VESSEL CONSTRUCTION CONTRACT
BETWEEN
AVONDALE INDUSTRIES, INC.
AND
BELLE OF ORLEANS, L.L.C.
Page 1
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS 1
ARTICLE II - DESCRIPTION OF VESSEL 3
ARTICLE III - CONTRACT 4
ARTICLE IV - REGULATORY COMPLIANCE 5
ARTICLE V - PRICE AND PAYMENT 7
ARTICLE VI - TIME AND CONDITIONS OF DELIVERY 10
ARTICLE VII - BUILDER'S DUTIES AND STATUS 13
ARTICLE VIII - SUBCONTRACTS AND OTHER AGREEMENTS 15
ARTICLE IX - OWNER'S DUTIES AND STATUS 16
ARTICLE X - OWNER'S RIGHT TO STOP WORK 18
ARTICLE XI - INSPECTION BY OWNER'S REPRESENTATIVE 19
ARTICLE XII - CHANGES IN THE WORK 20
ARTICLE XIII - FORCE MAJEURE 22
ARTICLE XIV - WARRANTY 23
ARTICLE XV - INSURANCE 25
ARTICLE XVI - INDEMNITY 27
ARTICLE XVII - TAXES 28
ARTICLE XVIII - PATENTS 28
ARTICLE XIX - USE OF THE PLANS AND SPECIFICATIONS 29
ARTICLE XX - DEFAULT 29
ARTICLE XXI - NOTICES 31
ARTICLE XXII - MEDIATION 32
ARTICLE XXIII - FINANCING MATTERS 34
ARTICLE XXIV - CONSTRUCTION 35
ARTICLE XXV - LAW APPLICABLE 35
ARTICLE XXVI - UNITED STATES APPROVAL 35
ARTICLE XXVII - ASSIGNMENT 35
ARTICLE XXVIII - AGREEMENT 36
LIST OF EXHIBITS
Exhibit "A" - Specifications
Exhibit "B" - Drawings
Exhibit "C" - Labor Rates for Time and Material Changes
Exhibit "D" - Parent Guaranty
Exhibit "E" - Standard Provisions
VESSEL CONSTRUCTION CONTRACT
THIS AGREEMENT is entered into as of this day of January, 1994 (the
"Agreement"), between Avondale Industries, Inc., a corporation organized and
existing under and by virtue of the laws of the State of Louisiana (the
"BUILDER"), appearing herein through its duly authorized officer, and Belle of
Orleans, L.L.C., (the "OWNER"), a Louisiana limited liability company, appearing
herein through Metro Riverboat Associates, Inc., its duly authorized member.
W I T N E S S E T H:
ARTICLE I - DEFINITIONS
1.1 Advancement Plan - as defined in Paragraph 7.9.
1.2 Agreement - as defined in the preamble.
1.3 Analysis - as defined in Paragraph 6.12.
1.4 Arrangements - as defined in Paragraph 2.4.
1.5 Builder - as defined in the preamble.
1.6 Change Order - as defined in Paragraph 12.4.
1.7 Claim - A "Claim" shall mean a demand or assertion by one of the parties
seeking, as a matter of right, adjustment or interpretation of Contract terms,
payment of money, extension of Contract time or other relief with respect to the
terms of the Contract. The term "Claim" also includes other disputes and matters
in question between OWNER and BUILDER arising out of or relating to the
Contract. Claims must be made by written notice. The responsibility of
substantiating Claims shall rest with the party making the Claim.
1.8 Commission - as defined in Paragraph 4.1.
1.9 Contract - as defined in Paragraph 3.1.
1.10 Contract Price - as defined in Paragraph 5.1.
1.11 Contract Time - "Contract Time" is the time elapsed between the
confirmation of the reconfiguration Arrangements by Change Order pursuant to
Paragraph 2.4 and the Scheduled Delivery Date, as adjusted hereunder.
1.12 Contract Documents - as defined in Paragraph 3.1.
1.13 Construction Schedule - as defined in Paragraph 6.11.
1.14 Defect - as defined in Paragraph 14.2.
1.15 Division - as defined in Paragraph 4.2.
1.16 Drawings - The "Drawings" are the graphic and pictorial portions of the
Contract Documents showing the design, location and dimensions of the Work,
generally including the outboard profile and arrangement plans, elevations,
sections, details, schedules and diagrams.
1.17 Force Majeure - as defined in Article XIII.
1.18 Good Shipbuilding Practices - as defined in Paragraph 7.1.
1.19 Indemnitees - "Indemnitees" shall include the party indemnified, and its
subsidiaries, partners and principals and each of their respective directors,
officers, agents, servants and employees.
1.20 Invoice for Payment - as defined in Paragraph 5.4.
1.21 Lender - as defined in Paragraph 23.1.
1.22 Mediator - as defined in Paragraph 22.3.
1.23 Milestones - "Milestones" are the names given to the completion of
certain events of construction which are critical to the timely completion of
the Work except for milestone (#l) and the thirty (30) day milestone (#2). The
milestones are set forth in Paragraph 5.2.
1.24 Owner - as defined in the preamble.
1.25 Owner's Representative - as defined in Paragraph 9.5.
1.26 Payment Schedule - as defined in Paragraph 5.2.
1.27 Principal Portion of the Work - The term "Principal Portion of the Work"
shall mean that which exceeds $250,000.00.
1.28 Project - The "Project" is the total construction of the Vessel of which
the Work performed under the Contract Documents is a part and which includes
construction by OWNER or by other contractors.
1.29 Project Manager - as defined in Paragraph 7.8.
1.30 Project Materials - as defined in Paragraph 19.1.
1.31 Scheduled Delivery Date - as defined in Paragraph 6.1.
1.32 Specifications - The "Specifications" are that portion of the Contract
Documents consisting of the written requirements for materials, equipment,
construction systems, standards and workmanship for the Work, and performance of
related services, which are attached hereto as Exhibit "A".
1.33 Work - The term "Work" means the work required by the Contract Documents,
whether completed or partially completed, and includes all other labor,
materials, equipment and services provided or to be provided by the BUILDER to
fulfill the BUILDER's obligations. The Work constitutes a part of the Project.
1.34 Vessel - as defined in Paragraph 2.3.
1.35 Unless otherwise stated in the Contract Documents, words which have well
known technical or shipbuilding industry meanings are used in the Contract
Documents in accordance with such recognized meanings.
ARTICLE II - DESCRIPTION OF VESSEL
2.1 BUILDER, for and in consideration of the sum to be paid it by OWNER as
hereinafter set forth agrees to build, equip, and deliver complete to OWNER,
afloat at BUILDER'S yard in Westwego, Louisiana free and clear from all liens,
and encumbrances, one (1) Paddlewheel Gaming Vessel, which shall be constructed
in accordance with the following documents, which have concurrently been
identified by the parties hereto and made a part hereof as if fully set forth
herein:
a. Specifications, dated 1/6/94, Revisions , attached
hereto as Exhibit "A".
b. Drawings numbered
93-049-001 - Outboard Profile (Revision 0)
93-049-002 - Hold Plan and Main Deck Arrangement
(Revision 0)
93-049-003 - 2nd and 3rd Deck Arrangements (Revision 0)
93-049-004 - 4th Deck and Pilothouse Arrangements,
(Revision 0) attached hereto as Exhibit "B".
2.2 The Vessel shall be assigned BUILDER'S Hull No. 114.
2.3 Except for such OWNER-furnished equipment and services as may be listed
in the Specifications, BUILDER agrees to furnish all professional design
services, drawing development, engineering services, submittals, procurement,
fabrication, assembly, construction, testing, inspection, management,
supervision, quality control, quality assurance, trials, delivery to the
specified
location for delivery, plant, labor, tools, equipment and material, and
miscellaneous support services, either expressly or reasonably required to
produce a complete, ready-for-use Vessel, as contemplated by the Contract
Documents (the "Vessel").
2.4 OWNER and BUILDER acknowledge that the Drawings and Specifications will
require some reconfiguration of the Vessel's gaming and/or gaming related
area(s), limited to those areas which do not include the Vessel's structural,
stability, main vertical fire zones, stairway and egress routes and hull lines,
layout arrangements (the "Arrangements") in order to suit OWNER'S needs. BUILDER
agrees to make such reconfiguration to the Drawings and Specifications in
accordance with OWNER'S reasonable wishes, and OWNER agrees to cooperate with
BUILDER in determining the necessary reconfiguration of the Arrangements,
provided, however that the parties agree that the reconfiguration of the
Arrangements has been considered in negotiating this Agreement and such
reconfiguration shall not give rise to a change in the Contract Price or in the
Contract Time. Within thirty (30) days of the date hereof, the parties agree to
meet to finalize the reconfiguration of the Arrangements by no cost Change Order
and payment of Milestone Number 2 funds.
2.5 Title to all material furnished by BUILDER shall vest in OWNER when the
same is either (a) actually installed or incorporated in the Work, or (b)
delivered to the yard or other location specifically approved by OWNER and paid
for by OWNER prior to incorporation into the Work, whichever occurs sooner.
BUILDER shall comply with all requirements of the Louisiana Ship Mortgage Law,
LA R.S. 9:5521 et seq, in connection with this Paragraph. BUILDER shall return
to OWNER all OWNER supplied material not required for the completion of the
Work.
2.6 The Vessel shall be constructed in accordance with the Drawings and
Specifications furnished by BUILDER.
ARTICLE III - CONTRACT
3.1 The Contract Documents (the "Contract Documents") consist of this
Agreement, the Drawings, the Specifications, and all written modifications
issued after execution of this Agreement. These form the Contract (the
"Contract"), and all are as fully a part of the Contract as if attached to this
Agreement or repeated herein. An enumeration of the Contract Documents appears
in Article I. The Contract may be amended or modified only by a written
modification. The Contract Documents shall be signed by OWNER and BUILDER.
3.2 The intent of the parties as enumerated in the Contract
Documents is for BUILDER to design and complete a fully functional Vessel for
the Contract Price and within the Contract Time. The Drawings and Specifications
are to be considered as cooperative and all work necessary for the execution of
the Work if shown on the Drawings and not described in the Specifications and
all work described in the Specifications and not shown on the Drawings, shall be
considered as a part of the Work and shall be executed by BUILDER in the same
manner and with the same character of material as other portions of the Contract
without extra compensation.
3.3 Unless expressly stipulated otherwise, BUILDER shall provide and pay
for all services, labor, overtime labor, standby labor, methods, materials,
equipment, transportation, fuel, taxes, permits and fees and all other
facilities and services necessary to complete the Vessel for the Contract Price
within the Contract Time.
3.4 All general language or requirements contained in the Specifications
and all other requirements inconsistent or in conflict with the provisions of
this Agreement are superseded by this Agreement, it being the intent of the
parties that the provisions of this Agreement shall prevail. If there is any
conflict or inconsistency between the Specifications and the Drawings, the
Specifications shall control.
ARTICLE IV - REGULATORY COMPLIANCE
4.1 The effective date of this Contract shall be the date of execution by
both parties and the receipt by BUILDER of the executed Parent Guaranty of
Exhibit "D". Notwithstanding anything herein to the contrary, the parties
acknowledge that pursuant to the rules and regulations of the Louisiana
Riverboat Gaming Commission (the "Commission"), OWNER must file a copy of this
Construction Contract with the Commission within five (5) days of execution by
all parties. Should the Commission reject the Contract or fail to approve the
Contract, both parties to this Contract hereby agree to cooperate in making such
changes to the Contract as may be required by the commission.
4.2 BUILDER represents and warrants that the Drawings and Specifications
will comply with the standards and requirements set forth in La. R.S. 4:504 et
seq., and the regulations promulgated by the Commission and the Louisiana
Riverboat Gaming Enforcement Division (the "Division") which are in effect as of
the date of execution of this Agreement. Should revisions to the Drawings or
Specifications be required by the Commission because said Drawings and
Specifications do not comply with the standards set forth in the law or the
regulations, BUILDER agrees to perform all such revisions at its sole cost. Any
revisions in the Drawings and Specifications required by changes in the law or
regulations subsequent to execution of this Agreement shall be for the account
of OWNER. If such revisions are necessary because of any reason other than an
error or omission of BUILDER in failing to comply with the objective standards
set forth in the law and the regulations, the revisions shall be treated as a
Change Order hereunder. Any conflict between U.S. Coast Guard regulations and
any other Federal, State or Local laws or regulations, the U.S.
