Work, Materials,
Components and Vessel to another location for sale. If Owner
completes the Vessel, and the unpaid balance of the Contract Sum
exceeds the expense of finishing the Vessel, only such excess shall
be paid to Builder. If the cost of completing the Vessel, however,
exceeds the unpaid balance of the Contract Sum, Builder shall pay
such excess to Owner. Builder shall not be entitled to any further
payments from Owner. If Owner sells the partially completed Work,
Materials, Components and Vessel, Owner shall be
20
entitled to keep the proceeds.
11.2 Owner may terminate this Contract, at any time, without cause by giving
seven (7) days' prior written notice to Builder of Owner's intent to
terminate under this Paragraph. In such event, Owner will pay Builder for
the portion of the Contract Sum allocable to the Work completed as of the
effective date of termination, less the aggregate of previous payments made
by Owner to the Builder. In the event that the aggregate of the previous
payments made by Owner to Builder exceeds the amount due to Builder,
Builder shall promptly refund any overage to Owner. The Owner also will
reimburse the Builder for all verified costs necessarily incurred for
organizing and carrying out the stoppage of the Work and paid directly by
the Builder incurred to date of termination. In any event, such payment
shall not be made unless Builder has furnished Owner with releases of liens
satisfactory to Owner. Owner will not be responsible for any of Builder's
continuing contractual commitments to any Subcontractor. Builder shall use
its best efforts to include in all subcontracts a provision permitting
voluntary termination by Builder without cancellation charge or penalty.
Owner shall not under any circumstances be responsible or liable to
Builder, or any Subcontractor for any incidental, consequential or special
damages or expenses of any type or kind, including, but not limited to,
loss of time, loss of profit or earnings, or losses related to detrimental
reliance upon the existence of the Contract, whether or not such losses
directly or indirectly arise out of the Contract, or from any actions taken
by Owner at any time to terminate the Contract.
11.3 In the event of termination by Owner, Owner may require Builder promptly to
assign and/or deliver to Owner all or any (a) bids or proposals, (b)
subcontracts, (c) construction plans, (d) Materials, Components, tools and
equipment (to the extent paid for by Owner), (e) appliances, (f) rental
agreements, and (g) any other commitments which Owner, in its sole
discretion, chooses to take by assignment, and in the case of assignments
hereunder, Builder shall promptly execute and deliver to Owner written
assignments of same. This provision shall survive the termination of the
Contract.
11.4 Delay by Owner or its representatives in providing to Builder or its agents
any Owner supplied documents and/or goods or materials for the construction
of the Vessel shall not constitute a breach or default of this Agreement by
Owner but shall be covered instead by the appropriate provisions of Article
6 relating to Force Majeure.
11.5 The failure of either party to exercise any rights conferred upon it under
any provision of this Agreement with respect to any breach or default by
the other party shall constitute neither a waiver of its rights under any
other provision of this Agreement with respect to such breach or default,
nor a waiver of its rights under the same or any other provision of this
Agreement with respect to any other breach or default.
11.6 The remedies available to Builder and Owner for default under this Article
11 are in addition to, and not in lieu of, their other remedies available
at law or in equity. The non-defaulting party shall take reasonable
actions to mitigate its damages.
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ARTICLE 12 - APPLICABLE LAW
12.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Louisiana.
ARTICLE 13 - CONTRACT
13.1 The "Contract Documents" shall mean and consist of this Agreement (and any
general or supplementary conditions thereto), the Specifications and
Contract Drawings, the Contract Schedule, Builder's Bid attached to this
Agreement as Schedule 13.1 and all written Modifications issued after
execution of this Agreement, and represent the entire agreement between
Owner and Builder. These form the Contract, and all are as fully a part of
the Contract as if attached to this Agreement or repeated herein. Any
conflict or inconsistency between other Contract Documents and this
Agreement shall be governed and controlled by this Agreement. The Contract
may be amended or modified only by a written Modification. A
"Modification" is (1) a written amendment to the Contract signed by both
parties, or (2) a Change Order. All Contract Documents shall be signed by
Owner and Builder. Terms used in this Agreement which are defined in the
Contract Documents shall have the meanings designated in those Contract
Documents.
