EHXIBIT 10.9
_______ KFELS
_______ ATWOOD
VESSEL CONSTRUCTION AGREEMENT
BY AND BETWEEN
ATWOOD OCEANICS PACIFIC LIMITED
AND
KEPPEL FELS LIMITED
Dated: 24 JULY 2001
TABLE OF CONTENTS
PREAMBLE
ARTICLE 1. DEFINITIONS
ARTICLE 2. PERFORMANCE OF WORK
ARTICLE 3. OWNER'S REPRESENTATIVE, INVITEES AND
OTHER CONTRACTORS
ARTICLE 4. AUTHORIZED WORK; VARIATIONS/ CHANGES
ARTICLE 5. CONTRACT PRICE
ARTICLE 6. PLANNING, PROGRESS REPORTS AND MEETINGS
ARTICLE 7. PROJECT PLANS AND DRAWINGS, COMMUNICATION WITH
CLASSIFICATION SOCIETY
ARTICLE 8. 'AS BUILT' DOCUMENTATION
ARTICLE 9. QUALITY ASSURANCE REQUIREMENTS
ARTICLE 10. SAFETY REGULATIONS
ARTICLE 11. OWNER FURNISHED EQUIPMENT
AND/OR INFORMATION
ARTICLE 12. INSPECTION, TESTING AND TRIALS
ARTICLE 13. DELAYS AND EXTENSION OF TIME FOR DELIVERY
ARTICLE 14. DELIVERY OF THE VESSEL
ARTICLE 15. WARRANTY
ARTICLE 16. INDUSTRY AND INTELLECTUAL PROPERTY RIGHTS
ARTICLE 17. TITLE TO AND RISK OF THE VESSEL AND OWNER-FURNISHED
EQUIPMENT.
ARTICLE 18. LIABILITY AND INDEMNIFICATION
ARTICLE 19. BUILDER'S SUBCONTRACTORS AND SUPPLIERS
ARTICLE 20. TERMINATION / CANCELLATION
ARTICLE 21. TAXES AND DUTIES
ARTICLE 22. SUPPLIES AND SERVICES FROM THIRD PARTIES
ARTICLE 23. AUDIT AND RECORDS
ARTICLE 24. LIENS
ARTICLE 25. CONFIDENTIALITY
ARTICLE 26. ASSIGNMENT
ARTICLE 27. NOTICES
ARTICLE 28. MISCELLANEOUS
ARTICLE 29. GOVERNING LAW: COURTS: LANGUAGE
VESSEL CONSTRUCTION AGREEMENT
ATWOOD OCEANICS PACIFIC LIMITED, a corporation organized under the laws of the
Cayman Islands, having its registered address at: P.O. Box 309, Ugland House,
George Town, Grand Cayman, Cayman Islands, British West Indies, (hereinafter
referred to as "OWNER") and Keppel FELS Limited, a corporation organized under
the laws of Singapore, having its registered address at: 31 Shipyard Road,
Jurong Town, Singapore 628130 (hereinafter referred to as "BUILDER"), have
entered into this Vessel Construction Agreement, including the attached Annexes
(hereinafter, collectively, the "Agreement") this 24th of July, 2001 (the
"Effective Date").
RECITALS
WHEREAS, the BUILDER agrees to construct, equip, complete, sell and deliver
the Vessel to OWNER at the Shipyard; and
WHEREAS, the OWNER agrees to purchase and take delivery of the Vessel from
BUILDER at the Shipyard and to pay for the same, all upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, OWNER AND BUILDER, IN CONSIDERATION OF THE COVENANTS AND
AGREEMENTS HEREINAFTER STATED, DO HEREBY DECLARE TO HAVE AGREED AS FOLLOWS:
1. DEFINITIONS
In this Agreement the following words and phrases shall have the
following meanings:
1.1 "Annexes" shall mean the Annexes attached to this Agreement which shall
be negotiated and agreed to by OWNER and BUILDER, which may, in part,
define the "Work" to be performed, the "Specifications",
"OWNER-Furnished Equipment," etc.; references to Annex "A", "B", "C",
etc. shall refer to the specific division of Annexes as intended by
this Agreement.
1.2 "Business Day" shall, for purposes of this Agreement, mean any day in
which commercial banks are open for business in Houston and Singapore.
1.3 "Certificate of Acceptance" shall mean the certificate referred to and
to be issued in accordance with Article 12, headed "INSPECTION, TESTING
AND TRIALS", and shall be in the form as set out in Annex "B" hereto.
1.4 "Classification Society" shall mean the American Bureau of Shipping
("ABS").
1.5 "OWNER-Designated Contractor" shall mean a contractor selected by the
OWNER to perform certain works or services as contemplated under
Article 3.6 hereof.
1.6 "OWNER-Designated Equipment" shall mean all equipment, materials and
services designated by the OWNER (excluding any BUILDER-Furnished
Equipment specified by OWNER as described in the Specifications) to be
purchased for the OWNER through the intermediary of the BUILDER for
incorporation into the Vessel.
1.7 "OWNER-Furnished Equipment" shall mean all equipment, materials and
services furnished directly to the BUILDER by the OWNER for
incorporation into the Vessel as well as all engineering data and
information relating to this equipment, materials and services, as set
forth in Annex "D" hereto.
1.8 "OWNER's Personnel" shall mean all employees, agents or representatives
of OWNER and its subsidiary or affiliated companies, as well as the
employees, agents and representatives of OWNER's other contractors
(excluding BUILDER), subcontractors or invitees.
1.9 "OWNER's Representative" shall mean the fully authorized representative
of the OWNER, who shall act in such capacity for the purposes of this
Agreement.
1.10 "Contract Documents" shall mean, collectively, this Agreement, the
Annexes, the Rules, and any Variation Orders, all as herein defined.
1.11 "Contract Price" shall means the aggregate amount in the United States
Dollars specified in Article 5 of this Agreement, subject only to
adjustments in accordance with the terms of this Agreement, payable by
the OWNER to the BUILDER for construction and delivery of the Vessel.
1.12 "BUILDER's Personnel" shall mean all employees, agents and
representatives of BUILDER and its subsidiary or affiliated companies,
as well as the employees, agents and representatives of BUILDER's other
contractors, subcontractors or invitees.
1.13 "BUILDER's Representative" shall mean the fully authorized
representative of the BUILDER, who shall act in such capacity for
purposes of this Agreement.
1.14 "BUILDER-Furnished Equipment" shall mean all equipment, materials and
services furnished by the BUILDER to the OWNER under this Agreement,
including that required by the "Specifications", as hereinafter
provided in the relevant Annexes.
1.15 "Days" shall mean consecutive running days, Saturdays, Sundays and
holidays included.
1.16 "Delivery Date" shall have the meaning ascribed to such term as set
forth in Article 14.3
1.17 "Force Majeure" shall mean any and all occurrences and/or causes not
within the control of the BUILDER that delay or hinder the performance
of BUILDER and which BUILDER, by the exercise of due diligence, would
not have been able to avoid or overcome including, without limitation,
acts of God, acts of public enemies, wars, blockades, insurrections,
riots, epidemics, landslides, earthquakes, floods, adverse weather
conditions (including only weather conditions not to be expected for
the time of the year according to Singapore Meteorological Department),
but specifically excluding financial or commercial difficulties or
ordinary business risks of BUILDER and absenteeism, strikes and labor
disputes of BUILDER's Personnel.
1.18 "Project" shall mean all activities involved in the construction of the
Vessel, whether set forth in the Specifications or Variations, and
shall include the Work (all as hereinafter defined).
1.19 "Protocol of Delivery and Acceptance" shall mean that form of document
attached to this Agreement as Annex "G", whereby BUILDER and OWNER
shall confirm the date, time and location that BUILDER delivers and
OWNER accepts the Vessel in accordance with the provisions of Article
14.
1.20 "Regulatory Bodies" shall mean the governmental authorities specified
in Annex "A" hereto.
1.21 "Rules" shall mean the rules and requirements, as officially published
on the Effective Date, of the Classification Society and the Regulatory
Bodies as specified in the Specifications, insofar as the same are
applicable to the Work.
1.22 "Shipyard" shall mean BUILDER's shipyard facilities located at
either 31 Shipyard Road or 50 Gul Road, Jurong Town, Republic of
Singapore 628130.
1.23 "Specifications" shall mean, collectively, the specifications,
standards, pricing provisions, procedures and the drawings (including
such drawings furnished or to be furnished by or on behalf of OWNER)
detailing the Work to be performed as recorded in Annex "A".
1.24 "Variations" shall mean any and all changes, additions, alterations or
deletions to the Specifications, as agreed between the OWNER and the
BUILDER in accordance with Article 4, headed "AUTHORIZED WORK;
VARIATIONS/CHANGES".
1.25 "Vessel" shall mean BUILDER's hull number B252 approximate dimensions:
234 feet long; 208 feet wide; and 25 feet deep at the side; which shall
be based upon the KFELS MOD V Enhanced B-CLASS design, as described in
the Specifications attached hereto as Annex "A".
1.26 "Work" shall mean any and all works, services, deliveries, supplies,
labor and equipment, including OWNER-Designated Equipment,
OWNER-Furnished Equipment (to the extent the same is installed by
BUILDER), and BUILDER-Furnished Equipment, to be performed or supplied
under this Agreement and as specified in the Specifications or in any
approved Variation Order.
2. PERFORMANCE OF THE WORK
2.1 The BUILDER shall perform the Work and furnish (or cause to be
furnished) all equipment, materials and labor necessary for the
construction and delivery of the Vessel in accordance with the terms of
this Agreement. In the event of a conflict between the body of this
Agreement and any Annex hereto, the body of this Agreement shall
control and govern. In the event of a conflict between the body of the
Annex and its attachments (including drawings), the body of the Annex
shall control and govern.
2.2 The BUILDER agrees to perform the Work at its Shipyard, all in a good
and workmanlike manner, in accordance with that degree of skill, care
and diligence ordinarily and reasonably exercised by skilled and
experienced operators of shipyard facilities engaged in similar
operations, and further, in accordance with:
(a) the Specifications, including any Variations;
(b) the Rules;
(c) the Contract Price and any Variation Orders; and
(d) this Agreement.
