Exhibit 10.38
TURNKEY CONTRACT
between
OFFSHORE SPECIALTY FABRICATORS, INC.
(Contractor)
and
Freeport-McMoRan Sulphur LLC (Company)
for the
REMOVAL, SITE CLEARANCE AND
SCRAPPING OF
MAIN PASS BLOCK 299
THIS TURNKEY CONTRACT (the "Contract") is made this the
______ day of March, 2002 by and between Freeport-McMoRan Sulphur
LLC (hereinafter "COMPANY" or "Freeport"), a Delaware limited
liability company with its principal office at 0000 Xxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000 and Offshore Specialty
Fabricators, Inc. (hereinafter "CONTRACTOR" or "OSFI"), a
Louisiana corporation with its principal office at 000 Xxxxxx
Xxxx, Xxxxx, Xxxxxxxxx 00000 (collectively COMPANY and CONTRACTOR
are referred to as the "Parties" and individually as "Party").
WITNESSETH
WHEREAS, COMPANY requires CONTRACTOR to perform certain
reclamation and abandonment services with respect to those
facilities (the "Sulphur Facilities") on COMPANY's Sulphur and
Salt Lease, OCS-G 9372, located in Main Pass Block 299 (the
"Sulphur Lease") in the Federal Domain, Offshore Louisiana, in
accordance with the description of the Work as provided in this
Contract and in accordance with applicable governmental laws,
regulations and procedures; and
WHEREAS, CONTRACTOR is willing and capable of providing the
facilities, equipment, vessels, supplies and material
(collectively the "Equipment") and the labor and supervision
(collectively the "Personnel") and any other items that are
necessary or appropriate to perform such reclamation and
abandonment services as required by COMPANY.
NOW, THEREFORE, for and in consideration of the premises and
mutual covenants contained herein and for other good and valuable
consideration the adequacy and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. WORK TO BE PERFORMED
CONTRACTOR shall provide to COMPANY, the Equipment,
Personnel and any other items that are necessary or
appropriate in order to perform and CONTRACTOR will
perform the work or services in connection with the
abandonment and removal of the Phase 1 Facilities and
Phase 2 Facilities, as described below and in Exhibits
A and B (the "Work"). CONTRACTOR has assured itself
that it can do the Work on the terms specified herein.
CONTRACTOR shall perform the WORK in two phases. In
Phase 1, CONTRACTOR shall remove any and all facilities
located on the Sulphur Lease, except Production
Platform No. 1, Production Platform Xx. 0, Xxxxxx 00,
Xxxxxx 00, Xxxxxx 12, Bridge 13, the BS-8 Facility, the
BS-9 Facility, the Y-7 Facility, the BS-2 Facility, the
Storage and Loading Facility, and the Control Platform
(the "Phase 2 Facilities"). The facilities to be
removed during Phase 1 are shown on Exhibit A and are
hereby referred to as "Phase 1 Facilities". In Phase
2, CONTRACTOR shall remove the Phase 2 Facilities
promptly following the determination that such
facilities will not be employed for any traditional or
alternative use or at such times as their removal is
required by the MMS. It is contemplated that some of
the Phase 2 Facilities will be made the subject of
agreements with third parties for such usage in
connection with which the entire responsibility for
reclamation and abandonment will be assumed by such
third party or third parties. Once such third party or
third parties provide all necessary bonding or other
financial assurances for reclamation, these facilities
will be removed from the set of Phase 2 Facilities for
which CONTRACTOR is responsible hereunder.
2. PERIOD OF CONTRACT:
This Contract shall commence on a date to be mutually
agreed by the Parties and continue until the Work is
completed and COMPANY has inspected and accepted the
Work or CONTRACTOR is instructed to cease by COMPANY,
which instruction may be given any time when CONTRACTOR
has failed to remedy a default under this Contract
within five (5) days following COMPANY's written notice
to CONTRACTOR advising of the default.