Coast Guard regulations shall prevail.
4.3 BUILDER shall provide access to the Work to any authorized
representative of the Commission and Division. Upon presentation of valid
identification, any member or employee of the Commission or Division shall have
the right at all times to inspect all portions or component parts of the Work.
BUILDER agrees to cooperate with representatives and/or members of the
Commission and the Division. Such cooperation shall include but not be limited
to providing any assistance required by these representatives during said
inspection.
4.4 The Vessel shall be constructed to meet the applicable requirements of
regulatory bodies including but not limited to U.S. Public Health Service
Certified; U.S. Coast Guard Certified per Sub-Chapter "H", A.B.S. (to the extent
required by the U.S. Coast Guard); and as set forth in the Contract Documents,
and interim and final certificates evidencing the required classifications shall
be furnished by BUILDER to OWNER. BUILDER shall pay all fees necessary to secure
such certificates. The Vessel shall meet all requirements of the Specifications
for the Americans with Disabilities Act.
4.5 In the event either party hereto becomes aware that any portion of the
Contract Documents violate any rule or regulation of the U.S. Coast Guard or
other regulatory authority, such party shall immediately notify the other of
said violation. In this event, BUILDER will stop work involving the area of such
violation until OWNER and BUILDER agree on the modification necessary to secure
compliance. BUILDER shall be responsible for any increase in cost or time delay
necessitated by a violation of U.S. Coast Guard rules or regulations in the
Contract Documents in effect at the time of execution of this Contract.
4.6 If any enforced changes in the U.S. Coast Guard or U.S. Public Health
Service rules or in the applicable rules of any governmental agency are made
subsequent to the date of this Contract, whereby the Contract Price is increased
and/or the Contract Time is extended, OWNER shall authorize and pay for, in
accordance with the terms of this Contract, as a change under this Contract,
such alterations, additional work items, outfit and/or equipment or additional
time as may be required to meet the enforced changes.
4.7 BUILDER shall submit Drawings and Specifications to any
regulatory agencies or authorities required by law. BUILDER shall pay for all
fees and permits necessary to accomplish the Work.
4.8 BUILDER shall comply with and give notices required by laws,
ordinances, rules, regulations and lawful orders of public authorities bearing
on performance of the Work.
4.9 BUILDER shall keep OWNER informed of any changes in law, rules,
approvals or permit required by the U.S. Coast Guard or U.S. Public Health
Service for the Project. BUILDER will not be responsible for informing OWNER of
any changes in state law, including gaming laws, except to the extent BUILDER
become aware of said changes.
4.10 BUILDER shall ensure that the Drawings and Specifications are in
accordance with applicable laws, statutes, codes, and rules and regulations,
except as expressly provided herein.
4.11 If BUILDER performs Work which is contrary to laws, statutes, codes
and rules and regulations without such notice to OWNER, BUILDER shall assume
full responsibility for the repair, removal or remediation of such Work and
shall bear the attributable costs. If the laws, codes, statutes or rules change
during construction and such changes which affect the Work already performed or
to be performed, such changes shall be made by Change Order.
ARTICLE V - PRICE AND PAYMENT
5.1 OWNER, in consideration of the true and faithful performance on the
part of BUILDER, agrees to pay to BUILDER the sum of $27,881,000.00 for the
Vessel as adjusted by Change Orders issued hereunder (the "Contract Price").
5.2 OWNER agrees to pay BUILDER according to the following payment schedule
(the "Payment Schedule") for the Work:
MILESTONE
NUMBER* MILESTONE DEFINITION PERCENTAGE
(% of Contract Price)
1 Contract Signed Contract is signed for
construction of Vessel 1%
2 Sign-off on OWNER and BUILDER
Drawings and mutually sign-off on
Specifications Vessel Drawings and
Specs (on or before 30
days) 19%
3 Lay Keel Complete structural
fabrication of lead
innerbottom module
including bottom plate,
tank top and transverse
structure. 10%
4 Complete Complete the joining of
Erection of both innerbottom modules
innerbottom on shipway. 10%
5 Hull Erected Hull modules, from main
deck down, are erected
on shipway. 10%
6 Superstructure Complete erection of 50%
Erection 50% of Superstructure units
complete (excluding pilot house). 15%
7 Start Joiner Commence joiner work
onboard Vessel 2%
8 Set Pilot House Pilot House is set onto
Vessel superstructure. 11%
9 Launch Vessel is launched from
launchway. 11%
10 Delivery OWNER takes delivery of
Vessel. 11%
(*Subject to adjustment in accordance with Paragraph 6.11.)
5.3 Retainage in the amount of ten percent (10%) of each payment shall be
withheld from each payment up to 50% of completion. Thereafter no additional
retainage will be withheld.
5.4 Milestones shall be completed sequentially and no payment for any
Milestones other than Numbers 1 and 2 shall be due until at least Twenty (20)
days has passed from notice to OWNER of completion of the previous Milestone.
Upon completion of each Milestone, BUILDER shall notify OWNER in writing by
submitting an Invoice for Payment (the "Invoice for Payment"). OWNER shall be
entitled to inspect the progress and confirm achievement of the Milestone.
BUILDER shall invoice OWNER for the percentage of Contract Price payable for
that Milestone. Within ten (10) days of receiving BUILDER'S Invoice for Payment
on any Milestone, OWNER
will notify BUILDER if it determines that the Milestone has not in fact been
achieved along with OWNER'S reasons for said determination. OWNER'S failure to
notify BUILDER within ten (10) days of receipt of an Invoice for Payment shall
constitute OWNER'S acceptance of the Milestone as complete.
5.5 BUILDER shall submit, together with each Invoice for Payment, other
than Numbers 1 and 2, an affidavit including 1) BUILDER'S certification that the
Milestone has been reached, and 2) BUILDER'S statement that it is aware of no
liens filed against the Work by itself, any third party, supplier, vendor,
laborer or subcontractor of any tier, or a description of any lien(s) which have
been filed against the Work.
5.6 Providing OWNER has not rejected BUILDER'S invoice for payment pursuant
to Paragraph 5.4 (except in the case of reconfiguration of the Arrangements and
Delivery), OWNER shall pay such invoice not later than twenty (20) days after
said submittal. OWNER shall pay that portion of all Change Orders approved as of
the date of an Invoice for Payment representing the percentage of completion of
the Work associated with the Milestone for which payment is requested.
5.7 A payment shall in no way lessen the responsibility of BUILDER to
correct and/or replace work, if it shall be later discovered to have been
improperly done or not according to this Contract or the plans, drawings,
specifications or other Contract Documents. The payments requested under this
Article shall not in any respect be deemed to be an acceptance of work
theretofore done, nor shall they release BUILDER from any responsibility
whatsoever in connection therewith.
5.8 Invoices for Milestones 1 (Contract Signing), Confirmation of
Arrangements and 11 (Delivery) shall be paid upon receipt.
5.10 On the day of delivery of the Vessel, OWNER shall pay to BUILDER the
full amount of the Contract Price, as adjusted, including all holdbacks, except
for retainage, less any amounts previously paid.
5.11 Payment of the retainage accumulated hereunder shall be due sixty (60)
days after delivery of the Vessel except for the cost of completing any
unfinished Work or correcting any warranty Defects known on the sixtieth day
following delivery. Said cost of completion and correction may be retained by
OWNER until the correction of the warranty Defect is complete.
5.12 In the event that any party hereto becomes aware of any materialman's
or workmans liens or privileges which are filed or have arisen against the
Project or any portion thereof, or any
property of OWNER in connection with this Project when such lien or privilege
results from the Work of BUILDER, any of its Subcontractors, Sub-subcontractors
or materialmen, BUILDER agrees to cause such liens or privileges to be removed,
or file a bond in lieu thereof, within ten (10) days of learning of such lien,
at its sole expense. If any such lien or privilege is filed and BUILDER does not
cause such lien or privilege to be removed or bonded, OWNER shall have the right
to pay all sums necessary to obtain removal of such lien or privilege and deduct
all sums to be paid from the Contract Price or from the next succeeding payment
until OWNER shall recoup the total amount of such lien or privilege.
ARTICLE VI - TIME AND CONDITIONS OF DELIVERY
6.1 Time is of the essence in this Contract. The Vessel, after required
trials set forth in the Specifications, completed in accordance with the
Specifications and the Drawings, shall be delivered to OWNER, subject to the
qualifications of this Contract, on or before 12 months and 15 days from the
date of the second payment required hereunder (Confirmation of Arrangements), or
on such later date or dates as may be required by reason of Change Orders agreed
to by BUILDER and OWNER, or by reason of specified delays resulting from "Force
Majeure", as that term is defined herein, (the "Scheduled Delivery Date").
6.2 BUILDER shall furnish OWNER upon delivery of the Vessel a BUILDER'S
certificate together with whatever other documents may be required by law or by
any regulatory agency of the United States having jurisdiction on the premises
in order for OWNER to document the Vessel in its name. Any expense in connection
with the furnishing of such documents and with the documentation of such Vessel
shall be paid by OWNER. In addition BUILDER shall furnish OWNER on delivery of
the Vessel with the following:
a. An affidavit by BUILDER that all bills, costs and expenses related to
the Vessel have been paid, or will be paid in the normal course of business,
including, without limitation, all subcontractors, suppliers and materialmen and
stating that the Vessel is free and clear of all liens and encumbrances.
b. A bill of sale warranting good and marketable title to the Vessel.
c. A Certificate of BUILDER that the Vessel has been constructed and
completed in accordance and conformity with the Specifications and the working
drawings.
d. A complete set of as-built drawings of the Vessel on mylar
transparencies and on Autocad 12 or such other format as shall be subsequently
in use by BUILDER.
6.3 The Vessel shall be built and delivered by BUILDER and accepted at
BUILDER'S yard in Louisiana or such other location in the New Orleans area as
OWNER may designate at its additional cost. OWNER shall execute a delivery and
acceptance certificate at the time of delivery and acceptance of the Vessel.
6.4 In the event BUILDER shall deliver the Vessel before the Scheduled
Delivery Date, OWNER shall increase the Contract Price in the amount of
$5,000.00 per day for each and every day up to a maximum of thirty (30) days
that the actual vessel delivery precedes the Scheduled Delivery Date set forth
in Paragraph 6.1 hereof, as adjusted under the terms of this Agreement.
6.5 If completion and delivery of the Vessel shall be delayed beyond the
Scheduled Delivery Date, it is agreed that OWNER will suffer damages which are
difficult of ascertainment and the parties hereby agree that OWNER shall sustain
liquidated damages. The liquidated damages set forth hereinafter shall be
OWNER'S sole remedy for late delivery.
6.6 In the event BUILDER shall deliver the Vessel later than the seven (7)
days after the Scheduled Delivery Date, but on or before twenty (20) days after
the Scheduled Delivery Date, BUILDER shall pay to OWNER as liquidated damages in
the form of a reduction in the Contract Price, to the extent any amounts are
still owing, the amount of ($12,868.15) per day for each and every day that the
actual vessel delivery date exceeds the Scheduled Delivery Date, as adjusted.
6.7 In the event BUILDER shall deliver the Vessel later than twenty (20)
days after the Scheduled Delivery Date, but on or before forty (40) days after
the Scheduled Delivery Date, BUILDER shall pay to OWNER as liquidated damages in
the form of a reduction in the Contract Price, to the extent any amounts are
still owing, the amount of ($16,728.60) per day for each and every day that the
actual vessel delivery date exceeds twenty (20) days after the Scheduled
Delivery Date, as adjusted. Any amount payable as liquidated damages under this
paragraph shall be in addition to the reduction in price provided in the
preceding paragraph.
6.8 In the event BUILDER shall deliver the Vessel later than forty (40)
days after the Scheduled Delivery Date, but on or before sixty (60) days after
the Scheduled Delivery Date, BUILDER shall pay to OWNER as liquidated damages in
the form of a reduction in the Contract Price, to the extent any amounts are
still owing, the amount of ($25,092.90) per day for each and every day that the
actual vessel delivery date exceeds forty (40) days after the Scheduled Delivery
Date, as adjusted. Any amount payable as liquidated damages under this paragraph
shall be in addition to the reduction in price provided in the preceding
paragraph.