2.3 The Vessel shall be constructed in accordance with the American Bureau
of Shipping "Rules for Building and Classing Mobile Offshore Drilling
Units", for classification of the Vessel as a "Maltese Cross A1 +
Self-Elevating Drilling Unit". In addition, construction shall be in
compliance with the International Maritime Organization's 1989 IMO MODU
Code, as amended. The Vessel shall also meet the rules, regulations and
requirements of the International Loadline Convention 1966. For the
avoidance of doubt, all fees and charges related to the classification
of the Vessel and the satisfaction of the Classification Society Rules,
as well as the rules, regulations and requirements of other Regulatory
Bodies, shall be for the account of the BUILDER. Furthermore, unless
otherwise provided in the Specifications, the rules, regulations and
requirements of the Classification Society, IMO MODU Code and
International Loadline Convention, as referred to in this Article 2.3,
shall be those in effect as of the Effective Date of this Agreement.
The BUILDER shall apply for the classification of the Vessel within one
(1) month from the Effective Date.
2.4 The Contract Documents shall constitute the entire agreement between
the Parties. Any and all previous agreements and/or arrangements
between the Parties with respect to works, services and supplies shall
be superseded and become null and void unless incorporated into the
Contract Documents, either by specific reference thereto or by
attachment to this Agreement as an Annex hereto.
2.5 All provisions or requirements contained in the Specifications and the
Rules are intended to amplify, explain and implement each other and the
requirements of this Agreement. In the event of any conflict or
inconsistency between the Contract Documents, the order of precedence
shall be as follows:
(a) the Rules;
(b) this Agreement; and
(c) the Specifications, including any Variations.
2.6 It is specifically agreed that the BUILDER shall, at all times during
the term of this Project, including Saturdays and Sundays, but
excluding Government Gazetted Public Holidays, have sufficient
qualified labor available to perform all aspects of the Work.
Additionally, at a minimum, the following project dedicated full time
personnel shall be assigned to this Project:
(a) a Project Manager and Deputy Project Manager / Project Superintendent;
(b) an Engineering Co-ordinator / Project Engineer; and
(c) a Scheduler.
All of the personnel listed above shall be made available in sufficient
numbers and with sufficient relief personnel to allow for the Work to
be carried out in accordance with the agreed Project schedule.
2.7 OWNER shall have the right at anytime to object to and to require
BUILDER to remove as soon as reasonably possible, at its own cost and
expense, any member of BUILDER's Personnel, including those described
in Article 2.6 above who are proven to be incompetent or negligent in
the performance of his duties or guilty of misconduct or otherwise
reasonably considered by OWNER to be unsuitable. Any person so removed
shall promptly be replaced by BUILDER, at its sole cost and expense,
with a suitable skilled and competent substitute.
2.8 BUILDER shall promptly advise OWNER in writing of and shall thereafter
consult regularly with OWNER regarding any labor disputes or unrest or
any anticipated labor disputes or unrest which affect or may be
reasonably expected to affect the performance of the Work under this
Agreement.
3. OWNER'S REPRESENTATIVE, INVITEES AND OTHER CONTRACTORS
3.1 Prior to or concurrent with the commencement of the Work, the OWNER
shall assign to the Shipyard a fully authorised OWNER Representative.
Unless otherwise specified by OWNER, the OWNER Representative shall be
authorized to issue and sign and execute on behalf of the OWNER any and
all documents referred to in this Agreement.
The OWNER's Representative, or his designated substitute, shall be and
shall remain at the Shipyard until the Vessel is completed and
delivered to OWNER.
Additionally, the OWNER will endeavour, throughout the term of the
Project, to assign and maintain a technical team of at least two (2)
people at the BUILDER's Shipyard.
3.2 Subject to BUILDER's safety and security requirements, the BUILDER
shall, at all times until the delivery of the Vessel, provide to the
OWNER's Representative and his team full access to the Shipyard for the
purpose of monitoring the progress of, inspecting and/or testing the
Work.
3.3 The BUILDER shall provide the OWNER's Representative and his
supervisory team, consisting of a maximum twenty (20) persons, with
sufficient office space at the Shipyard. Such office space, including
cleaning services and all utilities (electric power, water and heat/air
conditioning as appropriate), shall be furnished free of charge, and
shall be suitably furnished with desks, chairs, worktables, file
cabinets, etc. Furthermore, as described in the Specifications, the
BUILDER shall provide the OWNER's Representative and his team with
other reasonable facilities at the Shipyard, such as telephone,
facsimile, photocopy machines, and internet access, such facilities to
be charged at BUILDER's actual cost plus 10%.
3.4 The OWNER shall not be bound by any instructions, commitments or
agreements given by or entered into with any person other than an
authorized officer of OWNER or OWNER's Representative.
3.5 The OWNER shall have the right to invite persons to visit the Shipyard,
provided always that such visits do not interfere with any Work of the
BUILDER and do not in any way delay or interrupt the BUILDER's
operations, and provided, further such invitees of OWNER shall not be
in conflict with BUILDER's interest and business. BUILDER shall be
provided prior notice of any visits by OWNER's invitees, giving
reasonable details as to the date, time and purpose of the visit.
3.6 Notwithstanding the provisions of Article 2.1, the OWNER shall have the
right to carry out and perform work on the Vessel which is not of a
type offered by BUILDER or is otherwise mutually agreed between BUILDER
and OWNER, provided always, that such work and/or work in progress
shall not interfere with any of the Work of the BUILDER, and OWNER
shall not delay or interrupt the BUILDER's operations. In this regard,
OWNER and BUILDER agree to jointly develop a schedule which will
minimize interference between BUILDER and OWNER-Designated Contractors.
Choice of OWNER-Designated Contractors shall be subject to the approval
of BUILDER, which approval shall not be unreasonably withheld.
3.7 BUILDER shall not be responsible for the performance of
OWNER-Designated Contractors, however, BUILDER is obligated to furnish
full support services to such parties in the same manner as BUILDER
would accommodate and provide support services to its own
subcontractors. Subject to the foregoing provisions of this Article
3.7, all services provided to OWNER-Designated Contractor, as required,
shall be for the OWNER's account, based upon time and materials
supplied.
3.8 OWNER's Personnel shall be on board the Vessel and/or at the Shipyard
at the OWNER's sole expense and shall comply with all safety and
security regulations referred to in the Contract Documents and in
general with all laws and regulations applicable to the Shipyard,
including the laws and regulations of the Republic of Singapore.
4. AUTHORISED WORK; VARIATIONS / CHANGES
4.1 The Work to be performed under this Agreement, without further
instructions from the OWNER, includes all works, services and supplies
as set out in the Specifications. Unless so authorized in writing by
the OWNER, no modifications or changes to the Specifications or the
Work shall be undertaken, nor shall any other work be performed by the
BUILDER. No claim for additional compensation shall be made by the
BUILDER for modifications or changes to the Specifications and/or for
extra work unless such modifications or changes and/or extra work have
been authorized by the OWNER, in writing, by means of a Variation
Order.
4.2 The OWNER shall have the right, at any time, to request that reasonable
change(s) be made to any of the Work and/or the Specifications. No such
changes shall be undertaken or performed until a written Variation
Order, in the form of that attached hereto as Annex "E", has been
executed by the OWNER and the BUILDER, reflecting the agreement of the
parties as to any increase in the Contract Price or extension of the
Delivery Date resulting from any such modifications or changes.
4.3 If any modification or change necessitates an increase or decrease in
the quantity or quality of the services, equipment, or labor to be
furnished by the BUILDER under this Agreement, then the Contract Price
shall be increased or decreased accordingly and confirmed in a
Variation Order.
4.4 If any modification or change necessitates an increase or decrease in
the quantity or quality of the materials to be furnished by the BUILDER
under this Agreement, then the Contract Price shall be increased or
decreased equivalent to the increase in the price of such materials.
Any adjustment of the Contract Price resulting from an increase in the
quantity or quality of materials to be furnished by BUILDER shall be
confirmed by Variation Order.
4.5 If any modification or change necessitates an adjustment or change in
the time agreed for completion of the Work, then the Delivery Date
shall be re-assessed and adjusted accordingly. Changes, if any, to the
Delivery Date shall be made by mutual agreement between the OWNER and
the BUILDER and confirmed in a Variation Order.
4.6 All Variation Orders shall include, but will not necessarily be limited
to, the following details:-
(a) a description of the work to be performed;
(b) specification of the materials and equipment to be supplied and./or
used;
(c) a detailed schedule for the performance of the work;
(d) subject to the Work having been performed on a time and materials
basis, the cost, including copies of the applicable subcontractor's
quotations;
(e) the effect on the Contract Price, if any;
(f) the additional time required, if any; and
(g) subject to the work having been performed on a lump sum or fixed price
basis, the timing or schedule for payments.
4.7 In the event that, subsequent to the Effective Date, any amendments,
modifications or revisions are enacted or adopted to the Classification
Society Rules or the rules and regulations of any other Regulatory Body
which may affect the class or construction of the Vessel, the following
shall apply:
(a) If such amendments, modifications or revisions are compulsory for the
Vessel and its class, either party hereto, upon receipt of such
information from the Classification Society or such other
Regulatory Body, shall promptly transmit notice of the same in
writing to the other party, and the BUILDER shall thereupon
incorporate such alterations or changes into the Specifications
and/or the Work, subject to the execution of a Variation Order.
Any changes required by the Classification Society or Regulatory
Bodies arising as a result of revisions to Classification
Society or Regulatory Body requirements published up to the date
that the BUILDER applies to ABS to class the Vessel shall be for
BUILDER'S account.
(b) If such amendments, modifications or revisions are not
compulsory for the Vessel or its class, but the OWNER desires
to incorporate such amendments, modifications or revisions
into the Specifications or the Work, then the OWNER shall
notify the BUILDER and the BUILDER shall proceed to perform
such amendments, modifications, or revisions, subject to the
execution of a Variation Order addressing appropriate
adjustments (if any) to the Contract Price, Delivery Date
and/or any other provisions of this Agreement.
5. CONTRACT PRICE
5.1 In consideration for BUILDER carrying out the Work and constructing the
Vessel in accordance with the terms of this Agreement, and subject only
to adjustments agreed to pursuant to Variation Order(s), the OWNER
agrees to pay to BUILDER a contract price of UNITED STATES DOLLARS
EIGHTY-ONE MILLION NINE HUNDRED THOUSAND ONLY (US$81,900,000.00); the
foregoing being herein referred to as the "Contract Price".
5.2 Unless otherwise provided in this Agreement, it is specifically agreed
that all goods, services, supplies, materials and/or labor provided by
BUILDER in the performance of the Work shall be included in the
Contract Price. The Contract Price may only be changed or adjusted by a
Variation Order executed by OWNER and BUILDER in accordance with the
provisions of Article 4 of this Agreement.
