Exhibit 10.1
EXECUTION
COPY
AGREEMENT
For
ENGINEERING, PROCUREMENT,
AND
CONSTRUCTION
SERVICES
for
42 - INCH SABINE PASS PIPELINE
PROJECT
between
CHENIERE SABINE PASS PIPELINE
COMPANY
and
WILLBROS ENGINEERS,
INC.
AGREEMENT
THIS AGREEMENT
for Engineering, Procurement and
Construction Services (the “Agreement”) is made and
entered into effective as of this 1st day of February 2006
(“Effective Date”) by and between Cheniere Sabine Pass
Pipeline Company, a company organized under the laws of the State
of Delaware (“Cheniere”), and Willbros Engineers, Inc.,
a company incorporated under the laws of the State of Delaware
(“Willbros”). Cheniere and Willbros are hereinafter
sometimes referred to individually as a “Party” or
collectively as the “Parties.”
WHEREAS , Cheniere desires to design, build, own and
operate the 16.0-mile, 42-inch pipeline and related facilities to
be constructed from the Cheniere liquefied natural gas terminal to
a pipeline interconnect at Johnson’s Bayou, all located
entirely in Cameron Parish, Louisiana (as more fully described
herein, the “Project”); and
WHEREAS , Willbros, itself or through its Subcontractors
or Vendors desires to provide engineering, procurement and
construction services related to the Project;
NOW, THEREFORE,
in consideration of the mutual
covenants herein and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, Cheniere and
Willbros hereby agree as follows:
1. SCOPE OF
WORK
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1.1
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In close
cooperation and coordination with Cheniere and subject to Paragraph
1.3 below, Willbros agrees to perform the Work, including all
Project management, engineering, procurement, construction and
construction management for the Project, and provide all equipment,
materials, supplies, labor workmanship, apparatus, machinery,
tools, structures, inspection, manufacture, fabrication,
installation, design, delivery, transportation, storage and any
incidental work reasonably inferable as required and necessary to
complete the Project in accordance with Applicable Law, Applicable
Codes and Standards and all other provisions of this Agreement.
Without limiting the generality of the foregoing, the Work is
described in more particular detail in the Scope of Work set forth
in Schedule “B” .
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1.2
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The Scope of
Work is based upon and shall comply with the preliminary
engineering developed by Cheniere’s other consultants and
contractors and the FERC Certificate.
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1.3
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Willbros shall
not be responsible for and the Work excludes the Cheniere Provided
Items identified in Paragraph 5.3 which are to be provided by
Cheniere.
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2. PROJECT
SCHEDULE
The Work shall be performed in
accordance with the dates set forth in the Project Schedule
attached as Schedule “F” .
1
3.
COMPENSATION
Willbros will submit invoices, and
Cheniere shall pay Willbros the amounts due in accordance with
Paragraph 5.4 of Schedule “A” . The sum of the
Cost of the Work, the Willbros Management Fee and the Contingency
Costs is guaranteed by Willbros not to exceed Sixty-Seven Million
Six Hundred Seventy Thousand Two Hundred Dollars ($67,670,200),
subject to additions and deductions by Change Order as provided
herein (the “Guaranteed Maximum Price”), excluding
Louisiana sales and use taxes applicable to permanent materials and
equipment to be incorporated into the Project, which shall be
reimbursed by Cheniere in accordance with Paragraph 5.4.2 of
Schedule “A” . Costs which would cause the
Guaranteed Maximum Price to be exceeded shall be paid by Willbros
without reimbursement by Cheniere.
4. GENERAL
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4.1
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The Agreement
consists of this signed document (the “Signature
Document”) and the following attached Schedules, which by
this reference are incorporated herein and made a part
hereof:
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Schedule
“A” -
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Terms and
Conditions
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Attachment
I
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Willbros Parent
Guarantee
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Attachment
II
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-
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Payment Bond,
Performance Bond and Riders
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Attachment
III
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-
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Mechanical
Completion Certificate
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Attachment
IV
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Project
Completion Certificate
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Attachment
V
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-
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Start-up
Certificate
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Attachment
VI
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-
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Change Order
Form
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Attachment
VII
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-
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Approved
Subcontractors and Vendors List
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Attachment
VIII
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Organizational
Chart
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Attachment
IX
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-
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Cheniere’s Health, Safety and
Environmental Policies
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Attachment
X
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Lien and Claim
Waivers
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Schedule
“B” -
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Scope of Work
for the Project
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Attachment
I
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Work
Site
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Schedule
“C” -
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Intentionally Omitted
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Schedule
“D” -
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Applicable
Codes and Standards, Drawings and Specifications
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Attachment
I
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-
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Drawings
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Attachment
II
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Specifications
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Schedule
“E” -
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Intentionally Omitted
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Schedule
“F” -
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Project
Schedule
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4.2
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A reference in
the Agreement to any of the Schedules shall, in addition, be
considered a reference to any Attachments to said Schedules, and to
all documents referred to in said Schedules or
Attachments.
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4.3
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Any notice, demand, offer or
other written instrument required or permitted to be given pursuant
to this Agreement shall be in writing and signed by the Party
giving such notice
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2
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and shall be sufficient when
delivered in person or sent by e-mail, by facsimile, or by
certified or registered mail, to the other Party at the appropriate
address as follows:
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If delivered
to Cheniere :
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If delivered
to Willbros :
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Richard E.
Keyser
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Willbros
Engineers, Inc.
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Cheniere Sabine
Pass Pipeline
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2087 East 71st
Street
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717 Texas
Avenue, Suite 3100
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P.O. Box
701650
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Houston, Texas
77002
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Tulsa, Oklahoma
74170
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Telephone:
(832) 204-2284
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Telephone:
(918) 481-4163
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Fax: (713)
659-5459
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Fax: (918)
493-3430
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Attention: Mr.
Richard E. Keyser
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Attention: Mr.
Curtis E. Simkin
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E Mail:
rkeyser@cheniere.com
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E Mail:
curt.simkin@willbros.com
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Copy
to :
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Copy
to :
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Allan
Bartz
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Willbros
Engineers, Inc.
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Cheniere Sabine
Pass Pipeline
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2087 East 71st
Street
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717 Texas
Avenue, Suite 3100
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P.O. Box
701650
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Houston, Texas
77002
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Tulsa, Oklahoma
74170
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Telephone:
(713) 659-1361
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Telephone:
(918) 499-3706
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Fax: (713)
659-5459
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Fax: (918)
499-3702
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Attention: Mr.
Allan Bartz
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Attention: Mr.
Mike Reifel
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E Mail:
abartz@cheniere.com
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E Mail:
mike.reifel@willbros.com
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Willbros or Cheniere may notify the
other at any time of a change in, or addition to, the addresses
and/or persons to which communications should be sent. Notices,
demands, offers or other written instruments shall be deemed to
have been duly given on the date actually received by its intended
recipient.
IN WITNESS WHEREOF
, Cheniere and Willbros have
executed duplicate originals of the Agreement, effective and
binding as of the Effective Date.
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Witness
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Cheniere Sabine Pass Pipeline
Company
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/s/ Richard
Keyser
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By:
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/s/ Robert
Keith Teague
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Title:
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President
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Date:
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February 21,
2006
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Witness
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Willbros Engineers, Inc.
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/s/ Kevin R.
Fox
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By:
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/s/ Curtis E.
Simkin
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Title:
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President
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Date:
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February 1,
2006
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3
SCHEDULE
“A”
TERMS AND
CONDITIONS
TABLE OF
CONTENTS
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1. DEFINITIONS
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A-2
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2. WILLBROS’ OBLIGATIONS
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A-9
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3. WILLBROS PERSONNEL AND EQUIPMENT
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A-12
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4. WORK SITE RESPONSIBILITIES
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A-14
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5. CHENIERE’S OBLIGATIONS
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A-15
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6. WORK PLAN AND REPORTS
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A-20
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7. INSPECTION AND TESTING
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A-22
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8. COMPLETION AND START-UP
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A-23
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9. CHANGES
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A-25
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10. INDEMNITY, LIENS AND PATENTS
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A-26
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11. INSURANCE
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A-30
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12. WARRANTY
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A-34
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13. TITLE TO THE WORK AND TO WORK PRODUCT,
CONFIDENTIAL INFORMATION
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A-37
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14. DISPUTE RESOLUTION
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A-40
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15. SUSPENSION OF WORK
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A-42
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16. TERMINATION AT CHENIERE’S
CONVENIENCE
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A-43
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17. TERMINATION BY CHENIERE FOR
CAUSE
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A-44
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18. TERMINATION BY WILLBROS
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A-45
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19. WILLBROS’ OBLIGATIONS UPON SUSPENSION
OR TERMINATION
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A-45
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20. FORCE MAJEURE AND CHENIERE-CAUSED
DELAY
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A-46
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21. LIQUIDATED DAMAGES
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A-48
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22. PUBLICITY RELEASES
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A-49
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23. GOVERNING LAW
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A-49
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24. GENERAL PROVISIONS
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A-49
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ATTACHMENT I
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WILLBROS PARENT
GUARANTEE
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ATTACHMENT II
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PAYMENT BOND,
PERFORMANCE BOND AND RIDERS
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ATTACHMENT III
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MECHANICAL
COMPLETION CERTIFICATE
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ATTACHMENT IV
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PROJECT
COMPLETION CERTIFICATE
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ATTACHMENT V
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START-UP
CERTIFICATE
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ATTACHMENT VI
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CHANGE ORDER
FORM
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ATTACHMENT VII
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APPROVED
SUBCONTRACTORS AND VENDORS LIST
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ATTACHMENT VIII
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ORGANIZATIONAL
CHART
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ATTACHMENT IX
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CHENIERE’S HEALTH, SAFETY AND
ENVIRONMENTAL POLICIES
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ATTACHMENT X
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LIEN AND CLAIM
WAIVERS
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A-1
SCHEDULE
“A”
TERMS AND
CONDITIONS
1.
DEFINITIONS
The following terms shall have the
meanings indicated for all purposes of the Agreement and the use of
the singular includes the plural, and vice versa:
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1.1
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“AAA” has the meaning set forth in
Paragraph 14.3.
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1.2
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“AAA
Rules” has the meaning set forth in Paragraph
14.3.
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1.3
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“Actual
Contract Amount” has the meaning set forth in Attachment
I of the Letter Agreement.
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1.4
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“Agreement” has the meaning set
forth in, and incorporates by reference the documents as stated in,
Paragraph 4.1 of the Signature Document.
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1.5
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“Amendment” means any written
modification of the Agreement, signed by both Cheniere and
Willbros, other than Change Orders.
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1.6
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“Applicable Codes and Standards”
means any and all codes, standards or requirements set forth herein
(including Schedule “D” ) or in any Applicable
Law, which codes, standards and requirements shall govern
Willbros’ performance of the Work, as provided herein. In the
event of an inconsistency or conflict between any of the Applicable
Codes and Standards, the highest performance standard as
contemplated therein shall govern Willbros’
performance.
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1.7
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“Applicable Law” means all laws,
statutes, ordinances, certifications, orders, decrees, injunctions,
permits, agreements, rules and regulations, including any
conditions thereto, of any Governing Authority having jurisdiction
over all or any portion of the Work Site or the Project or
performance of all or any portion of the Work, or other legislative
or administrative action of a Governing Authority, or a final
decree, judgment or order of a court which relates to the
performance of Work hereunder or the interpretation or application
of this Agreement, including (a) any and all permits,
authorizations, certifications, or other approvals or orders,
(b) any Applicable Codes and Standards set forth in Applicable
Law and (c) any Applicable Law related to
(i) conservation, regulation, improvement, protection,
pollution, contamination or remediation of the environment or
(ii) Hazardous Substances or any handling, treatment, storage,
release, use and disposal or other disposition of Hazardous
Substances, including the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”).