3. COMPENSATION:
As full compensation for the performance of the Work
and for COMPANY's share of those services to be
provided under that Turnkey Contract, between COMPANY
and CONTRACTOR, for the Removal, Site Clearance, and
Scrapping of the Caminada Mine, CONTRACTOR shall be
entitled to receive COMPANY's right, title, and
interest in (i) the M/V X.X. Xxxx; (ii) the leasehold
rights for the Venice Base facility, located in Venice,
Louisiana (the "Venice Base"), pursuant to that
Agreement of Lease, dated April 20, 1990, between the
Louisiana Fruit Company, as lessor, and Freeport-
McMoRan Resource Partners, Limited Partnership, as
lessee (the "Louisiana Fruit Lease") and certain
equipment and other property located on the Louisiana
Fruit Lease (the "Venice Base Assets"); and (iii) those
living quarters, formerly located on the Sulphur Lease
and now located in CONTRACTOR's yard in Houma,
Louisiana (the "Louisiana Assets"). CONTRACTOR shall
also be entitled to receive certain monies in the Main
Pass Trust Account, as CONTRACTOR completes the
reclamation and removal of individual facilities, as
further provided in Paragraph 4. This compensation is
inclusive of all Equipment, Personnel, and any other
terms required to perform the WORK to COMPANY's
satisfaction. Except as otherwise provided herein,
CONTRACTOR shall be entitled to no other compensation
of any kind. Promptly following the execution hereof,
COMPANY will convey the Louisiana Assets to CONTRACTOR.
4. PAYMENT AND TERMS:
CONTRACTOR shall be entitled to payment from the Main
Pass Trust Account only upon the completion of certain
threshold degrees of Phase 1 reclamation: upon
completion of 25% of the abandonment and removal of
Phase 1 Facilities, CONTRACTOR shall be entitled to
receive 25% of the monies paid into the Main Pass Trust
Account; likewise upon the completion of 50%, 75%, and
100% of the abandonment and removal of Phase 1
Facilities, CONTRACTOR shall be entitled to receive
50%, 75%, and 100% of all monies theretofore paid into
the Main Pass Trust Account. However, before payment,
OSFI must establish, to Freeport's satisfaction, that
the Phase 1 Facilities covered thereby have been
abandoned and removed in accordance with all applicable
regulations, as further provided Section 9. In the
event of default and it becomes necessary for OSFI to
file suit to collect amounts due, OSFI will be entitled
to interest on the unpaid amounts due at the rate of 2%
above the prime lending rate per annum of XX Xxxxxx
Chase Bank from date of judicial demand plus reasonable
attorney fees and expenses, provided that if any amount
claimed to be due by CONTRACTOR is disputed in good
faith, reasonable efforts will first be made to
amicably resolve the dispute.
COMPANY and CONTRACTOR shall share, on a 50/50 basis,
any Contingent Payments as defined in (iii) below.
That said, the following amounts shall be placed in the
Main Pass Trust Account:
(i) The proceeds from the sale of Lease OCS-G 12362,
from COMPANY and CONTRACTOR to Chevron U.S.A.
Inc., pursuant to that letter agreement, dated
March 27, 2002;
(ii) The initial $5 million in proceeds from the
sale of Lease OCS-G 9372, Production Platforms 1
and 2, and certain other facilities, from COMPANY
and CONTRACTOR to Canadian Crude Separators, Inc.
(or any affiliate of Canadian Crude Separators,
Inc.), pursuant to that letter of intent, dated
March 15, 2002 or the initial proceeds from any
replacement transaction should this transaction
not be completed, exclusive of any Contingent
Payments; and
(iii) CONTRACTOR's 50% share of any payments
("Contingent Payments"), which COMPANY and
CONTRACTOR obtain as net profits or net proceeds
from Canadian or any other party, other than the
amounts described in (ii) above. However, when
CONTRACTOR completes all Phase 2 reclamation or
when the monies in the Main Pass Trust Account are
sufficient to fund the
Phase 2 reclamation that CONTRACTOR has yet to
conduct, then CONTRACTOR shall be entitled to
receive its 50% share of the Contingent Payments
described herein.