5.3 Subject to Article 5.4, amounts due BUILDER in respect to the Contract
Price shall be payable in installments in accordance with the following
schedule:
(a) An amount equivalent to twenty percent (20%) of the Contract
Price, shall be paid to BUILDER within three (3) business days
of the Effective Date;
(b) An amount equivalent to ten percent (10%) Contract Price,
shall be paid to BUILDER within three (3) business days
following striking of steel;
(c) An amount equivalent to fifteen percent (15%) Contract Price,
shall be paid to BUILDER within three (3) business days
following laying of the keel of the Vessel;
(d) An amount equivalent to fifteen percent (15%) of the Contract
Price, shall be paid to BUILDER within three (3) business days
following placement of first leg section;
(e) An amount equivalent to twenty percent (20%) of the Contract
Price, shall be paid to BUILDER within three (3) business days
following undocking of the Vessel;
(f) An amount equivalent to ten percent (10%) of the Contract
Price, shall be paid to BUILDER within three (3) business days
following placement of last leg section (up to 486 feet leg
length);
(g) An amount equivalent to ten percent (10%) of the Contract
Price, shall be paid to BUILDER on Delivery of the Vessel to
OWNER.
OWNER and BUILDER agree that except with respect to the first and last
installments listed above, in the event of dispute between OWNER and
BUILDER as to whether a given milestone has been reached the decision
of the Classification Society shall be binding on the parties with
respect thereto.
5.4 Except as otherwise (a) agreed by the parties, as evidenced by a
Variation Order, or (b) provided below in this Article 5.4, no
adjustment shall be made to the Contract Price as provided above in
Article 5.1. However, if delivery of the Vessel is delayed beyond the
Delivery Date and such delays are not due to either permissible delays
or a Force Majeure event as described in this Agreement, then beginning
at twelve (1200) o'clock midnight (Singapore time) on the Delivery
Date, the amount otherwise due as the final installment (see Article
5.3(g) shall be reduced by deducting therefrom the sum of US Dollars
Twenty Three Thousand and 00/100 (US$23,000.00) per day until such time
as the Vessel is delivered to OWNER pursuant to Article 14.6; provided,
that the amount of all reductions for late delivery shall not exceed an
amount in US Dollars equal to five percent (5%) of the Contract Price
and provided further that in the event OWNER does not have a drilling
contract or a commitment therefor for immediate use of the Vessel for a
third party customer at the time of the Delivery Date then there shall
be no deduction for the first thirty (30) days of delay. It being
understood by both parties that any such reduction of payment by OWNER
shall constitute liquidated damages, rather than a penalty. Said
liquidated damages shall be OWNER's exclusive remedy against BUILDER
for late delivery of the Vessel, subject to the provisions of Article
20.5.
On the other hand, if delivery of the Vessel should occur earlier than
the Delivery Date (as the same may be adjusted from time to time in
accordance with the terms of this Agreement), then in such event and
provided that OWNER has a drilling contract or a commitment therefor
for immediate use of the Vessel for a third party customer at the time
of the Delivery Date the final installment due pursuant to Article
5.3(g) shall be increased by adding thereto a sum equal to one-half
(1/2) of the excess of day rate revenues over direct operating costs
but not to exceed the sum of US Dollars Twenty-Three Thousand
(US$23,000.00) for each full day, beginning at twelve (1200) o'clock
midnight (Singapore time) on the Delivery Date, that the Vessel is
delivered early pursuant to the terms of Article 14.6; provided, that
the aggregate amount of all increases for early delivery of the Vessel
shall not exceed an amount in US Dollars equal to five percent (5%) of
the Contract Price
For purposes of this Article 5.4, delivery of the Vessel shall be
deemed to be delayed when and if the Vessel, after taking into full
account all postponements of the Delivery Date by reason of permissible
delays or Force Majeure events is not ready for delivery by the date
upon which the delivery is required under the terms of this Agreement.
5.5 In the event any change or modification to the Specifications or Work
warants an adjustment of the Contract Price, the amount of the
adjustment and schedule for payment(s) shall be addressed by Variation
Order. However, in the absence of any separate provision for the
schedule of payment(s), the amount of any adjustment to the Contract
Price shall be pro-rated over the remaining outstanding installments
due in accordance with Article 5.3 above.
5.6 Amounts due under Variation Orders which are calculated on a time,
material or equipment basis shall be billed as completed and accepted
and shall be payable within thirty (30) days of OWNER'S receipt of
BUILDER's invoice in respect thereto.
5.7 In the event any amount(s) which are due BUILDER or which are
determined to be due under this Agreement are not paid within the
agreed period, then the OWNER shall pay to the BUILDER interest on any
such amount(s) from the due date until paid at the rate of ten percent
(10%) per annum, without any summons being required for that purpose
and without prejudice to any other rights the BUILDER may have in
respect thereof.
5.8 All amounts due and payable to BUILDER pursuant hereto shall be paid to
BUILDER as follows (or as otherwise indicated on the invoice):
Citibank NA
3 Temasek Avenue
#14-00 Centenial Tower
Singapore 039190
Swift: CITISGSG
United States Dollar A/C: 0-010547-024
Singapore Dollar A/C: 0-010547-016
Favoring: Keppel FELS Ltd
5.9 In the event OWNER disputes any amounts claimed by BUILDER to be due to
BUILDER under the terms and conditions of this Agreement, OWNER shall
without delay pay as and when due the undisputed portion of such
amounts and the disputed portion shall be paid as mutually agreed by
the parties or as determined pursuant to Article 30 hereof.
5.10 In the event OWNER fails to pay any sums due BUILDER under or in
connection with this Agreement within ten (10) days of the date when
due, BUILDER shall have the right, upon giving written notice to OWNER
to suspend its performance under this Agreement and after a period of
suspension of twenty (20) days to terminate this Agreement and exercise
all rights and remedies available at law or in equity. Such rights and
remedies shall include the right to bring suit for the Contract Price
and the right to auction the Vessel in its then state of completion or
after commercially reasonable efforts to complete the Vessel. BUILDER
shall be entitled to purchase the Vessel at any such sale provided the
price bid by BUILDER is a reasonable fair market price. BUILDER shall
retain the installments of the Contract Price theretofore paid and
shall be entitled to recover from the net proceeds of auction sale,
after deducting reasonable costs of such sale, all other sums due
BUILDER under this Agreement. Any surplus shall be promptly remitted to
OWNER. Nothing herein shall require BUILDER to recover its damages
solely from the net price received from any such auction. Interest
shall accrue on all amounts determined to be due to BUILDER at the rate
of ten percent (10%) per annum from the date due until paid in full.
BUILDER shall be entitled to an extension of the Delivery Date by the
duration of the suspension, which extension shall be confirmed by a
Variation Order upon request by BUILDER.
6. PLANNING, PROGRESS REPORTS AND MEETINGS
6.1 OWNER and BUILDER shall regularly communicate with each other to ensure
that the Work is completed in a safe and expeditious manner on or
before the Delivery Date and within the Contract Price.
6.2 In accordance with the administrative instructions stated in the
Specifications, on or before the Effective Date, the BUILDER shall
provide the OWNER with a barchart plan (the "Barchart Plan") for the
period required to complete and deliver the Vessel to OWNER by the
Delivery Date as the same may be extended under the terms of this
Agreement. No later than seven (7) days after the Barchart Plan shall
be delivered to OWNER, OWNER shall give notice to BUILDER showing its
approval thereof, or give its reasons for non-approval in which event
the Barchart Plan shall be revised as mutually agreed. If the OWNER
fails to respond within seven (7) days of the Effective Date, the
Barchart Plan shall be deemed to have been approved by the OWNER.
6.3 The BUILDER shall use the approved Barchart Plan as the basis for
progress reporting, scheduling, testing, inspection, forecasting and
controlling the performance of the Work.
6.4 Any and all modifications or changes undertaken on the basis of
Variation Orders shall be processed into the Barchart Plan. The BUILDER
shall, within three (3) days of so processing any modifications or
changes into the Barchart Plan, provide the OWNER with a copy of the
revisions to the Barchart Plan.
6.5 From that point in time that the original Barchart Plan has been
submitted to and approved by OWNER until the Delivery Date, the BUILDER
shall prepare and provide the OWNER Representative with:
(a) monthly progress reports for the first ten months from the
Effective Date and fortnightly progress
reports from thereon until Delivery, containing;
o summary of the status of overall progress, including summary
of subcontractors progress reports;
o a detailed barchart which establishes a definitive
breakdown of tasks and measurement of progress;
o 'S' curve and supporting details indicating target for
completion and progress to date; and drawing register,
detailing status of plans, drawings and
documents to be issued to the Classification Society or to
the OWNER, including dates and status of issuance.
OWNER shall have free access to and may review the documents of BUILDER
set forth in this Article 6.5 at all reasonable times to monitor
progress of the Project.
6.6 As from the date when the original Barchart has been submitted to and
approved by OWNER, progress meetings will be held in the offices of the
BUILDER at least once per week and shall include the OWNER's
Representative and his team and the BUILDER's Representative and his
team (including BUILDER's main subcontractor's representatives). The
OWNER's and BUILDER's Representatives shall set the time for such
meetings.
6.7 The BUILDER shall make and keep minutes of such meetings and shall
provide the OWNER's Representative with a copy of the minutes of each
meeting within three (3) working days following the meeting.
6.8 During such progress meetings, the BUILDER shall report on the
following items:
(a) safety review;
(b) individual project status;
(c) resource and manpower allocation;
(d) barchart, 'S' curves and/or precedence network showing planned and
actual progress;
(e) status of drawings and documentation;
(f) status of Classification Society review / approvals;
(g) quality control; and (h) status of OWNER and BUILDER Furnished
Equipment.
7. PROJECT PLANS AND DRAWINGS; COMMUNICATION WITH
CLASSIFICATION SOCIETY
7.1 The Specification shall be Classification Society approved for
construction in accordance with the provisions of Article 7.4 below.
7.2 The BUILDER shall prepare and submit to the OWNER four (4) copies of
each of all Project plans and drawings for acceptance. The OWNER's
Representative shall, within fifteen (15) days from receipt, return one
(1) approved copy of all of such Project plans and drawings submitted
to him. If comments are received, the BUILDER, subject to a Variation
Order, shall modify the plans and drawings in accordance with the
OWNER's comments and resubmit the same to the OWNER. If the OWNER
Representative fails, without valid reason, to respond to such Project
plans and drawings (or any revisions thereto as submitted by BUILDER)
within fifteen (15) days from receipt, then the Project plans and
drawings shall be deemed to be approved by the OWNER.