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1.8
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“Books
and Records” has the meaning set forth in Paragraph
2.9.
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A-2
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1.9
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“Catastrophic Storms” means storms
which are listed by the National Oceanic and Atmospheric
Administration as Billion Dollar U.S. Weather Disasters.
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1.10
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“Change” means an addition,
deletion, suspension of, revision or any other modification or
Amendment to the Work. Adjustment to the Guaranteed Maximum Price,
the Preparation and Material Receipt Commencement Date, the
Construction Commencement Date or the Scheduled Mechanical
Completion Date shall in every instance constitute a
Change.
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1.11
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“Change
Order” means a document, in the form attached hereto as
Attachment VI and signed by Cheniere and Willbros, issued on
or after the Effective Date, authorizing a Change to the Work, the
Guaranteed Maximum Price, the Preparation and Material Receipt
Commencement Date, the Scheduled Mechanical Completion Date, the
Construction Commencement Date or any other material requirement
under this Agreement.
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1.12
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“Cheniere” has the meaning set forth
in the introductory paragraph of the Signature Document.
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1.13
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“Cheniere’s Authorized
Representative” means Richard E. Keyser, the person hereby
authorized by Cheniere to act on its behalf on all matters
pertaining to the Agreement, and whose actions shall be binding
upon Cheniere.
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1.14
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“Cheniere’s Confidential
Information” has the meaning set forth in Paragraph
13.6.
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1.15
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“Cheniere
Group” means the owners and affiliated companies of Cheniere
or its lenders, including, their respective officers, directors,
employees, agents, representatives, contractors (excluding
Willbros, its affiliates, Subcontractors and Vendors) and
subcontractors.
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1.16
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“Cheniere
Provided Items” means those items to be provided by Cheniere,
and those responsibilities to be performed by Cheniere, as
described in Paragraph 5.3.
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1.17
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“Claim” has the meaning set forth in
Paragraph 10.1.1.
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1.18
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“Confidential Information” has the
meaning set forth in Paragraph 13.8.
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1.19
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“Construction Commencement Date”
means the date set forth in Paragraph 6.1.2.
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1.20
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“Contingency Costs” means those
reasonable costs actually incurred incident to the performance of
Work under this Agreement and prior to Project Completion of the
Project, which are not reimbursable as a Cost of the Work, are not
attributable to Willbros’ negligence, willful misconduct or
breach of this Agreement, are not recoverable from Subcontractors,
Vendors or insurers, and for which records required hereunder exist
and are contemporaneously prepared and maintained
(“Contingency Costs”).
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A-3
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1.21
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“Contingency Pool” has the meaning
set forth in Attachment I of the Letter
Agreement.
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1.22
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“Contract
Amount” has the meaning set forth in Paragraph
5.4.1.
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1.23
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“Corrective Work” has the meaning
set forth in Paragraph 12.2.2.
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1.24
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“Cost of
the Work” has the meaning set forth in Paragraph
5.4.1.
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1.25
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“Defect” or “Defective”
has the meaning set forth in Paragraph 12.1.
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1.26
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“Defect
Correction Period” has the meaning set forth in Paragraph
12.2.2.
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1.27
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“Disclosing Party” has the meaning
set forth in Paragraph 13.8.
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1.28
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“Dispute” has the meaning set forth
in Paragraph 14.2.
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1.29
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“Dispute
Notice” has the meaning set forth in Paragraph
14.2.
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1.30
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“Drawings” means drawings developed
by Willbros and approved by Cheniere for the performance of the
Project in accordance with Paragraph 2.7, Paragraph 2.8 and
Schedule “B” and as listed in Schedule
“D” . The Drawings shall be based on the
Specifications. Should there be an inconsistency between the
Specifications and the Drawings, the Specifications shall
prevail.
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1.31
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“E&O
Insurance” has the meaning set forth in Paragraph
11.1.7.
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1.32
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“Effective Date” shall be the date
given in the introductory paragraph of the Signature
Document.
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1.33
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“Exception Items” means finishing
items required to complete various portions of the Work which are
incomplete, Defective or otherwise not in accordance with the
Agreement, but the completion of which shall not affect, interrupt,
disrupt, or interfere with the safe and orderly operation of all or
a part of the Project as more fully described in Paragraph
8.
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1.34
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“FERC
Certificate” means that certification issued by the Federal
Energy Regulatory Commission (“FERC”)
(i) authorizing the construction of the Project, including any
conditions governing the conduct of the construction activities for
the Project, and (ii) detailing the pipeline route and
required pipe class associated with the route’s population
density survey. The FERC Certificate includes related FERC filing
documents CP04-38-00, CP04-38-001, CP04-39-000 and CP04-40-000 and
the approved implementation plan.
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1.35
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“Force Majeure” means
Catastrophic Storms or floods, lightning, tornadoes, hurricanes,
named tropical storms, earthquakes and other acts of God, wars,
civil disturbances, terrorist attacks, revolts, insurrections,
sabotage, commercial embargoes, epidemics, fires,
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A-4
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explosions, and actions of a
Governing Authority that were not requested, promoted, or caused by
the affected Party, and strikes or other similar labor actions
(except as set forth in (iii) below); provided that such act
or event (a) renders impossible or impracticable the affected
Party’s performance of its obligations under the Agreement,
(b) is beyond the reasonable control of the affected Party and
not due to its fault or negligence and (c) could not have been
prevented or avoided by the affected Party through the exercise of
due diligence, including the expenditure of any reasonable sum
taking into account the Guaranteed Maximum Price. For avoidance of
doubt, Force Majeure shall not include any of the following:
(i) a Party’s economic hardship, (ii) changes in
market conditions, (iii) strikes, or other similar labor
actions to the extent caused by the act or omission of the Party
claiming Force Majeure, (iv) unavailability of Subcontractors
or Vendors; (v) climatic conditions (including rain, snow,
wind, temperature and other weather conditions), tides, and
seasons, regardless of the magnitude, severity, duration or
frequency of such climatic conditions (except those Catastrophic
Storms as set forth above), or (vi) nonperformance or delay by
Willbros or its Subcontractors or Vendors, unless any of the
foregoing conditions is otherwise caused by Force
Majeure.
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1.36
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“Guaranteed Maximum Price” shall
have the meaning set forth in Paragraph 3 of the Signature
Document.
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1.37
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“Governing Authority” means any
federal, state, or local department, office, instrumentality,
agency, board or commission having jurisdiction over a Party or any
portion of the Work, the Work Site or the Project.
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1.38
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“Hazardous Substance” means any
substance that under Applicable Law is considered to be hazardous
or toxic or is or may be required to be remediated, including
(a) “hazardous substances” as defined in 42 U.S.C.
§ 9601(14), (b) “chemicals” subject to
regulation under Title III of the Superfunds Amendments and
Reauthorization Act (“SARA”) of 1986, (c) natural
gas liquids, liquefied natural gas or synthetic gas, (d) any
petroleum, petroleum-based products or crude oil or any fraction,
or (e) any other chemical, waste, material, pollutant,
contaminant or any other substance, exposure to which is now or
hereafter prohibited, limited or regulated by any Governing
Authority or which may be the subject of liability for damages,
costs or remediation.
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1.39
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“Key
Personnel” or “Key Persons” has the meaning set
forth in Paragraph 3.1 and includes the Willbros Personnel listed
in Attachment VIII .
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1.40
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“Letter
Agreement” means that letter agreement entered into between
the Parties simultaneously with this Agreement dated
February 01, 2006.
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1.41
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“Liquidated Damages” has the meaning
set forth in Paragraph 21.1.
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1.42
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“Major Vendor” means
any Vendor (a) who has entered a subcontract or purchase order
having an aggregate value in excess of One Hundred Thousand Dollars
($100,000), or (b)
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A-5
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who has entered multiple
subcontracts or purchase orders with an aggregate value in excess
of One Hundred Thousand Dollars ($100,000).
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1.43
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“Mechanical Completion” or
“Mechanically Complete” means that all of the following
has occurred: (a) the Work is approved by Cheniere as being
ready for pre-commissioning and/or commissioning; (b) Willbros
has delivered to Cheniere a set of original test and inspection
certificates, including hydrostatic test reports, materials
documentation, MAOP establishment records, and internal geometry
pig results; (c) Willbros has completed all construction,
procurement, fabrication, assembly, erection, installation and
testing, including final pipeline hydrostatic tests for the
pipeline and all appropriate appurtenances to ensure that such
systems were correctly constructed, procured, fabricated,
assembled, erected, installed and tested and are capable of being
operated safely and reliably within the requirements contained in
this Agreement; (d) Willbros has delivered to Cheniere a
Mechanical Completion Certificate for the Project in the form of
Attachment III , and Cheniere has accepted such certificate
by signing such certificate; (e) Willbros has dewatered and
dried the pipeline to a dewpoint of negative forty degrees
Fahrenheit (-40ºF); (f) Willbros has completed all
Exception Items in accordance with Paragraph 8.1; and
(g) Willbros has performed all other obligations required
under this Agreement for Mechanical Completion.
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1.44
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“QA/QC
Plan” has the meaning set forth in Paragraph 7.1.
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1.45
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“Party” or “Parties” has
the meaning set forth in the introductory paragraph of the
Signature Document.
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1.46
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“Paragraph” means a paragraph in the
Schedule in which it appears, unless otherwise
indicated.
|
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1.47
|
“Preparation and Material Receipt
Commencement Date” has the meaning set forth in Paragraph
6.1.1.
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1.48
|
“Project” means the whole of the
Work to be performed by Willbros in respect of the pipeline and in
accordance with this Agreement, including the construction,
testing, and commissioning of the 16-mile, 42-inch pipeline and
related facilities, including an inlet monitor regulator station, a
pig launcher, a 30-inch side tap, a 42-inch side tap, two- 42-inch
mainline valves, and all other appropriate valves and
appurtenances, to be constructed from the Cheniere liquefied
natural gas terminal to a pipeline interconnect at Johnson’s
Bayou, all located entirely in Cameron Parish, Louisiana; for
purposes of clarification, the Project does not include the NGPL
Meter Station and the Cameron Meadows Meter Station being developed
by Cheniere.
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|
1.49
|
“Project Completion”
means the date when all Work and all other obligations under this
Agreement are fully and completely performed in accordance with the
terms of this Agreement, including: (a) the successful
achievement of Mechanical Completion of all systems for the
Project; (b) the successful achievement of Start-up of all
systems for the
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A-6
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|
Project; (c) delivery by
Willbros of all documentation required to be delivered under this
Agreement, including any Work Product, Cheniere’s
Confidential Information and other documentation; (d) delivery
by Willbros to Cheniere of fully executed Final Lien and Claim
Waivers in the form of Attachment X – Part 2 ;
(e) removal from the Work Site of all of Willbros Personnel,
supplies, waste, materials, rubbish and temporary facilities and
restoration of the Work Site to its natural conditions in
accordance with this Agreement, Applicable Law and Applicable Codes
and Standards or any other requirements of any Governing Authority;
(f) delivery by Willbros to Cheniere of a Project Completion
Certificate in the form of Attachment IV , which Cheniere
has accepted by signing such certificate; (g) delivery by
Willbros to Cheniere of evidence acceptable to Cheniere that all
Subcontractors and Vendors have been fully and finally paid,
including fully executed Final Lien and Claim Waivers from all
Subcontractors and Major Vendors in the form of Attachment X
– Part 4; (h) Willbros has completed all Exception
Items in accordance with Paragraph 8.3; and (i) performance of
all other obligations required by this Agreement for Project
Completion.