5. OBLIGATIONS OF COMPANY:
COMPANY will be responsible for all cost associated
with removing and disposing of all hazardous waste
associated with the Sulphur Facilities. There will be
no transfer of ownership and responsibility of such
hazardous materials for which COMPANY is responsible,
limited to the extent that CONTRACTOR must notify
COMPANY of the existence of any hazardous waste found
at the facility.
6. OBLIGATIONS OF CONTRACTOR:
Except as otherwise expressly provided for in this
Contract, CONTRACTOR shall furnish all of the
Personnel, Equipment and any other items that are
necessary or appropriate to perform the Work, and will
bear all costs and expenses involved in the
maintenance, repair and operation of the Equipment and
the performance of the Work. The Personnel shall be
trained and efficient and qualified to perform the Work
and the Equipment shall be adequate, serviceable and
maintained in first-class operating condition and
CONTRACTOR shall cause the Equipment to be seaworthy,
to the extent applicable. CONTRACTOR shall also as
part of the Work apply for and obtain all governmental
permits and approvals required for the Work. Prior to
the removal of any of the Phase 1 Facilities or Phase 2
Facilities, COMPANY shall have the right to designate
and retain any equipment located on such facilities.
Except with respect to equipment so designated,
CONTRACTOR shall own, immediately upon their removal,
any facilities or property that it removes in the
course of the Work. CONTRACTOR shall be in full
possession and control of the facilities and property
covered hereunder from the date hereof until completion
of the Work.
7. WORK SCHEDULE:
The Work schedule shall be as set out by OSFI, provided
that the Work must be commenced within 30 days
following completion of reclamation of the Caminada
Mine and approval by the MMS. Phase 1 must be
completed as soon as practicable but not later than 12
months after final government permitting and/or delays
from COMPANY or COMPANY's subcontractors or any shorter
time frame as may be practicable and stipulated by the
MMS. CONTRACTOR will include in its Work schedule
sufficient time for COMPANY to remove any materials for
which COMPANY has the obligation to remove under this
Contract. CONTRACTOR will allow COMPANY to use its
quarters and facilities at $60.00/man/day and
transportation to and from the OSFI's dock to assist
COMPANY in the removal of any such materials.
CONTRACTOR will be liable for all costs associated with
Government penalties, bonding requirements or
extensions for exceeding the stipulated removal window.
COMPANY will determine the timing and commencement of
the removal of the Phase 2 Facilities, taking into
account their potential for continued use.
8. COMPLIANCE WITH APPLICABLE LAW:
CONTRACTOR and its Personnel shall comply with all
applicable governmental laws, regulations and
procedures, including but not limited to those of the
Minerals Management Service and all other regulatory
agencies pertaining to safety, health and the
environment, and CONTRACTOR shall indemnity, hold
harmless and defend COMPANY from and against all
claims, fines, damages or losses arising out of
CONTRACTOR's (including its subcontractors') failure to
comply. CONTRACTOR shall consult with COMPANY in
determining the need for permits and authorizations,
shall make application for and obtain all necessary
permits and authorizations, and shall provide COMPANY
with copies of all applications, permits, and
authorizations obtained as part of the Work.
CONTRACTOR shall cause its Personnel to be adequately
trained in safety procedures as they pertain to their
duties. CONTRACTOR shall familiarize itself with the
COMPANY's Safety Practices, and follow the same where
applicable. CONTRACTOR shall furnish COMPANY a copy of
its accident report covering each accident involving
any Personnel occurring in connection with, or during
the performance of this CONTRACT within twenty-four
(24) hours after the accident occurs. CONTRACTOR may
contact COMPANY's Accident Prevention Representative at
any time to discuss safety precautions.
