EXHIBIT 10-II
NO. 1 CONTINUOUS
GALVANIZING LINE
TURNKEY ENGINEERING AND
CONSTRUCTION CONTRACT
BY AND BETWEEN
NATIONAL STEEL CORPORATION,
GREAT LAKES DIVISION
AND
NKK STEEL ENGINEERING, INC.
DATED
OCTOBER 23, 1998
NO. 1 CONTINUOUS GALVANIZING LINE
TURNKEY ENGINEERING AND CONSTRUCTION CONTRACT
Made this 23rd day of October, 1998, by and between NATIONAL STEEL
CORPORATION, Great Lakes Division, a Delaware corporation with its office at
0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000 ("NATIONAL"), and NKK STEEL
ENGINEERING, INC., a Delaware corporation with its office at 000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxx, XX 00000-0000 ("CONTRACTOR").
RECITALS
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A. NATIONAL desires to retain CONTRACTOR to provide the engineering,
design, construction, installation, supply, supervision, execution and start-up
of a complete and operable continuous galvanizing facility on an all-inclusive
"turnkey" basis, as more specifically described in the CONTRACT DOCUMENTS (as
that term is defined in Section 1.9).
B. CONTRACTOR is willing to perform such work, pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. DEFINITION OF TERMS:
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The following terms when used herein or in other CONTRACT DOCUMENTS shall
have the following meanings unless the context clearly requires another meaning.
1.1 "AFFILIATE" shall mean any PERSON directly or indirectly
controlling, controlled by or under common control with any other PERSON.
1.2 "AGREEMENT" shall mean this No. 1 Continuous Galvanizing Line Turnkey
Engineering and Construction Contract, together with Exhibits A through V
hereof, and any amendments hereto made pursuant to the terms hereof.
1.3 "AN APPROVED EQUAL" or a similar expression as used in the
SPECIFICATIONS or other CONTRACT DOCUMENTS is intended to give the CONTRACTOR
the optional use of materials of other manufacturers than those specifically
mentioned, but it shall be understood that such substitutions can be made only
after the written consent of NATIONAL has been obtained.
1.4 "AS SOLD SPECIFICATION" shall mean Contract Specification NKK-SE Job
Number 425 IC-0140-P60-01 Rev. 2, together with the following documents which
clarify and/or amend the foregoing: (i) minutes of meetings held October 5-8 to
clarify such specifications; (ii) letter from Xxx Xxxxxxx to Xxxxx Ise dated
October 9, 1998; (iii) letter from Yasuo Ise to Xxx Xxxxxxx dated October 12,
1998; (iv) letter from Xxxxxx Xxxxxxxxx to CONTRACTOR dated October 19, 1998.
1.5 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
51 (CONFIDENTIALITY) hereof.
1.6 "CONSTRUCTION EQUIPMENT" shall mean all plants, facilities, equipment,
machinery, tools, apparatus, appliances or things of every kind required for the
construction, completion and maintenance of the WORK and which are to be
provided by the CONTRACTOR, but does not include EQUIPMENT, MATERIALS or other
things forming part of the PLANT.
1.7 "COST AUDIT" shall have the meaning set forth in Section 46 hereof.
1.8 "CONTRACT" shall mean the PURCHASE ORDER, the AGREEMENT and all other
CONTRACT DOCUMENTS.
1.9 "CONTRACT DOCUMENTS" shall mean the CONTRACT, all applicable DRAWINGS
and SPECIFICATIONS, the T&M AGREEMENT, and any other writings which are
incorporated herein.
1.10 "CONTRACT PRICE" shall have the meaning set forth in Section 5
(CONTRACT PRICE) below. The CONTRACT PRICE shall have four (4) components: (i)
the CONTRACT PRICE - CONSTRUCTION COMPONENT - CIVIL AND BUILDING, (ii) the
CONTRACT PRICE - CONSTRUCTION COMPONENT - EQUIPMENT INSTALLATION, (iii) the
CONTRACT PRICE - EQUIPMENT COMPONENT, and (iv) the CONTRACT PRICE -
COMMISSIONING COMPONENT. The four components are more specifically described in
Exhibit C (CONTRACT PRICE BREAKDOWN).
1.11 "CONTRACTOR" shall mean NKK Steel Engineering, Inc., a Delaware
corporation with its office at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx, XX 00000-
9414.
1.12 "CONTRACTOR AUTHORIZED PERSONNEL" shall have the meaning set forth in
Section 25 (SAFETY RULES) hereof.
1.13 "COST" when used to identify CONTRACTOR's expenditures as chargeable
to NATIONAL under the CONTRACT shall mean the net expenditure paid by the
CONTRACTOR, recognizing offsets for any related credits or reductions, such as
trade, chain and cash discounts, refunds, premium dividends or returns, final
rate adjustments, reductions to recognize an approximated annualizing effect in
the case of payroll taxes and like items
involving annual dollar maximums, and other offsets implicit in the term "cost"
as used in normal business transactions wherein it is not specifically defined.
1.14 "DEEMED WARRANTY PERIOD" shall have the meaning set forth in Section
34.2 (WARRANTY AGAINST DEFECTIVE WORK) hereof.
1.15 "DRAWINGS" shall mean all engineering, equipment or other drawings of
every type, including, without limitation, preliminary design drawings, drawings
included within or referred to in the SPECIFICATIONS, and all amendments and
addenda thereto, and detailed construction drawings identified by the parties as
being applicable to the CONTRACT.
1.16 "ENVIRONMENTAL REQUIREMENTS" shall mean all GOVERNMENTAL REQUIREMENTS
prohibiting, regulating or otherwise relating to environmental pollution and
environmental control of any kind, including, but not limited to, oil pollution,
air pollution, water pollution, land pollution, groundwater pollution, noise
pollution, solid waste management and toxic substance control. Such requirements
include, but are not limited to, GOVERNMENTAL REQUIREMENTS under the Federal
Water Pollution Control Act; the Federal Clear Air Act; the Federal Resource
Conservation & Recovery Act; the Federal Noise Control Act; the Federal Safe
Drinking Water Act; the Federal Toxic Substances Control Act; the Comprehensive
Environmental Response, Compensation and Liability Act; and the Federal
Emergency Planning and Community Right to Know Act of 1986 (Title III of
Superfund Amendments and Reauthorization Act of 1986); and any amendments
thereto, and the state and local counterparts of all of such statutes.
1.17 "EQUIPMENT" or "MATERIALS" shall mean equipment, machinery, apparatus,
materials, articles and all other things to be provided and incorporated in the
PLANT by the CONTRACTOR under the CONTRACT (including, but not limited to, the
spare parts to be supplied by the CONTRACTOR under the CONTRACT), but does not
include the CONSTRUCTION EQUIPMENT.
1.18 "EXTRA WORK" shall have the meaning set forth in Exhibit B (EXTRA WORK
PROCEDURES) attached hereto and made a part hereof.
1.19 "FAILURE OF NATIONAL HOT RUN TEST CONDITIONS" shall have the meaning
set forth in Section 15.1(iii) hereof.
1.20 "FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS" shall have the
meaning set forth in Section 15.1(v) hereof.
1.21 "FORCE MAJEURE" shall mean any event beyond the reasonable control of
NATIONAL or CONTRACTOR, as the case may be, including, but not limited to: Acts
of God; wars; riots; fires; explosions; breakdowns or accidents (but as to
fires, explosions, breakdowns or accidents, only to the extent caused by
circumstances that are themselves FORCE MAJEURE); strikes; lockouts or other
labor difficulties; lack or shortages of labor, materials, utilities, energy
sources or transportation facilities (but only to the extent that such lack or
shortage is caused by circumstances that are themselves FORCE MAJEURE).
1.22 "GOODS" shall have the meaning given to it by Section 2-105 of the
Uniform Commercial Code, as enacted in the State of Michigan.
1.23 "GOVERNMENTAL REQUIREMENTS" shall mean all applicable federal, state
and local statutes, laws, ordinances, codes, rules, regulations, standards,
orders or other governmental requirements of any kind, and any present or future
amendments thereto.
1.24 "GREAT LAKES SPECIFICATION" shall mean NATIONAL's Specification GL-
2816 dated February 16, 1998, as supplemented by addenda dated March 17, 1998,
March 19, 1998 and March 26, 1998.
1.25 "HOT RUN COMMENCEMENT" shall have the meaning set forth in Section 6.4
(LIQUIDATED DAMAGES FOR DELAY) hereof.
1.26 "HOT RUN COMMENCEMENT DEADLINE" shall have the meaning set forth in
Section 6.4 (LIQUIDATED DAMAGES FOR DELAY) hereof.
1.27 "INCORPORATED PATENT" shall have the meaning set forth in Section 21.2
(NATIONAL WARRANTY AGAINST INFRINGEMENT) hereof.
1.28 "L/C" shall mean the irrevocable letter of credit described in Section
35.5 (RETAINAGE) hereof.
1.29 "LOSSES" shall have the meaning set forth in Section 30.1
(INDEMNIFICATION BY CONTRACTOR) hereof.
1.30 "NATIONAL" shall mean National Steel Corporation, Great Lakes
Division, a Delaware corporation with its office at 0000 Xxxxxx Xxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxx 00000.
1.31 "NATIONAL'S FAULT" shall have the meaning set forth in Section 30.1
(INDEMNIFICATION BY CONTRACTOR) hereof.
1.32 "OCCUPATIONAL SAFETY AND HEALTH REQUIREMENTS" shall have the meaning
set forth in Section 26 (OCCUPATIONAL SAFETY AND HEALTH) hereof.
1.33 "PERSON" shall mean an individual, partnership, firm, corporation or
other legal entity.
1.34 "PLANT" shall mean the continuous galvanizing line facility which is
described in the CONTRACT DOCUMENTS and which is to be constructed on the SITE
by the CONTRACTOR pursuant to the CONTRACT.
1.35 "PROGRESS EVALUATION PROCEDURE" shall mean the document attached
hereto as Exhibit T to be used to report and track progress of construction
items; provided, however, the parties acknowledge and agree that Exhibit T is
preliminary and will be finalized and approved by NATIONAL prior to construction
invoicing.
1.36 "PROJECT" shall mean the parameters of the WORK to be performed on the
SITE as set forth in the CONTRACT DOCUMENTS.
1.37 "PURCHASE ORDER" shall mean the purchase order issued by NATIONAL for
the performance of the WORK and any and all amendments and supplements thereto;
provided, however, that any preprinted standard terms and conditions contained
in or on the reverse side of such PURCHASE ORDER shall not be given effect, it
being understood, however, that typewritten (whether manually or by computer) or
handwritten provisions of the PURCHASE ORDER shall be considered a part of the
CONTRACT.
1.38 "RECORDS" shall have the meaning set forth in Section 46 (COST AUDIT)
hereof.
1.39 "RIGHT-TO-KNOW REQUIREMENTS" shall have the meaning set forth in
Section 27 (HAZARDOUS SUBSTANCES AND RIGHT-TO-KNOW) hereof.
1.40 "SAFETY RULES" shall have the meaning set forth in Section 25 (SAFETY
RULES) hereof.
1.41 "SCOPE OF WORK" shall mean the scope of work to be performed under the
CONTRACT as described in the SPECIFICATIONS and other CONTRACT DOCUMENTS.
1.42 "SITE" shall mean any and all locations at NATIONAL's Great Lakes
facilities located in Ecorse and River Rouge, Michigan, where the WORK, or any
part thereof, is to be performed.
1.43 "SPECIFICATIONS" shall mean (i) the GREAT LAKES SPECIFICATION, (ii)
the AS SOLD SPECIFICATION, (iii) any Great Lakes Division Standard
Specifications included in the GREAT LAKES SPECIFICATION, (iv) any other
specifications related to the PROJECT agreed to by the parties, and (v) any
subsequent addenda or amendments to the specifications referred to in clauses
(i) - (iv) which are agreed to by the parties.
1.44 "SUBCONTRACT" shall mean any contract, express or implied, under which
any SUBCONTRACTOR performs WORK.
1.45 "SUBCONTRACTOR" shall mean any PERSON having a contract, express or
implied, with the CONTRACTOR or with any SUBCONTRACTOR of any tier for any
portion of the WORK, including any PERSON who erects, constructs, alters or
repairs any part of the WORK, or furnishes labor, skill or superintendence in
connection therewith, or supplies or hauls materials, fixtures, machinery or
equipment therefor.
1.46 "SUBSTANTIAL COMPLETION DEADLINE" shall have the meaning set forth in
Section 6.1 (SUBSTANTIAL COMPLETION DATE) hereof.
1.47 "T&M AGREEMENT" shall mean NATIONAL's Time and Materials Agreement,
Form NSX-T&M/5, dated July 1, 1982, included as a part of Exhibit B (EXTRA WORK
PROCEDURES), attached hereto and made a part hereof.
1.48 "TECHNICAL DATA" shall have the meaning set forth in Section 21
(PATENT RIGHTS AND INDEMNIFICATION; OWNERSHIP OF DRAWINGS) hereof.
1.49 "TOXIC SUBSTANCE CONTROL REQUIREMENTS" shall have the meaning set
forth in Section 28 (TOXIC SUBSTANCE CONTROL) hereof.
1.50 "WORK" shall mean and shall include, unless otherwise specified, all
supervision, labor and other services of any kind, materials, structural
accessories, machinery, equipment, tools, facilities, other property of any
kind, transportation, disposal, commissioning, training and other requirements
for the performance of the CONTRACT.
2. CONTRACTUAL RELATIONSHIP:
CONTRACTOR is an independent contractor and not an agent, servant, or
representative of NATIONAL. CONTRACTOR shall have no authority to act for,
legally bind or make representations on behalf of, NATIONAL. CONTRACTOR shall
indemnify, defend and hold harmless NATIONAL from and against all liability,
claims, damages and expenses arising out of or in connection with any
unauthorized act, representation or misrepresentation by CONTRACTOR, its agents
or employees.
3. CONFLICT OF INTEREST:
3.1 Absence of Improper Payment. CONTRACTOR represents that it has not
directly or indirectly offered or given to any of NATIONAL's employees or
representatives any gifts, favors or other form of consideration (except that of
nominal value) in connection with the negotiation, award and/or performance of
the CONTRACT. CONTRACTOR agrees that all of its officers, directors and
employees will comply and will use its best efforts to ensure that its
SUBCONTRACTORS will comply with the requirements and the intent of Exhibit A
(NATIONAL STEEL CORPORATION CODE OF ETHICAL BUSINESS CONDUCT) attached hereto
and made a part hereof. CONTRACTOR agrees that any request or solicitation of
gifts or any other item of value by anyone representing NATIONAL is to be
reported to the Director - Corporate Audit, at the following address or
telephone number: 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000-0000;
(000) 000-0000.
3.2 Absence of Family Relationships. CONTRACTOR also represents that no
direct family relationship exists between any PERSON in CONTRACTOR's
organization and NATIONAL's organization which has affected or may affect the
award or performance of the
CONTRACT, except as disclosed in accordance with the following sentence.
CONTRACTOR agrees to report to NATIONAL the existence of any such relationship
and to disqualify any of its employees from acting on CONTRACTOR's behalf if any
question of preferential treatment regarding the award or performance of the
CONTRACT might reasonably be attached to such family relationship. This
provision shall be included in all SUBCONTRACTS in accordance with Section 4
(SUBCONTRACTS) hereof.
4. SUBCONTRACTS:
4.1 Approval of SUBCONTRACTS by NATIONAL. As a condition of the award
of the CONTRACT, CONTRACTOR shall give written notice to NATIONAL of all WORK to
be subcontracted and of the identity of all proposed SUBCONTRACTORS. Such
notice shall be given within such time as shall allow NATIONAL a reasonable time
to consider and agree upon each portion of the WORK to be subcontracted and the
proposed SUBCONTRACTORS. If NATIONAL disapproves of the employment of a
proposed SUBCONTRACTOR, it immediately shall notify the CONTRACTOR and
CONTRACTOR shall not employ said SUBCONTRACTOR; provided, however, that the
approval of NATIONAL shall not be required for any SUBCONTRACTORS listed on
Exhibit S (APPROVED SUBCONTRACTORS) who are performing WORK of the type listed
next to their respective names on said Exhibit S.
4.2 Inclusion of Provisions in SUBCONTRACTS. CONTRACTOR shall include
in all SUBCONTRACTS all provisions of the CONTRACT which in any way may be
applicable to performance of the SUBCONTRACT including, without limitation, this
provision and all other provisions intended for the protection of NATIONAL. To
the extent applicable, the term "SUBCONTRACTOR" shall be substituted for the
term "CONTRACTOR" and the term "CONTRACTOR" shall be substituted for the term
"NATIONAL" in all provisions of the CONTRACT DOCUMENTS utilized in drawing up
SUBCONTRACTS as provided above. NATIONAL shall have the right to require
CONTRACTOR to terminate the employment of any SUBCONTRACTOR employed by
CONTRACTOR in the event such SUBCONTRACTOR fails to perform its work in
accordance with the requirements of the CONTRACT or otherwise for cause, and
NATIONAL has notified CONTRACTOR of such failure or other cause of termination
and the SUBCONTRACTOR has failed to cure such failure or other cause within
thirty (30) days of CONTRACTOR's receipt of such notice; provided, however, that
the giving of notice and the provision of a cure period shall not be required if
NATIONAL reasonably determines that the SITE or its interests at the SITE would
be materially and adversely affected by the continuation of such failure or
other cause.
4.3 CONTRACTOR Not Relieved. CONTRACTOR shall not be relieved of any
responsibility or obligation under the CONTRACT by subcontracting any portion of
the WORK.
4.4 SUBCONTRACTORS Have No Rights Against NATIONAL. This CONTRACT is
between NATIONAL and CONTRACTOR and creates no relationship, rights or
liabilities, express or implied, including, without limitation, third-party
beneficiary rights or liabilities, between NATIONAL and any SUBCONTRACTOR or any
other PERSON. Any written or oral communications between NATIONAL and
SUBCONTRACTORS to facilitate performance of
the CONTRACT, or for any other reason, shall not be evidence of any such
relationship, rights or liabilities.
5. CONTRACT PRICE:
5.1 Amount of CONTRACT PRICE. The total amount due CONTRACTOR for full
and complete performance by CONTRACTOR of all the WORK, compliance with all the
terms and conditions of this CONTRACT, and for CONTRACTOR's payment of all its
obligations incurred in or applicable to performance of the WORK shall be One
Hundred Thirty Eight Million Six Hundred Thousand Dollars ($138,600,000). (Said
amount as increased or decreased by agreement of the parties or by Extra Work
Authorizations is hereinafter referred to as the "CONTRACT PRICE"). The
CONTRACT PRICE is a firm, all-inclusive, fixed "lump sum" price (subject,
however, to increases or decreases pursuant to agreed upon change orders or
Extra Work Authorizations), with no escalation, and includes all of CONTRACTOR's
COSTS (including premium time and overtime, if any, to be paid by CONTRACTOR),
overhead and profit as well as all applicable sales, use and other taxes;
provided, however, that CONTRACTOR shall not be responsible for any income,
franchise, capital stock or other similar taxes imposed upon NATIONAL or based
upon the income of NATIONAL. The CONTRACT PRICE shall be paid in the manner
specified in, and be subject to the provisions of, Section 35 (COMPENSATION AND
PAYMENTS) below.