13.2 The intent of the parties as enumerated in the Contract Documents is for
Builder to construct a fully functional vessel in accordance with Contract
Drawings and Specifications for the Contract Sum and prior to the
Completion Date. The Contract Drawings and Specifications are to be
considered as cooperative. All work necessary for the execution of the
Work, if shown or described in the Specifications and Contract Drawings,
shall be considered as a part of the Work and shall be executed by Builder
in the same manner and with the same character of material as other
portions of the contract without extra compensation. Builder shall be
responsible for reviewing the Specifications and Contract Drawings.
Builder shall notify Owner of any errors or omissions in the Specifications
and Contract Drawings and Builder shall be responsible for any such errors
or omissions about which Builder has failed to notify Owner.
13.3 Unless expressly stipulated to the contrary, Builder shall provide and pay
for all services, labor, overtime labor, standby labor, methods, materials,
equipment, transportation, fuel, taxes, permits and fees and all other
facilities and services necessary to complete the Work.
13.4 If there is any conflict or inconsistency between the specifications and
contract drawings comprising the Specifications and Contract Drawings, the
specifications shall control.
ARTICLE 14 - INSPECTION, ACCESS, TESTS AND OFFICIAL CERTIFICATES
14.1 During the construction of the Vessel at the Shipyards, Builder shall
provide Owner, or Owner's Representative, or any representative of any
Regulatory Agencies or Bodies or Louisiana Authorities, facilities and
access to inspect the Vessel, Materials, Components, workmanship, plans,
tests and movements and Builder shall provide a suitable office for Owner
or Owner's
22
Representative with access to suitable facilities and conditions such as a
telephone, fax, copy machine, heat and air conditioning. Builder shall
perform all of the tests and trials required of Builder in any of the
Contract Documents, and will give Owner at least ten (10) days' prior
notice of the date thereof.
14.2 All of the Work, Materials, and Components required by the Contract, while
the same is in the process of fabrication, erection, construction,
installation and performance, shall be inspected and approved or rejected,
as the case may be, by the Owner (or Owner's Representative) and by
representatives of Regulatory Agencies or Bodies in accordance with the
Contract. Failure to object will not preclude Owner from later complaining
if Owner establishes that it used reasonable diligence, under the
circumstances, to discover defects, and in any event shall have no effect
on the warranty provided by Builder hereunder.
14.3 Owner shall have the right to appoint an "Owner's Representative" and Owner
shall inform Builder in writing as to the extent of authority Owner has
granted to said Owner's Representative. In the event of a "working
conflict" between Owner's Representative and Builder, Builder shall
promptly inform Owner of the problem and Owner shall make a diligent effort
to promptly resolve the "working conflict" in a manner amenable to both
parties.
14.4 Builder shall provide access to the Vessel while under construction to
inspectors from any Louisiana Authorities or other Regulatory Agencies or
Bodies or Other Authorities upon request of Owner.
14.5 TESTS AND INSPECTIONS
14.5.1 Tests, inspections and approvals of portions of the Work required by
the Contract Documents or by laws, ordinances, rules, regulations or
orders of Regulatory Agencies or Bodies or Other Authorities having
jurisdiction shall be made at an appropriate time. Unless otherwise
provided, the Builder shall make arrangements for such tests,
inspections and approvals with an independent testing service or
entity acceptable to the Owner, or with the appropriate Regulatory
Agencies or Bodies, and Builder shall bear all related costs of
tests, inspections and approvals. The Builder shall give the Owner
and all appropriate Regulatory Agencies or Bodies timely notice of
when and where tests and inspections are to be made so they may
observe such procedures.
14.5.2 If the Owner or Regulatory Agencies or Bodies having jurisdiction
determine that portions of the Work require additional testing,
inspection or approval not included under Subparagraph 14.5.1, the
Owner will instruct the Builder to make arrangements for such
additional testing, inspection or approval by an entity acceptable
to the Owner, and the Builder shall give timely notice to the Owner
and all appropriate Regulatory Agencies or Bodies of when and where
tests and inspection are to be made so the Owner may observe such
procedures.
14.5.3 Required certificates of testing, inspection or approval shall be
secured by the Builder,
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at Builder's sole cost, and promptly delivered to the Owner.