9. ACCESS, INSPECTIONS AND ACCEPTANCE:
CONTRACTOR will provide COMPANY's representative(s)
with access to its Equipment and the Work site at all
times, and will provide safe and proper inspection
facilities to such representatives to allow them to
inspect the Work. The costs of providing such access
and inspection facilities is included in the
Compensation. CONTRACTOR will notify COMPANY as each
segment of the Work is completed and at the completion
of all of the Work, and in each case a COMPANY
representative will inspect any Work that is reasonably
susceptible of inspection at that time and advise
CONTRACTOR's representative of any deficiencies found
in the course of each such inspection or indicate its
acceptance. COMPANY's final acceptance is conditioned
upon the acceptance by both a COMPANY representative
and the Minerals Management Service. Nothing contained
in this paragraph shall in any way diminish
CONTRACTOR's obligations under Article 16 of this
Contract.
Promptly following completion of each material part of
the Work, CONTRACTOR will provide to COMPANY a written
certificate which certifies to COMPANY that that part
of the Work has been completed in accordance with this
Contract, including but not limited to compliance with
all applicable MMS and other governmental laws,
regulations and procedures.
10. INDEMNITIES:
For purposes of this indemnification section, the term
"CONTRACTOR GROUP" is used as a reference individually
and collectively for CONTRACTOR and its parent,
subsidiary and affiliated companies, CONTRACTOR's
subcontractors and its and all of their officers,
directors, employees, agents, assigns, representatives,
contractors, and subcontractors, and the subrogees of
said parties. Similarly, the term "COMPANY GROUP" is
used individually and collectively for COMPANY and its
parent, subsidiary and affiliated companies, its
coventuners, co-parties, joint working inter owners,
contractors and subcontractors (excluding Contractor
and its subcontractors) and its and their officers,
directors, employees, agents, assigns and
representatives and the subrogees of said parties.
10.1 CONTRACTOR shall be liable in any case of loss or
damage to CONTRACTOR GROUP's equipment, barges,
tugs and other Equipment, whether owned,
chartered, borrowed or rented by CONTRACTOR GROUP
arising out of or relating to CONTRACTOR's
performance under this Agreement and REGARDLESS OF
WHETHER CAUSED OR BROUGHT ABOUT BY CONTRACTOR
GROUP'S OR COMPANY GROUP'S NEGLIGENCE (INCLUDING
SOLE, JOINT CONCURRENT, ACTIVE OR PASSIVE
NEGLIGENCE) OR ANY OTHER THEORY OF LEGAL
LIABILITY, INCLUDING STRICT LIABILITY, THE
UNSEAWORTHINESS OF ANY VESSEL OR THE
UNAIRWORTHINESS OF ANY AIRCRAFT, and CONTRACTOR
shall release, defend, protect, indemnify and hold
harmless COMPANY GROUP from and against any loss,
cost, claim, obligation to indemnify another,
suit, judgment, award or damage (including
reasonable attorney's fees and expenses) on
account of such loss or damage.
10.2 CONTRACTOR shall be liable in any case of illness,
injury or death, suffered by CONTRACTOR GROUP's
employees and other Personnel arising out of or
relating to CONTRACTOR's performance under this
Agreement AND REGARDLESS OF WHETHER CAUSED OR
BROUGHT ABOUT BY CONTRACTOR GROUP'S OR COMPANY
GROUP'S NEGLIGENCE (INCLUDING SOLE, JOINT,
CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE) OR ANY
OTHER THEORY OF LEGAL LIABILITY, INCLUDING STRICT
LIABILITY, THE UNSEAWORTHINESS OF ANY VESSEL, OR
THE UNAIRWORTHINESS OF ANY AIRCRAFT, and
CONTRACTOR shall release, defend, protect,
indemnify and hold harmless COMPANY GROUP from and
against any loss, cost, claim, obligation to
indemnify another, suit, judgment, award or damage
(including reasonable attorney's fees and
expenses) on account of any such illness, injury,
or death.