6.9 In the event BUILDER shall deliver the Vessel later than sixty (60)
days after the Scheduled Delivery Date, but on or before seventy-seven (77) days
after the Scheduled Delivery Date, BUILDER shall pay to OWNER as liquidated
damages in the form of a reduction in the Contract Price, to the extent any
amounts are still owing, the amount of ($39,361.41) per day for each and every
day that the actual vessel delivery date exceeds sixty (60) days after the
Scheduled Delivery Date, as adjusted. Any amount payable as liquidated damages
under this paragraph shall be in addition to the reduction in price provided in
the preceding paragraph. OWNER and BUILDER agree that the aggregate maximum
amount of liquidated damages that BUILDER shall be responsible for is six
percent (6%) of the Contract Price. In the event of an increase in purchase
price pursuant to Change Order(s), liquidated damages shall be adjusted upward
to reflect a maximum of six percent (6%) of the total Contract Price. Such
adjustment shall be made by dividing six (6%) percent of the increase in the
purchase price by the number of sixteen (16) days and adding that number to the
amount stated in Paragraph 6.9 herein.
6.10 If BUILDER fails to deliver the Vessel on or before ninety (90) days
following the Scheduled Delivery Date, as adjusted, OWNER may terminate this
Contract and take possession of the Work, transport the Work in progress, at
BUILDER'S expense from BUILDER'S yard to another location, and complete the Work
by such means as OWNER reasonably deems fit. Upon notification of OWNER'S
termination of this Agreement, pursuant to this Article, BUILDER will promptly
undertake, at its sole cost, to place all Work in a suitable condition for
transportation to another location within Louisiana. BUILDER will assist OWNER
in the removal from the yard of any Work completed to the date when the work was
discontinued. In such event, BUILDER shall allow OWNER or OWNER'S
Representative(s), and other contractors continuing access to BUILDER'S yard for
a period of ninety (90) days following such termination in order to continue the
Work in progress. In such case, BUILDER shall not be entitled to receive any
further payment until the Work is completed. If the unpaid balance of the
Contract Price shall exceed the expense of completing the Work, including
reasonable compensation for additional managerial and administrative services,
such excess shall be paid to BUILDER. If such reprocurement expense, shall
exceed such unpaid balance, BUILDER shall pay the difference to OWNER promptly
on demand.
6.11 Within thirty (30) days after the award of the Contract, BUILDER shall
submit to OWNER a detailed Construction Schedule (the "Construction Schedule")
for completion of the Project within the Contract Time. Such schedule shall
indicate dates for commencement and completion of the various parts of the Work.
All points of interface between OWNER and BUILDER (i.e., all instances where
performance of BUILDER'S Work depends upon OWNER) and appropriate restraints
shall be included in the Construction Schedule. In
particular, but not by way of limitation, the required delivery date of each
item of OWNER furnished material and equipment shall be included, provided
however BUILDER shall not be responsible for including on the Construction
Schedule items to be furnished by OWNER, or OWNER'S separate Work of which
BUILDER is unaware because OWNER has not furnished BUILDER with necessary
information. In addition to any and all other parts of the Work shown, said
Construction Schedule shall indicate the dates of completion of the Milestones
set forth in the Payment Schedule.
6.12 OWNER and BUILDER shall meet from time to time to review the
Construction Schedule. If it is determined at any periodic schedule-review
meeting with OWNER that BUILDER is not substantially on schedule and that
completing the Work within the Contract Time is in jeopardy, BUILDER shall,
within three (3) days thereafter, provide a plan to OWNER, which plan must set
forth a revised Construction Schedule with a resequencing and/or acceleration of
elements of the Work in order to complete the Project within the Contract Time
or the shortest possible time thereafter. If either the OWNER or the BUILDER
believe that a revision of the Construction Schedule is needed because of delays
to or changes in the BUILDER'S work, the BUILDER shall submit to the OWNER a
written analysis (the "Analysis"). The Analysis shall illustrate what the
BUILDER believes is the influence of each change or delay on the Construction
Schedule and demonstrate how the BUILDER proposes to incorporate the change or
delay into the Work. If (1) BUILDER is continually or habitually late in
reaching Milestones, or (2) the Construction Schedule shows that BUILDER will be
substantially late in reaching said Milestones so as to delay the Scheduled
Delivery Date more than ninety (90) days, or (3) it is reasonably apparent that
the Scheduled Delivery Date will be delayed beyond ninety (90) days, then the
OWNER may, upon payment of BUILDER'S actual accrued cost and contractual
commitments, remove the Vessel to another yard for completion. This will be
OWNER'S sole remedy and BUILDER'S sole liability under this paragraph.
ARTICLE VII - BUILDER'S DUTIES AND STATUS
7.1 The BUILDER and OWNER accept the relationship of cooperation
established between them by this Agreement. BUILDER acknowledges that the
subject Vessel is being constructed as a riverboat gaming vessel for the
carriage of passengers in the tourism/gaming industry. BUILDER agrees to
construct the Vessel in accordance with good shipbuilding practices in order to
meet the appropriate standards of construction and levels of finish for the
class and type of vessel required herein by the Drawings and Specifications. The
parties agree to cooperate and further their respective and mutual interest in
completing this Contract. BUILDER agrees to furnish efficient business
administration and
superintendence and to make all efforts to furnish at all times an adequate
supply of workmen and materials with expedited promptness in order to preclude
delay in the orderly process of the Work. OWNER agrees to provide the financial
arrangements to fulfill its obligations under the Contract and furnish all
required information, services, reviews and equipment with expedited promptness
in order to preclude delay in the orderly progress of the Work. The parties will
perform the work in a manner consistent with the interests of the OWNER and
BUILDER and with good shipbuilding practices. "Good Shipbuilding Practices" for
this Article means the construction of a vessel to soundly conceived and
engineered detailed plans prepared by BUILDER with due consideration to a
standard of high quality, incorporating the specified components in order to
meet Specification requirements utilizing construction and testing methods that
ensure that the completed vessel will conform to the intended design required
for use in the tourist gaming industry consistent with the Specification
allowances.
7.2 BUILDER acknowledges that the Drawings and Specifications and other
portions of the Contract Documents relating to the design and construction of
the vessel have been or will be drawn and prepared by BUILDER, professionals,
and others selected, employed and paid by BUILDER. Design services shall be
performed by licensed, qualified and experienced architects, engineers,
professionals, and others selected and paid by BUILDER. However, nothing
contained herein shall create any contractual relationship between such persons
and OWNER.
7.3 BUILDER shall coordinate operations of Subcontractors and other persons
performing portions of the Work under a contract with BUILDER and shall see that
cooperation is obtained.
7.4 BUILDER shall be responsible to OWNER for acts and omissions of
BUILDER'S employees, Subcontractors and their agents and employees, and other
persons performing portions of the Work under a contract with BUILDER.
7.5 BUILDER shall not be relieved of obligations to perform the Work in
accordance with the Contract Documents either by activities or duties of OWNER
(except as expressly set forth in this Contract) or because of any tests,
inspections or approvals required or performed by persons other than BUILDER.
7.6 BUILDER shall be responsible for the cost of independent testing and
inspection and, when required, testing of portions of Work already performed
under this Contract to determine that such portions are in proper condition to
receive subsequent Work.
7.7 BUILDER will prepare Change Orders.
7.8 BUILDER shall employ a competent, full time Project Manager (the
"Project Manager"), who shall initially be Barry Fassbender. The Project Manager
shall be in attendance at the Project site during the progress of the Work as
the Work requires. The Project Manager shall represent BUILDER, and all
communications given to the Project Manager shall be binding as if given to
BUILDER. All communications shall be confirmed on written request in each case.
BUILDER shall not replace the Project Manager without OWNER'S prior approval,
which shall not be unreasonably withheld.
7.9 BUILDER acknowledges that OWNER'S submissions to the Commission include
a commitment to develop a program regarding the recruitment, training, and
advancement of, and the awarding of contracts to, minorities, women and
Louisiana residents (the "Advancement Plan") in the construction, planning,
development and operation of the Project. BUILDER, in conjunction with the
requirements of the Advancement Plan, hereby agrees to make good faith efforts
to reach those goals contained in the Advancement Plan with regard to the hiring
of women and minorities as employees, with the selection and retention of
subcontractors, and for the procurement of goods from minority-owned and
women-owned firms. OWNER and BUILDER acknowledge that such goals are flexible
and are not designed to be quotas nor to discriminate against any individual and
that OWNER and BUILDER will make good faith efforts to meet these goals. It is
acknowledged, however, that BUILDER must hire skilled workers to construct the
Vessel according to Good Shipbuilding Practice, and that these goals will not
restrict BUILDER'S ultimate authority in the hiring of skilled workers.
7.10 OWNER shall have an option to request BUILDER to furnish within thirty
(30) days of payment of Milestone Number 2 a payment and performance bond
covering faithful performance of the Contract and payment of obligations arising
thereunder for the full value of the Contract Price. The cost of the bond will
be for the account of OWNER that is reimbursed to BUILDER by adding the bond
premium to the next milestone payment following the furnishing of the bond. The
bond provisions and underwriters will be reasonably acceptable to the OWNER and
BUILDER. The issue of the bond will be subject to the market and rates
applicable during the option period following payment of Milestone Number 2 and
the approval of the Agreement by the bonding company.
ARTICLE VIII - SUBCONTRACTS AND OTHER AGREEMENTS
8.1 All portions of the Work that BUILDER'S organization does not perform
shall be performed under Subcontracts or by other appropriate agreement with
BUILDER. Nothing contained in the Contract Documents shall create any
contractual relationship between OWNER and any Subcontractor.
8.2 Unless otherwise stated in the Contract Documents or the bidding
requirements, BUILDER, as soon as practicable after award of the Contract, shall
furnish in writing to OWNER the names of persons or entities (including those
who are to furnish materials or equipment fabricated to a special design)
proposed for each Principal Portion of the Work.
8.3 BUILDER shall not change a Subcontractor, previously selected without
first notifying OWNER.
8.4 Each contract entered into by BUILDER (after execution of this
Agreement) with any Subcontractor or materialman shall provide that, if this
Contract is terminated for any reason, such contract with a Subcontractor or
materialman shall be, by its terms, at OWNER'S option, assigned to and assumed
by OWNER or a person designated by OWNER, without any need for action by BUILDER
or such Subcontractor or materialman, and such Subcontractor or materialman
shall continue to be bound by such contract. This provision shall survive the
termination of the Contract.
8.5 BUILDER shall use its best efforts to include in all Subcontracts for a
Principal Portion of the Work a provision permitting voluntary termination by
BUILDER without cancellation charge or penalty.
8.6 BUILDER shall furnish to OWNER a copy of each subcontract it enters
into for a Principal Portion of the Work in connection with the Project within
ten (10) days after execution of such subcontract.
ARTICLE IX - OWNER'S DUTIES AND STATUS
9.1 OWNER may be full time or may visit the site at intervals appropriate
to the stage of construction to become generally familiar with the progress and
quality of the completed Work and to determine in general if the Work is being
performed in a manner indicating that the Work, when completed, will be in
accordance with the Contract Documents. However, the OWNER will not be required
or waive any of its rights hereunder for failure to make on-site inspections to
check quality or quantity of the Work.
9.2 The OWNER will not have control over or charge of and will not be
responsible for design or construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in connection with the Work,
since these are solely the responsibility of BUILDER. OWNER shall not be
responsible for BUILDER'S failure to carry out the Work in accordance with the
Contract Documents. OWNER will not have control over or charge of and will not
be responsible for acts or omissions of BUILDER, Subcontractors, or their agents
or employees, or of any other
persons performing portions of the Work.
9.3 OWNER will have authority to reject Work which does not conform to the
Contract Documents, provided that any notice of such rejection shall be in
writing to BUILDER and shall state the precise nature and reason for rejection.
Whenever the OWNER considers it necessary or advisable, OWNER will have
authority to require additional inspection or testing of the Work in accordance
with the Contract Documents, whether or not such Work is fabricated, installed
or completed. However, neither this authority of OWNER nor a decision made in
good faith either to exercise or not to exercise such authority shall give rise
to a duty or responsibility of OWNER to BUILDER, Subcontractors, material and
equipment suppliers, their agents or employees, or other persons performing
portions of the Work. If the OWNER determines that portions of the Work require
additional testing or inspection, the OWNER will instruct the BUILDER to make
arrangements for such additional testing or inspection by an entity acceptable
to OWNER, and BUILDER shall give timely notice to OWNER of when and where tests
and inspection are to be made so OWNER may observe such procedures. The OWNER
shall bear costs except as provided herein. If any testing or inspection
discloses that any methods or means of construction or material or workmanship
are not acceptable under the Contract Documents, the BUILDER shall reimburse the
OWNER for the costs of such tests and inspections, including the cost of related
labor and facilities.