7.3 OWNER's acceptance of the Project plans and drawings as aforesaid shall
not serve to eliminate or reduce the obligations of the BUILDER as
provided in this Agreement.
7.4 The BUILDER shall arrange for submission to and obtaining approval from
the Classification Society for the Project plans and drawings. All
Classification Society costs for any survey requirements, approvals or
other Classification Society activities, as specified in the
Specifications, shall be for the account of BUILDER. Additionally, in
the event any part of the Work is rejected by or fails to receive the
approval of the Classification Society, the costs of any re-survey,
re-testing, or re-inspection by the Classification Society shall be for
the sole account of BUILDER, except in the case where the rejection or
failure is caused by OWNER's responsible faults, then such costs shall
be for the sole account of OWNER.
7.5 The BUILDER shall monitor and register the status of documents to be
issued to and approved by the Classification Society and shall keep
OWNER fully advised as to progress in respect thereto.
7.6 The OWNER Representative and his team shall have free and open access,
at all times, to all of BUILDER's (and any of BUILDER's
subcontractor's) engineering personnel during the preparation and/or
correction of any Project plans and drawings.
8. "AS BUILT" DOCUMENTATION
8.1 The BUILDER shall prepare and submit to the OWNER reproducible
originals and electronic files of all "As-Builts" drawings, records,
manuals and other data as specified in the Specifications. Such
documentation shall be approved by the Classification Society and four
(4) prints of such documentation shall be delivered to the OWNER within
three (3) weeks after the Delivery Date.
8.2 All such drawings shall be made on the "Auto-Cad" system. The BUILDER
shall supply both the drawings and the respective diskettes to the
OWNER on the Delivery Date or as soon as reasonably possibly
thereafter. Such drawings and details are the property of BUILDER who
will provide same to OWNER for use only with this particular Vessel.
9. QUALITY ASSURANCE REQUIREMENTS
9.1 The BUILDER shall have in place a project quality plan (the "Project
Quality Plan") to ensure effective performance of its obligations under
this Agreement.
9.2 Within thirty (30) days of the Effective Date, the BUILDER shall submit
to the OWNER for approval its Project Quality Plan, describing the
QA/QC activities to be performed within the scope of this Agreement.
The OWNER shall return one (1) approved copy of this Project Quality
Plan within ten (10) days from receipt, along with any comments or
additions to the Plan. Thereafter, if for any reason the Project
Quality Plan, as approved by OWNER, is modified, changed or amended,
BUILDER shall submit to OWNER for its approval such portions of the
Plan as are modified, changed or revised.
9.3 The OWNER shall have the right to investigate, or have a third party
investigate, all or part of the Shipyard facilities, equipment,
materials and personnel employed on the Work undertaken by BUILDER or
its subcontractors in order to establish conformity with applicable
technical, safety and environmental standards. All costs of such audit
or investigation shall be for the account of the OWNER.
10. SAFETY REGULATIONS
10.1 BUILDER shall ensure that the Work is carried out in a safe manner and
shall adhere to all safety regulations, rules and laws of the Republic
of Singapore, OWNER's Safety Management Plan, and to the safety
regulations referred to in this Agreement.
10.2 BUILDER shall submit to the OWNER the BUILDER's 'Safety Plan' which
shall include, at a minimum, the following:
(a) BUILDER's safety policy and objectives;
(b) BUILDER's organization chart showing responsibilities to safety and
reporting relationships.
(c) BUILDER's systems and procedures which it will employ to meet the
stated objectives;
(d) BUILDER's safety communications within the BUILDER's organisation;
(e) Details of BUILDER's safety awareness programs; and
(f) BUILDER's incident reporting and investigation procedures.
In the event of any conflicts with OWNER's Safety Management Plan, the
parties shall cooperate in the production of a bridging document to
address any such issues.
10.3 The BUILDER shall ensure that the following specific conditions are
enforced during the performance of the Work:
(a) The BUILDER must have, at its expense, a sufficient number of
safety inspectors assigned to the Project and present at all
times, both on the Vessel and at any worksite where the Work
is performed. Such inspectors shall be responsible for
enforcing safety requirements while the BUILDER is performing
Work.
(b) The BUILDER's senior safety inspector or supervisor must
attend every progress meeting as referred to in Article 6,
headed "PLANNING, PROGRESS REPORTS AND MEETINGS", during which
safety, progress, manpower and scheduling are discussed with
the OWNER's Representative. At such meeting BUILDER's senior
safety inspector or supervisor shall report the safety
precautions and situation at each work location. In addition
to the weekly meetings as required by Article 6, BUILDER's
senior safety inspector or supervisor shall meet with OWNER's
Representative (or designee) to review the safety of the Work
on a daily basis.
(c) The BUILDER's safety inspectors shall be authorized to enforce
safety requirements of the BUILDER and the OWNER utilizing
BUILDER's work force and other persons invited or contracted
by the OWNER present at the worksite.
(d) The BUILDER's safety inspectors shall ensure that any portion
of the Work involving the use of cutting torches or welding
equipment proceeds safely through the issuance of 'Permits to
Work' or similar instructions, which shall be renewed every
shift or crew change (see Article 10.6 below).
10.4 All of the BUILDER's Personnel must wear and utilize the proper safety
work gear while conducting Work under this Agreement including, as a
minimum:
o Eye protection and required face shields for welders and fitters
or general workers utilizing or working around cutting, welding
and grinding equipment;
o Proper steel toe footing protection;
o Hard hats;
o Safety belts, lashings and/or anti-fall restraining devices for
all BUILDER's Personnel working more than ten (10) feet in the air
or over the side; and
10.5 It is the BUILDER's responsibility to immediately report in writing to
the OWNER's Representative any incident resulting in any injury or near
miss (which could have resulted in an injury) to any member of
BUILDER's or OWNER's Personnel. In addition, a written report must be
faxed within twenty-four (24) hours to the OWNER's office as mentioned
in Article 27, headed 'NOTICES', for the attention of the OWNER's
Safety Manager.
o The BUILDER's safety inspectors must ensure that a signed 'Permit
to Work' or similar document is issued for every part of the Work
which is potentially hazardous in nature to personnel or property,
including, without limitation, any work involving the use of
cutting torches or welding equipment.
All required "Permits to Work' and similar documents shall be issued
promptly. Furthermore, the issuance of 'Permits to Work' shall not be
unreasonably denied or delayed to OWNER-Designated Contractors or
subcontractors engaged directly by OWNER.
10.6 The OWNER reserves the right to reject any tools or equipment used by
BUILDER to perform the Work which it reasonably considers unsafe. Any
equipment or tools rejected by OWNER shall be immediately replaced by
the BUILDER with safe equipment.
10.7 The BUILDER shall ensure that each team of BUILDER's Personnel holds a
safety meeting when they come on shift. Such meetings shall be led by
the foreman and shall be held with the crew going off shift to ensure
that the new crew is aware of any safety hazards. Additional safety
meetings shall be held whenever a new job is commenced.
10.8 BUILDER shall notify OWNER immediately of any violations of the
applicable safety regulations. In the event the BUILDER does not remedy
such safety violation within twenty-four (24) hours after having been
given notice, OWNER, after proper consultation with BUILDER, shall be
entitled to stop the relevant part of the Work until the unsafe
situation is rectified.
10.9 BUILDER shall have the right to stop or suspend Work being performed by
a OWNER-Designated Contractor if BUILDER discovers a OWNER-Designated
Contractor to be in breach of any applicable safety requirement or
using unsafe tools. In the event of such Work stoppage or suspension,
BUILDER shall provide OWNER's Representative with written notice
thereof, specifying the reasons for the stoppage or suspension. Should
any unsafe practice by OWNER-Designated Contractors result in a work
stoppage in excess of twenty-four (24) hours, BUILDER shall be entitled
to an extension of the Delivery Date to the extent the Work stoppage is
caused by a OWNER-Designated Contractor's unsafe practices and affects
the Delivery Date. Such Work stoppage and resultant delay shall be
confirmed by a Variation Order upon the request of BUILDER.
11. OWNER-FURNISHED EQUIPMENT AND/OR INFORMATION
11.1 The OWNER shall furnish or cause to be furnished to BUILDER, at the
Shipyard, those items of material, equipment, engineering data and
information as are explicitly set forth to be provided by OWNER on
Annex "D". All such material, equipment, engineering data and
information shall be made readily available to the BUILDER and ready
for undertaking the Work in the manner provided below.
BUILDER and OWNER shall at the time of contract signing agree on a
chronological listing of OWNER-Furnished Equipment, as well as all
information required to be furnished to BUILDER by OWNER, setting out
the dates specific documents and/or equipment deliveries are required.
In the event any actual delay in the Delivery Date is caused by such
material, equipment, engineering data and/or information not being
timely available for the BUILDER to perform the Work, any overall delay
which actually results therefrom will be deemed a permissible delay and
the Delivery Date shall be extended accordingly by the number of days
(or any portion thereof) the delivery of any OWNER-Furnished Equipment
(or technical data associated therewith) is delayed, and BUILDER shall
document the change in the Delivery Date which delay in the Delivery
Date shall be confirmed by a Variation Order upon request by BUILDER.
11.2 The BUILDER shall monitor the receipt and ensure the safe storage of
OWNER-Furnished Equipment and shall report to the OWNER the receipt of
all OWNER-Furnished Equipment in the progress reports as referred to in
Article 6.5. Furthermore, BUILDER and OWNER shall jointly examine
OWNER-Furnished Equipment immediately upon receipt and again before
using the same and shall immediately report to OWNER any visual defects
therein in time to allow OWNER to replace the same without delaying the
Work.
12. INSPECTION, TESTING AND TRIALS
12.1 The BUILDER shall cooperate with the OWNER's Representative in order to
have the Work carried out safely, expeditiously and smoothly. The
BUILDER shall give notice to the OWNER's Representative of any and all
tests and inspections that are to be conducted in connection with the
Work; such notice (except as otherwise provided in Article 12.2) to be
given at least seventy-two (72) hours in advance of the date and place
of such test and/or inspection, without justifiable reasons, after due
notice to him as provided, shall be deemed to be a waiver of the OWNER
Representative's right to be present. In such case, the OWNER shall be
obligated to accept the results of such tests or inspections on the
basis of the BUILDER's Certificate of Acceptance, subject always to any
required approval by the Classification Society. Nothwithstanding any
provision of this Agreement to the contrary, the presence or absence of
OWNER's Representative at any such test and/or inspection shall not
serve to amend, modify or otherwise reduce the obligations of the
BUILDER pursuant to the terms of this Agreement.