10.3 COMPANY shall be liable in any case of loss or
damage to COMPANY GROUP's property which is the
subject of the Work, equipment, barges, and tugs,
either owned or rented and operated by COMPANY
GROUP, arising out of or relating to its
performance under the Agreement AND REGARDLESS OF
WHETHER CAUSED OR BROUGHT ABOUT BY COMPANY GROUP'S
OR CONTRACTOR GROUP'S NEGLIGENCE (INCLUDING SOLE,
JOINT, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE)
OR ANY OTHER THEORY OF LEGAL LIABILITY, INCLUDING
STRICT LIABILITY OR THE UNSEAWORTHINESS OF ANY
VESSEL, and COMPANY shall release, defend,
protect, indemnify and hold harmless CONTRACTOR
GROUP from and against any loss, cost, claim,
obligation to indemnify another, suit, judgment,
award or damage (including reasonable attorney's
fees and expenses) on account of such loss or
damage. However, COMPANY shall not owe this
release and indemnification with respect to any
COMPANY GROUP property which is lost or damaged
prior to the effective date hereof.
10.4 COMPANY shall be liable in any case of illness,
injury or death, suffered by COMPANY GROUP's
employees arising out of or relating to its
performance under the Agreement AND REGARDLESS OF
WHETHER CAUSED OR BROUGHT ABOUT BY COMPANY GROUP'S
OR CONTRACTOR GROUP'S NEGLIGENCE (INCLUDING SOLE,
JOINT, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE)
OR ANY OTHER THEORY OF LEGAL LIABILITY, INCLUDING
STRICT LIABILITY OR THE UNSEAWORTHINESS OF ANY
VESSEL, and COMPANY shall release, defend,
protect, indemnify and hold harmless CONTRACTOR
GROUP from and against any loss, cost, claim,
obligation to indemnify another, suit, judgment,
award or damage (including reasonable attorney's
fees and expenses) on account of any such illness,
injury or death.
10.5 The indemnity obligations voluntarily assumed by
CONTRACTOR and COMPANY under this Clause shall be
supported by available liability insurance in at
least the amounts listed below, which shall be
primary to any other insurance provided by the
Party being indemnified herein. COMPANY and
CONTRACTOR agree to have their underwriters name
each other as additional assureds but only to the
extent of the indemnity obligations assumed
hereunder and to secure full and complete waivers
of subrogation in the policies covering such
illness, injury or death and damage to or loss or
destruction of property, to the extent of the
indemnity obligations assumed hereunder. Such
additional assureds shall be entitled to the full
limits of all policies actually obtained,
including excess or umbrella insurances, to the
extent of the indemnity obligations assumed
hereunder). The limits and coverages of the said
insurances shall in no way limit the liabilities
or obligations assumed by the Parties under this
Clause. If it is judicially determined that the
monetary limits of insurance required hereunder or
the indemnities assumed under this Clause exceed
the maximum monetary limits or scope permitted
under applicable law, it is agreed that said
insurance requirements or indemnities shall
automatically be amended to conform to the maximum
monetary limits or scope permitted under such law.
To the extent that a Party has assumed liability
under this Contract, it shall likewise be
obligated to pay the applicable deductibles or
retainages provided in the applicable insurance
policies.
11. INSURANCE:
11.1 CONTRACTOR agrees to carry or cause to be carried
with an insurance company or companies
satisfactory to COMPANY and authorized to do
business in the areas of operation covered under
this Contract, insurance coverage with limits of
not less than those set forth in this Article,
such coverage to include, but not be limited to,
liability assumed under the indemnity and hold
harmless provisions of this Contract. Each policy
shall also comply with the requirements set out in
Section 10.5 of this Contract.
CONTRACTOR shall provide the COMPANY a certificate
evidencing the required insurance and shall
require its subcontractors to carry similar
insurance to that which it is required to carry.
(i) Workers' Compensation and Employer's Liability Insurance
with limits of liability of not less than One Million
Dollars ($1,000,000.) covering all of CONTRACTOR's
employees, and all employees of any subcontractor
engaged in the Work to be performed hereunder;
(ii) Comprehensive General Liability including Contractual
Liability.