9.4 OWNER shall be responsible to BUILDER for the acts and omissions of
OWNER'S employees, subcontractors and their agents and employees and other
persons performing portions of the Project under a contract with OWNER.
9.5 Within fifteen (15) days of award of the Contract, OWNER shall appoint
its interior design agent and OWNER'S Representative (the "OWNERs
Representative") and shall make them available to work with BUILDER to develop
the construction Schedule.
9.6 Within ninety (90) days of payment of Milestone Number 2, OWNER shall
make available to BUILDER all technical information necessary for incorporating
all OWNER furnished equipment into the Vessel design along with the list of
vendors selected to provide such equipment.
9.7 Within one hundred twenty (120) days of payment of Milestone Number 2,
OWNER shall present to BUILDER the finalized aspects of all interior design and
allowance items impacting the detailed engineering efforts of BUILDER and joiner
contractor, and shall have final selections of all equipment and materials
identified as "long lead items" by the Construction Schedule. Certain long lead
items shall be identified by BUILDER within thirty (30) days of execution
hereof. With respect to those items
so identified, OWNER shall present information to BUILDER in such shorter time
period, as shall be reasonably required by BUILDER which shall be in no event
shorter than sixty (60) days.
9.8 OWNER will review and comment upon or take other appropriate action
upon BUILDER'S submittals such as Shop Drawings, product Data and Samples, but
only for the limited purpose of checking for conformance with OWNER'S wishes.
OWNER'S action will be taken with such reasonable promptness as to cause no
delay in the Work or in the activities of the BUILDER or separate contractors,
while allowing sufficient time to permit adequate review not to exceed ten (10)
days. Review of such submittals is not conducted for the purpose of determining
the accuracy and completeness of other details such as dimensions and
quantities, or for substantiating instructions for installation or performance
of equipment or systems, all of which remain the responsibility of BUILDER as
required by the Contract Documents. OWNER'S review of BUILDER'S submittals shall
not relieve BUILDER of the obligations under the Contract Documents. OWNER'S
review shall not constitute approval of safety precautions or of any
construction means, methods, techniques, sequences or procedures. The OWNER'S
approval of a specific item shall not indicate approval of an assembly of which
the item is a component.
9.9 OWNER may engage other contractor's or its own personnel to perform
work in connection with the Project, including installation of furniture,
fixtures or equipment, but only subject to this Agreement. More than one builder
may be engaged to perform work in a single trade. BUILDER shall cooperate with
and fully coordinate its Work with the work of OWNER and the other contractors.
BUILDER shall immediately report to OWNER, in writing, any apparent deficiencies
in the other contractors' work which would affect the Work hereunder.
ARTICLE X - OWNER'S RIGHT TO STOP WORK
10.1 If BUILDER fails to correct Work which is not in accordance with the
requirements of the Contract Documents or persistently fails to carry out Work
in accordance with the Contract Documents, and such failure continues for ten
(10) days after written notice from OWNER, OWNER, by written order or by the
OWNER'S Representative or an agent specifically so empowered by OWNER in
writing, may order BUILDER to stop the Work, or any portion thereof, until the
cause for such order has been eliminated; however, the right of OWNER to stop
the Work shall not give rise to a duty on the part of OWNER to exercise this
right for the benefit of BUILDER or any other person or entity.
10.2 OWNER'S right to stop the Work shall not relieve BUILDER of any of its
responsibilities or obligations under the Contract Documents and shall be in
addition to and not in restriction or
derogation of OWNER'S right to terminate hereunder.
10.3 In the event that OWNER exercises its right to stop the Work pursuant
to Article X, BUILDER'S sole remedy shall be an extension of the Contract Time
for a period equal to the time during which the Work was stopped.
ARTICLE XI - INSPECTION BY OWNER'S REPRESENTATIVE
11.1 BUILDER will furnish reasonable space at its yard for the duly
authorized representative(s) of OWNER who shall have reasonable access to the
work of BUILDER whenever the yard is open for business and at all times when
Work is being done, wherever located. BUILDER shall furnish OWNER on a monthly
basis a schedule of the work to be performed on the Vessel and OWNER'S
Representative(s) may inspect all workmanship and material which is in
conformity with this Contract, the Specifications and the Drawings, and may
reject all workmanship and material which does not comply with this Contract,
the Specifications and the Drawings, provided that any inspection or failure to
inspect or failure to reject workmanship and material by OWNER'S Representative
shall not prejudice the rights of OWNER under the provisions of this Contract.
11.2 BUILDER shall promptly correct Work rejected by OWNER for failing to
conform to the requirements of the Contract Documents. BUILDER shall bear costs
of correcting such rejected Work, including additional testing and inspections
and expenses made necessary thereby.
11.3 In the most expeditious manner, however without delaying the
Construction Schedule, BUILDER shall promptly remove from the Vessel portions of
the Work which are not in accordance with the requirements of the Contract
Documents and have been neither corrected by BUILDER nor accepted by OWNER.
11.4 If BUILDER does not proceed with correction of such nonconforming Work
within a reasonable time fixed by written notice from OWNER (provided however,
that BUILDER shall not be required to remove work in a manner which would delay
the Construction Schedule), OWNER may remove it and store the salvable materials
or equipment at BUILDER'S expense.
11.5 If OWNER prefers to accept Work which is not in accordance with the
requirements of the Contract Documents, OWNER may do so instead of requiring its
removal or correction, in which case the Contract Price will be reduced as
agreed to and equitable. Such adjustment shall be effected whether or not final
payment has been made.
ARTICLE XII-CHANGES IN THE WORK
12.1 Subject to the requirements of other work then pending in the yard,
the right is reserved by OWNER to make any deductions from or additions to the
Specifications and the Drawings on giving due notice in writing to BUILDER, the
amount of any such changes to be agreed upon in advance by OWNER and BUILDER,
and added to, or deducted from the total Contract Price. If any such change
shall delay the completion of the work, BUILDER shall be allowed reasonable
additional time sufficient to cover such delay. A statement of the increased or
reduced amount, and/or any additional time required, as aforesaid, shall be
submitted to OWNER by BUILDER, and shall be approved by OWNER in writing before
any such change is made.
12.2 Changes in the Work may be accomplished after execution of the
Contract, and without invalidating the Contract, by Change Order, subject to the
limitations herein.
12.3 Changes in the Work shall be performed under applicable provisions of
the Contract Documents, and BUILDER shall proceed promptly, unless otherwise
provided in the Change Order.
12.4 A Change Order ("Change Order") is a written instrument prepared by
BUILDER and signed by OWNER and BUILDER, stating their agreement upon a change
in the Work; the amount of the adjustment in the Contract Price, if any; and the
extent of the adjustment in the Contract Time, if any.
12.5 When OWNER and BUILDER agree on adjustments in the Contract Price and
Contract Time, or otherwise reach agreement upon the adjustments, such agreement
shall be effective immediately and shall be recorded by preparation and
execution of an appropriate Change Order.
12.6 If BUILDER wishes to make a Claim for an increase in the Contract
Price, he shall give OWNER written notice thereof as provided herein. This
notice shall be given by BUILDER before proceeding to execute the Work, except
in an emergency endangering life or property in which case BUILDER may proceed.
No such Claim shall be valid unless so made. If OWNER and BUILDER cannot agree
on the amount of the adjustment in the Contract Price, the parties may invoke
voluntary mediation as described herein or it shall be determined by Judicial
Proceeding. Any change in the Contract Price resulting from such Claim shall be
authorized by a Change Order.
12.7 BUILDER shall itemize each Claim for adjustment to Contract Price
brought about by changes to Work, as to labor, material and services involved.
BUILDER'S itemized estimate sheet showing changes or credits for additions to or
deductions from Work
as shown on Drawings and described in Specifications shall at all
times be open to inspection by the OWNER.
12.8 Changed or extra work will be paid for at the unit prices or lump sum
stipulated in the Change Order authorizing the work, or alternatively OWNER may
compensate BUILDER for such work on a time and materials basis to be computed in
the following manner. The percentages in items b and c below shall also apply to
a lump sum Change Order:
a. LABOR. For all labor and foremen in direct charge of the specific
operations, BUILDER shall be paid at the rates generally charged by BUILDER
for such work, as provided in Exhibit "C" attached hereto. These rates are
fully burdened and include, by way of example and not limitation, all
fringe benefits (Health and Welfare, Pension Fund, etc.), Worker's
Compensation, or Longshoreman's Insurance, subsistence and travel or camp
costs when applicable, and a labor markup (to cover additional bond,
property damage, liability insurance, unemployment insurance contributions,
social security and other taxes, administrative overhead costs and profit).
b. MATERIALS. For materials accepted by OWNER and actually used in the
changed or extra work, BUILDER shall receive the actual cost of such
materials delivered to BUILDER, including transportation charges, plus 10%
(as overhead and profit). BUILDER shall furnish invoices to OWNER for all
materials used in the Work plus freight charges when applicable.
c. EQUIPMENT. For any machinery or special equipment (other than small
tools) which have been authorized by OWNER, BUILDER shall receive the
rental rates specified in the Change Order authorizing the work. No
additional compensation will be made for other costs such as, but not
limited to, fuels, lubricants, replacement parts or maintenance costs.
(1) Equipment which must be rented or leased specifically for changed
or extra work required under this Section shall be authorized in writing by
OWNER. BUILDER shall be paid invoice price plus 5%.
(2) Time will be recorded to the nearest one-quarter hour of actual
use and exclusive of stand-by time for purposes of computing compensation
to BUILDER for equipment utilized under these rates.
d. GENERAL SUPERINTENDENCE. No additional allowance
will be made for general superintendence, the use of small
tools, or other costs for which no specific allowance is
herein provided.
e. RECORDS. BUILDER will maintain a daily record of
labor, equipment and materials utilized in the Work covered
under the Change Order and will present this record to OWNER
at the end of each day's work for verification and signature.
12.9 Unless specifically and expressly noted otherwise on its face, each
approved Change Order shall include all direct and indirect costs, including
delay, local disruption, cumulative disruption, acceleration and like costs
associated with resulting from, or incidental to the approved Change Order.
BUILDER hereby agrees that upon its acceptance of an approved Change Order,
BUILDER waives and releases all Claims for any and all additional costs or
delays in the Contract Time, including those based on cumulative disruption or
cumulative impact theories, resulting from an approved Change Order.
12.10 No change in the Work, whether by way of alteration or addition to
the Work, shall be the basis of an addition to the Contract Price or a change in
the Contract Time, unless and until such alteration or addition has been
authorized by a Change Order executed and issued in accordance with and in
strict compliance with the requirements of the Contract Documents.
ARTICLE XIII - FORCE MAJEURE
13.1 All obligations of the BUILDER contained in this Contract respecting
the Contract Time shall be subject to extension by reason of "Force Majeure",
which term is hereby declared to mean causes listed below that are beyond the
reasonable control of the BUILDER and only to the extent that such event
actually causes a delay. The parties agree that such events shall be limited to
the following: industrial or civil disturbances, riots or insurrections, arrests
and restraints of rulers and people; acts of God or acts of omissions of the
OWNER; war; preparation for war; blockade, sabotage, vandalism and malicious
mischief, landslides, floods, hurricanes, tornadoes, lightning, earthquakes or
other natural catastrophes; collisions and fires; non-delivery and/or late
delivery of any OWNER-furnished supplies, services, material or equipment (In
the event these OWNER items are late then it is agreed that OWNER shall pay the
reasonable additional costs of BUILDER because of such lateness.), which the
BUILDER by it best efforts cannot avoid; explosions, epidemics, unavoidable
casualties, or national emergencies; material interference in the orderly
prosecution by BUILDER of the Work by OWNER'S contractors or subcontractors;
Government or court orders, allocations or prohibitions. Rain shall not be
considered a "Force Majeure" event unless its occurrence requires a shutdown of
a substantial portion of all outside fabrication, assembly or painting work in
the
BUILDER'S yard of the Work prior to 12:00 noon on a regularly scheduled work
day. For each day on which rain requires a shut down as aforesaid, BUILDER shall
be entitled to one (1) day's extension of the Contract Time. Force Majeure shall
not include (i) shortage of skilled labor, (ii) delays in receiving materials,
except as provided below, or (iii) delays of carriers by land, sea or air. Force
Majeure may include delays of subcontractors or delays in receiving material,
only if such delays are caused by a Force Majeure event.