Upon successful completion of the test and/or inspection, BUILDER will
issue to OWNER a Certificate of Acceptance, subject always to any
required approval by the Classification Society. However,
notwithstanding the foregoing, the satisfactory testing or inspection
will not relieve, in any way, the BUILDER from the liabilities assumed
under this Agreement, as well as any warranties as referred to in
Article 15, headed "WARRANTY", as may be applicable.
12.2 Notwithstanding the provisions of Article 12.1, the BUILDER shall,
subject to the availability of any manufacturer's representative
required to be in attendance, provide the OWNER at least five (5) days
prior notice of the time and place of each of the trials, equipment
trials and other specified commissioning of the Vessel (or any
component part, equipment or system thereof including OWNER Furnished
Equipment) which are to be performed at the Shipyard (collectively
herein referred to as the "Tests and Trials"), and the OWNER shall
promptly acknowledge receipt of such notice(s). The OWNER shall have
its Representative onboard the Vessel to witness such Tests and Trials.
Failure by the Representative of the OWNER to attend any portion of the
Tests and Trials of the Vessel after due notice to the OWNER as
provided above shall be deemed to be a waiver by the OWNER of the right
to have its Representative onboard the Vessel at such portion of the
Tests and Trials, and the BUILDER may conduct such portion of the Tests
and Trials without the Representative of the OWNER being present.
12.3 The Tests and Trials shall be carried out under weather conditions
deemed favorable to the OWNER and the Classification Society surveyor.
In the event of unfavourable weather on the date(s) specified for the
Tests and Trials, the same shall take place on the first available day
thereafter that weather conditions permit. It is agreed that if during
the Tests and Trials, the weather should suddenly become so
unfavourable that orderly conduct of the Tests and Trials can no longer
be continued in the opinion of the OWNER and the Classification Society
surveyor, the Tests and Trials shall be discontinued and postponed
until the first favorable weather condition day next following unless
the OWNER agrees in writing to accept the Vessel (or any component
part, equipment or system thereof) on the basis of the Tests and Trials
already made before such discontinuance occurred subject to acceptance
by ABS. Any delay of the Tests and Trials in excess of forty-eight (48)
hours caused by such unfavorable weather conditions shall result in an
extension of the Delivery Date by the number of days (or portion
thereof) the unfavorable weather conditions cause the Tests and Trials
to be delayed beyond forty-eight (48) hours, and BUILDER shall document
the change in the Delivery Date which delay in the Delivery Date shall
be confirmed by a Variation Order upon request by BUILDER.
12.4 All expenses in connection with the Tests and Trials including, but not
limited to, fuel oil, lubricating oils and greases (the quality and
quantity of which shall be in accordance with applicable engine
specifications), except for hydraulic oil for OWNER-Furnished
Equipment, shall be for the account of the BUILDER, and the BUILDER,
unless otherwise specified by OWNER, shall provide at is own expense
the necessary crew to comply with conditions of safe manning and
navigation. The Tests and Trials shall be conducted in the manner
described in the specifications. The course of the Tests and Trials
shall be determined by the OWNER and the BUILDER with ABS approval as
applicable.
12.5 Upon successful completion of any Tests and Trials on the Vessel (or
any component part, equipment or systems thereon), and subject always
to the approval of the Classification Society surveyor who shall in all
cases be present for any and all Tests and Trials, the BUILDER will
issue OWNER a Certificate of Acceptance that the Vessel (or any
component part, equipment or systems thereof that is the subject of the
Test and Trials) is found to conform to the Agreement, including,
without limitation, the Specifications, and operates satisfactorily.
The OWNER shall, within three (3) business days after receipt of such
Certificate or Acceptance, notify the BUILDER of its acceptance or
rejection of the results of the Tests and Trials (or any portion
thereof) evidenced by the Certificate of Acceptance. In the event that
the OWNER rejects the Tests and Trials (or any portion thereof), the
OWNER shall indicate in its written notice of rejection in what respect
the Vessel (or any component part, equipment or systems thereof) does
not conform to the Rules and this Agreement, including, without
limitation, the Specifications including any Variations. Thereafter,
BUILDER, at its sole cost and expense, may repeat the Tests and Trials
(or any portion thereof) rejected by OWNER, or, alternatively, dispute
the rejection of the Tests and Trials (or any portion thereof) by the
OWNER, in which case the matter shall be submitted for resolution in
accordance with Article 30 hereof.
12.6 Should the results of the Tests and Trials indicate that the Vessel (or
any component part, equipment or systems thereon) does not conform or
perform to the requirements of the Rules and this Agreement, including,
without limitation, the Specifications including any Variations, then
the BUILDER shall promptly take the necessary steps to correct such
non-conformity or non-performance. Upon correction of such
non-conformity or non-performance, BUILDER shall undertake a second
round of Tests and Trials to test the non-conformity or
non-performance, and in such event the BUILDER shall give the OWNER no
less than three (3) business days prior notice of the second round of
Tests and Trials. Upon successful completion of the second round of
Tests and Trials, BUILDER shall issue OWNER a Certificate of Acceptance
subject to the terms and conditions of Article 12.5 above. Any
additional costs and expenses required for the second or any subsequent
round of Tests and Trials shall be for the BUILDER's account and shall
not result in an extension of the Delivery Date.
12.7 Subject to delivery of the Vessel to OWNER in accordance with Article
14, should any fuel, lubricants or consumable stores furnished by the
BUILDER for the Tests and Trials remain onboard the Vessel at the time
of the Vessel's deliver to OWNER, the OWNER agrees to buy the same from
the BUILDER at the original documented purchase price thereof, and
payment by the OWNER shall be effected within thirty (30) days
following OWNER's receipt of BUILDER's invoice therefor.
13. DELAYS AND EXTENSION OF TIME FOR DELIVERY
13.1 In case BUILDER shall be unable, wholly or in part, to carry out its
obligations under this Agreement due to an event of Force Majeure or
any permissible delay as described in this Agreement, the time for
performance (i.e. Delivery Date) shall be extended by the period of
such Force Majeure or the duration of any permissible delays. BUILDER
shall document the change in the Delivery Date which delay in the
Delivery Date shall be confirmed by a Variation Order upon request by
BUILDER. Performance of any obligations suspended while a Force Majeure
event or permissible delay is operative shall be resumed as soon as
possible after such Force Majeure or the cause for any permissible
delay ceases. BUILDER shall notify OWNER in writing of the occurrence
of anything constituting a permissible delay or of any event of Force
Majeure within forty-eight (48) hours, or reasonably thereafter, after
the commencement of such event.
13.2 BUILDER shall take all reasonable steps to mitigate or remedy the
effect of any permissible delay or Force Majeure event and continue the
performance of the Work (or any portion thereof) not affected thereby.
However, in the event BUILDER, despite its best efforts, is unable to
remedy a Force Majeure event within one hundred eighty (180) days or in
the case of the Vessel's jacking system within two hundred and seventy
(270) days of the commencement of such event, OWNER or BUILDER shall
have the right, but not the obligation, to terminate this Agreement
forthwith by the giving of thirty (30) days prior written notice to the
other. In the event OWNER or BUILDER so elects to terminate this
Agreement, BUILDER shall be entitled to all sums due and owing as of
the date of termination and a portion of the remaining milestones due
after the date of termination based on the percentage of Work performed
before the date of termination with respect to such remaining
milestones (including BUILDER's actual costs necessarily incurred in
terminating the ongoing Work). Any amounts claimed by BUILDER as a
result of termination pursuant to this Article 13.2, including costs
incurred by BUILDER in terminating the ongoing Work, shall be
substantiated and documented. In the event of such termination, title
and ownership of the Vessel in its then state of completion shall vest
in OWNER (after first having paid the sums called for hereunder) and
OWNER shall have the option to complete the Vessel with other
contractors (subject to the payment to BUILDER of reasonable berthing
charges) or OWNER may elect to remove the Vessel and its equipment and
materials already paid for to another facility to complete the
construction of the Vessel. Following termination and payment of the
sums called for hereunder, neither OWNER nor BUILDER shall have any
further obligations or liabilities to the other accruing from and after
the date of such termination.
13.3 Should a Force Majeure event occur, OWNER and BUILDER agree to discuss
in good faith any extension of the Delivery Date which might be
warranted by virtue of the delay.
14. DELIVERY OF THE VESSEL
14.1 Time is of the essence in the performance of this Agreement.
14.2 BUILDER and OWNER acknowledge and agree that the scope of the Work, as
described in the Agreement, including, without limitation, the
Specifications, is well defined, and BUILDER covenants to use its best
efforts to complete and deliver the Vessel by the Delivery Date
specified in Article 14.3, as the same may be adjusted in accordance
with the terms and conditions of this Agreement.
14.3 Subsequent to the completion by BUILDER and the acceptance by OWNER of
all Tests and Trials required to be performed or conducted by BUILDER
on the Vessel, including all component parts, equipment and systems
incorporated therein, and subject to the documentation required
pursuant to Article 14.6, the Vessel shall be delivered by the BUILDER
to the OWNER, safely afloat and secured dockside at the Shipyard or
such other mutually agreed location, ready for ocean tow as approved by
the OWNER underwriter's surveyors, on or before twenty-two (22) months
from the Effective Date. In the event of delays in the construction of
the Vessel or any performance required under this Agreement due to (i)
permissible delays as described herein, (ii) Force Majeure events, or
(iii) changes or modifications to the Work or Specifications (as
evidenced by Variation Orders) requiring additional time for the
completion and delivery of the Vessel, the aforementioned date for
delivery of the Vessel shall be postponed accordingly. The
above-described date, and any adjustment or extension thereof, being
referred to in this Agreement as the "Delivery Date". Permissible
delays shall include without limitation delays caused by the
Classification Society or flag inspectors and by acts or omissions of
OWNER or its Representatives or contractors other than BUILDER and its
subcontractors or by OWNER's failure to perform its obligations under
this Agreement as and when due. BUILDER shall document the change in
the Delivery Date which delay in the Delivery Date shall be confirmed
by a Variation Order upon request by BUILDER.
14.4 Subject to the BUILDER and the OWNER having fulfilled their respective
obligations stipulated under this Agreement, delivery of the Vessel
shall be effected forthwith by the concurrent execution by each of the
parties hereto of the Protocol of Delivery and Acceptance.