Bodily Injury $1,000,000.00 each person
$1,000,000.00 each occurrence
Property Damage $1,000,000.00 each
occurrence
(iii) Protection and Indemnity insurance on
Form SP-23 or equivalent endorsed to include
collision, contractual and pollution
liability coverage with limits of not less
than $1 million.
(iv) Hull and Machinery coverage on all risk basis
for the fair market value of the vessel.
(v) Excess liability insurance with limits of not
less than $10MM.
(vi) In addition, for all Work performed in any
navigable waters, including but not limited
to any bay, lake, river or stream, the
following insurance requirements are
applicable:
Endorsements to the Workers' Compensation and
Employer's Liability policy extending the
policy to provide when applicable:
(a) Federal Longshoremen's and Harbor Workers Compensation
insurance and extended to the Outer Continental Shelf.
(b) Extension of Coverage B to provide Employer's Liability
under Admiralty jurisdiction including the Xxxxx Act, with Marine
and Voluntary Compensation endorsed for transportation,
maintenance, wages and cure with limits of not less than U.S.
$500,000.00 per person, U.S. $500,000.00 per occurrence.
(c) In Rem Endorsement;
(d) Extension of territorial limits to include the areas of
operation under this Contract.
Endorsements to the Comprehensive General
Liability policy extending the policy to
provide:
(a) Deletion of watercraft exclusion provision to cover all
vessels not insured under a Protection and Indemnity
policy.
(b) In Rem Endorsement.
(c) Extension or territorial limits to include the areas of
operation under this Contract.
12. FORCE MAJEURE:
Any delays in or failures of performance by either
party shall not constitute default hereunder or give
rise to any claims for damages, if and to the extent
such delays or failures of performance are caused by
occurrences of Force Majeure. For purposes of this
Contract, Force Majeure includes, but is not limited
to, acts of God, acts of the public enemy, laws and
regulations, wars or warlike action (whether actual or
impending) arrests and other restraints of government
(civil or military), blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires,
sabotage, tropical storms and hurricanes, civil
disturbances, tidal waves, explosions, confiscation or
seizure by any government or other public authority,
and any other causes, whether of the kind herein
enumerated or otherwise, that are not reasonably within
the control of the Party claiming a suspension and that
could not have been overcome by the exercise of
ordinary diligence but shall not include COMPANY's
obligations to make payments to CONTRACTOR. The Party
experiencing Force Majeure shall notify the other Party
with reasonable promptness of the existence of any such
Force Majeure and the probable duration thereof, and
shall provide the other Party from time to time with
correct information concerning same. The Party
experiencing Force Majeure shall take all reasonable
actions to remove the cause of Force Majeure. In no
event shall Force Majeure excuse the failure to pay
amounts due, to honor indemnity obligations under this
Contract or release CONTRACTOR from the performance of
the Work hereunder, given appropriate delays due to
Force Majeure events.
13. NOTICES:
All notices, requests and other communications between
the Parties hereunder will be in writing and shall be
effective when delivered by hand or when faxed to the
party to which it is directed at the following
respective addresses/fax numbers:
COMPANY:
Freeport McMoRan Sulphur LLC
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
V.P. & General Manager
Fax No.: 000.000.0000
CONTRACTOR:
Offshore Specialty Fabricators, Inc.
000 Xxxxxx Xxxx/X.X. Xxx 0000
Xxxxx, Xxxxxxxxx 70363/70361
Attention: Xxx Xxxxxxxxx
V.P. and General Manager - Offshore
Division
FAX No.: 000.000.0000
14. LAW:
AS THIS CONTRACT IS MARITIME IN NATURE, THIS CONTRACT
SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
UNITED STATES GENERAL MARITIME LAW EXCLUDING ANY
CONFLICTS OF LAWS PRINCIPLES WHICH WOULD DIRECT THE
SUBSTANTIVE LAW OF ANOTHER JURISDICTION TO APPLY.
15. ASSIGNABILITY:
Neither Party shall have the right to assign its
obligations under this Contract without the prior
written consent of the other Party.
