41
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended April 3, 1994,
Commission File Number 1-5109
TODD SHIPYARDS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 91-1506719
(State or other jurisdiction of (IRS Employer I.D.No.)
incorporation or organization)
1801-16th Avenue SW, Seattle, WA 98134-1089 (206) 623-1635
(Address of principal executive offices)(zip code) Registrant's
telephone number
Securities registered pursuant to Section 12(g) of the Act:
Name of each exchange on
Title of each class which registered
Common stock, $.01 par value per share New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X Yes No
The aggregate market value of voting stock held by non affiliates
of the registrant was approximately $45 million as of June 23,
1994. There were 10,853,162 shares of the corporation's $.01 par
value common stock outstanding at June 23, 1994 held by non
affiliates.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
X Yes No
TABLE OF CONTENTS
PART I
Item 1. Business.............................................3
Item 2. Properties...........................................6
Item 3. Legal Proceedings....................................7
Item 4. Submission of Matters to a Vote of Security Holders..7
PART II
Item 5. Market for the Registrant's Common Equity and
Related Shareholder Matters..........................7
Item 6. Selected Financial Data..............................8
Item 7. Management's Discussion and Analysis of Financial
Condition Financial Condition and Results of
Operations...........................................9
Item 8. Consolidated Financial Statements and
Supplementary Data..................................16
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................37
PART III
Item 10. Directors and Executive Officers of the
Registrant..........................................37
Item 11. Executive Compensation..............................37
Item 12. Security Ownership of Certain Beneficial Owners
and Management......................................37
Item 13. Certain Relationships and Related Transactions......37
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K ................................37
ITEM 1. BUSINESS
Introduction
Todd Shipyards Corporation (the "Company") was organized in 1916
and has operated a shipyard in Seattle, Washington (the "Seattle
Shipyard") since incorporation. The Company has operated the
Shipyard as a wholly-owned subsidiary named Todd Pacific
Shipyards Corporation ("Todd Pacific") since 1977. The Company,
through Todd Pacific is engaged in the repair/overhaul,
conversion and construction of commercial and military marine
vessels.
From the mid 1970's until 1992, a substantial majority of the
revenues generated by the Seattle shipyard were attributable to
two major long term government contracts. As a result, the
Company had a substantial backlog of work during this era.
During the last two fiscal years, the Company's work backlog has
been much smaller, due to the shorter term nature of its ship
repair, overhaul and conversion contracts.
The Company is focusing on that portion of the vessel repair and
maintenance, overhaul, conversion and new construction work for
various commercial and governmental customers which is likely to
be performed on the West Coast. In particular, the Company
believes that it will continue to perform a substantial amount of
maintenance and repair work on commercial vessels engaged in
various seagoing trade activities in Puget Sound, and it plans to
bid on numerous repair, maintenance, overhaul and new
construction work on the ferry fleets operated by the states of
Washington and Alaska. The growing number of military vessels
home ported in Puget Sound waters with the opening of the
Everett, Washington Navy home port facility is expected to
provide increasing business opportunities to Puget Sound
shipyards. While the Company has previously been successful in
obtaining significant work in both the military and commercial
Puget Sound vessel repair and overhaul markets, there can be no
assurance that such success will continue.
A substantial portion of the revenues of the ship building and
repair industry has historically been derived from contracts with
the U.S. Government. The revenues and earnings of the private
sector of the ship building and repair industry will continue to
be materially affected by cessation of most U. S. Navy ("Navy")
new construction activity and by the reduction in the number of
ships in the Navy's active duty fleet, creating substantial
excess capacity in the industry. Excess shipyard capacity, both
nationally and locally, is expected to result in a continuation
of the intense price competition which the Company has faced in
recent years.
General
The Company's repair and overhaul work ranges from relatively
minor repair to major overhauls and often involves the drydocking
of the vessel under repair. The level of repair and overhaul
business available to domestic private-sector shipyards is
decreasing due to the downsizing of the active United States
Naval fleet. Also affecting private shipyards is the regional
impact of either the establishment or closure of United States
Navy ("Navy") home ports, the location of marine accidents, the
availability and scheduling of maintenance, overhauls, and
conditions within the maritime industry as a whole.
Commercial repair and overhaul contracts are obtained by
competitive bidding, awarded by negotiation or assigned by
customers who have a preference for a specific shipyard. On jobs
which are advertised for competitive bids, owners usually furnish
specifications and plans which become the basis for an agreed
upon contract. Jobs are usually contracted on a fixed-price
basis and any added work is negotiated.
U.S. Government ship repair and overhaul work is usually awarded
through a formal bidding process, which often results in
competition taking place among Government-owned and private
shipyards. The Company also performs repair/overhaul work for the
Navy under flexibly-priced contracts. These contracts provide for
reimbursement of costs, to the extent allocable and allowable
under applicable regulations, and payment of an incentive or
award fee based on the customer's judgment of the contractor's
performance with respect to certain pre-established criteria.
Under government regulations, certain costs, including certain
financing costs and portions of the Company's marketing expenses,
are not allowable costs under flexibly priced contracts. The
government also regulates the methods by which overhead costs are
allocated to government contracts.
The Company's commercial and U.S. Government repair and overhaul
contracts contain terms of customer payment determined by mutual
agreement. Typically the Company is periodically reimbursed
through progress payments based on the achievement of certain
agreed to benchmarks subject to a specified level of retention.
Some vessel owners contracting for repair and overhaul work
require some form and amount of performance and payment bonding,
particularly state and U.S. Government agencies.
The activity of the Company's operations in recent years has
included a significant amount of repair, overhaul and conversion
of U.S. Government vessels including naval combatant and
auxiliary vessels, as well as commercial vessels such as
freighters, tankers, pipe laying reel ships, fishing industry
related vessels, cruise ships, barges, tug supply vessels and
ferries.
The approximate amount of revenues for each class of the
Company's shipbuilding operations for each of the last three
fiscal years are summarized as follows (in millions):
Classification 1994 1993 1992
U.S. Coast Guard FRAM Contract $ - $ 5.5 $ 78.7
Other U. S. Government 16.2 24.4 24.9
Total U.S. Government 16.2 29.9 103.6
Commercial Vessels 52.4 24.4 43.9
Total $ 68.6 $ 54.3 $147.5
In the fiscal year ended in March 1986 the Company was awarded a
fixed price contract by the U. S. Coast Guard to overhaul its
fleet of eight large West Coast based cutters (the Fleet Repair
and Modernization or "FRAM" contract). Work was completed on the
contract in the fiscal year ended in March 1993. From 1986 to
1992 the FRAM contract (valued at $480 million) provided a
majority of the revenues of the Seattle shipyard.
Construction
The Company has not had any ship construction revenues for the
last three fiscal years and currently has no backlog of ship
construction contracts. However, the Company may bid for a
contract which the Washington State Ferry System expects to award
in the latter half of 1994 for constructing three new
passenger/vehicle ferries estimated to have a value in the
aggregate of $150 to $175 million. However, no assurance can be
given that the Company will be successful in obtaining new
construction work.
Availability of Materials
The principal materials used by the Company in its shipyard are
steel and aluminum plate and shapes, pipe and fittings, and
electrical cable and fittings. The Company believes that each of
these items can presently be obtained in the domestic market from
a number of different suppliers. In addition, the Company
maintains a small on site inventory of these items that is deemed
sufficient for emergency ship repairs.
Competition
Competition in the domestic shipbuilding industry is intense.
The Company competes for commercial and government work with a
number of other shipyards, some of whom have considerably lower
labor costs and more favorable work rules primarily due to their
nonunion status. The Company also competes with government
shipyards for government repair business. The declining size of
the U.S. Government's active duty fleet has resulted in a
significant decline in the total amount of government business
available to the private sector shipyards, has created excess
shipyard capacity, and lead to acute price competition.
Commercial ship construction and, to a lesser extent, repair work
performed outside the United States are substantially less costly
than domestic ship construction and repair. Many contracts are
awarded pursuant to competitive bidding and profitability is
dependent upon effective cost controls and the ability to meet
strict schedules, among other factors. Speed in the completion
of construction and repair projects is another element of
competition. With respect to repair work, the location,
availability and technical capability of repair facilities are
important factors.
Environmental Matters
See Note 11 of the Notes to Consolidated Financial Statements.
Employees
The number of persons employed by the Company in its shipyard
operations varies considerably from time to time and averaged
approximately 800 during fiscal year 1994 and totaled
approximately 650 on April 3, 1994. During fiscal year 1994 an
average of approximately 650 (83%) of the Company's shipyard
employees were covered by a 40 month union contract at the
Seattle Shipyard which expires on July 31, 1996. At April 3, 1994
approximately 550 (82%) Company employees were covered under this
agreement.
Backlog
At April 3, 1994 the Company's backlog consists of approximately
$35 million of commercial repair/overhaul and conversion work,
all of which is expected to be completed in fiscal year 1995.
ITEM 2. PROPERTIES
The Company has one operating shipyard in Seattle, Washington.
The shipyard is comprised of piers, building ways, drydocks,
buildings, cranes, machinery, tools and related equipment and is
capable of performing all types of ship conversion and
repair/overhaul work. In addition the shipyard is capable of
constructing a wide variety of vessels up to 500 feet in length
and is licensed by two European manufacturers to repair large
marine diesel engines.
The Company owns or leases property aggregating approximately 721
acres at the locations set forth below:
Acreage
Location Owned Leased Date of Lease Expiration
Seattle, WA 27 19 2001, 2003,2012
Roundup, MT 670(1)
Alameda, CA 5(2) -
(1) The acreage located in Roundup, Montana is owned by Montana
Valley Land Company, a wholly-owned subsidiary of the Company.
(2) The acreage located in Alameda, California was previously
occupied by the Company's San Francisco Shipyard which was closed
in fiscal year 1988. The sale of this property to the U.S. Navy
for approximately $600 thousand is pending the approval of the
Governor of California.
The Company has three drydocks, two steel and one wood, all of
which are located at the Seattle Shipyard. The design capacities
of such drydocks are as follows:
Year Type Max.Displacement Date of Lease
Name Built Owned Leased Capacity(in tons) Expiration
Emerald Sea 1970 Steel 40,000 -
YFD-70 1945 Steel 17,500 6/14/95
YFD-54 1943 Wood 5,700 6/30/94
The Company currently leases two drydocks from the Navy. It is
the practice of the Navy to lease its drydocks upon advertised
public bid. The Company has notified the Navy of its intent to
discontinue leasing the YFD-54 upon the expiration of the current
lease term.
The Company is required to maintain Navy certification on its
drydocks and cranes in order to qualify its facilities to bid on
and perform work under certain Navy and Coast Guard contracts.
The Company's current certification for the drydocks listed above
are 30,000 tons, 14,000 tons and 4,205 tons, respectively. While
such certification is less than the maximum design capacity, it
is sufficient to allow the Company to perform work on most Naval
and all Coast Guard vessels. The annual maintenance and repair
cost related to the drydocks including their certifications
totaled approximately $.7 million, $.4 million and $1.0 million
in fiscal years 1994, 1993, and 1992, respectively, and are
projected to average approximately $1.0 million annually in
future years. The Company also maintains certification of its
cranes which have a maximum lifting capacity ranging in size from
1/2 ton to 150 tons.
The Company believes that its owned and leased properties at the
Seattle Shipyard are in reasonable operating condition given
their age and usage, although, from time to time, the Company has
been required to incur substantial expenditures to ensure the
continuing serviceability of its owned and leased machinery and
equipment.
ITEM 3. LEGAL PROCEEDINGS
See Notes 10 and 11 of the Notes to Consolidated Financial
Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through
solicitation of proxies or otherwise, during the fourth quarter
of fiscal year 1994.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The Company's stock is listed on the New York Stock Exchange (the
"NYSE"). The following table sets forth for the fiscal quarters
indicated the high and low composite sales prices of the stock as
reported by the NYSE.
Quarter Ended High Low
March 29, 1992 $5.00 $4.00
June 28, 1992 5.63 4.38
September 27, 1992 5.13 4.25
December 27, 1992 4.50 3.50
March 28, 1993 6.00 4.13
June 27, 1993 5.50 4.50
September 26, 1993 4.75 4.25
January 2, 1994 4.38 4.00
April 3, 1994 4.50 4.00
On June 23, 1994 the high and low prices of the Company's common
stock on the NYSE were $4.38 and $4.13, respectively.
At June 23, 1994 there were approximately 2360 holders of record
of the outstanding shares of common stock. The Company does not
presently anticipate the declaration of dividends.
ITEM 6. SELECTED FINANCIAL DATA (In thousands of dollars,
except per share data)
April 3, March 28, March 29, March 31, April 1
1994 1993 1992 1991 1990
Operations:
Revenues(1) $68,552 $54,278 $147,500 $187,230 $241,567
Income (loss)
from continuing
operations(1) (2,714) (11,802) 19,637 19,599 (30,577)
per share (.24) (.99) 1.64 2.65 (8.13)
pro forma per
share(2) 1.64 (2.56)
New income(loss)(3)(2,714) (11,802) 29,021 6,782 59,449
per share (.24) (.99) 2.43 .66 13.33
pro forma per
share(2) .57 4.97
Financial position:
Working capital 52,337 57,311 67,195 38,632 259,259
Fixed assets 24,001 24,636 27,192 28,656 30,632
Total assets 111,447 129,287 138,988 117,588 367,711
Stockholders'
equity 63,740 70,700 83,240 54,219 47,437
per common share 5.83 5.99 6.96 4.54 1.78
pro forma per
share(2) 4.53 3.97
(1) Restated to exclude the results of The Aro Corporation which
was purchased on December 1, 1985 and sold on February 8,
1990.
(2) Calculated assuming the shares issued in the reorganization
were outstanding since the beginning of fiscal year 1990.
(3) For the fiscal year ended March 31, 1991, includes a
reduction of net income of approximately $23.5 million
resulting from the Company adopting SFAS 106 "Employers'
Accounting for Post Retirement Benefits Other Than Pensions"
and electing to recognize the total accumulated obligation
in fiscal year 1991. For fiscal year ended April 1, 1990,
includes gain on sale of and income from discontinued
operations of $63.4 million.
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Notes to Consolidated Financial Statements are an integral
part of Management's Discussion and Analysis of Financial
Condition and Results of Operations and should be read in
conjunction herewith.
Operating Results
In the fiscal year ended on April 3, 1994, the Company
experienced a net loss of $2.7 million on revenues of $68.6
million, compared with a net loss of $11.8 million on revenues of
$54.3 million in the fiscal year ended March 28, 1993. Included
in the $68.6 million in revenues was $52.4 million in revenues
from the commercial sector, an increase in commercial revenue of
$28.0 million (115%) from the previous fiscal year. The increase
is primarily due to a two-ship conversion contract and a ferry
overhaul contract. Government sector revenues decreased by $13.7
million (46%) due to lower government phased maintenance program
activities.
The Company's operating results were adversely effected by
problems encountered on the two major commercial contracts.
Tight contract and work specifications resolved in favor of the
vessel owner on a contract to convert two commercial vessels to
an open cargo hold design resulted in incurring losses on that
contract of $3.9 million in excess of the previously established
loss reserve. On the ferry overhaul contract, various problems
including the failure of an engineering subcontractor to produce
drawings in a timely manner caused substantial delays in the
identification and commencement of work on the contract, driving
costs to complete the work $2.2 million beyond original
estimates.
To compensate for the lack of large scale long term Government
contracts in its future business base, the Company is engaged in
an ongoing organizational streamlining of its Seattle shipyard
designed to reduce overhead costs while preserving the yard's
ability to undertake large scale ship repair, maintenance and
construction contracts. The streamlining accomplished in fiscal
year 1994 resulted in a reduction of the Seattle Shipyard's
annual overhead costs by $1.7 million compared to fiscal year
1993 despite a substantial increase in the shipyard's business
activity level.
The Company's future profitability depends largely on the ability
of the Seattle shipyard to maintain an adequate volume of ship
repair, overhaul and conversion business. The Company competes
with other large West-Coast shipyards some of whom have more
advantageous cost structures. Many of the Company's competitors
are nonunion, and some of them have much larger volumes of
business over which to allocate their overhead costs.
During the Company's 1995 fiscal year, the Washington State Ferry
System is expected to award three major contracts for
construction of three new ferries, overhaul of three Super class
ferries and overhaul of an Evergreen State class ferry. The
Navy's Everett home port officially commenced operations in April
1994, and the relocation of a number of Navy ships to that
facility is scheduled to take place during the upcoming year.
The Company believes that it may be awarded contracts for
substantial amounts of shipyard related work from the Navy and
Washington State Ferries. However, no assurance can be given that
the Company will be successful in obtaining this work.
Financial Overview
For the fiscal year ended April 3, 1994, the Company had revenues
of $68.6 million and a net loss of $2.7 million. The net loss
included a $10.2 million credit from contract loss reserve
utilization, a $6.5 million charge to earnings for an
environmental clean-up reserve, a $5.9 million credit from
reversing facility closure reserves, $2.2 million of interest
income, a $1.9 million pension plan credit resulting from an
increase in its deferred pension asset, a $1.8 million credit
related to the settlement of a dispute with a former insurance
carrier and a $0.6 million gain on the sale of its Galveston
shipyard property.
Liquidity, Capital Resources and Working Capital
During fiscal year 1994, working capital decreased by $5.0
million to $52.3 million at April 3, 1994 which includes
restricted and unrestricted cash, cash equivalents and marketable
securities of $58.0 million. The material items contributing to
the decrease in working capital were: (i) a decrease in cash,
cash equivalents, restricted cash, securities available for sale
and accounts receivable of $16.2 million used to fund operating
activities, (ii) the purchase of $3.6 million of treasury stock,
and (iii) a decrease of $2.5 million in costs and estimated
profits in excess of billings on incomplete contracts. These
items were partially offset by: (i) the utilization of $10.2
million in accrued contract loss reserves and (ii) a decrease of
$2.6 million in the estimated liability for closure of a
facility.
Expenditures for property, plant and equipment in fiscal year
1994 were $2.7 million compared to $.9 million for the prior
fiscal year and were primarily for the purchase of equipment for
the Seattle Shipyard. These expenditures are in addition to
ongoing repair and maintenance expenditures in the Seattle
Shipyard of $3.8 million, $2.7 million, and $4.3 million in
fiscal years 1994, 1993 and 1992, respectively. A change in the
composition or timing of projected work could cause capital
expenditures and repair and maintenance expenditures to increase.
The future business plans of the Seattle Shipyard are not
expected to require substantial additional capital expenditures.
Capital expenditures are expected to be financed out of working
capital.
The Company is required on some of its projects to provide
customers with performance, contract and payment bonds. The
Company is required by the surety which issues such bonds to
provide it with readily negotiable securities collateralizing the
full amount of all outstanding bonds. The Company is presently
involved in negotiations with other potential sureties to provide
performance and payment bonding capabilities without tying up
substantial amounts of working capital in cash collateralization.
Management considers the ability to secure such arrengements to
be an essential ingredient in deciding how to bid on such work in
the future.
Financial -- 1994 Compared with 1993
Revenues
Revenues for the fiscal year ended April 3, 1994 increased $14.3
million (26%) compared to the prior fiscal year. The change in
revenues is summarized in the table below (in millions):
Percent of Percent of Change
1994 Revenue 1993 Revenue Amount Percent
U.S. Government $ 16.2 24% $ 29.9 55% $(13.7) (46%)
Commercial
Contracts 52.4 76% 24.4 45% 28.0 115%
Total revenue $ 68.6 100% $ 54.3 100% $ 14.3 26%
The increase in revenues was primarily due to two major
commercial contracts, partially offset by a decrease in
government revenue due in part to a lower level of activity on a
Navy phased maintenance contract.
Operating Expenses
Operating expenses increased $7.0 million (10%) compared to the
prior fiscal year. The change in operating expenses is
summarized in the table below (in millions):
Percent of Percent of Change
1994 Revenue 1993 Revenue Amount Percent
Percent
Direct labor and
benefits $ 36.3 53% $ 19.0 35% $ 17.3 91%
Materials and
other 25.7 37% 11.3 21% 14.4 127%
Administrative
expenses 25.4 37% 27.1 50% (1.7) (6%)
Gross operating
expenses $ 87.4 127% $ 57.4 106% $ 30.0 52%
Executive
compensation
agreements - n/a (1.3) (2%) 1.3 n/a
Provision for
(utilization of)
contract loss
reserves (10.2) (15%) 12.5 23% (22.7) (182%)
San Francisco
contract
settlements - n/a (1.5) (3%) 1.5 n/a
Retirement System
cost (benefit) (1.9) (3%) 1.2 2% (3.1) (258%)
Total operating
expenses $ 75.3 109% $ 68.3 126% $ 7.0 10%
The increase in operating expenses was primarily due to the
increased level of activity at the Seattle shipyard. Increased
gross operating expenses of $30.0 million were the result of
increases of the shipyard's direct labor, fringe benefits and
direct material costs of $31.7 million partially offset by a
reduction of $1.7 million in administrative costs. The $30.0
million increase in the shipyard's operating expenses was
partially offset by a $22.7 million decrease in net operating
expenses due contract loss reserve activity, due to net creation
of loss reserves in fiscal year 1993 of $12.5 million and net
utilization of $10.2 million in loss reserves in fiscal year
1994.
Investment and Other Income
Investment and other income increased $1.4 million compared to
the prior fiscal year. The increase was due to a $5.9 million
reversal of facility closure reserves, a $1.8 million gain from
the settlement of a dispute with a former insurer and $.6 million
gain on the sale of the Galveston facility reduced by a $6.5
million environmental clean-up provision and decreased investment
income due to a decreases in market interest rates.
Interest and Debt Expenses
Interest and debt expenses were relatively unchanged compared to
the prior fiscal year and represent primarily financing expenses
on a capital lease.
Income Taxes
For fiscal year 1994 the income tax benefit of $263,000
represents a refund of fiscal year 1993 estimated tax payments.
For fiscal year 1993 the income tax expense of $50,000 reflects
the limitation of the recognition of tax credits attributable to
net operating losses and other miscellaneous adjustments.
Financial -- 1993 Compared with 1992
Revenue
Revenues for the fiscal year ended March 28, 1993 decreased $93.2
million (63%) compared to the year ended March 29, 1992. The
change in revenues is summarized in the table below (in
millions):
Percent of Percent of Change
1993 Revenue 1992 Revenue Amount Percent
Coast Guard FRAM
Contracts $ 5.5 10% $ 78.7 53% $(73.2) (93%)
Other Government
contracts 24.4 45% 24.9 17% (.5) (2%)
Revenue from
U.S. Government 29.9 55% 103.6 70% (73.7) (71%)
Commercial
Contracts 24.4 45% 43.9 30% (19.5) (44%)
Total revenue $54.3 100% $147.5 100% $(93.2) (63%)
The decrease in revenues was primarily due to completion of the
FRAM contract with the Coast Guard and decreased repair/overhaul
work on commercial contracts.
Operating Expenses
Operating expenses decreased $57.0 million (45%) compared to the
prior fiscal year. The change in operating expenses is
summarized in the table below (in millions):
Percent of Percent of Change
1993 Revenue 1992 Revenue Amount Percent
Direct labor and
benefits $ 19.0 35% $50.0 34% $(31.0) (62%)
Materials and
other 11.3 21% 52.6 36% (41.3) (79%)
Administrative
expenses 27.1 50% 35.7 24% (8.6) (24%)
Gross operating
expenses 57.4 106% 138.3 94% (80.9) (58%)
Executive
compensation
agreements (1.3) (2%) 2.6 2 % (3.9) (150%)
Provision for
(reversal of)
contract loss
reserves 12.5 23% (17.1) (12%) 29.6 (173%)
San Francisco
contract
settlements (1.5) (3%) - - (1.5) n/a
Retirement system
cost 1.2 2% 1.5 1% (.3) (20%)
Total operating
expenses $68.3 126% $125.3 85% $(57.0) (45%)
The decrease in operating expenses was substantially due to the
decreased level of repair/overhaul activity at the Seattle
Shipyard. The reductions were partially offset by (i) changes in
reserve activity as the Company accrued $12.5 million in fiscal
year 1993 for estimated losses on a conversion contract compared
to reversing $17.1 million in loss reserves in fiscal year 1992
upon the completion of the FRAM program, (ii) costs attributable
to the use of excess pension fund assets to pay retiree medical
benefits and incentive retirement costs and (iii) reversals of
executive compensation expense accruals.
Investment and Other Income
Investment and other income decreased $6.7 million compared to
the prior fiscal year. The decrease was due to a $6.9 million
gain from the settlement of a contract dispute with a customer in
the prior year.
Interest and Debt Expenses
Interest and debt expenses were relatively unchanged compared to
the prior fiscal year and represent primarily letter of credit
fees.
Income Taxes
The income tax provision of $50,000 for fiscal year 1993 reflects
the limitation of the recognition of tax credits attributable to
net operating losses and other miscellaneous adjustments. The
$11.5 million income tax provision in the prior year reflects the
statutory rate, the alternative minimum tax and other
adjustments.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
See following page.
REPORT OF ERNST & YOUNG INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Todd Shipyards Corporation
We have audited the accompanying consolidated balance sheets of
Todd Shipyards Corporation and subsidiaries (the "Company") as of
April 3, 1994 and March 28, 1993 and the related consolidated
statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended April 3, 1994. Our
audits also included the financial statement schedules listed on
the index at item 14(a). These financial statements and
schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and schedules are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Todd Shipyards Corporation and subsidiaries
at April 3, 1994 and March 28, 1993 and the consolidated results
of its operations and its cash flows for each of the three years
in the period ended April 3, 1994 in conformity with generally
accepted accounting principles. Also, in our opinion, the
related financial statements schedules, when considered in
relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.
As more fully described in Note 11, the Company has been named as
a potentially responsible party or contributor by the
Environmental Protection Agency and state agencies at several
different sites. The ultimate amount of liability cannot be
determined at this time.
/s/ Ernst & Young
Seattle, Washington
June 15, 1994
TODD SHIPYARDS CORPORATION
CONSOLIDATED BALANCE SHEETS
APRIL 3, 1994 and MARCH 28, 1993
(in thousands of dollars)
1994 1993
ASSETS:
Cash and cash equivalents $ 3,787 $ 24,673
Restricted cash 5,719 10,961
Securities available for sale 48,480 29,081
Accounts receivable, less allowance for
losses of $653 and $1,807, respectively
U.S. Government 3,364 4,952
Other 4,748 12,016
Costs and estimated profits in excess of
billings on incomplete contracts 3,063 5,542
Inventories 932 984
Other current assets 985 1,724
Total current assets 71,078 89,933
Property, plant and equipment, at cost 61,854 59,827
Less accumulated depreciation 37,853 35,191
24,001 24,636
Deferred pension asset 13,937 12,012
Other assets 2,431 2,706
Total assets $111,447 $129,287
LIABILITIES AND STOCKHOLDERS EQUITY:
Accounts payable and accruals $ 7,266 $ 6,828
Payrolls and vacations 3,552 4,657
Accrual for loss on contracts 2,267 12,499
Billings in excess of costs and estimated
profits on incomplete contracts 156 199
Capitalized lease obligations 93 360
Estimated facility closure liability 85 2,686
Taxes other than income taxes 1,370 1,414
Income taxes 3,952 3,979
Total current liabilities 18,741 32,622
Environmental Remediation Reserves 6,500 -
Deferred credit related to closure
of Galveston Shipyard - 3,281
Accrued post retirement health benefits 22,466 22,684
Stockholders equity:
Common stock ($.01 par value) 120 120
Additional paid-in capital 38,181 38,181
Retained earnings 29,788 33,137
68,089 71,438
Less treasury stock 4,349 738
Total stockholders' equity 63,740 70,700
Total liabilities and stockholders'
stockholders equity $111,447 $129,287
The accompanying notes are an integral part of this statement.
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended April 3, 1994, March 28, 1993, March 29, 1992
(In thousands of dollars)
1994 1993 1992
Revenues $ 68,552 $ 54,278 $147,500
Operating expenses:
Labor, material and other
expenses 66,621 59,406 111,474
Taxes, other than income taxes 5,161 3,250 6,187
Depreciation and amortization 3,173 3,291 2,976
Pension expense 321 2,349 4,657
75,276 68,296 125,294
Income (loss) from operations (6,724) (14,018) 22,206
Investment and other income 3,773 2,371 9,039
Interest and debt expenses (26) (105) (119)
Income (loss) before income taxes (2,977) (11,752) 31,126
Income tax provision (benefit) (263) 50 11,489
Income (loss) before
extraordinary item (2,714) (11,802) 19,637
Extraordinary item - - 9,384
Net income (loss) $ (2,714) $(11,802) $ 29,021
Net income (loss) per common share:
Income (loss), before extra-
ordinary item $ (.24) $ (.99) $ 1.64
Extraordinary item - - .79
Net income (loss) $ (.24) $ (.99) $ 2.43
Weighted average number of shares
(thousands) 11,540 11,943 11,956
The accompanying notes are an integral part of this statement.
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended April 3, 1994, March 28, 1993 and March 29, 1992
(in thousands of dollars)
1994 1993 1992
Cash flows from operating activities:
Income (loss) before
extraordinary items $(2,714) $(11,802) $19,637
Utilization of net operating loss
and tax credit carryforwards - - 9,384
Net Income (loss) $(2,714) $(11,802) $29,021
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 3,173 3,291 2,976
Galveston facility closure
adjustment (3,246) - -
Los Angeles facility closure
adjustment (2,636) - -
Increase (decrease) in accrued
loss on contracts (10,232) 12,499 (16,000)
Decrease (increase) in accounts
receivable 9,460 16,372 (11,197)
Increase in environmental cleanup
accrual 6,500 - -
Decrease (increase) in costs and
estimated profits in excess of
billings on incomplete contracts 2,479 (715) 15,583
Decrease (increase) in deferred
pension asset (1,925) 1,150 1,466
Increase (decrease) payrolls and
vacations (1,105) (3,183) 3,368
Decrease (increase) in other
current assets 739 (526) 2,728
Increase (decrease) in accounts
payable 438 (932) (2,831)
Decrease (increase) in other
assets 275 (13) (2,480)
Increase (decrease) in income
taxes (27) (1,817) 1,849
Other (1,654) (3,319) (1,819)
Net cash - operating activities (475) 11,005 22,664
1994 1993 1992
Cash flows from investing activities:
Purchases of securities available
for sale (46,278) (77,484) -
Maturities of securities available
for sale 16,487 44,494 -
Sales of securities available
for sale 9,756 3,909 -
Purchases of property, plant and
equipment (2,655) (901) (1,573)
Other 648 (756) (975)
Net cash - investing activities (22,042) (30,738) (2,548)
Cash flows from financing activities:
Decrease (increase) in restricted
cash 5,242 (8,877) 9,120
Purchases of treasury stock (3,611) (738) -
Net cash - financing activities 1,631 (9,615) 9,120
Net change in cash and cash
equivalents (20,886) (29,348) 29,236
Beginning cash and cash equivalents 24,673 54,021 24,785
Ending cash and cash equivalents 3,787 24,673 54,021
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 26 $ 105 $ 119
Income taxes 27 1,867 256
The accompanying notes are an integral part of this statement
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended April 3, 1994, March 28, 1993 and March 29, 1992
(in thousands of dollars/shares)
Additional
Common Paid-in Retained Treasury Total
Stock Capital Earnings Stock Equity
Balance at
March 31,1991 $ 120 $ 38,181 $15,918 $ - $54,219
1992 Net income 29,021 29,021
Balance at
March 29, 1992 120 38,181 44,939 - 83,240
Purchase of common
shares for treasury (738) (738)
1993 Net loss (11,802) (11,802)
Balance at
March 28, 1993 120 38,181 33,137 (738) 70,700
Purchase of common
shares for treasury (3,611) (3,611)
Unrealized losses on
marketable securities
available-for-sale (635) (635)
1994 Net loss (2,714) (2,714)
Balance at
April 3, 1994 $ 120 $ 38,181 $29,788 $(4,349) $63,740
SHARES ISSUED AND OUTSTANDING:
Balance at
March 31, 1991 and
March 29, 1992 11,956 -
Purchase of
common shares
for treasury (148)
Balance at
March 28, 1993 11,956 (148)
Purchase of
common shares
for treasury (871)
Balance at
April 3, 1994 11,956 (1,019)
The accompanying notes are an integral part of this statement.
TODD SHIPYARDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 3, 1994, March 28, 1993 and March 29, 1992
1. PRINCIPAL ACCOUNTING POLICIES
(A) Consolidation - The consolidated financial statements
include the accounts of Todd Shipyards Corporation (the
"Company") and its wholly-owned subsidiary Todd Pacific Shipyards
Corporation ("Todd Pacific"). All intercompany transactions have
been eliminated. The Company's policy is to end its fiscal year
on the Sunday nearest March 31. In accordance with this policy,
the Company's fiscal year 1994 ended on April 3, 1994 is a 53
week year.
(B) Inventories - Inventories, consisting of materials and
supplies, are valued at lower of cost (principally average) or
replacement market.
(C) Depreciation and Amortization - Depreciation and amortization
are determined on the straight-line method based upon estimated
useful lives or lease periods; however, for income tax purposes,
depreciation is determined on both the straight-line and
accelerated methods, and on shorter useful lives where permitted.
(D) Revenues - Revenues consist of the estimated realizable value
of work performed under construction, repair and conversion
contracts. Profits on major contracts, those in excess of $3
million, are recorded on the percentage-of-completion method
(determined based on direct labor hours). Profits on all other
contracts, generally short-term, are recorded upon completion.
Full provision is made for estimated losses on contracts not
completed. Revisions to contract estimates are recorded as the
estimating factors are refined.
(E) Income Taxes - Effective March 29, 1993 the Company adopted
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes." This Statement requires the establishment of
deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the financial
statements or tax returns. Under this method, deferred tax assets
and liabilities are determined based on differences between the
financial statement carrying amounts and the tax basis of assets
and liabilities using currently enacted tax rates which are
expected to be in effect during the years in which the
differences are anticipated to reverse. As permitted by
Statement 109, the Company has elected not to restate the
financial statements of prior years. There was no cumulative
effect on income of adopting Statement 109.
(F) Cash and Cash Equivalents - The Company considers all highly
liquid debt instruments purchased with a maturity of three months
or less to be cash equivalents. Cash equivalents consists
primarily of money market instruments, investment grade
commercial paper and U.S. Government securities. The carrying
amounts reported in the balance sheet are stated at cost which
approximates fair value.
(G) Securities Available for Sale - The Company considers all
debt instruments purchased with a maturity of more than three
months to be securities available for sale. Securities available
for sale consist primarily of U.S. Government securities and
investment grade commercial paper.
On April 3, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 "Accounting for Certain Investments
in Debt and Equity Securities". In accordance with Statement 115
Company management determines the appropriate classification of
debt securities at the time of purchase and reevaluates such
designation as of each balance sheet date. Debt securities are
classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity.
Marketable equity and debt securities not held as trading assets
in anticipation of short-term market movements and not classified
as held-to-maturity are classified as available-for-sale.
Available-for-sale securities are carried at fair value, with the
unrealized gains and losses, net of tax, reported in a separate
component of shareholder' equity. The amortized cost of debt
securities in this category is adjusted for amortization of
premiums and accretion of discounts. Such amortization is
included in investment income. Realized gains and losses and
declines in value judged to be other-than-temporary are
calculated based upon the amortized cost of the instrument and
are included in investment income. The cost of securities sold
is based on the specific identification method. Interest and
dividends on available-for-sale securities are included in
investment income.
2. RESTRICTED CASH AND SURETY LINE
In June 1993, the Company entered into a contract for the
overhaul of the Washington State Ferry "M.V. Tillikum". In
accordance with the terms of this contract, the Company deposited
$3.9 million in lieu of posting performance bonds. This amount,
together with other escrow accounts securing contract and other
performance bonds, is classified as restricted cash on the
Company's balance sheet.
The Company has an agreement with an insurer pursuant to which
the insurer will provide a surety line, for the necessary bid,
performance, contract and payment bonds, to the Company in the
aggregate amount of $17 million, provided that the bonds are
fully secured by the Company through letters of credit, cash, or
cash equivalents. The agreement is terminable at will by either
party. The Company is currently securing contract performance and
payment bonds by depositing the required security amounts in an
escrow account with the Company's insurer. The amount being used
for this purpose totaled approximately $.8 million on April 3,
1994 and March 28, 1993 and is classified as other current assets
on the Company's balance sheet.