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1.50
|
“Project
Schedule” means the dates for performance of the Work set
forth in Schedule “F” , including the
Preparation and Material Receipt Commencement Date, the Scheduled
Mechanical Completion Date and the Construction Commencement
Date.
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1.51
|
“Receiving Party” has the meaning
set forth in Paragraph 13.8.
|
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1.52
|
“Schedule
of Values” has the meaning set forth in Paragraph
5.4.13.
|
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1.53
|
“Scheduled Mechanical Completion
Date” means the date set forth in Paragraph 6.1.3.
|
|
1.54
|
“Shared
Savings” has the meaning set forth in Attachment I of
the Letter Agreement.
|
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1.55
|
“Signature Document” means the cover
document to which all Schedules of the Agreement are attached
thereto and which contains the signature page for which the Parties
have signed in order to be bound by this Agreement.
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1.56
|
“Specifications” means those items
and requirements governing the performance and standards of the
Work as set forth in this Agreement, including the FERC Certificate
and those standard engineering and construction specifications
developed by Willbros in accordance with Paragraph 2 and approved
by Cheniere and as set forth or incorporated by reference in
Schedule “D” .
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1.57
|
“Start-up” means that all of the
following has occurred: (a) the successful achievement of
Mechanical Completion of all systems for the Project;
(b) Cheniere has purged the Project with either natural gas or
nitrogen with assistance and support from Willbros as requested;
(c) delivery by Willbros to Cheniere of a Start-up Certificate
in the form of Attachment V , which Cheniere has accepted by
signing such certificate; (d) Willbros has completed all
Exception Items in accordance with Paragraph 8.2; and
(e) performance of all other obligations required by this
Agreement for Start-up.
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A-7
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1.58
|
“Subcontractor” means any person or
entity (other than a Vendor), of any tier, who performs any portion
of the Work or otherwise furnishes labor, materials, supplies or
equipment which are a portion of the Work or in connection with the
Work and who is not a direct full-time employee of Willbros. The
term “Subcontractor” may be referred to throughout the
Agreement as if singular in number and means a Subcontractor or an
authorized representative of Subcontractor.
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1.59
|
“Taxes” has the meaning set forth in
Paragraph 5.4.2.
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1.60
|
“Vendor” means any person or entity,
including a Major Vendor, (other than a Subcontractor), of any
tier, including materialmen and equipment suppliers or renters,
who, sells or supplies materials, supplies or equipment which are
to be incorporated into the Work or used in connection with the
Work and who is not a direct full-time employee of Willbros. The
term “Vendor” may be referred to throughout the
Agreement as if singular in number and means a Vendor or an
authorized representative of a Vendor.
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1.61
|
“Warranty” has the meaning set forth
in Paragraph 12.1.
|
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1.62
|
“Willbros” has the meaning set forth
in the introductory paragraph of the Signature Document.
|
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1.63
|
“Willbros
Authorized Representative” means Mike Reifel, the person
hereby authorized by Willbros to act on its behalf on all matters
pertaining to the Agreement, and whose actions shall be binding
upon Willbros.
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1.64
|
“Willbros’ Confidential
Information” has the meaning set forth in Paragraph
13.7.
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1.65
|
“Willbros
Equipment” means all machinery, apparatus, equipment,
materials, tools, temporary facilities and other items previously
owned by Willbros or rented for the purposes of this Project and
utilized by Willbros to perform the Work but not forming a part of
the Project, including also that of its Subcontractors and Vendors
at whatever tier.
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1.66
|
“Willbros’ Intellectual
Property” has the meaning set forth in Paragraph
13.4.
|
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1.67
|
“Willbros
Management Fee” means Willbros’ lump sum fee for
overhead, profit and indirect job risk which is set forth in the
Schedule of Values.
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1.68
|
“Willbros
Personnel” means all labor, supervisory and other personnel
utilized by Willbros to perform the Work, including also those of
its Subcontractors and Vendors at whatever tier.
|
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1.69
|
“Willbros
Group” means the owners and affiliated companies of Willbros
Engineers, Inc., and their respective officers, directors,
employees, agents, representatives, Subcontractors, and
Vendors.
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A-8
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1.70
|
“Willbros
RPI, Inc.” means the Willbros Group affiliated construction
company headquartered in Houston, Texas that may be a Subcontractor
to Willbros Engineers, Inc. on this Project.
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1.71
|
“Work” means all the work, services,
duties, responsibilities and other undertakings to be performed by
Willbros, its Subcontractors or its Vendors as described in this
Agreement, including that set forth in Schedule
“B” and Paragraphs 2, 3 and 4.
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1.72
|
“Work
Plan” means the plan described in Paragraph 6.2 and
formulated pursuant to Schedule “B” and
Schedule “F” of the Agreement.
|
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1.73
|
“Work
Product” has the meaning set forth in Paragraph
13.3.
|
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1.74
|
“Work
Site” means the location on which the Project shall be
located which is identified in more detail in Attachment I
of Schedule “B” .
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2. WILLBROS’
OBLIGATIONS
Subject to Paragraph 5 and in close
cooperation and coordination with Cheniere, and subject to the
terms and conditions of the Agreement, Willbros shall perform the
Work in accordance with good engineering and construction
practices, Applicable Law, Applicable Codes and Standards, the
Specifications and all other provisions of this Agreement. Willbros
accepts the relationship of trust and confidence established by
this Agreement and covenants with Cheniere to exercise its skill
and judgment in furthering the interests of Cheniere. Without
limiting the generality of the foregoing or the requirements of any
other provisions of this Agreement, Willbros shall:
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2.1
|
Engineering,
Procurement and Construction Management : Perform the Project management, engineering,
procurement, construction and construction management for the
Project as described in this Agreement, including in detail at
Schedule “B” and the Specifications set forth in
Schedule “D” ;
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2.2
|
Manpower and
Equipment : Provide
Willbros Equipment and Willbros Personnel, including Subcontractors
and Vendors, as set forth in more detail in Paragraph 3;
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2.3
|
Compliance : Perform the Work in compliance with the
requirements of and provide assistance and documentation to
Cheniere as reasonably requested by Cheniere in connection with
those approvals, permits, licenses, and/or other authorizations
obtained by Cheniere in accordance with Paragraph 5.1;
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|
2.4
|
Health, Safety and
Environmental Performance : Perform the Work in a safe, physically secure
and environmentally sound manner and otherwise in compliance with
Cheniere’s health, safety and environmental policies, which
are attached hereto as Attachment IX . Cheniere’s
provision of such health, safety and environmental policies shall
not in any
|
A-9
|
|
way relieve Willbros of its
responsibility regarding safety, health or the environment, and
Cheniere, in providing such policies, assumes no liability for the
policies;
|
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2.5
|
Authorized
Representative : Appoint
one (1) or more Willbros Authorized Representative for the
duration of the Work;
|
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2.6
|
Timeliness
and Manner of Performance : Perform all Work in a timely, complete and
workmanlike manner in accordance with this Agreement;
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|
2.7
|
Drawings and
Specifications : Prepare,
for Cheniere’s review and approval in accordance with
Paragraph 2.8, all necessary Drawings and Specifications for the
Project in accordance with the Applicable Codes and Standards,
Applicable Law, Schedule “B” , Schedule
“D” and all other requirements within this
Agreement; and
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2.8
|
Review and
Approval of Drawings and Specifications :
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|
|
2.8.1
|
Over the
Shoulder Review : During
the development of the Drawings and Specifications, provide
Cheniere with the opportunity to perform
“over-the-shoulder” reviews of the design and
engineering in progress. Such reviews may be conducted at
Willbros’ office located in Tulsa, Oklahoma, at any of its
Subcontractors’ offices or remotely by electronic internet
access. The reviews may be of progress prints, computer images,
draft documents, working calculations, draft specifications or
reports, Drawings, Specifications or other design documents
determined by Cheniere.
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|
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2.8.2
|
Submission
by Willbros : Submit
copies of the Drawings and Specifications to Cheniere for formal
review, comment, disapproval and approval in accordance with this
Paragraph 2.
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|
|
2.8.3
|
Review
Periods and Cheniere’s Approval : Allow Cheniere up to fifteen (15) days
from Cheniere’s receipt of the Drawings and Specifications
submitted in accordance with Paragraph 2.8.2 to issue written
comments, proposed changes and/or written approvals or disapprovals
of the submission of such Drawings and Specifications to
Cheniere.
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|
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(i)
|
If Cheniere
does not issue any comments, proposed changes or written approvals
or disapprovals within such time period, Willbros may proceed with
the development of such Drawings and Specifications and any
construction or procurement relating thereto, but Cheniere’s
lack of comments, approval or disapproval shall in no event
constitute an approval of the matters received by
Cheniere.
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|
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(ii)
|
In the event that Cheniere
disapproves the Drawings or Specifications, Cheniere shall provide
Willbros with a written statement of the reasons for such rejection
within the time period required for Cheniere’s response
for
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A-10
|
|
disapproval of the Drawings or
Specifications. Willbros shall provide Cheniere with revised and
corrected Drawings or Specifications as soon as possible thereafter
and Cheniere’s rights with respect to the issuing of
comments, proposed changes or approvals or disapprovals of such
revised and corrected Drawings or Specifications are governed by
the procedures specified in this Paragraph 2.8.3; provided that
Willbros shall not be entitled to any extensions of time to the
Project Schedule, the Preparation and Material Receipt Commencement
Date, the Construction Commencement Date, the Scheduled Mechanical
Completion Date, or an adjustment to the Guaranteed Maximum
Price.
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|
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(iii)
|
Upon
Cheniere’s written approval of the Drawings and
Specifications, such Drawings and Specifications shall be the
Drawings and Specifications that Willbros shall use to construct
the Work; provided that Cheniere’s review or approval of any
Drawings or Specifications shall not in any way be deemed to limit
or in any way alter Willbros’ responsibility to perform and
complete the Work in strict accordance with the requirements of
this Agreement, and in the event that there is a discrepancy,
difference or ambiguity between the terms of this Agreement and any
Drawings or Specifications, the Agreement shall control. Due to the
limited time under this Agreement for Cheniere’s review of
the Drawings and Specifications, Willbros’ or its
Subcontractors’ or Vendors’ expertise in the Work and
Cheniere’s reliance on Willbros to prepare accurate and
complete Drawings and Specifications, Willbros recognizes and
agrees that Cheniere is not required or expected to make detailed
reviews of the Drawings and Specifications, but instead
Cheniere’s review of the Drawings or Specifications may be of
only a general, cursory nature. Accordingly, any reviews or
approvals given by Cheniere under this Agreement with respect to
any Drawings or Specifications shall not in any way be, or deemed
to be, an approval of any Work or Drawings or Specifications not
meeting the requirements of this Agreement, as Willbros has the
sole responsibility for performing the Work in accordance with the
requirements of this Agreement.