16. WARRANTIES:
CONTRACTOR hereby warrants and guarantees the Work
which CONTRACTOR and its subcontractors perform under
this Contract to be free of defects and deficiencies
until the earlier to occur of: (a) six (6) months
following the acceptance of the Work by COMPANY, or (b)
the date on which the Minerals Management Service has
inspected and approved the Work. Upon receipt of notice
from OWNER, CONTRACTOR will promptly correct the defect
or deficiency, at CONTRACTOR's sole expense. The above
undertakings are in lieu of any other warranty of
materials or workmanship by CONTRACTOR and all other
implied warranties, including any of merchantability,
fitness for a particular purpose or workmanlike
performance are excluded, and except as provided in
this paragraph, CONTRACTOR shall not be liable for any
claims based on defective workmanship or material
regardless of the cause and even if caused by
CONTRACTOR's negligence.
17. CONSEQUENTIAL DAMAGES:
Notwithstanding anything to the contrary contained
elsewhere herein, neither CONTRACTOR (including its
subcontractors) nor COMPANY (including its other
contractors) shall be liable to the other for any
consequential, indirect or punitive damages of any kind
or character, including, but not limited to, loss of
use, loss of profit, loss of revenue, loss of product
or production, reservoir damage, or loss of hole damage
due to blowout or cratering, whenever arising under
this Contract or as a result of, relating to or in
connection with the Work hereunder, REGARDLESS OF
WHETHER SUCH CLAIM IS BASED OR CLAIMED TO BE BASED ON
NEGLIGENCE (INCLUDING SOLE, JOINT, ACTIVE, PASSIVE OR
CONCURRENT NEGLIGENCE), UNSEAWORTHINESS,
UNAIRWORTHINESS, FAULT, BREACH OF WARRANTY, BREACH OF
CONTRACT, STATUTE, STRICT LIABILITY OR OTHERWISE.
18. THIRD PARTIES:
Except as specifically set forth elsewhere herein, this
contract shall not be construed to confer any benefit
on any third party not a Party to this Contract nor
shall it provide any rights to such third party to
enforce its provisions.
19. WAIVER:
No benefit or right accruing to either Party under this
Contract shall be waived unless the waiver is reduced
to writing and signed by both Parties to this Contract.
The failure of either Party to exercise any of its
rights under this Contract shall in no way constitute a
waiver of those rights, nor shall such failure excuse
the other Party from any of its obligations under this
Contract.
20. POLLUTION:
With respect to pollution control and removal, the
distribution of risks shall be as follows:
20.1 CONTRACTOR shall exercise all reasonable diligence
to conduct its operations in a manner that will
prevent pollution or contamination and CONTRACTOR
shall endeavor to comply with all applicable laws,
ordinances, permits, rules, regulations and lease
or contract provisions regarding pollution.
CONTRACTOR shall not permit trash, waste oil,
bilge water, or other pollutants to be discharged
or to escape from CONTRACTOR's equipment into the
waterways or seat. CONTRACTOR will take all
reasonable measures to instruct its personnel in
such matters and to prevent such pollution or
contamination and will clean up any pollution
caused by it in the course of operations under the
Contract. The intent of this Clause is not to
limit or conflict with the responsibilities of
CONTRACTOR or the COMPANY as further defined
within the Contract.
20.2 CONTRACTOR's Responsibilities:
CONTRACTOR shall assume all responsibility for,
and release, defend, protect, indemnify and hold
harmless COMPANY GROUP from and against any loss,
cost, suit, judgment, award, obligation to
indemnify another, or damage arising out of or
relating to pollution or contamination, including
the cost of control and removal of pollution and
contamination which
(i) originates on or above the surface of the
land or water from spills or leaks of fuel,
lubricants, motor oil, pipe dope, paints,
solvents, ballasts, bilge, garbage, sewerage,
scrap steel and other materials in
CONTRACTOR's possession and control,
REGARDLESS OF WHETHER CAUSED BY CONTRACTOR'S
OR COMPANY'S NEGLIGENCE OF OTHER FAULT or
(ii) results from leakage or other uncontrolled
flow of oil, gas, water, or any combination
thereof, from pipelines, including lines on
or in submerged lands, which are ruptured or
damaged by CONTRACTOR GROUP's rigs, barges,
vessels, anchors or other equipment,
regardless of whether caused by CONTRACTOR's
negligence or others fault.