3. SECURITIES AVAILABLE FOR SALE
The Company implemented Financial Accounting Standard No. 115
"Accounting for Certain Investments in Debt and Equity
Securities" on April 3, 1994. The following is a summary of
available-for-sale securities as of April 3, 1994:
Gross Gross Estimated
Unrealized Unrealized Fair
(In Thousands) Cost Gains Losses Value
U.S. Treasury securities
and agency obligations $24,435 $ - $ 145 $24,290
U.S. corporate securities 3,027 - 45 2,982
Mortgage-backed
securities 21,653 6 451 21,208
$49,115 $ 6 $ 641 $48,480
Gross realized gains on sales of available-for-sale securities
totaled $19 thousand for the fiscal year ending April 3, 1994.
The Company had no realized losses on sales of available-for-sale
securities in fiscal year 1994.
The amortized cost and estimated fair value of the Company's
available-for-sale debt and mortgage-backed securities at April
3, 1994, by contractual maturity, are shown below:
Estimated
Fair
(In Thousands) Cost Value
Due in one year or less $ 5,037 $ 5,026
Due after one year through three years 22,425 22,246
27,462 27,272
Mortgage-backed securities 21,653 21,208
$49,115 $48,480
4. CONTRACT RECEIVABLES, CLAIMS AND ESTIMATED COSTS TO
COMPLETE CERTAIN CONTRACTS
Contracts -
Commercial Conversion - On February 4, 1993 the Company entered
into a contract for the conversion of two commercial container
ships to an open cargo hold configuration. The Company recognized
a $12.5 million loss provision in fiscal year 1993 based on a bid
price that was below full costs and the early performance results
on the first ship. The Company recognized an additional $3.9
million loss in fiscal year 1994 due to problems encountered
during the year in completion of work on the contract.
Additional work required by the owner had not been included in
earlier estimates. The learning curve anticipated for the second
ship in earlier estimates was not achieved because of additional
work required to meet dimensional tolerances despite large errors
in the ship's actual pre-conversion dimensions.
Tillikum - In May 1993, the Company entered into a contract with
Washington State Ferries to perform a major overhaul of its ferry
M/V Tillikum. In order to meet the requirements included in the
contract for participation by disadvantaged business enterprises,
the Company elected to subcontract to such businesses certain
portions of the work, including the detailed design work. Late
receipt of the required drawings and design errors which the
subcontractor failed to resolve caused delays in the
identification and commencement of the work and resulted in
acceleration of the work schedule to meet contractually specified
deadlines. This and other problems caused the Company to incur
approximately $2.2 million in unanticipated costs on the
contract.
Dredge Wheeler - Subsequent to the year ended April 3, 1994,
after execution of mutual releases, an insurance carrier paid the
Company $2.0 million in settlement of a claim it filed involving
damage sustained in 1990 by the Army Corps of Engineers dredge
Wheeler while the dredge was undergoing major repairs at the
Company's Galveston, Texas, shipyard. The payment fully
discharges the Company's previously recorded receivable of
approximately $1.8 million and will result in recognition of a
$0.2 million gain in the first quarter of the Company's fiscal
year ended April 2, 1995.
Navy Overhaul Contract - On November 3, 1993 the Company entered
into an agreement with the U.S. Navy to settle a dispute over
final pricing of work performed on the USS Chandler. The
settlement resulted in the collection of an amount slightly
greater than the Company's previously recorded receivable.
The Company's reported operating expenses for fiscal year 1994
were reduced by $10.2 million due to the utilization of $12.5
million of prior year loss reserves and the establishment of $2.3
million in current year loss reserves.
Unbilled Receivables - Certain unbilled items on completed
contracts included in accounts receivable were approximately $.9
million at April 3, 1994 and $9.9 million at March 28, 1993.
Retainages - Costs and estimated profits in excess of billings on
incomplete contracts include $1.0 million in retainages at April
3, 1994 and no retainages at March 28, 1993 (after deducting
progress billings of $157 million and $146 million at April 3,
1994 and March 28, 1993, respectively). Retainages are generally
due upon completion or acceptance of the contracted work and
completion of related warranty periods.
Customers - The Company currently operates in one business
segment, shipbuilding, which includes the construction,
repair/overhaul and conversion of marine vessels. Revenues from
the U.S. Government were $16.2 million (24%), $29.9 million
(55%), and $103.6 million (70%) in fiscal years 1994, 1993 and
1992, respectively.
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment and accumulated depreciation at
April 3, 1994 and March 28, 1993 consisted of the following:
1994 1993
Land $ 1,208 $ 1,208
Buildings 7,980 7,917
Piers, shipways and drydocks 25,260 25,205
Machinery and equipment 27,406 25,497
Total plant and equipment, at cost $61,854 $59,827
Less accumulated depreciation $37,853 $35,191
Plant, property and equipment, net $24,001 $24,636
6. EMPLOYEE BENEFIT PLANS
Union Pension Plans - Operating Shipyard- The Company
participates in several multi-employer plans, which provide
defined benefits to the Company's collective bargaining employees
at its Seattle Shipyard. The expense for these plans totaled
$2.2 million, $1.2 million and $3.2 million, for fiscal years
1994, 1993 and 1992, respectively.
Union Pension Plans - Previously Operated Shipyards- The Company
is a sponsor of several union pension plans due to the prior
operation of other shipyards. The ongoing operation and
management of these plans is the responsibility of boards of
trustees made up of equal numbers of employer and union
representatives.
Nonunion Pension Plans - The Company sponsors the Todd Shipyards
Corporation Retirement System (the "Retirement System"), a
noncontributory defined benefit plan under which substantially
all nonunion employees are covered. The benefits are based on
years of service and the employee's compensation before
retirement. The Company's funding policy is to fund such
retirement costs as required to meet allowable deductibility
limits under current Internal Revenue Service regulations.
The components of net periodic pension cost (benefit) for the
defined benefit plan in fiscal years 1994, 1993 and 1992 is as
follows (in thousands):
1994 1993 1992
Service cost-benefit earned during
the time period $ 333 $ 502 $ 848
Interest cost on projected benefit
obligation 2,325 2,439 2,863
Actual return on plan asset (1,981) (3,436) (3,768)
Net amortization and deferral (4,098) (2,986) (4,379)
Subtotal (3,421) (3,481) (4,436)
Liability for early retirement
incentive - 3,243 2,752
Net periodic pension benefit before
OBRA '90 (3,421) (238) (1,684)
Transfer of assets for payment of
retiree medical benefits
(401(h) Plan) 1,496 1,388 3,150
Net periodic pension cost (benefit) $ (1,925) $ 1,150 $ 1,466
During 1993 and 1994 the weighted average discount rate, rate of
increase in future compensation levels and the expected long-term
rate of return on assets used in determining the actuarial
present value of the projected benefit obligation were 8.0%, 5.0%
and 6.5%, respectively. During 1992, the weighted average
discount rate, rate of increase in future compensation levels and
the expected long-term rate of return on assets used in
determining the actuarial present value of the projected benefit
obligation were 8.5%, 7.5% and 8.5%, respectively.
The following table sets forth the plan's funded status and
amounts recognized in the Company's consolidated balance sheets
at April 3, 1994 and March 28, 1993 for the defined benefit plans
(in thousands):
1994 1993
Actuarial present value of benefit obligation:
Accumulated benefit obligations, including
vested benefits of $27,357 ($31,947 in 1993) $27,357 $33,066
Projected benefit obligation $28,756 34,563
Plan's assets at fair value 52,443 61,373
Plan's assets in excess of projected
benefit obligation 23,687 26,810
Unrecognized net loss 7,152 4,519
Unrecognized net transition asset being
recognized over 15 years (16,902) (19,317)
Deferred pension asset $13,937 $12,012
The Retirement System plan assets consist principally of common
stocks and U.S. government and corporate obligations.
Under a provision of the Omnibus Budget Reform Act of 1990 ("OBRA
'90") the Company transferred approximately $1.5 million in
excess pension assets from its Retirement System into a fund to
pay fiscal year 1994 retiree medical benefit expenses.
Post retirement Group Health Insurance Program - The Company
sponsors a defined benefit health care plan that provides post
retirement medical benefits to full-time exempt employees, and
their spouses, who met specified criteria. The Company terminated
post retirement health benefits for any employees retiring
subsequent to May 15, 1988. The plan contains cost-sharing
features such as deductibles and coinsurance. These benefits are
funded monthly through the payment of group health insurance
premiums. In fiscal year 1991 the Company adopted Statement of
Financial Accounting Standard No. 106, "Employers' Accounting for
Post retirement Benefits Other Than Pensions". In accordance
with the provisions of Statement 106, the Company elected to
record the actuarially calculated $23.5 million total accumulated
obligation of such benefits as of March 31, 1991.
The actuarially calculated components of net periodic post
retirement health benefit cost for the defined benefit plan in
fiscal years 1994, 1993 and 1992 are as follows (in thousands):
1994 1993 1992
Service costs $ - $ - $ -
Interest cost on projected
benefit obligation 1,533 1,907 2,046
Return on plan assets - - -
Net amortization of gain (200) - -
Net period postretirement benefit
cost $ 1,333 $ 1,907 $ 2,046
Current year plan contributions $(1,551) $(1,593) $(1,604)
Since such benefit obligations do not accrue to current employees
of the Company there is no current year service cost component of
the accumulated post retirement health benefit obligation.
For fiscal year 1993 and 1994 the weighted average discount rate
and rate of increase in the per capita cost of covered benefits
(i.e., health care cost trend) used in determining the actuarial
present value of the accumulated health benefit obligation were
8% and 12% grading down to 5% over 21 years, respectively. During
1992, the weighted average discount rate and rate of increase in
the per capita cost of covered benefits used in determining the
actuarial present value of the accumulated health benefit
obligation were 9% and 12%, respectively. The health care cost
trend rate assumption has a significant effect on the amounts
reported. Increasing the assumed health care cost trend rate by
one percentage point in each year would increase the accumulated
post retirement health benefit obligation as of April 3, 1994 by
$1.5 million and the interest cost component of net periodic post
retirement benefit cost for 1994 by $.1 million.
The following table sets forth the amounts recognized in the
Company's consolidated balance sheet at April 3, 1994 and March
28, 1993 for the post retirement health benefit obligation (in
thousands):
1994 1993
Accumulated post retirement health benefit
obligation $19,910 $19,928
Plan assets - -
Accumulated post retirement health benefit
obligation in excess of plan assets 19,910 19,928
Unrecognized net gain 4,160 4,360
Accrued post retirement health benefits 24,070 24,288
Less estimated current portion of obligations
classified as accrued expenses 1,604 1,604
Long-term portion of accrued post retirement
health benefits $22,466 $22,684
7. INCOME TAXES
The income taxes provided for or (credited to) the categories of
income (loss) are as follows (in thousands):
1994 1993 1992
Operations $ (263) $ 50 $11,489
Extraordinary item - utilization
of net operating loss and tax
credit carryforwards - - (9,384)
$ (263) $ 50 $ 2,105
The provision for income taxes consists of the following (in
thousands):
1994 1993 1992
Current: federal $ (263) $ 1,990 $ 165
state and local - -
Deferred: federal - (1,940) 1,940
state and local - - -
Total income tax provision $ (263) $ 50 $ 2,105
Upon adoption of Statement 109 in fiscal year 1994 there was no
cumulative effect on income as the Company had significant
business credit carryforwards for tax purposes. The Company
recorded these deferred taxes benefits on the balance sheet net
of a valuation reserve due to the lack of reasonable assurance
that they will be realized.
The provision (benefit) for income taxes differs from the amount
of tax determined by applying the federal statutory rate for the
following reasons (in thousands):
Liability Deferred Deferred
Method Method Method
1994 1993 1992
Tax provision (benefit) at
federal statutory tax rate $(1,042) $(3,996) $10,583
Increase in valuation allowance 1,261 - -
Tax rate differential (232)
Limitation on recognition of net
operating loss carryforward - 3,996 -
Utilization of net operating loss and
tax credit carry forward - - (9,384)
Alternative minimum tax - - 906
Other - net (250) 50 -
$ (263) $ 50 $ 2,105
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes. Significant components of the Company's
deferred income tax assets and liabilities at April 3, 1994 were
as follows (in thousands):
Amount
Deferred income tax assets:
Business credit carryforwards $9,429
Alternative minimum tax credit carryforwards 2,874
Accrued employee benefits 2,351
Environmental reserve 2,138
Reserves for contract losses 1,442
Deferred gain on sale of facility 847
Reserve for doubtful accounts 228
Other 607
Total deferred income tax assets 19,916
Valuation reserve for deferred tax assets (7,934)
Net deferred tax assets 11,982
Deferred income tax liabilities:
Accelerated depreciation 6,344
Deferred pension income 4,878
Completed contracts 703
Other 57
Total deferred income tax liabilities 11,982
Net deferred taxes $ -
Major components of the deferred income tax provision (benefit)
for fiscal years ending March 28, 1993 and March 29, 1992 are as
follows (in thousands):
1993 1992
Accelerated depreciation $(1,064) $(1,011)
Completed contract method of accounting (8,244) 8,385
Decrease (increase) in nondeductible
reserves (2,996) 3,673
Decrease in shipyard closures reserves 436 555
Limitation of the recognition of net
operating loss 9,501 -
Utilization of net operating loss
carryforwards - (6,538)
Utilization of investment tax credit
carryforwards - (2,846)
Other - net 427 (278)
$(1,940) $ 1,940
The Company had net operating loss carryforwards for financial
statement purposes of $2.2 million at April 3, 1994 and $11.8
million at March 28, 1993. These carryforwards expire in 2009.
The Company had net operating loss carry forwards for federal
income tax purposes of $10.4 million at March 29, 1992, all of
which were used during fiscal year 1993. The Company had no net
operating loss carryforwards for federal income tax purposes as
of April 3, 1994.
The Company had tax credit carryforwards for financial statement
purposes at March 29, 1992 and March 28, 1993 of approximately
$9.1 million. The Company had, for federal income tax purposes,
tax credit carryforwards of $9.4 million at April 3, 1994. If not
utilized, these carryforwards will expire in fiscal years 1995
through 2001.
In addition, the Company has paid approximately $2.9 million of
alternative minimum taxes on alternative minimum taxable income
from fiscal years 1988 through 1992, which will be allowed as a
credit carry forward against regular federal income taxes in
future years in the event regular federal income taxes exceed the
alternative minimum tax.
The Company does not presently believe that an ownership change
as defined for purposes of limiting the utilization of net
operating loss and tax credit carry forwards has occurred.
8. LEASES
Operating lease payments charged to expense were $.7 million, $.8
million, and $1.4 million for fiscal years 1994, 1993 and 1992,
respectively.
Minimum lease commitments at April 3, 1994 are summarized below
(in thousands):
Capital Operating
Leases Leases
1995 $ 96 $ 660
1996 - 365
1997 - 211
1998 - 146
1999 - 146
Thereafter - 1,455
Total minimum lease commitments 96 $ 2,983
Less amount representing interest (3)
Present value of net minimum lease payments $ 93
Capitalized leases included in plant, drydocks and equipment and
the related accumulated depreciation amounted to $1.4 million and
$1.3 million, respectively.
9. FACILITY CLOSURES
GALVESTON SHIPYARD
On December 16, 1993, the Company sold its Galveston shipyard
facilities to the Board of Trustees of the Galveston Wharves
("Galveston Wharves") for $6 million, consisting of $.6 million
cash with the balance financed with City of Galveston special
project revenue bonds issued to the Company. The revenue bonds
bear interest at the rate of eight percent payable semiannually
beginning July 1, 1994. The revenue bonds are secured by a lien
on the shipyard property and a subordinate lien on the revenues
of the Galveston Wharves. Annual bond principal payments of
$.216 million are due beginning January 1, 1995 with a final
balloon payment of $3.456 million due January 1, 2004. The
Company is recognizing the gain on the sale of the facility as
payments are received.
Upon the sale of the Galveston facility, the Company reversed a
$3.2 million deferred credit relating to estimated Galveston
facility closure costs. Upon receipt of the initial proceeds from
the Galveston facility and equipment sale, the Company recognized
a net gain of $.6 million.
LOS ANGELES SHIPYARD
During the third quarter ended January 2, 1994, the Company
reduced the Los Angeles facility closure provision from $2.7
million to $.1 million to account for remaining Los Angeles
facility closure costs. The provision had reflected estimated
contributions necessary to fund the Los Angeles Local 9 pension
plan. Based on data available to the Company regarding the plan
assets and the plan's expected future operating activity, the
Company believes that the pension plan assets currently
adequately fund its liabilities and that no contributions to the
plan will be necessary.
10. OTHER CONTINGENCIES
The Company is subject to various risks and is involved in
various claims and legal proceedings arising out of the ordinary
course of its business. These include complex matters of contract
performance specifications, environmental protection and
Government procurement regulations. Only a portion of these
risks and legal proceedings involving the Company are covered by
insurance, since the availability and coverage of such insurance
generally has declined or the cost has become prohibitive.
11. ENVIRONMENTAL MATTERS
The Company faces significant potential liabilities in connection
with the alleged presence of hazardous waste materials at certain
of its closed shipyards, at its Seattle Shipyard and at several
sites used by the Company for disposal of alleged hazardous
waste. The Company continues to analyze environmental matters and
associated liabilities for which it may be responsible. No
assurance can be given as to the existence or extent of any
significant environmental liabilities until such analysis has
been fully completed. The overall eventual outcome of
environmental matters cannot be determined at this time, however,
several site investigations have progressed sufficiently to allow
for provisions in the accompanying consolidated financial
statements.
The Company has been named as a potentially responsible party
("PRP") by the Environmental Protection Agency ("EPA") pursuant
to the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA") in connection with the documented
release or threatened release of hazardous substances, pollutants
and contaminants at the Harbor Island Superfund Site (the
"Site"), upon which the Seattle Shipyard is located. The EPA has
stated that, at this time, it is not aware of any other PRPs for
the Seattle Shipyard. The EPA has initiated a remedial
investigation and feasibility study ("RI/FS") for the Soil and
Groundwater Operable Unit of the Site ("Operable Unit"). The EPA
issued its Record of Decision ("ROD") for the Operable Unit in
September, 1993. (The RI/FS for the Sediment portion of the Site
is due to be released in 1995.) The ROD requires soil cleanup at
the Site of Total Petroleum Hydrocarbons ("TPH") and metals.
Soils containing in excess of 10,000 mg/kg of TPH must be
excavated and treated on-site with a thermal desorption unit.
The Company, along with a number of other Harbor Island PRPs,
received a Special Notice Letter from the EPA on May 4, 1994
pursuant to section 122 (e) of CERCLA. The letter triggers a
sixty day moratorium on EPA enforcement activities related to the
Site which will expire on July 5, 1994. If the PRPs have
submitted a "good faith" offer to the EPA by that deadline the
moratorium will be extended by an additional sixty days. To
avoid agency enforcement, an agreement must be reached between
the EPA and the PRPs by September 6, 1994.
In January 1990, the Company was notified that it was a PRP in an
action brought by the National Oceanic and Atmospheric
Administration ("NOAA") for alleged damages caused to the coastal
and marine natural resources in the Duwamish River and Elliott
Bay off the Harbor Island Site. Subsequent to this notification,
NOAA brought suit against the City of Seattle and the
Governmental agency responsible for sewage treatment in the
Seattle area ("Metro") for their contributions of hazardous
materials to the Duwamish River and Elliott Bay. This litigation
was settled between the parties. While NOAA, the City of Seattle
and Metro retain the right to bring suit against all the other
named PRPs, including the Company, the Company has not been
contacted since the January 1990 notification.
In November 1987, the Company was identified as a PRP by the EPA
in conjunction with the cleanup of the Operating Industries, Inc.
("OII") hazardous materials disposal site at Monterey Park,
California. It is the Company's position that its involvement
with the OII site is de minimis. In April 1992, the Company, a
nonsettling party, was notified by letter that the OII Steering
Committee, consisting of 133 settling parties, intends to pursue
contribution from the nonsettling parties. The Company is
continuing to investigate this matter.
The Company was identified as a PRP in 1986 as a generator of
materials deposited at the Maxey Flats Disposal Site in Fleming
County, Kentucky and specifically has been identified as a de
minimis contributor based on its volume of less than .25% of the
total site makeup. These materials were allegedly generated from
work the Company performed for the US Navy on the nuclear ship NS
SAVANNAH during the 1960's and 1970's. The EPA invited the
Company to participate with the de minimis coordinating committee
to resolve its alleged liability on a volume contribution basis
and as a result, the Company has agreed to settle its potential
liability in this matter for a cash payment of $158,287. The
Company intends to pursue its right to contractual
indemnification from the United States for the disposal of this
waste.
The Company was identified in 1983 as a generator of materials
deposited at the Western Processing Site in Kent, Washington.
Since that time the Company has executed, along with several
hundred other PRPs, a Consent Decree committing to its
proportionate share of the cleanup to take place at the site.
While it is not possible to predict the entire liability due
under the terms of the Consent Decree, the known costs to the
Company are included in the below stated reserve.
Todd has been notified by the EPA that the Casmalia Resources
Hazardous Waste Management Facility in Santa Barbara County,
California is undergoing remediation and closure under the
Resource Conservation and Recovery Act ("RCRA"). It is alleged
that the Los Angeles Division of Todd Pacific deposited certain
production wastes and by-products at this disposal site
throughout the 1980's. The Company has been participating in
settlement discussions with other PRPs and the EPA as a member of
the Steering Committee. Investigation continues on this site.
In June 1989, the Company was notified by the City of Hoboken,
New Jersey (the "City") that a volume of oil had been discovered
on the surface of the property that had been owned and operated
as the Hoboken Division of the Company. In June 1992, the City
and the Company were named as PRPs by the State of New Jersey
(the "State"). The City has undertaken a clean-up of the
property. The State has issued a Notice of Violation against the
Company pursuant to the New Jersey Spill Act ("Spill Act"). The
City and the State allege that the Company abandoned three
underground storage tanks in 1969 when the property was sold to
the City and that the discovered surface oil spilled from those
tanks. In April 1994 the City of Hoboken initiated a civil
action against the Company entitled City of Hoboken v. Todd et
al. for contribution under the Spill Act seeking reimbursement
for all monies expended for the cleanup of the Hoboken property.
Also named in the suit is the developer who allegedly trespassed
onto the property and caused the oil spill and several insurance
companies who allegedly issued comprehensive general liability
insurance policies in favor of the City of Hoboken covering the
property. The Company is vigorously defending this action.
During the fiscal year ended April 3, 1994 the Company analyzed
the most recent data available from the EPA and other sources
regarding the Harbor Island Superfund Site and believes it is now
possible to estimate an initial cost for the proposed surface and
ground water clean-up phase of the Remedial Investigation and
Feasibility Study. The Company further believes that
investigations regarding several other sites have progressed to
the degree that it is currently possible to estimate costs for
their respective remediations. The Company has provided
aggregate reserves of $6.5 million for these contingent
liabilities; no amount has been taken into consideration for the
possible recovery of some or all of these amounts through various
insurance contracts and/or right of contribution actions against
prior landowners and others who may have been responsible for the
alleged damage to the various sites. However, no assurance can
be given that the $6.5 million reserve is adequate to cover all
potential remediation costs the Company could incur. With
respect to the remediation the Harbor Island Operable Unit, a
final determination has not yet been made either of the timing
and technique which may be used or of the possible participation
of other parties in the remediation efforts.
Any remediation efforts necessary as a result of the RI/FS due to
be released in 1995 pertaining to the Sediment portion of the
Harbor Island Site have not been included in the above stated
reserve. The investigation of the Sediment contamination has not
progressed to the stage where any potential remediation cost or
method has been determined. At this time it is not possible for
the Company to predict accurately the scope of any liability
relative to the Sediment portion of the Site.
12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Financial results by quarter for the fiscal years ended April 3,
1994 and March 28, 1993 are as follows (in thousands):
Income
(loss) Income Net
from Income (loss) income
Revenues operations (loss) per share (loss)
1st Qtr 1994 $ 14,280 $ (2,649) $ (171) $ (0.01) $ (171)
2nd Qtr 1994 13 688 (5,071) (3,847) (0.33) (3,847)
3rd Qtr 1994 20,870 2,001 1,804 0.15 1,804
4th Qtr 1994 19,714 (1,005) (500) (0.05) (500)
$ 68,552 $ (6,724) $(2,714) $ (0.24) $(2,714)
1st Qtr 1993 $ 18,585 $ 1,207 1,129 $ 0.10 $ 1,537
2nd Qtr 1993 12,936 157 489 0.04 633
3rd Qtr 1993 8,704 (8,384) (7,013) (0.59) (7,565)
4th Qtr 1993 14,053 (6,998) (6,407) (0.54) (6,407)
$ 54,278 $(14,018) (11,802) $ (0.99) $11,802)
Fiscal year 1994 first quarter net income includes a $1.8 million
insurance settlement. Fiscal year 1994 third quarter net income
includes in-yard government phased maintenance activity
accomplished during the period.
TODD SHIPYARDS CORPORATION
Schedule I - Marketable Securities - Other Investments
April 3, 1994
(in thousands of dollars)
Amount at
which each
Market value security is
Name of issuer of ea. issue carried on
and title Principal Cost of at balance the balance
of each issue amount ea. issue sheet date sheet
US Treasury
Obligations $22,090 $21,794 $21,836 $21,836
FNMA, Mortgage
backed securities 9,987 10,106 9,763 9,763
FHLMC, Mortgage
backed securities 8,040 8,120 7,987 7,987
FHLB, Obligations 1,500 1,500 1,473 1,473
TVA Power Bond 1993,
Ser. A. 1,000 995 981 981
ATT, 4.5% Note 1,000 994 985 985
IBM, 4.55% Asset
Trust,Ser. A. 1,778 1,777 1,749 1,749
Merrill Lynch, 4.75%
Note 500 498 489 489
Mobil, 6.5% Note 500 524 510 510
SmithKline Beecham
5.25% Note 1,000 1,020 998 998
Structured Asset
Securities, CMO 1,700 1,725 1,709 1,709
Total Marketable
Securities $49,095 $49,053 $48,480 $48,480
Schedule X - Supplementary Income Statement Information
Years Ended April 3, 1994, March 28, 1993 and March 29, 1992
(in thousands of dollars)
Charged to Costs and Expenses
for the Fiscal Year Ended
April 3, March 28, March 29,
1994 1993 1992
1. Maintenance and repairs $3,843 $2,672 $4,300
3. Taxes, other than payroll and
income taxes 1,051 892 1,425
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCED DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
**
ITEM 11. EXECUTIVE COMPENSATION
**
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
**
ITEM 13. CERTAIN RELATIONSHIPS AND TRANSACTIONS
**
** The information for the above items will be provided in the
1994 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) 1 & 2. Financial Statements
The financial statements and financial statement schedule
listed in the accompanying index to financial statements and
financial statement schedules are filed as part of this annual
report.
3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are
filed as part of this annual report.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K for the fourth
quarter ended April 3, 1994.
TODD SHIPYARDS CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT AUDITORS
Items 14(a) 1 & 2
Report of Independent Auditors...............................15
Consolidated Balance Sheets at April 3, 1994
and March 28, 1993.........................................16
Consolidated Statements of Operations
For the years ended April 3, 1994,
March 28, 1993 and March 29, 1992..........................17
Consolidated Statements of Cash Flows
For the years ended April 3, 1994,
March 28, 1993 and March 29, 1992..........................18
Consolidated Statements of Stockholders Equity
For the years ended April 3, 1994,
March 28, 1993 and March 29, 1992..........................20
Notes to Consolidated Financial Statements
For the years ended April 3, 1994,
March 28, 1993 and March 29, 1992..........................21
Supplementary Information:
Quarterly Financial Data (unaudited).......................35
Consolidated Financial Statement Schedules:
I-Marketable Securities..................................36
X-Supplementary Income Statement Information.............36
All other schedules are omitted because they are not applicable,
or not required or because the required information is included
in the consolidated financial statements or notes thereto.
TODD SHIPYARDS CORPORATION INDEX TO EXHIBITS
(SEE SEPARATE PACKET)
Item 14(a)3
Exhibit Sequential
Number Page No.
3-1 Certificate of Incorporation of the Company *
dated November 29, 1990, filed in the Company's
Form 8-B Registration Statement dated January
15, 1991 Exhibit 3-1.
3-2 By-Laws of the Company dated November 29, 1990, *
as amended October 1, 1992 filed in the Company's
Form 10-K Report for 1993 as Exhibit 3-2.
10-1 Lease Agreement of floating drydock dated May 15, *
1981 between the Company and NAVSEA amended May
14, 1986, filed in the Company's Form 10-K for
1991 as Exhibit 10-2.
10-2 Amendments to Lease Agreement of floating drydock *
dated December 6, 1989, March 7, 1990 and June 6,
1990 filed in the Company's Form 10-K for 1990 as
Exhibit 10(h)(i).
10-3 Lease Agreement of floating drydock dated April 1, *
1987 between the Company and NAVSEA filed in the
Company's Form 10-K for 1991 as Exhibit 10-4.
10-4 Collective Bargaining Agreement between Todd 42-88
Pacific, Seattle Division and the Metal Trades
Dept. of the A.F.L.- C.I.O., the Pacific Coast
Metal Trades District Council, the Seattle Metal
Trades Council and the International Unions
signatory thereto dated April 1, 1993. *
10-5 Unsigned executed copy of Harbor Area Lease *
Agreement dated March 21, 1985 between the Company
and the State of Washington Dept. of Natural
Resources filed in the Company's Form 10-K for
1990 as Exhibit 10(ac)
10-6 Harbor Area Lease Agreement dated December 13,
1982 between the Company and the State of
Washington Dept. of Natural Resources filed in the
Company's Form 10-K for 1990 as Exhibit 10(ad).
10-7 Waterway Permit dated September 1, 1986 between *
the Company and the State of Washington Dept. of
Natural Resources filed in the Company's Form
10-K for 11990 as Exhibit 10(ae).
10-8 Waterway Permit dated September 1, 11986 between *
the Company and the State of Washington Dept. of
Natural Resources filed in the Company's Form
10-K for 1990 as Exhibit 10(ae)(i).
10-9 Lease Agreement dated December 4, 1989 between *
the Company and Tar Asset Figueroa filed in the
Company's Form 10-K for 1990 as Exhibit 10(al).
10-10 Savings Investment Plan of the Company filed *
in the Company's form 10-K for 1990 as Exhibit
10(ap).
10-11 Todd Shipyards Corporation Retirement System Plan *
filed in the Company's Form 10-K for 1990 as
Exhibit 10(aq).
10-12 Contracts for the Modification and Repair of the *
SS Kauai and for the SS Maui for the Matson
Navigation Company, Inc. by Todd Pacific dated
February 4, 1993.
10-13 Contract with the State of Washington for repair 89-162
of the MV Tillikum by Todd Pacific dated May 10,
1993.
10-14 Purchase and Sale Agreement and Deed of Trust 163-191
relating to the sale of the Company's Galveston
facility to the Galveston Wharves dated December
16, 1993.
22-1 Subsidiaries of the Company. 192
28-1 Unsigned unexecuted copy of Indemnity Agreement *
between the Company and ACSTAR Insurance Company
filed in the Company's Form 10-K for 1990 as
Exhibit 28(k).
28-2 Letters dated April 25, May 7 and June 8, 1990 *
between the Company and ACSTAR Insurance Company
in respect to the terms of the Surety Agreement
between the parties and the Court order dated
July 2, 1990 authorizing the Company to enter into
the Surety Agreement and the Indemnity Agreement
(Exhibit 28-3), filed in the Company's Form 10-K
Report for 1991 as Exhibit 28-4(a).
Note: All Exhibits are in SEC File Number 1-5109.
* Incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934 the registrant has duly caused
this Annual Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TODD SHIPYARDS CORPORATION
Registrant
By: /s/ David K. Gwinn
David K. Gwinn
Chief Financial Officer
June 30, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated:
/s/ Brent D. Baird /s/ Steven A. Clifford
Brent D. Baird, Director Steven A. Clifford, Director
June 24, 1994 June 24, 1994
/s/ Patrick W.E. Hodgson /s/ Joseph D. Lehrer
Patrick W.E. Hodgson, Joseph D. Lehrer, Director
Chairman, Chief Executive June 24, 1994
Officer, and Director
June 24, 1994
/s/ Philip N. Robinson /s/ John D. Weil
Philip N. Robinson, Director John D. Weil, Director
June 24, 1994 June 24, 1994
-25-
Exhibit 10-4
1993 Collective Bargaining Agreement
between
Todd Pacific Shipyards Corporation
and the
Metal Trades Department of the AFL-CIO,
the
Pacific Coast Metal Trades District Council,
the
Puget Sound Metal Trades Council,
and the
International Unions Signatory Thereto
ARTICLE 1. SCOPE OF AGREEMENT
1.1 This Agreement shall cover all production, repair and
maintenance employees within the bargaining unit in the employ of
the Employer signatory hereto, and shall apply to all work and
activities of the Employer in connection with the construction,
conversion, repair or scrapping of any vessel on the Pacific
Coast, including but not limited to, dredges, floating drydocks,
offshore drilling vessels, barges, mobile drilling platforms,
platforms and all component parts, plant equipment, and all
auxiliary equipment used in conjunction therewith.
ARTICLE 2. SUBCONTRACTING
2.1 The agreement of the Parties with respect to the subject of
subcontracting shall be that whenever the Employer subcontracts
work covered by ARTICLE 1 of this Agreement to be performed on or
off the Employer's premises, then persons performing such work
shall receive not less than the wage and conditions provided for
in this Agreement. This Article shall not apply to work
subcontracted to be performed away from the Employer's premises
outside of the Port areas of San Francisco, Portland and Seattle.
Navigable inland waters connected with the Port areas shall be
considered as part of the Port areas.
2.2 Upon request by the Puget Sound Metal Trades Council, the
Employer will provide the name, address, and telephone number of
the subcontractor who is either performing or is scheduled to
perform work for the Employer within the Port of Seattle as
defined above. The subcontractor shall provide on request, and
within a reasonable time, documents to validate conformance with
this Article. The Employer will assist with the enforcement of
this Article if any question of intent arises.
ARTICLE 3. NON-DISCRIMINATION, RECOGNITION, UNION SECURITY,
HIRING, SENIORITY
3.1 Nondiscrimination: The Employer and Unions agree that there
will be no discrimination in employment because of race, creed,
color, national origin, age, sex, or handicap, as defined by
Federal and State Laws. Nor shall there be any discrimination of
disabled veterans or veterans of the Vietnam era. In referring
to employees in this Agreement, the masculine gender is used for
convenience only and shall refer both to males and females.
Compliance with State and/or Federal laws shall not be considered
discrimination under this sub-section.
3.2 Recognition: The Employer recognizes the Unions as set
forth in the Preamble and signatory hereto as the sole collective
Bargaining Agents for all of its employees covered by this
Agreement, in all of the classifications contained in Schedule
"A" of this Agreement and employed on work covered by the "Scope
of this Agreement."
3.3 Union Security:
(a) Employees included in the Bargaining Unit covered by this
Agreement who are members of the respective Union as of the
effective date of this Agreement shall, as a condition of
employment, maintain their membership in the Union.
(b) Employees included in the Bargaining Unit covered by this
Agreement who are not members of the respective Union as of the
effective date of this Agreement, shall apply for membership in
said Union on the thirty-first (31st) day after such effective
date; and all employees who are accepted into membership into the
Union shall maintain their membership in the Union as a condition
of their employment.
(c) Employees hired after the effective date of this Agreement
shall apply for membership in the respective Union on the thirty-
first (31st) day following the beginning of such employment, and
all employees who are accepted into membership in the Union shall
maintain their membership in the Union as a condition of their
employment.
(d) The Employer, upon written request of the Local Union, shall
discharge any employee within two (2) working days after receipt
of such notice, who fails to tender the periodic dues and
initiation fees uniformly required by the Union as a condition of
acquiring or retaining membership in good standing in the Union.
(e) An employee who desires his regular monthly union dues to be
deducted from his pay by the Employer and remitted to the
Financial Secretary of the Union shall submit a fully executed
authorization card as follows:
Union Dues Deduction
I hereby authorize Todd Seattle Division to deduct $
regular monthly union dues from wages earned by me while in the
bargaining unit represented by the Unions shown below.
I understand that such deductions are to be made on the first
regularly scheduled payday of the month following the month in
which this authorization is received by the Personnel Office of
the Employer. This authorization and assignment shall remain in
effect until canceled by written notice of the Union or the
Employee. The dues deducted are to be sent no later than the end
of the calendar month in which the deduction was made to:
Employee Name: Date:
Signature: Soc. Sec. #:
The Union and the Employee shall hold the Employer harmless
against any claim that might arise out of or by reason of action
taken or not taken by the Employer in a good faith effort in
complying with this provision.
