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AMENDMENT NO. 1 TO FABRICATION AGREEMENT
This Amendment No. 1 (this "Amendment") dated as of August 31, 1999, to
that certain Fabrication Agreement made and entered into as of July 16, 1999 (as
in effect on the date hereof, the "Contract") by and between DELOS OFFSHORE
COMPANY ("Company"), a Delaware limited liability company, and MODEC
INTERNATIONAL LLC ("Contractor"), a Delaware limited liability company, is
entered into by and between Company and Contractor. Hereinafter, Company and
Contractor may be referred to individually as a "Party" and collectively as the
"Parties."
W I T N E S S E T H:
WHEREAS, Company and Contractor are parties to the Contract wherein
Contractor agreed to design, fabricate, assemble and deliver facilities in
accordance with the terms of such Contract, and Company agreed to pay for such
Work (as defined in the Contract) performed by Contractor; and
WHEREAS, Company and Contractor now desire to amend the Contract to (i)
redefine the order of priority of the appendices in the event of any conflict
between the provisions of the Contract Documents (as defined in the Contract),
and (ii) modify the notice periods specified in certain of the provisions of the
Contract.
NOW, THEREFORE in consideration of the premises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company and Contractor hereby stipulate and agree as
follows:
1. Definitions. Terms defined in this Amendment have the meanings
specified herein, and capitalized terms not defined herein, but defined in the
Contract, are used herein as therein defined.
2. Amendments. The Contract shall be and is hereby amended as follows:
A. Article 2.3 is hereby amended by deleting subsections (a), (b)
and (c) in their entirety, and substituting the following:
a) this Fabrication Agreement,
b) Appendices X, X, X, X, X, X, X, X, X, M, L, J, I, O, P and D.
B. Section 6.2 is hereby amended by replacing the term "seven (7)
Days" each time it appears in the second and third paragraphs with the
term "14 Days."
C. Section 12.2 is hereby amended by replacing the phrase "within
seven (7) Days" in the first paragraph with the following phrase:
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"within 21 Days (except with respect to offshore Work, in which
case it shall be submitted within two (2) Days)".
D. Article 16.1 is hereby amended by replacing the phrase "within
seven (7) Days" in the first paragraph with the following phrase:
"within 21 Days (except with respect to offshore Work, in which
case it shall be prepared within two (2) Days)".
Article 16.1 is further amended by replacing the phrase
"within seven (7) Days" in the second paragraph with the following
phrase:
"within 21 Days (except with respect to offshore Work, in which
case it shall be presented within two (2) Days)".
Article 16.1 is further amended by replacing the phrase
"within seven (7) Days" in the fourth paragraph with the following
phrase:
"within 21 Days (except with respect to offshore Work, in which
case it shall be informed within two (2) Days)".
E. Article 28.2 is hereby amended by replacing the term "14 Days"
in the first line with "21 Days."
3. No Other Waivers or Amendments. Except as expressly waived or
amended hereby, the Contract shall remain in full force and effect in accordance
with its terms, without any waiver, amendment or modification of any provision
thereof.
4. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the Parties and their respective successors and
permitted assigns.
5. Counterparts. This Amendment may be executed by one or more of the
Parties on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS, WITHOUT
REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES WHICH, IF APPLIED, MIGHT PERMIT OR
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to
Fabrication Agreement to be signed by their respective duly authorized
representatives effective as of the day and year first written in the preamble.
COMPANY:
DELOS OFFSHORE COMPANY, L.L.C.
/s/ XXXXX X. XXXXX
---------------------------------
Xxxxx X. Xxxxx
President
CONTRACTOR:
MODEC INTERNATIONAL LLC
/s/ X. XXXXXXXXX
---------------------------------
X. Xxxxxxxxx
President
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EXHIBIT 10.20
SUNDAY SILENCE FIELD DEVELOPMENT
FABRICATION AGREEMENT
DELOS OFFSHORE COMPANY, L.L.C.
HOUSTON
JULY 1999
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DELOS OFFSHORE COMPANY, L.L.C. SUNDAY SILENCE FIELD DEVELOPMENT
FABRICATION AGREEMENT
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TABLE OF CONTENTS
PART 1 GENERAL PROVISIONS.........................................................1
ART. 1 DEFINITIONS...........................................................1
ART. 2 CONTRACT DOCUMENTS - INTERPRETATION...................................4
ART. 3 REPRESENTATIVES OF THE PARTIES........................................5
PART 2 PERFORMANCE OF THE WORK....................................................5
ART. 4 OBLIGATIONS OF CONTRACTOR - MAIN RULES................................5
ART. 5 AUTHORITY REQUIREMENTS - PERMITS......................................6
ART. 6 DRAWING - SPECIFICATIONS - COMPANY PROVIDED ITEMS.....................7
ART. 7 SUBCONTRACTS..........................................................8
ART. 8 LABOR FOR THE WORK....................................................9
ART. 9 MINERALS MANAGEMENT SERVICE (MMS) OBLIGATIONS.........................9
ART. 10 QUALITY ASSURANCE.....................................................9
PART 3 PROGRESS OF THE WORK......................................................10
ART. 11 CONTRACT SCHEDULE - DELAYED PROGRESS.................................10
PART 4 VARIATIONS AND CANCELLATION...............................................11
ART. 12 RIGHT TO VARY THE WORK...............................................11
ART. 13 EFFECTS OF A VARIATION TO THE WORK...................................11
ART. 14 ISSUE OF VARIATION ORDERS............................................12
ART. 15 CONSEQUENCES OF VARIATION ORDERS - DISPUTES ABOUT CONSEQUENCES.......12
ART. 16 DISPUTE AS TO WHETHER A VARIATION TO THE WORK EXISTS - DISPUTED
VARIATION ORDER......................................................13
ART. 17 CANCELLATION.........................................................14
ART. 18 COMPANY'S RIGHT TEMPORARILY TO SUSPEND THE WORK......................16
PART 5 DELIVERY AND PAYMENT......................................................16
ART. 19 DELIVERY AND COMPLETION OF THE WORK..................................16
ART. 20 PAYMENT OF THE CONTRACT PRICE, INVOICING AND AUDIT...................17
ART. 21 GUARANTEE............................................................19
ART. 22 TITLE TO THE CONTRACT OBJECT - RIGHT TO DEMAND DELIVERY..............19
ART. 23 CONTRACTOR GUARANTEE - ACCEPTANCE CERTIFICATE........................20
PART 6 BREACH OF CONTRACT........................................................22
ART. 24 CONTRACTOR'S DELAY...................................................22
ART. 25 CONTRACTOR'S DEFECTS AND GUARANTEE LIABILITY.........................24
ART. 26 TERMINATION DUE TO CONTRACTOR'S BREACH OF CONTRACT...................25
ART. 27 COMPANY'S BREACH OF CONTRACT.........................................26
PART 7 FORCE MAJEURE.............................................................27
ART. 28 EFFECTS OF FORCE MAJEURE.............................................27
PART 8 LIABILITY AND INSURANCES..................................................28
ART. 29 LOSS OF OR DAMAGE TO THE CONTRACT OBJECT OR COMPANY PROVIDED ITEMS...28
ART. 30 EXCLUSION OF LIABILITY - INDEMNIFICATION.............................29
ART. 31 INSURANCES...........................................................34
PART 9 PROPRIETARY RIGHTS, ETC...................................................34
ART. 32 RIGHTS TO DOCUMENTS AND COMPUTER PROGRAMS............................34
ART. 33 INVENTIONS...........................................................35
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ART. 34 CONFIDENTIAL INFORMATION.............................................36
PART 10 OTHER PROVISIONS.....................................................37
ART. 35 ASSIGNMENT OF THE CONTRACT, ETC......................................37
ART. 36 NOTICES..............................................................37
ART. 37 UNITED STATES LAW AND DISPUTES.......................................37
ART. 38 EQUAL EMPLOYMENT OPPORTUNITY PROVISIONS..............................38
ART. 39 POLLUTION CONTROL AND RESPONSIBILITY.................................41
ART. 40 YEAR 2000 WARRANTY...................................................43
ART. 41 MISCELLANEOUS........................................................44
ART. 42 OPTION...............................................................46
APPENDICES
APPENDIX A -- SCOPE OF WORK
APPENDIX B -- COMPENSATION
APPENDIX C -- CONTRACT SCHEDULE
APPENDIX D -- ADMINISTRATION REQUIREMENTS
APPENDIX E -- SPECIFICATIONS
APPENDIX F -- DRAWINGS
APPENDIX G -- COMPANY PROVIDED FILMS
APPENDIX H -- SUBCONTRACTORS
APPENDIX I -- COMPANY'S INSURANCES, ETC.
APPENDIX J -- CONTRACTOR PARENT COMPANY GUARANTEE
APPENDIX K -- CONTRACTOR'S PROPRIETARY INFORMATION
APPENDIX L -- INVITATION TO BID
APPENDIX M -- AGREED UPON EXCEPTIONS AND CLARIFICATIONS
APPENDIX N -- CONTRACTOR'S BID PROPOSAL
APPENDIX 0 -- CONTRACTOR INSURANCE
APPENDIX P -- COMPANY PARENT COMPANY GUARANTEE
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DELOS OFFSHORE COMPANY, L.L.C. SUNDAY SILENCE FIELD DEVELOPMENT
FABRICATION AGREEMENT
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FABRICATION AGREEMENT
This Fabrication Agreement (this "Contract") effective as of July 16,
1999 (the "Effective Date") is by and between DELOS OFFSHORE COMPANY
("Company"), a Delaware limited liability company, and MODEC INTERNATIONAL LLC
("Contractor"), a Delaware limited liability company. Hereinafter, Company and
Contractor may be referred to individually as a "Party" and collectively as the
"Parties."
RECITALS
WHEREAS, Contractor is in the business to design, fabricate, assemble
and deliver facilities in accordance with Appendix A - Scope of Work ("Work");
and
WHEREAS, Company desires and has need of the type of Work provided by
Contractor; and
WHEREAS, Company and Contractor desire to enter into a contract whereby
Contractor shall provide such Work to Company pursuant to the terms and
conditions of this agreement and as defined in Appendix A; and
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration the adequacy and sufficiency of which are hereby acknowledged, the
Parties hereby stipulate and agree as follows:
PART 1 GENERAL PROVISIONS
ART. 1 DEFINITIONS
a) Acceptance Certificate means the certificate to be issued by
Company in accordance with Art. 23.5.
b) Affiliate means, with respect to a relevant Person, any Person
that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common
control with such relevant Person. For purposes of this
definition, the term "control" (including its derivatives and
similar terms) means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management and policies of the relevant Person, whether
through the ownership or control of voting interests, by
contract or otherwise.
c) Appendices means the following appendices which are attached
hereto and incorporated herein for all purposes: Appendix A -
Scope of Work, Appendix B - Compensation, Appendix C -
Contract Schedule, Appendix D - Administration Requirements,
Appendix E - Specifications, Appendix F - Drawings, Appendix
G - Company Provided Items, Appendix H - Subcontractors,
Appendix I - Company's Insurances, etc., Appendix J -
Contractor Parent Company Guarantee, Appendix K - Contractor's
Proprietary Information, Appendix L - Invitation to Bid,
Appendix M - Agreed Upon
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Exceptions and Clarifications, Appendix N - Contractor's Bid
Proposal, Appendix O - Contractor Insurance, and Appendix P -
Company Parent Company Guarantee.
d) Company shall have the meaning given to such term in the
preamble.
e) Company Indemnified Party means, other than any Contractor
Indemnified Parties, each of (i) Company and its Affiliates,
(ii) the contractors, subcontractors, agents, invitees and
other representatives of Company and its Affiliates, (iii) any
member, co-owner, partner, parent or other business
participant with the Company or any visitor of any such Person
and (iv) the directors, officers, employees and other
representatives of any such Person described in (i), (ii), and
(iii) above.
f) Company Provided Items shall have the meaning given to such
term in Appendix G.
g) Company's Representative means the Person who at any time is
appointed in accordance with Art. 3 to act on behalf of the
Company.
h) Completion Certificate means the certificate to be issued by
Company in accordance with Art. 19.
i) Contract means this Fabrication Agreement and Appendices as
stated in Art. 2, and, any amendments, supplements or
modifications thereto from time to time.
j) Contract Documents shall have the meaning given to such term
in Art. 2.1.
k) Contract Object means the item which Contractor, according to
the Contract, shall deliver, together with all parts thereof,
except for Company Provided Items before their incorporation
into the Contract Object.
l) Contract Price means the total sum payable to Contractor in
accordance with Appendix B, as that sum is increased or
decreased in accordance with the provisions of this Contract.
m) Contract Schedule shall have the meaning given to such term in
Appendix C.
n) Contractor shall have the meaning given to such term in the
preamble.
o) Contractor Indemnified Party means, other than any Company
Indemnified Parties, to the extent they are performing
services or delivering goods in connection with this Contract,
each of (i) Contractor and its Affiliates (ii) the
contractors, subcontractors, agents, invitees and other
representatives of Contractor or its Affiliates, (iii) any
member, co-owner, partner, parent or other business
participant with the Contractor or any visitor of any such
Person and (iv) the directors, officers, employees and other
representatives of any such Person described in (i), (ii), and
(iii) above.
p) Date Data shall have the meaning given to such term in
Art. 40.2.
q) Day means a consecutive calendar day unless otherwise stated.