5.2 CONTRACT PRICE Breakdown. The CONTRACT PRICE is broken down among its
component parts as set forth in Exhibit C (CONTRACT PRICE BREAKDOWN) attached
hereto.
6. TIME OF PERFORMANCE:
6.1 SUBSTANTIAL COMPLETION DEADLINE. CONTRACTOR shall substantially
complete the WORK no later than twenty-two (22) months and one (1) week from the
date of this CONTRACT (the "SUBSTANTIAL COMPLETION DEADLINE"). Substantial
completion of the WORK shall be defined as the time that NATIONAL issues (or is
deemed to have issued) the Certificate of Substantial Completion pursuant to
Section 15 (ACCEPTANCE OF THE WORK) hereof. Notwithstanding the attainment of
substantial completion of the WORK, CONTRACTOR shall be obligated to prosecute
the remainder of the WORK and the fulfillment of its remaining obligations
hereunder with due diligence.
6.2 Schedule Control and Construction Management. CONTRACTOR shall
provide the following minimum schedule control and construction management
functions as part of this CONTRACT, together with any additional such functions
set forth in the SPECIFICATIONS:
(i) Master Engineering Schedule: CONTRACTOR shall furnish a preliminary
Master Engineering Schedule in Primavera or equivalent format for the entire
PROJECT within thirty (30) days after the date of this CONTRACT, and shall
furnish a final Master Summary Schedule within sixty (60) days after the date of
this CONTRACT. This Master Summary Schedule shall show as a minimum the line
items contained in Exhibit C (CONTRACT PRICE
BREAKDOWN). Upon mutual agreement and approval of this Master Summary Schedule
by NATIONAL and CONTRACTOR, it, in combination with the General Construction
Schedule described in subsection (ii) below, shall be used to control the WORK.
(ii) General Construction Schedule: CONTRACTOR shall furnish a
preliminary General Construction Schedule in Primavera or equivalent format
within thirty (30) days after the date of this CONTRACT and a final General
Construction Schedule within one hundred twenty (120) days after the date of
this CONTRACT. Both the preliminary and final General Construction Schedule
shall comply with all applicable requirements with respect thereto set forth in
the SPECIFICATIONS, and be subject to NATIONAL's review and approval, which
approval shall not be unreasonably withheld or denied. The General Construction
Schedule shall be in sufficient detail to identify all construction activities
and the critical paths of construction, all SUBCONTRACTORS and the activities
each will perform, all engineering, all procurement and construction equipment
requirements and the timetables therefor. The General Construction Schedule
shall agree with and support the Master Engineering Schedule described in
subparagraph (i) above. NATIONAL and CONTRACTOR shall work in good faith to
resolve any disputes concerning the General Construction Schedule such that
neither CONTRACTOR's schedule for performing and completing the WORK nor
NATIONAL's production activities are interfered with in an unreasonable manner.
If the performance of the General Construction Schedule is dependent upon a
review, approval, interface or other response by NATIONAL, these activities and
the timetables therefor will be identified in the General Construction Schedule.
(iii) Construction Controls: CONTRACTOR shall furnish a resource curve
showing the estimated man-days for construction activities distributed over the
General Construction Schedule time scale. The estimated days shall state the
shift basis and work week to be used. In addition, CONTRACTOR shall furnish a
tabulation of the estimated man-days by craft by week that were used to develop
the resource curve. These documents shall be furnished to NATIONAL at the same
time as the General Construction Schedule is furnished to NATIONAL, and shall be
subject to NATIONAL's review and approval. CONTRACTOR shall maintain records on
a daily basis and shall furnish NATIONAL a report on a weekly basis of actual
construction man-days by craft. CONTRACTOR shall furnish NATIONAL a report on a
daily basis when available manpower is not sufficient to meet the schedule for
performance of the WORK. CONTRACTOR shall hold weekly progress meetings with
NATIONAL during the construction period. The frequency of these meetings shall
be increased upon the request of NATIONAL.
CONTRACTOR shall update the General Construction Schedule in a formal
manner monthly but informally on a weekly or more frequent basis. If such update
results in a change in critical paths in meeting any scheduled dates or in any
other significant matter, the CONTRACTOR shall immediately notify NATIONAL in
writing of such changes and its detailed plans for maintaining the overall
schedules, including a revised resource curve if required, and obtain NATIONAL's
approval thereof.
CONTRACTOR shall produce weekly WORK assignment schedules from the General
Construction Schedule by craft for each week, which schedules shall be furnished
to NATIONAL on a weekly basis prior to the week covered by such schedules. When
WORK is conducted on a more than one turn per day basis, CONTRACTOR shall
provide an overlap of supervision and a coordination meeting at each change.
(iv) Construction Management: CONTRACTOR shall provide all necessary
labor, tools, equipment, material and supervision to provide all necessary
construction management services. Construction management shall include, but not
be limited to, the performance of the activities set forth in the SPECIFICATIONS
and the performance of the following activities:
(A) Provide a monthly project management report which shall
include the following:
(1) status of engineering, drawings, procurement, manufacturing,
installation and testing;
(2) milestone status;
(3) list of activities completed in prior month and a list to be
completed in the next month;
(4) major issues to be resolved;
(5) Master Engineering Schedule and General Construction Schedule
update and status;
(6) updated monthly xxxxxxx resource curve;
(7) Extra Work Authorization status and log; and
(8) "punch list" and warranty review, as applicable.
In the event that CONTRACTOR falls behind schedule in the performance of the
WORK, CONTRACTOR will furnish NATIONAL with such additional and more frequent
reports as NATIONAL may reasonably request.
(B) Provide field survey parties to establish control points
for layout of the WORK and to verify the accuracy of the WORK.
(C) Provide necessary and applicable field inspection services
and tests to verify the quantity, quality and fitness of the WORK and to assure
compliance with the SPECIFICATIONS and other CONTRACT DOCUMENTS.
(D) Provide evidence, immediately upon request of NATIONAL,
that the WORK is progressing in accordance with the foregoing schedules, by
means of a physical inspection and tour of the PROJECT, accompanied by a
representative of NATIONAL, and by any other reasonable means.
(v) Minutes of Meetings: CONTRACTOR is responsible for taking and
distributing to the parties minutes of all meetings of the parties. Such minutes
shall be prepared and distributed within five (5) business days after each such
meeting occurring prior to on-SITE construction activities and within three (3)
business days after each such meeting occurring thereafter.
(vi) Incorporation of Schedules by Reference: The Master Engineering
Schedule, General Construction Schedule and resource curve provided under this
Section 6.2, after approval by NATIONAL, together with such other scheduling
documents as are required under the SPECIFICATIONS, shall become a part of and
be incorporated in the CONTRACT.
6.3 Time of Essence. Time is of the essence of the CONTRACT and all
schedules and deadlines herein. All actions taken by the parties hereto
(including, without limitation, all submissions, reviews and approvals) shall be
taken to the end that the performance of the CONTRACT shall be prosecuted with
due diligence. Notwithstanding the foregoing, if CONTRACTOR fails to adhere to
any schedule or to meet any deadline set forth in the Milestone of Equipment
Component and Milestone of Commissioning Component of Exhibit Q (Payment
Milestone Schedule) and NATIONAL's No. 1 CGL Overall Schedule as set forth in
the AS SOLD SPECIFICATIONS, then NATIONAL shall notify CONTRACTOR of such
failure and provide to CONTRACTOR an amount of time to cure such failure as
NATIONAL reasonably determines after discussing such failure and time to cure
with CONTRACTOR. Nothing in this Section 6.3 shall be construed to alter
CONTRACTOR's obligations to meet deadlines or to adhere to schedules pursuant to
Section 6.4 (LIQUIDATED DAMAGES FOR DELAY), Article 15 (ACCEPTANCE OF THE WORK)
and Article 34 (RESPONSIBILITY FOR AND GUARANTEE OF WORK) hereof.
6.4 Liquidated Damages for Delay. In the event that the HOT RUN
COMMENCEMENT (as defined below) has not occurred within eighteen (18) months of
the date of this CONTRACT (the "HOT RUN COMMENCEMENT DEADLINE"), CONTRACTOR
agrees to pay to NATIONAL, for each and every calendar day of such delay
following the HOT RUN COMMENCEMENT DEADLINE, an amount calculated in accordance
with the following formula, which sum is hereby, in view of the difficulty of
calculating the precise amount of damages which will be suffered by NATIONAL as
a result of such delay, agreed upon by NATIONAL and CONTRACTOR as a reasonable
estimate of the damages NATIONAL will suffer as a result of such delay, and not
as a penalty.
NUMBER OF DAYS LATE LIQUIDATED DAMAGES PER DAY
0-7 0
for each day after
the 7th day $90,000/day
For the purposes of this CONTRACT, the HOT RUN COMMENCEMENT shall occur on the
date upon which the last of all of the following events have occurred, in
accordance with the SPECIFICATIONS: (i) the Cold Run Test Completion Certificate
has been issued by CONTRACTOR and cosigned by NATIONAL, and (ii) the PLANT has
commenced hot running, meaning (A) the PLANT reasonably heats sheet product, (B)
the PLANT applies zinc to such product, (C) such zinc reasonably adheres to the
heated product, and (D) a minimum of one (1) wrap of zinc-coated product has
been re-coiled at the tension reel.
Such liquidated damages hereunder shall accrue in the manner set forth above,
but actual payment of such liquidated damages due for the period up to and
including the SUBSTANTIAL COMPLETION DEADLINE shall be deferred until the
SUBSTANTIAL COMPLETION DEADLINE, at which time the entire accrued amount shall
be due and payable. The assessment of liquidated damages hereunder does not
discharge CONTRACTOR from its duty to complete the WORK, to satisfy the
performance warranties and to otherwise fulfill all of the requirements of this
CONTRACT. The CONTRACTOR's maximum total liability for liquidated damages
pursuant to this Section 6.4 shall be three percent (3%) of the CONTRACT PRICE.
7. SCOPE OF WORK:
7.1 "Turnkey" PROJECT. CONTRACTOR acknowledges and agrees that the WORK
is to be performed on an all-inclusive "turnkey" basis and that CONTRACTOR is
responsible for the engineering, design, construction, installation, supply,
supervision, inspection and start-up and commissioning of the PLANT in
accordance with the CONTRACT DOCUMENTS, except for those items specifically
delineated in the SPECIFICATIONS as "Work by Owner".
7.2 Performance According to SPECIFICATIONS. CONTRACTOR shall perform
the WORK as specified by and in accordance with the SPECIFICATIONS and in
accordance with the other requirements of the CONTRACT.
7.3 All Items to be Provided by CONTRACTOR. CONTRACTOR shall supply and
furnish at the SITE all items, including labor, materials, and equipment,
necessary for the complete and satisfactory performance of the CONTRACT, except
such items as NATIONAL furnishes in accordance with the SPECIFICATIONS or
specifically agrees in writing to furnish to or for the use of CONTRACTOR.
7.4 Demolition Component of the WORK. Subject to the provisions of
Section 19 (REMOVAL OF DEBRIS AND WASTE MATERIAL) hereof, CONTRACTOR
acknowledges and agrees that it shall be responsible for the demolition and off-
site removal of any structures or facilities located at or on the SITE which
interfere with the proper performance of the WORK, and that all of such
activities are encompassed within the CONTRACT PRICE.
Such demolition (and the transportation and disposal of any demolition waste or
debris) shall be performed in full compliance with all applicable GOVERNMENTAL
REQUIREMENTS. All disposal material shall be listed on a written report setting
forth the description of such material, its weight and method of disposal, which
report shall be provided to NATIONAL. Title to all such materials to be disposed
of shall remain with NATIONAL.
7.5 Omission of Minor Details. The omission from the WORK plans,
SPECIFICATIONS, DRAWINGS or other CONTRACT DOCUMENTS of minor details, being
minor both in terms of price of materials and labor cost, which ordinarily form
a part of first-class WORK of the type that is the subject matter of this
CONTRACT shall not be a cause for extra work claims, but rather shall be
included by the CONTRACTOR within the WORK, as if such details had been
specifically mentioned in the CONTRACT DOCUMENTS.
7.6 Change in GOVERNMENTAL REQUIREMENTS. CONTRACTOR acknowledges that
the SCOPE OF WORK includes compliance with all GOVERNMENTAL REQUIREMENTS in
effect as of the date hereof. In the event that there is a change in such
GOVERNMENTAL REQUIREMENTS after the date hereof (which shall be deemed to
include a binding and enforceable change in the interpretation of any
GOVERNMENTAL REQUIREMENTS currently in effect by the governmental agency charged
with the interpretation thereof, or by a court of law, but shall not be deemed
to include any change in GOVERNMENTAL REQUIREMENTS for which there is a
published notice of proposed change (e.g., a proposed regulation published in
the Federal Register) publicly available as of September 4, 1998) applicable to
the WORK hereunder, the SCOPE OF WORK hereunder shall be deemed modified in a
manner so as to cause the WORK to comply with such changed GOVERNMENTAL
REQUIREMENTS. To the extent that compliance with such change in GOVERNMENTAL
REQUIREMENTS impacts the CONTRACT Schedule or the direct COST to CONTRACTOR of
performing the WORK, CONTRACTOR shall be entitled to an adjustment in the
CONTRACT Schedule and/or the CONTRACT PRICE in accordance with the provisions of
Section 11 (CHANGES) hereof; provided, however, that CONTRACTOR shall not be
entitled to an adjustment in the CONTRACT PRICE (i) if the change in
GOVERNMENTAL REQUIREMENTS does not directly impact the PLANT or the EQUIPMENT
(i.e., the change must directly relate to the PLANT or the EQUIPMENT, as opposed
to CONTRACTOR'S general costs of doing business or performing work) (e.g., a
change in OSHA requirements that mandates the inclusion of additional safety
equipment as part of the PLANT or EQUIPMENT would entitle CONTRACTOR to request
an adjustment in the CONTRACT PRICE with respect to the extra COST thereof; a
change in OSHA requirements that mandates that CONTRACTOR's employees wear
special safety equipment (for example, respirators) would not serve as the basis
for an adjustment to the CONTRACT PRICE); and (ii) unless the aggregate impact
of all changes in GOVERNMENTAL REQUIREMENTS applicable to the WORK exceeds
$25,000 (the first $25,000 being a "deductible").
8. SITE, FACILITIES AND UTILITIES:
8.1 SITE Inspection. CONTRACTOR shall be deemed to have examined the
SITE and to have secured full knowledge of (i) all conditions under which the
WORK is to be
executed and completed, including, but not limited to, soil conditions, (ii)
available roadway, rail and other approaches to the SITE, (iii) the space
available for WORK areas, storage and temporary buildings including offices, and
(iv) the availability of roads, gates, docking facilities, unloading facilities
and utilities, as applicable.
8.2 Location of WORK. The CONTRACTOR shall be responsible for locating
the WORK in accordance with property lines and elevations established in the
CONTRACT DOCUMENTS, and for accuracy of building lines and levels. Before
commencing the WORK, the CONTRACTOR shall verify grades, lines, levels and
dimensions indicated and report errors or inconsistencies to NATIONAL. The
CONTRACTOR shall not proceed until all errors and inconsistencies, if any, are
corrected. Should the CONTRACTOR proceed before all such errors and
inconsistencies are corrected, then, after the CONTRACT DOCUMENTS have been
modified to eliminate such errors and inconsistencies, the CONTRACTOR shall be
obligated, at the CONTRACTOR's own expense, to repair or remove and replace any
portion of the WORK that does not conform to such modified CONTRACT DOCUMENTS.
8.3 NATIONAL Information. CONTRACTOR agrees that NATIONAL cannot
guarantee the accuracy and completeness of information (including, but not
limited to, drawings, maps, surveys, reports, historical land usage and
operations, results of previous SITE investigations and surface or subsurface
conditions affecting the SITE) supplied by NATIONAL to CONTRACTOR, and
CONTRACTOR acknowledges that, unless otherwise agreed by the parties, if
CONTRACTOR has relied upon such information or data in the preparation of its
proposal and/or in the performance of this CONTRACT without further verification
by CONTRACTOR as to its accuracy or completeness, CONTRACTOR is doing so at its
own risk. (i) Notwithstanding anything to the contrary in the immediately
preceding sentence, following the discovery of an inaccuracy in such information
supplied by NATIONAL as to underground utility lines and other underground
utility facilities (unless CONTRACTOR knew or in the exercise of reasonable
judgment should have known about such inaccuracies), and (ii) where NATIONAL and
CONTRACTOR so agree following the discovery of any other inaccuracy in such
information, CONTRACTOR shall be entitled to an equitable adjustment in the
CONTRACT PRICE and/or time of performance, if applicable, to compensate
CONTRACTOR for any direct costs or delays it incurs as a result of any
inaccurate information supplied by NATIONAL. To the extent that CONTRACTOR
reasonably believes that it needs additional information from NATIONAL in order
to properly perform the WORK, it shall request such information in writing and
NATIONAL shall supply such information if it is in NATIONAL's possession or
control or can be obtained or created without undue delay or expense.
Notwithstanding anything to the contrary contained in this Section 8.3, unless
CONTRACTOR knows otherwise or in the exercise of reasonable judgment should know
otherwise, CONTRACTOR shall be entitled to rely on any NATIONAL drawings
provided to CONTRACTOR which depict the location of underground utility lines
and other underground facilities. CONTRACTOR shall be responsible for any
damage to such underground lines or underground facilities disclosed on
NATIONAL'S drawings, or of which it knows or of which it should have known as
described in the immediately preceding sentence, caused by it or any
SUBCONTRACTOR during the course of the WORK.
8.4 Use of SITE by Others. The SITE and approach facilities are to be
used by CONTRACTOR with due regard for the requirements of NATIONAL and others
permitted by NATIONAL to use same. If it becomes necessary to move the
materials or facilities of CONTRACTOR, it shall be done upon request of NATIONAL
at the expense of CONTRACTOR unless the request involves a movement from a
previously approved area. NATIONAL may install and operate equipment and
machinery or otherwise use and occupy the SITE during the progress of the WORK,
provided that NATIONAL does not unreasonably interfere with the prosecution of
the WORK under conditions originally contemplated.
8.5 Temporary Items to be Provided by CONTRACTOR. Unless otherwise
specified or agreed in writing, CONTRACTOR shall provide all temporary
buildings, sanitary facilities and offices and shall arrange for temporary
connections and lines for water, electricity, telephones, gas, compressed air,
steam, heat and other similar services and utilities required for performance of
the WORK. All such temporary services and utilities shall be secured by the
CONTRACTOR from public utility companies and other sources at the expense of the
CONTRACTOR, unless NATIONAL elects to furnish any such service or utility from
its own facilities, free of charge, in which case the COST thereof shall be
eliminated from the CONTRACT PRICE. CONTRACTOR shall make necessary connections
to NATIONAL's lines at CONTRACTOR'S expense.
8.6 Utility Failure. NATIONAL shall not be liable for damages and
losses suffered by the CONTRACTOR or any SUBCONTRACTORS through the failure or
interruption of any utilities and services furnished by NATIONAL; provided,
however, that nothing set forth in this Section 8.6 shall prejudice CONTRACTOR's
right to seek a CONTRACT PRICE adjustment or a schedule extension pursuant to
Section 16.5 (DELAYS CAUSED BY NATIONAL) hereof. NATIONAL shall attempt to
restore such utility or service at the earliest possible time.