20.3 COMPANY's Responsibilities:
COMPANY shall assume all responsibility for, and
release, defend, protect, indemnify and hold
harmless CONTRACTOR GROUP from and against any
loss, cost, suit, demand, judgment, award,
obligation to indemnify another, or damage arising
out of or relating to pollution or contamination,
including control and removal, which:
(i) originates on or above the surface of the land or water from
spills or leaks of fuel, lubricants, motor oil, pipe dope,
paints, solvents, ballasts, bilge, garbage, sewerage, scrap
steel and other materials emanating from COMPANY's or
COMPANY's other contractors' vessels or equipment from
the facilities and equipment which are to be included
therein (other than from CONTRACTOR's Work), REGARDLESS
OF WHETHER CAUSED BY CONTRACTOR'S NEGLIGENCE OF OTHER
FAULT; or
(ii) results from fire, blowout, cratering, seepage, or any other
uncontrolled flow, from the surface or the subsurface of
oil, gas, water, or any combination thereof, from xxxxx
located in or connected with the facilities included in
the Work during the conduct of operations hereunder AND
REGARDLESS OF WHETHER CAUSED BY COMPANY'S OR CONTRACTOR'S
NEGLIGENCE OR OTHER FAULT; or
(iii) results from leakage or other uncontrolled flow of oil,
gas, water, or any combination thereof, from pipelines,
or third party vessels, including lines on or in submerged
lands, which are ruptured or damaged by COMPANY's or
COMPANY's other contractors' rig, barge, anchors or other
equipment, IF CAUSED BY COMPANY'S NEGLIGENCE.
21. INDEPENDENT CONTRACTOR:
For all purposes under the terms of this Contract,
CONTRACTOR shall be considered an independent
contractor vis-a-vis COMPANY, and this Contract shall
not be deemed to have created a partnership or joint
venture between the parties with regard to the Work to
be performed hereunder, it being understood that
COMPANY shall have no control over the details of the
Work to be performed hereunder, COMPANY being
interested only in the results obtained.
22. DEFAULT AND TERMINATION:
If CONTRACTOR or any subcontractor materially breaches
any provision hereof or becomes insolvent, enters
voluntary or involuntary bankruptcy or receivership
proceeding or makes an assignment for benefit of
creditors, COMPANY shall have the right (in addition to
any other rights or remedies it may have) to terminate
this Contract by giving CONTRACTOR written notice;
whereupon COMPANY shall be relieved of all further
obligations hereunder, except to pay the reasonable
value of CONTRACTOR's prior performance; and CONTRACTOR
shall be liable to COMPANY for all costs incurred by
COMPANY in affecting completion of performance in
excess of the Compensation hereunder. COMPANY shall be
entitled to offset the amount of its payment obligation
as described above against the reasonably anticipated
amount of the costs for which CONTRACTOR is liable as
described above. COMPANY's obligations hereunder shall
not be affected by any previous waiver, forbearance or
course of dealing. Time is of the essence hereof.
23. ENTIRE AGREEMENT.
This Contract, Exhibit A, and Exhibit B form the entire
agreement between the Parties. Exhibit A and Exhibit B
are specifically adopted herein and made a part hereof.
IN WITNESS WHEREOF, the parties have executed this Contract,
as of the date herein above set forth.
OFFSHORE SPECIALTY FABRICATORS, INC.:
/s/ Xxxxx Xxxxxxxxx
----------------------------
By: Xxxxx Xxxxxxxxx
Title: President
Freeport-McMoRan Sulphur LLC
/s/ Xxxxx X. Xxxxxx
---------------------------
By: Xxxxx X. Xxxxxx
Title: Vice President and General Manager