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r) Delivery Date means the date of delivery of the Contract
Object set out in Appendix C, or as varied in accordance with
the provisions of Art. 12 through 16.
s) Delivery Protocol means the document to be executed by both
Parties in accordance with Art. 19 upon the delivery of the
Contract Object.
t) Disputed Variation Order means a Variation Order issued in
accordance with Art. 16.2.
u) Drawings and Specifications shall have the meaning given to
such term in Appendix A.
v) Effective Date shall have the meaning given to such term in
the preamble.
w) Force Majeure means strikes, seizure, casualty loss, labor
disturbance, earthquakes, riots, fire, governmental action or
inaction, war, acts of God, named tropical storms, or any
other cause similar or dissimilar to the foregoing beyond the
reasonable control of the Party whose performance is affected
and which by the exercise of reasonable diligence said Party
is unable to prevent or provide against.
x) FPF Support Structure shall have the meaning given to such
term in Appendix A.
y) Framework Contract means a contract entered into by Company
where the obligations concerning the scope of the delivery and
delivery date have not been specified.
z) Guarantee Period means the period stated in Art. 23.2.
aa) Installation Agreement means that certain Installation
Agreement between Company and Contractor to be executed within
30 Days following the Effective Date, which shall relate to
the transportation and installation of the Contract Object.
bb) Materials means all items required for the Work, other than
Company Provided Items and working equipment.
cc) Party shall have the meaning given to such term in the
preamble.
dd) Parties shall have the meaning given to such term in the
preamble.
ee) Progress Milestone means the following critical timing
deadlines: (i) major structural steel fabrication of the FPF
Support Structure must begin during September 1999 and (ii)
the Contract Object must have fabrication completed and
loaded-out and ready for tow no later than March 1, 2001, such
exact date to be mutually agreed upon by the Parties.
ff) Person means any individual or entity, including, without
limitation, any corporation, limited liability company, joint
venture, joint stock company,
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general or limited partnership, trust, agency, association,
organization, government authority (including any agency or
administrative group thereof) or other entity.
gg) Products shall have the meaning given to such term in Art.
23.6.
hh) Site means a place where Work is performed.
ii) Subcontract means an agreement entered into between Contractor
and a Subcontractor for the supply of goods or services in
connection with the Work.
jj) Subcontractor means a third party who has entered into an
agreement with Contractor for the supply of goods or services
in connection with the Work.
kk) Third Party means any party other than Company Indemnified
Parties and Contractor Indemnified Parties.
ll) Variation means a variation to the Work, Scope of Work,
Contract Schedule, Specifications, Drawings and Company
Provided Items made in accordance with the provisions of Art.
12 through 16.
mm) Variation Order shall have the meaning given to such term in
Appendix D.
nn) Work means all work which Contractor shall perform or cause to
be performed in accordance with the Contract, as further
defined by Appendix A.
oo) Year 2000 Compliant shall have the meaning given to such term
in Art 40.2.
ART. 2 CONTRACT DOCUMENTS - INTERPRETATION
2.1 The Contract Documents consist of this Fabrication Agreement and the
following Appendices:
Appendix A: Scope of Work
Appendix B: Compensation
Appendix C: Contract Schedule
Appendix D: Administration Requirements
Appendix E: Specifications
Appendix F: Drawings
Appendix G: Company Provided Items
Appendix H: Subcontractors
Appendix I: Company's Insurances, etc.
Appendix J: Contractor Parent Company Guarantee
Appendix K: Contractor's Proprietary Information
Appendix L: Invitation to Bid
Appendix M: Agreed Upon Exceptions and Clarifications
Appendix N: Contractor's Bid Proposal
Appendix O: Contractor Insurance
Appendix P: Company Parent Company Guarantee
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2.2 References made in the Contract to the expressions stated in Art. 2.1
are references to the content of the specific Appendix referred to,
including such variations as may have been made in accordance with the
provisions of Art. 12 through 16.
2.3 In the event of any conflict between the provisions of the Contract
Documents, they shall be given priority in the following order:
a) this Fabrication Agreement,
b) all Appendices, except Appendix D, in the order as
aforementioned in Art. 2.1,
c) Appendix D.
ART. 3 REPRESENTATIVES OF THE PARTIES
3.1 Prior to commencement of the Work each Party shall appoint a
representative with authority to act on its behalf in all matters
concerning the Contract, and appoint a deputy to act in its stead.
Without prejudice to Art. 8.1 first paragraph, each Party may, by
giving 14 Days notice to the other Party, substitute a representative
or deputy.
3.2 A representative or his deputy may delegate specific tasks to one or
more Persons appointed by him. In such case the other Party's
representative shall be notified of the authority given to such
appointed Person or Persons.
3.3 Contractor shall afford Company's Representative access to the Site and
the Work during working hours. The same access shall be afforded
Persons authorized by Company's Representatives, provided that
notification of such authorization has been given in reasonable time.
If, in the opinion of Contractor, the progress of the Work is impeded
by the presence or absence of Company's Representatives or Persons
authorized by him, Contractor shall without undue delay submit a
request in accordance with Art. 16.1.
PART 2 PERFORMANCE OF THE WORK
ART. 4 OBLIGATIONS OF CONTRACTOR - MAIN RULES
4.1 Contractor shall perform the Work in a professional and workmanlike
manner in accordance with the Contract. As part of such performance
Contractor shall:
a) give priority to safety in order to protect life, health,
property and environment, and
b) cooperate with Company's Representative and Persons appointed
by him in accordance with Art. 3.
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4.2 Contractor shall take care of the Contract Object, Company Provided
Items and Materials and shall ensure in accordance with Art. 6, that
they are kept in good order and condition. Unless specifically agreed
to by Company, Contractor shall not have the right to make temporary
use of Company Provided Items or Materials to be incorporated into the
Contract Object, other than for the purpose of fulfilling the Contract.
Company may prohibit any temporary use of Company Provided Items.
4.3 Within the framework of Appendices A, B and C, Contractor has a duty to
cooperate with Company and other contractors and to organize its
operations to ensure that all activities on a Site are carried out
efficiently and without delay. However, Contractor is under no
obligation to subordinate its execution plan to ensure overall
efficiency unless additional costs or schedule delays, if any, are
reimbursed by Company to Contractor.
However, any craft, equipment or labor required to perform such work by
Company shall be performed by Contractor or its subcontractor if
Contractor or subcontractor has the necessary craft, equipment or labor
available in the shipyard, fabrication yard or manufacturing plant or
the offshore site where the work is to be performed.
To the extent stated in Appendices A, B or C, Company is entitled to
perform work or let other contractors perform work on the Contract
Object. If Company desires such work to be performed which is not
contained in Appendices A, B or C, the provisions of Art. 12 through 16
apply accordingly.
ART. 5 AUTHORITY REQUIREMENTS - PERMITS
5.1 Contractor shall keep himself informed of and comply with:
a) laws and regulations which apply on the Site and at the place
where the Contract Object is to be used according to the
Contract,
b) requirements and orders of classification societies and public
authorities,
c) current trade union and wage agreements.
If laws and regulations as stated in a) above have been adopted and
requirements and orders as stated in b) above have been issued after
the signature of the Contract and necessitate Variations to the Work or
its execution, and this affects Contractor's costs or progress, either
Party may request a change in the Contract Price or Contract Schedule
reflecting the effect of such decisions or variations. Changes in the
way in which public authorities apply such laws or regulations
mentioned in a) above shall be dealt with in the same way. The rules in
Art. 12 through 16 apply accordingly.
5.2 Contractor and Company shall each obtain and maintain each required
permit or approval as defined in Appendix A, D and G. Contractor and
Company shall, as soon as reasonably practicable following the
Effective Date, mutually agree upon which
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permits are required, the Party responsible for obtaining each permit
and the time period for obtaining such permits.
5.3 Company may require that Contractor submits to Company such information
about the performance of the Work and about Contractor Indemnified
Parties as Company is obliged to submit to public authorities.
ART. 6 DRAWING - SPECIFICATIONS - COMPANY PROVIDED ITEMS
6.1 Contractor shall make a reasonable effort to detect defects (patent
and/or latent, discrepancies and inconsistencies ("errors") in the
Drawings and Specifications.
Contractor shall within seven (7) Days of detecting such defects notify
Company of any such "errors" discovered. If Contractor does not notify
Company of an "error" that he has discovered, and as a result, Company
incurs direct extra costs in connection with the Work, which are not
covered by insurance, warranties or guarantees, then all such costs
shall be borne by Contractor. However, any and all costs or delays
resulting from soil and environmental data and topside design details
and all Company supplied data shall be for the account of Company.
Contractor shall have the right to submit a request for a Variation
Order in accordance with Art. 12 through 16 for the cost and delivery
impact of inaccurate, incomplete, insufficient and/or incorrect Company
supplied data.
6.2 Company will remain responsible for the correct design and fabrication
of Company Provided Items as well as timely delivery so as to have no
adverse effect on the Contract Schedule and/or sequencing of the Work
Upon receipt of Company Provided Items Contractor shall make an
immediate visual inspection and within seven (7) Days of their receipt
give notice to Company of any "errors" discovered by such inspection.
Within a reasonable time thereafter, and not later than the time limit
given in Appendix G, Contractor shall carry out such examinations as
are described in Appendix G. Contractor shall notify Company within
seven (7) days of detecting defects of any such "errors" discovered.
If Contractor does not notify Company of an "error" that he has
discovered and as a result, Company incurs direct extra costs in
connection with the Work which are not covered by insurance, or loses
rights, warranties or guarantees, then, subject to the limitations set
forth in Art 23, all such costs incurred shall be borne by Contractor.
6.3 Upon receipt of notice from Contractor in accordance with Art. 6.1 or
6.2, Company shall, without undue delay, either have the necessary
corrections made, or give Contractor instructions in accordance with
Art. 12 through 16 as to how he shall proceed.
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ART. 7 SUBCONTRACTS
7.1 Contractor shall not enter into any Subcontract concerning parts of the
Work without the prior consent of Company, which shall not be
unreasonably withheld. Company shall notify Contractor of its decision
within seven (7) Days after having been asked by Contractor. However,
such consent is not required for deliveries of work by Subcontractors
listed in Appendix H - Subcontractors, nor for minor purchases or
limited use of hired labor.
7.2 Contractor is responsible according to the Contract for the fulfillment
of Subcontracts.
If Company enters into Framework Contracts with one or more contractors
and, subject to prior agreement with Contractor, these are assigned to
Contractor, Company shall delay the Delivery Date if necessary due to
the assignment to Contractor of the Framework Contracts, as agreed upon
by the Parties, and shall bear Contractor's direct extra costs,
provided Contractor can document that a contractor to a Framework
Contract is unable to deliver by a deadline stated in the Framework
Contract, or if deadlines are not stipulated in the Framework Contract,
Contractor documents that a delivery cannot be used within the agreed
Contract Schedule. These provisions shall, however, not apply if it can
be shown that the delay is due to circumstances under Contractor's
control. In other respects, the provisions in the third paragraph of
Art. 7.2 apply to Framework Contracts assigned to Contractor after
entry into the Contract.
If, after entry into the Contract, Company, with prior agreement of
Contractor, assigns a subcontract to Contractor, or appoints a
subcontractor, and the subcontract conditions were unknown to
Contractor at the time of entry into the Contract, then if conditions
which were undisclosed to Contractor cause a delay in the Contract
Schedule or result in additional costs to Contractor, then Contractor
shall be entitled to submit a request for a Variation Order in
accordance with Art. 12 through 16. If a subcontractor as mentioned in
the second and third paragraphs of Article 7.2 goes into liquidation
and the subcontract delivery in question is therefore annulled,
Contractor is entitled to an adjustment in the Contract Schedule and
Contract Price, pursuant to the rules in Art. 12 through 16.
7.3 Subcontractor shall state that:
a) the Subcontract may be assigned to Company,
b) Subcontractor is included in Contractor Indemnified Parties
with regard to the provisions of Art. 30,
c) Art. 22 concerning title; etc. shall apply in the relationship
between Contractor and the Subcontractor, and
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d) Company shall have the rights to documents and computer
programs stated in Art. 32 and the rights to inventions in
Art. 33.
Such Subcontracts shall also contain those provisions of the Contract
which are necessary to enable Contractor to fulfil its obligations in
accordance with the Contract.
However, Company is only entitled to request copies showing provisions
of price and payment, when Company shall compensate the Subcontract on
a reimbursable basis.
ART. 8 LABOR FOR THE WORK
8.1 Appointment, transfer or replacement of personnel described as key
personnel in Appendix D - Administration Requirements, shall be
approved by Company. Approval shall not be unreasonably withheld.
Contractor shall at its own cost replace personnel who, in Company's
reasonable opinion, conduct themselves in an improper manner or are
unsuitable to perform their tasks.
8.2 Contractor shall at its own cost ensure that personnel performing parts
of the Work offshore shall have previously passed a safety course and
medical examinations, in accordance with the existing laws and
regulations, unless the relevant public authorities have granted a
dispensation.
ART. 9 MINERALS MANAGEMENT SERVICE (MMS) OBLIGATIONS
9.1 This project has been approved for Royalty Relief and those obligations
to the Minerals Management Service ("MMS") to which the Company is
committed relative to the Sunday Silence Field Development and related
timing (i.e., Project Schedule) and cost control are of critical
importance to the performance of the Work. Upon Company's request,
Contractor shall assist Company in the honoring of those commitments.
Where Contractor's assistance results in an impact on Contractor's
Work, Contractor shall be entitled to submit a request for a Variation
Order pursuant to Art. 12 through 16. Contractor's sole liability for
any loss of royalty relief which is caused by Contractor's late
performance of the Work shall be as set forth in Art. 24 and Art. 26.
ART. 10 QUALITY ASSURANCE
10.1 Contractor shall have an implemented and documented system for quality
assurance in accordance with the requirements stated in Appendix D -
Administration Requirements.