3.4 Hiring:
(a) The Employer agrees that when additional employees are
required the appropriate Local Union will be given as much
advance notice as possible, but not less than twenty-four (24)
hours so that the Union may have a reasonable opportunity to
refer applicants for employment. The period of notice will
commence when the appropriate Union receives such notice by
telephone from the Employer. Such notice, including the number
and qualifications of the employees required, shall be given by
the Personnel Department or other designated representatives of
the Employer. The Unions agree that they will, upon request of
the Employer, refer experienced men, when available, to the
Employer for the classifications covered by this Agreement. If
less than twenty-four hour notice is given, the Unions agree that
upon receipt from the Employer of a request for additional
manpower, they will make every reasonable effort to provide the
manpower as soon as possible. However, this does not eliminate
the requirement of the employer to give advance notice to the
affected union regardless of whether all seniority employees have
been recalled or not.
(b) Selection of applicants for referral to jobs shall not be
based on, or in any way affected by, Union membership, by-laws,
rules, regulations, constitutional provisions or any other aspect
or obligation of Union membership, policies or requirements.
(c) The Employer retains the right to reject any job applicant
referred by the Unions. The Employer will provide, in writing,
within two (2) working days, the reasons for rejection of
applicants referred by the Union. The Employer may discharge any
employee for just and sufficient cause. The Employer agrees to
notify the appropriate Union in writing of the name or names of
any former employee or employees not eligible for rehire. The
"not eligible for rehire" letters sent to the Unions will be
reviewed annually upon request of the Union.
(d) The Unions agree that they will not discriminate against non-
union workmen in referring workmen to the Employer, and the
Employer agrees not to discriminate against Union members in
selecting job applicants referred to him by the Unions.
(e) A copy of this Article of Agreement shall be posted at the
employment office of the Employer and at the place where the
appropriate Local Unions conduct the operation of referring
persons for employment under this Agreement.
(f) The Employer may request any former unemployed employee by
name and the Unions shall refer such person after compliance with
the provisions set forth in this Article. The Employer will
provide proof of former employment of such person if requested by
the Union.
(g) If the Employer hires persons other than those referred by
the Unions, he shall advise the appropriate Local Union within
two (2) working days after such person is hired, as to the name,
address, social security number, date of hire, classification and
rate of pay of such employee. The same information shall be
furnished in writing by the Employer to the appropriate Local
Union within forty-eight (48) hours after the termination of such
employee.
(h) All employees referred to the Employer by the Unions under
this Article shall submit to the making of such records as are or
may be required by the Employer for the purpose of
identification.
(i) The Unions and Employer agree to hold each of the other
Parties signatory hereto harmless from any money damages and
penalties assessed against them by any Government Agency or Court
of Law because of any charge of unfair labor practice or act
where such practice or act was proximately or solely caused by
any one of the individual Unions or Employer.
3.5 Seniority:
(a) For the purpose of layoff and recall, the principle of
seniority is hereby established for employees in the bargaining
unit.
(b) Seniority shall be established after an employee has worked
in an established represented classification a period of "ninety
(90) cumulative working days within a nine (9) month period." Any
employee who acquired seniority prior to this Agreement will
retain the seniority date currently assigned. Any employee hired
or rehired after the date of this Agreement will acquire
seniority in accordance with the paragraph above.
For example: If an employee starts in January, he has until
the end of September to qualify for seniority. If at the end of
September he has not qualified for seniority, then the nine (9)
month period is extended to the month of October, and the month
of January is dropped.
(c) An employee's seniority under this Article shall be
terminated under the following conditions:
1. If the employee is discharged for cause.
2. If the employee quits.
3. If the employee fails to report to work at the time specified
by the Employer or within forty-eight (48) hours (Saturday,
Sunday and holidays excluded).
(a) The Employer will place his recall order with the Union,
naming employees eligible to be recalled for such order by
Seniority List. The Employer shall at the time of placing such
order send the "Official Notice of Recall" to such eligible
employee in the manner covered in Item 3.5 (c) (3) (d) below.
Upon receipt of such "Notice of Official Recall" the employee
must report for work within forty-eight (48) hours or suffer loss
of seniority.
(b) The Union shall make every reasonable effort to notify the
employee by telephone of his recall and time to report to the
Employer.
(c) Employees contacted by the Union shall make every reasonable
attempt to report for work at the time specified by the Employer.
(d) A list of those employees not contacted by the Union, and
those contacted who inform the Union they are not answering the
recall, shall be given to the Employer within twenty-four (24)
hours after the Union receives the recall order.
The Employer shall then notify the employee (unless "Notice of
Recall" is sent under Item 3.5 (c) (3) (a) above) by telegram,
Certified or Registered letter to the employee's last address on
record. The Employer shall notify the Union, in writing, within
two (2) working days, of receipt of an unacknowledged letter. It
is the employee's personal responsibility to maintain a current
address and telephone number with the Employer and the Union.
Upon receipt of such "notice of recall" the employee must report
for work within forty-eight (48) hours or suffer loss of
seniority. Individual problem cases shall be handled on their
merit by the Employer and the Union.
4. Any employee absent for three (3) consecutive work days or
more without notification and furnishing a justifiable reason for
such absence shall be considered to have voluntarily terminated
his employment. Exceptional cases will be handled on their
merit. Employees on Employer-approved leave of absence or
industrial injury shall not be subject to this provision.
5. If the employee is laid off for lack of work from the
Employer's active payroll for a period of one (1) year.
An employee on Employer-approved sick leave or industrial
injury at the time of lay off for lack of work shall be recalled
according to his respective seniority recall eligibility and if
still unable to return to work shall be returned to the
Employer's sick leave or industrial injury status.
(d) Seniority shall not apply to recall for jobs of less than
ten (10) working days duration starting on the first day
following the placing of the order at the Union Hall for an
employee.
1. The Employer has the responsibility under 3.5 (c) (3) a) to
call the Union Hall for employees with seniority for jobs regard
less of duration.
2. The provision under 3.5 (d) is only to give the right to the
employee with seniority to reject a job offer of less than ten
(10) days. Further, there is no guarantee of pay for days not
worked.
3. The Employer can call employees for more than one (1) job in
the ten (10) day period or less.
4. If the job is not completed in the ten (10) working days'
duration and is needed to be extended from one to three (1-3)
working days beyond the ten (10) day duration, the Employer is
not required to call seniority employees who originally rejected
the ten (10) day call back for that period of time.
(e) The Employer shall be entitled to retain Leading men and
classifications above the Leading men paid on an hourly rate
without regard to seniority.
(f) Seniority shall apply to classification of the Craft or
Union as set forth in this Agreement, and by such classifications
as may be agreed upon by the Employer and the appropriate Union.
(g) On layoffs and recalls in any classification or agreed
classification, the following factors shall apply:
1. Length of continuous seniority with the Employer in the
classification or agreed classification.
2. Demonstrated skill and ability to perform the work within the
classification or agreed classification. Where factor (2) is
equal as between employees to be laid off and recalled, then
factor (1) shall prevail.
(h) Employees who are laid off in accordance with Subsection (g)
shall be recalled to work in inverse order of layoff, provided
the employee is qualified to perform the work within the
classification or agreed classification.
(i) Employees promoted to any higher classification or to
Leading men paid on an hourly basis shall continue to accrue
seniority in the classification from which they are promoted
during the time they serve in such capacity. Employees promoted
to jobs outside the bargaining unit shall retain such seniority
as they had in the classification from which they were promoted
as of the day of the promotion. There will be no retroactive
adjustments, but prospectively these employees shall not continue
to accrue seniority while out of the bargaining unit.
(j) The Employer will furnish a current Seniority List on a
monthly basis to each appropriate Union, designating foreman or
the immediate classification above Leading man. Such Seniority
List will be posted in the office of the Unions and the
Employers, and it shall be the responsibility of the employee to
review such list as to his individual seniority status.
ARTICLE 4. LEADING MEN
4.1 Leading men in all departments shall be selected, as far as
practicable, from the crafts they are supervising and with a view
to their mechanical ability and shall be journeymen and/or
mechanics and shall be members of their respective Union. In
addition, the immediate supervisory classification above that of
Leading men when paid on an hourly wage rate basis, shall be
selected, as far as practicable, from the crafts they are
supervising and with a view to their mechanical ability and shall
be journeymen and/or mechanics and shall be members of their
respective Union. Apprentices, trainees, and helpers will not be
promoted directly to lead positions.
While on overtime, leadmen supervising a crew of more than four
journeymen, shall not work with the tools.
4.2 The Compensation for Leading men shall be in accordance with
established local practice but in no case less than one dollar
and twenty cents ($1.20) per hour over the wage of the craft they
are supervising as set forth in Schedule "A". The compensation
for the immediate supervisory classification above that of
Leading men, when paid on an hourly wage rate basis, shall be in
accordance with established local practice. The activities and
assignments of supervisors mentioned hereinabove shall not be
restricted, nor shall they be extended during overtime periods to
the end that they be used to replace employees in the performance
of overtime work.
4.3 Foremen, or the immediate supervisor above Leading men,
leading men and mechanics from other crews cannot be used to
complete a job or work assignment which continues into or
requires overtime work. The intention of the Parties signatory
to this Agreement is to continue to use foreman or immediate
supervisor above Leading men, Leading men and mechanics already
assigned in the completion of work which extends into overtime
periods, except in emergency situations.
It is the intention of the Employer not to eliminate the
classifications of Leading men or the immediate classifications
above Leadmen paid on an hourly basis and to substitute salaried
personnel for such classification.
4.4 In the interest of safety, it is agreed that the Company and
the Unions shall work together to insure that Leadmen will not
have crews of unmanageable size.
ARTICLE 5. STANDARD DAY SHIFT HOURS
5.1 Forty (40) hours shall constitute a work week, eight (8)
hours a day, five (5) days per week, Monday to Friday, inclusive
between the hours of 7:00 A.M. and 4:30 P.M., except that where
as to any locality or as to any plant of any Employer existing
traffic conditions render it desirable to start the day shift at
an earlier hour. Such starting time may, by agreement between
the Employer and the local Metal Trades Council, be made earlier.
ARTICLE 6. SHIFTS
6.1 Shift work shall be permitted in all classifications on the
following basis, without restrictions.
6.2 The regular starting time of the day shift shall be 7:00
a.m. unless modified as set forth in Article 5.
The normal starting time of the swing shift shall be between
4:00 and 5:00 p.m. unless modified by mutual agreement between
the Employer and the local Metal Trades Council.
The normal starting time of the graveyard shift shall be
between 11:30 p.m. and 1:00 a.m. unless modified by mutual
agreement between the employer and the local Metal Trades
Council.
6.3 The regularly established starting time of the day shift
shall be recognized as the beginning of the twenty-four (24) hour
work day period. When irregular or broken shifts are worked,
overtime rates shall apply before the regular starting time and
after the regular quitting time of the shift on which the
employee is regularly employed.
6.4 Employees transferred from one shift to another, unless
relieved from work at least seven and one-half (7 1/2) hours
before starting their new shift, shall be paid the overtime rate
for the first such shift worked.
6.5 No employee shall be transferred from his regular assigned
shift to another shift more than once in a work week; however,
he may be returned to his regular assigned shift. This shall not
apply in an extreme emergency or where there is shortage of
manpower. Any violation to this Section shall entitle the
employee to the overtime rate for the first such shift worked.
6.6 First or Regular Daylight Shift: An eight and one-half (8
1/2) hour period less thirty (30) minutes for meals on the
employee's time. Pay for a full shift period shall be a sum
equivalent to eight (8) times the regular hourly rate with no
premium.
6.7 Second Shift: An eight (8) hour period less thirty (30)
minutes for meals on employee's time. Pay for a full shift
period shall be a sum equivalent to eight (8) times the regular
hourly rate as set forth in Schedule "A" plus seventy-five (75)
cents for each hour worked.
6.8 Third Shift: A seven and one-half (7 1/2) hour period less
thirty (30) minutes for meals on the employee's time. Pay for a
full third shift period shall be a sum equivalent to eight (8)
times the regular hourly rate as set forth in Schedule "A" plus
one (1) dollar for each hour worked.
ARTICLE 7. WAGE SCALES
7.1 The Employer agrees to pay to its employees and the Unions
agree that their members employed by the Employer will accept the
wage scales for the various classifications set forth and
contained in Schedule "A" of this Agreement.
7.2 The wage rates herein established are minimum rates only,
and shall not prohibit the Employer from paying a premium wage
rate to any of his employees. Where an employee is receiving a
premium wage rate at the time a general increase in wages becomes
effective, such employee shall receive such general increase.
7.3 The granting of a premium wage rate to any employee and the
elimination of such premium wage rate, shall remain the sole
prerogative of the Employer. However, this section shall not be
used to avoid payment of a negotiated wage increase to premium
men.
7.4 Conditions and compensation for launching shall remain the
same as the existing practice.
7.5 All paychecks containing overtime pay shall specify on the
check stub the number of overtime hours worked.
ARTICLE 8. OVERTIME
8.1 Overtime at the rate of one and one-half (1 1/2) times an
employee's established hourly rate as set forth in Schedule "A"
shall be paid for all work performed outside or in excess of
eight (8) hours, but less than twelve (12) hours, on Monday
through Friday and less than twelve (12) hours on Saturday.
Overtime at the rate of two (2) times an employee's established
hourly rate shall be paid for all work performed on Sunday, a
holiday or in excess of twelve (12) hours on Monday through
Saturday. Overtime payment for hours outside of an employee's
established shift hours will be subject to Section 6.3.
8.2 If an employee working on the "first" or regular daylight
shift is required to return to work on the third shift within the
same twenty-four (24) hour work day period, he shall receive one
and one half (1 1/2) times his established rate for the first
such "third" shift worked. The twenty-four (24) hour work day
period mentioned herein shall be the twenty-four (24) hour period
commencing with the starting time of the day shift.
8.3 Work after 1:00 A.M.: Day shift required to work after 1:00
A.M. and laid off before 6:00 A.M. shall be paid to 6:00 A.M. at
overtime rates.
8.4 Employees required to work overtime past the quitting time
of their regular shift, unless relieved from work at least seven
and one-half (7 1/2) hours before starting to work on their next
regular shift, shall be paid the overtime rate for such shift.
8.5 Salvage and Dynamite: All salvage work at site, unless the
site is in Employer's yard or dock, shall be paid for at the
established overtime rate, regardless of the hour or day; also
Powder and Dynamite Boats when anchored at Powder Anchorage. Any
area designated by the U.S. Coast Guard as a powder, dynamite or
explosive site is understood to be a Powder Anchorage referred to
above.
The applicable rate applies to any craft while on the job at
the site.
8.6 Lunch Periods: A lunch period shall be allowed on the
Employer's time at the end of a regular shift if employees are
required to work overtime in excess of two (2) hours. A meal
period shall be allowed on the Employer's time when an employee
is required to work more than two (2) hours before his regular
shift and continues working into his regular shift thereafter.
8.7 Employees working overtime shall receive a lunch period of
thirty (30) minutes on Employer's time every four (4) hours.
8.8 The foregoing shall not apply to the noon day lunch period
on Saturday, Sunday and holidays.
8.9 An employee required to work during his regular lunch period
shall receive the established overtime rate for such lunch period
and shall thereafter be allowed a reasonable opportunity to eat
his lunch on the Employer's time. This provision shall not apply
to drydock crews provided that at least one (1) hour notice is
given prior to the regular lunch period.
8.10 Overtime work should be offered to employees first on a
voluntary basis. When mandatory overtime is necessary and an
insufficient number of employees volunteer, the employer may
invoke inverse seniority. The first qualified employee working,
with the least seniority, shall be the first employee required to
perform the work.
ARTICLE 9. HOLIDAYS
9.1 Holidays shall be recognized as follows and paid for as such
if worked.
9.2 The following shall be paid Holidays:
NEW YEAR'S DAY, DAY AFTER/BEFORE NEW YEAR'S DAY* , WASHINGTON'S
BIRTHDAY, MEMORIAL DAY, INDEPENDENCE DAY, LABOR DAY, THANKSGIVING
DAY, DAY AFTER THANKSGIVING DAY, CHRISTMAS DAY AND DAY
BEFORE/AFTER CHRISTMAS DAY*.
* For the years 1993 and 1994 only, New Year's Day, Day
before/Day after New Year's Day, Christmas Day and the Day
before/after Christmas Day shall be observed as a Holiday Week
(consisting of five (5) consecutive days off with four (4) days
compensation) for the holidays listed above.
Holiday Week 1993 - Monday, December 27 - Friday, December 31,
1993
Holiday Week 1994 - Monday, December 26 - Friday December 30,
1994.
Employees shall have the option to trade the Birthday holiday
for years 1993 and 1994 only, in order to receive five (5) days
compensation for the above referenced Holiday Week. This option
shall apply to all employees on an individual basis.
Any employee assigned to work the Wednesday during the holiday
week of 1993 or 1994 shall be compensated on an overtime basis
whether or not they had reserved their Birthday pay for that
occasion.
1995 - Tuesday, December 26, 1995, Day after Christmas Day;
Tuesday, January 2, 1996, Day after New Year's Day
The employees shall receive their birthday off with pay. The
employee may take off either the Monday or Friday during the week
his birthday falls with approval of the appropriate Department
Head. In the event that the pre-arranged day off is canceled by
the Employer, the employee will receive the appropriate holiday
rate for all hours worked on the pre-arranged day off.
Qualifying Conditions: An employee shall receive eight (8)
times the hourly rate of pay for each of the above holidays,
provided:
(a) He has been in the employ of the Employer for thirty (30)
calendar days, and
(b) He worked all of the hours required by the Employer on both
the regularly scheduled work day prior to and the regularly
scheduled work day following the applicable holiday.
(c) He will receive holiday pay in spite of absence on the work
day prior to or the work day following such holiday, where such
absence was due to:
1. industrial accident.
2. bonafide illness covered by a doctor's certificate.
3. absence approved by the Employer.
4. being laid off for "lack of work" within ten (10) regularly
schedule work days before the holiday, and is recalled to work
within (10) regularly scheduled work days after the holiday.
9.3 Holiday on Saturday and Sunday: If a holiday set forth
above falls on Saturday, the preceding Friday shall be observed
as the holiday. If a holiday set forth above falls on a Sunday
and is observed by the State or Nation on the Monday following,
said holiday will be paid for under the conditions contained in
this Article. Existing holidays whose dates are changed by
Congressional Law shall be changed in this Article.
9.4 When a paid holiday occurs within an employee's approved
vacation period, he shall receive holiday pay as provided in this
Article and is entitled to take another day of vacation at his
discretion if arrangements to do so are made in advance with the
Employer. It is the intention of the parties that earned
vacation days not be forfeited in this situation.
9.5 Work on Holiday: An employee who qualifies for holiday pay
under Paragraph 9.2 of this Article and who works on a holiday
listed in Paragraph 9.2 of this Article, shall be compensated in
accordance with the overtime provisions of this Agreement in
addition to such holiday pay. An employee who does not qualify
for holiday pay but who works on any such holiday shall be
compensated in accordance with the overtime provisions of this
Agreement.
9.7 Failure to Report: If an employee is schedule to work on
any holiday and fails to report for work, except where such
failure to report is due to one of the reasons listed in Section
9.5 (c) above, he shall not be entitled to holiday pay for that
holiday.
CLARIFICATION OF THE MEMORANDUM OF INTERPRETATION OF ARTICLE 9
- - -HOLIDAYS
I. EMPLOYEES WITH SENIORITY
Employees with seniority will be paid Holiday Pay if they have
either:
(a) worked the day prior to and the day after the Holiday or;
(b) is laid off for "lack of work" within *ten (10) regularly
scheduled work days before the Holiday, and is recalled to work
within *ten (10) regularly scheduled work days after the Holiday.
* 1980 Negotiation Change.
II. EMPLOYEES WITHOUT SENIORITY
Employees without seniority will be paid Holiday Pay if they
have:
(a) been in the continuous employ of the employer for 30
Calendar* days prior to the Holiday and;
(b) worked the day prior to and the day after the Holiday.
* 1980 Negotiation Change.
III. EXCEPTIONS TO SECTION I & II ABOVE
Employees will receive Holiday Pay in spite of non-compliance
with Sections Ia and IIb above if:
(a) they have been retained on "stand-by-status" or "on the
hook" by the Employer,
(b) they are off due to an industrial accident that occurred
sometime during the five regularly scheduled work days prior to
the Holiday.
(c) they are off due to a bonafide illness covered by a doctor's
certificate, or other evidence of illness which occurred sometime
during the five regularly scheduled work days prior to the
Holiday or
(d) they are off for any other absence excused by the Employer,
providing the excused absence commenced sometime within the five
regularly scheduled work days prior to the Holiday. NOTE: L/M
Meeting of 6/23/81 includes Jury duty in this Section.
IV. TARDINESS AND EARLY LEAVES
Employees' requests for early leaves on the day before the
Holiday or tardiness on either the day before or after the
Holiday shall be considered on the merits of each individual case
and the "rule of reasonableness" will apply.
V. DEFINITIONS
(a) EMPLOYEES WITH SENIORITY means Employees who have
established seniority, prior to the Holiday, in accordance with
and as defined in Article 3.5 of the Pacific Coast Master
Agreement, the Pacific Coast Marine Carpenters Agreement, the
Supplemental Agreement with the I.A.M., and the I.B.E.W. Pacific
Coast Agreement, included in the Pacific Coast Master Agreement
for the purpose of this Article.
(b) LAID-OFF means actual written termination by the Employer.
(c) STAND-BY STATUS OR ON THE HOOK means not on lay-off status,
as defined, but requested to stand-by for recall to work, and
shall be considered to be an Active Employee of the Employer
during this period.
ARTICLE 10. VACATIONS
10.1 All employees covered by this Agreement shall receive
vacations with pay.
10.2 Computation of vacation pay: Vacation pay shall be
computed at the following percentages of the actual hours worked
(except as to second and third shifts) multiplied by the
employee's established straight time hourly wage (exclusive of
shift premiums) being received by the employee calculated on a
daily basis and accumulated until the vacation is paid. Vacation
pay will be treated separate from other types of pay and wages
for the purpose of withholding taxes except in the case of
termination.
(a) First year period: Three (3) percent as computed above.
(b) Second year period: Three and one-half (3 1/2) percent as
computed above.
(c) Third year period: Four (4) percent as computed above.
(d) Fourth year period: Four and one-half (4 1/2) percent as
computed above.
(e) Fifth year period: Five (5) percent as computed above.
(f) Sixth year period through fifteenth year period: Five and
one-half (5-1/2) percent as computed above.
(g) Sixteenth year period through nineteenth year period: Seven
and one-half (7-1/2) percent as computed above.
(h) Twentieth year period and thereafter: Eight (8) percent as
computed above.
10.3 For the second and third full shift worked, an employee
shall be credited with eight (8) hours in computing his vacation
allowance.
10.4 To advance from one (1) year period percentage to the next
higher, as above provided, an employee is required to accumulate
one thousand (1,000) hours or more in the employ of the Employer
in any vacation year.
Time lost due to an industrial accident in any vacation year
not to exceed six (6) months shall be credited at the rate of
forty (40) hours per week toward the minimum one thousand (1,000)
hours required to advance to the next year's period percentage.
Years of service need not be consecutive regardless of method of
termination.
10.5 The vacation year for vacation pay, time and hours worked
shall start as follows:
(a) New Employees: anniversary date of employment.
(b) Employees on payroll at effective date: existing
anniversary date.
(c) Rehired Employees hired within one (1) year of anniversary
date: anniversary date of first employment.
10.6 Vacation periods or vacation pay are not cumulative from
year to year and the vacation shall be taken at a time mutually
agreeable between the Employer and the employee.
10.7 There shall be no vacation pay in lieu of a vacation.
Vacation pay accruing to an employee within his vacation year as
described above shall be paid to said employee upon completion of
his vacation year; unless said employee is leaving the area or
upon termination, in which event he shall be paid in full such
vacation pay as may have accrued to him under the terms of this
Article.
ARTICLE 11. NO LIMIT OF PRODUCTION
11.1 There shall be no contract, bonus, piece or task work, nor
shall there be a limit on, or curtailment of production or any
self-imposed restrictions placed or imposed by any Union.
ARTICLE 12. DIRTY WORK
Dirty Work - Dirty work shall be recognized by the Employer and
Union as work within the shipyard industry as conditions more
dirty, disagreeable, or unpleasant than normal shipyard working
conditions.
It is the intent of the parties to limit dirty work pay to
situations that are exceptionally dirty relative to normal
shipyard work.
The employer shall provide, at no cost to the employee(s),
protective clothing for all employees assigned unusually dirty
work.
The company shall determine, in advance, what areas warrant dirty
work pay. However, if a dispute arises, a craft steward or
committeeman, a company representative, and a safety
representative shall make the determination of dirty work pay
prior to work commencing.
It is not the intent of this provision to discontinue tank
cleaning or other cleaning services.
Employees required to work where unusually dirty conditions exist
relative to normal shipyard conditions in tanks, bilges, sumps,
or under floor plates where oil or water has accumulated, or in
boilers, uptakes, or stacks, or in machinery spaces where
unusually dirty conditions exist, shall be paid at the overtime
rate for the entire period so employed.
Human Waste - Employees required to work in tanks, or break into
tanks or related wet or dry systems containing human waste, shall
receive one (1) additional hour of straight-time pay for each
hour worked, and shall continue to receive such penalty pay until
they are allowed to shower or clean up. Clean up shall be on the
Employer's time and shall be paid at the employee's regular rate
of pay for the day. This shall be in accordance with Article
16.6 (b).*
The employer shall make available, at no cost to the employees,
proper preventative care, including, but not limited to gamma
globulin shots, for hepatitis and other diseases caused by
exposure to human waste.
*It is understood by the parties that removal of tank covers
(under normal conditions) will not be covered by this Article.
ARTICLE 13. MAINTENANCE WORK
13.1 The Employer may use its own employees to perform repair,
alteration, new construction, and maintenance construction at its
facilities, and such employees will receive the wages and
conditions contained in this agreement. Employees will receive
such wages and conditions for all maintenance construction work
of five days or less on a specific project. If it were known by
the company that the project would exceed five days prior to the
commencement of the work, then construction rates will be paid on
all work hours performed.
ARTICLE 14. REPORTING PAY AND MINIMUM PAY
14.1 Employees starting a shift or called and starting to work
after the starting time of a shift shall receive not less than
four (4) hours pay for the first period of the shift; and if
required to continue on second period of the shift, they shall
receive pay for a full shift.
14.2 Employees required to report for work not continuous with
their regular assigned shift hours, or on Saturday, Sunday and
holidays, shall receive not less than four (4) hours' straight
time pay.
14.3 Employees required to report for work and not used shall
receive four (4) hours straight time pay.
14.4 The foregoing (14.1, 14.2 and 14.3) shall not apply where
an employee is not put to work because of bad weather or
breakdown on machinery, except that this shall not be construed
to cover failure to have work or vessel available.
14.5 Employees who voluntarily quit, lay off or are discharged
for cause shall be paid only for actual hours worked.
14.6 Employees not at work on the day a shutdown or layoff
occurs shall be considered to have received notification of such
shutdown or layoff that they would have received if they had been
working.
14.7 In the event the foreman requests the employee who has
reported for work at his regular starting time and in unworkable
weather to remain on the premises with the expectancy of starting
work later if the weather clears, such employee shall be paid for
such waiting time, which in no case shall be less than four (4)
hours pay at his regular rate of pay.
ARTICLE 15. JURY DUTY
15.1 An employee having seniority and on the active payroll,
having been regularly employed and required by law to serve as a
juryman shall upon satisfactory proof to the employer of such
service rendered, be reimbursed by the employer for his work time
lost on the basis of the difference between his straight time day
shift hourly job classification rate and his jury pay (excluding
travel allowance), provided, however, such employer reimbursement
shall not be applicable to any period of time during which said
employee-juryman did not perform work for the employer other than
when prevented from doing so solely because of said jury service,
and further provided that such employer reimbursement is, in no
event, to be applicable for a period of more than eight (8) hours
in a standard work day, nor more than five (5) days in a standard
work week.
15.2 In applying the foregoing, it is understood that if an
employee is called for jury service, responds to the call, and
loses time, but is not accepted for service or serves and is
relieved therefrom by the middle of his work shift, the employee
will be reimbursed by the employer for his work time lost on the
basis of the difference between his straight-time day shift
hourly job classification rate and his jury pay (excluding travel
allowance), provided he returns to his job immediately, and
promptly reports these facts to the employer; provided further
that if an employee works his regular shift in addition to
performing jury duty, he shall not be paid by the employer under
the provision of this article.
ARTICLE 16. SAFETY, SANITATION, VENTILATION AND PHYSICAL
EXAMINATION
16.1 The Employer will exert every reasonable effort to provide
and maintain safe working conditions and shall comply with all
federal and state Safety and Health Laws and Regulations. The
Unions will cooperate to that end and encourage their members to
work in a safe manner. To that end, a Safety Committee shall be
established to be composed of a minimum of three (3) and a
maximum of five (5) representatives designated by the Employer,
and a minimum of three (3) and a maximum of five (5)
representatives designated by the Unions, which committee shall
assist, make recommendations to and cooperate with the safety man
of the Employer. The employees designated for this committee
shall be employees who have knowledge of the practices of the
yard and who have worked for the Employer a minimum of one (1)
year. The functions of such committee shall be advisory only.
This committee should meet once a month on Employer's time with
minutes of the meeting prepared by the Employer and a copy
thereof furnished to the Unions. It should be understood, that
while the Union will cooperate and participate with the Company
in providing a safe work environment, it is Management's
exclusive responsibility to carry out the administration of the
Safety Program.
16.2 Safety: All staging, walks, ladders, gangplanks and safety
appliances shall be constructed and removed in a safe and proper
manner by competent shipwrights. On vessels that are moored
alone or abreast where the combined total of persons is 200 or
more, no less than two (2) gangplanks will be provided; any
combined totals of less than 200, at least one gangplank will be
used when practicable.
16.3 The Employer shall provide covered transportation with
sufficient seating accommodations for employees to be transported
to and from jobs away from the yard or shop. No material or
equipment not safely secured shall be transported in the same
compartment of the truck with employees. Trucks shall not be
overloaded.
16.4 The Employer shall furnish suitable guards around welders
for the protection of employees' eyes.
16.5 Prompt ambulance service and first aid to injured
employees shall be provided on all shifts and a safety man shall
be employed and made responsible for the proper enforcement of
safety rules. All First Aid personnel shall be identified and
signs indicating location of First Aid Stations shall be posted.
16.6 (a) An employee suffering an industrial injury who is
advised not to resume work by a Nurse, First Aid attendant or by
a Physician to whom he has been referred, shall be paid on his
usual basis, pursuant to the terms of this Agreement, to the end
of the shift on which the injury occurred. If such employee had
reported such injury immediately following its occurrence to the
Nurse, First Aid attendant or Physician and had completed working
during the shift during which he was so injured, and on the
following day, after reporting for work, is advised by the Nurse,
First Aid attendant or Physician not to continue work because of
said injury, he shall be paid to the end of said shift.
(b) When an employee's clothing or body becomes soaked or
contaminated with human waste, water or oil due to circumstances
beyond his control, and when the incident is properly reported,
the employee shall be given the opportunity on the Employer's
time to clean up and change clothing. When circumstances require
the employee to leave the yard or job site (outside job) he shall
be compensated (not to exceed two (2) hours) at the normal
straight time rate. If the incident occurs less than two (2)
hours before the end of the shift he shall be paid at the
straight time rate until the end of the shift.
16.7 The Employer shall notify the respective Union not later
than the end of the next regular working day of lost time
accidents to any of its members that necessitated confinement in
any hospital or clinic, providing the Employer has knowledge of
such confinement.
16.8 Sanitation:
(a) Suitable individual lockers with locks, washrooms and
drinking water shall be furnished by the Employer.
(b) All toilets and washrooms shall be kept in a clean and
sanitary condition, properly heated and ventilated, and adequate
quarters with heat and hot water shall be provided for employees
to change and dry their clothes. Lunch areas with benches and
tables shall be provided and shall be separate from toilet
facilities.
16.9 Where noxious or poisonous gases may accumulate, the
Employer shall provide proper protection and ventilation. Proper
lighting and ventilation shall be provided for all enclosed
working spaces. No unsafe spray painting shall be performed in
confined or restricted spaces.
16.10 Physical Examination: There shall be no Doctor's physical
examination nor age limit, except as required by law. Unless
required by law, no employee shall be compelled to pay hospital
or examination fees in the course of employment or as a condition
to secure employment. No applicant shall be unlawfully
discriminated against in employment as a result of a physical
exam. Pre-employment physicals shall be paid in full by the
company, but the applicant shall not be paid for his time. Blood
and/or urine tests shall not be part of the pre-employment
physical.
16.11 Where employees are assigned to work in confined spaces as
described by OSHA for shipbuilding, ship repairing and ship
scrapping as published in the Bureau of Labor Standards, frequent
checks for the employee's safety shall be made. If and as
required by OSHA, a blood and urine test will be provided by the
Employer at no cost to the employee.
16.12 Existing practices with respect to providing special
protective devices and equipment in order to protect employees
from injury will continue in effect during the term of this
Agreement. Where conditions of work are such as to require
special protective devices and equipment in order to protect
employees from injury, such devices and equipment will be
supplied by the Employer at its expense. Protective devices and
equipment so furnished shall not be taken from the property of
the Employer except with specific authorization for use while at
work for the Employer.
16.13 When an Occupational Hygienist is used, the Employer will
make available the person's name and address to the Union, upon
their request.
16.14 The Company and the Union agree on the objective of
maintaining a safe working environment, including maintaining a
work place that is alcohol and drug free. It is agreed that the
use, sale, distribution, or possession of illegal drugs or
alcohol on Company premises shall be the grounds for immediate
discharge. It is understood, however, that there shall be no
random testing on employees covered under this Agreement. It is
further understood that the Company will provide, at no cost to
the employees, an Employee Assistance Program, which includes
assistance through counseling for alcohol and drug dependency, as
well as other related personal and family problems that adversely
effect an employee's job performance, and that any disciplinary
action taken would be subject to Article 23, Grievance Procedure.
In order to clarify the language contained in 16.14 above, the
following is agreed to by the parties signatory hereto:
1. It is understood that drug testing may be part of the pre-
hire program. Any applicant that has failed a pre-hire test, who
demonstrates that he/she has been evaluated by a certified
treatment facility and has satisfactorily completed the treatment
that was recommended by the treatment facility, shall become
eligible for hire upon the successful completion of another pre-
hire drug test. The second test shall be at the employee's
expense.
2. It is also agreed that there will be no random testing for
drugs on employees; however, testing for drugs on employees may
be accomplished when the employer has reasonable suspicion to
believe that an employee may be under the influence of drugs or
alcohol. Reasonable suspicion must be based on specific personal
observations that employer representatives can describe
concerning the appearance, behavior, speech, or breath odor of
the employee. Reasonable suspicion must be based on direct,
first hand observations by at least two employer representatives
who shall have received training in substance abuse detection.
These observations shall be documented in writing at the time the
employee is sent to the clinic. The employer shall contact the
appropriate shop steward or Business Representative prior to the
testing of any employee. Documentation resulting in an employee
being tested will be provided in a timely manner to the
appropriated Union representative. Reasonable suspicion may not
be based solely on third party observations or reports.
3. Approval for employee drug testing must be for good reason
and be directed by the Manager of Personnel and Labor Relations
or his designated representative from the Personnel Department.
All positive results must be reviewed by a Medical Review
Officer.
4. Any employee with a positive drug test will be given an
opportunity, based on the circumstances, to enter the Employer's
E.A.P. Any employee who tests positive and who the Employer is
going to discharge will first receive a suspension pending an
investigation by management and the appropriate Union
representative.
5. A Joint Labor/Management Committee will be formed to monitor
the on-going effectiveness of the program and to make
recommendations for the improvement of said program. The
Committee will also be responsible to review and/or negotiate any
requirements dictated by new legislation that may be effected.
6. Any employer drug/alcohol testing policy must conform to the
Drug Free Workplace Act, Subtitle D of Title V of Public Law 100-
690, and the Federal Acquisition Regulation Interim Rule (DOD FAR
Supp 252.223-7500) implemented by the Department of Defense.
7. Testing for drugs on employees or pre-hire drug testing in
accordance with this Article will not be implemented until the
Joint Labor/Management Committee agree on the testing procedures.
8. Any and all costs of testing will be paid by the Employer.
9. Any drug testing program must apply to subcontractors as well
as employees. To this extent the requirements of the Drug Free
Workplace act and the Federal Acquisition Regulation Interim Rule
(DOD FAR Supp 252.223-7500) implemented by the Department of
Defense shall be part of all subcontracts issued at Todd.