13.2 Within three (3) working days of knowledge of any "Force Majeure"
event involving rain which may affect the Contract Time, the BUILDER shall
notify the OWNER in writing and shall furnish an estimate, if possible, of the
extent of the probable delay. Upon receipt of any such notice, the OWNER shall,
within five (5) working days, acknowledge the same in writing and indicate
agreement that such development is to be treated as a "Force Majeure" event, or
state any objections, and the reasons therefor, to acceptance of this
development as a "Force Majeure" event. If BUILDER fails to notify OWNER of a
"Force Majeure" event involving rain within three (3) working days after
knowledge of the event, BUILDER shall be estopped from thereafter claiming
"Force Majeure" for any period of delay more than three (3) working days prior
to said notice. If OWNER should fail to respond within five (5) working days,
the extension of time shall be considered approved.
13.3 Within five (5) working days of knowledge of any other "Force Majeure"
event not involving rain which may affect the Contract Time, the BUILDER shall
notify the OWNER in writing and shall furnish an estimate, if possible, of the
extent of the probable delay. Upon receipt of any such notice, the OWNER shall,
within ten (10) working days, acknowledge the same in writing and indicate
agreement that such development is to be treated as a "Force Majeure" event, or
state any objections, and the reasons therefor, to acceptance of this
development as a "Force Majeure" event. If BUILDER fails to notify OWNER of a
"Force Majeure" event within five (5) working days after knowledge of the event,
BUILDER shall be estopped from thereafter claiming "Force Majeure" for any
period of delay more than five (5) working days prior to said notice. If OWNER
should fail to respond within ten (10) working days, the extension of time shall
be considered approved.
ARTICLE XIV - WARRANTY
14.1 BUILDER warrants that all labor and installations made shall meet the
requirements and standards described in the Specifications and the Drawings, and
all materials and all equipment used by BUILDER shall be of the quality set
forth in the Specifications and Drawings. All component parts of the Vessel,
except those specified or furnished by OWNER, shall conform to the
standards of first-class material for commercial vessels of this class. BUILDER,
however, does not warrant that any material or equipment purchased by it for
installation in the Vessel is free from manufacturer's defects, and specifically
disclaims any warranties, expressed or implied, with respect to such material or
equipment, but does hereby extend the manufacturer's warranty or guaranty, if
any, to OWNER. BUILDER will use its best efforts to secure a minimum of a one
year warranty on parts and labor from manufacturers equipment to be used in the
Vessel. BUILDER shall permit OWNER to inspect all component parts to be
installed in the Vessel and BUILDER shall advise and assist OWNER in said
inspection. BUILDER will use its best efforts and will cooperate with OWNER in
order to enforce any claims against manufacturer's defects that may occur.
14.2 Notwithstanding any inspection or failure to reject by OWNER or any
Regulatory Body pursuant to this Contract, if, at any time within 365 days after
delivery of the Vessel there shall appear or be discovered, any weakness, any
deficiency, and failure, any breaking down or deterioration in design, or
workmanship of BUILDER or its subcontractors in performing the contract work, or
any failure of the Vessel, so furnished by BUILDER to function as prescribed and
as intended by the Drawings and Specifications and this Contract ("Defect(s)"),
such Defect(s) shall be made good, at BUILDER'S expense, to the requirements of
the Drawings and Specifications and this Contract.
14.3 BUILDER'S warranty shall extend only to those Defects in workmanship
which are reported in writing to BUILDER within three hundred sixty-five (365)
days from the date of delivery of the Vessel. In the event OWNER notifies
BUILDER of any Defect covered under this warranty, BUILDER will make repairs
and/or replacement, if reasonably practicable, at the Vessel's berth location.
At BUILDER's option, provided repair at the Vessel's berth location is not
reasonably practicable, BUILDER may make such repair and/or replacement at one
of BUILDER'S yards without expense to OWNER for transporting the Vessel or any
component thereof to and from that yard; provided that if it is not practicable
to have the Vessel proceed to such yard, OWNER may, with the prior written
consent of BUILDER, have such repairs and/or replacement made elsewhere and in
such event, BUILDER will pay to OWNER a sum equivalent to the price BUILDER
would charge for remedying such Defect at its yard.
14.4 The sole and exclusive remedy of OWNER for any such Claim shall be the
obligation of BUILDER, under and pursuant to this Article, to repair and/or
replace, or cause to be repaired and/or replaced, any such defective workmanship
or installation of materials and equipment, provided such Defects have not been
caused by the negligent operation or maintenance of the Vessel, or its
equipment, after delivery, by those in charge of the Vessel's operations, or
other parties not in the employ of BUILDER.
Anything to the contrary notwithstanding, the ABOVE WARRANTY IS EXCLUSIVE AND
IN LIEU OF ALL OTHER WARRANTIES, SAVE THAT OF TITLE, WHETHER WRITTEN, ORAL, OR
IMPLIED, IN FACT OR BY LAW, AND SPECIFICALLY, ANY WARRANTY OF MERCHANTABILITY OF
FITNESS FOR A PARTICULAR PURPOSE IS EXCLUDED. In no event under this Agreement
shall BUILDER be responsible for any sum in excess of the cost of the repairs
and/or replacement as specified herein, it being specifically understood that
BUILDER is not responsible for delay, demurrage, loss of profits, loss of use or
any other consequential damages.
14.5 BUILDER shall have no responsibility whatsoever with respect to any
Defects or faulty workmanship not reported in writing to BUILDER within said
three hundred sixty-five (365) day period regardless of any negligence of
BUILDER or its employees or subcontractor or their employees or of any furnisher
of materials in connection therewith and OWNER waives and releases BUILDER, its
employees, subcontractors and their employees and all furnishers of supplies and
materials from all such liability and all damages resulting therefrom whether
same be based on contract and/or tort, for any damages or loss to the Vessel
resulting from defective design, manufacture or installation of property or
materials or from unseaworthiness; it being specifically understood that any
such defects reported after such three hundred sixty-five (365) day period and
all damages to the Vessel therefrom, shall be the exclusive responsibility of
OWNER.
ARTICLE XV - INSURANCE
15.1 BUILDER shall bear all risk of loss regarding the Work, including
materials, equipment and furnishings awaiting use, until the Vessel is delivered
to OWNER.
15.2 Builder shall purchase, at its own expense, and maintain in force at
all times during the performance of services under this Contract, the policies
of insurance listed below in such form and with such underwriters as are
acceptable to Owner. They shall be the minimum acceptable limits.
15.3 Certificates of insurance must be furnished to the Owner within
fifteen (15) days of execution of the Contract and must provide for a thirty
(30) day prior notice of cancellation, non-renewal or material change.
Other requirements:
(i) EMPLOYER'S LIABILITY INSURANCE. Which shall include coverage
for up to statutory limits of the United Stated Longshoremen's
and Harbor Worker's Act, the statutory limits of the
applicable State Compensation Insurance and in the instance of
the Jones Act, employer's liability protection of not less
than $5,000,000 per person.
(ii) COMPREHENSIVE (COMMERCIAL) GENERAL LIABILITY INSURANCE. Shall not be less
than $5,000,000 combined single limit per occurrence and annual aggregates.
Shall include premisesoperations, independent contractors, broad form
property damage, blanket contractual and personal injury endorsements. This
policy shall name Owner as an additional insured under the policy.
(iii) COMPREHENSIVE AUTOMOTIVE LIABILITY INSURANCE. With Coverage
limits not less than $1,000.000 combined single limit.
(iv) UMBRELLA LIABILITY. Shall have the Watercraft Exclusion B removed, excess
of the policies enumerated in (i), (ii) and (iii) above as well as excess
of the liability portion of the Builder's Risk Insurance in an amount
serving to increase primary limits to $10,000,000.00 for any one
occurrence. This policy shall name Owner as an additional insured under the
policy.
(v) BUILDER'S RISK. Including coverage for protection and
indemnity, including coverage for tests and trials, coverage
of period up to Delivery, covering the Vessel and work
hereunder including Joiner Work, including materials and
equipment to be furnished by Avondale's subcontractors in an
amount at least equal to the value of the Contract Price, plus
the value of Owner Furnished Equipment and materials received
by the Builder for use in or incorporated in the Vessel. This
policy shall name the Owner as an joint loss payee as their
interests may appear.
15.4 At OWNER'S option, BUILDER shall use its best efforts to provide, at
OWNER'S cost, a policy of professional liability insurance in the amount of
$1,000,000.00, insuring BUILDER and naming OWNER as additional insured against
design defects, errors or omissions arising out of the preparation or approval
of drawings, opinions, reports, surveys, Change Orders, designs or
Specifications, or the giving of or the failure to give directions or
instructions by any architect, engineer, marine surveyor or other professional
employed or retained by BUILDER, its agents or employees for a period of five
(5) years following expiration of the three hundred sixty-five (365) day
warranty of BUILDER'S design work pursuant to Article XIV.
15.5 Any endorsement naming OWNER as an additional insured shall contain
the following endorsement: (1) This policy shall not provide coverage to the
additional insured for the fault attributable to the additional insured arising
from the acts, omissions, negligence, strict liability and/or fault of the
additional insured, its parent, holding or affiliated companies,
their employees, officers and agents and their subcontractors; (2) the coverage
provided of the additional insured under this policy shall be subject to all the
terms and conditions of this policy, including all extensions from coverage set
forth therein (except as otherwise provided in this endorsement or in any
certificate of insurance pertaining to this policy).
15.6 Everyone entering the premises of BUILDER for any reason whatsoever
will be required to comply with the standard insurance and indemnity
requirements of the BUILDER. (Attached hereto as Exhibit "E").
ARTICLE XVI - INDEMNITY
16.1 To the fullest extent permitted by law, BUILDER hereby agrees to and
shall indemnify and hold harmless the OWNER and other Indemnitees from and
against any and all claims, liabilities, losses, damages, costs or expenses, for
property damage, personal injury, or death, including but not limited to
reasonable attorneys' fees and court costs in whole or in part, caused by,
resulting from, arising out of, or occurring in connection with the negligent
acts, errors or omissions, gross negligence or willful and wanton acts of the
BUILDER, any Subcontractor, anyone directly or indirectly employed by BUILDER or
any Subcontractor, or anyone for whose acts any of them may be legally
responsible, which acts, errors, omissions, negligence has occurred prior to
delivery of the Vessel or during the conduct of any warranty Work performed in
BUILDER'S yard. The above indemnity includes but is not limited to any such
injury resulting from the use of scaffolding, hoists, cranes, and all such other
equipment used on this Project or from the BUILDER'S failure to properly provide
and maintain the protective measures required by the Contract Documents arising
prior to delivery and acceptance of the Vessel or while warranty work is in
progress at BUILDER'S yard; provided, however, this right to indemnification
shall not apply to the extent that any such claims, liabilities, losses, damages
or expenses result from the OWNER'S or the Indemnitees' negligence. The BUILDER
agrees to pay on behalf of the OWNER and its Indemnitees upon their demand, the
amount of any judgment that may be entered against them in any action brought
against the OWNER and other Indemnitees upon or by reason of claims arising out
of any such acts or omissions of BUILDER as well as all costs of defense
including attorney's fees and litigation and court costs incurred by OWNER and
other Indemnitees in connection with such claims.
