AMENDMENT NO. 2 TO
NO. 1 CONTINUOUS GALVANIZING LINE
TURNKEY ENGINEERING AND
CONSTRUCTION CONTRACT
This Amendment No. 2 ("AMENDMENT") made this 22nd day of June, 1999 by and
between National Steel Corporation, Great Lakes Division, a Delaware corporation
with its office at 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000
("NATIONAL") and NKK Steel Engineering, Inc., a Delaware corporation with its
office at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx, Xxxxxxxxxxxx 00000-0000
("CONTRACTOR").
RECITALS
A. NATIONAL and CONTRACTOR are parties to the No. 1 Continuous Galvanizing
Line Turnkey Engineering and Construction Contract dated as of October 23, 1998,
as amended by Amendment No. 1 dated as of March 19, 1999 (together, the
"AGREEMENT").
B. NATIONAL and CONTRACTOR have agreed that the AGREEMENT should be further
amended.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Definitions. All capitalized terms, which are not otherwise defined
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herein, shall have the meanings given to them in the AGREEMENT.
2. Amendment of Section 6. Section 6 of the AGREEMENT is hereby amended by
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adding the following as a new Section 6.5:
"6.5 Bonus for Early Completion. In the event that the HOT RUN COMMENCEMENT
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occurs prior to the HOT RUN COMMENCEMENT DEADLINE, then NATIONAL agrees to
pay to CONTRACTOR, a bonus (the "COMPLETION BONUS") determined in
accordance with the requirements, and subject to the conditions, set forth
below :
(i) The amount of the COMPLETION BONUS shall be equal to $75,000 times the
lesser of (a) the number of BONUS ELIGIBLE DAYS (as hereinafter
defined), and (b) 30.
(ii) The COMPLETION BONUS shall be due and payable as follows:
(A) 50% of the COMPLETION BONUS shall be due and payable within
thirty (30) days after NATIONAL's receipt of CONTRACTOR's invoice
for such amount, which invoice shall be issued by CONTRACTOR no
earlier than the occurrence of the HOT RUN COMMENCEMENT;
(B) 50% of the COMPLETION BONUS shall be due and payable within
thirty (30) days after NATIONAL's receipt of CONTRACTOR's invoice
for such amount, which invoice shall be issued by CONTRACTOR no
earlier than the date on which the Certificate of Substantial
Completion has been issued by CONTRACTOR and countersigned by
National pursuant to Section 15.1(iv) of the AGREEMENT; and
(C) Amounts payable by NATIONAL to CONTRACTOR pursuant to
Sections 6.5(ii)(A) and (B) above shall not (x) be required to be
repaid by CONTRACTOR to NATIONAL under any circumstances, or (y)
be subject to NATIONAL's right to withhold pursuant to Section
35.7 of this AGREEMENT.
(iii) In the event that a COMPLETION BONUS is paid to CONTRACTOR pursuant
to this Section 6.5, then the SUBSTANTIAL COMPLETION DEADLINE shall
be moved forward one day for each BONUS ELIGIBLE DAY (so that, for
example, if there are 5 BONUS ELIGIBLE DAYS, the SUBSTANTIAL
COMPLETION DEADLINE shall be 22 months and 2 days from the date of
the CONTRACT).
(iv) In order to induce NATIONAL to enter into this AMENDMENT, CONTRACTOR
hereby affirms and agrees that it shall not, in an effort to expedite
the HOT RUN COMMENCEMENT, (i) reduce the time period allotted for the
No Load Test or Cold Run Test in the No. 1 CGL Overall Schedule, as
set forth in the AS SOLD SPECIFICATIONS, or (ii) otherwise modify,
amend or depart from the SPECIFICATIONS in its performance of the
WORK, without in either case, the prior written consent of NATIONAL.
It is understood and agreed by CONTRACTOR that it will continue to be
liable to perform the WORK in accordance with the SPECIFICATIONS and
the other requirements of the AGREEMENT.
(v) As used herein the term "BONUS ELIGIBLE DAY" shall mean each calendar
day (if any) by which the HOT RUN COMMENCEMENT precedes the HOT RUN
COMMENCEMENT DEADLINE.
(vi) In order for a COMPLETION BONUS to be payable hereunder, the HOT RUN
COMMENCEMENT must actually take place on or before the HOT RUN
COMMENCEMENT DEADLINE (as currently defined in Section 6.4 of the
AGREEMENT). Except as specifically set forth in the next succeeding
sentence, any provision of the AGREEMENT which provides for the
deemed occurrence of the HOT RUN COMMENCEMENT or for an extension of
the schedule for performance of the WORK, including the HOT RUN
COMMMENCEMENT DEADLINE (whether due to an act of FORCE MAJEURE, an
act of NATIONAL or otherwise) shall not be applicable.
Notwithstanding the foregoing, in the event that the HOT RUN
COMMENCEMENT would have occurred but for the fact that NATIONAL
failed to supply the steel coils necessary for the Hot Run Test,
then, for the sole purpose of determining CONTRACTOR's entitlement to
a COMPLETION BONUS, the HOT RUN COMMENCEMENT shall be deemed to have
occurred on the date that all other conditions for the HOT RUN
COMMENCEMENT have been satisfied by CONTRACTOR.
3. Calculation of Liquidated Damages and BONUS ELIGIBLE DAYS. For purposes of
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determining (i) the number of BONUS ELIGIBLE DAYS pursuant to Section 6.5(v) and
(ii)
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CONTRACTOR's liability for liquidated damages pursuant to Section 6.4 and
34.12, the number of calendar days, and not the number of hours, shall be
utilized. This principle is illustrated by the following examples:
(a) The HOT RUN COMMENCEMENT DEADLINE is April 23, 2000. If the HOT RUN
COMMENCEMENT takes place at 11:30 p.m. on April 22, 2000, then there
would be one BONUS ELIGIBLE DAY; and
(b) The HOT RUN COMMENCEMENT DEADLINE is April 23, 2000. If the HOT RUN
COMMENCEMENT takes place at 12:30 a.m. on May 1, 2000, then one day of
liquidated damages would be payable by CONTRACTOR pursuant to Section
6.4 of the AGREEMENT.
4. No Other Changes. Except as specifically provided for in this
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AMENDMENT, the terms and conditions of the AGREEMENT and other CONTRACT
DOCUMENTS shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
NATIONAL STEEL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Title: Vice President, General Counsel & Secretary
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NKK STEEL ENGINEERING, INC.
By: /s/ Xxxxxxxx Xxxx
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Title: Chairman & CEO
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