10. Individual participation in this program shall be held in
the utmost confidence.
11. The employer will give the Joint Labor/ Management Committee
45 days notice of an intent to change the collection site and
laboratory used in the Drug Testing Program. Any new laboratory
will be NIDA Certified and will be open to inspection by the
Joint Labor/Management Committee.
ARTICLE 17. UNION REPRESENTATIVES
17.1 The Business Representatives of the various crafts shall
have access to the Employer's shipyard and shipyard shops by
applying for permission through the designated office, provided
they do not interfere or cause employees to neglect their work.
17.2 Shop Stewards: It is recognized by the Employer that Shop
Stewards are desirable for the proper administration of the terms
of this Agreement. The Employer also recognizes that it is
desirable that the person designated as Steward shall receive his
fair share of the work that he is qualified to perform. In no
event shall the Employer discriminate against a Steward in the
matter of overtime, layoffs, or rehires or discharge him on
account of the proper performance of his duties. Twelve (12)
hours advance notice will be given individually to the Steward if
he is to be laid off. Every effort shall be made to deliver such
notice during regular shift hours. However, notice of lay off
may be given during the off shift by telephone or telegram, for
circumstances beyond the control of the employer. There may be
designated by each Union one (1) Chief Shop Steward on each shift
who will be granted super seniority during his respective term of
office. Such Chief Shop Steward shall have at least one (1) year
of seniority and be qualified to perform the work available.
Shop Stewards shall have at least six (6) months of work
experience with the Employer as far as practicable. It is the
intent of the Union that Shop Stewards shall be selected with a
view to their having first-hand knowledge of the Employer's work
and the collective bargaining agreement.
17.3 The Employer will not in any way discriminate against any
shop steward or committee man for presenting any complaint,
dispute or grievance to their foreman or department head or to
the personnel department in the manner provided for in this
Agreement.
17.4 The Union shall advise the Employer of the name or names of
Shop Stewards currently elected or appointed. The full grievance
procedure as set forth herein shall be available to any Union
which feels that its Shop Stewards have been discriminated
against. It shall be the intention of the Employer not to allow
the congregation, by assignment, of several Stewards in one
designated work area, but to keep them, as reasonably as
possible, spread out in a manner to cover all the work areas of
their appropriate Union's jurisdiction.
ARTICLE 18. PAY DAY
18.1 Pay day shall be weekly and in no case shall more than five
(5) days' pay be held back. Employees shall be paid prior to the
end of the assigned shift, exclusive of the lunch period.
18.2 (a) It is the intent of the Employer that in case an
Employee is laid off, discharged, or voluntarily terminates his
employment, he shall receive his pay in compliance with state
law, but in no case longer than two (2) working days from the end
of the shift on which he was working.
(b) It is the intent of the Employer that any error in an
Employee's paycheck shall be corrected by the Employer within two
(2) working days from the time the error was brought to the
Employer's attention.
(c) The Employer, upon the request of an Employee, shall mail
the Employee's final paycheck to the address stated by the
Employee, provided that the Employee has returned or accounted
for all company-issued property.
18.3 Second shift employees are to be paid on Thursday each week
and third shift employees no later than Friday morning.
If Christmas Day and the day before/after Christmas Day, and
New Year's Day and the day before/after New Year's Day fall on
Monday and Tuesday, pay day shall be on Friday for all shifts.
ARTICLE 19 TRAVEL TIME, OUT OF YARD AND OUT OF TOWN WORK AND
TRIAL TRIPS
19.1 When employees are sent to work away from the yard or
regular place of employment, they shall be paid their regular
shift pay while traveling, except in the case of traveling to or
from the yard or regular place of employment before the regular
starting or after the regular quitting time of their shift; in
such cases they shall receive pay at the established overtime
rate.
19.2 If employees are sent to work out of town, they shall
receive first class board (meals), lodging and transportation.
Coach will be acceptable as first class air transportation.
19.3 If employees are required to travel on overtime days, they
shall be paid travel pay at the established overtime rate.
19.4 Not more than eight (8) hours pay shall be paid for travel
time in any one (1) day of twenty-four (24) hours computed from
the starting time of the employee's regularly assigned shift.
19.5 Out of Yard Work, Trial Trips, Traveling Time and
conditions shall be as presently agreed to by Employer and Local
Lodge of the Union, unless otherwise mutually changed. The
Employer shall notify the Union in advance of any scheduled Trial
Trips. The Union and the Employer will meet as necessary, to
work out (negotiate) an understanding on any current problems
that exist. Any such understandings require mutual agreement.
ARTICLE 20. WELDING
20.1 It is recognized that the autogenous processes of welding,
burning and silver brazing are tools of the trades signatory to
this Agreement, and the rates of pay shall be the same as the
trades affected. Employees required to take a test shall be paid
for the time consumed in the test, if they pass it successfully.
Whenever an employee is required to take a test, the Employer
shall notify the employee's local Union of the results of such
test in writing within thirty (30) days from the date of the
test. The letter will specify the agency and type of test, date
of test, and the name of the inspector or the individual
supervising the test. This letter will be signed by an
authorized company representative. These shall be individual
letters on each employee.
20.2 Where U.S. Certificate is required by the U.S. Coast Guard
or other recognized agency for welding on pressure vessels,
boilers and class 1 piping, as defined in the U.S. Marine
Engineering Regulations and Material Specifications, the rate of
pay shall be an additional thirty-five (35) cents per hour, over
and above the standard mechanic's rate, for all time assigned to
such certified welding jobs.
ARTICLE 21. APPRENTICE AND TRAINEE PROGRAM
21.1 In order that an adequate supply of competent, skilled
craftsmen shall be available at all times, it is agreed between
the Parties hereto that an Apprentice and/or Trainee program
including safety, shall be established by the craft Union and the
Employer. Such an Apprentice and/or Trainee program shall not
conflict with Federal or State Apprenticeship laws. All existing
Apprentice and Training programs shall remain in effect until
changed by mutual agreement of both parties.
ARTICLE 22. STRIKES AND LOCKOUTS BARRED
22.1 There shall be no lockouts on the part of the Employer nor
suspension of work on part of the employees. This Agreement is a
guaranty that for its duration there will be neither strikes nor
lockouts, and that all complaints, grievances or disputes arising
under its provisions will be settled pursuant to its grievance
machinery, Article 23 "Grievances and Complaints" and Article 24
"Arbitration of Disputes."
ARTICLE 23. GRIEVANCE AND COMPLAINTS
23.1 The grievance procedure shall be as follows:
STEP 1. The shop steward or committeeman shall call any
complaint, dispute or grievance to the attention of the foreman
or department head within five (5) working days from the time it
arises. If the complaint, dispute or grievance is not adjusted
within two (2) working days after it is presented to the foreman
or department head, the shop steward or committeeman shall report
such complaint, dispute or grievance in writing over the
signature of the complainant to his respective Business
Representative. Such complaint, dispute or grievance shall be
submitted to the personnel department's representative or other
official designated by the Employer over the signature of the
Business Representative within twelve (12) working days from the
date the complaint, dispute or grievance arose. However, this
does not preclude the Business Representative from reporting such
complaint, dispute or grievance directly to the personnel
department's representative or other official designated by the
Employer. Within five (5) working days after the personnel
department's representative or other official designated by the
Employer receives a communication in writing from the respective
Union alleging violations of this collective bargaining
agreement, the Employer shall reply to the communication, in
writing. Any settlement reached in Step 1 shall be final and
binding.
STEP 2. Within five (5) working days after the Employer
replies to the communication from the respective Union alleging a
violation or violations of this collective bargaining agreement,
a Business Representative of the Union and the Director or
Assistant Director of Personnel and Labor Relations or other
official designated by the Employer shall meet for the purpose of
adjusting such complaint, dispute or grievance. Any final
decisions reached by the Employer Representative and the Union
Business Representative shall be reduced to writing. Any
settlement reached in Step 2 shall be final and binding.
STEP 3. If no agreement is reached in Step 2 within ten (10)
working days, the parties may by mutual agreement, submit the
grievance in writing to a grievance panel composed of two members
from Labor, to be selected by the Union, and two members from
Management to be selected by the Employer, requesting a Grievance
Committee hearing or they may proceed to Step 4 of this Article.
The Committee members shall not be from the Union or Company
involved.
Any complaint, dispute or grievance not submitted in writing
requesting a Grievance Committee hearing, or not referred to the
next step of this grievance procedure within ten (10) working
days, shall be regarded as waived unless the parties otherwise
agree in writing. The Grievance Committee shall meet within ten
(10) working days of receipt of such request. A decision by a
majority of the Grievance Committee shall be final and binding on
both parties. This decision shall be reached by secret ballot.
In the event that the Grievance Committee fails to render a
decision within (10) working days from their first meeting date,
either party may within ten (10) working days give written notice
to the other party of arbitration. The parties may mutually
agree to extend the time limits.
STEP 4. In the event the grievance is not settled as above
provided, either party may submit the grievance within five (5)
working days following the expiration of the time limit provided
in Step 2 to the International President of the Union, or his
duly designated representative and a company representative duly
selected by the Employer, for consideration and possible
settlement. If a settlement is reached, it will be final and
binding upon the Parties and shall be reduced to writing.
STEP 5. If no satisfactory solution eventuates from Step 4
within twenty (20) working days, then either Party may within ten
(10) working days thereafter give written notice of arbitration
to the other Party.
23.2 Any complaint, dispute or grievance not brought up or
carried forward to adjustment or arbitration as provided for in
this Article shall, unless the Parties otherwise agree in
writing, be regarded as waived.
23.3 No employee shall refuse to work or otherwise curtail
production or engage in any slow down or interfere with
Employer's operation because of any complaint, dispute or
grievance which he may have.
23.4 If the Employer has any complaint, dispute or grievance
with any Union or any employee covered by this Agreement, the
Employer shall likewise avail itself of any or all of the
foregoing grievance procedural steps.
ARTICLE 24. ARBITRATION OF DISPUTES
24.1 In the event the Parties shall be unable to adjust any
complaint, grievance or dispute involving the express terms of
this Agreement, such complaint, grievance or dispute shall be
referred to an impartial arbiter selected from a panel, mutually
agreed upon by the Parties, in each respective Port. The panel
shall be utilized only in the Port selecting said panel. The
panel will consist of no more than five (5) and no less than
three (3) impartial arbiters. The panel may be modified from
time to time by mutual agreement of the Parties in each
respective Port. If the Parties are unable to agree on a
specific arbiter from the panel, then the Party desiring to
arbitrate shall send a request by mail to the Director of the
Federal Mediation and Conciliation Service requesting the
Director to furnish a list of five (5) arbiters. Each party
shall have the right to strike a total of two (2) names from the
list, and the right to strike first shall be determined by lot,
or as otherwise agreed by the Parties, and each party shall
alternately strike one (1) name. The name remaining on the list
after each Party has stricken two (2) names shall be the
impartial arbiter.
The Employer and the Union or Unions involved shall equally pay
the arbiter's fee, the cost of any hearing room and the cost of a
court reporter, if requested by the arbiter. All other expenses
shall be paid by the Party incurring such expense.
The decision of the arbiter shall be final and binding upon the
Parties. Such decision shall be limited to interpretation and
application of the express terms of this Agreement and shall not
change or add to any of its terms or conditions. In his
decision, the arbiter shall specify whether or not the decision
is retroactive and the effective date thereof.
24.2 Awards or settlements of grievances may or may not be
retroactive as the equities of each case may demand, but in no
event shall any arbitration award be retroactive beyond thirty
(30) calendar days prior to the date on which the grievance was
first presented to the Employer unless agreed to by both parties;
provided however, that this provision shall not have any
application to grievances pertaining to the payment of either the
fringe benefits provided for in this Agreement or the wage scales
for the various classifications set forth in Schedule "A" of this
Agreement.
ARTICLE 25. JURISDICTIONAL DISPUTES
25.1 The Unions agree that in the event any jurisdictional
dispute shall arise between the Unions signatory to this
Agreement, with respect to the jurisdiction of work on any
classification of employment, whether or not included in the
schedule attached hereto, such dispute shall be settled by the
Unions in accordance with the Jurisdictional Policy of the Metal
Trades Department, AFL-CIO as amended May 10, 1968, which
provides that pending the adjustment of a jurisdictional dispute
there will be no stoppage of work.
25.2 It is agreed that Unions involved in such jurisdictional
disputes shall be primarily responsible for the prevention of a
stoppage of work because of jurisdictional disputes.
25.3 It is the intent of the parties to maximize the
productivity and competitive position of the employer in order to
secure and stabilize the work force.
To help in achieving this mutual goal, the parties agree to a
program of craft assistance. It is the intent of the employer to
maintain the traditional craft functions within the yard;
however, it is recognized and understood that inefficiencies and
standby time are detrimental and are not desired by either party,
and are to be eliminated whenever possible.
In the event a union should desire to discuss a jurisdictional
issue, the employer agrees to discuss the matter with the crafts
involved.
Alleged abuse of this provision shall be subject to the
grievance procedure.
25.4 The provisions of this section of the General Agreement
shall be equally binding upon the Employer and the Unions.
ARTICLE 26. HEALTH, WELFARE AND PENSIONS
26.1 Effective April 1, 1993, the Employer will pay $3.71 on
actual hours worked to the applicable jointly administered Trusts
as allocated by the individual Unions. The allocation of monies
among the various benefit trusts may be changed at any time by an
individual union through the Pacific Coast Metal Trades District
Council by serving written notice upon the Employer. The change
in allocation for the trust(s) involved will be made effective
upon the next regularly scheduled payment date after receipt of
notice.
26.2 The Employer will pay additional fringe monies with
allocation of these fringe increases to be determined by the
International Unions, to apply to Health and Welfare, Dental,
Pensions or whatever other fringe an International or Local Union
may want the money to apply, with the exception of Holidays and
Vacation which must be applied uniformly to all crafts.
Increased fringe monies are effective as follows:
effective 4-1-94 $3.86
effective 4-1-95 $4.01
effective 4-1-96 $4.06
26.3 Failure to Make Payments. Upon the failure of the Employer
signatory to this Agreement to make any of the payments required
by this Article, the Unions, or any of them, may undertake
economic action against such defaulting Employer to enforce
prompt payment, and such action shall not be deemed to be a
violation of this Agreement or any of the provisions thereof.
26.4 It is the joint responsibility of Management and the
Unions, signatory to this Agreement, to instruct the Trustees of
the applicable Pension Plans to take appropriate action to
eliminate any unfunded liability that currently exists or
unfunded liability that develops during the term of this
Agreement as soon as practical.
ARTICLE 27. TOOLS
27.1 Employees will be furnished tools. They shall use all
reasonable care in the use of tools and return them to the
custody of the Employer when no longer used. Employees shall
have sufficient time prior to the end of each shift to put away
tools on the Employer's time.
Determination of sufficient time shall be at the Employer's
discretion.
27.2 If the Employer fails to furnish tools, then the Employer
shall pay each employee fifteen (15) cents per hour for tools
furnished by employees.
27.3 The Employer has the right to take action against those
employees who misuse property supplied to them by the Employer.
ARTICLE 28. WARRANTY OF AUTHORITY
28.1 The officials executing this Agreement in behalf of the
Employer and the Unions signatory hereto hereby warrant and
guarantee that they have the authority to act for, bind and
collectively bargain in behalf of the organizations which they
represent.
ARTICLE 29. SAVING CLAUSE
29.1 Should any part hereof or any provision herein contained be
rendered or declared invalid by reason of any existing or
subsequently enacted legislation or by any decree of a court of
competent jurisdiction, such invalidation of such part or portion
of this Agreement shall not invalidate the remaining portions
hereof; provided however, upon such invalidation the Parties
agree immediately to meet and negotiate such parts or provisions
affected. The remaining parts or provisions shall remain in full
force and effect.
ARTICLE 30. COST OF LIVING ALLOWANCE
30.1 For purposes of this Article:
(a) "Consumer Price Index" refers to the Consumer Price Index
for Urban Wage Earners and Clerical Workers (including single
workers) published by the Bureau of Labor Statistics, U.S.
Department of Labor (1967=100) for the U.S. City Average.
(b) "Consumer Price Index Base" refers to the Consumer Price
Index for the month of May, 1993 (The May Consumer Price Index is
customarily published by the Bureau by the last week of June).
(c) "Change in the Consumer Price Index" is defined as the
difference between (i) the Consumer Price Index Base and (ii) the
applicable Consumer Price Index, (MINUS ANY COST OF LIVING
ADJUSTMENT, IF ANY, PREVIOUSLY PAID).
(d) "Cost of Living Adjustment" is calculated as below and will
be made every three months based on the cumulative change in the
Index over the prior three month period, the first adjustment
being effective October 1, 1993, based on the difference between
the May 1993 Index and the August 1993 Index. Applying the same
formula as above the remaining adjustment dates are January 1,
1994, April 1, 1994, July 1, 1994, October 1, 1994, January 1,
1995, April 1, 1995, July 1, 1995, October 1, 1995, January 1,
1996, April 1, 1996 and July 1, 1996.
30.2 Effective on each Adjustment Date, a Cost-of-Living
Adjustment equal to 1 cent per hour for each full .4 of a point
change in the Consumer Price Index shall become payable.
30.3 (a) The continuance of the Cost of Living Adjustment
provided for in this Article is dependent upon the availability
of the Consumer Price Index in its present form. In the event
the Consumer Price Index in its present form becomes unavailable
for any reason, the Parties shall substitute by mutual agreement
any other official formula or publication issued by the United
States Government.
(b) The payment of any Cost of Living Adjustment will be made
within a reasonable time after publication of the applicable
Consumer Price Index and after a decision has been made to its
application in accordance with Section 30.5.
30.4 When the cumulative adjustment amount reaches sixty cents,
it shall be frozen for the life of this agreement.
30.5 The Employer agrees that any Cost of Living Adjustment may
be applied, all or in part, to wages or a new fringe benefit or
to improve an existing fringe benefit, as may be decided by a
majority of the Vice Presidents representing the International
Unions affiliated with the Pacific Coast Metal Trades District
Council. It is understood that the implementation of any such
decision as to any application of a Cost of Living Adjustment, or
part thereof, to wages will be on a uniform basis among all
employees represented by such International unions.
30.6 No adjustment, retroactive or otherwise, shall be made as a
result of any revision which later may be made in the published
figures for the Consumer Price Index for any month on the basis
of which the Cost of Living Adjustment in this Article shall have
been determined.
30.7 As soon as possible after the Consumer Price Index Base
(The Consumer Price Index for the month of May, 1993, which would
customarily be published by the last week of June, 1993) is
available, the parties will prepare and supplement this Agreement
with a schedule setting out the calculation of the foregoing
provisions.
ARTICLE 31. EFFECTIVE DATE AND DURATION OF AGREEMENT
31.1 This agreement shall become effective on April 1, 1993 and
shall continue in full force and effect until July 31, 1996, and
from and for year to year thereafter, unless either party shall,
at least sixty (60) days, but not more than ninety (90) days
prior to any anniversary date, notify the other party in writing
of any desire to make changes in or to terminate this Agreement.
31.2 If either Party gives notice to the other as herein
provided, representatives of the Employer and of the Unions shall
negotiate such proposed changes without unnecessary delay.
31.3 Practices, customs, understandings, agreements of
interpretation or agreements of any nature whatsoever, which have
been previously mutually recognized at Todd's Seattle Division by
the Employer and the Unions, whether expressly covered by this
collective bargaining agreement or otherwise, will continue in
effect unchanged until the expiration of this agreement, except
as specifically modified as provided herein or by mutual
agreement between the parties.
31.4 Yard Closure or Relocation: The Employer will give timely
notification (normally not less than sixty (60) days) to the
Puget Sound Metal Trades Council of any decision to close down
the Seattle Division of Todd Pacific Shipyards Corporation or
relocate its operations, and will negotiate with the Unions to
develop a course of action designed to minimize any adverse
impact on the members of the bargaining unit of such events.
SCHEDULE "A"
CLASSIFICATIONS 4/1/93 4/1/94 4/1/95 4-1-96
Carpenter Journeyman $15.00 $15.10 $15.20 $15.25
Sheetmetal Journeyman $15.00 $15.10 $15.20 $15.25
Painter Journeyman $15.00 $15.10 $15.20 $15.25
Gen Machinist Journeyman $15.00 $15.10 $15.20 $15.25
Outside Machinist Journeyman $15.00 $15.10 $15.20 $15.25
Tool Room Journeyman $15.00 $15.10 $15.20 $15.25
Pipefitter Journeyman $15.00 $15.10 $15.20 $15.25
Electrician Journeyman $15.00 $15.10 $15.20 $15.25
Warehousemen $15.00 $15.10 $15.20 $15.25
Truck Drivers $15.00 $15.10 $15.20 $15.25
Fork Lift Operators $15.00 $15.10 $15.20 $15.25
Op Engineer Journeyman $15.55 $15.70 $15.80 $15.85
Stat. Engineer Journeyman $15.00 $15.10 $15.20 $15.25
Prod. Material Department $15.00 $15.10 $15.20 $15.25
Shipfitter $15.00 $15.10 $15.20 $15.25
Rigger $15.00 $15.10 $15.20 $15.25
Dry Dock Rigger $15.00 $15.10 $15.20 $15.25
Welder $15.00 $15.10 $15.20 $15.25
Burner $15.00 $15.10 $15.20 $15.25
Laborer-On Shipboard Work $14.00 $14.10 $14.20 $14.25
Laborer-Off Shipboard Work $13.00 $13.10 $13.20 $13.25
Firewatch $ 9.00 $ 9.00 $ 9.00 $ 9.00
Sandblaster $15.00 $15.10 $15.20 $15.25
Tank Cleaner $15.00 $15.10 $15.20 $15.25
ALL CRAFTS
Apprentices Per Standards (1)
Helpers
Step I $10.00
Step II $11.00
NEW HIRES
Laborers
Step I $10.00
Step II $11.00
Step III Journeyman
Helpers
Step I $ 9.00
Step II $10.00
Journeyman
Step I $11.00
Step II $12.00
Step III Journeyman
CLASSIFICATIONS 4/1/93 4/1/94 4/1/95 4-1-96
Quality Control $15.30 $15.40 $15.50 $15.55
Layer-Out $15.25 $15.35 $15.45 $15.50
Loftsman $15.30 $15.40 $15.50 $15.55
Plannerman $15.50 $15.60 $15.70 $15.75
Optical Man $15.35 $15.45 $15.55 $15.60
Leadmen $1.20 above Journeyman
Quartermen $1.65 above Journeyman
No employee will suffer a reduction in pay by virtue of any
change in the new Labor Agreement.
STANDARDS
Journeymen and Apprentices:
1. Apprentices and trainees will convert from existing
percentages of the previous Journeyman's rate to same percentage
of new Journeyman's rate. The wage progression schedules
currently in use will continue until changed by appropriate
means.
2. The listing of or the deletion of classification in Schedule
A neither establishes nor changes jurisdiction as recognized
under the previous collective bargaining agreement's Schedule A.
3. Starting rates for all Journeymen mechanics hired after the
effective date of this Agreement shall be as follows:
Step I $11.00
Step II $12.00
Step III Journeyman
A new hire (Journeyman) may be hired into any of the above Step
rates; however, after working ninety (90) days, the new hire will
be reviewed as to his proper Step placement based on verifiable
skill and ability. The review board shall consist of an
industrial relations representative and the appropriate union
business manager with the foreman of the department acting in
advisory capacity. The Union(s) will be advised of the final
decision and shall have the right to grieve any placement with
which they disagree.
Any former employee requested by name for referral will be
placed immediately in Step III. Any Journeyman new hire who has
completed a state approved Apprentice/Trainee Program will be
placed immediately in Step III.
Journeyman new hires with 6,000 hours experience in related
industry as demonstrated through Union records will be placed
immediately in Step III.
Journeyman new hires shall progress from Step I to Step II
after 1,000 hours worked and from Step II to Step III after an
additional 2,000 hours worked. Journeymen may also be moved from
one Step to a higher Step based on a recommendation by the
foreman of the department and subsequent approval by the review
board.
Laborers: Laborers hired after the effective date of this
Agreement will be paid as follows:
Step I $10.00
Step II $11.00
Step III Journeyman
Laborers shall progress from Step I to Step II after 2,000
hours, and from Step II to Step III after an additional 2,000
hours. Laborers shall be paid at tank cleaner's and scaler's
rate while cleaning areas defined under Article 12 (Dirty Work).
Laborers shall be paid a premium of $.25 per hour while engaged
in removal clean-up, and disposal of in-place fiberglass,
asbestos and rockwool insulation.
Any laborer engaged in "on shipboard work" and using a tool
such as a grinder, sander or needle gun (note: for purposes of
this provision, brooms, mops and feather dusters will not be
considered tools) shall received an additional twenty-five cents
per hour on a while engaged basis.
Laborers using heavy pneumatic tools (e.g., jackhammers) will
receive $14.50 per hour on a while engaged basis.
Helpers: Helpers hired after the effective date of this
Agreement will be paid as follows:
Step I $ 9.00
Step II $10.00
Helpers shall progress from Step I to Step II after 2,000 hours
Memorandum of Agreement
It is the intent of the parties signatory hereto, to utilize
helpers for unskilled/semi-skilled work. Along this line a
committee shall be formed to review any abuse of the helper's
intended functions. Such committee will be comprised of two
management representatives and two Union representatives. It is
further understood that helpers are a separate seniority
classification. It is not the intent of the employer to hire
helpers to perform journeyman or laborer work.
There may be a ratio of one (1) helper to every five (5)
mechanics within each craft. No helper shall be upgraded to
journeyman without the mutual consent of management and the Union
effected.
Recalled Employees
Any employee on the payroll as of the date of ratification and
any employee with seniority recall rights as of the date of
ratification who is laid off and recalled during the life of this
agreement shall be paid at least the same base rate upon recall
as he was paid upon his layoff.
SCHEDULE "B"
Plannerman
Applies to hourly rated craftsmen only, who do this work when
assigned. It does not apply to technical or administrative
employees.
Layer-Out
The classification of Layer-out as contained in Schedule "A" of
the Master Agreement is a mechanic who must have a thorough
knowledge of blueprints, who can lay out patterns and/or develop
and transpose the work from the print to the metal. He must have
knowledge of parallel and conic development, as well as simple
triangulation. The Layer-Out rate is to apply to those employees
when they are performing work falling within the scope of this
classification on the following basis:
(a) Layer-Out work performed for any period less than four (4)
hours duration, a minimum of four (4) hours pay at the Layer-Out
rate.
(b) Layer-Out work performed for any period over four (4) hours
duration, a minimum of eight (8) hours pay at the Layer-Out rate.
LETTERS OF UNDERSTANDING
Travel Time and Out-of-Yard Work.
Traveling time and conditions shall be as presently agreed to by
Employer and Signatory Unions to this Agreement, unless otherwise
mutually changed.
Conditions as presently agreed to by Employer and Signatory
Unions in the respective ports are as follows:
Out-of-Yard Work and Trial Trips:
Traveling time and conditions shall be as presently agreed to by
Employer and Local Lodge of the Union, unless otherwise mutually
changed.
1. When employees are required to work at sea or are assigned to
vessels on trial trips, or vessels anchored off shore, they shall
receive regular shift pay, meals and room accommodations when
necessary.
2. If employees are required to work or stand by outside of
their regular assigned shift hours, or on Saturday, Sunday or
holidays, they shall receive the established overtime rate as
defined in Article 8.
3. If employees are required to remain on the vessel, not
working or standing by, in excess of their regular shift hours,
they shall receive pay for the actual hours aboard said vessel at
their regular straight time hourly wage, not to exceed eight (8)
hours in any twenty-four (24) hour period.
Out-of-Town Work, Puget Sound Area Only: When employees are sent
on jobs out of town the following conditions shall prevail:
1. They shall receive first class board, lodging and
transportation when required to remain away overnight. "Coach
will be acceptable as First-Class air transportation."
2. They shall receive travel pay at double time before and after
the starting and quitting time of their regular shifts, not to
exceed eight (8) hours at straight time in any one (1) day of
twenty-four (24) hours. On extended trips of more than one (1)
day they shall receive not more than eight (8) hours at straight
time in any one (1) day of twenty-four (24) hours.
3. Employees required to work or travel on Saturday, Sunday or
holidays or required to work overtime before or after the regular
assigned shift for the job shall be paid at the overtime rate as
defined in Article 8 of the Master Agreement.
Out-of-Yard Work, Puget Sound Area Only:
1. When men are required to work away from the yard or regular
place of employment, they shall be furnished free transportation
to and from the yard to the place of work and be paid the regular
shift pay while traveling for the duration of the job.
2. Employees required to travel outside of their regular shift
hours or on Saturday, Sunday and holidays shall receive the
established overtime rate.
3. On jobs of extended duration, the Metal Trades Council agrees
to meet with the Employer at his request to discuss the
practicability of reaching a mutual understanding on the matter
of having the employees report to the job site.
Trial Trips, Puget Sound Area Only.
1. When employees are required to work at sea or are assigned to
vessels on trial trips or vessel anchored off shore, they shall
receive regular shift pay, meals and room accommodations when
necessary.
2. If employees are required to work or stand by outside of
their regular assigned shift hours, or on Saturday, Sunday or
holidays, they shall receive the established overtime rate as
defined in Article 8.
3. On trial trips at sea of one (1) day or less duration,
employees shall receive regular shift pay except that overtime
rates shall be paid before the regular starting time and after
the regular quitting time of the shift on which the employee is
regularly employed until the employee is returned to the shop.
4. When the trial trip extends beyond the limits of one (1)
twenty-four (24) hour period and only one (1) shift is used, the
employee shall be paid at his regular straight time rate for the
first shift worked, and double time for hours worked or standing
by beyond his shift, with a guarantee of a minimum of twelve (12)
hours work (sixteen (16) hours pay) within each twenty-four (24)
hours.
5. Trial trips returning at a time that provided less than a
shift off, the employees required by the Employer to return on
their regular day shift, will be paid the overtime rate. If the
day shift employee is not required to work on his regular shift,
he will be provided work on the regular "second" or swing shift.
6. When two (2) shifts are used, the following conditions shall
prevail: When two (2) shifts are worked, the "first" or day
shift shall start at the regular established starting time
recognized by each yard and shall last twelve (12) hours.
Employees shall receive sixteen (16) hours pay at the established
day shift rate. The "second" or night shift shall start
following the end of the twelve (12) hours period for the "first"
or day shift and shall end at the regular established graveyard
shift quitting time recognized by each yard. Pay for the
"second" or night shift shall be as follows: The first four (4)
hours shall be at double the regular day shift rate. The
following eight (8) hours shall be paid at the regular day shift
rate plus $1.00 per hour.
To the extent possible, night shift employees and ship's crew
will be berthed in separate quarters.
All hands will be paid from the time they are required to
report aboard until the beginning of the next regular shift.
Thereafter, off shift employees will not be paid until the start
of their next regular shift. If the ship returns to dock prior to
the starting time of the normal day shift, workers will work
normal day shift and swing shift hours that day.
If the ships returns to dock after the starting time of the
normal day shift, day shift works (is offered) the twelve (12)
hour shift, and night shift works (is offered) a full twelve (12)
hour shift, hours being the same as while at sea for that day,
and will work normal shifts hours the following day.
7. When three (3) shifts are used, each shift will consist of
eight (8) hours with a minimum of twenty-four (24) hours straight
time pay.
8. First class board and lodging shall be furnished to all
employees at sea on trial trips.
Out-of-Town Work, Bremerton Area Only:
1. When employees are required to work away from the Seattle
yard of Todd Pacific Shipyards Corporation or regular place of
employment to the Bremerton, Washington Area, they shall receive
$18.00 per day for traveling. The $18.00 shall be payable for
each scheduled work day or fraction thereof. Employees shall
report directly to the job site (Bremerton) at the beginning of
their respective shift and shall be responsible for their own
transportation to and from the job site.
2. All out-of-yard work will be strictly on a volunteer basis
with most senior qualified employees having first opportunity of
refusal.
NEGOTIATED HOURS
In order to remain competitive in the ship repair industry on the
West Coast, the parties hereto agree as follows:
That special hours of work, such as those contained in the 1993
Matson Project Agreement (4 x 10's & 3 x 12's), may be
established by the Company for jobs that will exceed twenty one
work days in length. Such schedules will only be utilized for
those projects wherein the establishment of special hours will
improve and enhance the Company's bid proposal and contribute to
a possible contract award and in no event shall the special hours
be applied to any job less than twenty one working days in
duration.
However, it is also understood that each project is unique and as
such, specifics of the special arrangements must be discussed and
negotiated with the Puget Sound Metal Trades Council.
If in the event the Company and the Unions cannot come to an
agreement on the terms and conditions of the optional work week
the Company may invoke the attached Matson Agreement and will
abide by the terms set out in this agreement.
Letter of Agreement by and between the Puget Sound Metal Trades
Council
and the Seattle Division of Todd Pacific Shipyards Corporation
In order for the parties to apply the newly created language set
forth in Article 25 of the 1993 collective bargaining agreement
between the parties, certain understandings have been reached as
to the application of the paragraph relating to craft assistance.
These understandings and interpretations are set forth below.
Craft assistance shall mean a craft performing or assisting in
the performance of work items not traditionally assigned to
his/her respective craft for limited durations of time to
accomplish work incidental to that craft's main task.
Reduction of standby time shall mean the minimization of those
periods of time spent waiting for another craft to appear to
perform a task that is incidental to the main task being
performed and those limited periods of time spent waiting to
perform a task that is incidental to the main task being
performed.
It is the agreement of the parties to minimize standby time by
providing for the concept of craft assistance.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this _____ day of ________________, 1993.
EMPLOYER - The Seattle Division of Todd INTERNATIONAL UNIONS:
Pacific Shipyards Corporation
International Brotherhood of Boilermakers
By:
Title: General Manager By:
Carpenters International
By:
UNIONS: Electrical Workers International
The Metal Trades Department of the AFL-CIO By:
By:Laborers International
The Pacific Coast Metal Trades District Council
By:
By:Machinists International
Puget Sound Metal Trades Council By:
By: Operating Engineers International
By:
The Painters International
By:
Sheet Metal Workers International
By:
Teamsters International
By:
United Association of Plumbers International
By:
SUPPLEMENTAL AGREEMENT BETWEEN THE INTERNATIONAL ASSOCIATION OF
MACHINIST AND AEROSPACE WORKERS AND THE PACIFIC COAST
SHIPBUILDING AND SHIP REPAIR FIRMS
This supplemental Agreement effective April 1, 1993 modifies the
Document entitled "Agreement between the Seattle Division of Todd
Pacific Shipyards Corporation" and the Metal Trades Department of
the AFL-CIO, the Pacific Coast Metal Trades District Council,
the Local Metal Trades Councils and the International Unions
signatory thereto" as far as it relates to members of the
International Association of Machinists and Aerospace Workers,
AFL-CIO.
The following Articles and sub-Articles shall apply to Machinists
and to the IAM and AW in lieu of those contained in the Master
Agreement.
ARTICLE 3. NON-DISCRIMINATION, RECOGNITION, UNION SECURITY,
HIRING, SENIORITY
3.5 Seniority:
With a view to maintain the most harmonious relations possible
and the utmost teamwork between employees, work shall be
distributed as evenly as possible among regular employees in
their various classification. In all layoffs and re-employment,
the rules of seniority shall prevail, where seniors are
competent; provided that the employee shall not be considered as
eligible for seniority until he has worked in an established
represented classification for a period of ninety (90) cumulative
working days within a nine (9) month period. Jobs of less than
ten (10) working days' duration shall apply to accrual of
seniority.
As an exception to the above paragraph, seniority shall not
apply to recall or layoff for jobs of less than ten (10) working
days duration starting on the first day following the placing of
the order at the Union Hall for an Employee.
(a) The Employer has the responsibility to call the Union Hall
for Employees with seniority for jobs regardless of duration and
to layoff by seniority as far as is practical under this
exception.
(b) The provisions under this exception are only to give the
right to the Employee with seniority to reject a job offer of
less than ten (10) days. Further, there is no guarantee of pay
for days not worked.
(c) The Employer can call Employees for more than one (1) job in
the ten (10) day period or less.
(d) If a job is not completed in the ten (10) working days
duration and is needed to be extended from one (1) to three (3)
working days beyond the ten (10) day duration, the Employer is
not required to call seniority Employees who were not available
or who originally rejected the ten (10) day call back for that
period of time.
(e) The employee shall retain seniority rights after layoff for
a period of time equivalent to his length of service up to a
period of two (2) years.