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10.2 Company's Representative and personnel authorized by him shall,
following reasonable notice, have the right to undertake quality audits
and verification of Contractor's and any Subcontractors' quality
assurance.
PART 3 PROGRESS OF THE WORK
ART. 11 CONTRACT SCHEDULE - DELAYED PROGRESS
11.1 Contractor shall perform the Work in accordance with Appendix C -
Contract Schedule.
If Contractor should have cause to believe that the Work cannot be
carried out in accordance with the milestones set out in the Contract
Schedule, he shall within seven (7) Days notify Company accordingly.
11.2 If in Contractor's opinion the Work cannot be performed according to
Appendix C - Contract Schedule, owing to circumstances for which
Company is to indemnify him, the provisions in Art. 16 shall apply
accordingly. A request for a Variation Order must be presented before
the expiration of the time limits set forth in Art. 27.1 and 28.2,
respectively.
11.3 If in Contractor's opinion the Work cannot be performed according to
Appendix C - Contract Schedule, for reasons for which Contractor is
responsible, he shall within seven (7) Days after notification
according to Art. 11.1 communicate:
a) the cause of the delay,
b) its estimated effect on the Contract Schedule and other parts
of the Work, and
c) the measures which Contractor considers appropriate to avoid,
recover or limit the delay.
Company shall within seven (7) Days notify Contractor of its view of
the information provided by Contractor in accordance with Art. 11.3 a),
b) and c). Such notification shall not release Contractor from any of
its obligations under Art. 11.1, Art. 24 or any other provisions of
this Contract.
If the measures proposed or implemented by Contractor are insufficient
to avoid or recover the delay, then Company may require Contractor to
take measures considered necessary. If Contractor maintains that it has
no obligation to implement the measures required by Company, the
variation provisions provided in Art. 12 through 16 shall apply,
accordingly.
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PART 4 VARIATIONS AND CANCELLATION
ART. 12 RIGHT TO VARY THE WORK
12.1 Company has the right to order such Variations to the Work as in
Company's opinion are desirable.
Variations may include an increase or decrease in the quantity,
character, quality, kind or execution of the Work or any part thereof,
as well as changes to the Contract Schedule.
Nevertheless, Company has no right to order Variation work which
cumulatively exceeds that which the Parties could reasonably have
expected when the Contract was entered into.
12.2 When Company orders a Variation to the Work to be performed, Contractor
shall submit within seven (7) Days an estimate to Company, unless the
Parties agree that it is unnecessary. Company may require the
submission of such estimate prior to ordering Variation work to be
performed. The estimate shall contain:
a) a description of the Variation work in question,
b) a detailed schedule for the execution of the Variation work
showing the required resources and significant milestones.
c) the effect on the Contract Price, showing the rates used when
preparing the estimate, and
d) the effect on the Contract Schedule, with documentation
demonstrating such effect.
Company shall pay Contractor's necessary and documented costs for
preparing the estimates required by Company. The provisions of Art. 12
through 15 shall apply, accordingly.
12.3 Contractor may propose a Variation to the Work in accordance with
Art. 12.
According to the provisions in Art. 3.3, 4.3, 5.1, 6.1, 6.3, 7.2, 11.2,
18.3, 27.1 and 28.2 and any other applicable Articles, Contractor has
the right to request variation in the Contract Price and/or the
Contract Schedule.
ART. 13 EFFECTS OF A VARIATION TO THE WORK
13.1 All Contractor's obligations under the Contract also apply to
Variations to the Work, unless otherwise agreed.
13.2 Unless otherwise agreed between the Parties, the price for Variations
to the Work shall be determined according to the provisions set forth
in Appendix B.
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13.3 If the net effect of all Variations to the Work is such that the
Contract Price becomes less than the original Contract Price, then
Company shall increase the Contract Price by six percent (6%) of the
difference.
13.4 The effects of Variation work on the Contract Schedule shall be agreed
upon in the particular Variation Order for such work, on the basis of
the accumulated net effect of a variation.
Subject to the limitations which follow from Art. 12.1, Company may
require Contractor to undertake special measures to avoid Variation
work having an effect on the Contract Schedule, or to limit delays as
much as possible. The provisions in Art. 12 through 16 shall apply,
accordingly.
13.5 A Variation to the Work caused by Contractor's defective performance of
the Work and/or Contractor's delay in the Contract Schedule shall not
entail any variations to the Contract Price or the Contract Schedule in
favor of Contractor.
ART. 14 ISSUE OF VARIATION ORDERS
14.1 All Variations to the Work required in accordance with the provisions
of Art. 12 and 13 shall be made by means of a Variation Order issued by
Company in accordance with the provisions of this Article and
Appendix D.
Company may also order Variations to the Work by means of a "drawing
revision." In the context of Art. 14, 15 and 16, "drawing revision"
means any change to Drawings or Specifications where the change is
clearly identified and has been submitted to Contractor in accordance
with such special procedures as are set forth in Appendix D -
Administration Requirements.
14.2 A Variation Order shall be expressly identified as such and be issued
on a prescribed form. It shall contain a complete description of the
Variation work and the schedule for its execution, together with the
effects on the Contract Price and the Contract Schedule, so far as
practicable, and the effects, if any, on the provisions of the
Contract. Such effects as are not recorded on the original Variation
Order shall be recorded in an addendum to it.
ART. 15 CONSEQUENCES OF VARIATION ORDERS - DISPUTES ABOUT CONSEQUENCES
15.1 On receipt of a Variation Order or a "drawing revision" as described in
Art. 14.1, Contractor shall implement it without undue delay, even if
the effect of the Variation Order or "drawing revision" on the
Contract Price, the Contract Schedule and other provisions of the
Contract has not yet been agreed.
15.2 If the Parties agree that there is a Variation, but disagree as to the
Variation's effect on the Contract Price, then Company shall pay
Contractor provisional compensation
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calculated in accordance with Appendix B. Payment shall be made in
accordance with the provisions of Art. 20. The undisputed amount shall
be due for payment 30 Days after Company receives the invoice.
Compensation paid for the Variation work for which there is a dispute
as to the Variation's effect on the Contract Price shall be considered
final unless, within six (6) months of the issue of the Variation Order
by Company, Contractor has begun dispute resolution proceedings as
provided for in Art. 37.2 or Company and Contractor agree on an
alternate sum to provisional compensation paid by Company pursuant to
Art. 15.2.
If a price for the Variation work is decided other than the
compensation paid in accordance with the first paragraph of this Art.
15.2, interest shall be paid on the difference between the compensation
paid and the final price and shall accrue at the rate of 10% per annum.
If Contractor has presented a request for a Variation Order which
satisfies the conditions in the third paragraph of Art. 16.1, interest
shall begin to be charged from the date when the work would have been
paid for if it had been part of the Work, but no earlier than 30 Days
after the presentation of the request for the Variation Order. Interest
shall similarly accrue on amounts that are not disputed between the
Parties. If Company issues a Variation Order without any previous
request having been presented for the Variation work, interest shall
begin to accrue from the due date according to the first paragraph.
15.3 If the Parties disagree as to the effect that a Variation Order will
have on the Contract Schedule, then the views of both Parties shall be
recorded on the Variation Order.
If Company requires implementation of the measures stated in Art. 13.4,
to avoid or limit the delay which, in the opinion of Contractor, will
result from a variation to the Contract Schedule, then the provisions
of Art. 15.2 shall apply accordingly. Company shall in such case
require such measures to be taken in accordance with the provisions of
Art. 16 regarding disputed variations.
15.4 Neither Company's payment nor Contractor's implementation of a
Variation Order or a "drawing revision" shall affect the Parties'
possible claims for variations to the Contract Price or the Contract
Schedule.
ART. 16 DISPUTE AS TO WHETHER A VARIATION TO THE WORK EXISTS -
DISPUTED VARIATION ORDER
16.1 If Company requests performance of specific work which in Contractor's
opinion is not part of its obligations under the Contract, then
Contractor shall request Company to issue a Variation Order and
shall, within seven (7) Days, prepare an estimate in accordance with
Art. 12.2. In the case of a "drawing revision" as described in
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Art. 14.1, this Art. 16.1 shall apply only if Contractor requests a
variation in the Contract Price or Contract Schedule as a result of the
revision.
If Contractor has not presented a request for a Variation Order within
seven (7) Days after Company has requested the work to be performed,
then Contractor loses the right to consider the work as Variation work
in accordance with Art. 12.
A request for a Variation Order shall be presented by means of a
prescribed form known as a Variation Order request, such form which is
in Appendix D. It shall contain a specified description of the work the
request relates to and the effects which in Contractor's opinion it
will have on the Contract Schedule and the Contract Price.
If Contractor presents a request which, in substance; is a request for
a Variation Order without using the above mentioned form, Company is
entitled to treat the request as a request for a Variation Order. In
that case, Contractor shall be informed in writing within seven (7)
Days.
16.2 When Contractor has made a request within the time limit specified in
Art. 16.1 and Company agrees with such request, Company shall, within
fourteen (14) Days, issue a Variation Order in accordance with the
provisions of Art. 14. If Company is of the opinion that the work
referenced in Contractor's request for a Variation Order is a part of
the Work, it shall be expressly recorded that the Variation Order is
disputed ("Disputed Variation Order"). A Disputed Variation Order shall
be expressly identified as such and shall be issued on a special form,
which shall identify the work in dispute between the Parties and state
Company's reason for regarding the Variation Order as disputed. Upon
receiving a Disputed Variation Order, Contractor shall implement it
within seven (7) Days.
16.3 If Contractor is of the opinion that it is entitled to a Variation to
the Work because of delay, or actions by Company or extra measures, or
other changes resulting from breach of Contract by Company, or from
Force Majeure, the provisions of this Art. 16 shall apply accordingly.
A request for a Variation Order must be made before the expiration of
the time limits stated in Art. 27.1 and Art. 28.2, respectively.
ART. 17 CANCELLATION
17.1 Company may by written notice to Contractor cancel the Contract with
the consequence that the performance of the Work ceases.
17.2 Following such cancellation, Company shall pay:
a) the unpaid balance due to Contractor for that part of the Work
already performed.
b) all costs incurred by Contractor and its Subcontractors in
connection with Materials and Services ordered prior to
receipt of the notice of cancellation by Contractor, and
compensation for work performed on such Materials prior to
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the said date, provided that such costs are not covered by
payment under Art. 17.2 a).
c) all necessary cancellation charges and administration costs
incurred by Contractor in connection with the cancellation,
d) Contractor's and Subcontractors' other expenses directly
attributable to an orderly closeout of the Contract,
calculated as far as possible in accordance with the
provisions of Art. 13.2.
Payment shall be made in accordance with the provisions of Art. 20.
17.3 In addition to the amounts stated in Art. 17.2, Company shall pay,
within 30 Days after receiving an invoice, a cancellation fee equal to
the lesser of:
a) 2% of the Contract Price, or
b) 4% of the part of the Contract Price which is not paid at the
date of cancellation and which shall not be paid pursuant to
Art. 17.2 a).
Company shall only be entitled to deduct from the cancellation fee such
claims as have been presented to Contractor prior to the date of
cancellation and have been accepted by Contractor.
17.4 Contractor shall, in accordance with Company's instructions, make its
best efforts to cancel Subcontracts on terms acceptable to Company. If
Company cannot accept the cancellation terms, then Contractor shall
assign such Subcontracts to Company.
If Company cancels the Contract, all of Contractor warranty obligations
on the Work not yet performed will cease and Contractor's Performance
Guarantee shall be rendered null and void as to such uncompleted Work
on the date of such cancellation, and such Performance Guarantee shall
be returned to Contractor within 30 Days of such cancellation. However,
all of Contractor warranty obligations and Contractor's Performance
Guarantee as to all Work completed prior to the cancellation by Company
shall remain in full force and effect subsequent to any such
cancellation.
17.5 The Parties shall execute a Delivery Protocol stating each Party's view
of the percentage of the Contract Object and the Work delivered and
completed, calculated in accordance with the principles of progress
measurement stated in the Contract. Company shall also issue a
Completion Certificate which reflects the Delivery Protocol. The
provisions of Art. 19 shall apply accordingly.
Contractor shall deliver copies of all plans, drawings, specifications
and other documents which Company is entitled to use in accordance with
Art. 32 and 33.
17.6 Company shall, at its own cost, remove the Contract Object, Materials
and Company Provided Items from Contractor's Site.
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If such removal is not done within 60 Days, then Contractor may, having
first given notice to Company, remove them to a suitable location for
storage at Company's cost and risk. Contractor shall, until the
Contract Object, Materials and Company Provided Items have been
removed, keep them in a safe manner at Company's cost and risk.
ART. 18 COMPANY'S RIGHT TEMPORARILY TO SUSPEND THE WORK
18.1 Company may temporarily suspend the performance of the Work, by giving
notice to Contractor.
The notice shall specify which part of the Work shall be suspended, the
effective date of the suspension and the expected date for resumption
of the Work. Furthermore, it shall state the mobilization plan and any
support functions which shall be maintained while the Work is
suspended.
Contractor shall resume the Work after notification by Company. The
date of resumption of the Work shall be determined with due
consideration of the mobilization plan, and the support functions that
have been maintained during the suspension.
18.2 Company shall compensate Contractor for all necessary expenses arising
from:
a) demobilization of personnel and equipment,
b) safeguarding the Contract Object, Company Provided Items and
related Materials and equipment,
c) personnel, Subcontractors and equipment which must be kept
available in accordance with the mobilization plan,
d) moving the Contract Object, if necessary, so that it does not
interfere unreasonably with Contractor's other activities, and
e) other expenses incurred by Contractor as a result of
suspension of the Work.