8.7 Permanent Utilities. Whenever, during the course of the WORK,
consumption of these utilities shall commence through connections and
installations which are a permanent part of the WORK, such utilities, including
steam, power and fuel for firing, testing and operating installed equipment and
heating buildings, shall be furnished or arranged for by NATIONAL, at its
expense.
8.8 Removal of Temporary Items. Upon completion of the WORK, CONTRACTOR
shall remove all temporary lines and shall, to NATIONAL's satisfaction, suitably
plug off and terminate all temporary connections and shall leave the permanent
lines in good and safe working condition. All temporary construction
facilities, equipment, signs and other property of CONTRACTOR shall be removed
by CONTRACTOR promptly upon completion of the WORK.
8.9 Use of Local Roadways. To the extent that CONTRACTOR is making use
of public roadways in connection with the WORK, CONTRACTOR shall ensure that its
vehicles and the transportation activities conducted thereby comply fully with
all applicable GOVERNMENTAL REQUIREMENTS, are not creating a nuisance to local
residents and do not otherwise interfere with local traffic.
9. APPROVAL OF DRAWINGS AND TECHNICAL DOCUMENTS:
9.1 Approval by NATIONAL. CONTRACTOR shall submit to NATIONAL for
approval all DRAWINGS (including, without limitation, all equipment drawings) as
well as any other documents subject to review and approval by NATIONAL in
accordance with the SPECIFICATIONS. Meetings for the review of such DRAWINGS
and other documents shall be held at such times at NATIONAL's premises as are
mutually convenient and agreeable to the parties. NATIONAL shall proceed with
due diligence to review DRAWINGS submitted by CONTRACTOR. Unless otherwise set
forth in the SPECIFICATIONS, NATIONAL shall review all such DRAWINGS and other
documents and inform CONTRACTOR whether or not the same are approved within five
(5) business days after receipt thereof unless NATIONAL notifies CONTRACTOR that
NATIONAL requires a longer period for review, in which event NATIONAL and
CONTRACTOR shall discuss and mutually agree upon the need for and duration of
such longer period. The request by NATIONAL for a longer period of time in
which to review DRAWINGS shall not serve as grounds for a schedule extension (or
an increase in the CONTRACT PRICE). NATIONAL shall be deemed to have approved
the DRAWINGS if NATIONAL fails to comment or request an extension for the review
of the DRAWINGS within such five (5) business days or mutually agreed upon
longer period. CONTRACTOR shall have the right to proceed with the WORK related
to the DRAWINGS after the approval or deemed approval of the DRAWINGS by
NATIONAL. NATIONAL's approval shall be limited to determining that CONTRACTOR's
DRAWINGS and other documents conform to the basic concept of the PROJECT and the
CONTRACT DOCUMENTS and shall not be considered as being approval by NATIONAL of
any specific design, dimension, calculation or any detail necessary for the
PROJECT to be in compliance with the SPECIFICATIONS or other CONTRACT DOCUMENTS.
In the event NATIONAL should inform CONTRACTOR that any of the DRAWINGS and
other documents are not approved, NATIONAL will circle the unapproved portion(s)
thereof and provide an explanation of the reasons for such disapproval, if
requested by CONTRACTOR, whereupon CONTRACTOR shall correct the same.
9.2 Submission In Sequence. In order for NATIONAL to timely review and
approve the DRAWINGS and documents as set forth in this Section 9, CONTRACTOR
shall submit such DRAWINGS and other documents in a properly sequenced manner,
and CONTRACTOR shall not submit an unreasonably large number of such DRAWINGS
and other documents at any one time.
9.3 "As Built" Specification. As a condition to the issuance of the
Certificate of Final Completion referred to in Section 15 (ACCEPTANCE OF THE
WORK) hereof, CONTRACTOR shall deliver to NATIONAL "as built" specifications
which conform in all respects to the requirements set forth in the
SPECIFICATIONS and elsewhere in the CONTRACT DOCUMENTS.
9.4 Sealing of Drawings. In the event that the WORK necessitates the
sealing of DRAWINGS or other documents by a duly licensed engineer or other
professional or employee, CONTRACTOR shall be responsible for making such
arrangements as are necessary to seal such DRAWINGS and documents at no
additional cost to NATIONAL.
10. CONTRACT DOCUMENTS AND PRIORITIES AND CONFLICTS:
The WORK shall be performed in accordance with all the requirements of the
CONTRACT. In the event of any conflict or discrepancy among the CONTRACT
DOCUMENTS, the following order of priority shall apply:
(i) this AGREEMENT;
(ii) the AS SOLD SPECIFICATION; and
(iii) the GREAT LAKES SPECIFICATION.
11. CHANGES:
11.1 Changes by NATIONAL. NATIONAL reserves the right, by written
notice to CONTRACTOR, to correct any errors in any CONTRACT DOCUMENT and to make
any changes in the DRAWINGS and SPECIFICATIONS and in the WORK. CONTRACTOR
shall proceed with the WORK as changed immediately after receipt of said notice.
If any such change causes an increase or decrease in the COST of performing the
WORK or the time of performance and written notice of such increase or decrease
is given by CONTRACTOR to NATIONAL, or by NATIONAL to CONTRACTOR, an equitable
adjustment in the CONTRACT PRICE and/or the time of performance shall be made by
NATIONAL in accordance with Exhibit B (EXTRA WORK PROCEDURES). Unless otherwise
agreed by the parties and subject to the other provisions of the CONTRACT,
NATIONAL shall not contract with third parties for the performance of material
portions of the SCOPE OF WORK as set forth in the CONTRACT DOCUMENTS.
11.2 No Compensation without EXTRA WORK Authorization. CONTRACTOR shall
not be entitled to any compensation in addition to that specified in the
CONTRACT for the performance of any EXTRA WORK, unless prior to the performance
of such EXTRA WORK CONTRACTOR shall have received from NATIONAL a specific
written authorization to perform such EXTRA WORK in accordance with Exhibit B
(EXTRA WORK PROCEDURES).
11.3 Delays. CONTRACTOR will be permitted a reasonable extension of time
to complete the PROJECT due to changes in the SCOPE OF WORK by NATIONAL or
corrections of the errors of NATIONAL. There shall be no adjustment of the time
of performance or of the CONTRACT PRICE in the event of a delay caused by the
need to correct an error of CONTRACTOR. CONTRACTOR shall advise NATIONAL in
advance of the extent of any such delay prior to proceeding with any such
changes and modifications.
11.4 CONTRACTOR's Markup on EXTRA WORK. The parties agree that
CONTRACTOR's markup on EXTRA WORK shall be fixed at ten percent (10%).
12. CONTRACTOR'S PERSONNEL:
12.1 Designation of Field Superintendent. CONTRACTOR shall designate a
competent field superintendent(s) acceptable to NATIONAL who, on behalf of
CONTRACTOR, shall have complete direct charge of all WORK in the field.
CONTRACTOR shall advise NATIONAL in writing of the name, address and telephone
number (day and night) of such individuals and of any changes thereto. One of
said individuals shall be at the SITE or, if reasonably acceptable to NATIONAL,
off-SITE but available to representatives of NATIONAL at all reasonable times.
12.2 Continuity of CONTRACTOR Personnel. The parties acknowledge that
in order to expedite the WORK and to maintain the quality of the WORK, it is
desirable to maintain the continuity of the CONTRACTOR personnel working on the
PROJECT. Accordingly, the PERSONS initially selected by CONTRACTOR to perform
the WORK shall continue to perform their duties on the PROJECT for the term of
the CONTRACT unless (i) NATIONAL has requested the removal of such PERSON with
respect to the performance of WORK, (ii) such PERSON has quit, retired, been
terminated, become incapacitated or is otherwise unable to perform his duties,
(iii) such PERSON is reasonably determined by CONTRACTOR to be not performing
his duties in a satisfactory manner, or (iv) such PERSON can be substituted for
without interruption or delay in the performance of the WORK and such PERSON is
not one of CONTRACTOR's key personnel as reasonably determined by CONTRACTOR.
CONTRACTOR shall provide notice to NATIONAL as soon as practicable in advance of
any change of the key personnel identified pursuant to the provisions of this
Section 12, or otherwise.
12.3 Attendance at Meetings. CONTRACTOR's field superintendent and such
other persons reasonably designated by NATIONAL shall be available and shall
attend such meetings as are called by NATIONAL at no additional expense to
NATIONAL.
13. WORK QUALITY, STANDARDS; INSPECTION AND REJECTION:
13.1 WORK Quality and Inspection. All WORK to be furnished or performed
under this CONTRACT shall conform to the standards applicable to such WORK in
the business or industry in which CONTRACTOR is engaged and shall incorporate
the best professional practices. All materials and workmanship furnished or
performed by CONTRACTOR shall be subject to final inspection, tests and
acceptance by NATIONAL upon completion of the WORK, whether or not previously
paid for by NATIONAL. At any and all proper times during manufacture or
performance of the WORK, all materials and workmanship furnished or performed by
the CONTRACTOR shall be subject to inspection, tests and approval by inspectors
of NATIONAL at any and all places where such manufacture or performance shall be
carried on; provided, however, that failure of such inspectors to make
inspection or tests or to discover defective workmanship or material shall not
prejudice any rights of NATIONAL, including the right to final inspection and
test. If facilities of NATIONAL are not available, and unless otherwise
contemplated by the CONTRACT DOCUMENTS, CONTRACTOR shall furnish, at NATIONAL's
expense, such facilities as may be necessary for the making of such inspection
and test.
13.2 Quality Control Plan. No later than thirty (30) days after the
execution of this CONTRACT, CONTRACTOR shall submit its Quality
Assurance/Quality Control Plan to NATIONAL for approval. CONTRACTOR's Plan
shall require and demonstrate compliance with the requirements of the CONTRACT
prior to final acceptance and payment. CONTRACTOR shall comply fully with all
requirements of its Quality Assurance/Quality Control Plan.
Any condition threatening to adversely affect quality assurance and control
of the PROJECT and its performance hereunder shall be immediately brought to the
attention of NATIONAL. Additionally, CONTRACTOR will immediately notify
NATIONAL if it becomes aware of any pending or threatened governmental or third
party action relating to (i) the WORK performed hereunder, (ii) the status of
any of NATIONAL's permits or licenses related to the SITE or the WORK, or (iii)
a violation or alleged violation of GOVERNMENTAL REQUIREMENTS.
13.3 Non-Conforming WORK. If upon any such inspection or test, any
MATERIAL, EQUIPMENT or WORK shall be found to be defective or not to conform to
CONTRACT requirements, then the applicable MATERIAL, EQUIPMENT or WORK shall be
promptly rejected and the CONTRACTOR shall be notified thereof. Such notice by
NATIONAL's authorized representatives will be in writing. CONTRACTOR, at its
own expense, shall promptly correct such WORK which does not conform to CONTRACT
requirements by making the same conform thereto and shall promptly replace any
MATERIAL or EQUIPMENT which does not conform to CONTRACT requirements and any
MATERIAL or EQUIPMENT which may have been consequently damaged as a result of
said nonconformity, unless such defect or nonconformity is caused by NATIONAL,
in which case such correction or replacement shall be at the expense of
NATIONAL. If CONTRACTOR shall fail to replace or correct any such MATERIAL,
EQUIPMENT or WORK promptly, NATIONAL, at its option, may replace or correct the
same and all costs and expenses of NATIONAL in connection therewith shall be
borne by CONTRACTOR and may be deducted from any amounts due CONTRACTOR
hereunder.
13.4 Industry Standards. Unless otherwise stated, all EQUIPMENT,
MATERIAL and other WORK designed and/or furnished hereunder will comply with
industry standards which, including but not limited to those listed below and
elsewhere in the CONTRACT DOCUMENTS, may be applicable thereto:
Standards of the American Institute of Electrical Engineers,
Standards of the American Society of Testing and Materials (ASTM
Standards),
Standards of the American Society of Mechanical Engineers,
Standards of the American National Standards Institute,
Standards of the American Institute of Steel Construction,
Standards of the Institute of Electrical and Electronic
Engineers,
Standards of the American Concrete Institute,
Standards issued under the Occupational Safety and Health Act,
and any other similar standards which may be applicable.
In case of conflict between any applicable standards, NATIONAL shall
determine which standards shall govern; provided, however, in no event shall
CONTRACTOR be excused from compliance with the Occupational Safety and Health
Act and Standards, as provided in Section 25 (SAFETY RULES) below.
14. REMOVAL OF UNFIT WORK:
14.1 Rejected WORK. Without prejudice to NATIONAL's other rights and
legal remedies, CONTRACTOR shall without delay take down all completed or
partially completed WORK and remove from the premises all MATERIALS or EQUIPMENT
(worked or unworked) properly rejected by NATIONAL for failure to comply with
DRAWINGS, SPECIFICATIONS or any other requirements of the CONTRACT, or condemned
by a duly authorized public official for failure to conform to GOVERNMENTAL
REQUIREMENTS. It is understood, however, that NATIONAL may elect to permit WORK
to remain and MATERIALS or EQUIPMENT to be used after agreement by CONTRACTOR to
an equitable reduction in the CONTRACT PRICE.
14.2 Replacement of WORK. MATERIALS, EQUIPMENT and WORK so rejected or
condemned shall be replaced and re-executed in accordance with the CONTRACT
without delay, and the cost thereof, together with the cost of making good other
WORK damaged by removal of unfit portions, shall be borne by the CONTRACTOR. No
extension of time will be allowed for such correcting of faulty MATERIALS,
EQUIPMENT or WORK unless the same is due to the fault of NATIONAL.
15. ACCEPTANCE OF THE WORK:
15.1 Testing and Acceptance Procedures. Acceptance of the WORK shall be
subject to the staged procedure set forth below:
(i) Promptly upon completion of all design, engineering,
manufacturing, mechanical and structural construction and installation of the
PLANT, such that the PLANT is functionally completed, and the start-up,
commissioning and testing process is ready to begin, CONTRACTOR shall deliver to
NATIONAL two (2) copies of the Installation Completion Certificate, certifying
such completion, in the form attached hereto as Exhibit D (INSTALLATION
COMPLETION CERTIFICATE). NATIONAL shall then have ten (10) calendar days after
its receipt of the Installation Completion Certificate to inspect and review
CONTRACTOR's WORK. During review and inspection by NATIONAL, CONTRACTOR may
proceed with commissioning work. If NATIONAL agrees that the criteria for
installation completion (as set forth in the SPECIFICATIONS and elsewhere in the
CONTRACT DOCUMENTS) have been satisfied, NATIONAL shall countersign the
Installation Completion Certificate within such ten (10) calendar day period and
deliver a signed original to CONTRACTOR. In the event that NATIONAL does not
agree that the criteria for issuance of the Installation Completion Certificate
have been fulfilled, NATIONAL shall provide CONTRACTOR with a list of those
deficiencies and/or defects in the WORK which prevent NATIONAL's sign-off on the
Installation Completion Certificate within such ten (10) calendar day period.
CONTRACTOR shall promptly correct such deficiencies and/or defects and, upon the
completion of such corrective action, will reissue the Installation Completion
Certificate to NATIONAL, in which event the procedures set forth above shall
once again apply. If NATIONAL fails to either countersign and deliver the
Installation Completion Certificate or to deliver its list of deficiencies and
defects within the aforementioned ten (10) calendar day period, the Installation
Completion Certificate shall be deemed to have been countersigned by NATIONAL as
of the expiration of the ten (10) calendar day period.
(ii) Upon delivery by NATIONAL of the executed Installation Completion
Certificate, the commissioning process shall promptly begin. The commissioning
process shall consist of a No Load Test, a Cold Run Test, a Hot Run Test and a
Performance Test, the criteria, timing, deadlines and procedures for which are
set forth in the SPECIFICATIONS and elsewhere in the CONTRACT DOCUMENTS. The
satisfactory completion of the No Load Test will be evidenced by the delivery by
CONTRACTOR and countersignature by NATIONAL of a No Load Test Completion
Certificate in the form attached hereto as Exhibit E (NO LOAD TEST COMPLETION
CERTIFICATE). The satisfactory completion of the Cold Run Test shall be
evidenced by the delivery by CONTRACTOR and countersignature by NATIONAL of a
Cold Run Test Completion Certificate in the form attached hereto as Exhibit F
(COLD RUN TEST COMPLETION CERTIFICATE). The satisfactory completion of the Hot
Run Test shall be evidenced by the delivery by CONTRACTOR and the
countersignature or deemed approval, as applicable, of the Provisional
Acceptance Certificate in the form attached hereto as Exhibit G. (PROVISIONAL
ACCEPTANCE CERTIFICATE) Subject to the provisions of Section 15.1 (iii) hereof,
the procedures for the issuance of the aforementioned Certificates shall be the
same as those set forth with respect to the Installation Completion Certificate
in subsection (i) above. During the commissioning process, NATIONAL shall
supply the coils specified in the SPECIFICATIONS for the performance of the Cold
Run, Hot Run and Performance Tests, as well as operating and maintenance
personnel and materials as delineated in the SPECIFICATIONS.
(iii) Subject to the other provisions of the CONTRACT, if CONTRACTOR
is ready, willing and able to perform its responsibilities with respect to the
Hot Run Test and the Installation Completion, No Load Test and Cold Run Test
Certificates have been issued (or deemed issued, if applicable) by and at the
times specified in the SPECIFICATIONS and elsewhere in the CONTRACT DOCUMENTS
and NATIONAL fails to perform its obligations with respect to such Hot Run Test
(as provided in the CONTRACT DOCUMENTS), and as a result, the Hot Run Test is
prevented from being completed prior to that date which is eight (8)
months from the date on which CONTRACTOR first notifies NATIONAL that CONTRACTOR
is ready, willing and able to perform its responsibilities with respect to the
Hot Run Test (such failure on the part of NATIONAL being hereinafter referred to
as a "FAILURE OF NATIONAL HOT RUN TEST CONDITIONS,") then (A) the Hot Run Test
shall be deemed to have been performed successfully, and the Provisional
Acceptance Certificate shall be deemed to have been issued by NATIONAL, (B) any
milestones for payment scheduled during such eight (8) month period shall be
deemed to have been met by CONTRACTOR, and (C) NATIONAL shall make such payments
to CONTRACTOR as are associated with such milestones. No such acceptance and
issuance of the Provisional Acceptance Certificate shall be deemed to have
occurred pursuant to the provisions of this Section 15.1(iii) unless (X)
CONTRACTOR shall have given to NATIONAL timely notice(s) that a FAILURE OF
NATIONAL HOT RUN TEST CONDITIONS is preventing CONTRACTOR from performing the
Hot Run Test, which notice shall set forth in detail the specific basis for
CONTRACTOR's belief that the delay is being caused by a FAILURE OF NATIONAL HOT
RUN TEST CONDITIONS, and (Y) no act or omission of CONTRACTOR or any
SUBCONTRACTOR prevents the performance of such Hot Run Test. CONTRACTOR shall
provide the aforementioned notice(s) within thirty (30) days after the beginning
of such delay by NATIONAL. No such acceptance and issuance of the Provisional
Acceptance Certificate shall be deemed to have occurred and no such milestone
payments shall be required to be made if there is a dispute between NATIONAL and
CONTRACTOR with regard to either CONTRACTOR's assertion that the delay is caused
by a FAILURE OF NATIONAL HOT RUN TEST CONDITIONS or with respect to the quality
of the WORK or the conformity of the WORK to the CONTRACT DOCUMENTS; provided,
however, that in the event of any such dispute, if it is ultimately determined
that there was a FAILURE OF NATIONAL HOT RUN TEST CONDITIONS, the issuance of
the Provisional Acceptance Certificate shall be deemed to have occurred
retroactive to the time that such Certificate should have been issued but for
the FAILURE OF NATIONAL HOT RUN TEST CONDITIONS.