(f) The employee shall lose his seniority rights for any one of
the following reasons: voluntary termination; discharge for
cause; failure to report from layoff within three (3) working
days after notification to report, on a seniority recall ten (10)
days duration or longer provided that the three (3) day period
specified in this paragraph shall be extended as necessary in
cases of verifiable sickness.
(g) No employee shall be discriminated against or jeopardized in
seniority standing or suffer any loss of employment on account of
membership or activity in the International Association of
Machinists and Aerospace Workers Union, so long as such
activities are not carried on during working hours so as to
interfere with production at the plant.
(h) Upon request by the Business Representative or the chairman
of the Shop Committee, once in each three (3) months period,
lists of employees in the bargaining unit with their dates of
employment will be furnished by the Employer.
(i) Leading men not working with tools may be retained out of
seniority. Leading men working with tools will be laid off and
recalled to work according to journeyman's seniority. A leading
man who is retained out of seniority, and works with tools, will
immediately be subject to application of seniority.
(j) Shop stewards shall be granted super seniority on the jobs
they are capable of performing during their respective term of
office. The present ratio system of representation shall not be
expanded, except by mutual agreement of the Union and the
Employer.
(k) The Parties agree that generally in layoffs, seniority will
apply. Under special circumstances employees may be retained or
recalled for overtime work on the basis of qualifications or
availability.
(l) The Employer shall not be allowed to use short term layoff
in order to circumvent the seniority provision of the bargaining
agreement.
ARTICLE 14. REPORTING PAY AND MINIMUM PAY
14.3 Employees required to report for work and not put to work,
shall receive four (4) hours straight time pay. After an
employee has been dispatched by the Union to report to the
Employer for work, whether the same or the following day, such
employee shall not have his work order canceled by telephone by
the Employer.
14.5 Employees who voluntarily quit, lay off or are discharged
for cause shall be paid only for actual hours worked and shall be
given written notice of termination if requested by the employee.
ARTICLE 24. JURISDICTIONAL DISPUTES
25.4 The Employer agrees that no reassignment of work will be
made unless in conformance with Section 25.1 above.
SCHEDULE "A"
Inside Machinist Only
Journeyman Base Wage Rate: (Machine Operators Only)
April 1, 1993 - $15.75 per hour
April 1, 1994 - $15.85 per hour
April 1, 1995 - $15.95 per hour
April 1, 1996 - $16.00 per hour
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
SUPPLEMENTAL AGREEMENT BETWEEN THE INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS AND THE PACIFIC COAST SHIPBUILDING AND SHIP
REPAIR FIRMS
PREAMBLE
The Agreement made and entered into April 1, 1993 between the
Seattle Division of Todd Pacific Shipyards Corporation" and the
International Brotherhood of Electrical Workers, Pacific Coast
Marine Council, Local 6, 46, 48, 76, 302 and 595, hereinafter
collectively called the "Union."
WITNESSETH:
The following articles and sub-articles shall apply in lieu of
those contained in the Master Agreement.
ARTICLE 1. SCOPE OF AGREEMENT
1.1 This Agreement shall cover all electrical production, repair
and maintenance employees within the bargaining unit (as defined
in NLRB Case 20-RC-2157, dated March 4, 1966) and shall apply to
all work and activities of the Employer in connection with the
construction, conversion, repair or scrapping of any vessel on
the Pacific Coast, including but not limited to dredges, floating
drydocks, offshore drilling vessels, barges, mobile drilling
platforms, plant equipment and all auxiliary equipment used in
conjunction therewith.
ARTICLE 22.2
That in accordance with past practice, it is understood that if a
seafaring union affiliated with the Maritime Trades Department,
AFL-CIO establishes a lawful primary picket line by reason of a
dispute affecting employees represented by the seafaring union
employed on a specific vessel on which work is to be performed by
a Pacific Coast Shipbuilders' Association shipyard no employee of
the shipyard shall be subject to disciplinary action for failure
to perform work on the struck vessel as distinguished from other
shipyard work.
ARTICLE 23. GRIEVANCES AND COMPLAINTS
23.1 Step 4:
Substitute "International Representative of IBEW" for
"International President" of the Master Agreement.
SCHEDULE "B"
Plannerman
Principal Duties: Check all electrical prints. Check and
monitor all revision notices (RNs) and Engineering change notices
(ECNs). Maintain percent progress reports. Coordinate work with
other craft plannermen as necessary. Prepare schedules and work
orders.
Qualifications: Full knowledge of craft work. Able to read and
understand blueprints.
SCHEDULE "C"
Layers-out
The classification of Layers-out as contained in Schedule "A" is
a Mechanic who must have a thorough knowledge of blueprints, who
can lay out patterns and/or develop and transpose the work from
the Print to the metal. He must have a knowledge of parallel and
conic development, as well as simple triangulation.
To qualify for Layers-out pay, the mechanic must be assigned to
do the layout of such compartments as C.I.C. rooms or computer
rooms on shipboard in new construction and conversion work.
Determining normal locations of such items as wireways, lights,
fixtures, junction boxes, and panels do not qualify as Layers-out
work.
(a) Layers-out work performed for any period less than four (4)
hours duration, a minimum of four (4) hours pay at the Layers-out
rate.
(b) Layers-out work performed for any period over four (4) hours
duration, a minimum of eight (8) hours pay at the Layers-out
rate.
SCHEDULE "D"
ELECTRONIC TECHNICIAN CLASSIFICATION
An electronic technician is one who normally through special
study and training has the knowledge and ability to understand,
analyze, test, service, repair and adjust electronic equipment.
The electronic technician shall perform trouble-shooting and
testing required on electronic equipment/devices for audio,
video, control circuits, remote and control instrumentation, etc.
an electronic technician shall receive .50 (fifty cents) per hour
over journeyman rate. This shall be an in use rate. It shall
not include wiring circuits from the source of supply to the
equipment power terminal or connection, installation, or mounting
of electronic equipment and ancillary components.
SCHEDULE "E"
MAINTENANCE AND CONSTRUCTION WORK
Maintenance work shall be performed at wage rates and conditions
herein established. Maintenance work shall consist of
maintenance of all yard and plant facilities, and temporary
services to vessel undergoing repairs or in the process of
construction.
The following work, for example, when performed by employees of
parties signatory to this Agreement, shall be paid for at the
prevailing wage rate for Building and Construction Trades in the
area where performed.
(a) The installation of any permanent new load center and branch
circuits therefrom.
(b) Any new permanent addition of a branch circuit extending 25
feet or more from an existing load center.
(c) The permanent extension or relocation of any existing
permanent branch circuit to an area outside of a 25 foot radius
of its original location.
(d) Any new addition, relocation, or replacement of lighting
fixtures involving ten or more fixtures in any given area.
(e) Any new permanent "under-pier" work requiring eight or more
manhours of labor.
(f) The installation of any new or relocation of existing
permanent major plant equipment such as air compressors, boilers,
cranes, electrical distribution switchboards.
SCHEDULE "F"
The following shall apply only to government contracts that use a
total ship test program. It shall be invoked only when Todd is
required to use test memos for Combat Systems Testing that
require government approval.
All rates shall be "in use rates" and shall be written in on the
timecard for actual time spent doing actual Combat Systems type
work.
These rates shall apply while performing the actual test or any
related aligning/grooming to make the system ready for operation
testing. This does not apply to installation, cabling, hook-up,
wire checking, meggering or "state 2 testing".
Personnel performing the agreed work shall be able to use/operate
all test equipment and tools necessary to align, calibrate, and
operate the required systems.
Combat Systems type work as defined shall apply to radar, sonar,
communication, weapon, guidance, surveillance, and countermeasure
systems as used by the government onboard combatants. The
following are not considered Combat System type systems: Gyro's
and repeaters, frequency converters/M.G. sets, signal lights
(including infrared), wind speed & direction indictors, doppler
speed log/pit sword, alarms, (unless integral to the equipment),
and dial or sound powered telephones.
Combat Systems Technician $.95
Combat Systems Leadman} In accordance with Combat Systems
Quarterman} Article 4, Section 2
COMBAT SYSTEMS TECHNICIAN
1. Operate equipment or systems.
2. Perform class "A", "B", "C", or 009-16 overhauls on
equipment.
3. Perform warranty and field service work in/or out of yard.
4. Research studies of equipment operational performances.
5. Research replacement material source.
6. Grooming, alignment, and calibration on equipment.
7. Initial light-off/start up of equipment system.
8. Troubleshoot and casualty repair equipment.
9. Perform test and evaluations in accordance with test
documents.
10. Perform evaluations of test criteria and/or test equipment.
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
SUPPLEMENTAL AGREEMENT BETWEEN THE PACIFIC COAST MARINE
CARPENTERS' COUNCIL AND THE PACIFIC COAST SHIPBUILDING SHIP AND
REPAIR FIRMS
This Supplemental Agreement effective May 15, 1987 modifies the
Document entitled "Agreement between the Seattle Division of Todd
Pacific Shipyards Corporation and the Metal Trades Department of
the AFL-CIO, the Pacific Coast Metal Trades District Council, the
Local Metal Trades Councils and the International Unions
signatory thereto" as far as it relates to members of the Pacific
Coast Marine Carpenters' Council.
The following Articles and sub-Articles shall apply to Carpenters
in lieu of those contained in the Master Agreement.
ARTICLE 3.2 RECOGNITION
The Employer, pursuant to the decision of the N.L.R.B. case No.
20-RC-1327, recognizes the Pacific Coast Marine Carpenters'
Council as the sole and exclusive bargaining agent for all
employees who are members of the following Local Unions nos.
1149, 247, 470, 780, 2071, 562, 1184, 1532 and 1597 of the United
Brotherhood of Carpenters and Joiners of America, AFL-CIO.
ARTICLE 4. LEADING MEN
4.3 Add to existing:
(a) Working Leading men shall receive the Leading man rate over
and above the contract rate while engaged in work for which a
contract premium rate is paid. A Leading man on the jobsite
leading a crew composed of journeymen receiving such contract
premium rate also is entitled to Leading man pay over and above
the premium.
(b) It is agreed that when shipwrights are performing service
work for another craft they will be under the direction of the
supervision of that other craft. Shipwright crews performing the
production work of their own craft will be under their own
supervision.
ARTICLE 7. WAGE SCALES
7.5 Existing Wages and Conditions: It is agreed and understood
that this Agreement shall not operate to reduce any existing
wages that might be higher than those contained herein, nor shall
it be used to change any conditions existing prior to the signing
of this Agreement. However, if such conditions are in conflict
with this Agreement, the terms of this Agreement will prevail.
7.6 Job Classification Award: Should any award be rendered
giving a Union signatory to this Agreement the jurisdiction over
a job classification with a lesser wage rate there will be no
change in the wage rate for such classification.
ARTICLE 8. OVERTIME
8.9 Add: A reasonable opportunity to eat their lunch shall be
no later than one (1) hour following the end of their regular
established lunch period.
ARTICLE 10. VACATIONS
10.8 There shall be no vacation pay in lieu of a vacation.
Vacation pay accruing to the employee within his vacation year as
described above shall be paid to said employee upon completion of
his vacation year unless said employee is leaving the area, is
discharged, quits, or the Union makes written requests, in which
event he shall be paid in full such vacation pay as may have
accrued to him under the terms of this Article. When a temporary
employee is laid off, however, if he requests his vacation pay,
the Employer shall mail his pro rata vacation pay the following
work day to the address the employee designates.
ARTICLE 12. DIRTY WORK
12.3 Protective clothing will be made available when conditions
warrant men are assigned to dirty work.
12.4 Work performed for any period less than four (4) hours
duration a minimum of four (4) hours pay as set forth in Schedule
"A."
12.5 Work performed for any period over four (4) hours duration,
a minimum of eight (8) hours pay as set forth in Schedule "A."
12.6 The installation and removal of fiberglass, rockwool and
similar insulating materials shall be paid at the rate set forth
in Exhibit "B."
12.7 Employees required to do Carpenter work with lumber treated
with creosote or other toxic materials as described in the U.S.
Bureau of Labor Safety and Health Regulations for Ship repairing
and/or shipbuilding as published by the Bureau of Labor
Standards, shall receive the premiums set forth in Exhibit "B."
ARTICLE 23. GRIEVANCES AND COMPLAINTS
Step 4.
In the event no satisfactory solution eventuates from Step 2
within five (5) working days, then the Local Union Representative
shall process such complaint, grievance or dispute with the
Employer. A Representative of the Marine Council or
International Union may be present to assist the Local Union.
ARTICLE 25. JURISDICTIONAL DISPUTES
25.2 Void - does not apply.
25.4 The Employer agrees that work assignments will be made to
the employees covered by this Agreement in accordance with the
established practice.
ARTICLE 27. TOOLS
27.4 It is hereby agreed that in respect to the safekeeping of
tools, the Employer will furnish a designated place for the
employee's tools to be placed while the employee is off shift.
In the event any tools or tool boxes are stolen from this
designated place, or lost due to fire, the Employer shall replace
such tools.
27.5 It is further agreed that each employee will furnish an
inventory in duplicate of these tools, and a copy of such
inventory shall be filed with the personnel department and the
employee's superintendent. Any additional tools that may be
purchased by the employee will be added to such list at the time
they are brought into the yard. The inventory shall be used for
the purpose of tool replacement only.
27.6 All tools shall be sharpened on the Employer's time.
EXHIBIT "B"
Carpenters
Carpenters engaged while working with creosoted, toxic materials,
treated lumber or fiberglass, rockwool, Styrofoam or similar
insulation work, greasing and waxing of the ways and the cutting
or grinding by machine of Marinate, asbestos materials and
fiberglass shall be paid in addition to their rate of pay, fifty
(50) cents per hour.
Wood caulking including reefing out and replacing of glue or
rubber in seams shall be paid in addition to their rate of pay,
fifteen (15) cent per hour.
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
SUPPLEMENTAL AGREEMENT BETWEEN INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, IRON SHIPBUILDERS, BLACKSMITH, FORGERS AND HELPERS
AND THE SEATTLE DIVISION OF TODD PACIFIC SHIPYARDS CORPORATION
The Employer recognizes the International Brotherhood of
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and
Helpers as the exclusive Collective Bargaining Representative of
the employees included in the job classifications referenced in
this addendum, separate and apart from the Pacific Coast Metal
Trades Council, Puget Sound Metal Trades Council and the National
Metal Trades Department AFL-CIO.
Further, the parties expressly recognize that by signing this
agreement and addendum, the International Brotherhood of
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and
Helpers are not waiving their right to negotiate separate and
apart from the Pacific Coast Metal Trades District Council, Puget
Sound Metal Trades Council or the National Metal Trades
Department AFL-CIO.
Further, the parties expressly recognize that separate
notification pursuant to Article 31 of the Collective Bargaining
Agreement must be given to or received from either the
International Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers or their Subordinate Local 104,
Seattle, Washington should Todd Pacific Shipyards Corporation or
the International Brotherhood of Boilermakers, Iron Ship
Builders, Blacksmiths, Forgers and Helpers or their Subordinate
Local 104 wish to modify or amend this agreement.
Job classifications covered by this Agreement shall be:
Shipfitter, Welder, Burner, Rigger and Drydock Rigger.
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
Letter of Understanding Between the United Association of
Journeymen and Apprentices of the Plumbing and Pipefitting
Industry of the United States and Canada, AFL-CIO and the Seattle
Division of Todd Pacific Shipyards Corporation.
April 1, 1993 to July 31, 1996
The following Articles and sub-Articles shall apply to
Pipefitters and to the United Association in lieu of those
contained in the Master Agreement.
Article 10.8
There shall be no vacation pay in lieu of a vacation. Vacation
pay accruing to the employee within his vacation year as
described above shall be paid to said employee upon completion of
his vacation year unless said employee is leaving the area, is
discharged, quits, or the Union makes written request, in which
event he shall be paid in full such vacation pay as may have
accrued to him under the terms of this Article. However, this
written request will not be honored more than once every ninety
days. When a temporary employee is laid off the Employer shall
mail his pro rata vacation pay within two working days to the
address the employee designates.
Article 12.3
Protective clothing will be made available when conditions
warrant men being assigned to dirty work.
Article 12.4
The employer shall make available, at no cost to employees,
proper preventive care, including, but not limited to gamma
globulin shots, for hepatitis and other diseases caused by
exposure to human waste.
Premiums
P-1 Piping $.35 hour
High Pressure Silbrazers $.35 hour
Waveguides $.50 hour
Refrigeration $.75 hour
Benders $.35 hour
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
Letter of Understanding Between The International Union of
Operating Engineers Local 302, AFL-CIO and the Seattle Division
of Todd Pacific Shipyards Corporation.
April 1, 1993 to July 31, 1996
The following Articles and sub-Articles shall apply to crane
operators in lieu of those contained in the Master Agreement.
Article 13 Maintenance Work
The employer shall pay outside scale per AGC/Local 302 master
labor agreement for all work on maintenance projects when the
crane operator(s) are assisting contractors or crafts being paid
outside construction scale.
Schedule "B"
(a) A crane operator can make two (2) moves involving two (2)
pieces of equipment in one shift. For each additional move, the
operator shall receive one (1) hour at the straight-time rate.
(b) A crane operator, while engaged in making a multiple crane
lift where two (2) whirley cranes are lifting simultaneously,
shall receive a premium of seventy-five cents (75) per hour
from hook-on to hook-off.
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
Letter of Understanding Between The International Brotherhood of
Painters Local 300 AFL-CIO and the Seattle Division of Todd
Pacific Shipyards Corporation.
April 1, 1993 to July 31, 1996
The following Articles and sub-Articles shall apply to painters
in lieu of those contained in the Master Agreement.
Article 21. APPRENTICESHIP AND TRAINEE PROGRAM
The parties agree to establish an apprenticeship program in
accordance with the applicable State standards.
SCHEDULE "A"
The individual painter working as the Hazardous Substance
Technician shall receive an additional $.50 per hour on an as
engaged basis.
SCHEDULE "B"
The Spray Painter rate ($.25 per hour) is to apply to employees
who are classified as Painters in accordance with Schedule "A" of
the Agreement. The Spray Painter rate is to apply to those
Painters when they are performing work falling within the scope
of this classification on the following basis:
(a) Spray painting work performed for any period less than four
(4) hours duration, a minimum of four (4) hours pay at the Spray
Painter rate.
(b) Spray painting work performed for any period over four (4)
hours duration, a minimum of eight (8) hours pay at the Spray
Painter rate.
For The Employer For The Union
By: By:
Title: Title:
Date: Date:
Exhibit 10-13
M.V. TILLIKUM RENOVATION
CONTRACT NO. 00-4173
INTRODUCTION
THIS CONTRACT (the "Contract") is made and entered into as of
this 10th day of May, 1993, between Todd Pacific Shipyards
Corporation (the "Contractor"), a corporation authorized to do
business in the State of Washington with its principal place of
business located at 1801-16th Avenue SW, Seattle, Washington
98134 and the State of Washington Department of Transportation,
Marine Division, operator of Washington State Ferries (said
Division referred to herein as "WSF") with the headquarters
offices located at Coleman Dock/Pier 52, 801 Alaskan Way,
Seattle, Washington 98104-1487.
WHEREAS, WSF desires to contract for the renovation of the auto
ferry M.V. TILLIKUM Official Number 278437 (the "Vessel" or
"Ship"); and
WHEREAS, the Contractor desires and is willing to renovate the
Vessel in compliance with the Contract Documents; and
WHEREAS, WSF agrees to pay for such renovation in accordance
with and subject to the terms contained herein;
NOW, THEREFORE, in consideration of the mutual and dependent
covenants contained herein and other good and valuable
consideration, the adequacy and receipt of which is hereby
acknowledged, WSF and Contractor agree as follows:
1. DEFINITIONS, ABBREVIATIONS AND INTERPRETATION OF TERMS
The following definitions, abbreviations and interpretations
are meant to assist the review of this Contract. In the event of
any instance where there is an irreconcilable inconsistency
between the definitions and abbreviations set forth in this
Article I and the use of said terms elsewhere in the Contract
Documents, then in that instance, but only in that instance, the
use of such definition, abbreviation or interpretation elsewhere
in the Contract Documents shall govern. Provisions contained in
Exhibits which are incorporated into the Contract may use
different defined terms than those used in the Contract itself.
1.1. Definitions
1.1.1. Addenda shall mean those documents identified as
Addenda [Nos. I - 14] issued by WSF through the date hereof as
supplements to the material entitled "M.V. Tillikum Bid Package",
but only to the extent that such Addenda supplement, modify or
interpret other Contract Documents.
1.1.2. Assistant Secretary shall mean the Assistant Secretary
for Marine Transportation of the State.
1.1.3. Authoritative Agencies shall mean, with respect to any
particular aspect of the Contract Work, any governmental or quasi-
governmental agency including, but not limited to, the USCG and
ABS (i) whose approval must be obtained; (ii) which has
promulgated relevant Regulations; or (iii) which in any other
manner has authority with respect thereto.
1.1.4. Bid shall mean the offer of the Contractor submitted on
the prescribed Bid Form for M.V. Tillikum Renovation Washington
State Ferries Contract No. 00-4173, which offer has been accepted
by WSF.
1.1.5. Bid Documents shall mean all pre qualification and bid
information, instruments or documents, which were provided or
submitted by the Contractor to WSF to enable the Contractor to
have the Bid accepted by WSF.
1.1.6. Bid Package shall mean that package of information
released by WSF on January 25, 1993 entitled "M.V. Tillikum
Renovation, Bid Package, Contract 00-4173".
1.1.7. Change Order shall mean a written order issued on WSDOT
Form No. 421-003M in accordance with the procedures set forth in
Section 12.3.
1.1.8. Change Order Work shall have the meaning set forth in
Section 12.1.
1.1.9. Completion Dates (a) Substantial Completion Date is
the day the WSF Representative determines that WSF has full and
unrestricted use and benefit of the Vessel, from both the
operational and safety standpoints, with only minor incidental
work or correction or repair remaining for physical completion of
the Contract Work.
(b) Physical Completion Date is the day all work is
physically completed on the project. All documentation, required
by the Contract and required by law, does not necessarily need to
be furnished by the Contractor by this date. The WSF
Representative will give the Contractor written notice of the
Physical Completion Date. Such notice shall not imply WSF
acceptance of the Contract Work.
(c) Completion Date is the day all of the Contract Work,
including all non-physical Contract Work, is completed. The WSF
Representative will give the Contractor written notice of the
Completion Date. Such notice shall not imply WSF acceptance of
the Contract Work or the Contract.
1.1.10. Commission or Washington State Transportation
Commission shall mean the appointive body having authority over
State transportation matters as provided by law.
1.1.11. Contract shall have the meaning set forth, in the
Introduction paragraph of this Contract.
1.1.12. Contract Documents consist of the Contract with the
listed three (3) Exhibits attached thereto, the Specifications,
the Drawings, the Addenda, the Bid Documents, WSF approved
Prequalification Commitments of the Contractor, Work
Authorization Records, Change Orders, and duly executed
Amendments to the Contract.
1.1.13. Contract Drawings or Contract Plans are used
interchangeably and are those documents or drawings provided by
WSF and identified as such in the Specifications, which
illustrate design features of the Vessel from which no departure
in the development of Working Drawings is permitted, unless such
departure is specifically authorized in writing by WSF.
1.1.14. Contract Guidance Drawings are those drawings
identified as such in the Specifications, which illustrate
certain design features of the Vessel. They include such things
as plan, elevation, and section views; diagrams and sketches;
proposed arrangements and details; estimated bills of material
and symbols. These drawings do not necessarily depict, nor is it
intended that they depict, all features and details of the
systems or structures to which they relate. Contract Guidance
Drawings serve the purpose of providing information which, when
utilized in conjunction with the applicable requirements of the
Specifications, will assist in design development of the Working
Drawings. Deviation from the Contract Guidance Drawings is
permitted, providing that the intent and direction of the
Contract Documents is fulfilled. WSF must be notified, in
writing, of each intended deviation prior to or when submitting
Working Drawings.
1.1.15. Contract Security is the form of security furnished by
the Contractor in compliance with Article 28.
1.1.16. Contractor shall have the meaning set forth in the
Introduction paragraph of this Contract.
1.1.17. Contractor's Representatives shall mean those
individuals who have authority to make final decisions on behalf
of the Contractor. An individual is only a Contractor's
Representative to the extent of the scope of his authority. Each
Contractor's Representative shall have such power as is set
forth in the written appointment. Reference to the "Contractor's
Representative" for a particular aspect of the Contract Work
shall mean the appropriate Contractor's Representative charged
with responsibility for such matters in the written appointment.
1.1.18. Contract Time shall mean the time between the Delivery
Date and the Redelivery Date as adjusted from time to time in
accordance with the Contract.
1.1.19. Contract Work shall have the meaning set forth in
Section 2.1.
1.1.20. Correction Period shall have the meaning set forth in
Section 21.1.
1.1.21. COTF (Change Order To Follow) Order shall have the
meaning set forth in Section 12.2.3.1.
1.1.22. COTF Period shall have the meaning set forth in
Section 12.2.3.1
1.1.23. Definite Work Price shall have the meaning set forth
in Section 6.1.
1.1.24. Deleted Work shall have the meaning set forth in
Section 12.4.1.
1.1.25. Delivery Date shall mean June 3, 1993.
1.1.26. Department or Washington State Department of
Transportation shall mean the Agency authorized by the laws and
regulations of the State to administer transportation related
work.
1.1.27. Diagrammatic Drawings shall mean any Contractor-
prepared Working Drawing which represents piping, ventilation,
and electrical systems which indicate the relative functionally
and spatially correct, location of valves and fittings, branches,
and equipment which can be used as a guide to arrangement and
detail drawings. They contain complete information such as pump
and motor size and capacity; pipe, duct, or wire size; flow
direction, velocity and pressure, voltage and ampere rating,
pressure drops and other design criteria which will identify
major equipment and components, function and operating
characteristics, including all control and alarm settings.
1.1.28. Drawings shall mean the Contract Drawings/Contract
Plans, Original Drawings, Contract Guidance Drawings, and
Illustrative Drawings. The term "Drawings" does not include the
Working Drawings.
1.1.29. Drydock shall mean the Contractor's drydock located at
the Shipyard or such other drydock as WSF may approve in writing.
1.1.30. Eagle Harbor shall mean the WSF maintenance facility
located on Bainbridge Island, Washington.
1.1.31. Events of Default shall have the meaning set forth in
Section 22.1.
1.1.32. Final Acceptance of the Contract Work by WSF is
accomplished by the signature of the WSF Representative on a
properly executed and forwarded Final Contract Voucher
Certificate (WSDOT Form #134-146). The date of Final Acceptance
is indicated on the form by the final approving WSF
Representative and may not precede the Completion Date.
1.1.33. Final Contract Voucher Certificate shall have the
meaning set forth in Section 6.7.
1.1.34. Government shall mean the United States of America
acting by and through its cabinet secretaries and departments as
noted in the Contract Documents.
1.1.35. Illustrative Drawings are drawings which illustrate
how similar elements of the Contract Work was done on other
Washington State ferries and are made available for guidance and
information in developing details of the Contract Work. The
Contractor is not required to perform the Contract Work in the
manner set forth in the Illustrative Drawings.
1.1.36. Indefinite Quantity Progress Estimate shall have the
meaning set forth in Section 13.8.3.
1.1.37. Indefinite Quantity Progress Payment shall have the
meaning set forth in Section 13.8.1.
1.1.38. Indefinite Quantity Work shall have the meaning set
forth in Section 13.1.
1.1.39. Initial Price shall be the price identified in the
Bid as the "Total Contract Bid Price for the Award".
1.1.40. Original Drawings are drawings of WCN&S and PSB&D for
original construction of the Vessel which may be reviewed by the
Contractor for information only. WSF makes no representation as
to their rehabitability, accuracy, or relevance.
1.1.41. Owner Furnished Equipment or OFE shall mean equipment
identified on the Contract Documents a being provided by WSF.
1.1.42. Price/Time Proposal shall have the meeting set forth
in Section 12.2. 1.
1.1.43. Progress Estimates shall have the meaning set forth in
Section 6.3.
1.1.44. Progress Payments shall mean monthly payments made in
accordance with the terms of Article 6 subject to the terms set
forth therein.
1.1.45. Project Engineer shall mean the individual identified
by WSF as the Vessel's project engineer.
1.1.46. Quality Assurance Program (QA-P) shall mean the
quality assurance program described in Article 10.
1.1.47. Redelivery shall mean return of possession of the
Vessel to WSF in a complete, seaworthy, full operational
condition, fit to perform its intended services and with an of
the Contract Work performed (provided that Redelivery may occur
under such other circumstances as may be acceptable to WSF under
the terms of Article 17 hereof). Redelivery is part of the
Contract Work. Redelivery will normally not occur prior to the
Substantial Completion Date.
1.1.48. Redelivery Date shall mean April 7, 1994 as may be
modified by Articles 12, 13, 14, 15 and 19.
1.1.49. Regulations shall mean collectively all applicable
Federal, State and local laws, ordinances and regulations.
1.1.50. Retainage shall mean a 5% withholding from each
Progress Payment, Indefinite Quantity Progress Payment and each
payment for Change Order Work pursuant to RCW 60.28.01 1.
1.1.51. Schedules shall mean those schedules identified in
Article 8.
1.1.52. Secretary or Secretary of Transportation shall mean
the Secretary of Transportation of the State of Washington and
such agents as are authorized to act in his behalf.
1.1.53. Shipyard shall mean Todd Pacific Shipyards Corporation
which is the location where the Contract Work is to be performed
or at such other location as WSF may approve in writing.
1.1.54. Specifications shall mean the M.V. TILLIKUM Renovation
Technical Specifications, a List of Known Hazardous Materials,
and Technical Data.
1.1.55. State shall mean the State of Washington, acting by
and through the Department or the duly authorized representative
as designated in writing by the Secretary.
1.1.56. Superintendent shall be a person appointed by the
Contractor, which appointment shall be deemed to be the
Contractor's warranty that such person is familiar with and
capable of understanding the Contract Documents and is able to
supervise performance of the Contract Work. The Superintendent
shall have full authority to represent, act for, and make binding
decisions on behalf of the Contractor.
1.1.57. Subcontractor shall mean an entity to which the
Contractor subcontracts part of the Contract Work pursuant to the
terms of Article 25.
1.1.58. Surety shall mean any surety or bond company, or owner
of alternate security, that is responsible for any portion of the
Contract Security; or is bound with the Contractor and/or WSF to
ensure performance of the Contract, payment of all obligations
pertaining to the Contract Work, and fulfillment of such other
conditions as are specified in the Contract, or as otherwise
required by law.
1.1.59. Termination Claim shall mean the claim presented by
the Contractor pursuant to the terms of Article 23.
1.1.60. Total Contract Price shall mean the Initial Price as
adjusted from time to time pursuant to the terms of this
Contract.
1.1.61. Vessel or Ship are interchangeable throughout the
Contract Documents and are as defined in the First Whereas
Clause.
1.1.62. WATF (Work Authorization To Follow) Order shall have
the meaning set forth in Section 13.5.
1.1.63. WATF Period shall have the meaning set forth in
Section 13.5.
1.1.64. Warranty Deficiencies shall have the meaning set forth
in Section 2 1.1.
1.1.65. Weighted Factor shall mean a value assigned to a work
breakdown item in accordance with Section 6.3 which represents
the item's percentage of the total Contract Work other than
Indefinite Quantity Work and Change Order Work. The sum of all
the Weighted Factors shall equal one-hundred percent (100%).
1.1.66. Work Authorization Record shall have the meaning set
forth in Section 13.3.
1.1.67. Working Drawings shall mean all of the Contractor
prepared construction drawings, calculations, and sketches which
are necessary to accomplish the Contract Work, to demonstrate
intended compliance with the Contract Documents, to satisfy the
requirements of the Authoritative Agencies and to be used by WSF
for repair and maintenance. They shall consist of all drawings
and sketches prepared by or for the Contractor associated with
the Contract Work other than the Drawings. They shall include
system diagrammatics, arrangements and details; structure and
design analysis and calculations; documents dealing with
fabrications, installation of machinery and equipment; material
lists; and final as built Drawings. Additional requirements are
contained in the Contract Documents.
1.1.68. WSF shall have the meaning set forth in the
Introduction paragraph of this Contract.
1.1.69. WSF Expense shall have the meaning set forth in
Section 22.3.
1.1.70. WSF Representative or State's Representative shall
refer to the Vessel's Project Engineer and/or other authorized
appointee(s), who shall be so designated by WSF in writing. Each
WSF Representative shall have such power as is set forth in the
written appointment. Reference to the "WSF Representative" for a
particular aspect of the Contract Work shall mean the appropriate
WSF Representative charged with responsibility for such matters
in the written appointment.
1.1.71. Additional definitions relating to among other things,
Affirmative Action and Minority and Women-Owned and Disadvantaged
Business Enterprises are contained in the appropriate portions of
the Contract Documents.
1.2. Abbreviations
1.2.1. Associations and Miscellaneous
The following abbreviations shall have the meanings set forth
next to them when used in the Contract Documents:
ACM Asbestos Containing Materials
ABS American Bureau of Shipping
AISI American Iron and Steel Institute
ANSI American National Standards Institute
ANST American Society for Nondestructive Testing
ASTM American Society for Testing and Materials
ASME American Society of Mechanical Engineers
ASHRAE American Society of Heating, Refrigeration, and
Air Conditioning Engineers
AWS American Welding Society
CFR Code of Federal Regulations
DBE Disadvantaged Business Enterprise
DOLI Department of Labor and Industries
DOT United States Department of Transportation
EES Electrical Engineering Schedule
EOS Engineers Operating Station
EPA Environmental Protection Agency
FCC Federal Communications Commission
FHWA Federal Highway Administration
FTA Federal Transit Administration
IEEE Institute of Electrical and
Electronics Engineers
ISO Intentional Standards Organization
LCP Lead Containing Paint
MARAD Maritime Administration, Department of
Transportation
MBE Minority Business Enterprise
MCS Material Control Schedule
MPS Master Plan Schedule
MRS Master Renovation Schedule
MSS Manufacturers Standardization Society of the Valve
& Fittings Industry
NAS National Aerospace Standards
NEC National Electrical Code
NEMA National Electrical Manufacturers
Association
NPT National Standard Taper Pipe Thread
NVIC Navigation and Vessel Inspection
Circular
OFE Owner Furnished Equipment
PCB Polychlorinated Biphenyl
PPC Planning Progress Curve
PSB&D Puget Sound Bridge and Dredging Company
QAP Quality Assurance Program
RCW Revised Code of Washington
SAE Society of Automotive Engineers
SCR Silicone Controlled Rectifier
SNAME Society of Naval Architects and Marine Engineers
SOLAS International Conference for the Safety of Life
at Sea, 1974 with 1978 SOLAS Protocol and 1981 and
1983 SOLAS Amendments
SRIS Structural Repair Inspection Schedule
SSPC Steel Structures Painting Council
UL Underwriters' Laboratories, Inc.
USC United States Code
USCG United States Coast Guard
USPHS United States Public Health Service
WAC Washington Administrative Code
WBE Women's Business Enterprise
WCN&S W. C. Nickum and Sons
WMO World Health Organization
WSDOE Washington State Department of Ecology
WSDOT Washington State Department of Transportation
WSF Washington State Ferries
WSTC Washington State Transportation Commission
1.2.2. Items of Work and Units of Measurement
The Contract Documents may include common engineering and
construction abbreviations. The following list is not all
inclusive, but when the following abbreviations are used, they
shall have the meanings set forth next to them:
Al Aluminum
C Centigrade
Cfm Cubic Feet per Minute
Cfs Cubic Feet per Second
Cl. Class
C02 Carbon Dioxide
Diam. Diameter
DWG Drawing(s)
Est. Estimate or Estimated
Excl. Excluding
F Fahrenheit
Ft. Foot or Feet
Gph Gallons per hour
Gpm Gallons per minute
Hund. Hundred
In. Inch or Inches
Incl. Included
IPS Iron Pipe Size
L Liter
Lb. Pound(s)
LF Linear Foot (Feet)
LS Lump Sum
Mech Mechanical
Nat Natural
Pres. Pressure
Psi or Psig Pounds per Square Inch Gauge
PSIA Pounds per Square Inch Absolute
PVC Polyvinyl Chloride
Qtrs Quarters
Reg. Regulator
Sec. Section
St. Steel
Sq. Ft. Square Foot or Feet
Sq. Yd. Square Yard(s)
1.3. Interpretation of Terms
1.3.1. Approval - Unless the context is expressly to the
contrary, any reference in the Contract Documents to "approved"
or "approval" shall mean "approved by WSF" or "approval by WSF".
WSF approval does not relieve the Contractor of securing approval
of the Authoritative Agencies as required by the law, nor does it
relieve the Contractor of the obligation to meet the Contract
Documents, nor does it imply approval of deviations from the
Contract Documents.