Contractor's claim for work performed shall be calculated in accordance
with Art. 13.2.
18.3 If suspension of the Work affects the Contract Schedule or if
Contractor claims that it does, then the provisions of Art. 12 through
16 concerning variations to the Contract Schedule and the Contract
Price shall apply accordingly.
PART 5 DELIVERY AND PAYMENT
ART. 19 DELIVERY AND COMPLETION OF THE WORK
19.1 The Delivery Date and delivery of the Contract Object shall occur when
(i) the Parties jointly, upon Contractor's request, execute a Delivery
Protocol in a form substantially
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similar to that set forth in Appendix D, (ii) the Contract Object has
been completed in all material respects and has passed the tests
specified in the Contract, and (iii) the Contract Object is ready for
tow.
The Delivery Protocol shall be executed even if minor parts of the Work
remain incomplete, provided that such remaining parts do not have
practical significance for the use of the Contract Object, or for later
construction work to be performed by other contractors.
19.2 The Delivery Protocol shall be executed when the conditions set forth
in Art. 19.1 have been met, provided that Contractor has requested the
execution of such Delivery Protocol no earlier than 30 Days before and
no later than two (2) Days before the proposed date of execution of
such Delivery Protocol.
The Delivery Protocol shall contain a thorough list of any outstanding
items of the Work, and information regarding when such items shall be
complete. When the Parties disagree, both views shall be recorded in
the Delivery Protocol.
The Delivery Protocol shall be dated and signed by both Parties.
19.3 Company shall issue the Completion Certificate for the Work, as defined
by Appendix A, Scope of Work, on the date the Delivery Protocol is
executed. The issuance by the Company of the Completion Certificate
shall be expressly conditioned upon the satisfactory completion by the
Contractor of the outstanding Work items as outlined in the Delivery
Protocol. Further, the issuance of the Completion Certificate shall in
no way relieve or release Contractor from its obligations to perform
guarantee Work and/or Work yet to be completed under the terms of this
Contract.
19.4 If the Contract requires parts of the Contract Object to be delivered
progressively, then the provisions of Art. 19.1, 19.2 and 23 apply
accordingly to deliveries of such parts; provided, however, that
progressive delivery of parts of the Contract Object shall not act to
extend the Guarantee Period set forth in Art. 23.2 and 23.3.
ART. 20 PAYMENT OF THE CONTRACT PRICE, INVOICING AND AUDIT
20.1 Company shall pay the Contract Price to Contractor within the time
limits and in accordance with the provisions stated in this Article and
elsewhere in the Contract. Company has no obligation to pay until
Contractor has submitted a guarantee in accordance with Art. 21.
The Parties agree that, consistent with the agreed upon payment
schedule and without reducing Company's duty to pay Contractor for all
Work performed by Contractor, Company shall not be required to pay more
than US$8 million in 1999 for the Work under this Contract, with the
remainder of the amounts otherwise due to Contractor
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for 1999 to be invoiced on or before January 1, 2000 and payable
thereafter within 30 Days in accordance with Art. 20.3.
20.2 Unless otherwise prescribed in Appendix B - Compensation, the
following provisions shall apply to invoicing:
a) The cut-off date for data-collection and invoicing for the
Work is the last Sunday in each calendar month.
b) Within ten (10) Days of a cut-off date, Contractor shall
submit to Company an invoice for the part of the Contract
Price payable in respect of Work performed up to that cut-off
date.
c) The invoice shall be prepared in accordance with the
provisions of Appendix B - Compensation, and Art. 12 through
16. Documentation necessary for control of the invoiced amount
shall be appended.
20.3 Company shall, within 30 Days after receipt of an invoice which
satisfies the requirements in Art. 20.2, pay the undisputed amount due
to Contractor according to the invoice. Unless otherwise provided for
in the Contract, the following deductions may be made from the payment:
a) any previous payments on account to Contractor which relate
to, or directly concern, the work covered by the invoice,
b) such parts of the invoiced amount as are insufficiently
documented or otherwise disputed, provided Company, within ten
(10) Days following receipt, specifies what documentation is
considered insufficient and/or what the dispute concerns,
c) all amounts due to Company from Contractor, provided that
Company is entitled to make such deductions in accordance with
the Contract.
20.4 Within 90 Days after issue of the Completion Certificate, Contractor
shall submit its proposal for the final account. The proposal shall
contain a breakdown of the total compensation for the Work, including
all claims to be made by Contractor, less any amounts due to Company.
The proposal shall contain documentation relating to each item included
in the breakdown.
Claims not included in the proposed final account cannot be submitted
later by Contractor. This does not apply to compensation for Work
performed after issue of the Completion Certificate.
Within 90 Days of receiving the proposed final account, Company must
notify Contractor of any objections to the proposal. Company must state
the grounds for its objections. If Company does not object within the
time limit, Contractor's proposal shall be regarded as accepted.
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20.5 Company is entitled to audit at Contractor's and its Subcontractor's
premises all payments for reimbursable work to Contractor and its
Subcontractors. Company's right to audit does not apply to a
Subcontractor where the Subcontract entails minor purchases and limited
use of hired labor.
Contractor may require the audit to be performed by a neutral auditor
where he can show that there is a possibility of confidential
information, or information which is not relevant for the purposes of
the audit, being disclosed to the wrong parties.
Company is entitled to audit during the period of Contract and for up
to 2 years after the end of the year of issue of the Completion
Certificate.
Payment shall not affect Company's audit rights. If charges are proven
incorrect, then a new account shall be prepared, whether or not this
is in the favor of Contractor.
ART. 21 GUARANTEE
21.1 As soon as reasonably practicable following the Effective Date but in
no event longer than 14 regular business days, Contractor shall cause
Modec, Inc. and FMC Corp. to execute a guarantee of Contractor's
obligations under the Contract, such guarantee to include material
terms which are substantially similar to the material terms set forth
in Appendix J - Contractor Parent Company Guarantee. Further,
Contractor represents and warrants that Modec Inc. and FMC Corp. have
agreed to and will execute such guarantee.
21.2 As soon as reasonably practicable following the Effective Date but in
no event longer than 14 regular business days, Company shall cause
Leviathan Gas Pipeline Partners L.P. to execute a guarantee of
Company's obligations under the Contract, such guarantee to include
material terms which are substantially similar to the material terms
set forth in Appendix P - Company Parent Company Guarantee. Further,
Company represents and warrants that Leviathan Gas Pipeline Partners
L.P. have agreed to and will execute such guarantee.
21.3 The guarantees referenced in Art. 21.1 and 21.2 above shall be valid
until the end of the Guarantee Period.
ART. 22 TITLE TO THE CONTRACT OBJECT-RIGHT TO DEMAND DELIVERY
22.1 Title to the Contract Object shall pass to Company progressively as the
Work is performed and Contractor is compensated accordingly. Title to
Materials passes to Company when Contractor is paid for such Materials
by Company.
As soon as Materials and Company Provided Items arrive at a Site,
Contractor shall xxxx them with an identification number and Company's
name, and as far as possible, shall keep them separate from other
items.
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22.2 During the performance of the Work and on delivery and only with
respect to payments which have been made by Company, Contractor agrees
that the Contract Object, Materials and all other items owned by
Company shall be free and clear of all liens, attachments, encumbrances
and rights whatsoever, incurred prior to or concurrently with the
performance and delivery of the Work to Company, other than those for
which Company is responsible. Further, and subject to the restrictions
in the preceding sentence, CONTRACTOR SHALL DEFEND, INDEMNIFY AND SAVE
COMPANY HARMLESS FROM AND AGAINST ANY AND ALL LOSSES RESULTING DIRECTLY
OR INDIRECTLY FROM SUCH LIENS AND/OR SIMILAR LEGAL PROCESS AND/OR
ATTACHMENTS.
22.3 Subject to Art. 22.1, Company shall have the right to register its
title to the Contract Object, Company Provided Items, Materials and
the Contract. Contractor shall, at Company's cost and without undue
delay, execute and deliver to Company such documents, and take such
actions as Company requires to effect such registration, including
ensuring, that title to deliveries by Subcontractors be so registered,
if Company cannot do so itself.
22.4 If Contractor claims, based on nonpayment by Company of disputed
amounts under the Contract, that Contractor is entitled to refuse to
deliver the Contract Object, Materials, or other items to which Company
claims it is entitled under the Contract, then Company may in all cases
demand delivery and delivery shall be immediate in return for:
a) payment of the outstanding amount due to Contractor under the
Contract, insofar as the amount is not in dispute, and
b) a guarantee issued by Company for any further amounts which
Contractor maintains are due under the Contract, but which
Company considers it has no obligation to pay.
ART. 23 CONTRACTOR GUARANTEE - ACCEPTANCE CERTIFICATE
23.1 With the execution of consumable items and excepting normal wear and
tear, Contractor guarantees and warrants the performance of the Work.
Contractor also guarantees and warrants that Materials delivered by it
for incorporation into the Contract Object are new, and that any
engineering performed by Contractor will be in accordance with the
Drawings and Specifications and industry standards for the oil and gas
industry. Contractor guarantees and warrants that all of its equipment
is in good working order and condition, that all of Contractor's
personnel are trained and capable of operating and shall operate such
equipment and perform the Work in a safe and workmanlike manner.
Contractor hereby warrants and guarantees the Work to the extent that
Contractor will repair or replace at Contractor's own expense, any
defects in such workmanship. Contractor also guarantees and warrants
that the Contract Object will conform during
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the Guarantee Period to the Drawings and Specifications which are valid
at the time of delivery (final documentation). This guarantee does not
apply to Company Provided Items unless required by Art. 6.1 and 6.2.
Contractor's liability for defects covered by the guarantee shall be
determined in. accordance with the provisions of Art. 25.
23.2 The Guarantee Period begins on the date of signing of the Delivery
Protocol. It expires, unless otherwise extended pursuant to Art. 23.3,
on the first occurring of the following times:
a) 15 months from the signing of the Delivery Protocol, or
b) 15 months from the date Company has taken over the Contract
Object in accordance with the Contract, where the conditions
for signing the Delivery Protocol in accordance with Art. 19.1
have not been fulfilled.
Notwithstanding the foregoing, Contractor shall provide an extended
limited warranty for the FMC Spring Tensioners recommended for use by
Contractor for the duration of the first installation or ten (10)
years, whichever comes first. The warranty will cover design,
workmanship and materials used in the Spring Tensioner. This warranty
includes an annual inspection by the manufacturer's technician,
replacement of all parts integral to the tensioner and all required
maintenance. Additionally, if Company determines through the
operational performance of the Spring Tensioners that the system does
not functionally satisfy the design expectations and preinstallation
test results, then subject to Art. 25.4, Contractor shall, at its
option and its own cost, either repair the existing system back to a
fully functional system, or remove and replace the entire system, at no
cost to Company, with an alternate system that meets the operational
requirements. Company shall have the opportunity to review and approve
the installation and/or repair procedures, such approval which shall
not be unreasonably withheld.
23.3 In case Contractor performs guarantee work during the Guarantee Period,
he guarantees those parts of the Work affected by the guarantee work.
This guarantee applies for 15 months after the date of completion of
the guarantee work. The length of the guarantee for such parts of the
Work shall, however, under no circumstances extend beyond 24 months
after completion of the first guarantee work.
23.4 Contractor shall, to the maximum extent reasonably possible, obtain
guarantees and warranties from its subcontractors, vendors and
suppliers regarding all material manufactured and/or supplied by those
parties and incorporated into, attached to, or in anyway affixed to or
used in connection with the Work and the components of that material
that (i) provide the same coverage as the guarantees and warranties
given by Contractor in this Art. 23, (ii) are freely assignable to, or
directly enforceable by, Company, and (iii) provide for prompt
recovery, repairs, or replacement and
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installation services for non-compliant items. Contractor shall assign
such guarantees and warranties to Company and shall assist and
cooperate fully with Company in seeking remedies thereunder, except
that no provision of this Art. 23 shall obligate Contractor to join
Company in litigation to enforce Company's or Contractor's rights under
said supplier warranties. Assignment of any warranties and guarantees
pursuant to this Art. 23.4 shall not limit, alter or waive any rights
of Company under this Contract or otherwise modify the obligations of
Contractor under this Contract.
Company shall be entitled to enforce the guarantees given by
Subcontractors, where such guarantees are more beneficial to Company
than Contractor's guarantee pursuant to this Article.
23.5 Company shall issue the Acceptance Certificate when all the Work, as
defined by Appendix A - Scope of Work to this Contract and Appendix A -
Scope of Work to the Installation Agreement, has been completed.
Issuance of the Acceptance Certificate does not in any way relieve or
release Contractor from obligations to perform guarantee work during
the Guarantee Period pursuant to Art. 23.2.
23.6 Contractor hereby represents and warrants that all applicable
materials, supplies and products, including but not limited to,
equipment, software, hardware, microprocessing chips, other data
processing devices and services, and parts and components thereof
(collectively the "Products"), supplied or furnished by Contractor are
and will be Year 2000 Compliant.
This representation and warranty shall survive until the earlier of 24
months or upon termination of this Contract. In the event that such
warranty compliance requires the acquisition of additional Products,
the expense for any such associated or additional acquisitions which
may be required (including, without limitation, data conversion tools)
shall be borne exclusively by Contractor.