(iv) After delivery or deemed delivery, as applicable, by NATIONAL of
the Provisional Acceptance Certificate, Performance Tests as set forth in the
SPECIFICATIONS and other CONTRACT DOCUMENTS shall be performed within the time
periods specified therein. Upon satisfactory completion or deemed completion, as
applicable, of such performance tests (as determined by subsection (v) below),
CONTRACTOR shall issue to NATIONAL a Certificate of Substantial Completion in
the form attached hereto as Exhibit H (CERTIFICATE OF SUBSTANTIAL COMPLETION),
together with a comprehensive list of "punch list" items to be completed or
corrected prior to final completion of the WORK by CONTRACTOR and final
acceptance by NATIONAL. Subject to the provisions of Section 15.1(v) hereof,
procedures for the issuance of the Certificate of Substantial Completion shall
be the same as those set forth with respect to the Installation Completion
Certificate in subsection (i) above.
(v) Subject to the other provisions of the CONTRACT, if CONTRACTOR is
ready, willing and able to perform its responsibilities with respect to the
Performance Tests and the Installation Completion, No Load Test, Cold Run Test
and Provisional Acceptance Certificates have been issued (or deemed issued, if
applicable) by and at the times specified in the SPECIFICATIONS and elsewhere in
the CONTRACT DOCUMENTS and NATIONAL
fails to perform its obligations with respect to such Performance Tests (as
provided in the CONTRACT DOCUMENTS) and, as a result, the Performance Tests are
prevented from being completed prior to that date which is four and one half (4
1/2) months from the date on which CONTRACTOR first notifies NATIONAL that
CONTRACTOR is ready, willing and able to perform its responsibilities with
respect to the Performance Tests (such failure on the part of NATIONAL being
hereinafter referred to as a "FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS,")
then (A) the Performance Tests shall be deemed to have been performed
successfully and the Certificate of Substantial Completion shall be deemed to
have been issued by NATIONAL, (B) any milestones for payment scheduled during
such period shall be deemed to have been met by CONTRACTOR, and (C) NATIONAL
shall make such payments to CONTRACTOR as are associated with such milestones.
No such acceptance and issuance of the Certificate of Substantial Completion
shall be deemed to have occurred pursuant to the provisions of this Section
15.1(v) unless (X) CONTRACTOR shall have given to NATIONAL timely notice(s) that
a FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS is preventing CONTRACTOR from
performing the Performance Tests, which notice shall set forth in detail the
specific basis for CONTRACTOR's belief that the delay is being caused by a
FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS, and (Y) no act or omission of
CONTRACTOR or any SUBCONTRACTOR prevents the performance of such Performance
Tests. CONTRACTOR shall provide the aforementioned notice(s) within thirty (30)
days after the beginning of such delay by NATIONAL. No such acceptance and
issuance of the Certificate of Substantial Completion shall be deemed to have
occurred and no such milestone payments shall be required to be made if there is
a dispute between NATIONAL and CONTRACTOR with regard to either CONTRACTOR's
assertion that the delay is caused by a FAILURE OF NATIONAL PERFORMANCE TEST
CONDITIONS, or with respect to the quality of the performance of the WORK or the
conformity of the WORK to the CONTRACT DOCUMENTS; provided, however, that in the
event of any such dispute, if it is ultimately determined that there was a
FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS, the issuance of the Certificate
of Substantial Completion shall be deemed to have occurred retroactive to the
time that such Certificate should have been issued but for the FAILURE OF
NATIONAL PERFORMANCE TEST CONDITIONS.
(vi) Notwithstanding any completion or deemed completion of the
Performance Tests or issuance or deemed issuance of the Certificate of
Substantial Completion, CONTRACTOR agrees that it shall diligently proceed to
complete all remaining portions of the WORK, including, without limitation, all
"punch list" items. The following criteria must also be satisfied prior to the
issuance of the Final Completion Certificate (which Final Completion Certificate
shall be in the form of Exhibit I (FINAL COMPLETION CERTIFICATE) attached hereto
and made a part hereof) and satisfaction must be so certified by CONTRACTOR at
the time it submits the Final Completion Certificate to NATIONAL: (A) completion
of all "punch list" items with respect to the WORK; (B) delivery of all lien
waivers and releases required in accordance with Section 20 (LIENS AND CLAIMS)
hereunder; (C) delivery of "as built" specifications and other drawings required
by the CONTRACT DOCUMENTS, and (D) fulfillment of all other requirements of the
CONTRACT that are required to be fulfilled at or prior to the completion of the
WORK. Upon satisfaction of the conditions set forth in this
subsection (vi), NATIONAL shall countersign the Final Completion Certificate and
release the hold back portion of the CONTRACT PRICE.
16. FORCE MAJEURE; EXTENSION OF TIME - CONTRACTOR'S WAIVER OF DAMAGES FOR
DELAY:
16.1 FORCE MAJEURE.
(i) If either party is prevented, hindered or delayed from performing
any of its obligations under the CONTRACT by an event of FORCE MAJEURE, then the
party affected by such FORCE MAJEURE shall be excused from the performance of
its obligations under the CONTRACT for so long as such event of FORCE MAJEURE
continues and to the extent that such party's performance is prevented, hindered
or delayed, including such time as is necessary to recommence performance.
(ii) The party or parties affected by the event of FORCE MAJEURE shall
use reasonable efforts to mitigate the effect thereof upon its or their
performance of the CONTRACT and to fulfill its or their obligations under the
CONTRACT.
(iii) No delay or non-performance by either party hereto caused by the
occurrence of any event of FORCE MAJEURE shall constitute a default or breach of
the CONTRACT, if and to the extent that such delay or non-performance is caused
by the occurrence of an event of FORCE MAJEURE.
16.2 Notice of Delay. The party affected by an event of FORCE MAJEURE
shall give the other party prompt written notice of such event and of the cause
and anticipated extent thereof. The affected party shall also promptly give the
other party written notice of the cessation and actual extent of such delay. If
CONTRACTOR is affected by an event of FORCE MAJEURE, NATIONAL shall reasonably
determine which portion of the delay, if any, was excusable hereunder and shall
grant CONTRACTOR a written extension of time equal thereto.
16.3 Failure to Notify. To the extent that the failure of CONTRACTOR to
give either or both such written notices to NATIONAL prejudices NATIONAL, such
failure(s) shall be sufficient reason for denial of an extension of time by
NATIONAL; provided, however, that if CONTRACTOR can cure or remove such
prejudice to NATIONAL's reasonable satisfaction, then such denial of an
extension shall be rescinded.
16.4 Sole Remedy. The extension of time provided hereunder shall be the
sole remedy of CONTRACTOR for any delay caused by an event of FORCE MAJEURE, and
CONTRACTOR expressly waives any and all claims for damages or other rights which
it may have against NATIONAL in the event of any delay caused by an event of
FORCE MAJEURE.
16.5 Delays Caused by NATIONAL. If, due to the fault of NATIONAL,
CONTRACTOR is delayed from performing the WORK other than as a result of an
event of FORCE MAJEURE, then CONTRACTOR shall be entitled to recover from
NATIONAL, as
CONTRACTOR'S sole remedy (other than an extension of the CONTRACT Schedule, if
applicable), CONTRACTOR's additional reasonable direct COSTS incurred as a
result of such delay caused by NATIONAL'S fault.
16.6 Make-Up of Lost Time. In the event of any delay hereunder,
CONTRACTOR shall use reasonable efforts to modify its scheduling and performance
of the WORK (without charge to NATIONAL, except as provided in Section 16.5
(DELAYS CAUSED BY NATIONAL) hereof) so as to make up for lost time.
16.7 Extension of Time Without Prejudice. Grant of an extension of time
by NATIONAL shall not prejudice any of NATIONAL's other rights under the
CONTRACT or for breach thereof.
16.8 Delays Greater Than 120 Days. If performance of the WORK is
delayed by an event of FORCE MAJEURE for a continuous period of one hundred and
twenty (120) days, the parties shall engage in good faith discussions to
determine what, if any, changes to the CONTRACT are appropriate; provided,
however, that, to the extent not prevented from doing so by such event of FORCE
MAJEURE, and (subject to the provisions of Section 17.4 (NO WORK STOPPAGE DUE TO
DISPUTES) below) payments to CONTRACTOR are paid when due hereunder, CONTRACTOR
shall continue with performance of the WORK while such discussions are ongoing,
and even if the results of such discussions are not satisfactory to CONTRACTOR.
17. PERFORMANCE OF WORK:
17.1 Notification of Conduct of WORK. CONTRACTOR, before entering the
SITE to undertake the WORK, must notify NATIONAL of its intention to do so and
at the same time inform NATIONAL of the starting date for the WORK, the areas in
which the WORK will be performed, approximate number and types of personnel to
perform the WORK and the schedule, length and number of turns to be worked.
17.2 Coordination with Other Work. NATIONAL represents that it and other
contractors may be working at the SITE during the performance of the CONTRACT.
NATIONAL reserves the right to direct CONTRACTOR to schedule the order of
performance of the WORK in such manner as not unreasonably to interfere with the
performance of other work by NATIONAL and other contractors; provided, however,
that such scheduling shall not, in the reasonable judgment of CONTRACTOR, impede
or delay its performance of the CONTRACT in any material way.
17.3 Inadequate Performance of WORK. If at any time during the progress
of the WORK, CONTRACTOR's actual progress reasonably appears to NATIONAL, in
light of all the requirements of the CONTRACT (including, without limitation,
any schedules applicable to the WORK), to be materially inadequate due to
conditions within CONTRACTOR's control, NATIONAL may notify CONTRACTOR of such
imminent or actual noncompliance with the CONTRACT. CONTRACTOR shall thereupon
take such steps as may be reasonably necessary
to improve its progress, and NATIONAL may require an increase in the labor
force, the number of shifts, the amount of resources and/or any other like or
unlike steps or measures as reasonably directed by NATIONAL. Neither such notice
by NATIONAL nor NATIONAL's failure to issue such notice shall (i) relieve
CONTRACTOR from its obligation to achieve the quality of WORK and rate of
progress required by the CONTRACT (including, without limitation, any schedules
applicable to the WORK), or (ii) constitute a waiver of any of NATIONAL's rights
under the CONTRACT.
17.4 No Work Stoppage Due to Disputes. In case of any dispute between
the parties hereto arising out of the CONTRACT, including, without limitation,
disputes regarding EXTRA WORK, or changes or delays in the WORK, the parties
shall negotiate in good faith to reach an agreement but in no case, except
pursuant to NATIONAL's prior written consent, shall any WORK be halted pending
such agreement, whether or not the dispute can be resolved to CONTRACTOR's
satisfaction, and CONTRACTOR shall be bound by the terms and conditions of the
CONTRACT to prosecute the WORK without delay to its successful completion. Any
such disputes shall be resolved in accordance with Section 52 (DISPUTE
RESOLUTION) hereof.
18. EQUIPMENT LOSS, THEFT AND DISAPPEARANCE:
18.1 Responsibility. CONTRACTOR shall be responsible for any loss, theft
or disappearance of or damage to (i) any EQUIPMENT and MATERIALS and (ii) any
tools, equipment and any other materials furnished to CONTRACTOR by NATIONAL, or
any SUBCONTRACTOR, however such loss, theft, disappearance or damage may have
occurred. CONTRACTOR shall pick up, secure and otherwise protect all such
EQUIPMENT and MATERIALS at all times. CONTRACTOR agrees that it shall make no
claim against NATIONAL for any loss, theft, disappearance or damage and
CONTRACTOR shall defend, indemnify and hold harmless NATIONAL from any claim
made relating thereto by any SUBCONTRACTOR or third party.
18.2 Security. CONTRACTOR shall be responsible for SITE security
beginning at the time CONTRACTOR first enters the SITE through the final
completion of the WORK and the issuance of the Certificate of Final Completion.
19. REMOVAL OF DEBRIS AND WASTE MATERIAL:
19.1 Removal of Debris and Waste; Scrap Metal. During the time period
set forth in Section 18.2 (SECURITY) hereof, CONTRACTOR shall remove all debris
and waste material and keep and leave the SITE in a safe and sanitary condition
satisfactory to NATIONAL; provided, however, that unless NATIONAL otherwise
states in writing, all scrap metal of any kind shall remain the property of
NATIONAL and shall be removed and relocated by CONTRACTOR as NATIONAL shall
direct.
19.2 Failure to Maintain SITE. In the event NATIONAL reasonably
determines that CONTRACTOR has failed to maintain the SITE in a safe and
sanitary condition during the times
and in the manner provided herein, NATIONAL may take all necessary steps to do
so, including, but not limited to, the employment of another contractor, and
charge CONTRACTOR for the cost and expense thereof, which charge may be offset
against any amounts due CONTRACTOR from NATIONAL under the CONTRACT.
20. LIENS AND CLAIMS:
20.1 Full Conditional Waiver of Liens. CONTRACTOR agrees to execute and
tender to NATIONAL, prior to commencement of WORK hereunder, a Full Conditional
Waiver of Lien in the form attached hereto as Exhibit J, waiving all mechanic's
liens, materialmen's liens, construction liens or other type liens against any
of the property or improvements of NATIONAL, which waiver is to be conditioned
solely upon actual payment of the CONTRACT PRICE. CONTRACTOR also agrees to
obtain from all SUBCONTRACTORS or materials suppliers of any tier prior to
commencement of WORK, a Full Conditional Waiver of Lien.
20.2 Prevention and Removal of Liens. If a lien or claim of any kind is
established or is attempted to be established upon or against the SITE, the WORK
or the property upon which the WORK is situated or any buildings or improvements
thereon and such lien relates to the performance of work or services, or the
furnishing of materials, equipment or supplies, by CONTRACTOR, any of its
SUBCONTRACTORS (whether direct or of any lower tier) or any suppliers of
materials or equipment with respect to the WORK, CONTRACTOR, with or without
notice from NATIONAL, shall immediately prevent the establishment thereof or
have said lien or other claim removed by the posting of a bond or provision of
other security or by any other lawful means. If after demand of NATIONAL,
CONTRACTOR fails to remove any lien it is required to remove under this Section
20, NATIONAL shall have the right to do so on behalf of CONTRACTOR and at the
expense of CONTRACTOR, and CONTRACTOR shall promptly reimburse NATIONAL for any
sums expended by NATIONAL for this purpose, or, at NATIONAL's option, such sums
may be deducted from the CONTRACT PRICE. Nothing contained herein is intended
to prevent CONTRACTOR from filing a lien in the event that NATIONAL fails to pay
any undisputed amounts to CONTRACTOR when such payments are due.
20.3 Submission of Partial or Full Unconditional Waivers of Liens. As a
condition precedent to NATIONAL's making any payment of the CONTRACT PRICE,
CONTRACTOR shall submit Partial or Full Unconditional Waivers of Liens, executed
by the CONTRACTOR and all SUBCONTRACTORS performing the WORK, in the forms
attached hereto as Exhibits K and L, respectively, together with a Sworn
Statement, in the form attached hereto as Exhibit M, unconditionally waiving
through the date of the payment, all mechanic's liens, materialmen's liens,
construction liens or other type liens against any of the property or
improvements of NATIONAL. In each instance in the CONTRACT wherein CONTRACTOR
is to obtain from a SUBCONTRACTOR a Partial Unconditional Waiver of Liens and
such SUBCONTRACTOR has completed all of its WORK under its SUBCONTRACT, then
CONTRACTOR shall instead obtain from such SUBCONTRACTOR a Full Unconditional
Waiver of Liens in lieu of a Partial Unconditional Waiver of Liens. Such
waivers must be submitted covering all such claims as a condition to final
payment. CONTRACTOR shall, in the event any SUBCONTRACTOR
refuses to furnish a Full Unconditional Waiver of Liens, furnish a bond or other
security satisfactory to NATIONAL to protect and indemnify NATIONAL and
NATIONAL's property against any and all liens which may at any time be filed or
asserted by such SUBCONTRACTOR, even though the SUBCONTRACTOR has not yet
asserted a claim or lien against NATIONAL or NATIONAL's property, and if
CONTRACTOR refuses or fails to do so NATIONAL may do so in accordance with the
provisions of Section 20.2 above. Making any payment of the CONTRACT PRICE
without requiring strict compliance with any of the provisions of this Section
20 shall not be construed as a waiver by NATIONAL of the right to insist upon
such compliance as a condition of later payments.
20.4 Indemnification. CONTRACTOR shall indemnify, defend and hold
harmless NATIONAL from and against all LOSSES (as defined in Section 30 hereof)
arising from or related to the failure of CONTRACTOR to satisfy its obligations
pursuant to this Section 20.
20.5 Waivers. Upon completion of the WORK and payment to CONTRACTOR of
all CONTRACT PRICE components then due, CONTRACTOR shall furnish to NATIONAL
Full Unconditional Waivers of Liens from itself and all SUBCONTRACTORS.
20.6 SUBCONTRACTOR's Notice. CONTRACTOR shall require in each of its
SUBCONTRACTS that the SUBCONTRACTOR give notice to NATIONAL in the event that
the SUBCONTRACTOR claims payment to it by CONTRACTOR is more than thirty (30)
days overdue. Notice shall be given to:
Great Lakes Division
National Steel Corporation
No. 0 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
ATTENTION: Xxx Xxxxx
The SUBCONTRACTS shall also provide that timely compliance with this provision
shall be a condition precedent to the filing of any action by the SUBCONTRACTOR
against the CONTRACTOR.
21. PATENT RIGHTS AND INDEMNIFICATION; OWNERSHIP OF DRAWINGS:
21.1 CONTRACTOR Warranty Against Infringement. CONTRACTOR warrants that
(i) use of the WORK or any part thereof for the purposes for which such WORK was
designed, (ii) sale of the WORK or any part thereof by NATIONAL, and (iii)
performance by CONTRACTOR under the CONTRACT, will not infringe any patent,
copyright or other intellectual property right, nor will any of the foregoing
violate any agreement between CONTRACTOR and any third party with respect
thereto, and CONTRACTOR will, at its expense, defend NATIONAL and hold NATIONAL,
its affiliated corporations, successors and assigns, free and harmless in
respect to any claim, action or suit, or for any claim arising out of such
action or suit, for infringement of any patent, copyright or other intellectual
property right or violation of any third party agreement, based on the use of
such WORK or any part thereof for
the purposes for which it was designed or the sale of such WORK or any part
thereof by NATIONAL, or for actively inducing infringement or for contributory
infringement arising out of the performance of any act by CONTRACTOR under the
CONTRACT; provided, however, that NATIONAL may be represented in any such action
or suit by attorneys of its own selection at its expense. In the event that an
injunction shall be obtained against the use of any such WORK or part thereof by
NATIONAL, CONTRACTOR, in addition to its above obligations, shall, at the option
of NATIONAL and at CONTRACTOR's expense, procure for NATIONAL the right to
continue using said WORK, modify said WORK to become non-infringing or replace
said WORK with non-infringing WORK satisfactory to NATIONAL. If CONTRACTOR
cannot perform in accordance with the immediately preceding sentence, NATIONAL
shall have the right to require CONTRACTOR to take back the infringing portion
of the WORK and reimburse NATIONAL for the portion of the CONTRACT PRICE
applicable thereto and all other expenditures of NATIONAL incurred in connection
therewith. Such remedy shall be in addition to such other remedies as are
available to NATIONAL at law, in equity or hereunder.