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|
2.9
|
Audit Rights
: During the term of this Agreement
and for a period of three (3) years after the earlier of
Project Completion or termination of this Agreement, retain full
and detailed books, construction logs, Drawings, Specifications,
Change Orders, records, daily reports, accounts, payroll records,
receipts, statements, electronic files (including schedules,
e-mails and CAD), correspondence, subcontracts and other documents
of Willbros, its affiliated companies or their respective
Subcontractors and Vendors, which in any way: (a) pertain to
the Agreement, including any such documents related to the Work; or
(b) relate to costs, compensation for changes in the Work, or
claims of any type by Willbros or its Subcontractors or Vendors
(“Books and Records”). Upon five (5) days’
written notice, Cheniere or any of its representatives shall have
the right to audit such Books and Records during such three
(3) year period, provided, however, such parties shall not
have the right to audit or have audited Books and Records in
connection
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A-11
|
|
with the internal composition of
any compensation that is fixed in amount hereunder such as the
composition of unit rates or hourly rates. When requested by
Cheniere, Willbros shall provide the auditors with reasonable
access to all such Books and Records, and Willbros Personnel shall
cooperate with the auditors to effectuate any audit hereunder. The
auditors shall have the right to copy all such Books and Records.
Willbros shall include audit provisions identical to this Paragraph
2.9 in all subcontracts and purchase orders with Subcontractors and
Vendors. Willbros shall maintain all Books and Records in
accordance with generally accepted accounting principles applicable
in the United States. Willbros will not charge for any costs
incurred by it in assisting Cheniere with audits performed pursuant
to this Paragraph 2.9. Willbros obligations under this Paragraph
2.9 shall survive the termination of this Agreement.
|
3. WILLBROS PERSONNEL AND
EQUIPMENT
|
3.1
|
Key
Personnel : Willbros
Personnel shall be provided in sufficient numbers, and shall be
competent and fully qualified to execute the Work. Willbros shall
submit to Cheniere’s Authorized Representative an updated
organization chart of key Project personnel from Willbros’ or
its Subcontractors’ or Vendors’ organization
(“Key Personnel” or “Key Persons”) who
shall be assigned to the Work, such organization chart to be in the
form of and attached as Attachment VIII . Key Personnel
shall, unless otherwise expressly stated in such organization
chart, be devoted full-time to the Work for the entire duration of
the Project, and Key Personnel shall not be removed or reassigned
without Cheniere’s prior written approval. Cheniere shall
have the right, but not the obligation, at any time to request that
Willbros replace any Key Person with another employee acceptable to
Cheniere. In such event, Willbros shall replace such Key Person
without additional expense to Cheniere.
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|
3.2
|
Willbros
Equipment : Willbros
Equipment shall be suitable for the performance of the Work, in
good repair and otherwise comply with the terms of this Agreement.
Notwithstanding anything to the contrary contained in this
Agreement, Willbros shall be responsible for repair, damage to or
destruction or loss of, from any cause whatsoever, all Willbros
Equipment. Willbros shall require that all insurance policies
(including policies of Willbros and all Subcontractors and Vendors)
in any way relating to such Willbros Equipment include clauses
stating that each underwriter will waive all rights of recovery,
under subrogation or otherwise, against the Cheniere
Group.
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|
3.3
|
Subcontractors and
Vendors : Cheniere
acknowledges and agrees that Willbros intends to have portions of
the Work accomplished by Subcontractors or Vendors pursuant to
written subcontracts or purchase orders between Willbros and such
Subcontractors and Vendors, and that such Subcontractors and
Vendors may have certain portions of the Work performed by lower
tier subcontractors or vendors. All Subcontractors and Vendors
shall be reputable, qualified firms with an established record of
successful performance in their respective trades performing
identical or substantially similar work. All contracts with
Subcontractors and Vendors shall be consistent with the terms or
provisions of this Agreement. No Subcontractor or Vendor is
intended to be or shall be
|
A-12
|
|
deemed a third party beneficiary
of this Agreement. Willbros shall be fully responsible to Cheniere
for the acts or omissions of Subcontractors and Vendors and of
persons directly or indirectly employed by either of them, as
Willbros is for the acts or omissions of persons directly employed
by Willbros. The Work of any Subcontractor or Vendor shall be
subject to inspection by Cheniere to the same extent as the Work of
Willbros. Nothing contained herein shall (i) create any
contractual relationship between any Subcontractor or Vendor and
Cheniere, or (ii) obligate Cheniere to pay or cause the
payment of any amounts to any Subcontractor or Vendor. Willbros
shall, within thirty (30) days prior to the selection of any
Subcontractor or Vendor, notify Cheniere in writing of the
selection of such Subcontractor or Vendor and inform Cheniere
generally what portion of the Work such Subcontractor or Vendor is
performing.
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|
3.4
|
Bidding of
Subcontracts and Purchase Orders : As part of Willbros’ performance of the
Work on an “open book basis”, Willbros shall provide
all necessary services related to the bidding of subcontracts and
purchase orders for the construction and procurement components of
the Work, including the following: (a) preparing lists of
prospective bidders for review by Cheniere; (b) preparing
appropriate bid documents, including proposed forms of subcontract
and purchase orders; (c) establishing bid schedules;
(d) advertising for bids and developing bidder interest;
(e) furnishing information concerning the Project to
prospective bidders; (f) conducting pre-bid conferences;
(g) receiving bids, as described below, and analyzing bids and
making recommendations to Cheniere regarding bid awards;
(h) investigating the acceptability and responsibility of
lower-tiered Subcontractors and Vendors proposed by any
Subcontractor or Vendor and advising Cheniere of such evaluations;
(i) negotiating with Subcontractors and Vendors concerning any
matter related to the Project; and (j) providing such other
services required by Cheniere with respect to the bidding process.
Willbros shall require bidders to submit their sealed bids directly
to Willbros, and Willbros shall forward copies of such bids to
Cheniere. Willbros shall require bidders for the construction
component of the Work to submit their sealed bids directly to
Cheniere and copies of such bids to Willbros. The receipt of the
proposed bidders list by Cheniere shall not require Cheniere to
investigate the qualifications of prospective bidders, nor shall it
waive the right of Cheniere to later object to or reject any
proposed Subcontractors or Vendors.
|
|
3.5
|
Cheniere
Approval of Subcontractors and Vendors :
|
|
|
3.5.1
|
Approved
Subcontractors and Vendors List : Attachment VII sets forth a list of
Subcontractors and Vendors that Willbros and Cheniere have agreed
are approved Subcontractors and Vendors for the performance of that
stated portion of the Work specified in Attachment VII .
Approval by Cheniere of any Subcontractors or Vendors does not
relieve Willbros of any responsibilities under this Agreement.
Unless Cheniere otherwise approves, each prospective bidder list
shall contain at least three (3) Subcontractors or Vendors
from the Approved Subcontractors and Vendors List in Attachment
VII .
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A-13
|
|
3.5.2
|
Additional
Proposed Subcontractors and Vendors : In the event that Willbros is considering the
selection of a Subcontractor or Vendor not listed on Attachment
VII , Willbros shall (i) notify Cheniere of its proposed
Subcontractor or Vendor as soon as possible during the selection
process, including clearly identifying such proposed Subcontractor
or Vendor on the list of prospective bidders provided in accordance
with Paragraph 3.4, and furnish to Cheniere all information
reasonably requested by Cheniere with respect to Willbros’
selection criteria, and (ii) notify Cheniere no less than
seven (7) business days prior to the execution of a
subcontract or purchase order with a Subcontractor or Vendor not
listed on Attachment VII . Cheniere shall have the
discretion, not to be unreasonably exercised, to reject any
proposed Subcontractor or Vendor not listed on Attachment
VII at any time. Willbros shall not enter into any subcontract
or purchase order with a proposed Subcontractor or Vendor that is
rejected by Cheniere in accordance with the preceding sentence.
Cheniere shall undertake in good faith to review the information
provided by Willbros with respect to such proposed Subcontractor or
Vendor expeditiously and shall notify Willbros of its decision to
accept or reject a proposed Subcontractor or Vendor as soon as
practicable after such decision is made. Failure of Cheniere to
accept a proposed Subcontractor or Vendor within seven
(7) business days shall be deemed to be a rejection of such
Subcontractor or Vendor.
|
4. WORK SITE
RESPONSIBILITIES
|
4.1
|
Land
Acquisition Plan :
Willbros shall provide reasonable assistance to Cheniere, as
requested by Cheniere in writing, in finalizing Cheniere’s
land acquisition plan as necessary to permit land activities for
the Project to proceed in accordance with the FERC Certificate and
in accordance with Paragraph 5.2. Such plan may include required
rights of way, access roads, materials and equipment storage
facilities, office sites, vehicle parking areas, temporary
electrical supply locations and trash collection areas, including
proposed locations for each.
|
|
4.2
|
Provision of
Facilities : Willbros
shall provide warehousing, offices, storage and related utilities
in accordance with the terms of this Agreement and the FERC
Certificate for Willbros Equipment and such other materials and
equipment to be incorporated into the Work.
|
|
4.3
|
Maintenance
of Work Sites : Willbros
shall, to Cheniere’s satisfaction, at all times keep the Work
Site free from all waste materials or rubbish caused by the
activities of Willbros or any of its Subcontractors or Vendors.
Without limitation of the foregoing or limiting Willbros’
obligations, Willbros shall clean up all such waste materials or
rubbish at Cheniere’s request with reasonable
notice.
|
|
4.4
|
Compliance with Real Property
Interests and Other Work Site Restrictions : Willbros shall, in the performance of the
Work, comply, and cause all Subcontractors and Vendors to comply,
with any agreement governing any easement, lease, right-of-way or
other
|
A-14
|
|
property interests that affect or
govern the Work Site or any other real property used for the
purposes of completing the Work, including any line list, insurance
or indemnification restrictions or obligations therein, to the
extent such easement, lease, right-of-way or other property
interests relate to the performance of the Work (but only to the
extent that such indemnification restrictions and obligations are
consistent with Willbros indemnification obligations agreed to
herein). In addition, Willbros shall comply with any one-call
requirements imposed by Applicable Law (including local law) and
coordinate with owners or operators of all third-party utilities,
including those crossed by the Project or otherwise situated within
the Work Site or affected by the Work. Cheniere shall provide
Willbros with copies of all relevant portions of the agreements
governing such easement, lease, right-of-way, and other property
interests to the extent that such agreements impose restrictions or
obligations on Willbros pursuant to this Paragraph 4.4. To the
extent that such agreements require Willbros to procure insurance
in addition to or in amounts in excess of that insurance required
by this Agreement, the Willbros shall be entitled a Change Order
increasing the Guaranteed Maximum Price to cover the cost of such
additional insurance.