14.5.4 If the Owner is to observe tests, inspections or approvals required
by the Contract Documents, the Owner will do so promptly and, where
practicable, at the normal place of testing.
14.5.4.1 Neither such observations of the Owner nor inspections,
tests, or approvals by persons other than the Builder
shall relieve the Builder from its obligations to perform
the Work in accordance with the Contract Documents.
14.5.5 Tests or inspections conducted pursuant to the Contract Documents
shall be made promptly to avoid unreasonable delay in the Work.
ARTICLE 15 - ASSIGNMENT; CONSTRUCTION FINANCING
15.1 The Contract shall inure to the benefit of the Builder and Owner and their
successors and assigns and shall be binding upon the Builder and Owner and
their successors and assigns; provided, however, that Builder shall not
assign the Contract or any interest hereunder without the prior written
consent of Owner, and any assignment without said prior written consent
shall be null and void. Owner may at any time sell the Vessel and/or
assign the Contract, but shall at all times remain liable under the
Contract. Builder agrees that such a sale and/or assignment shall not be
grounds for termination of the Contract.
Owner shall not be required to obtain Builder's consent to the collateral
assignment of the Contract in connection with any financing of the Contract
Sum. Builder understands and agrees that Owner will be required to satisfy
its lender's or lenders' security requirements for the financing of the
Contract Sum and agrees that Builder will execute such documents and make
such amendments to the Contract as may be required by Owner in order to
satisfy the requirements of its lender or lenders and to allow such lender
to obtain a perfected first priority security interest in the Contract, the
Vessel, its Materials, the Work and the Components, including, but not
limited to, such documents or amendments to vest Owner with clear title in
the Work, the Vessel, its Materials and the Components. Furthermore,
Builder hereby agrees that its interest in the Contract, the Vessel, the
Materials, the Work and the Components is hereby expressly subordinated and
subject to any first priority security interests in the Contract, the
Vessel, its Materials, the Work and Components granted by Owner to Owner's
lender or lenders.
ARTICLE 16 - COMPLIANCE WITH REGULATIONS
16.1 The Builder shall comply with all laws, rules, regulations and requirements
of any Regulatory Agencies or Bodies affecting the construction of the Work
and the Vessel, and shall procure at its own expense such permits from such
Regulatory Agencies or Bodies, the Louisiana Authorities and any Other
Authorities, as may be necessary for Builder to begin or carry on the
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completion of the Work, and shall at all times comply with all United
States, State and local laws, to which Builder is aware, in any way
affecting the Work.
ARTICLE 17 - PATENTS
17.1 Owner agrees to protect and hold harmless Builder against claims of third
persons for damages sustained by reason of the infringement of the patent
rights with respect to materials, processors, machinery, equipment, and
hull form selected and used by Owner in such works; and Owner agrees to
protect and hold harmless Builder against claims of third persons for
damages sustained by reason of infringement of patent rights with respect
to materials, processes, machinery and equipment supplied or specifically
acquired by Owner or required by any Specifications furnished by Owner.
Builder agrees to protect and hold harmless Owner against claims of their
persons for damages sustained by reason of infringement of patent rights
with respect to materials, processes, machinery and equipment supplied or
specifically acquired or applied by Builder.
ARTICLE 18 - USE OF THE CONTRACT DRAWINGS AND SPECIFICATIONS
18.1 The Specifications, Contract Drawings and Builder's Working Drawings of the
Vessel are and shall remain property of the Owner.
18.2 The Builder shall, at no additional cost to Owner, provide "As Built"
drawings of the Vessel.
ARTICLE 19 - NOTICES AND COMMUNICATIONS
19.1 Notices required hereunder shall be sent in accordance with the following
and at the addresses hereinafter set forth. Any notice or communication
required or permitted to be given hereunder shall be given in writing,
shall be effective only if given in one of the following manners, and shall
be deemed given and deemed received: (a) if mailed by United States
Registered or Certified Mail, postage prepaid, return receipt requested, on
the third day after the notice is deposited in an official United States
mail receptacle with postage prepaid; (b) if given by facsimile
transmission, on the date transmitted provided that (1) receipt is
confirmed, and (2) an additional copy of the notice or communication is
sent on the same day by normally utilized overnight courier; or (c) if
given by nationally utilized overnight courier, on the first business day
after it is sent; or (d) if hand delivered, on the date a receipt is
obtained from the person to whom same is delivered. Notices hereunder
shall be addressed as follows:
If to Owner: Hollywood Casino Shreveport
c/o Hollywood-Louisiana, Inc.