21.2 NATIONAL Warranty Against Infringement. NATIONAL warrants that the
incorporation into the WORK at the direction of NATIONAL of the design set forth
in any United States patent owned by NATIONAL (the "INCORPORATED PATENT") shall
not result in an infringement of any other United States patent held by a third
party or violate any agreement between NATIONAL and any third party with regard
to the INCORPORATED PATENT, and NATIONAL will, at its expense, defend CONTRACTOR
and hold CONTRACTOR free and harmless in respect to any claim, action or suit,
or for any claim arising out of such action or suit, for infringement of such
other United States patent or violation of a third party agreement as a result
of the incorporation of the INCORPORATED PATENT into the WORK at the direction
of NATIONAL; provided, however, that CONTRACTOR may be represented in any such
action or suit by attorneys of its own selection at its expense.
21.3 Ownership of DRAWINGS and Other TECHNICAL DATA. CONTRACTOR agrees
that NATIONAL shall be the owner of all drawings, plans, documents, writings,
computer software and data, and all other sources of technical information in
any form, tangible or intangible (herein called "TECHNICAL DATA") relating to
the subject matter of this CONTRACT which was transferred, provided or exhibited
to NATIONAL, its employees or agents, in the course of performance of this
CONTRACT and which is necessary or useful in the operation of the facilities,
equipment, apparatus and/or processes which are the subject matter of this
CONTRACT; provided, however, that CONTRACTOR shall have the unqualified free
right to possess and shall be permitted to make use of TECHNICAL DATA developed
by it (as opposed to TECHNICAL DATA supplied or developed by NATIONAL) in
connection with the WORK. Any exceptions to the above-described ownership
rights of NATIONAL must be agreed to in writing by NATIONAL and made an exhibit
to this CONTRACT and must provide for the unqualified free right of NATIONAL to
possess and use the TECHNICAL DATA in all of its operations.
22. RIGHT TO USE COMPUTER SOFTWARE AND INDEMNIFICATION:
22.1 License to Use Software. CONTRACTOR agrees, represents and warrants
that if any equipment or other GOODS covered by the CONTRACT include computer
software or require the use of computer software to enable NATIONAL to use the
GOODS, NATIONAL shall have the unrestricted, irrevocable, perpetual, paid-up
right and license to use such computer software solely in connection with the
GOODS so long as the GOODS are in use. If requested in writing by CONTRACTOR,
NATIONAL will protect any such computer software from disclosure to third
parties to the same extent it protects its own confidential information, but the
failure by NATIONAL to do so shall not cause the revocation of, or otherwise
affect, NATIONAL's right to use such computer software. CONTRACTOR agrees to
indemnify and defend NATIONAL from and against any claims of third parties
relating to NATIONAL's rights under this Section 22.
22.2 Year 0000 Xxxxxxxx; System Compatibility. CONTRACTOR represents and
warrants that each item of hardware, software and firmware delivered to or
developed for NATIONAL pursuant to this CONTRACT will process correctly any data
(including, but not limited to, calculating, comparing and sequencing) from,
into and between the years 1999 and 2000, including, but not limited to, leap
year calculations and any other calculations associated with the change of the
year 1999 to 2000 and/or the change of the twentieth (20th) century to the
twenty-first (21st) century. CONTRACTOR further represents and warrants that
any hardware, software and firmware delivered to or developed for NATIONAL
hereunder also shall perform as an integrated system, including, but not limited
to, interfacing with NATIONAL's existing computer systems. If any item(s) of
hardware, software or firmware (either individually, collectively or in
conjunction with NATIONAL's pre-existing systems, if applicable) delivered to or
developed for NATIONAL hereunder fails to perform as warranted herein,
CONTRACTOR shall, at NATIONAL's option, repair or replace such item(s) at
CONTRACTOR's sole cost and expense, within thirty (30) days.
23. PLANT PROTECTION REGULATIONS:
CONTRACTOR shall be responsible for compliance by itself, its SUBCONTRACTORS and
the employees of both, with all plant protection rules and regulations of
NATIONAL. CONTRACTOR, before entering NATIONAL's premises to undertake the
WORK, must notify NATIONAL of its intention to do so and at the same time inform
NATIONAL of the starting date for the WORK, the nature of the WORK to be
performed, the areas in which the WORK will be performed, duration of the WORK,
approximate number and types of personnel to perform the WORK, the schedule,
length and number of turns to be worked and such other information as may be
necessary to enable the CONTRACTOR to be advised of and to comply with all plant
protection rules and regulations.
24. SUBSTANCE ABUSE:
CONTRACTOR, in accordance with Great Lakes Specification #G-6, "Substance Abuse
Policy for Contractors", Exhibit N hereto, and any revisions thereto, shall
institute, implement and enforce a substance abuse screening program for all
employees involved with the performance of the WORK on NATIONAL's premises, and
guarantees to NATIONAL that all employees, hired
and existing, performing the WORK on NATIONAL's premises have successfully
passed the substance abuse screening test and, further, CONTRACTOR will use its
best efforts to insure that such employees are not under the influence of any
drugs or other such substance while performing any WORK on NATIONAL's premises.
25. SAFETY RULES:
25.1 Safety Rules. This Section 25 applies to all employees, agents,
SUBCONTRACTORS, consultants and invitees of CONTRACTOR and the employees of any
of them (herein called "CONTRACTOR AUTHORIZED PERSONNEL") and to all rules and
regulations pertaining to the safety of PERSONS or property while on any
premises of NATIONAL, regardless of by whom said rules and regulations have been
issued (herein called "SAFETY RULES"). CONTRACTOR agrees that while any
CONTRACTOR AUTHORIZED PERSONNEL are on premises of NATIONAL, they will conform
to all SAFETY RULES. CONTRACTOR acknowledges that it has received those SAFETY
RULES issued by NATIONAL. CONTRACTOR will see to it that all CONTRACTOR
AUTHORIZED PERSONNEL will be instructed with respect to all SAFETY RULES and
will be advised to report any infractions thereof to CONTRACTOR without fear of
recrimination. CONTRACTOR will be held responsible for immediately correcting
any such infractions and for any and all consequences thereof. CONTRACTOR
agrees to defend and indemnify NATIONAL from and against any claims and
liability for personal injury or death of any CONTRACTOR AUTHORIZED PERSONNEL
occurring while they are present on NATIONAL's premises and arising out of or in
any way in connection with (i) the actual or alleged insufficiency of any SAFETY
RULES, or (ii) any act or omission related in any way to the enforcement or
observance of any SAFETY RULES or the failure to enforce or observe any SAFETY
RULES, whether or not such claims or liability may be based in whole or in part
upon any breach of duty or negligence of NATIONAL, its employees or agents.
25.2 Safety Meetings. Prior to the commencement of any WORK on the SITE
by CONTRACTOR, and prior to commencement of any WORK on the SITE by each
SUBCONTRACTOR, a meeting shall be held with a NATIONAL engineer, the NATIONAL
Safety Representative and the Safety Representative of CONTRACTOR and of each
SUBCONTRACTOR for the purpose and with the effect of a thorough review and
mutual understanding of all SAFETY RULES.
25.3 Health & Safety Plan. CONTRACTOR shall conduct all operations
under the CONTRACT in a manner so as to avoid risk of bodily harm to persons or
damage to property and in full compliance with all GOVERNMENTAL REQUIREMENTS.
Further, CONTRACTOR shall continuously inspect its WORK, materials and equipment
to identify any unsafe conditions and shall promptly take action to correct any
condition which presents such a risk.
CONTRACTOR represents and warrants that it is fully qualified and
knowledgeable with respect to all health and safety requirements relating to the
WORK and that as an independent contractor, CONTRACTOR shall be solely
responsible for compliance with those requirements.
Upon demand by NATIONAL, CONTRACTOR shall submit in writing to NATIONAL for
review its SITE-specific Health & Safety Plan. CONTRACTOR shall comply fully
with the terms of such Plan.
CONTRACTOR shall provide and maintain its own safety equipment in
accordance with its Health & Safety Plan (if applicable) and all other
applicable legal and health and safety requirements. The CONTRACTOR is also
responsible for providing CONTRACTOR AUTHORIZED PERSONNEL with adequate
information and training in conformance with GOVERNMENTAL REQUIREMENTS.
CONTRACTOR shall ensure that all CONTRACTOR AUTHORIZED PERSONNEL comply with all
applicable requirements.
Should CONTRACTOR fail to comply with its Health & Safety Plan, or with
other applicable requirements as referenced above, such action or inaction shall
be considered a material breach of the CONTRACT. Should CONTRACTOR upon notice
thereof neglect or refuse to take appropriate corrective action, NATIONAL shall
have the right, but not the duty, to stop the CONTRACTOR's WORK or any portion
thereof, and/or correct the condition and backcharge all incident costs to
CONTRACTOR's account.
CONTRACTOR shall be responsible for all fines or penalties assessed due to
its failure to comply with the Health & Safety Plan and applicable GOVERNMENTAL
REQUIREMENTS, including any fines or penalties assessed against NATIONAL.
CONTRACTOR agrees, to the fullest extent permitted by law, to indemnify and hold
NATIONAL harmless from any losses, liabilities, costs and expenses resulting
from CONTRACTOR's failure to comply with the Health & Safety Plan and all
applicable health and safety GOVERNMENTAL REQUIREMENTS.
Nothing in this Section shall be interpreted as enlarging the legal duty of
NATIONAL to CONTRACTOR or to CONTRACTOR AUTHORIZED PERSONNEL or third parties or
as altering the independent contractor status of CONTRACTOR.
26. OCCUPATIONAL SAFETY AND HEALTH:
CONTRACTOR agrees on behalf of itself, its employees, agents, materialmen and
SUBCONTRACTORS to comply with, and to perform the WORK in compliance with,
GOVERNMENTAL REQUIREMENTS relating to the occupational safety and health of
CONTRACTOR's employees, as well as any other PERSONS present at locations where
WORK is to be performed, specifically including the federal Occupational Safety
and Health Act of 1970 and any rules, regulations, standards, or orders issued
thereunder (herein collectively called "OCCUPATIONAL SAFETY AND HEALTH
REQUIREMENTS"). CONTRACTOR represents that all GOODS sold, used or furnished in
connection with the performance of the CONTRACT will comply with all
OCCUPATIONAL SAFETY AND HEALTH REQUIREMENTS, and CONTRACTOR agrees upon request
to furnish to NATIONAL any and all information regarding the ingredients of such
GOODS. CONTRACTOR further agrees to indemnify, defend and hold harmless
NATIONAL from and against any claims, losses, damages,
fines, penalties, costs and expenses suffered or incurred by NATIONAL as a
result of any violation of or non-compliance with any OCCUPATIONAL SAFETY AND
HEALTH REQUIREMENTS to the extent caused or contributed to by CONTRACTOR, its
agents, materialmen or SUBCONTRACTORS, or the employees of any of them.
27. HAZARDOUS SUBSTANCES AND RIGHT-TO-KNOW:
CONTRACTOR agrees on behalf of itself, its employees, agents, materialmen and
SUBCONTRACTORS, to comply with, and to perform the WORK in compliance with,
GOVERNMENTAL REQUIREMENTS relating to the right of employees and other PERSONS
and entities to be notified of the presence of hazardous chemicals or
substances, specifically including the federal Hazard Communication Standard,
adapted pursuant to the Occupational Safety and Health Act of 1970, the federal
Right-to-Know provisions of the Superfund Amendments and Reauthorization Act of
1986 ("XXXX"), Title III, Emergency Planning and Community Right-to-Know Act of
1986, and any rules, regulations, standards or orders issued thereunder and any
similar state or local Right-to-Know Acts or other GOVERNMENTAL REQUIREMENTS
relating to the presence of, exposure to or release of hazardous chemicals or
substances (herein collectively called "RIGHT-TO-KNOW REQUIREMENTS").
CONTRACTOR agrees to provide NATIONAL with any and all information necessary for
NATIONAL to comply with any RIGHT-TO-KNOW REQUIREMENTS. CONTRACTOR represents
that all GOODS sold, used or furnished in connection with the performance of the
CONTRACT will comply with all RIGHT-TO-KNOW REQUIREMENTS. In addition to
providing NATIONAL with information as required by RIGHT-TO-KNOW REQUIREMENTS
with respect to such GOODS, CONTRACTOR agrees upon request to furnish to
NATIONAL any and all information regarding the ingredients of such GOODS.
CONTRACTOR further agrees to indemnify, defend and hold harmless NATIONAL from
and against any claims, losses, damages, fines, penalties, costs and expenses
suffered or incurred by NATIONAL as a result of any violation of or non-
compliance with any RIGHT-TO-KNOW REQUIREMENTS to the extent caused or
contributed to by CONTRACTOR, its agents, materialmen or SUBCONTRACTORS, or the
employees of any of them.
28. TOXIC SUBSTANCES CONTROL:
CONTRACTOR agrees on behalf of itself, its agents, materialmen and
SUBCONTRACTORS, and the employees of any of them, to comply with, and to perform
the WORK in compliance with, GOVERNMENTAL REQUIREMENTS relating to the control
of toxic substances, including those contained in or authorized by the federal
Toxic Substances Control Act (herein collectively called "TOXIC SUBSTANCES
CONTROL REQUIREMENTS"). CONTRACTOR represents that all GOODS sold, used or
furnished in connection with the performance of the CONTRACT will comply with
all TOXIC SUBSTANCES CONTROL REQUIREMENTS, and CONTRACTOR agrees upon request to
furnish to NATIONAL any and all information regarding the ingredients of such
GOODS. CONTRACTOR further represents that each and every chemical substance
sold, used or furnished in connection with the performance of the CONTRACT, as
of the time of such sale, use or furnishing, is on the list of chemical
substances compiled and published by the Administrator of the Environmental
Protection Agency pursuant
to the federal Toxic Substances Control Act. CONTRACTOR further agrees to
indemnify, defend and hold harmless NATIONAL from and against any claims,
losses, damages, fines, penalties, costs and expenses suffered or incurred by
NATIONAL as a result of any violation of or non-compliance with any TOXIC
SUBSTANCES CONTROL REQUIREMENTS to the extent caused or contributed to by
CONTRACTOR, its agents, materialmen or SUBCONTRACTORS, or the employees of any
of them, or the GOODS or other WORK of any of them.
29. ENVIRONMENTAL REQUIREMENTS:
CONTRACTOR agrees on behalf of itself, its employees, agents, materialmen and
SUBCONTRACTORS to comply with, and to perform the WORK in compliance with,
ENVIRONMENTAL REQUIREMENTS which arise out of performance of the CONTRACT.
CONTRACTOR warrants that all WORK covered by the CONTRACT will not violate any
ENVIRONMENTAL REQUIREMENTS. CONTRACTOR further agrees to indemnify, defend and
hold harmless NATIONAL from and against any claims, losses, damages, fines,
penalties, costs and expenses suffered or incurred by NATIONAL as a result of
any violation of or non-compliance with any ENVIRONMENTAL REQUIREMENTS to the
extent caused or contributed to by CONTRACTOR, its agents, materialmen or
SUBCONTRACTORS, or the employees of any of them or any release of hazardous
substances, pollutants or contaminants to the extent caused or exacerbated by
CONTRACTOR, its agents, materialmen or SUBCONTRACTORS.
30. INDEMNITY BY CONTRACTOR:
30.1. Indemnification by CONTRACTOR. Subject to the later provisions of
this Section 30.1, CONTRACTOR shall be solely responsible for and shall
indemnify NATIONAL from and against any and all claims, suits, damages, losses,
specifically, including loss of use of property, and all other liabilities
whatsoever, including related expenses and attorneys' fees ("LOSSES") , for or
on account of (i) injuries to or death of any PERSON, including but not limited
to employees of NATIONAL or CONTRACTOR, and/or loss of or damage to any
property, including, but not limited to, the property of NATIONAL or CONTRACTOR,
in any way sustained or alleged to have been sustained, directly or indirectly,
by reason of or in connection with the performance of the WORK by CONTRACTOR,
its employees, agents or SUBCONTRACTORS or their employees; (ii) subject to the
limitations set forth below, the presence of CONTRACTOR's employees or
SUBCONTRACTORS or their employees on the premises of NATIONAL; (iii) the
negligence, recklessness or willful misconduct of CONTRACTOR or any CONTRACTOR
AUTHORIZED PERSONNEL; (iv) any breach by CONTRACTOR of any representation,
warranty, covenant or agreement contained in the CONTRACT DOCUMENTS which
results in injuries or death to any third PERSON and/or loss or damage to any
property of a third PERSON, it being understood and agreed that CONTRACTOR's
indemnification obligation pursuant to this subsection (iv) shall be limited to
the amount of NATIONAL's liability to such third PERSON as a result of
CONTRACTOR's breach, together with costs, expenses and attorneys' fees, if any,
incurred by NATIONAL in the investigation or defense of any such claim; (v) any
violation of GOVERNMENTAL
REQUIREMENTS by CONTRACTOR, its SUBCONTRACTORS or any CONTRACTOR AUTHORIZED
PERSONNEL; and (vi) the failure of the WORK to conform to GOVERNMENTAL
REQUIREMENTS. With respect to subsection (ii) above, in the event that it is
ultimately determined by a court of law that the LOSSES incurred were due to
NATIONAL'S FAULT (as defined below), NATIONAL shall refund to CONTRACTOR the
amount of out-of-pocket COSTS incurred by CONTRACTOR in connection with the
defense thereof. With respect to all of the indemnity events set forth in
subsections (i) through (vi) above, CONTRACTOR shall indemnify NATIONAL to the
full extent of NATIONAL's LOSSES; provided, however, that if NATIONAL's
liability is wholly or partially the result of NATIONAL's contributory
negligence, willful misconduct or other fault-based grounds (collectively,
"NATIONAL'S FAULT") then CONTRACTOR's indemnity obligations shall be offset by
an amount equal to (A) NATIONAL's LOSSES multiplied by (B) the percentage of
NATIONAL'S FAULT. Nothing in this Section 30.1 shall be construed to be an
agreement to indemnify NATIONAL against liability for damages caused by or
resulting from the sole negligence of NATIONAL, its agents or employees, under
circumstances whereby said agreement would be in violation of Michigan Public
Xxx 0000, No. 165, (S) 1 (M.C.L.A. (S) 691.991), if applicable, or of any other
applicable law, it being the intent of the foregoing provisions to absolve and
protect NATIONAL from, and to indemnify NATIONAL against, any and all liability
and loss by reason of the premises except to the limited extent prohibited by
Michigan Public Xxx 0000, No. 165, (S) 1, if applicable, or by any other
applicable law, and as limited herein.
30.2 Indemnity Obligation Exclusive of Insurance Requirements. The
obligation of CONTRACTOR to indemnify NATIONAL as provided above is not
superseded or modified by the provisions of Section 31 (INSURANCE) requiring
CONTRACTOR to procure and maintain insurance for the benefit of NATIONAL.