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|
4.5
|
Coordination
of Work : Willbros
acknowledges that Cheniere and other consultants and contractors
may be working at the Work Site during the performance of this
Agreement and the Work or use of certain facilities may be
interfered with as a result of such concurrent activities, and
Willbros agrees to coordinate the performance of the Work with
Cheniere and such other consultants and contractors performing work
at the Work Site so as not to materially interfere with Cheniere or
its other consultants or subcontractors performing work at the Work
Site.
|
5. CHENIERE’S
OBLIGATIONS
In close cooperation and
coordination with Willbros, and subject to the terms and conditions
of the Agreement, Cheniere shall:
|
5.1
|
Licenses and
Permits : Provide, or
cause to be provided, all approvals, permits, licenses (other than
Willbros’ or its Subcontractors’ or Vendors’
operating and professional licenses, including road bonding) and/or
other authorizations necessary for the Project from any Governing
Authority, including the FERC Certificate and all environmental
agencies.
|
|
5.2
|
Work Site
Access : Secure legal and
reasonable access to the Work Site, in accordance with the FERC
Certificate, as necessary to permit Willbros to commence Work in
accordance with this Agreement by obtaining the rights of way, pipe
yards, ware yards, and all other land rights or property interests
necessary for the Work, all in accordance with Cheniere’s
land acquisition plan.
|
|
5.3
|
Cheniere Provided
Items : Cheniere shall
provide: (i) hydrostatic test water; (ii) natural gas or
nitrogen and personnel to determine the achievement of Start-up in
accordance with Paragraphs 1.57 and 8.2; and
(iii) environmental inspection services during
|
A-15
|
|
construction Work. In addition,
Cheniere shall provide to Willbros the following preliminary
drawings which shall be updated by Willbros in accordance with this
Agreement: (y) preliminary drawings submitted to FERC,
indicated by drawing numbers CH-5763-D-1103 (Sheets 1 to 6), Rev. 0
and titled “Proposed 42-inch Natural Gas Pipeline, Sabine
Pass Pipeline Project, FERC Alignment Sheet,” and
(z) preliminary alignment drawings, indicated by drawing
numbers CH-5763D-1101 to 1115, Rev. 1 and titled “Cheniere,
Sabine to Johnson’s Bayou, Cameron Parish,
Louisiana.”
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|
5.4
|
Payment : Remunerate Willbros as required by the
Agreement.
|
|
|
5.4.1
|
Contract
Amount : Subject to
additions and deductions by Change Order, Cheniere shall pay
Willbros for performance of the Work to be performed by Willbros
for the Project as described in this Agreement and Schedule
“B” , the “Contract Amount” consisting
of (i) the Cost of the Work, (ii) the Willbros Management
Fee, (iii) Contingency Costs, and (iv) Louisiana sales
and use taxes applicable to permanent materials and equipment to be
incorporated into the Project. The “Cost of the Work”
shall mean those costs necessarily incurred by Willbros in good
faith in the proper performance of the Work.
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5.4.2
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Taxes : The Guaranteed Maximum Price includes any and
all taxes, assessments, levies, duties, fees, charges and
withholding of any kind or nature whatsoever and howsoever
described, including value-added, sales and use taxes (except as
indicated herein), gross receipts, license, payroll, environmental,
profits, premium, franchise, property, excise, capital stock,
import, stamp, transfer, employment, occupation, generation,
privilege, utility, regulatory, energy, consumption, lease, filing,
recording and activities taxes, levies, duties, fees charges,
imposts and withholding, together with any and all penalties,
interests and additions thereto in any way related to the Work
(collectively, “Taxes”), but not including Louisiana
sales and use taxes applicable to permanent materials and equipment
to be incorporated into the Project, the cost of which is not
subject to the Guaranteed Maximum Price. With each invoice that
requests reimbursement for Louisiana sales and use taxes applicable
to permanent materials and equipment to be incorporated into the
Project, Willbros shall separately list in the invoice such
Louisiana sales and use taxes. Subject to the other provisions of
this Agreement, Cheniere shall remit to Willbros the payment of
such Louisiana sales and use taxes within the time allowed for
payment of invoices under this Agreement. Willbros shall be
responsible for paying to the applicable Governing Authority all
Taxes and Louisiana sales and use taxes applicable to permanent
materials and equipment to be incorporated into the Project owed
under Applicable Law with respect to the Work. IF AND TO THE EXTENT
CHENIERE HAS PAID TO WILLBROS THE APPLICABLE TAXES AND LOUISIANA
SALES AND USE TAXES APPLICABLE TO PERMANENT MATERIALS AND EQUIPMENT
TO BE INCORPORATED INTO THE PROJECT REQUIRED UNDER THIS PARAGRAPH,
WILLBROS SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE CHENIERE
GROUP FROM AND AGAINST ANY CLAIMS
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BY ANY GOVERNING AUTHORITY FOR
THE NON-PAYMENT OF SUCH TAXES AND SUCH LOUISIANA SALES AND USE
TAXES.
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5.4.3
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Invoicing : Willbros shall submit invoices to Cheniere as
follows:
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(i)
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twice per month
for Project management, engineering and drafting, procurement
services, and construction management services performed during the
previous invoicing period. Charges shall be accumulated and
invoiced on a rate reimbursable basis reflecting man-hours expended
as described in Paragraph 1.2 of Attachment I to the Letter
Agreement;
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(ii)
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for permanent
materials as set forth in Paragraph 1.3 of Attachment I to
the Letter Agreement;
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(iii)
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for the
construction component of the Work as set forth in Paragraph 1.4 of
Attachment I to the Letter Agreement;
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(iv)
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for the
Willbros Management Fee properly allocable to the completed Work.
The Willbros Management Fee allocable to the completed Work shall
be determined by multiplying the percentage completion of the Work
by the total amount of the Willbros Management Fee payable to
Willbros for the Project; and
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(v)
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for
Willbros’ portion of any Shared Savings upon Project
Completion.
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5.4.4
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Invoice
Format : Invoices shall
be complete with sufficient detail and itemized to facilitate
Cheniere’s confirmation and approval. Willbros’
invoices shall be in a format and supported by such documentation
as required by Cheniere. Without limitation of the foregoing,
Willbros shall, with each invoice, submit payrolls, petty cash
accounts, receipted invoices or invoices with check vouchers
attached, and any other evidence required by Cheniere to
demonstrate that cash disbursements already made by Willbros on
account of the Cost of the Work equal or exceed (i) progress
payments already received by Willbros; less (ii) that portion
of those payments attributable to the Willbros Management Fee; plus
(iii) payrolls for the period covered by the present invoice.
Invoices shall show the percentage of completion of each portion of
the Work as of the end of the period covered by the invoice. The
percentage of completion shall be the lesser of: (1) the
percentage of that portion of the Work which has actually been
completed; or (2) the percentage obtained by dividing
(a) the expense that has actually been incurred by Willbros on
account of that portion of the Work for which Willbros has made or
intends to make actual payment prior to the next invoice by
(b) the share of the Guaranteed Maximum Price allocated to
that portion of the Work in the Schedule of Values.
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5.4.5
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Payment
Terms : Cheniere shall
pay Willbros all undisputed amounts due hereunder within fifteen
(15) days after receipt of a complete and accurate invoice for
Work that is satisfactorily completed during that
period.
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5.4.6
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Lien and
Claim Waivers : Each
progress invoice shall be accompanied by a fully executed
Willbros’ Interim Lien and Claim Waiver in the form of
Attachment X – Part 1 , a fully executed Interim Lien
and Claim Waiver in the form of Attachment X – Part 3
for each Subcontractor and Major Vendor, and such other evidence
satisfactory to Cheniere to ensure that all amounts owed in
connection with performance of this Agreement, including amounts
owed to all Subcontractors and Vendors, have been paid. Waivers of
liens and claims, however, will not be required from Subcontractors
or Vendors until they have performed Work or furnished materials or
equipment, and Willbros, Subcontractors and Major Vendors will be
required to submit waivers of liens and claims only if they have
performed Work or furnished materials or equipment not covered by a
previous waiver. Receipt of all Interim Lien and Claim Waivers
under this Paragraph 5.4.6 or all Final Lien and Claim Waivers
required to meet the requirements of Paragraph 1.49, as applicable,
is a condition precedent to payment of any amounts under an
invoice.
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5.4.7
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Final
Invoice : Prior to
submission of a final invoice, Willbros shall perform an audit to
determine the total Cost of the Work for the Project. Such audit
shall also take into consideration Contingency Costs expended and
the Willbros Management Fee in order to calculate the Actual
Contract Amount in accordance with Paragraph 2.2 of Attachment
I to the Letter Agreement. Willbros shall provide a copy of
such audit report to Cheniere upon submission of Willbros’
final invoice. Cheniere’s accountants will review and report
in writing on Willbros final audit within thirty (30) days
after delivery thereof by Willbros. If Cheniere’s accountants
report the Cost of the Work and Contingency Costs as substantiated
by Willbros final audit to be less than claimed by Willbros, and
Willbros disagrees with Cheniere’s accountants reporting of
the Cost of the Work and Contingency Costs, Willbros has the right,
within seven (7) days of its receipt of the Cheniere’s
accountants’ report, to submit the Dispute for resolution in
accordance with Paragraph 14. If Willbros fails to submit the
Dispute within such seven (7) day period, Willbros shall be
deemed to have agreed with Cheniere’s accountants report on
the Cost of the Work and Contingency Costs. Final payment shall not
be made until resolution of a Dispute under this Paragraph
5.4.7.
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5.4.8
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Unperformed
Obligations : Project
Completion and payments made hereunder shall not in any way release
Willbros or any surety of Willbros or its Subcontractors from any
unperformed obligations of the Agreement, including Warranties,
compliance with the Agreement, liabilities for which insurance is
required or any other responsibility of Willbros, including the
payment of any and
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all fines and penalties assessed
as a result of Willbros’ failure to comply with Applicable
Law or Applicable Codes and Standards.
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5.4.9
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Withholding : In addition to retainage and amounts withheld
that are in dispute, Cheniere may, in addition to any other rights
at law, in equity or under this Agreement, withhold amounts
otherwise due by Cheniere to Willbros without payment of interest
on account of: (a) Defective Work not remedied by Willbros in
accordance with Paragraph 12; (b) the filing of claims or
liens or evidence indicating the probable filing of claims or liens
against Cheniere, the Project or the Work; (c) failure of
Willbros to pay amounts when due for labor, services or material
used by Willbros in performing the Work or amounts due to
Subcontractors or Vendors as required in their respective
subcontracts and purchase orders; (d) the assessment of any
fines or penalties against Cheniere as a result of Willbros’
failure to comply with Applicable Law or Applicable Codes and
Standards; or (e) any other circumstance permitted under this
Agreement. If and when the cause, or causes, for withholding any
such payment shall be remedied or removed and satisfactory evidence
of such remedy or removal has been presented to Cheniere, the
payments withheld shall be made to Willbros in the next invoice and
if the final invoice has been paid, within thirty (30) days of
such remedy or removal.
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5.4.10
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Payment
Account Number : Payments
to Willbros under this Agreement shall be made by wire transfer
to:
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Southwest Bank of Texas
Houston, Texas
ABA#: 113-011-258
Beneficiary: Willbros USA,
Inc.
Account Number: 127736
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5.4.11
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Address for
Invoicing : Willbros
shall submit invoices for payment to:
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Cheniere Sabine Pass
Pipeline
717 Texas Avenue, Suite
3100
Houston, Texas 77002
Telephone:
(713) 659-1361
E Mail
abartz@cheniere.com
Facsimile:
(713) 659-5459
Attention :
Mr. Allan
Bartz
Or such other addressee and location
as Cheniere may direct in writing.
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5.4.12
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Payment of Shared
Savings : Willbros shall
be paid its share of the Shared Savings within thirty
(30) days of settlement and verification thereof by
the
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Parties following
Cheniere’s receipt of a final invoice and accounting report
from Willbros in accordance with Paragraphs 5.4.4 and
5.4.7.
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5.4.13
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Schedule of
Values : Attachment
IV of the Letter Agreement sets forth the schedule of values
allocating the entire Guaranteed Maximum Price among the various
portions of the Work as of the Effective Date of the Agreement
(“Schedule of Values”) to be used as a basis for
reviewing the invoices. Willbros shall periodically, upon award of
various components of the Work to Subcontractors and Vendors,
submit to Cheniere for Cheniere’s written approval an updated
Schedule of Values allocating the entire Guaranteed Maximum Price
among the various portions of the Work, except that the Willbros
Management Fee shall be shown as a separate line item. The updated
Schedule of Values shall be prepared in such form and supported by
such data to substantiate its accuracy as Cheniere may require.