1.3.2. Capitalized Terms - Terms used during the performance
of the Contract Work shall have the meaning assigned to them in
the Contract Documents as the context may require, whether or not
capitalized or identified as a defined term.
1.3.3. Compliance With, According To - Terms such as
"compliance with" or "according to" the Contract Documents shall
mean compliance with or according to all of the Contract
Documents subject to Article 4 hereof and subject to any
variation from certain of the Drawings as is permitted or
contemplated by the terms of the Contract Documents.
1.3.4. Days - Any reference to "days" herein shall be calendar
days unless otherwise specified.
1.3.5. Dollars or S - Any reference to "dollars" or use of the
symbol "$" herein shall be United States dollars.
1.3.6. Furnish - When the Contract Documents state that the
Contractor is to furnish an item, then, except with respect to
Owner Furnished Equipment, the Contractor shall be responsible
for manufacturing, purchasing, or otherwise procuring and
providing such item including all spare parts and documentation,
and deliver such item on board the Vessel prior to Redelivery.
With respect to Owner Furnished Equipment the Contractor shall
load the equipment from a WSF warehouse or storage facility
located in the greater metropolitan Seattle area and transport it
to the Shipyard (or such other site as may be appropriate for the
use of the equipment) for storage, safekeeping, and/or
installation. The Contractor shall inventory and inspect the
equipment and immediately report to WSF, in writing, any
shortages, damage and/or non-compliance with Contract Documents.
The Contractor shall care for the material as if the Contractor
had furnished it.
1.3.7. Good Shipbuilding Practice - The term "good
shipbuilding practice" refers to the renovation of the Vessel
consistent with those soundly conceived and engineered details,
plans, and practices which have proven to be effective and
reliable in the maritime industry for seaworthy vessels, which
will meet the details and performance requirements of the
Contract Documents and which are required to obtain and/or
maintain approval or certification of all Authoritative Agencies.
However, approval by any Authoritative Agency does not imply
acceptance by WSF, nor does it necessarily mean "good
shipbuilding practice."
1.3.8. He, She or It - These terms are used interchangeably
and in the sex neuter sense.
1.3.9. Install - When the Contract Documents state that the
Contractor is to install an item, the Contractor shall be
responsible for providing all labor, tools, equipment, and
material necessary to perform such installation in accordance
with manufacturer's instructions and as required by the Contract
Documents. For all installation, including installation of Owner
Furnished Equipment, the Contractor shall provide all electrical
power, water service, lubrication, fighting, ventilation and
other facilities or means required for the installation, and
shall deliver to WSF complete and operable machinery, equipment,
or systems.
1.3.10. Or Equal - An "or equal" product is one which exhibits
the same size, weight, characteristics, performance, reliability,
maintainability and other salient features as the product
identified in the Contract Documents and which fulfill the
requirements thereof. The total performance of the "or equal"
product will be such that its use will not adversely affect the
intended performance or systems of the Vessel and will cause no
increase in required maintenance or accelerate the need for
premature replacement. Demonstration of an "or equal" status is
the sole responsibility of the Contractor. Any "or equal"
substitutions require written approval by the WSF Chief Naval
Architect. The approval of an "or equal" product by WSF does not
relieve the Contractor of resolving any problems or interference
which result from differences between the specified product and
the "or equal" product.
1.3.11. Provide - When the Contract Documents state that the
Contractor is to provide an item, the Contractor shall furnish
and install the item.
1.3.12. Remove - When the Contract Documents state that the
Contractor is to remove materials, equipment or components, the
Contractor shall be responsible for providing all labor, tools,
equipment, material and services required to disconnect all
electrical power, piping, couplings, and foundations; to move
ashore and safely store or dispose of such material, equipment,
and components as required by the Contract Documents. Removal
shall include all pipe hangers, clips, brackets, wiring, pad
eyes, and similar items which will not be reused during the
Contract Work. Remaining weld scars shall be ground
smooth and blended to the surrounding surface.
Disturbed areas shall be repaired consistent with surrounding
area.
2. SCOPE OF WORK
2.1. For purposes of performing the renovation contemplated
herein, the Contractor shall: (i) absent express provisions in
the Contract Documents to the contrary, furnish, provide, perform
and/or install (as the case may be) all services, labor, tools,
equipment, materials, transportation, and incidentals (as the
case may be) described in or contemplated by the Contract
Documents; and (ii) do everything required of the Contractor
pursuant to the terms set forth in, or incorporated by reference
into, the Contract Documents (all of which work to be performed
by the Contractor to be referred to as the "Contract Work").
2.2. The Contractor warrants that it has determined the methods,
materials, labor, and equipment required to perform the Contract
Work (other than such work as may be performed pursuant to
Article 12 and taking into account the cumulative amount of
Indefinite Quantity Work set forth in the Bid Documents) and that
the Initial Price is reasonable in view of the cost of such
methods, materials, labor and equipment. Any costs exceeding
those anticipated by the Contractor will not entitle it to
additional compensation except as may be allowed under Articles
12 or 13.
2.3. All Bid Documents are incorporated into and made a part of
this Contract by reference. All warranties, undertakings and
representations made by the Contractor in the Bid Documents shall
be deemed made again as of the date hereof.
2.4. The Contractor warrants that it has inspected the Vessel
and all its particulars to its satisfaction and has reviewed all
of the Contract Documents, including all of the Addenda, and all
other documents and materials which it deems necessary or
advisable to determine the nature and scope of the Contract Work
and to determine that the Contractor can complete the Contract
Work by the Redelivery Date. The Contractor warrants that it is
satisfied that the Contract Documents are sufficient in form and
substance to make such determinations with respect to the
Contract Work.
2.5. The Contractor shall perform the Contract Work in
accordance with the Contract Documents. The Contractor shall
provide all necessary or advisable planning, scheduling, design
development and engineering. The Contractor shall prepare all
Working Drawings, procurement specifications, purchase orders,
and other items and documentation as are required to supplement
and implement the information contained in the Contract Documents
in order to accomplish the substance and intent of the Contract
Work.
2.6. Except where expressly set forth to the contrary in the
Contract Documents, the Contractor is wholly responsible for
obtaining the approval and certifications of all Authoritative
Agencies as required, and the development, verification, and
submission of validated final as-built drawings.
2.7. The Contractor warrants that it has the skills generally
associated with an enterprise engaged in the business of ship
construction and repair, and undertakes to take no advantage of
any error or omission in the Contract Documents which would be
apparent to any such enterprise. The Contractor warrants that as
of the date hereof, it is not aware of any such error or
omission. In the event errors or omissions in the Contract
Documents are found which would prevent the Contractor from
completing the Contract Work in a manner consistent with all the
rules of the Authoritative Agencies, good shipbuilding practice
or other standards set forth in the Contract Documents, the
Contractor shall immediately notify WSF.
WSF will then make such corrections and interpretations as may be
necessary to fulfill the intent of the Contract Documents.
2.8. The Contractor shall use its best efforts to cooperate with
WSF, including, but not limited to, the WSF Representatives, in
every way possible.
2.9. WSF will deliver possession of the Vessel to the Contractor
at Eagle Harbor, at a mutually agreed time between 8:00 AM and
2:00 PM on the Delivery Date. The Contractor will acknowledge
delivery in writing by executing a letter prepared by WSF. Prior
to delivery, WSF will remove from the Vessel, all stores, spare
parts, hand tools and passenger and crew supplies. To the extent
possible, WSF will remove fuel oil and lube oil in tanks and
systems, and accumulated sewage, utilizing the Vessel's installed
equipment. The Contractor shall arrange and pay and assume all
liability for moving the Vessel from Eagle Harbor to any and all
locations where Contract Work will be performed. The Contractor
shall not enter into any transport or towage contract or similar
agreement under which liability is assumed by WSF and/or the
Vessel. The Contractor shall hold harmless and indemnity WSF in
respect of any and all claims for loss, liens, damage, fines or
expense, including legal costs, arising out of or in connection
with the movement of the Vessel.
2.10. The Contractor shall perform all dockside and drydock work
at the Shipyard.
2.11. The Contractor shall complete the Contract Work and shall
effect Redelivery in accordance with Article 17.
3. SPECIFICATIONS, DRAWINGS AND OTHER REQUIREMENTS
3.1. The Specifications are hereby incorporated into and made a
part of this Contract by reference.
3.2. Drawings
3.2.1. The Drawings are hereby incorporated into and made a
part of this Contract by reference, but only to the extent and
for the purposes contemplated by this Contract and the
Specifications as amended by the Addenda.
3.2.2. The Contractor is wholly responsible for developing all
of the Working Drawings necessary or advisable to perform the
Contract Work.
3.3. The Addenda are hereby incorporated into and made a part of
its Contract by reference.
3.4. The Contractor shall keep a complete set of the Contract
Documents and Working Drawings at the Shipyard and at the Drydock
at all times in an organized format readily accessible for review
by the WSF Representatives.
3.5. Compliance with Laws, Regulations and Codes
3.5.1. The Contractor warrants that it is familiar with the
Regulations.
3.5.2. As part of the Contract Work, the Contractor undertakes
that all Contract Work and the Vessel shall comply with the
instructions, directives and requirements of and, where required,
be approved by the Authoritative Agencies and pursuant to the
Regulations, including, but not limited to:
(a) Title 46, CFR;
(b) Title 33, CFR;
(c) WHO, "Guide to Ship Sanitation";
(d) ABS, "Rules for Building and Classing Steel Vessels";
(e) IEEE, Standard No. 45, "IEEE Recommended Practice for
Electrical Installations on Shipboard", except for new
electric motors which shall comply with 46 CFR 11
1.25; and
(f) applicable standards for electrical equipment and
fighting as published by UL.
3.5.3. Any misunderstanding or ignorance of the Regulations
does not relieve the Contractor of its obligations and shall not
be adequate justification for additional compensation or
extension of the Contract Time.
3.5.4. The Contractor shall obtain all required permits and
licenses and give or post any notices these require.
3.5.5. Where the Specifications require that any aspect of the
Contract Work conform to certain standards of the MARAD, USCG,
ABS, ASTK AISI, SAE, IEEE or other recognized agency, institution
or body, the applicable portions of those standards form a part
of the Contract, and that requirement shall be clearly indicated
on any purchase specification, order or other relevant documents
developed and issued by or for the Contractor.
3.5.6. Unless WSF states otherwise in writing, all items,
materials and work requiring USCG approval shall be provided or
made available by the Contractor to the appropriate USCG
Inspection Office in a timely manner such that the USCG can
conduct its review and issue its directive for changes or its
approvals so as not to delay the Contract Work on the Vessel.
3.5.7. Unless WSF states otherwise in writing, all items,
materials and work requiring ABS approval shall be provided or
made available by the Contractor to ABS in accordance with the
rules of ABS in a timely manner which allows ABS to conduct its
review and issue its directive for changes or its approvals.
3.5.8. Interpretation or representation by WSF of any laws,
regulations or ordinances as set forth in the Contract Documents
or otherwise, takes no precedence over the law, regulation or
ordinance itself and the Contractor shall satisfy itself as to
the true construction and content of such laws, regulations and
ordinances on a current basis.
3.5.9. Attached hereto as Exhibit I and incorporated herein
and made a part hereof by reference, is a document identifying
certain Regulations and/or setting forth contract provisions
required by, or which in the opinion of WSF, implement the intent
of the Regulations. Without limiting its general undertaking to
comply with all Regulations, the Contractor specifically agrees
to comply with the Regulations identified therein and will follow
and implement said Regulations in accordance with the procedures
and practices described therein.
3.5.10. ALL fees and charges of the Authoritative Agencies
associated with their duties as contemplated by the Contract
Documents shah be for the account of the Contractor. Except to
the extent that these fees may increase as a result of Change
Orders or as a result of authorized performance of Indefinite
Quality Work which, taken as a whole, is greater than the amount
described in the Bid Documents, all such fees are included in the
Initial Price.
3.6. The Contractor shall complete the Contract Work in
accordance with good shipbuilding practice. Where requirements of
the Contract Documents exceed the requirements of any
Authoritative Agency or good shipbuilding practice, the Contract
Documents shall prevail.
3.7. The extent of structural repairs is described as known at
the time of the initial release of the Bid Package. Additional
structural repairs or renewals recommended as a result of
inspections will be handled through Indefinite Quantity Work
procedures where possible. Structural work undertaken by the
Contractor which has not been specifically authorized by these
Contract Documents, or authorized by Work Authorization Record or
Change Order, shall be at the Contractor's risk.
3.8. All materials, machinery, equipment, and components
furnished by the Contractor shall be new, currently in
production, and currently supported by spare parts readily
available in the United States of America. All materials,
machinery, equipment, and components shall be of good commercial
marine quality, in full compliance with the Contract Documents,
the requirements of the Authoritative Agencies, and suitable for
the service intended. All equipment, materials, or components
used or installed in the Vessel shall be free from imperfections
of manufacture and from defects which adversely affect appearance
or serviceability.
3.9. It is not practicable for the Contract Documents to
enumerate all of the details, fittings or appurtenances required
to perform the Contract Work. Failure of the Contract Documents
as existing on the date hereof to outline or describe all of the
details of the Contract Work as described or contemplated therein
shall not relieve the Contractor of its responsibility to perform
such Contract Work (assuming the cumulative amount of Indefinite
Quantity Work performed equals the cumulative amount described in
the Bid) for the Initial Contract Price.
4. COORDINATION OF CONTRACT DOCUMENTS
4.1. All of the Contract Documents are essential parts of the
Contract and a requirement occurring in one is binding as though
occurring in all. They are intended to be complementary in their
description of the Contract Work.
4.2. There are no intentional conflicts or omissions in the
Contract Documents. The order of precedence of the Contract
Documents is as follows:
(a) The Contract;
(b) Technical Specifications;
(c) Contract Drawings
(d) Contract Guidance Drawings;
(e) illustrative Drawings;
(f) Technical Data;
(g) List of Known Hazardous Materials;
(h) Other Drawings; and
(i) Bid Documents.
If Addenda, Change Orders and Work Authorization Records are
issued they shall have precedence over the Specifications, the
Drawings and prior Addenda, Change Orders and Work Authorization
Records, but absent express language to the contrary, shall not
have precedence over this Contract
5. TOTAL CONTRACT PRICE
5.1. WSF agrees to pay the Contractor the sum of Seventeen
Million, Seven Hundred Fifty Eight Thousand, Thirty Eight Dollars
and 501100 ($17,758,038.50) (such figure as it may be adjusted
from time to time as provided herein to be referred to as the
"Total Contract Price", and the Total Contract Price as of the
date hereof to be referred to a the "Initial Price") for the
Contract Work.
5.2. WSF will make no adjustment in the Total Contract Price
because of any change in laws, ordinances or regulations, except
as specifically provided by the following:
(a) Changes in laws, ordinances or regulations within the
scope of the Revised Code of Washington ("RCW") 39.04.120; and
(b) changes in taxes on materials incorporated in or consumed
for construction of the Contract Work which are imposed by
Federal or State Government, or changes in the State Sales Tax,
provided that the aggregate amount of all such changes is greater
than $100.00 where:
(i) for items included in the original Contract Work, the
change takes place after the date of the Bid opening; or
(ii) for items covered by a Change Order, the change takes
place after the date on which the Contract or Change Order was
executed.
Compensation will be increased or decreased for the actual dollar
amount of changes in Federal or State taxes meeting the
requirements of this Section; provided, that the Contractor, if
requested by WSF, certify in writing that no amount for any such
change in taxes was included in the Initial Price as a
contingency reserve or otherwise; and; provided further, that the
Contractor allow WSF to audit its records to the extent necessary
to substantiate any claim for compensation under the provisions
of this section.
6. PROGRESS PAYMENT FOR THE WORK
6.1. Except as otherwise noted or agreed, payment of that
portion of the Total Contract Price set forth as Contract Item
No. I in the Bid (the "Definite Work Price") shall be effected
through monthly progress payments ("Progress Payments") subject
to the Retainage.
6.2. Progress Payments shall be made monthly for work completed
since the last application for payment. The day of the month on
which the Progress Payment is paid will be mutually agreed to by
the WSF Representative and the Contractor's Representative.
6.3. Before beginning the Contract Work, the Contractor shall
prepare a document in a form subject to WSF's approval, which
will give an itemized breakdown with Weighted Factors reflecting
labor, material, and subcontractor work totaling one hundred
percent (I 00%) of the Definite Work Price. Not less than 5
working days before each Progress Payment is due, the Contractor
shall present WSF with a document showing the progress of the
Contract Work by item number, with labor, material, and
subcontractor work, multiplied by Weighted Factor and all added
together to determine the current physical percentage of
completion of the Contract Work (the "Progress Estimate"). The
Progress Estimate is subject to approval by WSF who may change
the percentage if disagreement exists between WSF and the
Contractor. With submission of each Progress Estimate, the
Contractor shall include copies of the updated Schedules, each
prepared in accordance with the Specifications provided that if
the Specifications set forth an alternative timetable for
submission of any of the Schedules, the Specification shall
govern. Progress Payments will not be made absent timely
submission of Schedules.
6.4. The Progress Estimates are tentative and made only for the
purpose of determining Progress Payments. Progress Estimates
will not be evidence of progress or acceptability of the Contract
Work for any other purpose. Acceptance of any Progress Estimate
by WSF shall not constitute an admission by WSF as to the status
of the Contract Work. WSF may make any changes in Progress
Estimates which it deems to be proper and shall adjust its
Progress Payment accordingly. Without limiting the foregoing,
WSF may in good faith, determine that the Progress Estimate
percentage for a given month is less than it was for a previous
month and withhold or reduce any Progress Payment for said month.
6.5. Upon acceptance of the Progress Estimate, WSF shall make a
Progress Payment to the Contractor reflecting a percentage of the
Total Contract Price equal to the increase in the percentage of
completion between the Project Estimate for the prior month and
the Progress Estimate for the current month. Retainage is part of
the Progress Payment but is paid to a separate account
established in accordance with the Contractors instructions.
6.6. Payments for Materials on Hand
6.6.1. Progress Estimates may include the cost of materials
to be incorporated into the Vessel if said materials have been
paid for by the Contractor, meet the requirements of the Contract
Documents to the extent they are applicable and are delivered to
or stockpiled in the Shipyard or another storage site approved in
writing by WSF, and are receiving proper protection, preservation
and service in storage.
6.6.2. Payment for materials will be determined by the
Weighted Factors approved by WSF and shall include the
Contractors mark-up assigned to materials.
6.6.3. Progress Payments for materials on hand as specified
above shall not constitute acceptance, and any faulty material
discovered will be rejected even though partial payment therefore
may have been made.
6.6.4. The Retainage under this Contract shall be reserved by
WSF as a trust fund for the protection and payment of (a) the
claims of any person arising under the Contract; and (b) the
State with respect to taxes imposed pursuant to Title 82 RCW
which may be due from the Contractor. WSF shall reserve the
Retainage in accordance with the provisions of RCW 60.28.01 1.
6.7. WSF shall release and pay in full the fiends retained under
this Contract in accordance with the provisions of RCW 60.28.
Payment shall be made against a "Final Contract Voucher
Certificate" which the Contractor submits on the Completion Date.
The Final Contract Voucher Certificate shall be signed by the
Contractor, and shall constitute a release of all claims of the
Contractor against WSF and the State except such claims, in
stated amounts, as are expressly identified and excepted from the
Contractors certification in the Final Contract Voucher
Certificate.
6.8. Any payments due pursuant to Work Authorization Records
shall be made in accordance with Article 13 respectively and
shall not affect the payments to be made under this Article.
6.9. The Contractors rights under this Article to receive
Progress Payments and the Retainage are further subject to all
applicable terms of the Contract Documents and all relevant
provisions of law.
7. CONTRACTOR'S REPRESENTATIVES AND WSF REPRESENTATIVES
7.1. Contractor's Representatives
7.1.1. Prior to the commencement of the Contract Work, the
Contractor shall appoint in writing its Contractors
Representatives. Before starting work the Contractor shall
designate in writing a Superintendent.
7.1.2. The appropriate Contractor's Representative shall be
continually present at all sites where Contract Work is being
performed.
7.1.3. The Contractor shall remove incompetent, careless, or
negligent employees immediately upon written request of WSF, and
the Contractor shall immediately provide a suitable replacement.
7.2. Prior to commencement of the Contract Work, WSF shall
appoint in writing its initial WSF Representatives.
7.3. The appropriate WSF Representatives shall be kept advised
as to the progress of the Contract Work and shall be provided
free access to the Vessel or any parts of the Contract Work at
any time that Contract Work is in progress. Any questions
concerning responsibility or scope of authority should be
directed to the Project Engineer.
7.4. Questions or comments which may arise during the
performance of the Contract Work concerning the content, intent,
or other interpretation of the Contract Documents, as found
conditions in the Vessel or other circumstances which require a
response by the WSF Representative shall be submitted to the
appropriate WSF Representative. If the Contract Documents and the
appointments do not indicate the appropriate WSF Representatives,
the question or comment shall be submitted in writing to the
Project Engineer. The format for the submission form shall be
developed by the Contractor and the form submitted to the Project
Engineer for approval prior to its adoption for use in connection
with the Contract Work. The form shall provide space to identify
the Contract for dating and serialization, identification of the
particular provision of the applicable Contract Document being
commented on, a statement of the problem observation, or comment,
a recommended solution to the problem and a space for the WSF
Representative's reply. The individual preparing the submission
and the individual responsible for the performance of the work,
shall be identified. A reasonable response required date shall
be indicated, but such date does not constitute a contractual
requirement that response be made by that date.
7.5. The WSF Representative may utilize the same format and form
as the Contractor to initiate informal communication concerning
inspection observations, work 17 performance, and other similar
items.
7.6. Subject to Articles 14 and 15, the WSF Representative's
decision will be final on all questions including, but not
limited to, the following:
(a) quality and acceptability of materials and Contract
Work;
(b) measurement of Indefinite Quantity Work;
(c) acceptability of rates of progress on the Contract
Work;
(d) interpretation of the Contract Documents;
(e) changes in the Contract Time;
(f) fulfillment of the Contract by the Contractor; and
(g) payments under the Contract.
7.7. Facilities
7.7.1. The Contractor shall provide office, toilet, and shower
facilities including daily janitorial services and supplies,
convenient to the work-site for the exclusive use of the WSF
Representatives and the inspection staff. These facilities shall
be available from the time two weeks prior to delivery of the
Vessel through thirty (30) days after Redelivery of the Vessel.
7.7.2. The office shall be equipped with five (5) telephone
lines, two (2) connected at all times to an outside line that is
toll free to Seattle, one (1) outside line to the local area, one
(1) additional toll free Seattle line available for dedicated FAX
transmissions, and one (1) connected to the Contractor's internal
system, or to the local area if the Contractor does not have an
internal system. Telephone service shall be touch tone if
available.
7.7.3. The office shall have comfortable space for eleven (I
1) persons, including a separate space fitted with a latching
door dedicated for the use of the Project Engineer. The Project
Engineers space shall include and be of sufficient size to permit
the unrestricted use of, one (1) office desk w/chair, one (1)
computer desk w/chair, two (2) side chairs, one (1) four drawer
filing cabinet, and one (1) two- shelf bookcase. The shall be
furnished with the following:
NUMBER ITEMS
10 office desk w/chair;
1 computer desk w/chair;
2 drawing table, at least 72 inches long, w/stool;
10 4 drawer, legal size filing cabinet;
2 shelf bookcase;
1 conference table, at least 72 inches long;
10 side chair;
2 chalk or felt pen marking board, wall mounted,
at least 36 inches by 72 inches; and
2 cork-faced bulletin board, wall mounted, at least
36 inches by 72 inches.
7.7.4. The office shall have at least twelve (12) three- wire
grounded 120 volt AC outlets suitable for personal computers,
printers, calculators, adding machines, and other similar
equipment and devices.
7.7.5. The office space shall be heated, air conditioned,
maintained clean, and be at least comparable to those provided
for the Contractors staff.
7.7.6. WSF shall be provided with thirteen (13) clearly marked
parking spaces convenient to the office and well clear of grit-
blasting and painting areas dedicated to the exclusive use of the
WSF Representative and the inspection staff. WSF shall be
provided with facility access and parking permits as required.
8. SCHEDULES
8.1. The MRS, PPC, SRIS, NTS EES and MCS, are referred to
jointly as the "Schedules". The Contractor shall be responsible
for preparing and delivering the Schedules all in accordance with
the Contract Documents. Approval of any submitted Schedules or
any other schedule prepared by the Contractor shall not be
construed to assign responsibility of performance or
contingencies to WSF or to relieve the Contractor of its
responsibility to adjust manning, equipment and work schedules as
required to ensure completion of Contract Work within the
prescribed Contract Time.
9. WORKING DRAWINGS
9.1. When submitting Working Drawings for approval, the
Contractor shall state the latest date on which it wishes to have
the Working Drawings returned with WSF's comments and/or
approval; however, the failure of WSF to respond by such date
shall not be grounds for a modification in the Contract Time or
compensation. Working Drawings submitted to WSF for approval will
normally be acted upon within ten (10) working days of receipt;
however, circumstances may require additional time for WSF
approvals. Should WSF fail to return the submitted Working
Drawings within fifteen (15) working days after receipt thereof
and should the Contractor thereafter serve notice to WSF of the
need for the submitted Working Drawings, then one (1) week after
such notice has been served, the Contractor shall forthwith
proceed with all relative work as if the submitted Working
Drawings were approved without any comments.
9.2. The WSF Representative will review each Working Drawing
submitted. Any failure of the WSF Representative to find errors
or omissions in the Contractor's calculations, specifications, or
drawings shall not relieve the Contractor of its responsibility
in relation thereto.
9.3. Approval by the WSF Representative of the contractors
Working Drawings does not relieve the Contractor of details,
locations or interferences; nor does mutual agreement of
dimensions or details, locations or interferences relieve the
Contractor of the responsibility for the agreement and conformity
of his Working Drawings with the Contract Document; nor does it
relieve the Contractor of responsibility for compliance with the
Contract Documents or requirements of the Authoritative Agencies.
9.4. Any work undertaken by the Contractor prior to approval of
Working Drawings by the WSF Representative is at the Contractor's
risk including any and all costs of delays or disruptions
resulting from proceeding prior to approval.
10. QUALITY ASSURANCE PROGRAM
10.1. The Contractor will establish and maintain a QAP and within
twenty (20) days after the date hereof submit to the WSF
Representative, for approval, a QAP which specifically addresses
the Contract Work.
10.2. The QAP shall describe the quality assurance organization,
identify key personnel by name, provide contact telephone numbers
and:
(a) describe procedures for: (i) controlling engineering and
drawing development and adherence to invoked drawing standards;
(ii) design verification; (iii) minimize interference between and
among structures, piping, ventilation, wireways, and outfit and;
(IV) providing adequate and safe access for operation and
maintenance;
(b) describe the organization and procedures for inspecting
and checking work in progress for conformity to Drawings, Working
Drawings, Specifications, and Schedules;
(c) describe procedures for inspecting and checking work for
completeness and pretesting before the tests required by or
pursuant to Articles I I and 16; and
(d) describe procedures for compartment close-out after
repair, renovation, modification, and installations have been
completed.
10.3. The Contractor will provide samples of all quality
assurance tags, forms, and other documentation that will be used
to implement, maintain, and monitor the QAP for this Contract.
10.4. Quality Assurance is totally the responsibility of the
Contractor. Inspections, reviews and approvals by WSF and
Authoritative Agencies in no way relieve the Contractor of its
responsibility to assure the quality of Contract Work.
11. INSPECTIONS AND CERTAIN APPROVALS
11.1. The Vessel is to be renovated and equipped under the
inspection of, and subject to the approval of WSF and the
Authoritative Agencies.
11.2. Inspections, tests, measurements estimates, certifications
or other acts or functions performed by the WSF Representative
are recognized as being for the sole purpose of assisting WSF to
determine with reasonable assurance that the workmanship,
materials, rate of progress and quantities provided comply with
the Contract Documents. These acts or functions shall not be
construed as relieving the Contractor from its responsibilities
for full compliance with the Contract Documents and proper
performance of the Contract Work.
11.3. Without limiting the foregoing, the Contractor
acknowledges that the failure of the WSF Representative to
discover materials or workmanship not in accordance with the
Contract Documents shall not be deemed as acceptance of the
Contract Work or materials or as a waiver of the provisions of
the Contract Documents. No payment shall be construed as
acceptance of any Contract Work or material which is not in
compliance with the requirements of the Contract Documents.
Approval of any item will not in any case relieve the Contractor
of responsibility for satisfactory installation and operation of
any such item.
11.4. The Contractor is wholly responsible for properly
preparing and presenting all completed Contract Work for
acceptance and for giving adequate notice that the Contract Work
in question is complete and ready for inspection. Adequate notice
is at least one (1) working day prior notice to the appropriate
WSF Representative and as required by mutual agreement between
the Contractor and the Authoritative Agencies.
11.5. When submitting an item for approval, the Contractor shall
specifically call attention to all departures from the Contract
Documents, any previously approved Working Drawings and any
additional instructions received from the WSF Representative.
11.6. Workmanship and materials not meeting the requirements of
the Contract Documents shall be made to satisfy such
requirements.
11.7. Covered Work
11.7.1. If the WSF Representative requests it, the Contractor
shall remove or uncover such portions of the completed Contract
Work as may be directed. Should the Contract Work thus exposed or
examined prove acceptable to the WSF Representative, then, except
as provided otherwise herein, the Contractor may initiate a
Change Order providing that the uncovering, removing, and
replacing of the covering, or the making good of the parts
removed or repaired or replaced, will be paid for by WSF at
specified labor rates and material costs. Should the Contract
Work so exposed or examined prove unacceptable to WSF, the
uncovering, removing, or replacing of the covering and the making
good of parts removed, replaced, or repaired shall be at the
Contractors expense.
11.7.2. Notwithstanding the foregoing, any Contract Work that
is closed or covered prior to inspection and approval by WSF and
Authoritative Agencies shall be at the Contractors risk, whether
or not the Contract Work proves acceptable to WSF and the
Authoritative Agencies.
11.8. Subject to Articles 14 and 15, in the course of inspection
WSF's decision will be final on all questions.
11.9. Nothing in this Contract requires WSF to provide the
Contractor with direction or advice on how to perform the
Contract Work. If WSF approves or recommends any method or manner
for doing the Contract Work or producing materials, the approval
or recommendation shall not:
(a) guarantee that following the method or manner will result
in compliance with the Contract Documents;
(b) relieve the Contractor of any risk or obligations under
the Contract Documents; or
(c) give rise to any liability of WSF.
12. CHANGE ORDERS
12.1. WSF reserves the right to make changes in the Contract
Work within the general scope of the Contract Documents ("Change
Order Work") at any time during the progress of the Contract
Work. Change Order Work may include, but is not limited to:
(a) deletion of any portion of the Contract Work;
(b) changes in the Contract Documents;
(c) changes in the specified method or manner of
performance of the Contract Work;
(d) addition of new Contract Work;
(e) changes in WSF furnished facilities, equipment,
materials, or services; or
(f) directed acceleration or delay in the performance
of the Contract Work.
All Change Orders can only be authorized as provided in this
Article. As long as the Contractor follows the procedures set
forth in this Contract, it shall be entitled to request an
equitable adjustment in the Total Contract Price and/or the
Contract Time for performance of Change Order Work.
12.2. All Change Orders will be initiated through one of the
following procedures:
12.2.1. WSF may prepare a written order describing the Change
Order Work to be performed. Within the time period specified in
said order, the Contractor shall submit a price and time proposal
(a "Price /Time Proposal") to accomplish the desired work. The
Contractor may request additional time to prepare its Price/Time
Proposal. The WSF Representative's decision on any such request
shall be binding upon the Contractor. A Price/Time Proposal
shall include all items of direct and indirect costs associated
with the Change Order Work along with a cost breakdown including
man-hour breakdowns for the Contractor and each Subcontractor who
is expected to perform in a portion of such Change Order Work. In
the event that the Contractor contends that performance of the
Change Order Work will have an impact on the Contract Time, the
Contractor's Price/Time Proposal shall include a critical path
analysis in support of its claim; or
12.2.2. The Contractor may suggest a Change Order, describing
the scope of the work to be performed. Such suggestion shall be
in writing and shall include a Price/Time Proposal covering the
proposed Change Order Work. Where provisions in other Articles
of this Contract contemplate adjustments in the Total Contract
Price or Contract Time by Change Order, the Contractor shall be
responsible for promptly initiating such a Change Order pursuant
to this Section. WSF also may, at its discretion, initiate Change
Orders contemplated by such provisions in the Articles of this
Contract. WSF need not provide a Change Order if it determines
that such a Change Order is not warranted under the terms of the
Contract.
12.2.3. Change Orders derived from written or oral orders.
12.2.3.1. When a WSF Representative identifies work which
qualifies as Change Order Work but which the WSF Representative
believes must proceed immediately, the WSF Representative shall
issue a written or oral order to the Contractor. Such order (to
be referred to as a "COTF Order") shall contain the phrase,
"Change Order to Follow", and shall set forth a period in which a
Change Order will be issued (said period to be referred to as the
"COTF Period"). No oral or written order, instruction or
directive may be treated as a COTF Order unless it contains the
phrase, "Change Order to Follow".
12.2.3.2. During the COTF Period, the Contractor and WSF
shall negotiate the terms of a Change Order. In the event that
no Change Order is issued within the COTF Period, the Contractor
may protest the COTF Order, but shall continue performing the
work described in the COTF Order. If an agreement on the terms
of a Change Order can be reached, it will be prepared by WSF and
signed by both parties (which will be in substitution for the
procedures set forth in Section 12.3).
12.2.3.3. If the parties cannot agree on the terms of a
Change Order within the COTF Period, the WSF Representative will
provide the Contractor with an interim, unilateral Change Order
which limits price and man-hours. The interim, unilateral Change
Order will specify: (i) the date by which the Contractor must
submit a Price/Time Proposal; and (ii) a date by which a final
Change Order must be issued by WSF for the Change Order Work
described in the interim unilateral Change Order. The Contractor
shall not proceed with any work beyond the cost and man-hour
limits of the interim, unilateral Change Order prior to receipt
of a further Change Order. The WSF Representative may, in his
discretion, increase the dollar and man-hour limits or extend the
dates contained in the interim, unilateral Change Order.
12.3. Issuance of Final Change Order
12.3.1. The WSF Representative will review the Price/Time
Proposal provided by the Contractor. If the Contractor fails to
deliver the Price/Time Proposal in accordance with Section
12.2.1, the WSF Representative may proceed without it, in which
case, the WSF Representative's estimates of the matters to be set
out in the Price/Time Proposal shall be binding on the
Contractor.
12.3.2. The WSF Representative may then submit a proposed
Change Order to the Contractor. The Change Order will contain a
description of the Change Order Work, identify the Contract
Documents to be changed and identify the materials to be used.
The Change Order will include, where applicable, all impact,
delay, disruption or other indirect costs associated with the
Change Order Work. The Change Order will contain an equitable
adjustment in the Total Contract Price for the purposes of
determining an equitable adjustment to the Total Contract Price,
all labor hours, along with material and sub-contractor work
markups, shall be priced as set forth in Contract Item 2(b) on
Page 30 of the Bid; EXCEPT when any request, or aggregate of
pending requests, for equitable adjustment(s) seeks payment for
the equivalent to 500, or more, straight-time labor hours for
direct charge craft employees of the Contractor, then the hourly
labor rates for direct charge craft employees of the Contractor
for any such equitable adjustment(s) shall be priced at the labor
rates set forth in Contract Item 2(b)(1) on Page 30 of the Bid
(the "Labor Rates"), or at reasonable costs for the individual
components of those Labor Rates as defined in the text under Item
2(b) on Page 30 of the Bid, whichever is less. Whenever possible,
all Change Order Work will be priced in a manner substantially in
accord with the pricing for similar Indefinite Quantity Work.
Until such time as the cumulative amount of payment authorized
for Indefinite Quantity Work and Change Order Work equals the
total amount in Contract Item 2 on Page 2 of the Bid all costs
incurred in connection with Change Order Work shall be charged
against the amount set forth in Contract Item. 2. If the Change
Order is acceptable to the Contractor, both parties will sign the
Change Order. If the Contractor does not accept the proposed
Change Order, the Contractor will continue to negotiate the
Change Order with the WSF Representative. If, in the opinion of
the WSF Representative, negotiations are at an impasse, WSF may
proceed to take the appropriate action authorized under Section
12.3.3.
12.3.3. If the parties cannot agree on the terms of a Change
Order, WSF may (i) withdraw the proposed Change Order or (ii)
issue a final, unilateral Change Order. The final, unilateral
Change Order will contain an equitable adjustment in the Total
Contract Price and the Contract Time.