30.3 Indemnity Obligations Not Limited by Employee Benefit Acts. The
indemnity obligations of CONTRACTOR set forth in this CONTRACT shall not be
limited in any way by the limitation on the amounts and types of damages,
compensation or benefits payable by or for CONTRACTOR, SUBCONTRACTOR or any
CONTRACTOR AUTHORIZED PERSONNEL under any workers' compensation acts, disability
acts of other employment-related laws or regulations.
31. INSURANCE:
31.1 Provision of Insurance by CONTRACTOR and SUBCONTRACTORS.
CONTRACTOR and all SUBCONTRACTORS, at their own expense, shall procure and
maintain with respect to the WORK any policies of insurance (CONTRACTOR and any
such SUBCONTRACTORS being solely responsible for any deductible or retention, as
well as any liability based upon the fault of CONTRACTOR in excess of the
insurance coverage limits set forth herein), which may be required by NATIONAL
as set forth herein and which shall be in such form and issued by such company
or companies satisfactory to NATIONAL, and prior to commencement of WORK
hereunder, shall secure and deliver to NATIONAL Certificates of Insurance
evidencing the following insurance coverage:
(i) Workers' Compensation according to applicable statutory requirements
and Employer's Liability Insurance with a limit of at least
$100,000.00 per occurrence.
(ii) Comprehensive General Liability Insurance written on an "occurrence"
basis covering operations and SUBCONTRACTORS (including the contractual
liability assumed under Section 30 (INDEMNITY BY CONTRACTOR) above as well
as the following: Products Liability/Completed Operations providing
coverage for one year beyond the acceptance of the PROJECT by NATIONAL;
Blanket Contractual Liability - All Written Contracts; Operations Premises
Liability; Explosion, Collapse, and Underground Property Damage; Personal
Injury; Independent Contractors Coverage; Broad Form Property Damage
Endorsement; Cross-Liability and Severability of Interest; Modified Notice
of Occurrence and Knowledge of Occurrence Endorsement, and with a minimum
limit applicable to Bodily Injury Liability and Property Damage Liability
of not less than:
$2,000,000.00 combined single limit which must be available at
all times under this CONTRACT.
(iii) Comprehensive Automobile Liability Insurance written on an
"occurrence" basis covering owned, non-owned and hired motor vehicles
(including, without limitation, land motor vehicles and trailers or
semi-trailers designed to travel on public roads (including all
machinery or apparatus attached thereto)) with a combined single limit
for bodily injury and property damage of not less than:
$2,000,000.00 combined single limit.
(iv) Excess Liability Insurance written on an "occurrence" basis with a
limit of at least $4,000,000 per occurrence and aggregate in excess of
the Comprehensive General Liability and Employers Liability coverages
required under subparagraphs (i) and (ii) above. The Excess Liability
Insurance shall include the "following form" endorsement and "drop
down" endorsement relating to exhaustion of primary limits. This
coverage shall be further endorsed to be excess of the Comprehensive
Automobile Liability coverage required under subparagraph (iii) above.
(v) Builders Risk Insurance written on an "occurrence" basis for an amount
not less than 100% of the insurable value on a Replacement Cost basis,
which will protect against all risks of physical loss including flood
and earth movement, to the PROJECT property during construction, such
property to include without limitation, all machinery, equipment,
materials and supplies which are destined to become a permanent part
of the PROJECT. Insurance shall be in force for the
entire course of WORK under the CONTRACT, while property is in transit, on
or off-site awaiting installation, during the course of construction
and/or installation and terminating at final acceptance by NATIONAL.
CONTRACTOR SHALL MAKE NATIONAL AN ADDITIONAL INSURED ON A PRIMARY BASIS UNDER
CONTRACTOR'S INSURANCE POLICIES REFERRED TO IN SUBPARAGRAPHS (ii) THROUGH (iv)
ABOVE APPLICABLE TO THE WORK BY MEANS OF AN ENDORSEMENT TO THE POLICY IN THE
FORM ATTACHED TO THE CONTRACT AS EXHIBIT O SIGNED BY THE INSURER, A DUPLICATE OF
WHICH SHALL BE FURNISHED TO NATIONAL WITH THE REQUIRED CERTIFICATES OF
INSURANCE. ALL INSURANCE REQUIRED HEREUNDER SHALL BE ENDORSED TO BE PRIMARY
OVER ANY OTHER VALID AND COLLECTIBLE INSURANCE AVAILABLE TO NATIONAL.
31.2 Insurance Requirements in Addition to Indemnity Obligations. The
obligation of CONTRACTOR to provide insurance for the benefit of NATIONAL under
this Section 31 is in addition to and not in limitation or substitution of
CONTRACTOR's obligation to indemnify NATIONAL pursuant to Section 30 (INDEMNITY
BY CONTRACTOR) above.
31.3 Certificates of Insurance. All certificates of insurance from the
insuring companies required to be furnished to NATIONAL hereunder shall include
the following clause: "At least thirty (30) days advance notice shall be given
in writing by certified mail, return receipt requested, to:
Manager, Capital Construction/Services
National Steel Corporation
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
prior to cancellation, termination, or any alteration of the policy or policies
evidenced by this certificates".
32. FIRST AID AND MEDICAL FACILITIES:
32.1 Provision of Facilities by CONTRACTOR and SUBCONTRACTORS. It is
understood and agreed that CONTRACTOR, before proceeding with the WORK under the
CONTRACT, shall make and shall require all SUBCONTRACTORS to make such
arrangements as may be necessary to provide adequate first aid, medical,
surgical and hospital treatment for injuries sustained by any employees of
CONTRACTOR, by any employee of a SUBCONTRACTOR or by any other PERSON employed
or invited on the SITE by CONTRACTOR or a SUBCONTRACTOR arising out of or in
connection with the performance of the WORK. In the event that NATIONAL were to
supply any such first aid, medical, surgical or hospital treatment, then
CONTRACTOR and all SUBCONTRACTORS shall indemnify and defend NATIONAL from any
claims, suits, liabilities and damages arising out of or in connection
therewith, whether based in whole or in part on the active or passive negligence
of NATIONAL, its employees or agents; provided, however, that the foregoing
shall not be
construed to be an agreement to indemnify NATIONAL against liability for damage
caused by or resulting from the sole negligence of NATIONAL, its agents or
employees, under circumstances whereby said agreement would be in violation of
Michigan Public Xxx 0000, No. 165, (S) 1 (M.C.L.A. (S) 691.991), if applicable,
or of any other applicable law, it being the intent of the foregoing provisions
to absolve and protect NATIONAL from, and to indemnify NATIONAL against, any and
all liability and loss by reason of the premises except to the limited extent
prohibited by Michigan Public Xxx 0000, No. 165, (S) 1, if applicable, or by any
other applicable law.
32.2 Accident Reports. CONTRACTOR must submit a written report to
NATIONAL's representative of all accidents, giving full details and statements
of witnesses, if reasonably available, within twenty-four (24) hours of the
accident. In addition, all accidents shall be reported immediately by telephone
or messenger to NATIONAL.
33. LABOR CONDITIONS:
33.1 Compliance with Labor Agreements. CONTRACTOR shall comply in full
with any labor agreements to which CONTRACTOR is a party or to which CONTRACTOR
is otherwise bound to the full extent that such labor agreements apply to the
WORK.
33.2 National Maintenance Agreement. All construction WORK on the SITE
shall be performed in accordance with the National Maintenance Agreement
attached hereto as Exhibit P, to the extent that it is agreed upon by NATIONAL
and all applicable unions.
33.3 Refusal of Entry. NATIONAL has the right to refuse entry onto its
property to any employee of CONTRACTOR or of a SUBCONTRACTOR in the event such
employee commits acts which, in NATIONAL's reasonable opinion, constitute proper
cause for refusal of entry. In addition, NATIONAL may require CONTRACTOR to
discharge any incompetent or unsatisfactory employees; provided, however, that
CONTRACTOR shall not be required to take any action which, in its reasonable
judgment, would result in a violation of any GOVERNMENTAL REQUIREMENTS or of any
labor agreement to which CONTRACTOR is a party.
33.4 GOVERNMENTAL REQUIREMENTS Relating to Labor Conditions. CONTRACTOR
will comply with GOVERNMENTAL REQUIREMENTS relating to: (i) equal employment
opportunity, including but not limited to all GOVERNMENTAL REQUIREMENTS
contained in or authorized by Federal Executive Order No. 11246 of September 24,
1965, and any amendments thereto; (ii) employment of veterans, including but not
limited to all GOVERNMENTAL REQUIREMENTS contained in or authorized by the
Vietnam Era Veterans' Readjustment Assistance Act of 1974, and any amendments
thereto; and (iii) employment of the handicapped, including but not limited to
all GOVERNMENTAL REQUIREMENTS contained in or authorized by the Rehabilitation
Act of 1973, and any amendments thereto.
33.5 Incorporation of Regulations. The following clauses and
regulations are hereby incorporated herein by reference thereto: (i) the equal
employment opportunity clause contained in 41 C.F.R. (S) 60-1.4; (ii) the
affirmative action clause covering the employment of veterans and the
regulations contained in 41 C.F.R., Part 60-250, this incorporation by reference
being authorized by 41 C.F.R. (S) 60-250.22; and (iii) the affirmative action
clause covering the employment of handicapped workers and the regulations
contained in 41 C.F.R. Part 60-741, this incorporation by reference being
authorized by 41 C.F.R. (S) 60-741.22.
34. RESPONSIBILITY FOR AND GUARANTEE OF WORK:
34.1 Responsibility for WORK. CONTRACTOR shall be responsible for all
MATERIALS, EQUIPMENT and other items delivered (including materials furnished by
NATIONAL) to the SITE and the WORK performed until the HOT RUN COMMENCEMENT.
The WORK shall be delivered free from defects, complete, undamaged and in proper
operating condition capable of meeting all performance requirements. CONTRACTOR
warrants that upon delivery to the SITE, CONTRACTOR shall have good title to,
and the right to convey to NATIONAL, the WORK and all of its component parts.
34.2 Warranty Against Defective WORK. CONTRACTOR shall be responsible
to NATIONAL for promptly repairing or replacing any portion of the WORK which is
or becomes defective at any time (a) within one year after the date of issuance
(but not the deemed issuance) of the Certificate of Substantial Completion by
NATIONAL, or (b) subject to the next succeeding sentence, within seventeen and
one-half (17.5) months from the date of issuance of the No Load Test Completion
Certificate if there is a deemed issuance of the Certificate of Substantial
Completion hereunder (herein referred to as the "DEEMED WARRANTY PERIOD"), or
(c) within such longer warranty period applicable thereto, regardless of when
such defect is discovered; provided, however, that with respect to any
equipment, materials or services which are defective and which are corrected
(either by CONTRACTOR or by NATIONAL, if CONTRACTOR fails to make such
corrections), then the warranty with respect to such equipment, materials or
service shall extend for one (1) year from the date of correction. No such
DEEMED WARRANTY PERIOD shall apply under this Section 34.2, and the one-year
warranty period shall begin to run as of the date of issuance, or deemed
issuance, as the case may be, of the Certificate of Substantial Completion
unless (i) CONTRACTOR shall have given to NATIONAL timely notice(s) that a
FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS is preventing the issuance of
the Certificate of Substantial Completion, which notice shall set forth in
detail the specific basis for CONTRACTOR's belief that the delay is being caused
by a FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS, (ii) no act or omission of
CONTRACTOR or any SUBCONTRACTOR prevents the issuance of the Certificate of
Substantial Completion, and (iii) either the parties have agreed, or a court of
law has determined, that such delay was indeed caused by a FAILURE OF NATIONAL
PERFORMANCE TEST CONDITIONS. CONTRACTOR shall provide the aforementioned
notice(s) within thirty (30) days after the beginning of such delay by NATIONAL.
No such deemed commencement of the warranty period shall occur if there is a
dispute between NATIONAL and CONTRACTOR with regard to CONTRACTOR's assertion
that the delay is caused by a FAILURE OF NATIONAL PERFORMANCE TEST CONDITIONS or
with respect
to the quality of the WORK or the conformity of the WORK to the CONTRACT
DOCUMENTS. In the event that there is a dispute as to whether the warranty
period has expired, and NATIONAL requests CONTRACTOR to perform services or work
which NATIONAL believes should be covered by CONTRACTOR's warranty, CONTRACTOR
shall be obligated to perform such services or WORK as if such warranty was in
effect, but CONTRACTOR shall keep COST and expense records with reference to its
performance of services and/or work and in the event that it is subsequently
determined by a court of law or agreed that the warranty period has expired,
NATIONAL shall pay CONTRACTOR for such services and work at CONTRACTOR's
customary rates. The one year warranty period set forth herein shall apply to
all portions of the WORK with respect to which warranty periods of longer
duration are not specified. In addition to its obligations hereunder, CONTRACTOR
shall make available to NATIONAL the benefits of any and all manufacturer and
supplier warranties applicable to any portions of the WORK for the complete
warranty period, which shall not be less than such one year warranty period
described above. Notwithstanding the foregoing, the CONTRACTOR shall not be
responsible for repair, replacement or making good of any defect or of any
damage to the WORK to the extent arising out of or resulting from the improper
operation or maintenance of the PLANT by NATIONAL, the operation of the PLANT by
NATIONAL outside the SPECIFICATIONS provided in the CONTRACT or normal wear and
tear.
34.3 Intent of CONTRACT DOCUMENTS. CONTRACTOR acknowledges that the
intent of the CONTRACT DOCUMENTS is to define the absolute minimum functional
requirements for a continuous galvanizing line. The WORK shall be designed,
engineered, manufactured and constructed in accordance with all applicable codes
and manufacturing standards, and shall incorporate the latest technology
available. Compliance with the minimum standards set forth in the CONTRACT
DOCUMENTS does not waive the CONTRACTOR's responsibility to provide a "turnkey"
fully operating automotive exposed continuous galvanizing line facility.
34.4 Performance Requirements as Express Warranties. All requirements
relating to the WORK set forth in the SPECIFICATIONS (including, without
limitation, all operating and performance standards), DRAWINGS and other
CONTRACT DOCUMENTS shall be deemed express warranties by the CONTRACTOR that the
WORK will conform in all respects thereto.
34.5 Design and Construction Warranties. CONTRACTOR warrants that the
WORK will be designed, manufactured and constructed according to the CONTRACT
DOCUMENTS and there shall be no defects in design, engineering, material and
workmanship of the PLANT supplied and of the WORK executed.
34.6 Spare Parts. The CONTRACT PRICE includes all of those spare parts
listed in the SPECIFICATIONS. CONTRACTOR represents that, to the best of its
knowledge, based upon its prior experience, such list constitutes a full
complement of those spare parts that would be required for use during the first
two (2) years of operation of the galvanizing facility.
34.7 Knowledge of Existing Conditions and Applicable Laws. CONTRACTOR
represents and warrants that it is technically, physically, financially and
legally ready, willing
and able to perform the WORK hereunder and that it is familiar with and
knowledgeable about applicable GOVERNMENTAL REQUIREMENTS to the extent necessary
to carry out its duties in a professional, complete and competent manner.
34.8 NATIONAL's Reliance on CONTRACTOR's Experience and Expertise.
CONTRACTOR acknowledges and agrees that NATIONAL is relying upon CONTRACTOR's
special and unique abilities and the accuracy, competence and completeness of
CONTRACTOR's WORK. CONTRACTOR represents that it has performed WORK similar to
that required hereunder on other projects, and that CONTRACTOR's experience and
expertise are the principal reasons that NATIONAL is retaining CONTRACTOR to
perform the WORK hereunder.
34.9 Training and Qualifications. CONTRACTOR represents, covenants and
warrants that it has the requisite personnel, competence, skill and physical
resources to perform the WORK required hereunder and that it has and shall
maintain the capability, experience, registrations, licenses, permits and
government approvals required to perform the SCOPE OF WORK herein.
34.10 Review of CONTRACT DOCUMENTS. CONTRACTOR represents that it (i)
has thoroughly reviewed all of the documents comprising the CONTRACT; (ii) is in
agreement with the design, approach and concepts set forth in such documents
with respect to the WORK; and (iii) is of the belief that such design, approach
and concepts are reasonable under the circumstances and will accomplish
NATIONAL's purposes with respect to the WORK.
34.11 Additional Warranties. The warranties set forth herein are in
addition to any other warranties set forth elsewhere in the CONTRACT, as well as
any express warranties made by CONTRACTOR.
34.12 Liquidated Damages for Failure to Achieve Performance Warranties.
(i) In the event that the WORK fails to meet the operating performance
criteria set forth in the SPECIFICATIONS by the SUBSTANTIAL COMPLETION DEADLINE,
CONTRACTOR agrees to pay to NATIONAL an amount calculated in accordance with the
following formula, which sum is hereby, in view of the difficulty of calculating
the precise amount of damages which will be suffered by NATIONAL as a result of
such failure to meet such performance warranty standards, agreed upon by
NATIONAL and CONTRACTOR as a reasonable estimate of the damages NATIONAL will
suffer as a result thereof, and not as a penalty.
(ii) Liquidated damages hereunder shall be assessed based upon the failure
to satisfy any or all of the seven (7) performance warranty criteria set forth
in Section 8.3 of the AS SOLD SPECIFICATION by the SUBSTANTIAL COMPLETION
DEADLINE (as set forth in subsection (iii) below). Liquidated damages shall
accrue on a daily basis in accordance with the following schedule:
DAYS AFTER SUBSTANTIAL LIQUIDATED DAMAGES
COMPLETION DEADLINE MAXIMUM PER DAY
0-7 0
8-14 $20,000
15-21 $40,000
for each day after
the 21st day $90,000
The liquidated damages amounts set forth above represent the maximum liquidated
damages payable per day for failure to achieve the performance warranties.
(iii) The amount of liquidated damages payable on a daily basis shall be
determined based upon which of the seven (7) performance warranty criteria are
not satisfied as of that date.
(A) In the event that any one or more of the following four (4) criteria
are not satisfied, the entire maximum liquidated damages amount payable for that
day shall be assessed: (1) zinc coating weight; (2) strip temperature; (3)
galvannealing capability; and (4) process computer.
(B) In the event that any one or more of the following three (3) criteria
are not satisfied, one-third (1/3) of the maximum liquidated damages amount
payable for that day shall be assessed for each of the unsatisfied criteria: (1)
productivity; (2) finished strip flatness; and (3) finished strip surface.
(iv) By way of example, if on day 8, the performance warranty criteria for
zinc coating weight, strip temperature, productivity and finished strip flatness
are unsatisfied, the liquidated damages amount for that day is $20,000 ($20,000
being the daily "cap"). If on day 12, only the criteria for productivity and
finished strip flatness remain unsatisfied, the liquidated damages amount for
that day is $13,333.33 (1/3 of $20,000 assessable for each of the two
unsatisfied criteria).
(v) Liquidated damages under this Section 34.12 shall be payable on a
monthly lump-sum basis by CONTRACTOR and such payment of liquidated damages
shall be due no later than ten (10) days after the end of the calendar month for
which such damages are payable. The assessment of liquidated damages hereunder
does not discharge CONTRACTOR from its duty to complete the WORK, to satisfy the
performance warranties and to otherwise fulfill all of the requirements of this
CONTRACT.
(vi) CONTRACTOR's total maximum liability for liquidated damages pursuant
to this Section 34.12 shall be three percent (3%) of the CONTRACT PRICE.