16.2 To the fullest extent permitted by law, OWNER hereby agrees to and
shall indemnify and hold harmless the BUILDER and other Indemnitees from and
against any and all claims, liabilities, losses, damages, costs or expenses, for
property damage, personal injury, or death, including but not limited to
reasonable attorney's fees and court costs in whole or in part, caused by,
resulting from, arising out of, or occurring in connection with the negligent
acts, errors or omissions, gross negligence or willful and wanton acts of the
OWNER, OWNER'S Subcontractors, anyone directly or indirectly employed by any of
them or anyone for whose acts any of them may be legally responsible, which
acts, errors, omissions, negligence or breach of contract has occurred prior to
delivery of the vessel. This right to indemnification shall not apply to the
extent that any such claims, liabilities, losses, damages or expenses result
from the BUILDER's or the Indemnitees' negligence. The OWNER agrees to pay on
behalf of the BUILDER and other Indemnitees upon their demand, the amount of any
judgment that may be entered against them in any action brought against the
BUILDER or other Indemnitees upon or by reason of claims arising out of any such
acts or omissions of OWNER as well as all costs of defense including attorney's
fees and litigation and court costs incurred by BUILDER and other Indemnitees in
connection with such claims.
ARTICLE XVII - TAXES
17.1 Any sales, use or similar tax on the sales or use of the Vessel which
may be levied upon or imposed in connection with the construction or delivery of
the Vessel hereunder shall be for the account of OWNER. BUILDER agrees that it
will not pay any such tax or concede any liability for same without prior notice
to OWNER. BUILDER acknowledges and accepts exclusive liability for the payment
of any transportation taxes, personal property taxes (only to the extent that
liability therefore attaches prior to the delivery and acceptance of the Vessel
by OWNER), payroll taxes, unemployment taxes or contributions, taxes based on
income or other taxes or contributions now or hereafter imposed by any
government or taxing authority have jurisdiction in the premises, and which are
measured or computed in accordance with salaries or other compensation or income
and which shall be due and payable by virtue of the performance of BUILDER'S
obligations hereunder.
ARTICLE XVIII - PATENTS
18.1 OWNER shall defend and indemnify BUILDER against and hold BUILDER
harmless from all damages and costs decreed against BUILDER as a result of
BUILDER complying with plans and/or specifications furnished by OWNER.
18.2 BUILDER shall defend any suit or proceeding brought against OWNER or
its customers that is based on a Claim resulting from complying with plans and
specifications furnished by BUILDER, that the equipment used or work performed
in the manufacture of any article constitutes an infringement of any patent, if
notified promptly in writing and given authority, information, and assistance
for defense of same, and BUILDER shall pay all damages
and costs awarded therein.
ARTICLE XIX - USE OF THE PLANS AND SPECIFICATIONS
19.1 To the extent that BUILDER has any rights to the following items,
BUILDER hereby grants to OWNER upon delivery of the Vessel, or if the Contract
is terminated by OWNER pursuant to this Agreement, upon termination, the right
to use all Drawings, Specifications, calculations, sketches, test data, survey
results, photographs, and renderings, and any other materials related to this
Work and prepared in connection therewith by BUILDER or its Subcontractors or
furnished to BUILDER by OWNER (collectively referred to as "Project
Materials")for any purpose. OWNER shall indemnify and hold BUILDER harmless
from, for and against any and all liability which may arise as a result of said
use, including design liability. The provisions of this Article XIX shall
survive the completion or termination of this Agreement.
ARTICLE XX - DEFAULT
20.1 If (a) at any time there shall be filed by or against BUILDER in any
court a petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of BUILDER'S property,
and a discharge thereof; or, if BUILDER makes an assignment for the benefit of
creditors or petitions for or enters into an agreement or agreements with its
creditors, and by reason of any of these events BUILDER'S obligations under this
Contract may be assigned to or performed by a person other than BUILDER, or (b)
if BUILDER materially fails to execute the Work in accordance with this
Agreement, except failure to deliver timely the vessel, or (c) fails to cause
the removal or bonding of any liens or privileges filed against the Project
according to Paragraph 5.13, hereof or materially disregards laws, ordinances,
rules, regulations or orders of any public authority having jurisdiction; or
(d), without limitation, fails to perform any material provisions of this
Contract, then OWNER by giving fifteen (15) days' prior written notice of any
such default to BUILDER and may then terminate the services of BUILDER and take
possession of all or some of BUILDER'S Work, transport the Work in progress, at
BUILDER'S expense from BUILDER'S yard to another location, and complete the Work
by such means as OWNER deems fit; provided, however, BUILDER shall have the
fifteen (15) day period referred to above to cure any such default. Upon
notification of OWNER'S termination of this Agreement, pursuant to this Article,
BUILDER will promptly undertake, at its sole cost, to place all Work in a
suitable condition for transportation to another location. BUILDER will assist
OWNER in the removal from the yard of any Work completed to the date when the
work was discontinued. In such event, BUILDER shall allow OWNER or OWNER'S
Representative(s), and other contractors continuing access to
BUILDER'S yard for a period of ninety (90) days following such termination in
order to continue the Work in progress. In such case, BUILDER shall not be
entitled to receive any further payment until the Work is completed. If the
unpaid balance of the Contract Price shall exceed the expense of completing the
Work, including reasonable compensation for additional managerial and
administrative services, such excess shall be paid to BUILDER. If such
reasonable expense, shall exceed such unpaid balance, BUILDER shall pay the
difference to OWNER promptly on demand.
20.2 OWNER may terminate this Contract without cause by giving seven (7)
days' prior written notice to BUILDER, and in such event OWNER will pay BUILDER
for that portion of the Contract Price, less the aggregate of previous payments,
allocable to the Work completed as of the date of termination. OWNER also will
reimburse BUILDER for all verified costs necessarily incurred for organizing and
carrying out the stoppage of the Work and paid directly by BUILDER, including
overhead, general expenses and profit incurred to date of termination. For
purposes of this paragraph, "profit" shall mean such reasonable amount not to
exceed 6% of BUILDER's verified costs referred to in the preceding sentence.
OWNER will pay for the cost of material, labor (including Subcontractor's
reasonable profit) and equipment of work in progress, as verified to its
satisfaction, until the date of said termination. OWNER shall also pay
reasonable cancellation charges actually incurred by BUILDER for subcontractors
or vendors affected by OWNER'S termination hereunder provided BUILDER has used
best efforts to contract with subcontractors and vendors without cancellation
charges. Except as specifically provided in this Paragraph, OWNER shall not
under any circumstances be responsible or liable to BUILDER, its contractors or
subcontractors of any tier, for any incidental, consequential or special losses,
damages or expenses including, but not limited to, loss of time, loss of profit
or earnings whether directly or indirectly arising out of this Contract.
20.3 In the event of termination by OWNER, OWNER may require BUILDER
promptly to assign to it all or any (i) bids or proposals, (ii) subcontracts,
(iii) construction plans, (iv) materials, tools and equipment (to the extent
paid for by OWNER), (v) appliances, (vi) rental agreements, and (vii) any other
commitments which OWNER, in its sole discretion, chooses to take by assignment,
and in such event BUILDER shall promptly execute and deliver to OWNER written
assignments of the same. This provision shall survive the termination of the
Contract.
20.4 If OWNER shall breach any payment provision hereof, and if such breach
shall not be corrected within (10) days after written notice thereof from
BUILDER to OWNER, BUILDER shall have the right to terminate OWNER'S right to
proceed with performance of this Contract, whereupon BUILDER or its nominee may,
but shall not
be obligated to, take over and complete in a reasonable manner the performance
of this Contract, to market the Vessel for resale after completion thereof or at
any state of partial completion, and to deduct the costs thereof from any money
due or thereafter to become due to OWNER under this Contract. OWNER shall not be
entitled to any refunds or payments, if applicable, until performance is
complete and the Vessel is sold. If, after completion and sale of Vessel, the
balance of funds received by BUILDER from the sale of the Vessel shall exceed
the expense of finishing the work, including reasonable compensation for
additional managerial, production, marketing and administrative work entailed,
only such excess shall be paid to OWNER. If such compensation, costs and damages
shall exceed such funds received from the sale of the Vessel, OWNER shall be
liable for and shall pay the difference to BUILDER.
20.5 The failure of either party to exercise any rights conferred upon it
under any provision of this Contract with respect to any breach or default by
the other party shall not constitute a waiver of its rights under any other
provision of this Contract with respect to such breach or default, or a waiver
of its rights under the same or any other provision of this Contract with
respect to any other breach or default.
ARTICLE XXI - NOTICES
21.1 Copies of notices required by this Contract to be given by OWNER to
BUILDER or to be given to OWNER by BUILDER shall be in writing and will be
delivered in person, by facsimile, or by registered mail to BUILDER or OWNER, or
the designated representative of either, as the case may be.
Notices to BUILDER shall be addressed to:
Barry Heaps
Avondale Boat Division
P.O. Box 50280
New Orleans, LA 70150
with a copy to:
R.D. Church
Avondale Industries
P.O. Box 50280
New Orleans, LA 70150
with a copy to Surety
Notices to OWNER shall be addressed to:
Norbert A. Simmons
400 Lafayette Street
Suite 100
New Orleans, LA 70130
with a copy to:
Carol S. DePaul
Bally Manufacturing Corporation
8700 W. Bryn Mawr
Chicago, IL 60631-3547
21.2 In all matters the parties will be represented by none other than the
following named persons for OWNER:
Thomas A. Gourguechon or ____________________________
and for BUILDER:
Barry Heaps or R.D. Church
21.3 Each party agrees that at least one of its named representatives will
be available for consultation during normal working hours. Both parties agree
that no one other than the named individuals shall be considered as an agent of
either party for making of admissions or giving of instructions. Except as
herein authorized, no change or modification in this Contract or the
Specifications shall be valid or binding on either party unless the same is in
writing and signed by one of the above designated representatives of each party.
Any change in the Contract Price resulting from change in Specifications shall
be agreed upon in writing in advance.
21.4 Any such address may be changed and any other person may be designated
to act for either party upon written notice of such designation accomplished in
accordance with the provisions of this paragraph.
ARTICLE XXII - MEDIATION
22.1 In the event a dispute arises hereunder, prior to the commencement of
any formal proceedings, the parties shall continue performance as set forth in
this Contract and shall attempt in good faith to reach a negotiated resolution
by designating an officer of appropriate authority to resolve the dispute. If
the parties have attempted in good faith to resolve the dispute and failed to do
so, if both BUILDER and OWNER agree, they may proceed to mediation, as set forth
herein.
22.2 In the event of any dispute or difference arising between OWNER and
BUILDER as to any matter or thing arising out of or relating to this Contract,
or any stipulation therein or in the Specifications or the Working Drawings
which cannot be settled by
the parties themselves, the matter in dispute may be referred for
voluntary, non-binding mediation.
22.3 In the event BUILDER claims a Force Majeure day(s) and OWNER does not
agree and the result is a dispute over an amount owed, the OWNER agrees to
escrow the disputed amount with the Mediator; and the Mediator shall decide the
issue(s) and disburse money(s) pursuant to his decision.
22.3 BUILDER and OWNER agree that Matthew Kawasaki shall be Mediator and
__________________ shall be the alternate Mediator. If the Office of Mediator
is vacant, by the request of either BUILDER or OWNER a new Mediator shall be
appointed by using the following procedures:
22.4 OWNER and BUILDER shall each name a Marine Surveyor to represent them.
The two chosen Marine Surveyors shall then select a third Marine Surveyor, who
shall serve as the Mediator. The Mediator and any alternate Mediator shall both
have spent the past five (5) years regularly engaged in their profession.
22.5 The parties agree that the powers of the Mediator shall be limited as
follows:
1. He shall deal only with the disputes which are referred
for him to investigate and submit his findings and recommendations.
2. He shall have no power to decide any matter which is not
directly related to the dispute submitted to him.
3. He shall have no power to modify the working drawings or
any specifications, terms or conditions related thereto.
4. He shall have no power to add to, subtract from, or modify
any of the terms of this Agreement.
5. His decisions shall be advisory only and shall not bind the parties,
except as provided in Section 22.3 herein.
22.6 The party initiating the demand for mediation shall notify the other
party in writing, at the same time stating the matter or matters in dispute.
Within a reasonable time thereafter, not exceeding five (5) calendar days, the
second party shall acknowledge the notice in writing, either specifying any
additional issue or issues to be mediated or refusing the demand for mediation.
Providing the mediation has been agreed to, the mediation shall be conducted in
New Orleans, Louisiana under applicable Louisiana laws however, the decision of
the Mediator shall not bind the parties.
22.7 Should OWNER and BUILDER consent, the Mediator will review Claims and
take one or more of the following preliminary actions within ten (10) days of
receipt of Claim: (1) request additional supporting data from the claimant, (2)
submit a schedule to the parties indicating when the Mediator expects to take
action, (3) reject the Claim in whole or in part, stating reasons for
rejection, (4) recommend approval of the Claim by the other party or (5) suggest
a compromise.