14.5 Notwithstanding any provision of this Agreement to the contrary, it is
agreed and understood that the Vessel shall be delivered to OWNER when
completed and accepted by OWNER, regardless of the existence of any
pending disagreement, dispute or arbitration proceeding, provided that:
(a) OWNER shall pay to BUILDER all undisputed sums due prior to or
upon delivery of the Vessel; and
(b) OWNER shall have deposited any disputed portion of the
Contract Price or other sums of money due BUILDER into a joint
interest bearing account, where such disputed money shall
remain until settlement of the dispute or a final award by the
courts.
14.6 Upon delivery and acceptance of the Vessel, the BUILDER shall deliver
to the OWNER all documentation, certificates and papers required for
the operation and registration of the Vessel under the flag of the
Marshall Islands, including, but not limited to, the following
documents:
(a) Legal Bill of Sale, notarially acknowledged;
(b) All certificates, including any certificate issued by the
BUILDER, including but not limited to a Builder's Certificate,
and any interim class certificate issued by the Classification
Society. All such class certificates shall be issued without
conditions or exceptions affecting the seaworthiness or
operability of the Vessel and any conditions or exceptions
shall be corrected by BUILDER within a reasonable time
following delivery of the Vessel;
(c) A Declaration of Warranty by the BUILDER that the Vessel is
delivered to the OWNER free and clear of any liens, charges,
rights in rem, claims, mortgages or other encumbrances upon
the OWNER's title thereto, and in particular, that the Vessel
is free of all liabilities and burdens of any nature,
including but not limited to those which may be related to
taxes, duties or other charges imposed by the governmental
authorities of the Republic of Singapore, as well as all
liabilities of the BUILDER's Personnel, and all liabilities
arising from the operation of the Vessel during any Tests and
Trials, or otherwise prior to its delivery to OWNER;
(d) Within three weeks from delivery, all drawings and plans
pertaining to the Vessel as stipulated in the
Specifications available upon delivery of the Vessel;
(e) A Protocol of Tests and Trials of the Vessel made pursuant to
the Specifications;
(f) A Protocol of Inventory of the equipment of the Vessel,
including spare parts and the like, all as
described in the Specifications, and
(g) A Protocol of Consumable Stores listing the amount of fuels,
lubricants, grease and other consumables which were not
consumed after having been placed onboard the Vessel by
BUILDER during any Tests and Trials.
Provided, however, if, through no fault on the part of the BUILDER, any
certificates or other documents as contemplated by this Article 14.6
are not available at the time of the Vessel's delivery to OWNER,
provisional certificates or documentation shall be accepted by the
OWNER, provided that the BUILDER shall furnish the OWNER with formal or
permanent certificates as promptly as possible after such are available
and that provisional certificates are issued without conditions or
exceptions affecting the seaworthiness or operability of the Vessel and
which conditions or exceptions shall be corrected by BUILDER within a
reasonable time following delivery of the Vessel.
14.7 The OWNER shall take possession of the Vessel immediately upon delivery
and acceptance thereof and, unless otherwise agreed, shall remove the
Vessel from the premises of the Shipyard within fifteen (15) days after
delivery and acceptance thereof is effected. Thereafter, if the OWNER
has not removed the Vessel from the premises of the Shipyard within the
aforesaid fifteen (15) days, and provided BUILDER has expressed a
verifiable need for the Shipyard space, then, in such event, commencing
on the sixteenth (16th) day, the OWNER shall pay to the BUILDER any
reasonable mooring charges associated therewith at the rates set forth
in Annex "C".
15. WARRANTY
15.1 The BUILDER hereby warrants to the OWNER that the Vessel (including her
hull, machinery, equipment, gear and all appurtenances thereto,
including OWNER-Designated Equipment, but excluding any OWNER-Furnished
Equipment or work performed by OWNER-Designated Contractors) is free
from defects, whether latent or patent, in workmanship and materials.
The express warranty set forth in the preceding sentence shall commence
on the date that title to the Vessel is transferred to the OWNER, as
evidenced by the Protocol of Delivery and Acceptance, and shall
continue thereafter until the one (1) year anniversary of such date
(the "Warranty Period").
BUILDER's liability for breach of the foregoing warranty shall include:
(a) repairing or replacing any defects in the BUILDER's workmanship
or materials, as the case may be, at the
BUILDER's Shipyard or on board the Vessel at her location; and
(b) repairing or replacing any OWNER-Furnished Equipment
damaged, destroyed or lost as a direct result of
the defects in workmanship or materials warranted hereunder by
BUILDER; or
(c) reimbursing the OWNER for the reasonable costs of such repairs
or replacements referred to in (a) and (b) above in the event
that such repair or replacement work cannot be timely or
reasonably carried out by BUILDER at the location of the
Vessel and the Vessel cannot be reasonably returned to the
BUILDER's Shipyard for correction of the work or materials.
For the purposes hereof, BUILDER's liability as provided above shall be
deemed to include all costs of labor associated with the repair or
replacement of any defects, the costs of all materials, equipment and
supplies necessary, and all other ancillary costs associated with or
related to the satisfaction of BUILDER's obligations pursuant to the
provisions of this Article 15.1 but not including mob and demob of the
Vessel or other incidental or out-of-pocket costs of OWNER.
15.2 In the event of any defect in workmanship or materials for which a
warranty claim is to be made, OWNER shall promptly notify BUILDER
thereof. Such notice by OWNER shall describe the nature and extent of
the defects to the extent known by OWNER. The BUILDER shall have no
obligation for any defect unless such defect is discovered prior to the
expiration of the Warranty Period, and notice of such defect is
received by the BUILDER not later than thirty (30) days following
expiration of the Warranty Period.
15.3 Any work performance or any materials supplied by BUILDER in
satisfaction of its warranty obligations shall be further warranted for
the balance of the Warranty Period or six (6) months from completion of
such work or installation of such material, whichever is later, but in
no event shall the extended warranty period exceed twenty-four (24)
months from the Delivery Date.
15.4 By signing this Agreement, the BUILDER agrees to assign and transfer to
the OWNER any and all guarantees and/or warranties given and/or to be
given to the BUILDER or to BUILDER's subcontrators by the manufacturers
and/or vendors of suppliers, materials and equipment furnished by
BUILDER and its subcontractors. However, notwithstanding the foregoing,
any such warranties assigned or transferred pursuant to the terms
hereof shall not be in lieu of or limit the warranties given by BUILDER
as recited in Article 15.1.
15.5 Nothing in Article 15.1 above shall extend the BUILDER's warranty to
cover any defect which has been caused by replacement or repair work
performed by a OWNER-Designated Contractor, or which has been caused by
any wilful act or omission or the negligent maintenance or operation of
the Vessel by OWNER Personnel.
15.6 The warranties provided by BUILDER pursuant to this Article 15 shall be
in lieu of and replace any other liability, guarantee, warranty and/or
condition imposed or implied by law, custom or usage, whether in
contract or in tort, and except as otherwise expressly provided herein,
BUILDER makes no warranty/condition of merchantability or fitness for
any particular purpose. The remedies provided for herein shall be
exclusive with respect to breach of warranty.
16. INDUSTRIAL AND INTELLECTUAL PROPERTY RIGHTS
16.1 If the Work (or any portion thereof) is to be performed according to
drawings, models or other instructions (in the broadest sense of the
word), the party who has supplied such drawings, models, or other
instructions warrants vis-a-vis the other party that no trademark,
patent, copyright or any other right of third parties will be infringed
thereby, and the party who has supplied the same shall indemnify and
hold harmless the other party from and against any claims from third
parties in connection therewith.
16.2 In the event the use of equipment or tools or the method of operation
of either party should infringe any trademark, patent. Copyright or any
other right of third parties, the party using such equipment or tools,
or employing the method of operation, shall indemnify and hold harmless
the other party from and against any claims by third parties in
connection therewith.
17. TITLE TO AND RISK OF LOSS OF THE VESSEL AND OWNER FURNISHED EQUIPMENT
17.1 Except as otherwise provided in Article 17.2, risk of loss to the
Vessel and all equipment and materials purchased for and/or installed
on the Vessel, including all Work performed upon the Vessel whether by
BUILDER, BUILDER's Personnel, OWNER, OWNER's Personnel or any
OWNER-Designated Contractors, shall remain in BUILDER until such time
as the Vessel is delivered to OWNER pursuant to Article 14 hereof;
provided title to all materials, equipment, supplies and other property
incorporated into or purchased for incorporation into the Vessel shall
vest in OWNER as and when BUILDER receives payment for same from OWNER
under this Agreement.
17.2 Title to all OWNER-Furnished Equipment shall remain in OWNER and shall
not be subject to any liens or encumbrances of any nature whatsoever in
favor of BUILDER, BUILDER's Personnel, or any party claiming by or
through BUILDER or BUILDER's Personnel; provided BUILDER shall have the
risk of loss as provided in Article 18, until the Vessel is delivered
to the OWNER pursuant to Articles 14 or 20 hereof.
18. LIABILITY AND INDEMNIFICATION
18.1 The BUILDER agrees to defend, indemnify and hold the OWNER and OWNER's
Personnel free and harmless from and against any and all claims and /or
liabilities (including, without limitation, the cost of any lawsuit and
reasonable attorney's fees ) arising in favour of any of BUILDER's
Personnel (or representatives or any survivor of any of the foregoing)
on account of illness of, injury to and/or death of any such parties in
connection with the Vessel and/or the Work performed pursuant to this
Agreement, regardless of whether the OWNER and/or OWNER's Personnel may
be wholly, partially or solely negligent or otherwise at fault.
18.2 The OWNER agrees to defend, indemnify and hold the BUILDER and
BUILDER's Personnel free and harmless from and against any and all
claims and/or liabilities (including, without limitation, the cost of
any lawsuit and reasonable attorney's fees) arising in favour of any of
OWNER's Personnel (or representatives or any survivor of any of the
foregoing) on account of illness of, injury to and/or death of any such
parties in connection with the Vessel and/or the Work performed
pursuant to this Agreement, regardless of whether the BUILDER and/or
BUILDER's Personnel may be wholly, partially or solely negligent or
otherwise at fault.