35. COMPENSATION AND PAYMENTS:
35.1 Full Compensation. CONTRACTOR agrees to accept payment specified
hereunder as full compensation for performing the WORK, for any and all loss or
damage arising out of or in connection with the WORK, whether from the action of
the elements or from any unforeseen or unknown difficulties or obstructions
which may arise or be encountered in the prosecution of the WORK at any time
until final acceptance of the WORK by NATIONAL, and for any and all risks of
every description connected with the WORK.
35.2 Down Payment. Within ten (10) days of the execution of this
CONTRACT, and subject to the provisions of Section 35.5 (RETAINAGE) hereof,
NATIONAL shall make a down payment in the amount of ten percent (10%) of the
CONTRACT PRICE - CONSTRUCTION COMPONENT and five percent (5%) of the CONTRACT
PRICE - EQUIPMENT COMPONENT to CONTRACTOR.
35.3 Payment Terms.
(i) Attached hereto as Exhibit Q is a Payment Milestone Schedule, which
correlates the engineering, design, EQUIPMENT supply and commissioning
components of the WORK with an appropriate percentage of the CONTRACT PRICE, and
also sets forth the dates on which each of the milestone events are to be
completed. Promptly following the end of each calendar month, CONTRACTOR shall
certify to NATIONAL, by executing and delivering a status report, in such form
and substance as is reasonably specified by NATIONAL, whether or not (A) the
milestone events on the Payment Milestone Schedule for that month were
accomplished; and (B) the progress of the WORK is in compliance with the
CONTRACT Schedule, and shall provide along with such certification appropriate
supporting documentation. Notwithstanding anything to the contrary set forth in
the Payment Milestone Schedule, CONTRACTOR shall not invoice NATIONAL, and
NATIONAL shall not be obligated to pay, for milestones achieved more than one
month ahead of the projected completion date therefor set forth in the Payment
Milestone Schedule.
(ii) Those aspects of the WORK for which payment is not governed pursuant
to either Section 35.2 or subsection (i) above (e.g., construction components of
the WORK) shall be paid for via progress payments in the manner set forth in
Section 35.4(ii) below. Attached hereto as Exhibit R is a Construction Estimate
which sets forth estimated total quantities to be used during the construction
components of the WORK and breaks the construction component into subcategories
for the WORK. CONTRACTOR shall update the information contained on Exhibit R
(THE CONSTRUCTION ESTIMATE) from time to time by providing written notice
thereof to NATIONAL. Promptly following the end of each calendar month in which
construction components of the WORK are being performed, CONTRACTOR shall
provide NATIONAL with a status report, in such form and substance as is
reasonably specified by NATIONAL and in accordance with the PROGRESS
EVALUATION/PROCEDURE, setting forth the progress of construction activities
detailed in the then-applicable version of Exhibit R (THE CONSTRUCTION
ESTIMATE).
35.4 Partial Payments.
(i) For those aspects of the WORK covered by Section 35.3(i) hereof,
NATIONAL shall make partial payments of the CONTRACT PRICE as WORK progresses as
follows: in the event that NATIONAL agrees that CONTRACTOR has met all of the
milestone events shown on the Payment Milestone Schedule which are then required
to have been met and that the progress of this WORK is on schedule as of a date
when payment is due under the Payment Milestone Schedule, then NATIONAL shall on
or before the twenty-fifth (25th) day of the month following the month in which
NATIONAL receives the certification referred to in Section 35.3(i) hereof, make
the progress payment called for under the Payment Milestone Schedule (minus
retainage as set forth in Section 35.5 below). In the event that NATIONAL
reasonably determines that CONTRACTOR has failed to accomplish any required
milestone event and/or that the progress of the WORK with respect to a
particular milestone is not on schedule as of a date when payment is due under
the Payment Milestone Schedule, then NATIONAL shall be entitled to withhold
making such payment of that portion of the CONTRACT PRICE attributable to that
milestone until NATIONAL is reasonably satisfied that the required milestone
event has been accomplished and that the WORK scheduled to be completed with
respect to that milestone as of that payment date has in fact been
satisfactorily completed. Upon satisfaction of such requirements by CONTRACTOR,
the withheld payment shall be made.
(ii) For those aspects of the WORK covered by Section 35.3(ii) hereof,
NATIONAL shall make partial payments of the CONTRACT PRICE as WORK progresses as
follows: CONTRACTOR shall present to NATIONAL an itemized invoice for all
charges payable under Section 35.3(ii) (together with appropriate backup
documentation) at the end of each calendar month while WORK is being performed.
CONTRACTOR'S invoice shall include on its face such information as NATIONAL
shall reasonably require and shall be cross-referenced to the appropriate
portions of the then-applicable version of Exhibit R (THE CONSTRUCTION
ESTIMATE). In the event that NATIONAL reasonably determines that CONTRACTOR's
WORK is behind schedule (as compared to the then-applicable version of Exhibit
R - THE CONSTRUCTION ESTIMATE) as of a date when payment is due under this
subsection, then NATIONAL shall be entitled to withhold making such payment (but
only to the extent applicable to those portions of the WORK that are behind
schedule) until NATIONAL is reasonably satisfied that those portions of the WORK
are back on schedule Approved progress payment invoices shall be paid (minus
retainage as set forth in Section 35.5 below) on or before the twenty-fifth
(25th) day of the month following the month in which NATIONAL receives the
CONTRACTOR's invoice.
35.5 Retainage.
(i) All payments of the CONTRACT PRICE - CONSTRUCTION COMPONENT - CIVIL AND
BUILDING to be made by NATIONAL to CONTRACTOR hereunder shall be subject to
withholding of retainage of ten percent (10%) of the applicable payment. If
CONTRACTOR has fully performed those of its obligations hereunder due at such
time, retained amounts with respect to the CONTRACT PRICE - CONSTRUCTION
COMPONENT - CIVIL AND BUILDING shall be paid by NATIONAL to CONTRACTOR no later
than ten (10) days after NATIONAL reasonably determines that the completion of
the Civil and Building portions of the construction component of the WORK has
occurred, as described in Exhibit R; provided,
however, that as a condition precedent to the payment of such retainage, (A)
CONTRACTOR shall have delivered to NATIONAL all required lien waivers as of the
date of the paydown, and (B) CONTRACTOR shall have provided to NATIONAL an
irrevocable letter of credit ("L/C") in an amount equal to ten percent (10%) of
the CONTRACT PRICE -CONSTRUCTION COMPONENT - CIVIL AND BUILDING in form and
substance reasonably satisfactory to NATIONAL and CONTRACTOR to secure
CONTRACTOR'S performance and, if applicable, payment obligations hereunder.
(ii) All payments of the CONTRACT PRICE - CONSTRUCTION COMPONENT -
EQUIPMENT INSTALLATION to be made by NATIONAL to CONTRACTOR hereunder shall be
subject to withholding of retainage of ten percent (10%) of the applicable
payment. If CONTRACTOR has fully performed those of its obligations hereunder
due at such time, retained amounts with respect to the CONTRACT PRICE -
CONSTRUCTION COMPONENT - EQUIPMENT INSTALLATION shall be paid by NATIONAL to
CONTRACTOR no later than ten (10) days after the issuance of the Installation
Completion Certificate; provided, however, that as a condition precedent to the
payment of such retainage, (A) CONTRACTOR shall have delivered to NATIONAL all
required lien waivers as of the date of the paydown, and (B) CONTRACTOR shall
have provided to NATIONAL an additional L/C in an amount equal to ten percent
(10%) of the CONTRACT PRICE - CONSTRUCTION COMPONENT - EQUIPMENT INSTALLATION in
form and substance reasonably satisfactory to NATIONAL and CONTRACTOR to secure
CONTRACTOR's performance and, if applicable, payment obligations hereunder.
(iii) Each of the L/Cs described in clauses (i) and (ii) above shall be
issued by a bank with offices in the United States with a rating of A or better
from Xxxxx'x or Standard & Poor's, or otherwise acceptable to NATIONAL, and such
L/C shall contain provisions consistent with this Section 35.5 (iii). Each of
the L/Cs shall remain in effect until the issuance (or deemed issuance) of the
Certificate of Substantial Completion by NATIONAL. Each of the L/Cs may be
drawn down by sight drafts, one or more times, upon presentation of a sworn
statement by an officer of NATIONAL stating that CONTRACTOR has failed to
perform its obligations or pay sums due hereunder; provided, however, that
NATIONAL shall not draw down on either of the L/Cs until after the giving of
such notices and the expiration of such cure periods as are required under
Section 41 (TERMINATION) hereof.
(iv) All payments of the CONTRACT PRICE - EQUIPMENT COMPONENT to be made by
NATIONAL to CONTRACTOR hereunder shall be subject to withholding of retainage of
five percent (5%) of the applicable payment. If CONTRACTOR has fully performed
those of its obligations hereunder due at such time, retained amounts with
respect to the CONTRACT PRICE - EQUIPMENT COMPONENT shall be paid by NATIONAL to
CONTRACTOR in accordance with the following schedule: (A) fifty percent (50%) of
the then retained amounts, no later than ten (10) days after the issuance (or
deemed issuance) of the Provisional Acceptance Certificate, and (B) the
remainder of the then retained amounts no later than ten (10) days after the
issuance (or deemed issuance) of the Certificate of Substantial Completion;
provided, however, that a condition precedent to the release of any retainage
hereunder shall be the delivery by CONTRACTOR to NATIONAL of all required lien
waivers as of the date of the paydown.
CONTRACTOR understands and agrees that, notwithstanding the issuance or deemed
issuance of the Certificate of Substantial Completion, NATIONAL shall be
entitled to hold back such amounts of retainage under this Section 35.5(iv) as
NATIONAL, in its reasonable discretion, determines is necessary to ensure the
satisfactory completion of all "punch list" items and satisfaction of any other
obligations for which CONTRACTOR is responsible pursuant to Section 15.1(vi)
hereof; provided, however, that such hold back shall not exceed an amount equal
to twice the value of the "punch list" items and unfulfilled obligations.
(v) Payments of the CONTRACT PRICE - COMMISSIONING COMPONENT shall not be
subject to withholding for retainage.
35.6 Payment of Remaining Amounts Due. Payment of all remaining amounts
of the CONTRACT PRICE due CONTRACTOR (less the hold back for "punch list" items
and other items referred to in Section 35.5 above) shall be made by NATIONAL
within thirty (30) days of the issuance (or deemed issuance) by NATIONAL of the
Certificate of Substantial Completion referred to in Section 15 (ACCEPTANCE OF
THE WORK) hereof. Any remaining hold back portions of the CONTRACT PRICE shall
be paid upon issuance of the Certificate of Final Completion.
35.7 Payments Subject to Being Withheld. Payments otherwise due may be
withheld by NATIONAL in amounts reasonably related to the extent of defective
WORK not remedied, claims filed, or reasonable evidence indicating the
probability of filing of claims, overcharges or duplication of charges, failure
of CONTRACTOR to make proper payment to SUBCONTRACTORS or for materials or
labor, or the existence of a reasonable doubt that the CONTRACT can be completed
for the balance then unpaid. If the foregoing causes are removed, the withheld
payments shall promptly be made. If said causes are not removed after written
notice to CONTRACTOR, NATIONAL may rectify or discharge the same at CONTRACTOR's
expense. After final payment is made, CONTRACTOR shall, upon demand by
NATIONAL, pay, or reimburse NATIONAL for payments of, any amount that NATIONAL
may be obliged to pay in discharging any lien or claim relating to the WORK for
which CONTRACTOR is responsible pursuant to Section 20 (LIENS AND CLAIMS) hereof
and affecting title to the WORK or NATIONAL's other property.
35.8 Payment Not Acceptance. No payment by NATIONAL hereunder shall be
construed as acceptance or approval of WORK hereunder.
35.9 Method of Payment. All payments to be made by NATIONAL to
CONTRACTOR hereunder shall be made by wire transfer to a United States bank
account or accounts to be designated in writing by CONTRACTOR to NATIONAL. Each
party shall bear the charges and costs assessed by its own respective bank with
respect to such wire transfer.
35.10 Interest on Late Payments. Late payments of sums due either party
shall bear interest at the rate quoted for six-month London Interbank Offered
Rates under the caption "Money Rates" in the Wall Street Journal on the date
such payment is due plus one-half percent (0.5%) per annum; provided, however,
that interest shall not accrue on amounts not paid due to
the existence of a good faith dispute between the parties until the date of
resolution of such dispute.
36. TITLE; RISK OF LOSS.
36.1 Title. Title to the EQUIPMENT and MATERIALS shall vest in NATIONAL
upon payment therefor by NATIONAL. Notwithstanding the foregoing, title to any
EQUIPMENT and MATERIALS, excluding spares, in excess of the requirements for the
WORK shall revert to CONTRACTOR upon the issuance or deemed issuance of the
Certificate of Substantial Completion by NATIONAL or at such other time as the
parties may mutually agree.
36.2 Risk of Loss. Risk of loss for the EQUIPMENT AND MATERIALS shall
pass from CONTRACTOR to NATIONAL upon HOT RUN COMMENCEMENT, notwithstanding the
fact that title to such EQUIPMENT and MATERIALS may have passed to NATIONAL at
an earlier date.
36.3 Construction Equipment. Risk of loss for the CONSTRUCTION EQUIPMENT
shall remain at all times with the CONTRACTOR or its SUBCONTRACTOR(S), as
applicable.
37. FORFEITURE OF COMPENSATION FOR FALSELY IDENTIFIED WORK:
37.1 Compensation Only for PROJECT WORK. CONTRACTOR understands and agrees
that it is essential for construction management and financial purposes of
NATIONAL that all WORK performed under this CONTRACT be only for the PROJECT and
within the SCOPE OF WORK. CONTRACTOR therefore certifies and agrees that all
WORK for which CONTRACTOR claims or receives compensation from NATIONAL under
this CONTRACT, including, without limitation, all EXTRA WORK, whether such WORK
is performed by CONTRACTOR or any SUBCONTRACTOR of any tier, will be performed
only on the PROJECT and within the SCOPE OF WORK.
37.2 Forfeiture of Compensation. If CONTRACTOR claims compensation under
this CONTRACT for WORK done by CONTRACTOR or any SUBCONTRACTOR of any tier:
(i) on another project which may be simultaneously ongoing on NATIONAL's
premises, or
(ii) which is not within the SCOPE OF WORK,
such WORK shall be deemed to be falsely identified by CONTRACTOR and CONTRACTOR
agrees to forfeit to NATIONAL any and all compensation and/or claims for
compensation for such falsely identified WORK, said forfeited amount being
agreed upon liquidated damages due to NATIONAL and not a penalty; provided,
however, that this forfeiture provision shall not apply to WORK performed under
an Extra Work Authorization issued pursuant to Section 11 (CHANGES) hereof which
covers WORK performed on the PROJECT but outside the initial
SCOPE OF WORK if such Extra Work Authorization clearly indicates that the SCOPE
OF WORK is being modified by it.
38. WORKER'S COMPENSATION INSURANCE AND UNEMPLOYMENT INSURANCE:
Notwithstanding any provision herein to the contrary, CONTRACTOR shall be solely
liable for the payment of any and all taxes and contributions for worker's
compensation, occupational disease, unemployment insurance, old age retirement
benefits, pensions and annuities which may now or hereafter be imposed by the
United States of America or any state, whether measured by the wages, salaries
or other remuneration paid to PERSONS employed by CONTRACTOR or otherwise, for
or in connection with the WORK required to be performed hereunder. CONTRACTOR
shall comply with all GOVERNMENTAL REQUIREMENTS relating thereto, shall maintain
suitable forms, books and records, and agrees to furnish to NATIONAL, upon
reasonable advance notice, satisfactory evidence that CONTRACTOR and all
SUBCONTRACTORS have complied fully with all the provisions of said GOVERNMENTAL
REQUIREMENTS. CONTRACTOR agrees to and does hereby release NATIONAL of and from
any and all claims of the CONTRACTOR which may arise under or by virtue of any
of such GOVERNMENTAL REQUIREMENTS, and CONTRACTOR further agrees to indemnify,
save harmless and defend NATIONAL from and against any and all suits, actions,
legal proceedings, claims, demands, damages, costs, expenses and attorneys' fees
made or brought against, or incurred by, NATIONAL under or by virtue of said
GOVERNMENTAL REQUIREMENTS.
39. LIMITATION OF LIABILITY.
In no event shall either party hereto be liable to the other party by way of
indemnity or by reason of any breach of the CONTRACT or in tort or otherwise,
for any indirect, special or consequential damages or losses, including loss of
production, lost profits and loss of any contract of the party suffering
therefrom.
40. TAXES:
Unless otherwise agreed in writing, CONTRACTOR shall pay any and all taxes,
excises, assessments or other charges of any kind levied by any governmental
authority on or because of the WORK or any part thereof including, but not
limited to, any such governmental charges of any kind levied on the production,
transportation, sale or lease of any equipment, supplies, materials or other
property or services of any kind used or transferred in the performance of the
WORK. Notwithstanding the foregoing, each party shall be liable for its own
income taxes and for its liability for the Michigan Single Business Tax.
CONTRACTOR shall save NATIONAL harmless from the payment of any and all such
taxes, contributions, penalties, excises, assessments or other governmental
charges. CONTRACTOR shall provide NATIONAL with CONTRACTOR's state tax number
or registration number in connection with any applicable exemption from sales
and use tax or other similar tax for the purchase of machinery and equipment,
and CONTRACTOR shall obtain such a number if it does not already have one.
41. TERMINATION:
41.1 Termination for Cause. Should CONTRACTOR at any time fail in any
respect to prosecute the WORK or any portion thereof with promptness and
diligence, or fail in the performance of any of the agreements on its part
contained herein, or become bankrupt, insolvent, or unable to pay its debts as
they mature, CONTRACTOR shall be in breach of the CONTRACT and, in addition to
its other legal remedies, NATIONAL may, after forty-eight (48) hours written
notice to CONTRACTOR, provide any such labor or materials and deduct the cost
thereof from any money due or thereafter to become due CONTRACTOR under the
CONTRACT; and, upon said notice, NATIONAL may also terminate CONTRACTOR's right
to proceed with the WORK or such part of the WORK as to which such defaults have
occurred or terminate the CONTRACT as a whole. In the event of any such
termination, (i) for the purpose of completing the WORK and using, maintaining
and repairing the WORK, NATIONAL may enter upon the premises and take
possession of all materials, equipment, tools, appliances, and other property
thereon belonging to or under the control of CONTRACTOR and may finish the WORK
by whatever method it may deem expedient, including the hiring of another
contractor or contractors under such form of contract as NATIONAL may deem
advisable, (ii) NATIONAL may use (but shall not disclose to third parties unless
reasonably necessary to complete the WORK) DRAWINGS, SPECIFICATIONS, trade
secrets, proprietary or confidential information and other documents and
information previously provided by CONTRACTOR to NATIONAL under the CONTRACT,
and (iii) CONTRACTOR agrees to provide to NATIONAL such DRAWINGS,
SPECIFICATIONS, trade secrets, proprietary or confidential information and other
documents and information then in its possession and not previously provided to
NATIONAL, as are reasonably necessary for NATIONAL to complete the WORK, free
from any and all patent infringement or other claims by CONTRACTOR or others;
provided, however, that for the purpose of clauses (ii) and (iii), NATIONAL
agrees to execute, and to cause such other contractors and subcontractors to
execute, NATIONAL's standard form of Secrecy Agreement covering any such trade
secrets or proprietary or confidential information provided by CONTRACTOR to
NATIONAL and CONTRACTOR shall be a third party beneficiary thereof. If the
unpaid balance under the CONTRACT is less than the expense to NATIONAL of
completing the WORK, compensation for additional managerial and administrative
services, and the total amount of such other costs, expenses, losses and damages
as NATIONAL may suffer, to the fullest extent allowed by applicable law,
CONTRACTOR and its sureties, if any, shall be liable for and shall pay the
difference to NATIONAL upon demand. The determination by NATIONAL's auditors of
all costs of completion, expenses, losses, damages and other matters described
herein shall be final and binding upon the parties. Failure of NATIONAL to
exercise any of its rights under this Section 41.1 shall not excuse CONTRACTOR
from compliance with the provisions of the CONTRACT or prejudice rights of
NATIONAL to recover damages for such default.