23.7 The remedies provided in this Contract between Company and Contractor
shall be exclusive and in lieu of any other remedies with respect to
the subject matter available to the parties, and ANY IMPLIED WARRANTIES
OF FITNESS FOR PURPOSE, MERCHANTABILITY AND OTHER IMPLIED OR STATUTORY
REMEDIES (EXCLUDING WARRANTIES OF TITLE) WHICH ARE INCONSISTENT WITH
THIS CONTRACT ARE EXPRESSLY WAIVED BY COMPANY. Contractor makes no
other warranties, either express or implied thereof, except as
expressly set forth in this Contract.
PART 6 BREACH OF CONTRACT
ART. 24 CONTRACTOR'S DELAY
24.1 Save what is stated in Art. 11 concerning delayed progress, delay
occurs when Work prescribed in the Contract Schedule has not been
completed in accordance with the Contract.
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24.2 If: (a) a claim, demand or lawsuit is instituted by any Third Party
against Company or Contractor based upon the design or
specifications of the Contract Object, Materials or similar
claims, and such claim, demand or lawsuit results in any
deadline in the Progress Milestones or the Delivery Date as
set forth on the Contract Schedule being missed, or
(b) the Work is delayed for reasons within Contractor's or
Contractor Indemnified Parties' control causing any deadline
in the Progress Milestones or the Delivery Date as set forth
on the Contract Schedule to be missed,
then a default by Contractor shall be deemed to have occurred, and the
following shall apply accordingly:
(i) in the event the September 30, 1999 Progress
Milestone is missed, Contractor shall pay daily
liquidated damages in the amount of 0.20% of the
Contract Price per Day until the earlier of the Day
the Work which should have been completed on or
before such Progress Milestone is completed or until
the maximum cumulative liability for liquidated
damages has been paid in accordance with Art. 24.4;
(ii) in the event the March 1, 2001 Progress Milestone is
missed, Contractor shall pay daily liquidated damages
in the amount of 0.10% of the Contract Price per Day
until the earlier of the Day the Work which should
have been completed on or before such Progress
Milestone is completed or until the maximum
cumulative liability for liquidated damages has been
paid in accordance with Art. 24.4.
24.3 If a default as described in Art. 24.2 has occurred and Company is
subjected to a loss in whole or in part of royalty relief for the
Sunday Silence project due to such breach, then within seven (7) Days
of losing such royalty relief, Company shall elect to either: (1) waive
any further payment of the liquidated damages imposed by Art. 24.2
against Contractor and continue to operate under the terms of the
Contract, (ii) terminate the Contract without further assessment of
damages, pay for and take immediate possession of any and all
Materials, and pay Contractor for the Work completed prior to the time
of the termination, or (iii) suspend Work pursuant to Art. 18.1 and
18.2, during which time no liquidated damages will be assessed against
Contractor.
Further, if (a) a default has occurred pursuant to Art. 24.2(i), (b)
Company has not lost the royalty relief in whole or in part for the
Sunday Silence project, and (c) Company has not elected to terminate
the Contract pursuant to Art. 24.3(ii), then if Contractor meets the
March 1, 2001 Progress Milestone, an amount equal to the amount of
liquidated damages previously paid by Contractor in accordance with
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Art. 24.2(i) shall be reimbursed by Company to Contractor upon the
completion of the Work and Company waives any night to assess any
liquidated damages against Contractor under Art. 24.2(i).
24.4 Notwithstanding the above, Contractor's cumulative liability for
liquidated damages under Art. 24.2 is limited to 10% of the Contract
Price. The assessment of liquidated damages and the right to terminate
as described in Art. 24 and 26 shall be Company's sole and exclusive
remedy for late completion.
Accrued liquidated damages and the reimbursement of liquidated damages
shall be settled in connection with the final account, in accordance
with Art. 20.4.
24.5 Upon Contractor's reasonable request, Company shall be obligated to
provide Contractor with verbal updates as to Company's communications
and negotiations with the MMS regarding the royalty relief referenced
in Art. 24.3. Additionally, Contractor may assist Company in such
negotiations with the MMS.
24.6 In addition to the provisions of Art. 24.3, Company may terminate the
Contract in accordance with Art. 26 due to delay. The provisions stated
in Art. 11, Art. 24 and Art. 26 are Company's sole remedies against
Contractor's delay.
ART. 25 CONTRACTOR'S DEFECTS AND GUARANTEE LIABILITY
25.1 If the Contract Object has a defect when delivered to Company, whether
stated in the Delivery Protocol or not, or if a defect arises for which
Contractor is liable under its guarantee in accordance with Art. 23,
then Contractor is responsible for the defect in accordance with the
provisions of this Article.
Notwithstanding the foregoing paragraph, Contractor is, however, liable
for a defect only if Company has given notice of the defect, within 14
Days after having discovered the defect. Such notice must, in any case,
have been given at the latest before the expiration of the Guarantee
Period. If the notice concerns defects in guarantee work, then it must
have been given before the expiration of the period set forth in Art.
23.3. All notices to Contractor under this Article shall be in writing.
The notice to Contractor shall contain a specific description of the
defect.
25.2 When Contractor is responsible for a defect, it shall, at its own cost
and within six (6) Days, rectify it, commence rectification, or submit
a rectification plan to Company for Company's review and comment.
Contractor shall notify Company of which measures it intends to apply
and the time schedule for rectification. Company shall notify
Contractor of its views on the rectification plans without undue delay.
Company shall not unreasonably prevent Contractor from performing the
planned rectification.
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25.3 If Contractor is unable to rectify a defect within the time schedule as
originally agreed upon by the parties pursuant to Art. 25.2, then
Company shall be entitled to rectify the defect itself or to engage a
Third Party to do so. In such case, Contractor shall pay the necessary
costs of rectification, provided Company acts in a reasonable manner.
However, in no case shall the amount Contractor is obligated to pay be
more than the sum of Contractor's good faith estimated amount it would
have cost Contractor to rectify the defect plus 15%.
If in accordance with this Art. 25.3, the rectification work is
performed by parties other than Contractor or if the work is left
undone, Contractor shall not be obligated to guarantee such
rectification work.
25.4 Contractor's liability for rectification work and for costs under Art.
25.3 is limited to 15% of the Contract Price, above which amount
Company agrees to release and hold harmless Contractor.
Contractor is under no circumstances liable for costs relating to:
a) dismantling of other objects than the Contract Object to provide
access to the Contract Object,
b) board and lodging offshore,
c) transport to, from and at the offshore location,
d) heavy lift operations offshore,
e) extra costs associated with guarantee work performed below the water
line.
ART. 26 TERMINATION DUE TO CONTRACTOR'S BREACH OF CONTRACT
26.1 Company is entitled to terminate the Contract with immediate effect by
notifying Contractor when:
a) Company has become entitled to be paid maximum liquidated
damages in accordance with Art. Art. 24.2, or
b) Contractor is in material breach of a material provision of
the Contract and has not agreed to implement reasonable
actions to cure the breach within 14 Days, or
c) Contractor becomes insolvent or stops its payments, or
d) a default by Contractor pursuant to Art. 24.3 has occurred,
subject to the limitations set forth in Art. 24.3.
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26.2 Upon termination of the Contract, Company is entitled to take over from
Contractor the Contract Object, Materials, Company Provided Items,
Subcontracts, documents and other rights necessary to enable Company to
complete the Contract Object, either by itself or with the help of
others.
Company is entitled either by itself or with the assistance of any
Third Party, to use Contractor's Site, equipment, tools, drawings, etc.
as necessary to complete the Contract Object, provided such use is
compensated for and is of a limited duration, and provided further that
business secrets, know-how and other information which Company or such
Third Party acquire shall be used only for completion of the Contract
Object. The use of any Subcontractor site shall first require the
consent of said Subcontractor.
Contractor is entitled to be paid for Work actually performed and for
plant and equipment taken over by Company in accordance with the first
paragraph of this Art. 26.2, less any amounts due from Contractor to
Company.
26.3 When the Contract is terminated, Company shall also be entitled to
enforce one or more of the following claims:
a) Company may claim damages for delay in the form of liquidated
damages in accordance with the provisions of Art. 24.2; and
b) Company may claim damages for defects and other breaches of
Contract, subject to the limitations set forth in Art. 25.4.
Notwithstanding anything to the contrary contained in this Contract,
Contractor's total liability (under this Art. 26.3, Art. 24, Art. 25
and the responsibility for carrying out measures requested under Art.
11.4) shall in no circumstances exceed 25% of the Contract Price.
Notwithstanding any other provision of this Contract to the contrary,
such limitation of liability shall encompass all liabilities under such
Articles, whether under contract at law, in equity or in admiralty.
26.4 In all cases where Company takes over the Work from Contractor,
Contractor cannot guarantee proper completion and/or quality of the
Work, and, therefore Contractor's warranty obligations cease with
respect to any Work not completed at the point Company takes over the
Work.
ART. 27 COMPANY'S BREACH OF CONTRACT
27.1 If Company is late in delivering Company Provided Items, Drawings,
Specifications or access to installation site, or is in breach of any
other material obligations under the Contract, then Contractor may be
entitled to an adjustment of the Contract Schedule and/or the Contract
Price in accordance with the provisions of Art. 12 through 16, as
applicable. Such adjustment shall reflect the actual costs of the delay
caused to Contractor by Company's breach of Contract.
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Contractor has a corresponding right with respect to delay caused by
defects, discrepancies and inconsistencies in Company Provided Items,
Drawings or Specifications. Nevertheless, such adjustment shall not be
made insofar as the delay is due to Contractor not fulfilling its
obligations in accordance with Art. 6.
A Variation Order shall be issued in accordance with Art. 12 through 16
in respect of adjustments in the Contract Schedule, Contract Price and
other consequences resulting from Company's breach of Contract.
Contractor loses its right to request a Variation Order if it has not
made such request within 30 Days after discovery of the breach of
Contract.
27.2 Contractor is entitled to terminate the Contract with immediate effect
by notifying Company when:
a) Company has failed to make payment of an undisputed amount to
Contractor within 30 Days of such payment becoming due,
b) Company is in substantial breach of the Contract and has not
agreed to implement reasonable actions to cure the breach
within 14 Days, or
c) Company becomes insolvent.
PART 7 FORCE MAJEURE
ART. 28 EFFECTS OF FORCE MAJEURE
28.1 Except for Company's obligation to make payment in accordance with Art.
20, a Party shall not be considered to be in default in the performance
of its obligations to the extent that it proves that such performance
has been prevented by Force Majeure. The Party affected by Force
Majeure shall give written notice to the other Party as soon as
possible, but not later than seven (7) days after having been so
affected. Failure to give this notice shall preclude such Party from
claiming Force Majeure.
28.2 Within 14 Days after a Force Majeure condition affecting Contractor's
ability to perform its operations hereunder has ended, Contractor shall
present any claim for adjustment of the Delivery Date with particulars
of such claim. Such proposal shall state additional time necessary for
repairs and other remedies, or for remobilization of personnel and
equipment, and measures by Contractor to accelerate performance of the
affected portion of the Work, or otherwise to mitigate the effect of
Force Majeure.
28.3 If Company claims a Force Majeure situation and as a result is
prevented from delivering the Company Supplied Items or otherwise
carrying out other of its obligations to Contractor, Contractor shall
have the right to submit a request for a Variation Order pursuant to
Art. 12 through 16 for such additional compensation and extension of
the Delivery Date as Contractor can document it is entitled to by
reason of Company's inability to carry out its obligations to
Contractor.
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28.4 The Party prevented from performing by the Force Majeure condition
shall resume performance as soon as reasonably possible after the Force
Majeure condition ceases.
28.5 If a Force Majeure situation lasts without interruption for 90 Days or
more, then each Party shall have the right to cancel the Contract, by
notice to the other Party. The provisions of Article 17.2, 17.4, 17.5
and 17.6 shall apply accordingly.
28.6 WHEN THE DELIVERY DATE WHICH WOULD HAVE APPLIED IN THE ABSENCE OF FORCE
MAJEURE IS REACHED AND FORCE MAJEURE STILL CONTINUES, COMPANY IS
ENTITLED TO DEMAND DELIVERY OF THE CONTRACT OBJECT. COMPANY SHALL, IN
ADDITION, ISSUE A VARIATION ORDER IN ACCORDANCE WITH ART. 12 THROUGH
16, AS APPLICABLE.
28.7 A FAILURE OF THE PRODUCTS CAUSED BY OR CONTRIBUTED TO BECAUSE SUCH
PRODUCTS IS NOT YEAR 2000 COMPLIANT AS DEFINED IN ART. 40 IN THIS
CONTRACT IS NOT TO BE CONSIDERED AS A FORCE MAJEURE EVENT.
PART 8 LIABILITY AND INSURANCES
ART. 29 LOSS OF OR DAMAGE TO THE CONTRACT OBJECT OR COMPANY PROVIDED ITEMS
29.1 If loss of or damage to the Contract Object occurs between the start of
the Work until the time when the Delivery Protocol has been signed or
should have been signed in accordance with Art. 19.1 and 19.2,
Contractor shall carry out necessary measures to ensure that the Work
is completed in accordance with the Contract. The same applies if any
loss of or damage to Materials or Company Provided Items occurs while
they are at Site under any Contractor Indemnified Party's safekeeping
and control.
CONTRACTOR'S OBLIGATION TO CARRY OUT MEASURES STATED HEREIN APPLIES
REGARDLESS OF WHETHER NEGLIGENCE IN ANY FORM HAS BEEN SHOWN BY ANY
COMPANY INDEMNIFIED PARTY. However, in the case of such negligence by
a Company Indemnified Party, any and all schedule delays will be
addressed in accordance with the Variation Order procedures in Art. 12
through 16.