Each Cheniere-approved, updated Schedule of Values shall be
incorporated into this Agreement by Change Order.
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6. WORK PLAN AND
REPORTS
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6.1
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Time for
Performance : Willbros
shall commence performance of the Work upon the Effective Date and
shall perform the Work in accordance with the Project Schedule set
forth in this Paragraph 6 and in Schedule “F” .
TIME IS OF THE ESSENCE with respect to Willbros’ performance
of the Work. Willbros may not commence a portion of the Work prior
to the relevant commencement date, if any, listed below:
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6.1.1
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Willbros shall
commence Work related to ware yard preparation and material receipt
at the Work Site no earlier than January 01, 2007
(“Preparation and Material Receipt Commencement Date”).
The Preparation and Material Receipt Commencement Date shall only
be adjusted by Change Order as provided under this
Agreement.
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6.1.2
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Willbros shall
commence Work related to the construction of the Project at the
Work Site no earlier than April 01, 2007 (“Construction
Commencement Date”). The Construction Commencement Date shall
only be adjusted by Change Order as provided under this
Agreement.
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6.1.3
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Willbros shall
achieve Mechanical Completion of the Project no later than
September 30, 2007 (“Scheduled Mechanical Completion
Date”) based on an April 1, 2007, release for
construction. The Scheduled Mechanical Completion Date shall only
be adjusted by Change Order as provided under this
Agreement.
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6.2
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Work Plan
: On or before February 28,
2006, Willbros shall prepare and submit to Cheniere’s
Authorized Representative for review and written approval, a
detailed critical path method schedule in a format approved by
Cheniere (“Work Plan”). The Work Plan shall be based on
and consistent with the Project Schedule, including the Preparation
and Material Receipt Commencement Date, the Construction
Commencement Date and the
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A-20
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Scheduled Mechanical Completion
Date, shall show the method and order in which Willbros shall
perform the Work, its subcontracting plan, and any other
information that Cheniere may consider useful. The Work Plan shall
represent Willbros’ best judgment as to how it shall achieve
Mechanical Completion by the Scheduled Mechanical Completion Date,
and shall be a detailed graphic representation of all significant
aspects of the Work showing Willbros’ plans for performance
of the Work. Without limitation of the foregoing, the Work Plan
shall include separate activities for each portion of the Work,
show the duration, early/late start dates, early/late finish dates
and available float for each activity, show activity number,
activity description and responsible Subcontractor or Vendor, and
show an uninterrupted critical path from commencement of the Work
through Project Completion.
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6.3
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Updated Work
Plan : The Work Plan
shall be used as the basis for progress reporting, schedule control
and schedule forecasting. As reasonably requested by Cheniere,
Willbros shall revise the Work Plan to include the effect of Change
Orders and Amendments and to reflect actual Work in progress as
agreed with Cheniere, provided, however, Willbros may not modify
the Preparation and Material Receipt Commencement Date, the
Construction Commencement Date or the Scheduled Mechanical
Completion Date without a Change Order being executed in accordance
with this Agreement. Each updated Work Plan shall provide the same
details and form as required of the Work Plan. Willbros shall
prepare schedule and cash flow forecasts on a monthly basis or as
requested by Cheniere that reasonably predict the date for
Mechanical Completion of the Project. Willbros shall notify
Cheniere of any anticipated or actual slippage in the performance
of the Work as compared to the Work Plan. Willbros shall provide to
Cheniere weekly reports, monthly summaries of such reports, and
upon request, all other relevant information concerning any
circumstance or condition affecting the Work.
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6.4
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Progress
Meetings : Work progress
meetings between Authorized Representatives shall be held monthly
between Cheniere and Willbros.
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6.5
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Recovery
: If Willbros is responsible for any
delays in the time and/or sequence of the performance of the Work
that is on the critical path of the Work Plan, Willbros shall on
its own initiative or at Cheniere’s written directive, employ
such additional forces, obtain such additional equipment, employ
such additional supervision, pay such additional overtime wages,
and use such priority freight as may be required to bring the Work
back on schedule. If Willbros’ progress is more than fourteen
(14) days behind the critical path of the Work Plan, Cheniere
may, without prejudice to any other remedies available to it under
this Agreement, also require in writing that Willbros submit,
within two (2) days of Cheniere’s written notice and for
Cheniere’s approval, a recovery plan to Cheniere detailing
Willbros’ proposal for bringing the Work back on schedule and
that the sequence of the performance of the Work be changed. In no
event shall such costs to bring the Work back on schedule cause the
Guaranteed Maximum Price to be exceeded. This Paragraph 6.5 shall
not be construed to require that Cheniere give Willbros a written
notice to perform any of the acts listed herein, and the Parties
agree that Cheniere’s
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failure to give such written
notice to Willbros shall not in any way relieve Willbros of its
obligation to perform the Work within the times set forth in the
Project Schedule.
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6.6
|
Acceleration : Even if the Work is otherwise in compliance
with the Work Plan, Cheniere may, at any time, direct Willbros to
accelerate the Work by, among other things, establishing additional
shifts, paying or authorizing overtime or providing additional
equipment. In the event of this directive, Cheniere’s sole
liability to Willbros shall be to pay Willbros for any documented
costs clearly and solely attributable to such acceleration. Such
costs may include any shift differential, premium, or overtime
payments to workers or field supervisors and other employees of
Willbros dedicated to the Work on a full-time basis actually
incurred over and above Willbros’ normal rates, overtime
charges for equipment, amounts to account for lost efficiency of
workers and other costs agreed upon by Cheniere and Willbros in
writing. Any adjustment to the Guaranteed Maximum Price resulting
from Cheniere’s directive to accelerate the Work shall be
implemented by Change Order.
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7. INSPECTION AND
TESTING
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7.1
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QA/QC
Plan : On or before
March 31, 2006, Willbros shall submit to Cheniere’s
Authorized Representative, for review and written approval thereof,
a quality assurance and quality control plan for materials
procurement and for construction (“QA/QC Plan”).
Cheniere’s review and approval of the QA/QC Plan shall in no
way relieve Willbros of its responsibility for performing the Work
in compliance with this Agreement.
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7.2
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Willbros’ Inspection and Testing of
Work : Willbros shall
inspect and test the overall and component parts of the Work,
including that of its Subcontractors or Vendors, to ensure
conformity of such Work with Applicable Codes and Standards, and
all other obligations within this Agreement.
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7.3
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Cheniere
Inspection of Work : All
Work shall be subject to inspection by Cheniere or its designee at
all times and at Cheniere’s own expense, to determine whether
the Work conforms to the requirements of this Agreement. Willbros
shall furnish Cheniere with access to all locations where Work is
in progress, including locations not on the Work Site such as
locations from where equipment and material are being obtained,
including pipe fabrication and coating and factory testing of
mainline valves.
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7.4
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Correction of Work Prior to
Start-up : If, in the
judgment of Cheniere, any Work is Defective or any Work is
determined to be Defective as a result of the testing and
inspections performed pursuant to Paragraph 7.2, then Willbros
shall, at its own expense, promptly correct such Defective Work,
whether by repair, replacement or otherwise. Subject to
Willbros’ right to pursue a Dispute under Paragraph 14, the
decision of Cheniere shall be conclusive as to whether the Work is
conforming or Defective, and Willbros shall comply with the
instructions of Cheniere in all such matters while pursuing any
such Dispute. If it is later determined that the Work was not
Defective, then Cheniere shall reimburse Willbros for all costs
incurred in connection with such repair or
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replacement and a Change Order
shall be issued for such amount and shall address any impact the
repair or replacement may have had on the Project Schedule. If
Willbros fails, after a reasonable period of time not to exceed
five (5) days, to repair or replace any Defective Work, or to
commence to repair or replace any Defective Work and thereafter
continue to proceed diligently to complete the same, then Cheniere
may repair or replace such Defective Work and the expense thereof
shall be paid by Willbros.
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7.5
|
Notice to
Cheniere and Cost of Disassembling : Willbros shall advise Cheniere’s
Authorized Representative of tests to be witnessed sufficiently in
advance to enable him or his designee to attend and witness such
test at Cheniere’s expense. Willbros shall likewise advise
Cheniere’s Authorized Representative in advance of any
critical component of the Work to be closed or covered. If such
action is taken by Willbros before an opportunity to inspect or
witness has been provided to Cheniere, it must, if required by
Cheniere, be opened or uncovered for inspection or witnessing and
recovered at Willbros’ expense. The cost of disassembling,
dismantling or making safe finished Work for the purpose of
inspection, other than as set forth above, and reassembling such
portions (and any delay associated therewith) shall be borne by
Cheniere if such Work is found to conform with the requirements of
this Agreement and by Willbros if such Work is found to be
Defective.
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7.6
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No
Obligation to Inspect :
Cheniere’s right to conduct inspections under this Paragraph
7 shall not obligate Cheniere to do so. Neither the exercise of
Cheniere of any such right, nor any failure on the part of Cheniere
to discover or reject Defective Work shall be construed to imply an
acceptance of such Defective Work or a waiver of such
Defect.
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8. COMPLETION AND
START-UP
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8.1
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Mechanical
Completion : Willbros
shall comply with all requirements for Mechanical Completion,
including as set forth in the definition of the term Mechanical
Completion and elsewhere in this Agreement. When Willbros believes
the Work is Mechanically Complete, Willbros shall certify to
Cheniere in writing in the form of the Mechanical Completion
Certificate attached hereto as Attachment III that all of
the requirements for Mechanical Completion of the Work have
occurred, including all documentation required to establish that
the requirements for Mechanical Completion have been met. Within
seven (7) days after receipt of such notice Cheniere shall
inspect the Work and either accept the Work as being Mechanically
Complete (which acceptance shall be evidenced by Cheniere’s
signature on such Mechanical Completion Certificate), or specify
the Exception Items which must be completed to achieve Mechanical
Completion in a written notice to Willbros. Upon completion or
correction of such Exception Items, Willbros shall so advise
Cheniere. Within seven (7) days after receipt of such notice,
Cheniere shall either accept the Work as being Mechanically
Complete in the manner set forth above, or notify Willbros in
writing of still unfinished or uncorrected Exception Items. If
Exception Items remain unfinished or uncorrected, the foregoing
procedure shall be repeated until the Work is Mechanically
Complete.
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8.2
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Start-up : Willbros shall comply with all requirements
needed to achieve Start-up, including as set forth in the
definition of the term Start-up and elsewhere in this Agreement.
When Willbros believes Start-up has been achieved, Willbros shall
certify to Cheniere in writing in the form of the Start-up
Certificate attached hereto as Attachment V that all of the
requirements for achieving Start-up have occurred, including all
documentation required to establish that the requirements for
Start-up have been met. Within seven (7) days after receipt of
such notice Cheniere shall inspect the Work and either accept the
Work as having achieved Start-up (which acceptance shall be
evidenced by Cheniere’s signature on such Start-up
Certificate), or specify the Exception Items which must be
completed to achieve Start-up in a written notice to Willbros. Upon
completion or correction of such Exception Items, Willbros shall so
advise Cheniere. Within seven (7) days after receipt of such
notice, Cheniere shall either approve the Start-up of the Work in
the manner set forth above, or notify Willbros in writing of still
unfinished or uncorrected Exception Items. If Exception Items
remain unfinished or uncorrected, the foregoing procedure shall be
repeated until Start-up is achieved. Notwithstanding the foregoing,
if Cheniere has not commenced the introduction of either natural
gas or nitrogen in accordance with Paragraph 1.57 within thirty
(30) days of achievement of Mechanical Completion, then
Start-up shall be deemed achieved upon the expiration of such
thirty (30) day period, provided that Willbros has fully
satisfied all other requirements for Start-up.