Two Galleria Tower, Suite 2200
00000 Xxxx Xxxx, XX 00
Xxxxxx, XX 000000
Attention: General Counsel
Fax: 000-000-0000
25
If to Builder: Leevac Shipyards, Inc.
X.X. Xxx 0000
Xxxxxxx 00 Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Fax: 000-000-0000
The parties expressly agree that any notice or other communication that the
Builder is required to give Owner under the terms and conditions of the Contract
shall also be given to Owner's lender or lenders if any, in the same manner
given to Owner at such address, telex or facsimile number as Owner may specify
by written notice to Builder.
ARTICLE 20 - TITLE
20.1 Title in and to the Vessel to be constructed pursuant to the Contract shall
be vested in Owner. The Work shall be deemed delivered to, and title of the
Work shall be vested in Owner as and when performed; and in addition to the
foregoing, title to the completed Vessel shall be vested in Owner upon
completion thereof; the Materials shall be deemed delivered to Owner, and
title to the Materials shall vest in Owner as and when delivered to the
Shipyard and the Components shall be deemed to have been delivered to Owner
and title to all Components shall vest in Owner upon commencement of
fabrication of the Components. It is understood and agreed and it is the
intent of Builder and Owner that Owner shall have the rights and benefits
afforded a "Purchaser" and that Builder shall have the obligations imposed
on a "Builder" by the Louisiana Ship Mortgage Law, La. R.S. 9:5521. The
Builder shall have the obligation to cause the Vessel, the Materials and
the Components referred to above, to be marked as follows:
20.1.1 Builder shall affix a plaque showing the name of the Builder and
Owner, i.e., Leevac Shipyards, Inc. - Builder; Hollywood Casino
Shreveport - Owner; the Hull Number of such Vessel and the parishes
in which such Vessel is to be constructed to the keel of the Vessel,
if such Vessel has a keel, or to the bottom plates, if such Vessel
does not have a keel, when laid, so as to be clearly visible at all
times during the performance of the Work and until the decking is
laid. At such time as the decking is laid, the aforementioned plaque
shall be removed and permanently affixed to the weather deck of such
Vessel so as to be clearly visible at all times during continuation
of the Work and after completion.
20.1.2 Builder shall xxxx or stamp on all Materials for the Vessel the name
of the Owner and the Hull Number of the Vessel, upon delivery of
such Materials to the Shipyard, or alternatively, maintain records
which will identify with certainty all such Materials for the Vessel
with the name of the Owner and the Hull Number of the Vessel for
which the Materials will be used.
20.1.3 Builder shall xxxx or stamp on all Components for the Vessel, the
name of the Owner and the Hull Number of the Vessel for which the
Components will be used upon
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commencement of the fabrication thereof, or alternatively, maintain
records which will identify with certainty all such Components for
the Vessel with the name of the purchaser and the Hull Number of the
Vessel for which the Components will be used.
20.2 If any Materials or Components purchased by the Builder for the Vessel are
not utilized for the Vessel, such Materials and Components shall become the
property of the Builder following Delivery and Acceptance of the Vessel.
Any Materials Components furnished by the Owner which are not utilized for
the Vessel shall remain the property of the Owner.
ARTICLE 21 - INDEMNIFICATION
21.1 To the fullest extent permitted by law and subject to the limitation of
Paragraph 8, Builder hereby agrees to and shall indemnify and hold harmless
the Owner and Owner's representatives, and each of their respective
directors, officers, partners, members, agents and employees (collectively,
"Owner's Indemnitees") from and against any and all claims, liabilities,
losses, damages, costs or expenses, including but not limited to reasonable
attorney's fees and court costs in whole or in part, caused by, resulting
from, arising out of, or occurring in connection, with the negligent acts,
errors or omissions, gross negligence or willful and wanton acts of or
breach of contract by the Builder, any Subcontractor, anyone directly or
indirectly employed by any of them or anyone for whose acts any of them may
be legally responsible, which acts, errors, omissions, negligence or breach
of contract has occurred prior to delivery of the Vessel. The above
indemnity includes but is not limited to any such injury resulting from the
use of scaffolding, hoists, cranes, and all such other equipment used in
connection with the Work or from the Builder's failure to properly provide
and maintain the protective measures required by the Contract arising prior
to delivery and acceptance of the Vessel or while warranty work is in
progress provided, however, this right to indemnification shall not apply
to the extent that any such claims, liabilities, losses, damages or
expenses result from the Owner's or the Owner's Indemnitees' negligence.