29.2 Company agrees to procure and maintain during the period of the
performance of the Work, a Builder's All Risk Insurance policy in
accordance with Art. 31 covering all necessary repairs to or
replacement of the Work and all Materials incorporated or to be
incorporated therein. Company shall require its underwriters to name
Contractor as co-insured under such policy and require its underwriters
to waive all rights of subrogation against Contractor Indemnified
Parties. Company shall assume liability and responsibility for any
losses for which an exclusion applies. Company shall
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deliver a certified copy of its Builder's All Risk Insurance to
Contractor prior to the commencement of the Work.
29.3 Contractor shall be liable for the deductible associated with the
Builder's All Risk Insurance referenced in Art. 29.2 up to a maximum as
defined in Appendix I, above which amount Company shall be liable.
ART. 30 EXCLUSION OF LIABILITY - INDEMNIFICATION
30.1 Contractor Indemnity
CONTRACTOR RELEASES EACH COMPANY INDEMNIFIED PARTY FROM ANY LIABILITY
TO CONTRACTOR FOR, AND CONTRACTOR WILL DEFEND, INDEMNIFY AND HOLD EACH
COMPANY INDEMNIFIED PARTY HARMLESS FROM AND AGAINST, ALL LOSSES, BY
WHOMEVER BROUGHT, BASED ON PERSONAL INJURY OR DEATH, WHENEVER
OCCURRING, SUFFERED OR INCURRED BY ANY CONTRACTOR INDEMNIFIED PARTY
ARISING FROM OR RELATED IN ANY WAY TO PERFORMANCE OF THE WORK OR CAUSED
BY THE CONTRACT OBJECT HEREUNDER, REGARDLESS OF HOW SUCH PERSONAL
INJURY OR DEATH IS CAUSED AND EVEN IF CAUSED BY THE NEGLIGENCE, WHETHER
SOLE OR CONCURRENT OR ACTIVE OR PASSIVE, OR OTHER LEGAL FAULT,
INCLUDING STRICT LIABILITY THE UNSEAWORTHINESS OF ANY VESSEL AND THE
UNAIRWORTHINESS OF ANY AIRCRAFT AND INCLUDING PRE-EXISTING CONDITIONS,
OF ANY COMPANY INDEMNIFIED PARTY.
CONTRACTOR RELEASES EACH COMPANY INDEMNIFIED PARTY FROM ANY LIABILITY
TO CONTRACTOR FOR, AND CONTRACTOR WILL DEFEND, INDEMNIFY AND HOLD EACH
COMPANY INDEMNIFIED PARTY HARMLESS FROM AND AGAINST, ALL LOSSES, BY
WHOMEVER BROUGHT, BASED ON PROPERTY DAMAGE OR LOSS, WHENEVER OCCURRING,
SUFFERED OR INCURRED BY EACH CONTRACTOR INDEMNIFIED PARTY ARISING FROM
OR RELATED IN ANY WAY TO PERFORMANCE OF THE WORK OR THE CONTRACT OBJECT
HEREUNDER, REGARDLESS OF HOW SUCH DAMAGE OR LOSS IS CAUSED AND EVEN IF
CAUSED BY THE NEGLIGENCE, WHETHER SOLE OR CONCURRENT OR ACTIVE OR
PASSIVE, OR OTHER LEGAL FAULT, INCLUDING STRICT LIABILITY, THE
UNSEAWORTHINESS OF ANY VESSEL AND THE UNAIRWORTHINESS OF ANY AIRCRAFT
AND INCLUDING PRE-EXISTING CONDITIONS, OF ANY COMPANY INDEMNIFIED
PARTY; PROVIDED, HOWEVER, THAT CONTRACTOR'S INDEMNIFICATION OBLIGATIONS
HEREUNDER SHALL NOT EXTEND TO ANY PORTION OF THE WORK FOR WHICH
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COMPANY HAS EXPRESSLY ASSUMED THE RISK OF LOSS PURSUANT TO THIS
AGREEMENT.
30.2 Company Indemnity
COMPANY RELEASES EACH CONTRACTOR INDEMNIFIED PARTY FROM ANY LIABILITY
TO COMPANY FOR, AND COMPANY WILL DEFEND, INDEMNIFY AND HOLD EACH
CONTRACTOR INDEMNIFIED PARTY HARMLESS FROM AND AGAINST, ALL LOSSES, BY
WHOMEVER BROUGHT, BASED ON PERSONAL INJURY OR DEATH, WHENEVER
OCCURRING, SUFFERED OR INCURRED BY ANY COMPANY INDEMNIFIED PARTY
ARISING FROM OR RELATED IN ANY WAY TO PERFORMANCE OF THE WORK OR CAUSED
BY THE CONTRACT OBJECT HEREUNDER, REGARDLESS OF HOW SUCH PERSONAL
INJURY OR DEATH IS CAUSED AND EVEN IF CAUSED BY THE NEGLIGENCE, WHETHER
SOLE OR CONCURRENT OR ACTIVE OR PASSIVE, OR OTHER LEGAL FAULT,
INCLUDING STRICT LIABILITY THE UNSEAWORTHINESS OF ANY VESSEL AND THE
UNAIRWORTHINESS OF ANY AIRCRAFT AND INCLUDING PRE-EXISTING CONDITIONS,
OF ANY CONTRACTOR INDEMNIFIED PARTY.
COMPANY RELEASES EACH CONTRACTOR INDEMNIFIED PARTY FROM ANY LIABILITY
TO COMPANY FOR, AND COMPANY WILL DEFEND, INDEMNIFY AND HOLD EACH
CONTRACTOR INDEMNIFIED PARTY HARMLESS FROM AND AGAINST, ALL LOSSES, BY
WHOMEVER BROUGHT, BASED ON PROPERTY DAMAGE OR LOSS, WHENEVER OCCURRING,
SUFFERED OR INCURRED BY EACH COMPANY INDEMNIFIED PARTY ARISING FROM OR
RELATED IN ANY WAY TO PERFORMANCE OF THE WORK OR THE CONTRACT OBJECT
HEREUNDER, REGARDLESS OF HOW SUCH DAMAGE OR LOSS IS CAUSED AND EVEN IF
CAUSED BY THE NEGLIGENCE, WHETHER SOLE OR CONCURRENT OR ACTIVE OR
PASSIVE, OR OTHER LEGAL FAULT, INCLUDING STRICT LIABILITY, THE
UNSEAWORTHINESS OF ANY VESSEL AND THE UNAIRWORTHINESS OF ANY AIRCRAFT
AND INCLUDING PRE-EXISTING CONDITIONS, OF ANY CONTRACTOR INDEMNIFIED
PARTY; PROVIDED, HOWEVER, THAT COMPANY'S INDEMNIFICATION OBLIGATIONS
HEREUNDER SHALL NOT EXTEND TO ANY PORTION OF THE WORK FOR WHICH
CONTRACTOR HAS EXPRESSLY ASSUMED THE RISK OF LOSS PURSUANT TO THIS
AGREEMENT.
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30.3 Third Parties
Until the issuance of the Acceptance Certificate, Contractor shall
indemnify all Company Indemnified Parties from:
a) costs resulting from the requirements of public authorities
in connection with the removal of wrecks, or pollution from
vessels or other floating devices provided by Contractor
Indemnified Parties for use in connection with the Work
(subject to Art. 39), and
b) claims arising out of loss or damage suffered by anyone other
than a Contractor Indemnified Party and a Company Indemnified
Party in connection with the Work or caused by the Contract
Object,
but only to the extent of Contractor Indemnified Parties' negligence or
other fault attributable to Contractor Indemnified Parties.
Company shall indemnify Contractor Indemnified Parties from and against
claims mentioned in the paragraph above, to the extent that they exceed
the limitations of liability mentioned in Art. 30.4 below, regardless
of any form of liability, whether strict liability or by negligence
(including sole or concurrent or active or passive) in whatever form by
Contractor Indemnified Parties.
After issue of the Acceptance Certificate, Company shall indemnify
Contractor Indemnified Parties from and against any claims of the kind
mentioned in Art. 30.3 a) and b) above, regardless of any form of
liability, whether strict liability or by negligence (including sole or
concurrent or active or passive) in whatever form by Contractor
Indemnified Parties. Further, after issue of the Acceptance
Certificate, Contractor shall be under no responsibility to insure
against any risk or liabilities in relation to the Contract.
30.4 Limitations on Liability
Contractor's liability for loss or damage arising out of each incident
as provided in Art. 30.1 through 30.3 shall be limited to US$1,000,000.
However, this does not apply to Contractor's liability for loss or
damage for each incident covered by insurances provided in accordance
with Art. 31.2, where Contractor's liability extends to the sum
recovered under the insurance for the loss of damage. In addition,
Contractor should obtain Excess Liability Insurance serving to increase
primary limits to other required coverages to US$24,000,000 per
occurrence. The Excess Liability Insurance shall remain in force until
issuance of the Acceptance Certificate.
30.5 Proprietary and Intellectual Property Indemnity and Related Matters
CONTRACTOR shall indemnify and hold each COMPANY INDEMNIFIED PARTY
harmless from suits, claims or cause of actions resulting from
infringement of an industrial property right in connection with the
work, or any
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COMPANY INDEMNIFIED PARTY'S use of the CONTRACT OBJECT. Industrial
property rights include patent, trademark, copyright, unfair
competition and trade secret rights.
CONTRACTOR shall be liable for any damages, including increased damages
because of willful and/or intentional acts, an award of attorneys fees
that includes the third party attorneys fees, and/or prejudgment
interest, incurred by any COMPANY INDEMNIFIED PARTY as a result of a
suit, claim or cause of action for infringement of any industrial
property right of any third party, which claim or cause of action
arises from the purchase or use of the work or CONTRACT OBJECT.
CONTRACTOR agrees to defend each COMPANY INDEMNIFIED PARTY and their
privies against all suits, claims and causes of action for infringement
by the work or CONTRACT OBJECT of the industrial property rights of any
third party.
If a temporary, preliminary or a permanent injunction is obtained
against any COMPANY INDEMNIFIED PARTY'S use of the work or CONTRACT
OBJECT, or any portion thereof by reason of an infringement of an
industrial property right, CONTRACTOR will, at its option and expense,
use commercially reasonable effort to either
(i) Procure for any COMPANY INDEMNIFIED PARTY the right to
continue using the work and CONTRACT OBJECT, or
(ii) Replace or modify for any COMPANY INDEMNIFIED PARTY the work
and CONTRACT OBJECT or such infringing portion thereof so that
it no longer infringes such industrial property right, so long
as the utility or performance of the work and CONTRACT OBJECT
is not adversely affected by such replacement or modification
and the work and CONTRACT OBJECT continues to materially
conform with the specifications of the work or CONTRACT
OBJECT.
If COMPANY INDEMNIFIED PARTY is damaged as a result from non-use of the
work or CONTRACT OBJECT purchased under this contract, where non-use
results from a court order not to make or use the work or CONTRACT
OBJECT as a result of a lawsuit brought by a third party for
infringement by the work or CONTRACT OBJECT of an industrial property
right, then COMPANY INDEMNIFIED PARTY shall be reimbursed from
contractor for actual damages from said non-use incurred by COMPANY
INDEMNIFIED PARTY up to a limit of $1,000,000.
CONTRACTOR shall also indemnify and hold each COMPANY INDEMNIFIED PARTY
harmless for any claim, cause of action or suit, such as for trade and
business torts, for use of the work or CONTRACT OBJECT
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Under the contract which is caused in whole or part by CONTRACTOR,
which is brought against a COMPANY INDEMNIFIED PARTY by a third party.
CONTRACTOR shall defend and pay all costs and expenses in defending a
claim, cause of action or suit for such dispute.
The provisions of this section on defense and indemnification shall
survive the expiration of the term of this contract. The privileges and
benefits enjoyed under this section on defense and indemnification
shall inure to the benefit of COMPANY INDEMNIFIED PARTIES' privies,
including a subsequent owner of an interest of any COMPANY INDEMNIFIED
PARTY.
If it becomes necessary for COMPANY INDEMNIFIED PARTIES to enforce this
indemnification provision against CONTRACTOR, CONTRACTOR shall pay for
COMPANY INDEMNIFIED PARTIES' attorneys' fees, court costs, litigation
expenses and any other costs or expenses associated with the
enforcement action.
30.6 Notice of Claim
Whenever any claim shall arise for indemnification hereunder, the
indemnified party shall promptly notify the indemnifying party of the
claim and, when known, the facts constituting the basis for such claim,
except that in the event of any claim for indemnification hereunder
resulting from or in connection with any claim or legal proceedings by
a Third Party, such notice shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom.
The Parties shall give each other information and other assistance
needed for handling the claim. Neither Party shall, without the consent
of the other Party, approve of a claim which shall be indemnified, in
whole or in part, by the other Party.
30.7 Consequential Damages
Notwithstanding anything to the contrary contained elsewhere in this
Contract, no Company Indemnified Party or Contractor Indemnified Party
shall be liable to any member of the other group for any consequential,
incidental or indirect damages (whether liquidated or unliquidated),
including, but not limited to, loss of use, loss of profit, loss of
revenue, loss of product or production, reservoir damage, or loss of
hole, damage due to blowout or cratering, whenever arising under this
Contract or as a result of, relating to or in connection with the Work
under the Contract and no claim shall be made by any Contract
Indemnified Party Group or Company Indemnified Party against any member
of the other group regardless of whether such claim is based or claimed
to be based on negligence (including, sole, joint, active, passive,
concurrent or gross negligence), unseaworthiness, unairworthiness,
fault, breach of warranty, breach of agreement, statute, strict
liability or otherwise.