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8.3
|
Project
Completion : Willbros
shall comply with all requirements for Project Completion,
including as set forth in the definition of the term Project
Completion and elsewhere in this Agreement. When Willbros believes
it has completed all obligations under this Agreement to achieve
Project Completion, Willbros shall certify to Cheniere in writing
in the form of the Project Completion Certificate as attached
hereto as Attachment IV that all of the requirements for
achieving Project Completion have occurred, including all
documentation required to establish that the requirements of
Project Completion have been met. Within seven (7) days after
receipt of such notice Cheniere shall inspect the Work and either
accept that Project Completion has been achieved (which acceptance
shall be evidenced by Cheniere’s signature on such Project
Completion Certificate), or specify the Exception Items which must
be completed to achieve Project Completion in a written notice to
Willbros. Upon completion or correction of such Exception Items,
Willbros shall so advise Cheniere. Within seven (7) days after
receipt of such notice, Cheniere shall either accept the Work as
having achieved Project Completion in the manner set forth above,
or notify Willbros in writing of still unfinished or uncorrected
Exception Items. If Exception Items remain unfinished or
uncorrected, the foregoing procedure shall be repeated until
Project Completion is achieved.
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8.4
|
No Waiver
: No acceptance by Cheniere of any
or all of the Work or any other obligations of Willbros under this
Agreement, including acceptance of Mechanical Completion, Start-up
or Project Completion, nor any payment made hereunder, whether an
interim or final payment, shall in any way release Willbros or any
surety of Willbros or its Subcontractors from any obligations or
liability pursuant to this Agreement, including obligations with
respect to unperformed obligations of this Agreement,
obligations
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regarding any remediation or
other Work required pursuant to Paragraph 12, correction of any
Work that does not conform to the requirements of the Agreement or
other Warranty obligations, and any liabilities for which insurance
is required or any other responsibility of Willbros, including the
payment of any and all fines and penalties assessed as a result of
Willbros’ failure to comply with Applicable Law.
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9. CHANGES
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9.1
|
Change
Orders Requested by Cheniere : At any time upon written notice to Willbros
from Cheniere, and without notice to the sureties, if any, Cheniere
may advise Willbros to make or agree with Willbros that there has
been a Change to the Work, including the time and/or sequence of
performance, or the conditions affecting the Work. All Work
involved in a Change, as directed by a Change Order, shall be
performed in accordance with the terms and conditions of the
Agreement and shall not otherwise affect the existing rights or
obligations of the Parties (except as may be expressly stated in a
Change Order). Cheniere shall specify, in the Change Order, the
amount and nature of Work to be done or omitted, the materials to
be used and the equipment to be furnished. Willbros shall perform
the Work as changed without delay.
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9.2
|
Change Order
Format : A Change in the
Work shall be set forth in writing in a Change Order, using the
form provided in Attachment VI , and signed by both Parties.
Change Orders shall include the adjustment, if necessary, in the
Preparation and Material Receipt Commencement Date, the Scheduled
Mechanical Completion Date, Construction Commencement Date or the
Guaranteed Maximum Price.
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9.3
|
Change
Orders Act as Accord and Satisfaction : The Parties agree that Change Orders executed
by Cheniere and Willbros shall constitute a full and final
settlement and accord and satisfaction of all effects of the Change
upon any and all respects of this Agreement and the Work and shall
compensate Willbros fully. Willbros expressly waives and releases
any and all right to make a claim or demand or to take any action
or proceeding for any other consequences arising out of, relating
to, or resulting from the Change reflected in the Change Order,
whether the consequences result directly or indirectly from the
Change reflected in that Change Order.
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9.4
|
Adjustment Only Through Change
Order : Willbros shall
not perform a Change of any kind, except as authorized in a Change
Order. Adjustments to the Guaranteed Maximum Price, the Preparation
and Material Receipt Commencement Date, the Construction
Commencement Date or the Scheduled Mechanical Completion Date shall
only be made by Change Order. No course of conduct or dealings
between the Parties, nor express or implied acceptance of
additions, deletions, suspensions or modifications to this
Agreement, the Drawings or the Specifications, including any Work,
and no claim that Cheniere has been unjustly enriched by any such
addition, deletion, suspension or modification of this Agreement,
the Drawings or the Specifications, whether or not there is in fact
any such unjust enrichment, shall be the basis for any claim for an
adjustment in the Guaranteed Maximum Price, the Preparation and
Material Receipt Commencement
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Date, the Construction
Commencement Date, the Scheduled Mechanical Completion Date or any
other obligations of Willbros under this Agreement.
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9.5
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Change
Orders Requested by Willbros : Willbros shall give written notice to Cheniere
of any requests, claims or proposals for adjustments to the Work,
the Guaranteed Maximum Price, the Preparation and Material Receipt
Commencement Date, the Construction Commencement Date or the
Scheduled Mechanical Completion Date for Changes directed by
Cheniere or for circumstances otherwise permitted by this Agreement
within the time frame and in accordance with Paragraph
14.1.
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9.6
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Change Order
Compensation : The cost
or credit to Cheniere resulting from a Change in the Work shall in
each instance be determined in accordance with one of more of the
following methods and specified in the Change Order: (i) by
mutual acceptance of a properly itemized lump sum amount; or
(ii) for Project management, engineering and drafting,
procurement services and construction management services, by unit
prices or hourly rates set forth in Attachment II of the
Letter Agreement or otherwise agreed upon by the Parties; or
(iii) for construction work performed by Willbros RPI, Inc.
(if such entity is the selected construction Subcontractor), by
unit prices or hourly rates set forth in Attachment III of
the Letter Agreement or otherwise agreed upon by the Parties. If
any of the Changes provided for in a Change Order increase the lump
sum construction costs within the Guaranteed Maximum Price, such
increase shall be subject to Cheniere’s right to retainage as
set forth in Paragraph 1.4.1 of the Letter Agreement.
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10. INDEMNITY, LIENS AND
PATENTS
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10.1
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General
Indemnifications Notwithstanding any other provision to the
contrary, Cheniere and Willbros agree as follows:
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10.1.1
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I
NJURIES TO W ILLBROS G ROUP P ERSONNEL AND D AMAGE TO W ILLBROS G ROUP P ROPERTY : W ILLBROS HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY , AND HOLD THE C HENIERE G ROUP HARMLESS FROM AND AGAINST , ANY AND ALL CLAIMS , DEMANDS , CAUSES OF ACTION , SUITS , LIABILITIES , LOSSES , DAMAGES AND EXPENSES INCLUDING COURT COSTS AND REASONABLE ATTORNEY ’ S FEES ( COLLECTIVELY , “C LAIMS ”) ARISING OUT OF OR
RESULTING FROM (1) INJURY TO OR
DEATH OF THE W ILLBROS G ROUP PERSONNEL , OR
(2) DAMAGE TO OR
DESTRUCTION OF THE W ILLBROS G ROUP PROPERTY , WHETHER OR NOT SUCH C LAIMS ARE DUE TO AN
ACT , OMISSION , NEGLIGENCE WHETHER CONTRIBUTORY , JOINT , OR
SOLE , FAULT OR STRICT LIABILITY OF THE C HENIERE G ROUP , BUT EXCLUDING ONLY THOSE C LAIMS DUE TO THE WILLFUL MISCONDUCT OF THE C HENIERE G ROUP .
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10.1.2
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T HIRD P ARTY I NDEMNIFICATION : W ILLBROS HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY , AND HOLD C HENIERE G ROUP HARMLESS FROM AND AGAINST , ANY AND ALL C LAIMS ARISING OUT OF OR
RESULTING FROM DAMAGE TO OR
DESTRUCTION OF PROPERTY OR PERSONAL INJURY TO OR
DEATH OF ANY THIRD PARTY ( OTHER THAN A MEMBER OF THE C HENIERE G ROUP OR THE W ILLBROS
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G ROUP ) TO
THE EXTENT ARISING OUT OF OR
RESULTING FROM W ILLBROS ’ OR ITS S UBCONTRACTORS ’ OR V
ENDORS ’ PERFORMANCE OF THE W ORK , INCLUDING THE BREACH OF THIS A GREEMENT BY W
ILLBROS AND THE NEGLIGENCE , GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF W
ILLBROS , ITS S UBCONTRACTORS , ITS V ENDORS OR ANYONE EMPLOYED BY THEM OR ANYONE FOR WHOSE ACTS THEY MAY BE LIABLE .
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10.1.3
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I
NJURIES TO C HENIERE G ROUP P ERSONNEL AND D AMAGE TO C HENIERE G ROUP P ROPERTY : C HENIERE HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY , AND HOLD THE W ILLBROS G ROUP HARMLESS FROM AND AGAINST , ANY AND ALL C LAIMS ARISING OUT OF OR
RESULTING FROM (1) INJURY TO OR
DEATH OF THE C HENIERE G ROUP PERSONNEL , OR
(2) DAMAGE TO OR
DESTRUCTION OF THE C HENIERE G ROUP PROPERTY ( EXCLUDING THE W ORK OR THE P ROJECT ), WHETHER OR NOT SUCH C LAIMS ARE DUE TO AN
ACT , OMISSION , NEGLIGENCE WHETHER CONTRIBUTORY , JOINT , OR
SOLE , FAULT OR STRICT LIABILITY OF THE W ILLBROS G ROUP , BUT EXCLUDING ONLY THOSE C LAIMS DUE TO THE WILLFUL MISCONDUCT OF THE W ILLBROS G ROUP .
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10.1.4
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H
AZARDOUS
S UBSTANCES I NDEMNIFICATION : W ILLBROS HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY AND HOLD C HENIERE G ROUP HARMLESS FROM ANY AND ALL C LAIMS , FINES , PENALTIES OR REMEDIATION OBLIGATIONS ARISING OUT OF OR
RESULTING FROM ( A
) ACTUAL OR ALLEGED POLLUTION OR CONTAMINATION OF THE LAND , WATER OR AIR ARISING FROM SPILLS , RELEASES , DISCHARGES OR OTHERWISE OF H
AZARDOUS S UBSTANCES , INCLUDING FUELS , LUBRICANTS , MOTOR OILS , PIPE DOPE , PAINTS , SOLVENTS , AND GARBAGE , USED , HANDLED OR DISPOSED OF BY
W ILLBROS OR ITS S UBCONTRACTORS OR V
ENDORS DURING THE PERFORMANCE OF THE W ORK , AND ( B
) ANY ENVIRONMENTAL DAMAGE OF ANY OTHER NATURE TO THE EXTENT RESULTING FROM THE PERFORMANCE OF THE W ORK BY W
ILLBROS OR ITS S UBCONTRACTORS OR V
ENDORS ; PROVIDED , HOWEVER , THAT W ILLBROS SHALL HAVE NO LIABILITY OR RESPONSIBILITY FOR ANY POLLUTION , CONTAMINATION OR ENVIRONMENTAL DAMAGE EXISTING AT THE W ORK S ITE PRIOR TO THE COMMENCEMENT OF THE W ORK .