The Builder agrees to pay on behalf of the Owner and Owner's Indemnitees
upon their demand the amount of any final judgment, including all appeals,
that may be entered against them in any action brought against the Owner
and Owner's Indemnitees upon or by reason of claims arising out of any such
acts or omissions of Builder as well as all costs of defense including
attorney's fees and costs incurred by Owner and Owner's Indemnitees in
connection with such claims
21.2 To the fullest extent permitted by law, Owner hereby agrees to and shall
indemnify and hold harmless the Builder and Builder's representatives, and
each of their respective directors, officers, partners, members, agents and
employees (collectively, "Builder Indemnitees") from and against any and
all claims, liabilities, losses, damages, costs or expenses, including but
not limited to reasonable attorney's fees and court costs in whole or in
part, caused by, resulting from, arising out of, or occurring in connection
with the negligent acts, errors or omissions, gross negligence or willful
and wanton acts of or breach of contract by the Owner, Owner's
subcontractors, anyone directly or indirectly employed by any of them or
anyone for whose acts any of them may be legally responsible, which acts,
errors, omissions. negligence or breach of contract has occurred prior to
delivery of the Vessel. This right to indemnification shall not
27
apply to the extent that any such claims, liabilities, losses, damages or
expenses result from the Builder's or the Builder's Indemnitees'
negligence. The Owner agrees to pay on behalf of the Builder and Builder's
lndemnitees upon their demand, the amount of any final judgment, including
all appeals, that may be entered against them in any action brought against
the Builder or Builder's Indemnitees upon or by reason of claims arising
out of any such acts or omissions of Owner as well as all costs of defense
including attorney's fees and costs incurred by Builder and Builder's
Indemnitees in connection with such claims.
ARTICLE 22 - DISPUTE RESOLUTION
22.1 In the event a dispute between the parties arises under the terms of the
Contract, either party may send to the other a letter of dispute setting
forth in particular the subject matter of the dispute. The parties shall
meet at a mutually convenient location not later than thirty (30) days
after the date of the receipt of the letter of dispute for the purposes of
negotiating a settlement of the disputed matter or to select an alternate
dispute resolution procedure.
22.2 In the event that either party determines after compliance with Paragraph
22.1 that the disputed matter cannot be resolved by the parties, the
disputed matter shall be submitted to binding arbitration. In any event,
Builder shall continue to pursue all Work required with due diligence as
time is of the essence, and shall not slow down or delay the Work or either
of the Delivery Dates due to any disputes or claims.
22.3 To invoke arbitration under this article, either party shall notify the
other, and the arbitrators, in writing, setting forth:
(a) The issue to be arbitrated; and
(b) That arbitration is demanded.
22.4 With regard to elements of the Work to be performed by the Builder to which
Owner makes objection, refuses to pay or rejects; or disputes relating to
the stage of completion of the Work, Change Orders or Force Majeure, or a
dispute relating to insurance proceeds not exceeding One Hundred Thousand
($100,000.00) Dollars, Builder and Owner agree to be bound by the decision
of the Principal Surveyor of the A B S Technical Services, Inc. in Houston,
Texas or his designee. All costs and fees of the arbitrator shall be borne
equally by Owner and Builder.
22.5 In all matters other than those described in Paragraph 22.4, if arbitration
is invoked, the disputed matter shall be submitted to binding arbitration
before a panel of three (3) arbitrators, one of whom is appointed by the
Owner, one of whom is appointed by the Builder, and the third of whom shall
be selected by the other two arbitrators and will act as chairman. All
shall be Members of the Society of Maritime Arbitrators, of The New Orleans
Board of Trade, Ltd. (the "Society"). The majority of the panel of three
(3) arbitrators may make a binding decision. Each party shall be
responsible for the costs of its appointee and the parties shall be jointly
responsible for the costs of the third appointee.