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Art. 31 INSURANCES
31.1 Company shall provide and maintain the insurances described below and
in Appendix I - Company's Insurances, etc.
a) Builder's all risk insurance, or equivalent insurance,
covering the Contract Object, Materials and Company Provided
Items against physical loss or damage, in accordance with the
insurance conditions.
b) Transport insurance covering the Contract Object, Materials
and Company Provided Items against physical loss or damage
during transportation, in accordance with the insurance
conditions.
c) Liability insurance covering Company's liability under Art.
30.3 for claims arising from each accident.
Such insurance coverage shall be effective from the start of the Work
and shall not expire until issue of the Acceptance Certificate.
The policies shall state that Company and Contractor are named
insureds, and the insurers shall waive any right of subrogation against
Contractor Indemnified Parties, but only to the extent of Contractor
Indemnified Parties' obligations under this Contract.
31.2 Contractor shall, and shall cause each authorized subcontractor to,
carry insurance as specified in Appendix O.
31.3 If one of the Parties fails to take out insurance according to its
obligations of this Article, then the other Party is entitled to take
out such insurance and claim a refund of the costs from the Party in
default.
31.4 When any incident occurs for which coverage is granted under one of the
Parties' insurance policies, the other Party shall notify that Party
without undue delay, enclosing a description of the incident that gives
rise to the insurance claim. When the Party whose insurance policy
covers the claim, handles the claim, the other Party shall provide it
with reasonable assistance, without claiming compensation.
31.5 Each Party shall support its mutual indemnity obligations with respect
to injury or death of any Person or damage to or loss of property by
liability insurance coverage in the amounts set forth herein.
PART 9 PROPRIETARY RIGHTS, ETC.
ART. 32 RIGHTS TO DOCUMENTS AND COMPUTER PROGRAMS
32.1 Documents and computer programs provided by Company to Contractor, or
which are developed mainly on the basis of such documents and computer
programs, shall
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remain the exclusive property of Company. The same applies to all
copies of the aforementioned documents and computer programs.
Such documents, computer programs or copies shall not be used by
Contractor other than for the purpose of the Work. Such documents,
computer programs or copies shall be returned to Company at the
expiration of the Contract, unless otherwise agreed between Company and
Contractor.
32.2 Documents and computer programs provided by Contractor to Company, or
which are developed mainly on the basis of such documents and computer
programs, including, but not limited to, technical data, design,
drawings, plans, reports, specifications and other materials employed
in the design, fabrication, assembly, installation and operation of the
Work, shall remain the exclusive property of Contractor. The same
applies to all copies of the aforementioned documents and computer
programs.
Company shall be entitled to use such documents, computer programs and
copies only in connection with the operation, repair, modification and
maintenance of the Contract Object or Contractor supplied equipment,
unless otherwise prescribed in Appendix K - Contractor's Proprietary
Information.
32.3 All other documents, computer programs and copies thereof developed by
Contractor or its Affiliate in connection with the Work shall be the
property of Contractor.
Company shall be entitled to use such documents, computer programs and
copies only in connection with the operation, repair, modification and
maintenance of the Contract Object or Contractor supplied equipment,
unless otherwise prescribed in Appendix K - Contractor's Proprietary
Information.
32.4 The Parties shall ensure that all those who have access to such
documents, computer programs and copies thereof as referenced in Art.
32.1 through 32.3 shall comply with the provisions of this Contract.
Further, any Third Party to receive such documents shall be required by
the Party disclosing the documents, prior to communication of the
information, to execute a written covenant and confidentiality
agreement with such Party on the same terms specified in this Art. 32
and in Art. 34.1.
ART. 33 INVENTIONS
33.1 Inventions made by Contractor during the performance of the Work shall
be the property of Contractor. This does not apply, however, to
inventions mainly based on technical information received from Company
under Art. 32.1, which inventions shall be the exclusive property of
Company.
Contractor shall notify Company of all inventions which shall be
Company's exclusive property, and Contractor shall provide the
necessary assistance to enable
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Company to acquire the patents to the inventions. Company shall pay
Contractor for all reasonable costs in connection with such assistance,
including compensation to Contractor's employees or others, in
accordance with applicable law or general agreements concerning
compensation for inventions.
33.2 Company shall grant to Contractor an irrevocable, royalty-free,
non-exclusive license to inventions which are Company's exclusive
property in accordance with Art. 33.1.
33.3 Contractor shall grant to Company an irrevocable, royalty-free,
non-exclusive license to all inventions which are under, or which prior
to delivery of the Contract Object come under, Contractor's control, to
the extent necessary for Contractor to perform the Work, or for the
operation, maintenance, modification and repair of the Contract Object.
Contractor shall also grant to Company an irrevocable, royalty-free,
non-exclusive license to inventions made by Contractor in connection
with the Work and which are based on technical information from both
Parties, without any of them providing the main part of such
information. The license shall include a right to use the invention in
construction of objects of whatever kind, provided, however, that the
license under this paragraph shall at all times be restricted to
operations where Company is an operator, and shall at no time include a
right to sublicense.
Company shall also grant to Contractor an irrevocable, royalty-free,
non-exclusive license to inventions made by Company in connection with
the Work and which are based on technical information from both
Parties, without any of them providing the main part of such
information. The license shall include a right to use the invention in
construction of objects of whatever kind, provided, however, that the
license under this paragraph shall at no time include a right to
sublicense.
ART. 34 CONFIDENTIAL INFORMATION
34.1 All information exchanged between the Parties shall be treated as
confidential and shall not be disclosed to a Third Party without the
other Party's written permission, unless such information:
a) may be disclosed to a Third Party in accordance with Art. 32
and 33,
b) is already known to the party in question at the time the
information was received,
c) is or becomes part of the public domain other than through a
fault of a Company Indemnified Party or a Contractor
Indemnified Party,
d) is rightfully received from a Third Party, without an
obligation of confidentiality.
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Each of the Parties may, however, use or disclose confidential
information to a Third Party, to the extent necessary for the
performance of and control of the Work and use of the Contract
Object. In such cases the Parties, prior to disclosing the confidential
information to the Third Party, shall ensure that the Third Party
executes a written covenant and confidentiality agreement in accordance
with Art. 32, 33 and 34, as such Articles are applicable to the
confidential information being disclosed.
34.2 Contractor shall not publish information concerning the Work or the
Contract without Company's written approval. This approval shall not
unreasonably be withheld.
PART 10 OTHER PROVISIONS
ART. 35 ASSIGNMENT OF THE CONTRACT, ETC.
35.1 Company may assign its rights and obligations under the Contract to a
Third Party, provided that Company can demonstrate that the assignee
has the financial strength required to fulfil Company's obligations
under the Contract. At Contractor's request, Company shall provide a
guarantee satisfactory to Contractor of the Third Party's performance.
35.2 Contractor may not assign or mortgage the Contract, or a part or
interest in it, to a Third Party without Company's written approval.
Such approval is not required for an assignment or mortgage to a bank
or other financial enterprise.
ART. 36 NOTICES
All notices, claims and other notification to be given in accordance
with the provisions of the Contract shall be submitted in writing to
the relevant Party's representative under Art. 3, with such address as
given in Appendix D - Administration Requirements or as changed by
notice.
ART. 37 UNITED STATES LAW AND DISPUTES
37.1 Choice of Law
THIS CONTRACT SHALL BE DEEMED TO BE A CONTRACT UNDER, AND SHALL BE
CONSTRUED, INTERPRETED AND GOVERNED BY AND ACCORDING TO, THE LAWS OF
THE STATE OF TEXAS, EXCLUDING ANY CONFLICT OF LAWS PRINCIPLES WHICH, IF
APPLIED, MIGHT PERMIT OR REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION. NON-EXCLUSIVE VENUE FOR ANY LEGAL PROCEEDING ARISING FROM
OR RELATING TO THIS CONTRACT SHALL BE HOUSTON, XXXXXX COUNTY, TEXAS.
37.2 Dispute Resolution
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The Parties recognize that the amicable settlement of disputes is in
their mutual best interests. As such, the Parties agree to promptly
notify the other Party of any dispute and to engage in good faith
consultations to resolve such a dispute. If such consultations do not
resolve the dispute within 30 Days of notification thereof, the Parties
agree to submit any dispute to consultations to resolve such a dispute.
If such consultations do not resolve the dispute within 30 Days of
notification thereof, the Parties agree to submit any dispute to
consultations between the Chief Executive Officer of MODEC
International LLC and the President, chief executive office or
principal of the Company. If such consultations fail to resolve such a
dispute within 30 Days, either Party may submit the matter to
arbitration under American Arbitration Association Construction
Industry Rules as presently in force. The number of arbitrators will be
one. The arbitration will be conducted by one mutually agreed
arbitrator (or in the absence of agreement, by an arbitrator appointed
by the administering body for the arbitration). The arbitrator shall
agree that time is of the essence in the rendering of a decision. The
place of the arbitration shall be Houston, Texas and the arbitration
shall be conducted in English. The arbitrator shall be empowered to
order injunctive relief but shall not be empowered to award damages in
excess of compensatory damages and each Party hereby irrevocably waives
any right to recover such damages with respect to any dispute resolved
by arbitration. The decision of the arbitrator will be final and
binding upon each Party and may be enforced in any court of competent
jurisdiction. The cost and expenses of any such arbitration, including
the legal expenses of the prevailing Party, will be borne as determined
by the arbitrator. Neither Party shall be excused from the performance
of its obligations, alternative dispute resolution or litigation
relating hereto. Notwithstanding this provision, nothing in this
Contract shall preclude either Party from seeking injunctive relief
from a court of competent jurisdiction to preserve the status quo
during the pendency of the dispute nor shall either Party be precluded
from seeking appropriate judicial relief to enforce or preserve
separately available statutory rights.
All statutes of limitations which would otherwise apply to an action at
law would apply to an action under this arbitration provision.
ART. 38 EQUAL EMPLOYMENT OPPORTUNITY PROVISIONS
In order to ensure compliance with the Equal Employment Opportunity
provisions of Executive Orders 11246, 11375, 11598, 11141, and 11758,
the Contractor agrees to and shall be bound by these provisions and
all rules and regulations promulgated thereunder, and with all
amendments and additions thereto.
Contractor shall be bound by and agrees to the following provisions as
contained in Section 202 of Executive Order 11246, to wit:
(1) Contractor will not discriminate against any employee or
applicant for employment because of race, color, religion,
sex, age or national origin. The
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Contractor will take affirmative action to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion,
sex, or national origin. Such action shall include, but not be
Limited to the following. Employment, upgrading, demotion, or
transfer, recruitment or recruitment advertising, layoff or
termination rates of pay or other forms of compensation; and
selection for training, including apprenticeship. The
Contractor agrees to post in conspicuous places, available to
employees and applicants for employment, notice to be provided
by the contracting officer setting forth the provisions of
this nondiscrimination clause.
(2) Contractor will, in all solicitations or advertisements for
employees placed by or on behalf of the Contractor, state that
all qualified applicants will receive consideration for
employment without regard to race, color, religion, sex, age
or national origin.
(3) Contractor will send to each labor union or representative of
workers with which he has a collective bargaining agreement or
other contract or understanding, a notice, to be provided by
the agency contracting officer, advising the labor union or
worker's representative of the Contractor's commitments under
Section 202 of Executive Order 11246 of September 24, 1965,
and shall post copies of the notice in conspicuous places
available to employees and applicants for employment.
(4) Contractor will comply with all provisions of Executive Order
11246 of September 24, 1965, and of the rules, regulations,
and relevant orders of the Secretary of Labor.
(5) Contractor will furnish all information and reports required
by Executive Order 11246 of September 24, 1965, and by the
rules, regulations, and orders of the Secretary of Labor, or
pursuant thereto, and will permit access to its books,
records, and accounts by the contracting agency and the
Secretary of Labor for the purposes of investigation to
ascertain compliance with such rules, regulations and orders.
6) In the event of the Contractor's noncompliance with the
nondiscrimination clauses of this contract or with any such
rules, regulations, or orders, this contract may be cancelled,
terminated or suspended in whole or in part and the Contractor
may be declared ineligible for further Government contracts in
accordance with procedures authorized in Executive Order 11246
of September 24, 1965, and such other sanctions may be imposed
and remedies invoked as provided in Executive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the
Secretary of Labor, or as otherwise provided by law.
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7) Contractor will include the provisions of Sections I.A.(1)
through I.A.(7) in every subcontract or purchase order unless
exempted by rules, regulations or orders of the Secretary of
Labor issued pursuant to Section 204 of Executive Order 11246
of September 24, 1965, so that such provisions will be binding
upon each subcontractor or vendor. The Contractor will take
such action with respect to any subcontract or purchase order
as the contracting agency may direct as a means of enforcing
such provisions including sanctions for noncompliance:
PROVIDED, HOWEVER, that in the event the Contractor becomes
involved in, or is threatened with, litigation with a
subcontractor or vendor as a result of such direction by the
contracting agency, the Contractor may request the United
States to enter into such litigation to protect the interests
of the United States.