12.3.4. If the WSF Representative issues a final, unilateral
Change Order, the Contractor may protest such Change Order
pursuant to the provisions of Article 14.
12.3.5. In the event that the Contractor has performed Change
Order, and thereafter WSF does not issue a final Change Order
regarding such work, the Contractor shall be entitled to an
adjustment in the Total Contract Price and/or an adjustment in
the Contract Time as provided by, and subject to the limitations
of, the interim, unilateral Change Order.
12.4. Deletion of Contract Work
12.4.1. Before or after issuing a notice of deletion of
Contract Work, the WSF Representative shall initiate a Change
Order providing for that deletion (such work to be referred to
as "Deleted Work") as provided in Section 12.2. 1. The procedures
for issuance of a Change Order for Deleted Work will be the same
as those set forth in Sections 12.2 and 12.3 except as otherwise
provided herein.
12.4.2. In any Change Order for Deleted Work, the Total
Contract Price and Contract Time will be equitably adjusted
taking into account the following factors:
12.4.2.1. The Total Contract Price will be reduced to
reflect all savings resulting from the reduction in need for
materials and equipment. If materials or equipment have already
been purchased in connection with the performance of the Deleted
Work, WSF, at its discretion, may (i) keep the materials, making
no Contract material cost adjustment; or (ii) direct the
Contractor to return the materials, in which case the Total
Contract Price will be reduced (but never increased) by an amount
equal to the purchase price less any actual costs incurred by the
Contractor relating to the purchase and return of such material;
12.4.2.2. The Total Contract Price will be reduced by all
savings resulting from deductions for labor which would have been
needed to perform the Deleted Work. Deductions shall be priced
using rates bid by the Contractor, as set forth on Contract Item
2(b) on Page 30 of the Bid Form. The Total Contract Price shall
not be reduced to the extent labor costs were incurred by the
Contractor prior to its receipt of notice from WSF of the
deletion of Contract Work, or issuance of the Change Order for
deleted work, whichever first occurs- provided that in no event
shall the Contractor be allowed labor costs in excess of the
amount to which it would have been entitled had the Deleted Work
been performed;
12.4.2.3. The Contractor shall not be entitled to
anticipated markups for overhead and profits with respect to the
Deleted Work, and any change in the Total Contract Price shall
take such factor into account; and
12.4.2.4. The Contract Time shall be adjusted as the parties
agree. If the parties cannot agree, WSF will determine the
equitable adjustment for Contract Time. Such adjustment may be a
reduction in Contract Time.
12.5. During the negotiation of any Change Order, the Contractor
shall proceed promptly with the work as WSF instructs so as not
to delay Redelivery.
12.6. Any Change Order signed by the Contractor and the WSF
Representative shall constitute a final agreement between the
parties with respect to all adjustments in the Contract Time and
the Total Contract Price to which the Contractor may be entitled
for performance of the Change Order Work. Such adjustments will
be fun compensation for all Change Order Work described or
contemplated therein, including, but not limited to, compensation
for the cost the Change Order Work on unchanged Contract Work,
all resulting delay, local disruption, cumulative disruption,
acceleration and any other unspecified impacts. Payment for
Change Order Work shall be made monthly in the manner described
in Article 6 for Definite Work, or (ii) as otherwise agreed in
writing. The Contractor will submit a schedule of all Change
Order Work for which it claims it is entitled to payment along
with its monthly Progress Estimate. WSF may review such schedule
and make such payments as are due. All payments will be subject
to a Retainage which will be handled in substantially the manner
set forth in Article 6.
12.7. Except as provided in Section 28.5, all Contract security,
whether a bond and/or any alternate form of security, shall cover
and apply to all approved Change Orders as if the Change Orders
were in the original Contract; provided, in no event shall
ultimate liability upon the bond and/or alternate security device
exceed the original penal sum for that bond and/or alternate
security device unless additional Contract security is required
where a Change Order significantly increases the amount of WSF's
exposure to performance and/or payment loss. The need for
additional security will be made known to the Contractor as part
of the scoping of the work by WSF and will include notification
of any requirement for an increase in the amount of security
previously provided by the Contractor. Such notice shall specify
the acceptable form(s) and format of such additional security.
12.8. Extra work and materials furnished without a Change Order,
Work Authorization Record or other authorization as provided in
this Contract will be considered unauthorized and will not be
paid for by WSF. Upon order of WSF, unauthorized work or
materials shall be immediately remedied, removed, replaced or
disposed of at the Contractors expense.
12.9. Upon execution by WSF, all Change Orders shall
automatically be incorporated into and become part of this
Contract.
13. INDEFINITE QUANTITY WORK
13.1. Reference is made to the Indefinite Quantity Work
Provisions under Contract Item 2(a) of the Contractor's Bid.
Unless covered elsewhere in the Contract Documents, Indefinite
Quantity Work includes, but is not limited to, unit priced work
such as structural repairs, piping, insulation and structural
fire protection work including all materials and labor used in
that work.
13.2. The Contractor shall perform Indefinite Quantity Work at
the unit prices set forth in Contract Item 2(a) of the Bid.
13.3. Orders to perform Indefinite Quantity Work shall be
provided on a Work Authorization Record form provided by WSF. No
work shall be deemed Indefinite Quantity Work unless such work is
covered by a Work Authorization Record. All work ordered pursuant
to a Work Authorization Record shall be deemed to be Indefinite
Quantity Work. In the event that a WSF Representative instructs
the Contractor to perform work through some means other than a
Work Authorization Record and the Contractor believes such work
to be Indefinite Quantity Work, or in the event that the
Contractor believes that work ordered pursuant to a Work
Authorization Record is not Indefinite Quantity Work, the
Contractor may protest such action in accordance with Article 14.
13.4. Except as provided herein, no Indefinite Quantity Work
shall be performed prior to the issuance of a Work Authorization
Record covering such work. Any such work performed prior to
authorization in accordance with this Article shall be at the
Contractor's risk and expense.
13.5. When the WSF Representative believes that certain work
which is properly Indefinite Quantity Work should proceed
immediately, he shall issue a written or oral order to the
Contractor. Such order (to be referred to as a "WATF Order")
shall include the phrase, "Work Authorization to Follow" and
shall set forth a period in which a Work Authorization Record
will be issued (the "WATF Period"). No oral or written order,
instruction or directive will be treated as a WATF Order unless
it contains the phrase "Work Authorization to Follow". In the
event that a Work Authorization Record is not issued within the
time provided in the WATF Order, the Contractor may protest in
accordance with Article 14.
13.6. The Contractor shall not be entitled to an equitable
adjustment in the Contract Time for Indefinite Quantity Work
referenced in Contract Item 2(a) of the Bid for delay,
acceleration and/or disruption, or otherwise until the amount of
authorized Indefinite Quantity Work exceeds 125% of the total Bid
for those items and then only if the Work Authorization Record
for such Indefinite Quantity Work is issued after all similar
work has been completed.
13.7. The Contractor shall not be entitled to an adjustment in
Total Contract Price for Indefinite Quantity Work for delay,
acceleration and/or disruption, or otherwise, except as
authorized in Section 13.12.
13.8. The Contractor shall not be entitled to an upward
adjustment in price for those labor rates established in Contract
Item 2(b) of the Bid, whether for Change Order 10 Work,
Indefinite Quantity Work, or otherwise.
13.9. Where applicable, the Contractor shall make a request for
an extension in Contract Time or for change in Total Contract
Price relating to Indefinite Quantity Work by immediately noting
that request on the Work Authorization Record authorizing such
Indefinite Quantity Work. The WSF Representative will review such
request and, if appropriate, make an equitable adjustment in the
Contract Time and/or Total Contract Price by issuing a Change
Order pursuant to Section 12.3. In the event that the WSF
Representative does not agree to the Contractor's request for a
time extension, or a price adjustment, the Contract may protest
in accordance with Article 14.
13.10. Indefinite Quantity Work which has been authorized may be
deleted in whole or in part by the WSF Representative by issuance
of a new Work Authorization Record. In the event of such
deletion, WSF will pay the Contractor for those direct costs, if
any, necessarily and actually incurred by the Contractor in
anticipation of performing the Indefinite Quantity Work that has
been deleted or terminated. Any such payment may never exceed a
figure equal to: (i) the cost which WSF would have incurred had
such Indefinite Quantity Work been performed in accordance with
the Contract Document less (ii) the cost of materials which would
have been purchased to perform such work. For the purpose of
calculating material costs in (ii), with respect to any materials
which were purchased and returned, the cost of materials shall be
equal to the purchase price less any expenses incurred by the
Contractor relating to the purchase and return of such material.
13.11. Payment for Indefinite Quantity Work
13.11.1. Except as otherwise noted or agreed, payment for
Indefinite Quantity Work shall be effected through monthly
progress payments ("Indefinite Quantity Progress Payments").
13.11.2. Indefinite Quantity Progress Payments shall be made
monthly for Indefinite Quantity Work completed since the last
application for payment. Payment shall be on the same day of the
month on which Progress Payments are paid.
13.11.3. On the same day as the Progress Estimate is due, the
Contractor shall present WSF with a document showing the progress
of the Indefinite Quantity Work (the "Indefinite Quantity
Progress Estimate") by item number, covering labor, material and
subcontractor work.
13.11.4. The Indefinite Quantity Progress Estimates are
tentative and made only for the purpose of determining Indefinite
Quantity Progress Payments. Indefinite Quantity Progress
Estimates will not be evidence of progress or acceptability of
the Contract Work for any other purpose. Acceptance of any
Indefinite Quantity Progress Estimate by WSF shall not constitute
an admission by WSF as to the status of the Indefinite Quantity
Work. WSF may make any changes in Indefinite Quantity Progress
Estimates which it deems to be proper and adjust its Indefinite
Quantity Progress Payment accordingly.
13.11.5. Upon acceptance of the Indefinite Quantity Progress
Estimates, WSF shall make an Indefinite Quantity Progress Payment
to the Contractor reflecting the Indefinite Quantity Work
performed. All payments shall be subject to a Retainage which
shall be handled substantially as set forth in Article 6.
13.12. Adjustment of Indefinite Quantity Work Payments
13.12.1. After completion of the Contract Work, or at such
earlier time as WSF deems that all Indefinite Quantity Work has
been completed, a calculation will be made of the total payment
for all Indefinite Quantity Work. Subject to the limitations in
Section 13.12.2, an equitable adjustment in favor of either party
may be made to the payment for Indefinite Quantity Work in the
event either of the following circumstances exists:
13.12.1.1. if the total payment for Indefinite Quantity Work
charged to Contract Item 2 on Page 2 of the Bid under Section
12.3.2, exceeds one hundred and twenty-five (125%) percent of the
amount set forth in Contract Item 2(a) on Page 2 of the Bid, then
the price for the portion of Indefinite Quantity Work exceeding
one hundred twenty-five percent (125%) of that amount should be
subject to an equitable adjustment, or 13.12.1.2. if the total
payment for Indefinite Quantity Work charged to Contract Item 2
on Page 2 of the Bid under Section 12.3.2, is less than fifty
(50%) percent of the amount set forth in Contract Item 2(a) on
Page 2 of the Bid, then the price for Indefinite Quantity Work
should be subject to an equitable adjustment.
13.12.2. Any equitable adjustment made under Section 13.12.1
shall be subject to the following limitations:
13.12.2.1. any such adjustment shall price, where
applicable, the Contractor's direct craft labor hours, along with
material and subcontractor work mark-ups, as set forth in
Contract Item 2(b) on Page 30 of the Bid; EXCEPT where the
reasonable labor costs for direct charge craft employees of the
Contractor are less than those labor rates set forth in Contract
Item 2(b)(1) on Page 30 of the Bid, then those reduced
reasonable labor costs shall be used to price the adjustment in
lieu of the labor rates set forth in Contract Item 2(b)(1) on
Page 30 of the Bid.
13.12.2.2. no adjustment will be allowed for delay,
acceleration and/or disruption other than for labor actually
performed to complete the Indefinite Quantity Work which exceeds
the labor normally required to perform such Work.
13.12.2.3. other than normal mark ups upon material and
labor for work actually performed, no payment for loss of
anticipated profits win be allowed;
13.12.2.4. for claims under Section 13.12.1.2 the total
payment for Indefinite Quantity Work will not exceed fifty
percent (50%) of the amount set forth in Contract Item No. 2 on
Page 2 of the Contractors Bid;
13.12.2.5. no payment will be made for extended or
unabsorbed overhead to the extent that there is an unbalanced
allocation of such expenses among all of the Contract Work;
13.12.2.6. no payment for consequential damages will be
allowed because of any variance in quantities from those
originally shown in the Contract Documents; and
13.12.2.7. no adjustment shall be made in the Indefinite
Quantity Work unless the equitable adjustment is greater than
$10,000.
13.13. Notwithstanding any disagreement with respect to issues
covered by this Article but subject to the restrictions
contained herein, the Contractor shall proceed promptly with
Indefinite Quantity Work so as not to delay Redelivery.
13.14. Upon execution of a Work Authorization Record by WSF such
Work Authorization Record shall automatically be incorporated
into and become part of the Contract.
14. PROTEST BY THE CONTRACTOR
14.1. If the Contractor disagrees with any final, unilateral
Change Order, Work Authorization Record or any written or oral
order, direction, instruction, interpretation or determination by
a WSF Representative, the Contractor shall:
(a) Give a signed written notice of protest to the WSF
Representative at least one (1) working day prior to performing
the work;
(b) in the case of work suspension or delay caused by WSF as
described in 19.2 (b), no later than seven (7) working days after
such suspension or event of delay, give a signed written notice
of protest to the WSF Representative;
(c) supplement the written notice of protest within fifteen
(15) days with a written statement providing the following:
(i) the date of the protested action,
(ii) the nature and circumstances which caused the
protest,
(iii) the Contract Document provisions that support the
protest,
(iv) the estimated dollar cost, if any, of the protested
work and how that estimate was determined, and
(v) an analysis of the progress schedule showing the
schedule change or disruption if the Contractor is asserting a
schedule change or disruption; and
(vi) if the protest is continuing, supplement the
information required above upon request by the WSF
Representative. In addition, the Contractor shall promptly
provide the WSF Representative as soon as possible, and in no
event later than issuance of the Final Contract Voucher
Certificate, a written statement of the actual adjustment in the
Total Contract Price and Contract Time requested. To the extent
that the WSF Representative is unable to obtain accurate
information due to the Contractor's delay in providing such
information, the WSF Representative shall be entitled to make any
reasonable presumption with respect to such information, which
presumption may not later be contested or challenged by the
Contractor.
14.2. Throughout any protested work, the Contractor shall keep
complete records of costs and time incurred. The Contractor shall
permit the WSF Representative access at any reasonable time to
these and any other records needed for evaluating the protest.
14.3. The WSF Representative will evaluate all protests provided
the procedures in this Section are followed. If the WSF
Representative determines that a protest is valid, WSF will make
an equitable adjustment in the Total Contract Price and/or
Contract Time. No adjustment will be made for an invalid
protest.
14.4. Notwithstanding any protest, the Contractor shall proceed
promptly with the work as directed by the WSF Representative.
14.5. The failure of the Contractor to initiate, pursue and
evidence its protest of any final, unilateral Change Order, Work
Authorization Record, or any other order, direction, instruction,
interpretation or determination made by a WSF Representative in
accordance with all of the terms of this Article (including the
Contractor's duty to disclose all relevant information to the WSF
Representative) shall be deemed a waiver of its right to any
adjustment in the Contract Time and Total Contract Price and
shall constitute an accord and satisfaction with respect to all
issues relating to such matter, provided that such accord and
satisfaction shall in no way relieve the Contractor from
completing all of the Contract Work in accordance with the
Contract Documents.
15. DISPUTES AND CLAIMS
15.1. If the Contractor claims that it is entitled to an
adjustment in the Contract Time and/or Total Contract Price, and
provided that, the Contractor has pursued and exhausted all the
means provided in Article 14 to resolve a dispute, the Contractor
may file a claim as provided in this Article.
15.2. All claims of the Contractor shall be in writing, filed
with the WSF Representative as soon as possible, and in no event
later than the issuance of the Final Contra Voucher Certificate.
All claims should be in sufficient detail to enable the WSF
Representative to ascertain the basis and amount of the claim.
All claims shall be submitted to the WSF Representative. As a
minimum, the following information must accompany each claim
submitted:
15.2.1. A detailed factual statement of the claim providing
all necessary dates, locations, and items of work affected by the
claim.
15.2.2. The date on which facts arose which gave rise to the
claim.
15.2.3. The name of each WSF individual, official, or
employee and each Contractor or Subcontractor employee or agent
involved in, or knowledgeable about, the claim.
15.2.4. The specific provision of the Contract Documents
which support the claim and a statement of the reasons why such
provisions support the claim.
15.2.5. A detailed statement setting forth all facts
supporting its position relating to the decision of the WSF
Representative, if the claim relates to a decision of the WSF
Representative which the Contract leaves to the WSF
Representative's discretion or as to which the Contract provides
that the WSF Representative's decision is final.
15.2.6. The identification of any documents and the substance
of any oral communications that support the claim.
15.2.7. Copies of any identified documents, other than
documents prepared b WSF and documents previously furnished to
WSF by the Contractor, that support the claim.
15.2.8. If an adjustment in the Contract Time is sought:
(a) the specific days and dates for which it is sought
(b) the specific reasons the Contractor believes a time
adjustment should be granted;
(c) the specific provisions of the Contract under which it
is sought; and
(d) the Contractors analysis of its progress schedule to
demonstrate the reason for such adjustment.
15.2.9. If additional compensation is sought, the exact
amount claimed and a breakdown of that amount into the following
categories:
(a) labor;
(b) materials;
(c) overhead;
(d) Subcontractors claims (in the same level of detail as
specified herein); and
(e) other categories as specified by the Contractor or WSF.
15.2.10. A signed, dated and notarized statement to the WSF
Representative containing the following language:
Under the penalty of law for perjury or falsification, the
undersigned,
(name)
(title)
(company)
hereby certifies that the claim for extra compensation and time,
if any, made herein for work on this Contract is a true statement
of the actual costs incurred and time sought, and is fully
documented and supported under the Contract between the parties.
15.3. It shall be the responsibility of the Contractor to keep
full and complete records of the costs and additional time
incurred for any alleged claim. The Contractor shall permit the
WSF Representative to have access at all reasonable times to
those records and any other records as may be required by the WSF
Representative to determine the facts of contentions involved in
the claim. The Contractor shall retain those records for a period
of not less than three (3) years after Final Acceptance.
15.4. The fact that the Contractor has provided a proper
notification, provided a properly filed claim, or provided the
WSF Representative access to records of actual cost, shall not in
any way be construed as proving or substantiating the validity of
the claim.
15.5. The Contractor shall pursue administration of any claim
only with the WSF Representative until such time as WSF has
issued a decision.
15.6. All such documentation must be submitted promptly so as
not to delay or impede review by the WSF Representative. To the
extent that the WSF Representative is unable to obtain accurate
information due to the Contractors delay in providing such
information, the WSF Representative shall be entitled to make any
reasonable presumption with respect to such information, which
presumption may not later be contested or challenged by the
Contractor.
15.7. The failure of the Contractor to initiate, pursue and
evidence its claim in accordance with all of the terms of this
Article (including the Contractor's duty to disclose all relevant
information to the WSF Representative) shall be deemed a waiver
of its right to any adjustment in the Contract Time and/or Total
Contract Price and shall constitute an accord and satisfaction
with respect to all issues relating to such matter, provided that
such accord and satisfaction shall in no way relieve the
Contractor from completing all of the Contract Work in accordance
with the Contract Documents. Full compliance by the Contractor
with the provisions of this Article is a contractual condition
precedent to the Contractors right to seek non-judicial or
judicial relief
15.8. Provided that the Contractor is in full compliance with
all the provisions of this Article and after the formal claim
document has been submitted, WSF will 29 respond, in writing, to
the Contractor as follows:
(a) within sixty (60) days from the date the claim is
received by WSF; provided however,
(b) if in the opinion of WSF the above time period is
unreasonable due to the complexity of the claim under
consideration, the Contractor will be notified within thirty (30)
days from the date the claim is received by WSF as to the amount
of time which will be necessary for WSF to prepare its response.
15.9. For the convenience of the parties to the Contract, it is
mutually agreed by the parties that any causes of action which
the Contractor has against WSF arising from the Contract shall be
brought within one hundred and eighty (180) days from and after
Final Acceptance; and it is further agreed that any such causes
of action shall be brought only in the Superior Court of Thurston
County. The parties understand and agree that the Contractor's
failure to bring suit within the time period provided, shall be a
complete bar to any such causes of action. It is further mutually
agreed by the parties that when any claims or causes of action
which the Contractor asserts against WSF arising from the
Contract are filed or initiated, the Contractor shall permit WSF
to have timely access to any records deemed necessary by WSF to
assist in evaluating the claims or action.
16. TESTS AND TRIALS
16.1. When the Contract Work is substantially complete and all
associated installation tests have been satisfactorily completed,
the Contractor shall conduct dock trials in accordance with the
Contract Documents.
16.2. After successful dock trials and when the Vessel is ready
in all respects for sea, except for minor items that have no
effect on the ability of the Vessel to be safely and legally
taken to sea, the Contractor shall conduct sea trials in
accordance with the Contract Documents.
16.3. To insure that the Vessel is in proper condition for
Redelivery, WSF, the Contractor and appropriate Authoritative
Agencies will complete a joint inspection of the Vessel at least
three (3) working days prior to the scheduled Redelivery. The
inspection shall include the testing of individual systems,
equipment, machinery, and components, both new and existing, to
demonstrate satisfactory workmanship, operation, and compliance
with the requirements, intent, and substance of the Contract
Documents. This inspection will not be made until the Contractor
has carefully checked, and has reported that all Contract Work
has been satisfactorily completed. Prior to Redelivery, the
Contractor shall correct any discrepancies arising from this
joint inspection.
17. REDELIVERY
17.1. The Contractor shall provide the attention and labor force
necessary to facilitate progress of the Contract Work so that the
Contract Work will be completed and Redelivery to WSF effected at
Eagle Harbor, between 8:00 AM and 2:00 PM on the Redelivery Date.
TIME IS OF THE ESSENCE IN THE CONTRACT. The Contractor shall
arrange and pay and assume all liability for moving the Vessel
from the Shipyard to Eagle Harbor for Redelivery. Contractor
shall not enter into any transport or towage contract or similar
agreement under which liability is assumed by WSF and/or the
Vessel. The Contractor shall hold harmless and indemnity WSF in
respect of any and all claims for loss, liens, damage, fines or
expense, including legal costs, arising out of or in connection
with the movement of the Vessel.
17.2. Upon Redelivery, the Vessel shall be clean throughout; all
Contractor tools, equipment and excess material shall be removed
from the Vessel. Bilges throughout the Vessel shall be clean,
dry, and oil free. The Vessel at Redelivery shall be in a
condition so that it can immediately re-enter its usual service,
and the Contractor hereby warrants that it has reviewed the
Vessel's usual service and is fully cognizant of the details of
such service. WSF and the Contractor will acknowledge Redelivery
by executing a letter to be prepared by WSF. This letter shall
be drafted by the WSF Representative and co-signed by an
authorized Contractor's representative indicating concurrence
with its contents. The Redelivery letter shall contain, but is
not limited to the following information:
(a) the date, time and place of Redelivery;
(b) the general condition of the Vessel at Redelivery;
(c) if WSF is willing to accept Redelivery prior to
completion of all the Contract Work:
(i) a description of any major discrepancies existing at time
of Redelivery and the deadline for their correction;
(ii) as an enclosure, a listing of any minor discrepancies
existing at the time of Redelivery with a schedule for their
correction; and
(iii) a description of any alleged discrepancy which is in
dispute at the time of Redelivery.
17.3. If the Contract Work is not finished on the Redelivery
Date, then at such time or any time thereafter, WSF, in addition
to any other rights it may have under this Contract, shall have
the option, but not the duty, to take Redelivery of the Vessel,
and treat all unfinished Contract Work (which may be work
commonly know as punch fist work) as Warranty Deficiencies
subject to completion and/or repair under Article 21 or on terms
otherwise acceptable to WSF. The return of the Vessel under the
terms of this paragraph shall constitute Redelivery subject to
said Warranty Deficiencies. Any Warranty Deficiencies which can
be identified at such time will be included in the letter
delivered at Redelivery provided that failure to identify any
Warranty Deficiency shall not prejudice WSF rights under Article
with respect thereto. Redelivery under the terms of this
paragraph may not occur before the Substantial Completion Date.
17.4. In addition to its rights under Section 17.2, WSF may take
redelivery of the Vessel under such terms as it instructs prior
to completion of the Contract Work, but after completion of a
sufficient portion of the Contract Work such that WSF deems that
the Vessel is fit for its intended service. Such redelivery shall
not be deemed Redelivery (provided, however, that provisions in
this Contract relating to towage in anticipation of Redelivery
shall apply to such redelivery), and the Contractor will remain
responsible for completion of the Contract Work (which may be
work commonly know as punch fist work) within the Contract Time,
provided that to the extent the Contractor's Work is delayed or
made more difficult as a result of this redelivery, the
Contractor shall be entitled to an extension in the Contract Time
and/or an increase in the Total Contract Price pursuant to a
Change Order.
17.5. In no event shall Redelivery be delayed or withheld
because of disputes between the Contractor and WSF.
18. FAILURE TO COMPLETE ON TIME
18.1. The Vessel is an operating unit of the complete WSF
system, and the Contract is a link in a chain of successive
renovations over the next decade. Delays inconvenience the
traveling public and interfere with and delay commerce. In view
of this fact, it is essential that the Contract Work be completed
at the earliest possible time, and failure to complete the
Contract Work within the Contract Time will result in loss of
passenger money and other operating revenue, and incurrence of
operating and other expenses to WSF. Delays also cost taxpayers
undue sums of money, adding time needed for administration,
engineering, inspection and supervision. In view of the
foregoing, and because the parties find it impractical to
calculate the actual cost of delays, it is mutually agreed
between WSF and the Contractor that liquidated damages, in lieu
of actual damages, in the amount of Ten Thousand Dollars
($10,000) per calendar day will be assessed against the
Contractor for each and every calendar day that Redelivery of the
Vessel to WSF extends past the Redelivery Date. Such liquidated
damages shall not exceed the sum of $600,000. The payment of
liquidated damages shall be made monthly in arrears as an
adjustment to the progress payment due.
18.2. The Contractor acknowledges that the liquidated damages
agreed to herein are solely and exclusively for damages suffered
by WSF in connection with loss of passenger money, other
operating revenue loss and additional occurrence of operating and
other expenses incurred by WSF due to delay. Any and all other
damages incurred by WSF including, but not limited to, those
arising from an Event of Default, from Warranty Deficiencies and
extra costs incurred by WSF as a result of poor workmanship by
the Contractor are in addition to the liquidated damages referred
to above.
19. EXTENSION OF TIME
19.1. At any time the Contractor anticipates difficulty for any
reason in completing the Contract Work and effecting Redelivery
on or before the Redelivery Date, then, whether or not the
Contractor believes such delay justifies an extension in the
Contract Time under the terms of this Article, the Contractor
shall immediately notify the Project Engineer verbally which
verbal notice shall be followed within two (2) days by a written
notice. This notice should identify the reason for the delay, but
is not in lieu of the written request required by Section 19.3
hereof Receipt of this notification is not to be construed as a
waiver of any rights which WSF may have under this Contract.
19.2. The Contract Time may be extended for a period equal to the
time WSF determines, based on a critical path analysis, that
completion of the Contract Work 8 has been delayed because of:
(a) extremely severe unseasonable weather;
(b) any action, neglect or default of WSF, its officers,
or employees that is inconsistent with WSF's obligations under
the terms of the Contract;
(c) fire or other casualty for which the Contractor is not
responsible;
(d) the combined action of workers which constitutes a
strike; or
(e) exceptional cases not specifically identified in items
(a) through (d) provided that the request letter described in
Section 19.3 proves the Contractor could not reasonably
anticipate the delay and had no control over the cause of the
delay and could have done nothing to avoid or shorten it.
19.3. The Contractor shall submit any request for an extension
in the Contract Time to WSF in writing no later than seven (7)
days after the occurrence of the event which is the cause of the
delay. Failure to do so shall be deemed a waiver of any right to
an extension for such event. To be considered, the request shall
be in sufficient detail to enable WSF to ascertain the basis and
the amount of time requested.
19.4. If the amount of time requested combined with the
extensions granted pursuant to previous requests, Change Orders
and Work Authorization Records equals twenty-five (25) percent or
more of the original Contract Time, the Contractor's letter of
request must bear the consent of all Sureties issuing contract,
performance or payment bonds on this Contract under RCW 39.08.010
that said security will remain bound under the terms of the
Contract. Once this consent is given, additional consent of such
Sureties will not be required until the revised Contract Time, as
extended by all subsequent Change Orders, Work Authorization
Records, or otherwise, is again exceeded by twenty-five percent
(25%), or more, of the cumulative revised Contract Time. In the
case of alternate security, the owner of alternate surety will be
deemed to have agreed that all alternate security shall remain
bound under the Contract irrespective of any extensions to the
original Contract Time.
19.5. The reasons and times of extensions shall be determined by
WSF and such determination will be final. The Contractor may
protest this decision in accordance with the terms of Article 14.
19.6. The Contractor shall not be entitled to a time extension
for:
(a) failure to obtain necessary materials and sufficient
workers;
(b) Change Orders, protests, increased quantities, or
changed conditions that do not delay the completion of the
Contract Work or otherwise prove to be invalid or inappropriate
extension requests;
(c) delays caused by duly rejected Working Drawings;
(d) rejection of faulty materials and workmanship; or
(e) delays by any Subcontractors or suppliers.
19.7. Under no circumstances will the Contractor be entitled to
any extension of the Contract Time for any delay resulting from
causes in existence on or before the date hereof.
19.8. WSF will not allow an extension in the Contract Time for
any cause if it resulted from the Contractor's default,
collusion, action, or inaction, or failure to comply with the
Contract Documents. The Contractor shall not be entitled to an
extension in the Contract Time to the extent that it fails to
mitigate the loss of time in an otherwise valid claim for an
extension in the Contract Time.
19.9. Extensions in the Contract Time pursuant to Change Orders,
Indefinite Quantity Work and Protests will be handled under the
procedures set forth in Articles 12, 13, 14 and 15.
20. BONUS
The Vessel is an operating unit of the complete WSF system and
the Contract is a link in a chain of successive renovations over
the next decade. Early Redelivery enhances system performance and
may expedite successive renovations providing benefits to the
public and to commerce. If the Contract Work can be completed
prior to the Redelivery Date, the Contractor shall be entitled to
a bonus. The amount of the bonus shall be Fifteen Thousand
Dollars ($15,000.00) per calendar day, thirty (30) days maximum,
for each day that Redelivery precedes the Redelivery Date.
Notwithstanding the foregoing, the Contractor shall not be
entitled to a bonus to the extent that such early Redelivery is a
result of an adjustment to the Contract Time which is made after
Redelivery has occurred (as a result of a protest, claim or
otherwise).
21. WARRANTY DEFICIENCIES AND REMEDIES
21.1. "Warranty Deficiencies" shall mean any deficiency,
imperfection, fault, inferiority or defect in the workmanship,
materials and design of the Contract Work or the fitness of the
Vessel with respect thereto, or the failure of Contractor's
workmanship, materials or design to meet the terms of the
Contract Documents. Without Emitting the foregoing, the ten-n
"Warranty Deficiencies" shall include any unsatisfactory
vibrations, noise or temperature levels. "Correction Period"
shall mean a period of twelve (12) months from the actual
Redelivery plus any extension provided for herein; Provided such
Correction Period shall not be a Limitation on warranties
reserved by or granted to WSF under this Article.
21.2. Notwithstanding any action or inaction by WSF or any of
the Authoritative Agencies in connection with Contract Work, if
at any time within the Correction Period there shall appear,
arise, exist or occur any Warranty Deficiency, whether or not
discovered during the Correction Period, said Warranty Deficiency
shall be made good, at the Contractors expense, to the
requirements of the Contract Documents; provided, however, the
Contractor shall not be responsible for the cost of correcting
any such Warranty Deficiency to the extent that such Warranty
Deficiency is due to ordinary wear and tear. At the discretion of
WSF, any work required to be performed by the Contractor pursuant
to the provisions of this Article shall be carried out
(a) at the Vessel's home port unless impractical; or
(b) with the concurrence of the Contractor, while the Vessel
is underway; or
(c) if neither of the foregoing options are available,
(i) at the Shipyard of the Contractor; or
(ii) with the concurrence of the Contractor at another
shipyard.
Notwithstanding the foregoing, WSF may independently arrange to
have Warranty Deficiencies corrected at sea or by a shipyard or
ship repair yard at any port satisfactory to WSF on condition
that Contractor has received prior notice of the Warranty
Deficiency and that the Warranty Deficiency is repaired in a
sound and workmanlike manner. In such event the Contractor shall
be liable to WSF for the expense incurred at the chosen yard,
including the cost of drydocking the Vessel within the
limitations of this Article hereof, if necessary. Alternatively,
in the event that the repairs are performed by WSF itself, the
Contractor shall be liable for all reasonable costs incurred by
WSF in performing the repairs.
21.3. WSF shall notify the Contractor in writing of any Warranty
Deficiency for which the Contractor is liable pursuant to Section
21.2 above within ninety (90) days after its discovery. Whenever
WSF discovers a Warranty Deficiency and decides to correct it or
have it corrected, WSF shall promptly give the Contractor notice
thereof and whenever practical (taking into consideration the
necessity of keeping the Vessel performing its usual service) the
Contractor shall be given an opportunity to inspect the Warranty
Deficiency or damage before it is remedied. WSF shall have the
burden of proving the existence of a Warranty Deficiency and
shall have the burden of proving that any such Warranty
Deficiency occurred within the Correction Period. Whenever
practical (taking into consideration the necessity of keeping the
Vessel performing its usual service), the Contractor shall be
given complete access to the Vessel and to all records of WSF
relating thereto for the purpose of verifying the existence of
the Warranty Deficiency and of determining the Contractors
obligation to correct it.
21.4. For the determination of any underwater Warranty
Deficiencies, WSF, at its expense, may drydock the Vessel or
carry out an underwater survey, during or after the Correction
Period. WSF shall pay, at its expense, for the haul day, refloat
day and any lay days required to accomplish the Vessel's normal
drydocking maintenance; provided, however, that if a Warranty
Deficiency is discovered, the correction of which requires
additional drydocking time, the Contractor, in addition to the
cost of the correction of the Warranty Deficiency, as provided in
this Article, shall also pay for each additional drydocking lay
day. If it becomes necessary to drydock the Vessel solely for the
correction of a Warranty Deficiency, the cost of the entire
drydocking required for the correction of the Warranty
Deficiency, as well as the cost of remedying the Warranty
Deficiency, as provided in this Article, shall be at the expense
of the Contractor.
21.5. The Contractor shall save and hold WSF harmless with
respect to any taxes, ad valorem duty or similar duty imposed or
assessed on any payment made in connection with the correction of
a Warranty Deficiency.
21.6. The Contractor shall assign to WSF any guarantee or
warranty furnished in connection with its purchase of any
equipment, materials or items used in the work done pursuant to
this Article.
21.7. At the end of the Correction Period, the Contractor agrees
to transfer and assign to WSF, as to any item of material,
equipment and machinery installed in the Vessel, the guarantee or
warranty rights of the Contractor against the vendor or supplier
of such items where, under the terms of such vendors or
supplier's guarantee, the vendor's obligations extend for a
period beyond the Correction Period; provided, that the
Contractor may exclude from such assignment any rights against
the vendor or supplier in favor of the Contractor for corrective
work performed for WSF without charge.
21.8. Contractor's warranty with regard to all Owner Furnished
Equipment shall be limited to workmanlike installation in
accordance with the manufacturer's specifications, good
shipbuilding practice, and the Contract Documents.
21.9. Subsequent to Redelivery, should the Contractor so
request, and at the risk and expense of Contractor, the
Contractor may place a warranty engineer on board the Vessel, who
shall represent Contractor and have full opportunity to observe
and inspect the working of the Vessel in all its parts, but
without any directing or controlling authority over the Vessel.
21.10. If in the good faith opinion of WSF, the repair of
Warranty Deficiencies requires that the Vessel be removed from
service, the Correction Period for the Vessel shall be adjusted
to cover a period extending for a period of time equal to the
number of calendar days (or partial days) which the Vessel was
out of service due to the repair of the Warranty Deficiency. In
all cases, upon the correction of a Warranty Deficiency, the
Correction Period with respect to the piece of equipment or other
item on which the repair was made shall be adjusted to cover a
period extending to twelve months from the date of repair of such
item was completed. In all events, the maximum Correction Period
will be twenty-four (24) months.