18.3 The OWNER and OWNER's Personnel shall not be responsible for any loss
of and/or damage to the BUILDER's Shipyard, premises, buildings,
facilities, equipment and/or other tangible property used in the
performance of the Work, whether such belongs to BUILDER or BUILDER's
Personnel, and the BUILDER agrees to defend, indemnify and hold the
OWNER free and harmless from and against any and all claims and/or
liabilities (including, without limitation, the costs of any lawsuit
and reasonable attorney's fees) with respect to any such loss and/or
damage, regardless of whether such loss and/or damage is caused by the
negligence or fault of OWNER or OWNER's Personnel.
18.4 The BUILDER shall not be responsible for any loss of and/or damage to
the property of OWNER or OWNER's Personnel excluding, however,
OWNER-Furnished Equipment from and after delivery to BUILDER's Shipyard
premises and used in the performance of the Work, and the OWNER agrees
to defend, indemnify and hold the BUILDER free and harmless from and
against any and all such claims and/or liabilities (including, without
limitation, the costs of any lawsuit and reasonable attorney's fees)
with respect to any such loss and/or damage regardless of whether such
loss or damage was caused by the negligence or fault of BUILDER or
BUILDER's Personnel. Notwithstanding the foregoing, BUILDER shall be
responsible for any loss or damage to the OWNER-Furnished Equipment
howsoever caused unless caused by OWNER or OWNER Personnel provided the
same is not covered by Builder's Risk Insurance to be provided by
BUILDER under the provisions of Annex "F" hereto.
18.5 In the event of any loss and/or damage to the property of, or personal
injury and/or death of any third parties, OWNER and BUILDER each agree
to be responsible for and defend, indemnify and hold the other harmless
from and against any and all claims and/or liabilities (including,
without limitation, the cost of any lawsuit and reasonable attorney's
fees) with respect to such loss and/or damage, or personal injury
and/or death to the extent caused by or resulting from the indemnifying
party's negligence or fault.
18.6 Except as otherwise expressly provided in this Agreement, neither the
OWNER nor the BUILDER shall be liable vis-a-vis the other for any
incidental or consequential loss, including (but not limited to) loss
of profits or earnings, loss of contract or loss of time in operating
the Shipyard, the Vessel and/or other assets of the OWNER, or
out-of-pocket expenses, regardless of whether the OWNER and/or the
BUILDER and/or their respective Personnel may be wholly, partially or
solely negligent or otherwise at fault, or whether or not such
consequential loss has been caused by the wilful misconduct or gross
negligence of the OWNER, the BUILDER, or their respective Personnel,
breach of this Agreement including fundamental breach, or any breach of
warranty.
18.7 BUILDER shall be responsible for and dispose of in an environmentally
safe manner and in compliance with all applicable laws and regulations,
any and all garbage, waste, scrap, debris, oil, chemicals,
contaminants, irritants, pollutants and other by-products of the Work
except for bulk mud and cement test medium, and, notwithstanding any
other provision of this Article 18 to the contrary, BUILDER shall be
responsible for and shall defend, indemnify and hold the OWNER free and
harmless from and against any and all claims, liabilities , costs,
expenses, fines and/or penalties, of every kind or character (including
without limitation the cost of any lawsuit and reasonable attorney
fees) incurred by or imposed on OWNER, arising from or in connection
with, directly or indirectly, in consequence of or with respect to, the
actual or potential disposal, discharge, emission, spillage or leakage
upon or into the seas, water, land or air during the course of
performance of the Work, of any garbage, debris, waste, scrap, oil,
petroleum products, chemicals, contaminates, irritants, pollutants,
and/or any substance, of any kind or nature whatsoever, regardless or
whether caused wholly, in part or solely by the negligence of OWNER or
OWNER's Personnel ; provided, however, this provision shall not apply
to events caused by the wilful misconduct of OWNER or OWNER's
personnel.
18.8 The liabilities assumed by BUILDER hereunder shall be supported by
available insurance policies placed with first line reliable insurance
companies.
18.9 Prior to the commencement of Work under this Agreement, BUILDER shall
furnish to OWNER certificates of insurance evidencing the coverages,
with limits and endorsements, as set forth in the attached Annex "F".
BUILDER agrees to maintain all such insurances as described in Annex
"F" as long as this Agreement shall remain in effect.
18.10 BUILDER shall use its best efforts to cause its subcontractors to carry
similar insurance coverages for the types and amounts listed in Annex
"F". BUILDER shall be responsible for any shortfall in insurance
coverages furnished by any of its subcontractors.
19. BUILDER'S SUBCONTRACTORS AND SUPPLIERS
19.1 The BUILDER shall be at liberty to subcontract all parts of the Work;
however, BUILDER shall use due care to select competent and efficient
subcontractors. BUILDER shall be fully responsible for the performance
of all subcontractors and any segment of the Work performed thereby and
shall ensure that all production milestones are met.
19.2 The BUILDER shall remain fully responsible under this Agreement for any
part of the Work which has been subcontracted to any subcontractors or
suppliers. All work performed by subcontractors hereunder shall be
subject to the provisions of this Agreement as if the same had been
performed by BUILDER including, but not limited to, all warranty
provisions hereof as set forth in Article 15.
19.3 Throughout the existence of this Agreement, the BUILDER shall be an
independent contractor with full power and authority, subject to the
terms of this Agreement, to select the means, methods and manner of
performing its obligations hereunder. BUILDER shall be solely
responsible for and shall indemnify OWNER for all matters pertaining to
its subcontractors and its employees, servants and agents and OWNER
shall never be responsible for such parties.
20. TERMINATION/CANCELLATION
20.1 Should BUILDER fail to fulfill or perform any of its material
obligations as outlined under this Agreement, OWNER shall notify
BUILDER in writing, specifically describing in reasonable detail the
failures of BUILDER. Thereafter, subject to Article 5.4 hereof, should
BUILDER fail to initiate corrective action within ten (10) business
days following receipt of notice from OWNER to eliminate the matters
complained of, or, having initiated corrective action, fail to
prosecute such corrective action to completion, then OWNER shall have
the right to terminate this Agreement forthwith. Election of OWNER to
terminate this Agreement pursuant to this Article 20.1 shall not
relieve BUILDER from its obligation to accommodate and assist OWNER
with the removal of the Vessel from BUILDER's shipyard in the event
OWNER elects to engage another BUILDER to complete the Work.
20.2 This Agreement may be terminated for Force Majeure as specified
under the terms and conditions as set forth in Article 13 hereof.
20.3 Subject to the provisions of Article 20.4, this Agreement may be
terminated by either party hereto in the event the other party shall
become insolvent, have a receiver appointed, apply for moratorium, be
declared bankrupt, go into liquidation, or if all or substantially all
of a party's assets shall be attached or seized.
20.4 In the event this Agreement is terminated by OWNER pursuant to the
provisions of Articles 20.1 or 20.3 above, OWNER shall be obligated to
pay BUILDER all sums due and owing BUILDER as of the date of
termination and a portion of the remaining milestones due after the
date of termination based on the percentage of work performed before
the date of termination with respect to such remaining milestones
(excluding any costs incurred by BUILDER in terminating the ongoing
Work); provided, however, OWNER shall be entitled to (a) an assignment
of title by BUILDER, free and clear of all liens, encumbrances and
claims of any kind, in and to the Vessel, including all equipment, raw
material, goods and appurtenances purchased by BUILDER for
incorporation on or into the Vessel, and (b) deduct from any amounts
due BUILDER any additional costs incurred by OWNER to complete the Work
(over and above the balance of the Contract Price that OWNER would have
reasonably expected to have paid had BUILDER completed the Work),
including, without limitation, the cost of removing the Vessel from
BUILDER's shipyard and transporting it to another contractor, any costs
associated with relocating OWNER's Personnel, and any additional costs
incurred, directly or indirectly, in respect to OWNER-Designated
Contractors or OWNER-Furnished Equipment (including the transportation
costs associated therewith); provided, OWNER shall endeavor to mitigate
any such additional costs incurred to relocate and/or to complete the
Work wherever possible, and provided further, in no event shall such
additional costs as referred to in this Article 20.4(b)(ii) exceed, in
the aggregate, ten percent (10%) of the Contract Price. Upon transfer
of title, settlement and payment of BUILDER's obligations as stated in
(a)-(b) above, the parties' liability recited in this paragraph 20.4
shall be discharged.
20.5 The remedies provided for in this Agreement for termination shall be
exclusive remedies. In no event shall OWNER terminate this Agreement
due to late delivery of the Vessel until the running of the full period
of time for accrual of maximum liquidated damages under Article 5.4
hereof.
21. TAXES AND DUTIES
21.1 The Contract Price and any and all further costs and expenses to be
paid by the OWNER to the BUILDER pursuant to this Agreement, including,
without limitation, any sums paid pursuant to any Variation Order(s) on
a time and materials basis, shall be inclusive of any and all
applicable Singapore taxes, assessments, levies and/or duties
including, when applicable, VAT and/or GST taxes. Any taxes paid by
BUILDER in respect to invoices submitted by its subcontractors or any
third parties are exclusively for BUILDER's account.
21.2 BUILDER shall bear and pay any and all liabilities or claims for any
income taxes, profits taxes, property taxes, stamp taxes, document
taxes, value added taxes, goods and services taxes, sales taxes, excise
taxes, surtaxes, surcharges or any other taxes or governmental charges
of whatever nature which any Singapore governmental authority
(including any political sub-division thereof) claiming jurisdiction
over the BUILDER may impose, assess or levy against BUILDER on account
of or resulting from BUILDER's execution of or performance under this
Agreement.
21.3 BUILDER further agrees to withhold from wages, salaries, fees or other
remuneration of its agents, servants, employees or subcontractors, all
sums required to be withheld by the laws of Singapore and to pay the
same promptly when due to the proper authorities.
21.4 BUILDER, at BUILDER's sole cost and expense, agrees to make all reports
and take all other actions necessary to satisfy tax, accounting and
reporting requirements of Singapore (including any political
sub-division thereof) claiming jurisdiction over the subject matter
hereof.
21.5 BUILDER shall defend, indemnify and hold OWNER harmless against any and
all liabilities or claims for taxes or other governmental charges,
including interest and penalties thereon, imposed, assessed or levied
against OWNER, which are otherwise the responsibility of BUILDER.
Likewise, OWNER shall defend, indemnify and hold BUILDER harmless
against any and all liabilities or claims for taxes or other
governmental charges, including interest and penalties thereon,
imposed, assessed or levied against BUILDER, which are otherwise the
responsibility of OWNER.
21.6 OWNER shall be responsible for making all necessary arrangements and
for the payment of all port dues, duties, taxes and charges in respect
of the importation or exportation of OWNER-Furnished Equipment and for
the payment of all taxes due in respect to OWNER's Personnel.