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10.1.5
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C
OMPLIANCE
WITH A PPLICABLE L AW I NDEMNIFICATION : W ILLBROS HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY AND HOLD C HENIERE G ROUP HARMLESS FROM ANY AND ALL C LAIMS , FINES , PENALTIES OR REMEDIATION OBLIGATIONS TO THE EXTENT ARISING OUT OF OR
RESULTING FROM W ILLBROS ’ OR ITS S UBCONTRACTORS ’ OR V
ENDORS ’ ACTUAL OR ALLEGED FAILURE TO COMPLY WITH A PPLICABLE L AW
OR A PPLICABLE C ODES AND S TANDARDS , OR
ANY JUDICIAL ARBITRAL OR REGULATORY INTERPRETATION THEREOF .
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10.1.6
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W AIVER OF C ONSEQUENTIAL D AMAGES : N OTWITHSTANDING ANY OTHER PROVISIONS IN THIS A GREEMENT TO THE CONTRARY , IN
NO EVENT SHALL ANY ENTITY IN EITHER C HENIERE G ROUP OR THE W ILLBROS G ROUP BE LIABLE , ONE TO THE OTHER , FOR INDIRECT , SPECIAL , INCIDENTAL OR CONSEQUENTIAL DAMAGES ,
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INCLUDING LOSS OF PROFITS , LOSS OF USE OF ASSETS , OR
BUSINESS INTERRUPTION UNDER THIS A GREEMENT OR ANY CAUSE OF ACTION RELATED THERETO , PROVIDED THAT THE LIMITATION OF LIABILITY SET FORTH IN THIS P ARAGRAPH 10.1.6 SHALL NOT APPLY TO (
A ) W ILLBROS ’ CONFIDENTIALITY OBLIGATIONS AS PROVIDED BY THIS A GREEMENT ;
( B ) W ILLBROS ’ INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS UNDER THIS A GREEMENT ;
( C ) THE AMOUNTS ENCOMPASSED WITHIN THE L IQUIDATED D AMAGES PROVIDED FOR IN P
ARAGRAPH 21; OR (
D ) AS EXPRESSLY PERMITTED UNDER P ARAGRAPH 21.2.
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10.2
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L
IEN I NDEMNIFICATION : W ITHOUT IN ANY WAY LIMITING THE FOREGOING , SO
LONG AS C
HENIERE REMITS UNDISPUTED PAYMENTS TO W
ILLBROS WHEN DUE UNDER THIS A GREEMENT ,
W ILLBROS HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY AND HOLD C HENIERE G ROUP HARMLESS FROM , AND SHALL KEEP THE W ORK , THE W ORK S ITE AND THE P ROJECT FREE AND CLEAR OF ,
ANY AND ALL LIENS AND ENCUMBRANCES ASSERTED BY AN
ENTITY ACTING THROUGH W ILLBROS , ANY S UBCONTRACTOR , ANY V ENDOR OR ANY OTHER PERSON OR ENTITY ACTING THROUGH OR UNDER ANY OF THEM .
I F W ILLBROS FAILS TO DISCHARGE SUCH LIEN OR ENCUMBRANCE OR POST ADEQUATE SECURITY WITH RESPECT THERETO WITHIN THIRTY (30) DAYS OF THE FILING OF SUCH LIEN OR ENCUMBRANCE , C HENIERE , IF
IT SO ELECTS , MAY DISCHARGE ANY SUCH LIENS OR ENCUMBRANCES , AND W ILLBROS SHALL BE LIABLE TO C
HENIERE FOR ALL DAMAGES , COSTS , LOSSES , AND EXPENSES ( INCLUDING ALL ATTORNEYS ’ FEES , CONSULTANT FEES AND LITIGATION OR ARBITRATION EXPENSES ) INCURRED BY C
HENIERE ARISING OUT OF OR
RELATING TO SUCH DISCHARGE OR RELEASE .
T HEREAFTER
, C HENIERE MAY INVOICE W ILLBROS FOR SUCH AMOUNT OWED ( WHICH INVOICE SHALL BE PAID BY W
ILLBROS WITHIN THIRTY (30) DAYS AFTER RECEIPT THEREOF ) OR
DEDUCT THE AMOUNT SO PAID BY C
HENIERE FROM SUMS DUE OR WHICH THEREAFTER BECOME DUE TO W
ILLBROS HEREUNDER .
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10.3
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P ATENT AND C OPYRIGHT I NDEMNIFICATION : W ILLBROS HEREBY RELEASES , AND AGREES TO DEFEND , INDEMNIFY AND HOLD C HENIERE G ROUP HARMLESS FROM ANY C LAIMS TO THE EXTENT ARISING FROM OR RELATING TO THE ACTUAL OR ALLEGED INFRINGEMENT OF ANY DOMESTIC OR FOREIGN PATENTS , COPYRIGHTS , TRADEMARKS OR OTHER INTELLECTUAL PROPERTY RIGHTS THAT MAY BE ATTRIBUTABLE TO W
ILLBROS OR ITS S UBCONTRACTORS OR V
ENDORS IN CONNECTION WITH THE W ORK .
I N THE EVENT THAT ANY SUIT ,
C LAIM , TEMPORARY RESTRAINING ORDER OR PRELIMINARY INJUNCTION IS GRANTED IN CONNECTION WITH THIS P ARAGRAPH 10.3, W ILLBROS SHALL , IN
ADDITION TO ITS OBLIGATION ABOVE , MAKE EVERY REASONABLE EFFORT , BY
GIVING A SATISFACTORY BOND OR OTHERWISE , TO
SECURE THE SUSPENSION OF THE INJUNCTION OR RESTRAINING ORDER .
I F , IN
ANY SUCH SUIT OR C
LAIM , THE W ORK , THE P ROJECT OR ANY PART , COMBINATION OR PROCESS THEREOF , IS
HELD TO CONSTITUTE AN INFRINGEMENT AND ITS USE IS PRELIMINARILY OR PERMANENTLY ENJOINED ,
W ILLBROS SHALL PROMPTLY MAKE EVERY REASONABLE EFFORT TO SECURE FOR C HENIERE A LICENSE , AT
NO COST TO C
HENIERE , AUTHORIZING CONTINUED USE OF THE INFRINGING W ORK .
I F W ILLBROS IS UNABLE TO SECURE SUCH A LICENSE WITHIN A REASONABLE TIME ,
W ILLBROS SHALL , AT
ITS OWN EXPENSE AND WITHOUT IMPAIRING PERFORMANCE REQUIREMENTS , EITHER REPLACE THE
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AFFECTED W ORK , IN
WHOLE OR PART , WITH NON - INFRINGING COMPONENTS OR PARTS OR MODIFY THE SAME SO THAT THEY BECOME NON - INFRINGING .
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10.4
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A
TTORNEYS
’ F
EES : E ACH P ARTY AGREES TO REIMBURSE THE PREVAILING P ARTY FOR ANY AND ALL NECESSARY EXPENSES , ATTORNEY ’ S FEES , AND RELATED COSTS INCURRED IN THE ENFORCEMENT OF ANY PART OF THE INDEMNITY AGREEMENTS PROVIDED FOR HEREIN .
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10.5.1
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Exclusions
to Liability and Indemnity : Except as expressly provided elsewhere in this
Agreement, the exclusions of liability and indemnities herein shall
apply according to their terms to any such Claim, loss, damage,
expense, injury, illness or death, without regard to the cause
thereof, including strict liability, ultra hazardous activity,
breach of express or implied warranty, imperfection of material,
defect or failure of equipment, defect or “ruin” or
other condition of premises, or the sole or concurrent negligence
or other fault of the party being indemnified.
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10.5.2
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C
ONCURRENT
N EGLIGENCE : E XCEPT AS OTHERWISE SET FORTH IN P
ARAGRAPHS 10.1.1 AND 10.1.3, THE INDEMNITY , DEFENSE AND HOLD HARMLESS OBLIGATIONS FOR PERSONAL INJURY OR DEATH OR PROPERTY DAMAGE UNDER THIS A GREEMENT SHALL APPLY REGARDLESS OF WHETHER THE INDEMNIFIED PARTY WAS CONCURRENTLY NEGLIGENT ( WHETHER ACTIVELY OR PASSIVELY ), IT BEING AGREED BY THE P ARTIES THAT IN THIS EVENT , THE P ARTIES ’ RESPECTIVE LIABILITY OR RESPONSIBILITY FOR SUCH DAMAGES , LOSSES , COSTS AND EXPENSES UNDER THIS P ARAGRAPH 10 SHALL BE DETERMINED IN ACCORDANCE WITH PRINCIPLES OF COMPARATIVE NEGLIGENCE .
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10.5.3
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Louisiana
Oilfield Anti-Indemnity Act : Willbros and Cheniere agree that the Louisiana
Oilfield Anti-Indemnity Act, L A .
R EV . S TAT .
§ 9:2780, ET
. SEQ ., is
inapplicable to this Agreement and the performance of the Work.
Application of these code sections to this Agreement would be
contrary to the intent of the Parties, and each Party hereby
irrevocably waives any contention that these code sections are
applicable to this Agreement or the Work. In addition, it is the
intent of the Parties in the event that the aforementioned act were
to apply that each Party shall provide insurance to cover the
losses contemplated by such code sections and assumed by each such
Party under the indemnification provisions of this Agreement, and
Willbros agrees that the payments made to Willbros hereunder
compensate Willbros for the cost of premiums for the insurance
provided by it under this Agreement. The Parties agree that each
Party’s agreement to support their indemnification
obligations by insurance shall in no respect impair their
indemnification obligations.
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10.5.4
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Conflict with Applicable
Law : In the event that
any indemnity provisions in this Agreement are contrary to the law
governing this Agreement, then the indemnity
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obligations applicable hereunder
shall be applied to the maximum extent allowed by Applicable
Law.
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11.
INSURANCE
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11.1
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Willbros’ Insurance
: All insurance obtained pursuant to
this Agreement shall: (1) be issued by insurers with an
“A-X” or better A.M. Best Co. rating in the current
Property-Casualty Edition and authorized to do business in the
state in which the Project is located, and (2) be in all other
respects acceptable to Cheniere. Willbros shall carry and maintain
or cause to be carried and maintained in force at all times during
the term of the Agreement the following insurance:
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11.1.1
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Workers’ Compensation/Employers’
Liability
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Workers’ compensation with
appropriate longshoremen’s or harbor workers’
endorsement (if applicable) covering all Willbros Personnel in
accordance with the statutory requirements of the state of hire or
country in which the Work is to be performed, and if the Work
includes the use of vessels, appropriate maritime extensions.
Employers’ liability insurance with the limit of One Million
United States Dollars (U.S. $l,000,000) per accident or
illness.
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11.1.2
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Commercial
General Liability
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Commercial general liability
insurance with contractual liability, products and completed
operations, and broad form property damage coverage included, which
shall provide for a combined single limit of One Million United
States Dollars (U.S. $1,000,000) for personal injury, death or
property damage resulting from each occurrence and covering all of
Willbros’ Work under the Agreement; provided, however, this
coverage requirement may be satisfied by Willbros through any
combination of primary and excess liability insurance.
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11.1.3
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Automobile
Liability
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Automobile liability insurance
covering owned, non-owned and hired motor vehicles, with combined
single limits of at least One Million United States Dollars (U.S.
$1,000,000) for personal injury, death, or property damage
resulting from each occurrence.
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11.1.4
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Aircraft
Liability Insurance
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Aircraft liability insurance, to the
extent applicable, covering owned, non-owned and hired aircraft
with a combined single limit of Five Million United States Dollars
(U.S. $5,000,000) for bodily injury, death and property damage
resulting from each occurrence.
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