Contractor certifies that he does not maintain or provide for its
employees any segregated facilities at any of its establishments, and
that he does not permit its employees to perform their services at any
locations, under this contract where segregated facilities are
maintained. He certifies further that he will not maintain or provide
for its employees any segregated facilities at any of its
establishments, and that he will not permit location, under its
control, where segregated facilities are maintained. Contractor agrees
that a breach of this certification is a violation of the Equal
Opportunity Clause in this contract. As used in this certification, the
term "segregated facilities" means any waiting rooms, work areas, rest
rooms and wash rooms and other storage or dressing areas, parking lots,
drinking fountains, recreation or entertainment area, transportation
and housing facilities provided for employees which are segregated by
explicit directive or are in fact segregated on the basis of race,
creed, color, or national origin, because of habit, local custom or
otherwise. He further agrees that (Except where he has obtained
identical certifications from proposed subcontractors for specific time
periods) he will obtain identical certifications from proposed
subcontractors prior to the award of subcontractors exceeding $10,000
which are not exempt from the provisions of Equal Opportunity Clause;
that he will retain such certifications in its files; and that he will
forward the following notice to such proposed subcontractors (except
where the proposed subcontractors have submitted identical
certifications for specific time periods):
NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR CERTIFICATIONS
ON NONSEGREGATED FACILITIES
A Certification of Nonsegregated Facilities as required by the May 9,
1965, order on Elimination of Segregated Facilities, by the Secretary
of Labor 932 Fed. Reg. 7439, May 19, 1967), must be submitted prior to
the award of a subcontract exceeding $10,000 which is not exempt from
the provisions of the Equal Opportunity Clause. The Certification may
be submitted either for each subcontract or for all subcontracts during
a period (i.e., quarterly, semiannually, or annually). (1968 MAR.)
(Note: The penalty for making false statements in offers is prescribed
in 18 U.S.C. Section 1001.)
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ART. 39 POLLUTION CONTROL AND RESPONSIBILITY
39.1 During the performance of the Work under this Contract, the
responsibility of Company and the Contractor for control and removal of
pollution or contaminations shall be defined as follows:
39.2 Conduct of Operations
Each Contractor Indemnified Party shall exercise all reasonable
diligence to conduct its operations in a manner that will prevent
pollution and each Contractor Indemnified Party shall comply with all
applicable laws, ordinances, rules, regulations and lease or contract
provisions regarding pollution, including without limitation those of
the U.S. Coast Guard, U.S. Army Corps of Engineers, U.S. Geological
Survey, and U.S. Department of Interior. No Contractor Indemnified
Party shall permit trash, waste oil, bilge water, or other pollutants
to be discharged or to escape into the sea. Each Contractor Indemnified
Party will take reasonable measures to instruct its personnel in such
matters and to prevent such pollution and will clean up such pollution
caused by it in the course of operations relating to this Contract.
Contractor shall provide Company with a copy of all environmental
response plans covering work conducted hereunder prior to commencement
of such work. It is not intended hereby to limit or conflict with the
responsibilities of Company and Contractor as further defined within
this Exhibit.
39.3 Contractor's Responsibilities
Contractor shall assume all responsibility for, including control and
removal of, and release, indemnify and hold each Company Indemnified
Party harmless against and from loss, cost or damage arising from
pollution or contamination:
(1) Which originates above the surface of the land or water:
(a) from spills or leaks of fuels, lubricants, motor oil,
pipe dope, paints, solvents, ballasts, bilge,
garbage, sewerage, and other materials exclusive of
those covered by subpart (b) below, in each
Contractor Indemnified Party's possession and
control, WHETHER CAUSED OR BROUGHT ABOUT BY ANY
COMPANY INDEMNIFIED PARTY'S NEGLIGENCE (INCLUDING
ACTIVE, PASSIVE, SOLE, JOINT OR CONCURRENT
NEGLIGENCE) OR ANY OTHER THEORY OF LEGAL LIABILITY,
INCLUDING STRICT LIABILITY, THE UNSEAWORTHINESS OF
ANY VESSEL AND THE UNAIRWORTHINESS OF ANY AIRCRAFT
AND INCLUDING PRE-EXISTING CONDITIONS.
(b) from spills, leaks or dumping of oil emulsion, oil
base or chemically treated drilling fluids,
contaminated cuttings and lost circulation and fish
recovery materials and fluids, when said materials
are in each
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Contractor Indemnified Party's possession, although
their use or disposition may be at Company's
direction, and such spill, leak or dumping is a
result of any Contractor Indemnified Party's acts or
omissions;
(2) Resulting from fire, blowout, cratering, seepage, or any other
uncontrolled flow, from surface or subsurface, of oil, gas or
water from xxxxx during the conduct of operations hereunder
when caused by any Contractor Indemnified Party's acts or
omissions, but only up to and not in excess of the first
$500,000 per occurrence of such loss, cost or damage;
(3) Resulting from leaking or other uncontrolled flow of oil, gas
or water from pipelines, including lines on or in submerged
lands, ruptured or damaged by any Contractor Indemnified
Party's rig, barge, anchors or other equipment, or by any
Contractor Indemnified Party's operations, when such rupture
or damage is caused by any Contractor Indemnified Party's acts
or omissions, but only up to and not in excess of the first
$500,000 per occurrence of such loss, cost or damage.
39.4 Company's Responsibilities
Company shall assume all responsibility for, including control and
removal of, and release, indemnify and hold each Contractor Indemnified
Party harmless against and from loss, cost or damage arising from
pollution or contamination:
(1) Resulting from fire, blowout, cratering, seepage, or any other
uncontrolled flow of oil, gas or water from xxxxx during the
conduct of operations hereunder when not resulting from any
Contractor Indemnified Party's acts or omissions and,
excluding the first $500,000 per occurrence of such loss, cost
or damage, WHETHER CAUSED OR BROUGHT ABOUT BY ANY CONTRACTOR
INDEMNIFIED PARTY'S NEGLIGENCE (INCLUDING ACTIVE, PASSIVE,
SOLE, JOINT OR CONCURRENT NEGLIGENCE) OR ANY OTHER THEORY OF
LEGAL LIABILITY, INCLUDING STRICT LIABILITY, THE
UNSEAWORTHINESS OF ANY VESSEL AND THE UNAIRWORTHINESS OF ANY
AIRCRAFT AND INCLUDING PRE-EXISTING CONDITIONS.
(2) Resulting, except as provided in Art. 39.3(1)(b) above, from
possession, use or disposition of oil emulsion, oil base or
chemically treated drilling fluids, contaminated cuttings,
lost circulation, fish recovery materials and fluids,
including such possession, use or disposition by any Company
Indemnified Party;
(3) Resulting from leakage or other uncontrolled flow of oil, gas
or water from pipelines, including lines on or in submerged
lands, ruptured or damaged by Contractor Indemnified Party's
barge, anchors, or other equipment, or by
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Contractor Indemnified Party's operations, when such rupture
or damage is not caused by Contractor Indemnified Party's acts
or omissions, and excluding the first $500,000 per occurrence
of such loss, cost or damage, WHETHER CAUSED OR BROUGHT ABOUT
BY ANY CONTRACTOR INDEMNIFIED PARTY'S NEGLIGENCE (INCLUDING
ACTIVE, PASSIVE, SOLE, JOINT OR CONCURRENT NEGLIGENCE) OR ANY
OTHER THEORY OF LEGAL LIABILITY, INCLUDING STRICT LIABILITY,
THE UNSEAWORTHINESS OF ANY VESSEL AND THE UNAIRWORTHINESS OF
ANY AIRCRAFT AND INCLUDING PRE-EXISTING CONDITIONS.
39.5 Agreement
Without relieving Contractor of any of its obligations above provided,
it is agreed that Company may take part to any degree it deems
necessary in the control and removal of any pollution or contamination
which is the responsibility of Contractor under the foregoing
provisions; and Contractor shall reimburse Company for the cost
thereof, subject to any limitations above provided, upon the receipt of
billing therefor from Company.
ART. 40 YEAR 2000 WARRANTY
40.1 Contractor hereby represents and warrants to Company that all Products
are and will be Year 2000 Compliant.
40.2 This representation and warranty shall survive until the earlier of 24
months or upon termination of this Contract. In the event that such
warranty compliance requires the acquisition of additional Products,
the expense for any such associated or additional acquisitions which
may be required (including, without limitation, data conversion tools)
shall be borne exclusively by supplier.
As used herein, "Year 2000 Compliant" means the Product will:
A. function without interruption or human intervention with
four-digit year processing on all Date Data, including errors
or interruptions from functions which may involve Date Data
from more than one century or leap years, regardless of the
date of processing or date of Date Data ("Date Data" means
any data, input, or output which includes an indication of
date);
B. provide results from any operation accurately reflecting any
Date Data used in the operation performed, with output in any
form, except graphics, having four-digit years;
C. accept two-digit year Date Data in a manner that resolves any
ambiguities as to century in a defined manner; and
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D. provide data interchange in the ISO 8601:1988 standard of
CCYYMMDD
40.3 This warranty shall apply to all Products delivered by supplier now or
in the future, including all bug fixes, patches, updates, enhancements,
new development, or other software, equipment or documentation. A
Product (as such term is defined herein) failure caused by or
contributed to be because such Product is not Year 2000 Compliant, as
defined above, is not a Force Majeure event.
ART. 41 MISCELLANEOUS
41.1 Taxes
Any duties or tariffs or state or county sales, use or ad valorem taxes
which become payable to any authority as a consequence of the
performance of the Work shall be paid by Company and Company shall
provide Contractor a sales tax exemption certificate; however,
Contractor agrees to PROTECT AND KEEP COMPANY SAFE AND HARMLESS against
all taxes and fines, penalties, and interest thereon assessed or
levied against or on account of the Work related to wages, salaries, or
other benefits paid to Contractor's employees or employees of
Contractor's subcontractors. Contractor will promptly forward all tax
assessments and similar statements or notices to Company for which
Company is responsible.
41.2 Effective Date
The effective date of this Contract shall be the date on which this
Contract is fully executed by authorized signatories of each of the
Parties.
41.3 Amendments
This Contract may not be amended, nor any provision hereof waived,
except by a written amendment executed with the same formality as this
Contract and executed by duly authorized representatives of the
respective Parties.
41.4 Entire Agreement
This Contract constitutes the sole and only agreement of the Parties
and supersedes any prior understandings or written or oral agreements
between the Parties respecting the within subject matter. No agent,
employee or representative of Company has any authority to bind Company
to any affirmation, representation or warranty outside of, or in
conflict with, the stated terms of this Contract, and Contractor hereby
stipulates that it has not relied and will not rely on such an
affirmation, representation or warranty.
41.5 Counterparts
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This Contract may be executed in multiple counterparts, each of which,
when executed, shall be deemed an original, and all of which shall
constitute but one and the same instrument.
41.6 Further Assurances
Subject to the terms and conditions set forth in this Contract, each of
the Parties agrees to use all reasonable efforts to take, or to cause
to be taken, all actions, and to do, or to cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Contract. In case, at any time after the execution of this Contract,
any further action is necessary or desirable to carry out its purposes,
the proper officers or directors of the Parties shall take or cause to
be taken all such necessary action.
41.7 Severability
Any term or provision of this Contract that is invalid or unenforceable
in any jurisdiction shall be ineffective as to such jurisdiction, to
the extent of such invalidity or unenforceability, without rendering
invalid or unenforceable the remaining terms and provisions of this
Contract or affecting the validity or enforceability of any terms and
provisions of this Contract in any other jurisdiction. If any provision
of this Contract is so broad as to be unenforceable, each provision
shall be interpreted to be only so broad as is enforceable. A
bankruptcy or similar trustee must accept or, to the extent permitted
by law, reject this Contract in its entirety.
41.8 Waiver
Neither action taken (including, without limitation, any investigation
by or on behalf of either Party) nor inaction pursuant to this
Contract, shall be deemed to constitute a waiver of compliance with any
representation, warranty, covenant or agreement contained herein by the
Party not committing such action or inaction. A waiver by any Party of
a particular right, including, without limitation, breach of any
provision of this Contract, shall not operate or be construed as a
subsequent waiver of that same right or a waiver of any other right.
41.9 No Third Party Beneficiaries
Except to the extent a third party is expressly given rights herein,
any agreement herein contained, expressed or implied, shall be only for
the benefit of the Parties and their respective legal representatives,
successors, and assigns, and such agreements or assumption shall not
inure to the benefit of any other Person whomsoever, it being the
intention of the Parties that no Person shall be deemed a third party
beneficiary of this Contract except to the extent a third party is
expressly given rights herein.
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ART. 42 OPTION
42.1 For a period of 36 months from the Effective Date for the Sunday
Silence unit, Contractor will execute projects and deliver the
additional XXXX TI_P platforms to Company with all costs to Contractor,
passed through to Company. Contractor will earn a discounted profit of
6% on the total contract value as its profit.
42.2 In addition, Company and Contractor will agree to mutually acceptable
incentives and penalties to cost and schedule.
42.3 Contractor will negotiate option pricing for a second unit from its
vendors and sub-contractors, on a component basis, when placing the
purchase order/contract for scopes of work for the Sunday Silence
unit. Contractor will make its best efforts to obtain this option
pricing at about the same pricing level as the components for the
first unit. To the extent possible, this option pricing will be valid
for a period of 12 months from the date of purchase order or
subcontract from Contractor, or longer if possible to obtain from the
vendor/sub-contractor. Contractor wishes to highlight that
approximately 80% of the total cost of the unit is from vendors and
sub-contractors. This mechanism will allow the prices, by component,
to be firmed up at least for the next 12 months at the low levels
available in today's depressed market conditions.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, Contractor and Company have caused this
Fabrication Agreement to be duly executed and delivered as of the date and year
first above written.
COMPANY
DELOS OFFSHORE COMPANY, LLC.
/s/ XXXXX X. XXXXX
-----------------------------------------
Xxxxx X. Xxxxx
President
CONTRACTOR
MODEC INTERNATIONAL LLC
/s/ K. MATAUNAGA
-----------------------------------------
Name: K. MATAUNAGA
------------------------------------
Title: PRESIDENT & CEO
-----------------------------------