22. SUPPLIES AND SERVICES FROM THIRD PARTIES
22.1 In the event BUILDER orders supplies and/or services from third parties
and such are not or cannot be delivered to the BUILDER at the time the
BUILDER requested or anticipated, then the BUILDER, subject to OWNER's
approval which will not be unreasonably withheld, shall be entitled to
order reasonable substitute supplies and/or services of equal or better
quality; however, such shall not affect the Contract Price and no
additional cost incurred by BUILDER in respect to any such substitution
shall be passed on to OWNER. Furthermore, unless otherwise agreed by
OWNER, the substitution of supplies and/or services as provided herein
shall not constitute a permissible delay giving rise to any extension
of the Delivery Date.
22.2 It is specifically agreed that all supplies and/or services provided
hereunder, whether furnished by BUILDER, BUILDER's subcontractors or
third parties, are to be of first class shipbuilding quality, approved
by the Classification Society and any Regulatory Bodies having
jurisdiction thereof and by the OWNER such approval not to be
unreasonably withheld or delayed.
23. AUDIT AND RECORDS
23.1 For the purpose of reviewing and verifying the costs and the quantities
of reimbursable items or any part of Work performed on a time, material
or equipment basis, the OWNER or its authorized representatives shall
have access to (at all reasonable times) and the right to reproduce and
retain copies of all books, records (including data stored on
computers), certificates, correspondence, instructions, plans,
drawings, way bills, receipts, vouchers and memoranda of the BUILDER
and its subcontractors, their agents and servants, pertaining to the
Work; provided, however, that the BUILDER shall have the right to
exclude any trade secrets, formulas, processes or commercially
sensitive information (including information regarding BUILDER's
profit) from such audits.
23.2 The above rights of the OWNER shall continue for a period of one (1)
year after the date title to the Vessel is transferred to OWNER and the
BUILDER shall preserve, and, to the extent possible, shall cause its
subcontractors to preserve, all documents for said period or, in the
event of a dispute, until the date when that dispute has been finally
determined by agreement, litigation or otherwise.
24. LIENS
24.1 All charges for labor, materials, equipment, services, supplies and
other items to be furnished by BUILDER for or in connection with this
Agreement shall be paid promptly by BUILDER and BUILDER shall indemnify
and hold harmless OWNER from and against any and all claims, demands,
actions, proceedings, liabilities, costs and expenses suffered or
incurred by OWNER in respect thereof or in relation thereto.
24.2 Upon delivery of the Vessel to OWNER, BUILDER shall furnish to OWNER,
in accordance with Article 14.6(c), a declaration of warranty that the
Vessel is delivered free and clear of any liens or encumbrances as may
be imposed by suppliers, subcontractors and vendors of BUILDER in
connection with this Agreement and BUILDER will indemnify and hold
OWNER harmless from any such liens, encumbrances, or claims. OWNER
shall be entitled to withhold payment of the final installment of the
Contract Price (or such portion thereof as necessary) until such time
as BUILDER furnishes the foregoing declaration.
24.3 Except for BUILDER's own lien rights, BUILDER shall keep the Vessel,
its machinery, equipment, materials and appurtenances, as well as any
OWNER-Furnished Equipment, free and clear of all liens, charges and
other encumbrances. If BUILDER fails or neglects to discharge any such
lien, charge or other encumbrance created in breach of this Article,
OWNER (without prejudice to any other rights or remedies of OWNER under
this Agreement or at law) shall be entitled to settle or otherwise
provide for the discharge of the same and all amounts paid and all
costs and expenses incurred by OWNER in connection therewith or in
relation thereto may be deducted from any sums due or which become due
to BUILDER hereunder or may be recovered from BUILDER as a debt.
25. CONFIDENTIALITY
25.1 All information acquired or furnished by the OWNER to the BUILDER
and/or by the BUILDER to the OWNER, other than information which
either:
o is part of the public domain;
o becomes part of the public domain other than through the fault of the parties;
o is already known by the parties at the time of disclosure; or o is required to
be disclosed to third parties according to applicable law;
is to be treated as confidential and not to be used by either party for
any other purpose than for the benefit of the Work under the terms of
this Agreement.
25.2 The parties each covenant and agree that the above obligation of
confidentiality shall be strictly enforced as to its respective
Personnel. This obligation shall continue for a period of two (2) years
from the expiration of the Warranty Period as mentioned in Article 15,
headed "Warranty".
25.3 Neither party hereto shall issue any press release or provide any
information to the media or any other third party without the express
prior written approval of the other party, except where it is necessary
to satisfy securities laws or regulations and Stock Exchange
requirements. Nothing herein shall prohibit OWNER from providing
information to market the Vessel.
26. ASSIGNMENT
26.1 Except for the proceeds of this Agreement which may be assigned for
financial purposes, neither BUILDER nor OWNER shall assign this
Agreement or any part hereof.
26.2 OWNER shall have the right to designate a party other than OWNER to
take delivery and title of both the Vessel and the Option Vessel as
defined herein, provided such party agrees to be bound by the terms and
conditions of this Agreement. In the event the OWNER elects to
designate a party other than itself to take delivery and title to the
Vessel and the Option Vessel, OWNER shall give notice to BUILDER of the
same, which in no event shall such notice be given less than thirty
(30) days prior to the Delivery Date, as the same may be adjusted or
extended.
27. NOTICES
27.1 The BUILDER's Representative shall be authorized to receive notices and
to issue and sign and execute on behalf of the BUILDER any and all
documents referred to in this Agreement.
27.2 Notices shall be in English and shall be deemed properly given if made
in person to the Representative of the other Party, or by facsimile or
by courier service if to the addresses and facsimile numbers shown
below:
For the OWNER: Atwood Oceanics Pacific Limited
c/o Atwood Oceanics, Inc.
15835 Park Ten Place Drive
Houston, Texas U.S.A.
Telephone: (281) 749-7805
Facsimile: (281) 578-3253
Attn: Glen P. Kelley
With a copy to: Alan Quintero
For the BUILDER: Keppel FELS Limited
31 Shipyard Road
Jurong Town
Singapore 628 130
Telephone: (65) 267-6700
Facsimile: (65) 261-7719
Attn: Managing Director
C H Tong
With copy to: Project Manager
27.3 All notices shall be deemed as properly given upon their
actual receipt.
28. MISCELLANEOUS
28.1 BUILDER represents and warrants that it is duly authorized to
construct, equip, complete, sell and perform the entirety of the Work
and to deliver the Vessel as provided hereunder and that it will obtain
in a timely manner all necessary permits, licenses and authorizations
required to perform the Work and deliver the Vessel. BUILDER further
represents and warrants that it shall comply with, and shall use its
best endeavors to procure that its subcontractors comply with, all
applicable statutes, by-laws and other rules and regulations having the
force of law in the applicable jurisdiction in which any of the Work is
performed or in which BUILDER's Shipyard is located, and shall
indemnify and hold the OWNER harmless from and against any and all
liabilities, proceedings, claims, actions, demands, penalties, losses,
costs and expenses whatsoever suffered or incurred by OWNER as a result
or by reason of any failure or neglect on the part of BUILDER or any of
its subcontractors to so comply.
28.2 It is agreed that notwithstanding anything to the contrary contained in
this Agreement, the provisions of Articles 14,15, 16, 17, 18, 21, 23,
24, 25 and 28 shall survive and continue following termination or
completion of this Agreement.
28.3 This Agreement, when executed, shall contain the entire agreement
between the parties and shall supersede all prior agreements or
understandings, oral or written, between the parties. Furthermore, this
Agreement shall not be modified, changed, altered or amended except by
the express written agreement of BUILDER and OWNER.
28.4 Unless the context otherwise requires, the singular shall include the
plural and the plural the singular, and words indicating persons shall
include firms and corporations.
28.5 Article headings are inserted for convenience only and shall be
ignored for the purposes of construction or interpretation.
28.6 It is recognized that the Contract Drawings may not yet completely
incorporate the items agreed to be part of the Work as outlined in the
Specifications. Reference Article 2.1, the Contract Drawings shall be
amended within one (1) month after the Effective Date to fully reflect
the Work outlined in the Specifications. Where there are any
differences between the Specifications and the Contract Drawings, the
Specifications shall take precedence over the Contract Drawings.
28.7 In the event that the terms and conditions of this Agreement require
the issuance of a Variation Order, whether for variations or changes
pursuant to Article 4 or wherever in this Agreement BUILDER is entitled
to an extension of the Delivery Date, OWNER agrees to sign proper
Variation Orders as and when requested by BUILDER and BUILDER shall so
request same in a timely manner.
29. OPTION VESSEL
29.1 BUILDER hereby grants to OWNER an option for a second Vessel (the
"Option Vessel"), to be substantially identical to the first Vessel, on
the terms and conditions expressly set forth herein. Such option must
be exercised by notice to BUILDER in writing within six (6) months of
the Effective Date or thereafter said option shall lapse. If so
exercised, BUILDER and OWNER shall within ten (10) days after notice of
the exercise of the option is given to BUILDER execute and deliver a
construction contract in the form of this Agreement, except that the
Contract Price shall be UNITED STATES DOLLARS EIGHTY-TWO MILLION NINE
HUNDRED THOUSAND DOLLARS ONLY (US$82,900,000.00) increased or decreased
to cover Variation Orders approved through the date of such new
contract and the Delivery Date shall be six (6) months following
delivery of the Vessel.
30. GOVERNING LAW; COURTS; LANGUAGE
30.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of England, excluding any choice of law rules
which would refer the matter to the laws of another jurisdiction.
30.2 Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof, shall be
determined by the High Court of Justice, London, to which the parties
agree to submit.
30.3 In the event of any dispute, controversy or claim requiring legal
proceedings in the courts and arising or occurring prior to the
delivery and acceptance by the OWNER of the Vessel, any award or
decision of the court proceedings shall include a finding as to whether
or not the Delivery Date of the Vessel should be altered or adjusted as
a result of such dispute.
30.4 This Agreement is written in the English language and, notwithstanding
any translation hereof into any other language, the English language
version shall control.
SIGNED IN DUPLICATE ORIGINALS AT Houston, Texas as of the date first
appearing on the face hereof.
Atwood Oceanics Pacific Limited Keppel FELS Limited
"OWNER" "BUILDER"
/s/Glen P. Kelley /s/Ton Chong Heong
----------------------- -------------------------
By:___________________ By:__________________
Title:__________________ Title:_________________