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22.6 The parties may follow such rules and procedures as are agreed to between
the parties. If the parties cannot agree to such rules and procedures
within five (5) days of an election to submit the dispute to arbitration,
then the Maritime Arbitration Rules of the Society shall apply.
22.7 Any arbitration under this Article 22 shall take place in New Orleans,
Louisiana or another location mutually agreeable to the parties.
ARTICLE 23 - GENERAL
23.1 This agreement may be executed in several counterparts, all of which may be
taken to be one and the same agreement.
23.2 Builder acknowledges that Owner's lease with the City of Shreveport
contains the following:
"Construction Phase - Prior to the contracting process, Tenant will
------------------
meet with a representative sampling of minority and female
construction related companies in a geographic area no smaller than an
area encompassing Dallas, Texas, New Orleans, Louisiana and Atlanta,
Georgia (the "Subject Area") to ensure that such companies: (1) are
------------
fully aware of the available contract opportunities for construction
projects and (2) have a Tenant contact person available to answer
questions throughout the contracting and construction phase of such
projects. After surveying a representative sampling of minority and
female construction related companies in the Subject Area, Tenant will
establish a goal for the total construction budget to be contracted
with such companies. Any general contractor wanting to do business
with Tenant for construction projects must accept this provision in
order to contract with Tenant. The general contractor will be held
accountable for ensuring compliance with M/WBE goals and will be
required to report on such goal compliance at least quarterly (such
reports will be made available to the Office of the Mayor)."
Builder agrees to act in good faith to assist Owner in complying with its
obligations to the City of Shreveport.
29
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their proper authorized representatives, thereunto duly authorized.
WITNESSES: LEEVAC SHIPYARDS, INC.
/s/ X. X. Xxxxxx
------------------------- ------------------------------
Name: X. X. Xxxxxx
------------------------- Title: President
Date: July 16, 1999
-------------------------
HOLLYWOOD CASINO SHREVEPORT,
A LOUISIANA PARTNERSHIP
By: HWCC-Louisiana, Inc.,
its general partner
By: /s/ Xxxxxxx X. XxXxxxx III
-------------------------
WITNESSES: Name: Xxxxxxx X. XxXxxxx III
Title: Vice President
------------------------- Date: July 16, 1999
--------------------
-------------------------
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List of Exhibits
----------------
Exhibit "A" - Form of Certificate of Completion and Delivery
Exhibit "B" - Form of Schedule of Values
Exhibit "C" - Form of Change Order
List of Schedules
-----------------
Schedule 2.1 - Specifications and Contract Drawings
Schedule 13.1 - Builder's Bid
31
Exhibit A
CERTIFICATE OF COMPLETION AND DELIVERY
Date: Time:
------------------------------ -------------------------
Place:
------------------------------
Pursuant to the Vessel Construction Agreement for the construction of one
_____________ Casino Vessel, Leevac Shipyards, Inc. hereby tenders to
Hollywood Casino Shreveport.
Leevac Shipyards, Inc. warrants (i) that the Vessel has been completed;
(ii) that all trials and tests have been satisfactorily completed; (iii) that
the Vessel complies with the Specifications and Contract Drawings and the
Agreement, and is free from defects in materials and workmanship; and (iv) that
there are no liens or claims upon said Vessel for materials, equipment or labor
for said Vessel, except those created or incurred by the Owner, its
subcontractors, vendors or employees.
LEEVAC SHIPYARDS, INC.
------------------------------
By:
---------------------------
Title:
------------------------
HOLLYWOOD CASINO SHREVEPORT
------------------------------
By:
---------------------------
Title:
------------------------
32
Exhibit B
AIA Form G702 Application for Payment
AIA Form G703 Application for Payment Continuation Sheet (Schedule of Values)
33
Exhibit C
CHANGE ORDER
Vessel: Change Order #_____
Hull # From:
To:
Title:
Description:
Delivery Impact: Added Days:
Pricing Adjustment
Grand Total (Deduct/Add)
Accepted: Accepted:
------------------------------ ------------------------------
Date: Date:
------------------------- -------------------------
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