22.8 If a Claim has not been resolved, the party making the Claim, shall,
within ten (10) days after the Mediator's preliminary response, take one or more
of the following actions: (1) submit additional supporting data requested by the
Mediator (2) modify the initial Claim or (3) notify the Mediator that the
initial Claim stands.
22.9 If a Claim has not been resolved after consideration of the foregoing
and of further evidence presented by the parties or requested by the Mediator,
the Mediator will notify the parties or in writing that the Mediator's decision
will be made within seven (7) days. Either party aggrieved by the conduct or
decision of the Mediator may at any time seek a judicial determination of the
Claim. Upon expiration of such time period, the Mediator will render to the
parties the Mediator's written decision relative to the Claim, including any
change in the Price or Contract Time or both.
22.10 The Mediators so appointed shall determine which party or the proper
proportion which each party shall assume of the expenses of such mediation, and
the mediation expenses so allocated shall be paid directly by the party or
parties to which such expenses are directed to be paid.
22.11 A decision by the Mediators shall not be required as a condition
precedent to litigation of a dispute between BUILDER and OWNER.
ARTICLE XXIII - FINANCING MATTERS
23.1 BUILDER acknowledges that OWNER may secure financing of the Vessel
from a third party lender (the "Lender"). In consideration of the arrangements
made by Lender to lend funds to OWNER for the purpose of meeting its obligations
to BUILDER hereunder, BUILDER hereby agrees to cooperate with OWNER and Lender
and to execute such documents, take such actions, and make such amendments to
this Agreement as are reasonably required by Lender. These may include but are
not limited to a) providing additional copies of all Notices required to be
given to OWNER hereunder to Lender; b) providing Lender with notice of any OWNER
default hereunder; c) permitting Lender to assume OWNER'S position under this
Agreement following Lender's cure of an OWNER default; d) naming Lender on any
insurance policies required hereunder; e) indemnifying Lender to the extent
OWNER is indemnified hereunder; e) allowing Lender or its representative to
inspect the progress of construction of the Vessel; f) the execution of such
certificates regarding the progress of Vessel construction as Lender may require
in order to authorize payments.
ARTICLE XXIV - CONSTRUCTION
24.1 The headings of the sections have been inserted as a convenience for
reference only, and are not to be considered in any construction or
interpretation of this Contract.
ARTICLE XXV - LAW APPLICABLE
25.1 This Contract shall be governed by the Laws of the State
of Louisiana, U.S.A.
ARTICLE XXVI - UNITED STATES APPROVAL
26.1 All obligations of BUILDER and OWNER herein are subject to compliance
with all applicable laws and regulations of the United States Government and
agencies thereof.
ARTICLE XXVII - ASSIGNMENT
27.1 This Contract shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
27.2 BUILDER may not assign this Contract, and any act of BUILDER
purporting to effect an assignment of this Contract shall be void and of no
effect. BUILDER shall not delegate any of its duties as BUILDER under this
Contract; provided, however, that BUILDER may subcontract portions of the Work
to qualified Subcontractors.
27.3 OWNER may, upon notice but without the consent of BUILDER, assign this
Contract to an affiliate or subsidiary of a principal of OWNER, a lender
providing financing for the Project or any person who succeeds to OWNER'S
interest in the Project. In the event of such assignment, this Contract shall
vest in OWNER'S assignee, who shall assume OWNER'S obligations hereunder, and
BUILDER shall continue to be bound by its terms. Should an assignment of this
Contract take place pursuant to this paragraph OWNER and BUILDER agree that the
Parent Guaranty shall remain in place and effective. Anything to the contrary
notwithstanding, this Contract shall not become effective until the Parent
Guaranty is executed and delivered satisfactory to BUILDER.
27.4 In the event any assignment is made under this Article XXVII, OWNER
shall guarantee the performance of its obligations hereunder by the assignee and
such assignment shall not in any way violate any law of the United States of
America or any rules or regulations issued or promulgated by any department,
agency, or instrumentality of the United States Government.
ARTICLE XXVIII - AGREEMENT
28.1 This Agreement contains the entire agreement of the parties in respect
to this transaction and supersedes any and all prior agreements or
understandings. No modification, waiver or release of any provision will be
valid unless in writing signed by the party to be bound.
28.2 This Agreement may be executed simultaneously in two counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. All specifications, drawings,
attachments and/or exhibits referred as part of this Agreement have been
initialed on each page thereof by the parties executing this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as of
the day and year first above written.
WITNESSES:
JOY T. RINALDI AVONDALE INDUSTRIES, INC.
ALBERT L. BOSSIER, JR.
VERLIE B. LECOMPTE BY: Albert L. Bossier, Jr.
Its: President and CEO
?? Unreadable Name ?? BELLE OF ORLEANS, L.L.C.
BY: METRO RIVERBOAT
ASSOCIATES, INC., Member
NORBERT A. SIMMONS
THOMAS GOURGUECHON BY: Norbert A. Simmons
Its: President
EXHIBIT "C"
LABOR RATES FOR TIME AND MATERIAL CHANGES
Straight Time Time and Double
One Half Time
Production Labor $28.00 p/hr $42.00 p/hr $56.00 p/hr
Engineering Services $40.00 p/hr $60.00 p/hr $80.00 p/hr
(in house)
EXHIBIT "D"
GUARANTY AGREEMENT
WHEREAS this Guaranty Agreement ("Guaranty"), is executed and delivered
to AVONDALE INDUSTRIES, INC. ("BUILDER") in consideration of BUILDER'S
furnishing labor, material and plant facilities for Belle of Orleans, L.L.C.,
(hereinafter called "OWNER"), or its assigns, to construct one (1) Paddlewheel
Casino Vessel, Hull No. 114 (the "Vessel") pursuant to that certain Vessel
Construction Contract (the "Contract") executed between BUILDER and OWNER on
January 12, 1994.
NOW, THEREFORE, for the consideration above stated and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned Bally Entertainment Corporation, a Delaware corporation, with a
business address of 8700 West Bryn Mawr, Chicago, Illinois, 60631 (hereinafter
called "GUARANTOR"), hereby unconditionally guarantees to BUILDER, the due and
punctual payment, at its office in Avondale, Louisiana, of the indebtedness of
OWNER to BUILDER in an amount equal to all sums due, pursuant to the Contract,
provided, however, that notwithstanding anything to the contrary herein
contained, the maximum amount that GUARANTOR shall be liable for hereunder shall
not exceed SIX MILLION AND NO/100 ($6,000,000.00) DOLLARS (the "Guaranty
Amount").
GUARANTOR expressly waives diligence on the part of BUILDER in the
collection of any and all of the sum or sums due hereunder, protest, notice and
all extensions that may be granted under any instrument evidencing any sum or
sums due hereunder, provided, however, notwithstanding anything to the contrary,
BUILDER shall first make written demand of payment of all indebtedness from
OWNER with a copy to GUARANTOR and shall not exercise its rights under this
Guaranty unless such demand is not satisfied within five (5) days from the date
of such written demand provided, however, that GUARANTOR may assert any claims
or defenses that OWNER may have in the Contract. BUILDER shall be under no
obligation to notify the undersigned of its acceptance hereof, nor of any credit
extended on the faith hereof, nor of any extensions of time or other adjustments
made in the Vessel construction contract, nor of the failure to pay any sum or
sums due hereunder, in accordance with the terms thereof, nor to use diligence
in preserving the liability of any person or any sum or sums due hereunder, or
in bringing suit to enforce collection of the debt due under this Guaranty.
This is an absolute guaranty of payment and not of collectibility.
This Guaranty shall continue until full, complete and faithful
performance of the Contract as it may be from time to time amended as authorized
by its terms. Upon receipt of the final payment or when the Guaranty Amount is
reduced to zero, whichever occurs earlier, this Guaranty will be terminated
except for the payment obligations indicated in the Contract to survive the
completion or termination of the contract for which the Guaranty shall remain
operative.
This Guaranty shall be governed by the laws of the Sate of Louisiana,
excluding any conflict-of-law rule or principle which might direct the
application of the laws of any other jurisdiction.
This continuing Guaranty is for the benefit of BUILDER, and shall be
binding upon GUARANTOR and its respective successors, by operation of law or
otherwise. This continuing Guaranty is not intended to and does not create any
rights in or benefits for any other third parties.
IN WITNESS WHEREOF, the undersigned, has executed this Guaranty as of the
respective date indicated, in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
TWO WITNESSES: BALLY ENTERTAINMENT CORPORATION
"GUARANTOR"
MARY BUTLER ARTHUR M. GOLDBERG
--------------------------------- By: Arthur M. Goldberg
Title: President
[SIGNATURE NOT READABLE]
--------------------------------- -------------------------------
Date: July 8, 1994
I, CAROL S. DEPAUL, certify that I am the Secretary of Bally
Entertainment Corporation named as a GUARANTOR herein; that Arthur M. Goldberg
who signed this Guaranty on behalf of the Bally Entertainment Corporation was
then President of said corporation; that said Guaranty was duly signed for and
in behalf of said corporation by authority of its governing body, and is within
the scope of its corporate powers.
CAROL S. DEPAUL
Carol S. DePaul
Secretary, Bally Entertainment Corporation
AVONDALE INDUSTRIES, INC.
Avondale SHIPYARDS DIVISION EXHIBIT "E"
Shipyards Division P.O. BOX 50280, NEW ORLEANS, LA 70150-0280
504-436-2121
Fax 436-5443
Fax 436-5374
ENCLOSURE I
INSURANCE & SAFETY REQUIREMENTS FOR VENDORS
4. LIABILITY AND INDEMNITY: Contractor shall be solely responsible for all
materials, equipment and work until the project is completed to Avondale's
satisfaction. Contractor shall pay Avondale the full amount ofall damage
to, or destruction of, any property of Avondale resulting from the work
performed by Contractor or any subcontractor hereunder. Contractor does
agree to indemnify and hold harmless Avondale Industries, Inc., its
employees, officers, agents, representatives and underwriters, from and
against any and all losses, expenses, liens, claims, demands and causes of
action of every kind and character for personal injury to or death of
Contractor's own employees, the employees of Avondale Industries, Inc.
and/or third persons and/or for damage to or loss of the property of
Contractor, Avondale Industries, Inc. and/or third parties, in any way
arising out of, resulting from or connected with the performance by
Contractor or work on or about the premises of Avondale Industries, Inc. or
elsewhere even though caused, occasioned or contributed to by the sole or
concurrent negligence of Avondale Industries, Inc., its employees,
officers, agents, representatives, subcontractors or invitees, including
any claim based upon the unseaworthiness of any vessel or upon any theory
of strict liability, vice or defect in the premises of equipment located
therein. Avondale Industries, Inc. shall have the right, at its option, to
participate in the defense of any such suit, without relieving the
Contractor of any obligation.
5. INSURANCE: Contractor shall provide at all times the following insurance
with insurers satisfactory to AvondaleIndustries, Inc.:
(a) WORKERS' COMPENSATION INSURANCE fully complying with the laws of the
state or states in which the work is to be done, including the
Longshoremen's and Harbor Workers' Compensation Act Endorsement in an
amount required by said Act and Employer's Liability Insurance in the
amount of $500,000 covering injuries to and death of Contractor's employees
in any state where Workers' Compensation laws are not in force. Contractor
agrees to obtain from its underwriters a Waiver of Subrogation in favor of
Avondale Industries.
(b) COMPREHENSIVE GENERAL LIABILITY INSURANCE in the amount of $500,000 per
person for bodily injury or death of persons and $1,000,000 for any one
occurrence, with deletion of the Watercraft Exclusion. INDEMNITOR agrees to
have Avondale Industries, Inc. named as an additional assured under its
policy of insurance and to obtain Contractual Liability Insurance to cover
this specific Hold Harmless and Indemnity Agreement. A Waiver of
Subrogation in favor of Avondale Industries, Inc. must be provided.
(c) AUTOMOBILE LIABILITY AND PROPERTY DAMAGE INSURANCE covering personal
injuries in the amount of $250,000 per person and $500,000 for any one
occurrence and property damage in the amount of $500,000 per accident. This
coverage applies to each and every unit of automotive equipment operated or
used by Contractor in the performance of their work. Contractor agrees to
have Avondale Industries, Inc. named as an additional assured under its
policy of insurance and a Waiver of Subrogation in favor of Avondale
Industries, Inc. must be provided.