41.2 Termination Without Cause. Should conditions arise which, in the
sole discretion of NATIONAL, make it advisable to cease WORK under the CONTRACT,
NATIONAL may terminate the CONTRACT without cause by written notice to
CONTRACTOR. Such termination shall be effective in the manner specified in said
notice and shall be without
prejudice to any claims or legal remedies which NATIONAL may have against
CONTRACTOR. On receipt of such notice, CONTRACTOR shall, unless the notice
directs otherwise, immediately discontinue the WORK and placing of orders for
materials, facilities and supplies in connection with the performance of the
CONTRACT and shall, if requested, make every reasonable effort to procure
cancellation or termination of all existing orders and SUBCONTRACTS upon terms
satisfactory to NATIONAL and shall thereafter do only such WORK as may be
necessary to preserve and protect WORK already in progress and buildings,
material, equipment, supplies and other property at the SITE or in transit
thereto.
Upon such termination by NATIONAL, it is agreed: (i) that all completed or
partially completed WORK on the SITE shall be and remain the property of
NATIONAL and that NATIONAL may elect, upon written notice to CONTRACTOR, to take
title to all other material, equipment and other property on the SITE or located
elsewhere and identified to the CONTRACT which CONTRACTOR owns or has the right
to acquire; (ii) that CONTRACTOR shall be entitled to pro rata compensation for
the portion of WORK already completed and to reimbursement for the net COST to
CONTRACTOR of all material, equipment and other property identified to the
CONTRACT for which CONTRACTOR has become legally obliged to pay in the course of
proper performance of the CONTRACT prior to termination by NATIONAL; and (iii)
that all obligations of the CONTRACTOR under the CONTRACT with respect to
completed WORK, including but not limited to all performance guarantees and
patent rights and indemnities, applicable as of such date shall apply to all
WORK completed or substantially completed by CONTRACTOR prior to termination by
NATIONAL.
42. GOVERNMENTAL REQUIREMENTS:
CONTRACTOR represents that CONTRACTOR, its employees and representatives, and
all WORK furnished by CONTRACTOR, its employees and representatives hereunder,
will comply with all GOVERNMENTAL REQUIREMENTS, including but not limited to the
GOVERNMENTAL REQUIREMENTS set forth in the following Sections: 26. OCCUPATIONAL
SAFETY AND HEALTH, 27. HAZARDOUS SUBSTANCES AND RIGHT-TO-KNOW, 28. TOXIC
SUBSTANCES CONTROL 29. ENVIRONMENTAL REQUIREMENTS, 33. LABOR CONDITIONS, and
38. WORKER'S COMPENSATION INSURANCE AND UNEMPLOYMENT INSURANCE, hereof, subject
to the provisions of Section 7.6 (CHANGE IN GOVERNMENTAL REQUIREMENTS) hereof.
Any provisions required to be included in a CONTRACT of this type by any
GOVERNMENTAL REQUIREMENTS are deemed to be incorporated herein. CONTRACTOR
agrees to cooperate with NATIONAL in connection with the application of any
GOVERNMENTAL REQUIREMENTS to NATIONAL, its employees or property and which are
related to the WORK.
CONTRACTOR represents and warrants that it and all of its SUBCONTRACTORS working
at the SITE are properly authorized and qualified under applicable GOVERNMENTAL
REQUIREMENTS to perform the WORK in the State of Michigan.
43. PERMITS AND INSPECTIONS:
CONTRACTOR shall procure and pay for any and all permits, inspections and other
requirements of any governmental board or authority with respect to any part of
the WORK except permits or authorizations which NATIONAL elects to procure.
CONTRACTOR shall furnish any bonds, security or deposits required to permit
performance of the WORK or any part thereof.
44. NOTICES:
Any notices permitted or required hereunder, unless otherwise provided in the
CONTRACT, shall be in writing and shall be given by personal delivery, by
certified mail, return receipt requested, or by telefax, telecopy or similar
electronic medium to the addresses set forth below. Any such notice shall be
effective upon receipt. In the case of CONTRACTOR any such notice may be served
personally on the resident manager or superintendent of CONTRACTOR at the SITE.
If to NATIONAL: If to CONTRACTOR:
NATIONAL STEEL CORPORATION NKK STEEL ENGINEERING, INC.
Great Lakes Division 000 Xxxxxxxx Xxxxx, Xxxxx 000
No. 0 Xxxxxxx Xxxxx Xxxx, XX 00000-0000
Xxxxxx, XX 00000 ATTN: Mr. Yasuo Ise
ATTN: X. Xxxxxxxxx ------------------------
--------------------- Telecopy: (000) 000-0000
Telecopy: (000) 000-0000 --------------------
-----------------
For any notices given pursuant to Article 16
hereof, a copy shall be sent to:
NATIONAL STEEL CORPORATION
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
ATTN: General Counsel
---------------------
Telecopy: (000) 000-0000
-----------------
45. NON-ASSIGNMENT:
Neither party shall assign the CONTRACT or any part thereof or assign any monies
to become due hereunder, without first obtaining written consent of the other
party. An assigning party shall not be relieved of any responsibility or
obligation under the CONTRACT by assigning any portion thereof.
46. COST AUDIT:
46.1 Right to Audit Cost Charges. All RECORDS (as defined below in
Section 46.2) of CONTRACTOR shall be open to inspection, audit and copying
(hereinafter a "COST AUDIT") by NATIONAL at reasonable times and places to
permit evaluation and verification of any charge of CONTRACTOR or of any
SUBCONTRACTOR that is determined by or based upon COST, it being understood,
however, that such right to inspect, audit and copy shall not apply with respect
to elements of this CONTRACT for which CONTRACTOR is being paid or reimbursed
solely on a "lump sum" basis.
46.2 RECORDS Subject to Inspection and COST AUDIT by NATIONAL. For
purposes of this Section 46, the term "RECORDS" subject to COST AUDIT shall
include but not be limited to any and all writings, data and other sources of
information of every kind and character, including, without limitation, the
documents described in Section 46.4 below and all other documents, records,
books, papers, subscriptions, recordings, agreements, purchase orders, leases,
contracts, commitments, arrangements, notes, daily diaries, meeting minutes,
superintendent reports, drawings, receipts, cost files and data, written
policies and procedures, CONTRACT and SUBCONTRACT files (including proposals of
successful and unsuccessful bidders, bid recaps and all other bid documents),
original estimates, estimating work sheets, correspondence, Extra Work
Authorization and change order files, back charge logs and supporting
documentation, general ledger entries detailing cash and trade discounts earned,
insurance rebates and dividends, any other supporting evidence deemed necessary
by NATIONAL to substantiate charges related to the CONTRACT, and any and all
other evidence and sources of information in any form, tangible or intangible,
that are relevant to the COST AUDIT. For purposes of this Section 46.2,
"NATIONAL" shall include its officers, employees, auditors and designated
representatives (including independent auditors).
46.3 Access to RECORDS. NATIONAL shall give CONTRACTOR reasonable
advance notice of its intent to perform a COST AUDIT. NATIONAL shall have
access to all of CONTRACTOR's locations and facilities where such relevant
RECORDS are located and to all such RECORDS, and shall be provided adequate and
appropriate work space in order to perform a COST AUDIT in compliance with this
Section 46. In connection therewith, knowledgeable employees of CONTRACTOR
shall be available for interviews by NATIONAL. NATIONAL shall be afforded
access to all of the relevant CONTRACTOR's RECORDS pursuant to the provisions of
this Section 46 throughout the term of the CONTRACT and for a period of four (4)
years after final payment or longer if required by law or any GOVERNMENTAL
REQUIREMENTS, such RECORDS to be kept in a readily accessible and organized
manner during all such times.
46.4 CONTRACTOR's Obligation to Furnish Specific Documents. In addition
to and not in limitation of any other provision of this Section 46, in all cases
where any charge, or portion thereof, of CONTRACTOR or of any SUBCONTRACTOR is
subject to a COST AUDIT, CONTRACTOR shall furnish to NATIONAL with progress
xxxxxxxx and all documents related thereto, including but not limited to the
following:
(i) Labor Related Documents - Daily force and time reports, weekly
payroll records of wages, records and reports of payroll taxes, insurances, and
fringe benefits (by individuals, and in summary);
(ii) Materials Related Documents - Vendor invoices and credits, purchase
requisitions, purchase orders and amendments, receiving reports (properly
acknowledged and authenticated) and SUBCONTRACTOR invoices, with supporting
documents; and
(iii) Equipment Related Documents - Agreements with lessors, lessor
invoices, CONTRACTOR's own rental rate schedule and daily equipment usage
reports for both rented or owned equipment.
46.5 Withholding of Payments by NATIONAL. CONTRACTOR must comply with
all the documentation requirements of Sections 46.3 and 46.4 above or NATIONAL
may withhold payment until said requirements are met.
46.6 Reimbursement of COST AUDIT Costs. If a COST AUDIT in accordance
with this Section 46 discloses overcharges of any nature by the CONTRACTOR to
NATIONAL in excess of two percent (2%) of the total CONTRACT xxxxxxxx reviewed,
the actual cost of NATIONAL's COST AUDIT relating to such overcharge or charges,
including the discovery thereof, shall be reimbursed to NATIONAL by the
CONTRACTOR. Any adjustments and/or payments which must be made as a result of
any such COST AUDIT of the CONTRACTOR's RECORDS shall be made within a
reasonable amount of time (not to exceed thirty (30) days) from presentation of
NATIONAL's findings to CONTRACTOR.
46.7 Inclusion of COST AUDIT Rights in SUBCONTRACTS. The provisions of
Section 46 shall be inserted in all SUBCONTRACTS in accordance with Section 4.2,
in order to ensure that NATIONAL shall have the right to conduct a COST AUDIT
with respect to any charge or portion thereof of a SUBCONTRACTOR that is
determined by or based upon COST.
47. WAIVER OR INVALIDITY:
It is mutually understood and agreed that any failure by NATIONAL at any time,
or from time to time, to enforce or require the strict keeping and performance
by CONTRACTOR of any of the provisions of the CONTRACT shall not constitute a
waiver by NATIONAL of such provisions, and shall not affect or impair such
provisions in any way, or the right of NATIONAL at any time to avail itself of
such remedies as it may have for any breach or breaches of such provisions. The
waiver, illegality, invalidity, breaches of such provision and/or
unenforceability of any provision appearing in the CONTRACT DOCUMENTS shall not
affect the validity of the CONTRACT as a whole or the validity of any other
provisions therein.
48. CONTRACT INCLUDES ENTIRE AGREEMENT:
The CONTRACT embodies the entire agreement between NATIONAL and CONTRACTOR.
CONTRACTOR represents that in entering into the CONTRACT it does not rely on any
previous or contemporaneous written, oral, implied, or other representation,
inducement or understanding of any kind whatsoever. The CONTRACT may not be
amended except by a writing signed by both parties, or a written change order or
Extra Work Authorization signed by NATIONAL. Except to the extent expressly
provided herein, none of CONTRACTOR's proposals, bid documents, correspondence
or other written materials provided to NATIONAL by CONTRACTOR shall constitute
any part of the parties' agreement hereunder. In no event shall any preprinted
terms or conditions found in NATIONAL's or CONTRACTOR's or any SUBCONTRACTOR's
or material or equipment supplier's purchase order, acknowledgment or work order
be considered to be part of this CONTRACT or to otherwise be binding upon any
party hereto.
49. APPLICABLE LAWS:
Except as otherwise specifically provided for in the CONTRACT, the CONTRACT and
the rights of the parties under the CONTRACT shall be governed by and construed
and enforced in accordance with the laws of the State of Michigan without regard
to its conflicts of laws provisions. The parties hereby consent to the exclusive
jurisdiction of the county courts of Xxxxx County, Michigan, and federal
district court for the United States District Court for the Eastern District of
Michigan in connection with any dispute, claim or litigation arising out of the
WORK or this CONTRACT, and the parties hereby waive any objection to personal
jurisdiction in such courts. The parties agree that the mailing to the last
known address of the respective parties of any process by certified mail, return
receipt requested, shall constitute lawful and valid source of process.
50. COMMUNICATIONS WITH REGULATORY AUTHORITIES:
CONTRACTOR shall not communicate directly or indirectly with any governmental or
regulatory authorities except to the extent expressly authorized by NATIONAL in
writing. To the extent that CONTRACTOR deems any such communications necessary
or appropriate to the performance of the WORK, CONTRACTOR shall so notify
NATIONAL and NATIONAL shall make such arrangements as are appropriate.
51. CONFIDENTIALITY:
Each party shall retain as confidential and shall not disclose to third parties
the specific proprietary information (herein called "CONFIDENTIAL INFORMATION")
furnished to it by the other party identified on Exhibit U (CONFIDENTIAL
INFORMATION) attached hereto and made a part hereof. Notwithstanding the above,
CONTRACTOR may furnish to its SUBCONTRACTORS such CONFIDENTIAL INFORMATION that
CONTRACTOR receives from NATIONAL to the extent required for the SUBCONTRACTORS
to perform their respective portions of the WORK, so long as CONTRACTOR obtains
from such SUBCONTRACTORS an undertaking of confidentiality substantially similar
to that imposed on CONTRACTOR hereunder. In the event that either party becomes
legally compelled to disclose CONFIDENTIAL INFORMATION of the other party, it
will provide the other party with prompt written notice prior to disclosure in
sufficient time to allow such party to seek a
protective order or other appropriate remedy to protect the confidentiality of
such information. The confidentiality obligations set forth herein shall not
apply to information which (i) enters the public domain through no fault of the
receiving party, or (ii) can be proven to have been in the possession of the
receiving party at the time of disclosure and which was not previously obtained,
directly or indirectly, from the other party hereto; or (iii) otherwise becomes
lawfully available to the receiving party from a third party under no obligation
of confidentiality.
52. DISPUTE RESOLUTION:
Except as provided herein, no civil action with respect to any dispute, claim or
controversy arising out of or relating to the CONTRACT may be commenced until
the matter has been submitted to JAMS/ENDISPUTE, or its successor, for non-
binding mediation. Either party may commence mediation by providing to
JAMS/ENDISPUTE and the other party a written request for mediation, setting
forth the subject of the dispute and the relief requested. The parties will
cooperate with JAMS/ENDISPUTE and with one another in selecting a mediator from
JAMS/ENDISPUTE's panel of neutrals, and in scheduling the mediation proceedings.
The parties covenant that they will participate in the mediation in good faith,
and that they will share equally in its costs. All offers, promises, conduct and
statements, whether oral or written, made in the course of the mediation by any
of the parties, their agents, employees, experts and attorneys, and by the
mediator and any JAMS/ENDISPUTE employees, are confidential, privileged and
inadmissible for any purpose, including impeachment, in any litigation or other
proceeding involving the parties; provided, however, that evidence that is
otherwise admissible or discoverable shall not be rendered inadmissible or non-
discoverable as a result of its use in the mediation. Either party may seek
equitable relief prior to the mediation to preserve the status quo pending the
completion of that process. Additionally, either party may seek equitable or
other relief in the event of an emergency situation which presents a danger to
human health, safety or the property of such party or third parties. Except for
such an action to obtain equitable or other relief, neither party may commence a
civil action with respect to matters submitted to mediation until after
completion of the initial mediation session, or 45 days after the date of filing
the written request for mediation, whichever occurs first. Mediation may
continue after the commencement of a civil action, if the parties so desire. The
provisions of this Section 52 may be enforced by any court of competent
jurisdiction, and the party seeking enforcement shall be entitled to an award of
all costs, fees and expenses including attorneys' fees, to be paid by the party
against whom enforcement is ordered.
53. RECORDS RETENTION:
CONTRACTOR shall retain, for a period of three (3) years after the issuance (or
deemed issuance) of the Certificate of Substantial Completion at no additional
cost to NATIONAL, and shall make available to NATIONAL and its designees upon
request, copies of all documents generated as a result of or in connection with
the performance of WORK hereunder.
54. SURVIVAL:
Any provision setting forth an obligation or duty of CONTRACTOR which by its
very nature is not expected to or cannot or may not be performed during the
actual life of this CONTRACT (including, without limitation, CONTRACTOR's
obligations with respect to warranties, indemnity and insurance) shall be deemed
to survive suspension, expiration, termination, completion or cancellation of
the CONTRACT for a period of three (3) years, except for the provisions of
Section 20 (LIENS AND CLAIMS), Section 21 (PATENT RIGHTS AND INDEMNIFICATION;
OWNERSHIP OF DRAWINGS), Section 22 (RIGHT TO USE COMPUTER SOFTWARE AND
INDEMNIFICATION), Section 25.3 (HEALTH AND SAFETY PLAN), Section 26
(OCCUPATIONAL SAFETY AND HEALTH), Section 27 (HAZARDOUS SUBSTANCES AND RIGHT-TO-
KNOW), Section 28 (TOXIC SUBSTANCES CONTROL), Section 29 (ENVIRONMENTAL
REQUIREMENTS), Section 30 (INDEMNITY BY CONTRACTOR), Section 32 (FIRST AID AND
MEDICAL FACILITIES), Section 37 (FORFEITURE OF COMPENSATION FOR FALSELY
IDENTIFIED WORK), Section 40 (TAXES), Section 42 (GOVERNMENTAL REQUIREMENTS) and
Section 51 (CONFIDENTIALITY), which shall survive indefinitely.
55. CUMULATIVE REMEDIES:
The rights and remedies of NATIONAL under this CONTRACT are cumulative and not
exclusive of any rights or remedies which NATIONAL might otherwise have.
56. CAPTIONS:
The captions at the beginning of each of the sections and subsections herein are
for reference purposes only and are of no legal force and effect.
57. NKK CORPORATION GUARANTEE:
Simultaneously with the execution of this CONTRACT, CONTRACTOR shall cause NKK
Corporation, the parent corporation of CONTRACTOR's parent corporation, to
execute and deliver the form of guarantee attached hereto as Exhibit V (THE
GUARANTEE).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
The parties hereto, intending to be legally bound, have executed this
CONTRACT by their duly authorized representatives.
NATIONAL STEEL CORPORATION, CONTRACTOR:
GREAT LAKES DIVISION:
By: /s/Xxxxxx X. Xxxxx By: /s/ Xxxxxxxx Xxxx
------------------ -----------------
Title: V.P. Strategic Sourcing Title: Chairman & CEO
----------------------- --------------
Date: October 23, 1998 Date: October 23, 1998
---------------- ----------------
CONTRACTOR's State Tax or
Registration Xx.xx:___________________