(d) Regarding vessel owners and/or vessel brokers, the following wording is
required under the Vessel's HULL AND P&I policy:
"While the vessels named herein are performing work for Avondale
Industries, Inc. at any given time, then Avondale Industries, Inc. is
named as an additional assured during that particular time and all
rights of subrogation hereunder are waived with respect to Avondale
Industries, Inc."
"In the event of cancellation or material change by underwriters,
at least ten (10) days prior written notice will be given to Avondale
Industries, Inc."
Contractor agrees that the insurance requirements as set forth above shall
not limit or diminish in any way the rights and obligations of Contractor
under any of the indemnity provisions set forth in this agreement.
Furthermore, Contractor agrees that prior to its commencement of work, it
will furnish Avondale Industries, Inc. with a Certificate of Insurance
evidencing that such insurance is in force and effect and such Certificate
of Insurance shall provide that at least ten (10) days written notice be
given Avondale Industries, Inc. prior to the discontinuance of the
coverage.
AGREEMENT
This agreement is made in conjunction with that certain Vessel Construction
Contract between Avondale Industries, Inc. and Belle of Orleans, L.L.C.,
executed on January 12, 1994.
The parties agree that during the first thirty (30) days after this date
the Builder, Avondale Industries, Inc., will not order either equipment or
materials pursuant to the contract and/or its plans or specifications without
the prior written consent of the Owner, Belle of New Orleans, L.L.C. in excess
of the First Milestone Payment.
This 12th day of January, 1994.
AVONDALE INDUSTRIES, INC. BELLE OF ORLEANS, L.L.C.,
BUILDER OWNER
BY: METRO RIVERBOAT
ASSOCIATES, INC.,
MEMBER
BARRY HEAPS NORBERT A. SIMMONS
BY: Barry Heaps BY: Norbert A. Simmons,
President
ALBERT BOSSIER
BY: Albert Bossier,
Chairman
jc/AGREE.LET
VESSEL CONSTRUCTION CONTRACT
AMENDMENT NO. 1
This Agreement is entered into this 11th day of February, 1994. Both
parties hereby agree to extend Milestone No. 2, as defined in the Vessel
Construction Contract, for the construction of a Paddlewheel Gaming Vessel,
BUILDER'S hull No. 114, (the "Vessel") executed 12 January 1994, by seven (7)
days.
All other terms and conditions will remain the same.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
as of the day indicated.
WITNESSES:
______________________ AVONDALE INDUSTRIES, INC.
BARRY HEAPS
______________________ BY Barry Heaps
Vice President
Its:
2/11/94
Date
______________________ FOR BELLE OF ORLEANS, L.L.C.
BY: METRO RIVERBOAT ASSOCIATES, INC.
THOMAS GOURGUECHON
______________________ BY:
Its: Authorized Representative
2/11/94
Date:
(1380)824
VESSEL CONSTRUCTION CONTRACT
AMENDMENT NO. 2
This Agreement is entered into this 18th day of February, 1994 (the
"Amendment" between Avondale Industries, Inc. (the "BUILDER") and Belle of
Orleans, L.L.C. (the "OWNER") for the purpose of amending the Vessel
Construction Contract (the "Contract") between the parties, executed 12
January 1994, for the construction of a Paddlewheel Gaming Vessel, BUILDER's
hull No. 114, (the "Vessel") as follows:
1) The last sentence of Paragraph 2.4 of the Contract is revised to
read:
"Within forty-five (45) days of the date hereof, the parties agree
to meet to finalize the reconfiguration of the Arrangements by no
cost Change Order and payment of Milestone Number 2 funds.
2) In Paragraph 5.2 add a new milestone as follows:
Milestone % of Contract
No. Milestone Definition Price
---------- --------- ---------- -------------
1a Amendment Time extension for 1/2%
No. 2 signed reconfiguration of
arrangements
3) In Paragraph 5.2 revise the "% of Contract Price" from "19%" to read
"18.5%" and under "Definition" revise the "30 days" to read "52
days".
4) In Paragraph 5.4, second line, revise the words "Numbers 1 and 2" to
read "Numbers 1, 1a and 2."
5) In Paragraph 5.5, second line, revise the words "Numbers 1 and 2" to
read "Numbers 1, 1a and 2."
6) Revise Paragraph 5.8 to read:
"Invoices for Milestone 1 (Contract Signing), Milestone 1a
(Amendment No. 1 signed), Milestone 2 (Sign off on Drawings and
Specifications) and Milestone 10 (Delivery) shall be paid upon
receipt.
7) In Paragraph 6.1, in lines 5 and 6, revise the words "the second" to
read "Milestone Number 2."
8) In Paragraph 6.11 revise the "thirty (30) days" to read "fifty-two
(52) days" for the submittal of the Construction Schedule.
This Amendment No. 2 to the Contract shall be executed in two
counterparts, each of which shall be deemed an original but both of which
together shall constitute one and the same instrument. Except as specified
in this Amendment No. 1 the Contract remains unchanged in all of its
provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 as of the day indicated.
WITNESSES:
______________________ AVONDALE INDUSTRIES, INC.
-------------------------
BARRY HEAPS
______________________ BY Barry Heaps
Vice President
Its:
2-18-94
Date
THOMAS GOURGUECHON FOR BELLE OF ORLEANS, L.L.C.
BY: BALLY'S LOUISIANA, INC.
(UNREADABLE SIGNATURE) CAROL S. DEPAUL
BY: Carol S. DePaul
Its: Authorized Representative
2/21/94
Date:
AMENDMENT NO. 3 TO VESSEL CONSTRUCTION CONTRACT
THIS AMENDMENT NO.3 entered into on and as of the 17th day
of June, 1994, by and between BELLE OF ORLEANS, L.L.C. ("OWNER"),
and AVONDALE INDUSTRIES, INC. ("BUILDER").
W I T N E S S E T H:
WHEREAS, OWNER and BUILDER have heretofore entered into a Vessel
Construction Contract dated January 12, 1994 (the "Original Agreement") for the
construction of one (1) Paddlewheel Gaming Vessel designated by hull no. 114
(the "Vessel"), all as more fully set forth therein; and,
WHEREAS, OWNER and BUILDER desire to amend the Original Agreement to
facilitate the financing of the Vessel by Hibernia National Bank and for other
purposes.
NOW, THEREFORE, in consideration of the foregoing, OWNER and BUILDER agree
to amend and do hereby amend the Original Agreement in the following respects:
W
1. AMENDMENT TO ARTICLE I. Unless otherwise defined herein capitalized
terms used herein shall have the same meanings as set forth in the Original
Agreement. In addition, the following terms shall be added as defined terms in
Article I and shall have the following meanings:
"1.36 Components. 'Components' mean, in accordance with La. R.S.
9:5522(h), all present and future parts and components of the Vessel which
are fabricated by BUILDER for use in the construction of the Vessel, which will,
when so used, form a part of the Vessel, and the fabrication of which is
commenced at the Shipyard.
1.37 Materials. 'Materials' mean, in accordance with La. R.S.
9:5522(g), all present and future materials, all items of machinery and all all
items of equipment, which are purchased or acquired for use in the construction
of the Vessel, which will, when so used, form a part of the Vessel, and which
have been delivered to the Shipyard.
1.38 Shipyard. 'Shipyard' means, in accordance with La. R.S.
9:5522(j), BUILDER's construction facility located in Westwego, Louisiana.
1.39 Vessel Work. 'Vessel Work' means, in accordance with
La. R.S. 9:5522(c), the keel and all present and future Materials,
machinery, equipment, Components and fabrications forming a part of the
Vessel when permanently installed in place."
2. AMENDMENT TO ARTICLE II. Section 2.5 is hereby deleted in its
entirety and replaced with the following:
"2.5 In accordance with La. R.S. 9:5524, OWNER shall be the owner
of the Vessel to be constructed pursuant hereto, title to the Vessel
Work shall vest in OWNER as and when performed, title to the Materials
shall vest in OWNER as and when delivered to the Shipyard and title to
the Components shall vest in OWNER as and when fabricated. In
furtherance of the foregoing, BUILDER does hereby sell, transfer and
assign to OWNER BUILDER's ownership interest in and to the Vessel, the
Vessel Work, the Materials and the Components. It is understood and
agreed and it is the intent of BUILDER and OWNER that OWNER shall have
all the rights and benefits of a "purchaser" as provided in the
Louisiana Ship Mortgage Law, La. R.S. 9:5521 ET SEQ. BUILDER shall
have the obligations imposed on a builder by said statute and agrees
to do the following:
(a) BUILDER shall affix a plaque, showing the name of BUILDER,
OWNER, the hull number of the Vessel, and the parish in which the
Vessel is to be constructed, to the keel of the Vessel so as to be
clearly visible at all times during the performance of the Work until
the decking is laid. At such time as the decking is laid, the
aforementioned plaque shall be removed and permanently affixed to the
weather deck of the Vessel so as to be clearly visible at all times
during continuance of the work and after completion.
(b) BUILDER shall mark or stamp on all Materials the hull number
of the Vessel upon delivery of such Materials to the Shipyard, or
alternatively, maintain records which will identify with certainty all
such Materials with the name of OWNER and the hull number of the
Vessel.
(c) BUILDER shall mark or stamp on all Components the hull number
of the Vessel upon
commencement of the fabrication thereof, or alternatively, maintain
records which will identify with certainty all such Components with the
name of OWNER and the hull number of the Vessel.
(d) Notwithstanding the foregoing, except as may be otherwise
provided in this Agreement, the risk of loss or damage to the Vessel
Work, Materials, Components or the Vessel shall remain in BUILDER until
delivery and acceptance of the Vessel, and OWNER shall not be deemed to
have waived its rights to require BUILDER to replace, at BUILDER's
expense, defective, damaged or destroyed workmanship or material, and
to deliver the Vessel with the contract work completed, as provided in
this Agreement. BUILDER shall be subject to the risk of loss of all
contract workmanship and material in the undelivered and unaccepted
Vessel, as provided in this Agreement."
3. AMENDMENT TO ARTICLE XXII. Section 22.12 shall be added to Article
XXII as follows:
"22.12 The provisions of this Article XXII shall not be binding on
Lender (as hereinafter defined) with respect to the creation,
perfection or enforcement of Lender's Security (as hereinafter
defined); provided, that in the event that Lender assumes the
obligations of OWNER hereunder, then the provisions of this Article
XXII shall be binding on Lender."
4. AMENDMENT TO ARTICLE XXIII. The following shall be added to the end
of Section 23.1:
"BUILDER acknowledges that it is OWNER's intent to obtain interim
construction financing of the Vessel from Hibernia National Bank
("Lender"), and OWNER intends to grant to Lender such liens and
security interests (including a preferred ship mortgage, if and when
obtainable), as Lender may require ("Lender's Security")."
5. AMENDMENT TO ARTICLE XXVII. Section 27.5 shall be added to Article
XXVII as follows:
"27.5 Notwithstanding the foregoing, OWNER shall have the right to
grant Lender a lien and security interest in this Agreement, the
Vessel, the Vessel Work, the Components and the Materials. With
Builder's prior written consent (which will not be unreasonably
withheld or delayed), Lender shall have the right to assign Lender's
Security and the rights of Lender thereunder and hereunder provided
that such assignee assume in writing all the obligations of Lender
under the Consent and Agreement dated as of June 17, 1994, among
BUILDER, OWNER and Lender."
6. RATIFICATION. BUILDER and OWNER agree that the Original Agreement shall
be deemed amended in each instance where appropriate to incorporate the
foregoing agreements. The parties hereto further ratify, reaffirm and adopt all
of the terms and provisions of the Original Agreement as amended herein, with
the same force and effect as though the Original Agreement as amended herein was
set forth at length in this instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
be executed in their respective names and by their duly authorized officers.
AVONDALE INDUSTRIES, INC. BELLE OF ORLEANS, L.L.C.
By: Bally's Louisiana, Inc.,
Member
ALBERT L. BOSSIER, JR.
By: Albert L. Bossier, Jr.
Title: President LEE HILL
By Lee Hill
Title: Vice President
258992 TFGD