21.11. Should any disagreement arise in connection with Warranty
Deficiencies, the Contractor may protest any action taken by WSF
in the manner set forth in, and subject to the terms of, Article
14. If no WSF Representative has been appointed, such protest
will be made to the Project Engineer.
21.12. Notwithstanding Section 15.9, WSF shall have all remedies
available to it under applicable law to enforce its rights under
this Article.
21.13. The rights and remedies provided in this Article are in
addition to, and not in substitution of, any rights and remedies
which WSF might have as a matter of law or otherwise under the
Contract Documents or in law or equity. The failure of WSF to
exercise the rights and remedies conferred upon it hereunder,
shall not constitute a waiver of any of its rights or remedies at
any subsequent time. WSF specifically reserves all other written,
oral, implied, statutory and common law warranties to WSF arising
from performance of the Contract Work.
22. TERMINATION FOR DEFAULT
22.1. The following shall constitute "Events of Default" of the
Contractor under this Contract:
(a) the failure of the Contractor to prosecute the Contract
Work with such diligence and in such manner as will enable it to
complete such Work on or before the Redelivery Date and/or
Contractor's failure to effect Redelivery on the Redelivery Date;
(b) the failure of the Contractor to provide sufficient,
properly skilled workers or satisfactory materials and equipment
so as to be able to perform the Contract Work within the Contract
Time;
(c) the failure of the Contractor to relieve
unsatisfactory workers upon WSF's direction;
(d) the failure of the Contractor in any other respect to
perform any of its covenants, agreements, or undertakings under
this Contract;
(e) the existence of any material inaccuracy in any
warranty or representation made by the Contractor as of the time
such warranty or representation was made; or
(f) the Contractor making a general assignment for the
benefit of its creditors, the filing by the Contractor of a
petition in voluntary bankruptcy or of a petition for
reorganization or for other relief under any bankruptcy or
insolvency law, the filing of a petition by the Contractor at
common law or in equity for the appointment of a receiver in any
court, or the filing against the Contractor by one or more of its
creditors of a petition seeking the appointment of a receiver of
the Contractor's assets, whether temporary or permanent, or
seeking relief under any bankruptcy or insolvency law, which
petition shall not have been dissolved within a period of ten
(10) days from the date of the filing of the petition in that
court.
22.2. Once WSF determines that sufficient cause exists to
terminate the Contract for default, WSF shall give written notice
to the Contractor and its Surety specifying that the Contractor
is in breach of the Contract, and that the Contractor is to
remedy the breach within the time period specified in the notice.
WSF may, in writing and at its option, extend such time period
if, in WSF's sole judgment, an extension is justified. If WSF
determines that an emergency exists as a direct result of such
default, WSF may immediately terminate the Contract effective
upon the Contractors receipt of written notice thereof
Emergencies include but are not limited to:
endangerment of life or property; failure to timely
obtain insurance or Contract Security; or failure to pay
any taxes required by this Contract. After the expiration
of the default notice period, if one or more of the
defaults described in such notice then remains
unremedied, WSF may, by serving written notice to the
Contractor and Surety, either:
(a) Transfer the performance of the Contract Work from the
Contractor to the Surety; or
(b) Terminate the Contract and at WSF's option prosecute it
to completion by contract or otherwise.
If WSF elects to pursue one remedy, it will not bar WSF from
pursuing other remedies on the same or subsequent breaches.
Upon receipt of a notice that the Contract Work is being
transferred to the Surety, the Surety shall enter the Shipyard
and take possession of the Vessel and all materials, tools, and
appliances for the purpose of completing the Contract Work, and
employ by contract or otherwise any person or persons
satisfactory to WSF to finish the Contract Work and provide the
materials without termination of the Contract. Such employment
shall not relieve the Surety of its obligations under the
Contract and Contract Security. If there is a transfer to the
Surety, payments on estimates covering Contract Work subsequent
to the transfer shall be made to the extent permitted under law
to the Surety or its agent without any right of the Contractor to
make any claim.
Upon receipt of a notice that WSF elects to terminate the
Contract, WSF may enter the Shipyard, take possession of and
remove the Vessel (which shall not be Redelivery) and any Vessel
material purchased from the Shipyard or wherever else it may be
located, with or without judicial intervention. WSF may transport
the Vessel and any such materials to another facility designated
by WSF for the purpose of completing the Contract Work. If WSF
elects to have all or part of the Contract Work completed in any
other shipyard or at sea the Contractor shall, upon WSF's
request, assign to WSF all of its rights under such subcontracts
and orders for material, services and supplies to be used in the
performance of said Contact Work to WSF.
22.3. If WSF terminates the Contract because of an Event of
Default, the Contractor shall not recover any further payments
until the Contract Work has been completed and only if the unpaid
portion of the Total Contract Price exceeds all of the costs and
damages (including litigation costs, attorney fees, and
liquidated damages as provided in Article 18) incurred by WSF in
enforcing this Contract and completing the Contract Work (the
"WSF Expense"). If the unpaid portion of the Total Contract
Price exceeds the WSF Expense, WSF will pay the excess amount to
the Contractor. If the WSF Expense exceeds the unpaid balance of
the Total Contract Price, or if there is no unpaid balance, WSF
will deduct the unsatisfied portion of the WSF Expense from the
Contract Security provided by the Contractor and return the
balance, if any, to the Contractor. If the WSF Expense exceeds
the amount of the Contract Security the Contractor shall pay the
difference on demand to WSF.
22.4. The rights conferred upon WSF under the terms of this
Article shall be cumulative (unless clearly inconsistent) and in
addition to, and not in substitution of, any other rights which
WSF has under this Contract, the Contract Security, in law or in
equity. The failure of WSF to exercise the rights and remedies
conferred upon it hereunder, shall not constitute a waiver of any
of its rights or remedies at any subsequent time. Any retention
or payment of monies to the Contractor by WS will not release the
Contractor from liability.
22.5. If WSF has terminated this Contract for default, and it
is later determined for any reason that the Contractor was not in
default, the rights and obligations of the parties shall be the
same as if the notice of termination had been issued pursuant to
Article 23, TERMINATION FOR PUBLIC CONVENIENCE.
23. TERMINATION FOR PUBLIC CONVENIENCE
23.1. WSF, upon written notice to the Contractor, may terminate
the Contract in whole, or from time to time in part, whenever:
(a) the Contractor is prevented from proceeding with the
Contract Work as a direct result of an Executive Order of the
President with respect to the prosecution of war or in the
interest of national defense; or an Executive Order of the
President or Governor of the State with respect to the
preservation of energy resources;
(b) the Contractor is prevented from proceeding with the
Contract Work by reason of a preliminary, special or permanent
restraining order of a court of competent jurisdiction where the
issuance of such restraining order is primarily caused by acts or
omissions of persons or agencies other than the Contractor; or
(c) WSF determines that such termination is in the best
interests of the State.
23.2. Whenever the Contract is terminated in accordance with
this Article, the Total Contract Price will be adjusted based on
the principles set forth in Sections 12.4, and 13.0.
23.3. After receipt of a notice of termination in accordance
with the above procedures, the Contractor, in order to receive
payment, shall submit to WSF its claim in sufficient detail to
enable WSF to ascertain the basis and amount of such claim (the
"Termination Claim"). The Termination Claim shall be submitted
promptly but in no event later than sixty (60) days from the
effective date of termination. The Contractor shall pursue
resolution of its Termination Claim through the established
administrative channels to the Assistant Secretary. The
Contractor agrees to make its records available to the extent
deemed necessary by the Assistant Secretary to verify its
Termination Claim. In the event the Termination Claim is not
accepted, the Contractor may appeal to the Secretary for
determination. The decision of the Secretary will be final.
24. SUSPENSION OF WORK
24.1. WSF may order suspension of all or any part of the
Contract Work if:
(a) Extremely severe unseasonable weather and such other
conditions beyond the control of the Contractor that prevent
satisfactory and timely performance of the Contract Work; or
(b) The Contractor does not comply with the Contract or the
WSF Representative's orders.
When ordered by the WSF Representative to suspend or resume
Contract Work, the Contractor shall do so immediately.
If the Contract Work is suspended for reason (a) above, the
period of work stoppage will be counted as non-working days. But
if the WSF Representative believes the Contractor should have
completed the suspended work before the suspension, all or part
of the suspension period may be counted as working days. The WSF
Representative will set the number of non-working days (or parts
of days) by deciding how long the suspension delayed the entire
Contract.
If the Contract Work is suspended for reason (b) above, the
period of work stoppage will be counted as working days. The lost
work time, however, shall not relieve the Contractor from any
Contract responsibility. If the performance of all or any part
of the Contract Work is suspended for an unreasonable period of
time by an act of WSF in the administration of the Contract, or
by failure to act within the time specified in the Contract (or
if no time is specified, within a reasonable time), WSF will make
an adjustment for any increase in the Total Contract Price and/or
Contract Time for the performance of the Contract (excluding
profit) necessarily caused by the suspension. However, no
adjustment will be made for any suspension if (1) the performance
would have been suspended by any other cause, including the fault
or negligence of the Contractor, or (2) an equitable adjustment
is provided for or excluded under any other provision of the
Contract.
If the Contractor believes that the performance of the Contract
Work is suspended for an unreasonable period of time and such
suspension is the responsibility of WSF, the Contractor shall
submit a written notice of protest to the WSF Representative as
provided in Article 14. No adjustment shall be allowed for any
cost incurred more than seven (7) working days before the date
the WSF Representative receives the Contractors written notice of
protest. If the Contractor contends damages have been suffered
as a result of such suspension the protest shall not be allowed
unless the protest (stating the amount of damages) is asserted in
writing as soon as practicable, but no later than the issuance of
the Final Contract Voucher Certification. The Contractor shall
keep full and complete records of the costs and additional time
of such suspension and shall permit the WSF Representative to
have access to those records and any other records as may be
deemed necessary by the WSF Representative to assist in
evaluating the protest.
The WSF Representative will determine if an equitable adjustment
in Total Contract Price and/or Contract Time is due as provided
in this Article. The equitable adjustment for increase in Total
Contract Price, if due, shall be subject to the limitations
provided in Article 15, provided that no profit of any kind will
be allowed on any increase in Total Contract Price necessarily
caused by the suspension.
Request for extensions of Contract Time will be evaluated in
accordance with Article 19. WSF's determination as to whether an
adjustment should be made will be final as provided in Article
19. No claim by the Contractor under this Article shall be
allowed unless the Contractor has followed the procedures
provided in this Article and in Articles 14, 15 and 19.
25. SUBCONTRACTORS
25.1. WSF recognizes that the Contractor may desire to
subcontract part of the Contract Work; however, the Contractor is
obligated to obtain WSF's prior written approval as to each such
Subcontractor (See Section 25.10). WSF will approve a
Subcontractor only if satisfied with the proposed Subcontractor's
record, equipment, experience, and ability. Work done by the
Contractor itself shall account for at least forty percent (40%)
of the total Contract Work.
25.2. All work to be subcontracted shall be evidenced by a
written agreement between the Contractor and the Subcontractor or
between the Subcontractor and any other Subcontractor, a copy of
which shall be delivered to WSF within three (3) days of
execution and in all events before such work commences. All
subcontracts shall include a copy of this Article, Articles 39-41
and Exhibit I to this Contract as exhibits to any subcontract. AN
subcontracts shall expressly state that the Subcontractor
consents to the provisions of this Article and Articles 39-41 and
will comply with the provisions of Exhibit I to this Contract.
The Contractor shall attach to the copy delivered to WSF a
certificate stating that the subcontract complies with all
relevant provisions contained in Exhibit I hereto and includes
the provisions required under this Article and Articles 39-41.
In the event that WSF discovers at any time that the subcontract
does not comply with such provisions, WSF shall have the right to
terminate the subcontract immediately, and the Contractor shall
not be entitled to an adjustment in the Total Contract Price or
the Contract Time as a result of such termination.
25.3. All subcontracts shall provide that all obligations
imposed by the Contract Documents on the Contractor, with respect
to or in connection with the Contract Work to be subcontracted,
shall be assumed by such Subcontractor.
25.4. WSF approval to subcontract shall not:
(a) relieve the Contractor of any responsibility for
performance of all of the Contract Work;
(b) relieve the Contractor of any obligation or liability
under the Contract or relieve the Contractor and/or any Surety of
any obligation or liability under Contract Security;
(c) create any contract between the WSF and the
Subcontractor; or
(d) convey to the Subcontractor any rights against WSF.
25.5. To the extent that any Subcontractor desires to further
subcontract any portion of the Contract Work, it shall do so in
accordance with this Article as if it were the Contractor. Such
subcontractors of Subcontractors shall be deemed Subcontractors
for purposes of this Contract. No direct Subcontractor of the
Contractor may further subcontract more than twenty-five percent
(25%) of the Contract Work which was subcontracted to it.
25.6. WSF will not consider as subcontracting the purchase or
delivery of materials to the Shipyard unless such materials are
furnished by an approved Subcontractor as part of its
subcontract. WSF reserves the right to approve or reject any
suppliers from whom the Contractor purchases or receives
materials for use in the Contract Work.
25.7. The Contractor shall certify to the amounts paid to any
DBE firms that were Subcontractors. This certification shall be
supplied with the Final Contract Voucher Certification on the
form provided by WSF.
25.8. If dissatisfied with any part of the subcontracted work,
WSF may request in writing that the Subcontractor be removed. The
Contractor shall comply with this request at once and shall not
employ the Subcontractor for any further Contract Work.
25.9. ALL Subcontractors and suppliers must warrant their work
and/or materials at least to the same extent as provided in this
Contract and such warranties shall expressly provide that WSF is
a third party beneficiary of such warranty entitled to enforce
such rights directly against the Subcontractor or supplier.
25.10. A Subcontractor will not be permitted to perform any
Contract Work under the Contract until the following and, where
required by WSF, approved by the WSF Representative:
(a) Request to Sublet Work (Form 421-012); and an
executed "Acknowledgment of Subcontract Terms" in the form
attached hereto as Exhibit 2.;
(b) Statement of Intent to Pay Prevailing Wage (Form
F700-029-000(1 1-89) (Submitted to the Washington State
Department of Labor and Industries with a copy to the WSF
Representative);
(c) Contractor and Subcontractor or Agent Forms and
Certification for Federal-aid Projects; and
(d) Such other documents as WSF may reasonably request.
25.11. The Contractor's records pertaining to the requirements
of this Article shall be open to inspection or audit by
representatives of WSF, FTA and FHWA prior to, and for a period
of not less than three (3) years after, the date of Final
Acceptance. The Contractor shall retain the records for that
period. The records of all Subcontractors shall be open to
similar inspection or audit for the same period, and the
Contractor shall be responsible for assuring such records are
maintained.
25.12. The Contractor shall be responsible for making certain
that equivalent restrictions in the enforcement of lien and in
rem rights are included in all of its contracts with
Subcontractors and suppliers of materials as specified in Article
40.
26. EMPLOYMENT OF OTHERS
26.1. WSF shall be permitted to utilize any of its employees,
officers, crew or direct labor contractors or other personnel in
any work other than Contract Work upon the Vessel, at any time,
provided that the Contractor will have previously received
notification of such employment and such work does not materially
interfere with the performance of the Contract Work by the
Contractor. WSF shall not be r sum for the exercise of this
right.
26.2. As a specific instance of WSF's rights under Section 26.1,
in the event that WSF and the Contractor cannot reach agreement
on the terms of a Change Order pursuant to Article 12, WSF shall,
upon two (2) days written notice, have the right to engage any
agent, employee or other outside contractor to perform the work
involved.
26.3. The Contractor hereby further undertakes to cooperate
with, and provide to WSF or its said employees, officers, crew
and all contractors described in this Article all necessary
services and assistance required by them to assist them in
carrying out their work in order that the work is substantially
completed upon the Vessel not later than Redelivery. Any
assistance over and above that called for in the Contract
Documents should be provided only as authorized by Change Order.
27. RESPONSIBILITIES AND INDEMNITIES
27.1. Contractor's Responsibility
27.1.1. As between WSF and the Contractor, the Contractor
shall be solely responsible for performance of the Contract Work,
for making good all damage, loss or injury to all or any portion
of the Vessel from the time of delivery under Section 2.9 until
Redelivery, and to any equipment or material used in the
performance of the Contract Work, whether or not on or
incorporated into the Vessel from the date hereof until
Redelivery.
27.1.2. Where the Contractor removes or dismantles property
of WSF, the Contractor shall be responsible for such removals,
dismantling, proper storage and protection of any such property
and for reinstallation of same in good working order in
accordance with applicable Contract Documents. Where WSF requests
it, the Contractor shall conduct tests of such equipment. In
addition to preparing and painting new work, the Contractor shall
properly prepare and touch up existing paint damaged by the
Contract Work.
27.1.3. The Contractor shall not be responsible for damage
to the Contract Work or the Vessel caused by: (i) cataclysmic
phenomenon of nature constituting an act of God, or (ii) acts of
public enemy or of governmental authorities; provided, however,
that these exceptions shall not apply should damages result from
the Contractor's negligence or its failure to take reasonable
precautions or to exercise sound engineering and construction
practices in conducting the Contract Work. Notwithstanding the
foregoing, the Contractor shall be liable for any damage or loss
arising from the causes set forth in this subsection to the
extent that said loss was or should have been covered by
insurance which the Contractor was required to maintain under
Article 29, such liability to be reduced by any actual recovery
under an applicable insurance policy.
27.1.4. The Contractor shall be responsible for any
liability imposed by law for injuries to, or the death of, any
persons or damages to property resulting from any cause
whatsoever during the Contract Time and at any other time in
which Contract Work is performed during the performance of the
Contract Work.
27.1.5. The Contractor shall indemnify and hold harmless
WSF, the Commission, the Government and the State and all
officers or employees and any agents thereof including, but not
limited to the Secretary and the Assistant Secretary against any
claims arising from any violation of any laws, ordinances or
regulations by the Contractor, the Subcontractors, or the agents
or employees of the Contractor and Subcontractors. The
Contractor shall indemnity, defend, and save harmless the
Government, the State, the Commission and WSF and all officers
and employees of the Government and the State from all claims,
suits, or actions brought for injuries to, or death of, any
persons or damages resulting from the Contract Work or to the
extent caused by any act or omission by the Contractor, the
Subcontractors or the agents or employees of the Contractor and
Subcontractors. In addition to any remedy authorized by law, WSF
may retain so much of the money due the Contractor as deemed
necessary by WSF to ensure indemnification until disposition has
been made of such suits or claims.
27.2. The State, Commission, and all officers and employees of
the State, including but not limited to those of the WSDOT, will
not be responsible in any manner for any loss or damage that may
happen to the Contract Work or any part thereof, for any loss of
material or damage to any of the materials or other things used
or employed in the performance of Contract Work, for injury to or
death of any persons, either workers or the public or for damage
to property for any cause which might have been prevented by the
Contractor or anyone employed by the Contractor.
27.3. If a claim, suit or action for injuries, death, or damages
as provided in the preceding paragraphs of this Article is caused
by or results from the concurrent negligence of (a) WSF or WSF
agents or employees and (b) the Contractor, the Subcontractors
or the agents or employees of the Contractor and Subcontractors,
the indemnity provisions provided in the preceding paragraphs of
this Article shall be valid and enforceable to the extent of the
Contractors negligence.
27.4. The Contractor is wholly responsible for disposal of
removed materials and debris, the waste disposal site selection,
and all arrangements, and expenses associated with the disposal
of removed waste materials and debris. Such arrangements shall
be subject to the written approval of WSF and shall specifically
protect WSF from any and all damages associated with or arising
therefrom.
28. CONTRACT SECURITY
28.1. The Contract Security to be provided will consist of the
items set forth in this Article. All Contract Security shall
cover all of the Contact Work including Contract Work ordered
pursuant to Change Orders and Work Authorization Records.
28.2. Contract Security for Performance Exposure
28.2.1. The Contractor shall provide WSF with Contract
Security for performance exposure in an initial amount equal to
22% of the Initial Price. Contemporaneously with the execution
of this Contract, the Contractor will deliver evidence
satisfactory to WSF that such security is in place.
28.2.2. The Contractor may provide this portion of the
Contract Security in the form of -.
(a) a contract bond, to protect WSF against
performance and payment loss exposure, in an initial amount equal
to 52% of the Initial Price;
(b) a performance bond, to protect WSF against
performance loss exposure only, in an initial amount equal to 22%
of the Initial Price; or
(c) alternate form(s) of security as provided in
Section 28.2.3, below.
28.2.3. Alternate Forms of Contract Security for Performance
Exposure
28.2.3.1. The following alternate forms of Contract
Security for performance exposure are acceptable if they provide
protection in an amount at least equal to WSF's exposure to
performance loss, meet all legal requirements for effectiveness
and authenticity, and meet the special requirements set forth in
Section 28.2.3.2.
(a) certified check;
(b) cashiers check;
(c) treasury bill(s);
(d) irrevocable bank letter of credit;
(e) assignment of a savings account; and/or
(f) assignment of other liquid asset specifically
approved by the Assistant Secretary or his designee.
28.2.3.2. Alternate forms of Contract Security for
performance exposure are subject to the (1) preapproval of the
FTA, @A and the Assistant Secretary; and (2) the requirements
found in WAC 468-320-050.
28.3. Contract Securely for Payment Exposure
28.3.1. WSF requires protection against (i) the Contractors
failure to pay all laborers, mechanics, Subcontractors, agents,
suppliers, material men and others who have provided services and
materials for work under the Contract; (ii) all taxes and other
governmental obligations related to this Contract; and (iii) all
wage rates required by law. This protection shall in an initial
amount equal to 30% of the Initial Price. Contemporaneously
herewith, the Contractor shall provide evidence satisfactory to
WSF of such protection.
28.3.2. The Contractor may provide this portion of the
Contract Security in the form of:
(a) a contract bond, to protect WSF against performance
and payment loss exposure, in an initial amount equal to 52% of
the Initial Price, or
(b) a payment bond, to protect WSF against payment loss
exposure only, in an initial amount equal to 30% of the Initial
Price, or
(c) receive progress payments only for the labor,
materials and services for which the Contractor can provide proof
of performance and payment, pursuant to Section 28.3-3.
28.3.3 In lieu of a contract or payment bond, the Contractor
may request application of WSF procedures which will eliminate
WSF's exposure to payment loss. Under such procedures, WSF will
pay progress payments for labor, materials, taxes, subcontractor
and agent expenses up to the amount of physical progress and
materials received, as determined by WSF; Provided that the
Contractor submits documentation to WSF confirming that (i)
payrolls have been met; (ii) materials, taxes, subcontractor and
agent expenses have been paid; and (iii) materials and other
goods have been received. Confirmation that payrolls have been
paid shall be accomplished by providing to WSF an affidavit on a
form provided by WSF supported by certified payrolls.
Confirmation that all other expenses have been paid and that all
materials/goods have been received shall be accomplished by
providing to WSF written evidence of such payment and/or delivery
(e.g. canceled check or affidavit of payment and delivery).
28.4. The contract bond, performance bond, and payment bond
shall be upon the forms furnished by WSF, and signed by an
approved surety or sureties. The Surety shall be registered with
the Washington State Insurance Commissioner, and the Surety's
name shall appear on the current Authorized Insurance Company
List in the State of Washington published by the Office of the
Insurance Commissioner. Samples of the required contract bond,
performance bond and payment bond forms are included in the Bid
Package.
28.5. WSF reserves the right to require additional Contract
Security at any time the Contract Work increases WSF's exposure
to performance or payment loss. In such event, the Contractor
shall provide additional Contract Security so that the total
Contract Security is not less than WSF's total exposure to
performance and payment loss exposure, as re-calculated by WSF at
such time. Such additional Contract Security may be declared by
WSF to be temporary in nature and only be required during the
duration of certain additional Contract Work. At any time that
the Total Contract Price reaches 125% of the Initial Price, the
Contractor shall obtain the consent of all sureties issuing
contract, performance or payment bonds on this Contract that said
security will remain bound under the terms of the Contract. Once
this consent is given, additional consent of sureties will not be
required until the revised Total Contract Price, as increased by
all subsequent Change Orders, Work Authorization Records, or
otherwise, is again exceeded by more than 25% of the cumulative
revised Total Contract Price. In the case alternate security, the
owner of alternate security will be deemed to have agreed that
all alternate securities shall remain bound under the Contract
irrespective of any and all extensions of Contract Time and/or
increases to the Initial Contract Price by subsequent Change
Orders Work Authorization Records, or otherwise.
28.6. Duration of Contract Security
28.6.1. All Contract Security for payment exposure shall
remain in effect until the latest of the following dates: (1) the
last day for filing of any lien, pursuant to RCW Chapter 60.28 or
any other applicable lien law; (2) settlement of any liens filed
under RCW Chapter 60.28 or any other applicable hen law; and (3)
WSF receipt of releases from other State of Washington agencies.
28.6.2. All Contract Security for performance exposure shall
remain in effect until Final Acceptance of the Contract Work. In
addition, the Contract Security for performance exposure shall
ensure that WSF receives warranty coverage for all losses
resulting from any defects in material and workmanship while WSF
has any warranty rights. With the written approval of WSF, the
Contractor may vary the form of Contract Security to cover the
period after Redelivery, provided that the form of any Contract
Security shall comply with the relevant provisions of this
Article and further provide, that warranty coverage shall be at
least as effective in protecting WSF as that contained in the
WSF's standard contract bond. Warranty coverage under a contract
bond shall be specified in the bond and shall equal ten percent
(10%) on the penal sum of the bond at the time of Redelivery.
Warranty coverage under alternate forms of security and
combinations of bonding and alternate forms of security shall be
equal to at least ten percent (10%) of the combined performance
and payment security amount at the time of Redelivery.
28.7. To the extent that the Contractor is required to provide
additional Contract Security as a result of Change Orders and
Indefinite Quantity Work, the Contractor shall be entitled to
recover all costs for providing such additional Contract
Security, which additional costs will be handled by Change Order.
28.8. The Contractor shall not use the same assets to secure
more than one form of Contract Security.
29. INSURANCE
29.1. The Contractor shall provide evidence of insurance with a
carrier or carriers satisfactory to WSF and its insurance broker
covering injury to persons and/or property suffered by WSF or a
third party, as a result of operations which arise both out of
and during the performance of the Contract Work by the Contractor
or by any Subcontractor. This coverage will also provide
protection against injuries to all employees of the Contractor
and the employees of any subcontractor engaged in work on the
Contract. The required insurance shall be provided by companies
or through sources approved by the Washington State Insurance
Commissioner pursuant to Title 48 RCW.
Evidence of insurance shall be furnished to WSF contemporaneously
with execution of the Contract by WSF. Such evidence, executed
by the carrier's representative and issued to WSF, shall consist
of a certificate of insurance or policy declaration page with
required endorsements attached thereto. Acceptance by WSF of
deficient evidence does not constitute a waiver of Contract
requirements.
All required insurance shall be kept in force until the
Completion Date of the Contract. Written notification is required
to be delivered to the Secretary of Transportation, care of the
WSF Representative, forty-five (45) days before cancellation of
any coverage or reduction in any limits of liability.
29.2 Types of Insurance
29.2.1 The Contractor shall provide insurance covering Ship
Repairs Legal Liability with a limit of liability of at least
$36,440,000-00 and deductibles not to exceed $100,000-00. In
addition to liability for physical loss of, damage to, or damage
caused by the Vessel imposed upon the Contractor by law or
contract, as provided herein, and by Ship Repairs Legal
Liability, such insurance shall be caused to specifically
include:
(a) conversion risks;
(b) a discovery period of not less than 180 days;
(c) sea trials as often as necessary for completion and
testing of the Contract Work; and
(d) coverage in respect of OFE from the time of delivery of
OFE to the Contractor.
29.2.2 The Contractor shall provide insurance covering
Comprehensive or Commercial General Liability. Such insurance
shall cover all operations by, or on behalf of, the Contractor
including all operations by a Subcontractor, providing insurance
for bodily injury and property damage liability including
coverage for premises and operations, products and completed
operations, contractual liability, broad form property damage
including property in the Contractors care, custody and control,
and personal injury liability. The minimum liability shall be:
(a) If the Contractor carries a Comprehensive General
Liability policy, the limits of liability shall not be less than
a combined Single Limit for bodily injury, property damage and
Personal Injury Liability of:
(i) $1,000,000 each occurrence; and
(ii) $2,000,000 aggregate.
(b) If the Contractor carries a Commercial General Liability
policy, the limits of liability shall not be less than:
(i) $1,000,000 each occurrence (combined single limit
for bodily injury and property damage);
(ii) $1,000,000 for Personal Injury Liability;,
(iii) $2,000,000 Aggregate for Products Completed
Operations; and
(iv) $2,000,000 General Aggregate
WSF and its officers and employees are to be named as additional
insured under this coverage.
29.2.3. The Contractor shall provide Automobile Liability
Insurance. Such insurance shall cover all owned, hired and non-
owned vehicles and provide coverage not less than that the
Business Automobile Policy in limits not less $1,000,000 Combined
Single Limit per accident bodily injury and property damage. WSF
and its officers and employees are to be named as additional
insured under this coverage.
29.2.4. The Contractor shall provide and maintain, for all
employees of the Contractor engaged in work under this Contract,
Worker's Compensation Insurance as required by State law. The
Contractor shall be responsible for Workers' Compensation
Insurance for any Subcontractor who provides services under the
Contract and shall provide evidence of United States Longshore
and Harbor Workers' coverage and contingent coverage for Jones
Act (Marine Employers Liability) in compliance with Federal
Statutes.
29.2.5. Subject to the provisions of 29.1.2 above, the
Contractor may provide as a public liability alternative a
standard form Owners and Contractors Protective Liability policy
written by a company approved by WSF and authorized to do
business in the State of Washington. This alternative is in lieu
of the requirement above that WSF be added as an additional
insured to coverages required therein.
This policy must be written on an "occurrence" basis and the
Government and State of Washington, Department of Transportation
must be named as additional insured. The policy shall be written
with minimum Limits of Liability of at least $1,000,000.00 per
occurrence.
29.3. Upon written request from WSF at any time during the term
of the Contract, the Contractor shall provide to WSF copies of
the policies required under this Article within five (5) working
days of the request. WSF will make no further payment to the
Contractor until the Contractor has fully complied with this
request. This remedy is not exclusive, and WSF may take such
other action as is available to it under any other provision of
the Contract, or otherwise in law. Coverage in the minimum amount
set forth herein shall not be construed to relieve the Contractor
from liability in excess of such coverage.
29.4. The cost to name WSF as being insured as required in this
Article shall be reported to WSF on WSDOT Form 421-025, Public
Liability and Property Damage Insurance Certification. This
certification shall identify only the cost to provide insurance
coverage for WSF in accordance with this Article and shall not
include any cost for the Contractors portion of the insurance.
The Contractor shall make every effort to identify the cost.
However, in the event the cost is not identifiable, the
Contractor will be permitted to report that fact in order to
comply with these requirements. The certification shall be
submitted to WSF as soon as the cost can be identified but not
later than when the Contractor signs and returns the Final
Contract Voucher Certification. This certification shall be
subject to audit to ensure the costs are properly reported.
29.5. WSF will make no payments to the Contractor at any time
when any portion of the insurance contemplated by this Article is
not in effect. This remedy is not exclusive and WSF may take
such other action as is available to it under any other
provisions of the Contract, or otherwise in law.
29.6. Any tower hired by the Contractor shall carry tower's
legal liability insurance in an amount of $15,000,000.00 to cover
loss, damage and/or expense to WSF arising out of towage of the
Vessel from the WSF's Eagle Harbor facility to the Shipyard. Any
tower hired by the Contractor shall carry tower's legal liability
insurance in an amount of $36,440,000.00 to cover loss, damage
and/or expense to WSF arising out of towage of the Vessel from
the Shipyard to the WSF's Eagle Harbor facility.
29.7. WSF maintains insurance coverage of $15,000,000.00 for the
Vessel's hull and machinery. At WSF's option, this coverage may
stay in effect while the Vessel is in the Shipyard. In the
event of a loss which involves a claim under insurance policies,
underwriters may reserve their rights of subrogation
29.8. The requirements in this Article shall not limit the
Contractor's responsibilities under this Contract including, but
not limited to, duties of liability and indemnity.
30. SANITATION, SECURITY AND GENERAL SERVICES
30.1. The Contractor shall provide employees with all
accommodations and equipment required by cognizant Industrial
Health, Safety, Labor, and other such agencies and organizations,
whether local, state, or federal. Accommodations and equipment
shall be kept clean, neat, sanitary, and in proper working order
and shall not cause any public nuisance.
30.2. During the period from the Delivery Date to Redelivery,
the Vessel and immediate surrounding areas shall be kept in a
neat, clean, and sanitary condition. Accumulated trash, refuse,
garbage, dirt, and industrial waste shall be removed from the
Vessel on a daily basis. Accumulated water or other liquids shall
be removed from the Vessel on a daily basis unless their presence
presents either a personnel safety hazard or an imminent threat
to the safety of the Vessel in which case they shall be removed
immediately upon discovery and disposed of by approved methods in
accordance with currently applicable Regulations.
30.3. During the period from the Delivery Date until Redelivery,
the Contractor shall:
(a) provide safety and security services for the entire
Vessel. Every reasonable precaution shall be taken to protect
the Vessel from the hazards of fire, flooding, pilferage,
malicious damage, and other events including cataclysmic
phenomena of nature;
(b) provide and maintain a safe moorage for the Vessel
including piers, mooring lines, fenders, camels, and other such
devices as required to ensure the safety and integrity of the
Vessel;
(c) provide covers which will minimize the entry of water
or snow for all openings to the weather through which sea water,
rain or snow might enter the Vessel during periods of inclement
weather. The covering shall be affixed in such a manner as to
preclude removal by the action of winds of velocities normally
experienced in the Puget Sound (or other geographical location in
which the work may be performed). During periods when
temperatures may be expected to be below freezing precautions
shall be exercised to protect all piping systems, machinery and
equipment, and components of the Vessel, whether installed,
onboard awaiting installation or removal, or stored ashore, from
freezing. The Contractor shall be wholly responsible for any and
all costs incurred to repair or replace piping systems, machinery
or equipment, or components damaged by the failure to protect
them from freezing;
(d) provide and maintain comprehensive and effective fire
prevention, fire and flooding detection, and fire fighting
programs and systems sufficient to ensure the safety and
integrity of the Vessel;
(e) provide personnel trained in shipboard firefighting
techniques and trained to cooperate with and assist local
firefighting organizations;
(f) provide sufficient shore fire lines to ensure an
adequate supply of firefighting water at sufficient pressure, and
maintain an adequate number of tested fire-hoses aboard the
Vessel to effectively fight fires at any location in the Vessel;
(g) provide and maintain portable fire extinguishers in
sufficient quantity, and of the appropriate type, to combat
locally contained fires of any class;
(h) provide sufficient fire watches, including roving fires
that may be inadvertently started by welding sparks or heat,
electrical malfunction, or spontaneous combustion are detected,
reported and promptly extinguished. A welder or burner may not
act as his own fire watch;
(i) wire or otherwise lock in the fully closed position, an
valves connecting directly to the sea, except while in actual
use, whenever the Vessel is waterborne. If piping has been
removed from the inboard flange or other valve connection, the
valve shall be provided with a blank cover. Valves shall be
provided with a positive means of readily ascertaining that they
are in fact fully closed or blanked;
(j) provide around-the-clock, seven day a week on-board
surveillance patrols in sufficient number to ensure the safety
and watertight integrity of the Vessel. The patrol(s) shall
maintain a log, either through key stations or logbook, of their
activity and observations;
(k) provide tank and bilge cleaning, and gas freeing
services, as required to ensure that areas in which flammable,
toxic or other hazardous gasses or vapors may be present are
clean, gas free, and have a sufficient oxygen concentration prior
to the entry of personnel or any heat or spark producing work is
undertaken. No space which is suspected of having flammable,
toxic, or other hazardous gasses or vapors remaining in
flammable, explosive, or toxic quantities, or which has an oxygen
deficient atmosphere shall be entered, or hot work undertaken
therein, until the space has been certified, and an appropriate
certificate posted, SAFE for MEN, or SAFE for FIRE. Certificates
and initial certification shall be provided by a marine chemist
currently certified by the National Fire Protection Association.
The Contractor shall maintain the gas free condition throughout
the period in which personnel may be required to work in the
space(s) or hot work may be required as required by WAC 296-304-
02009 (or pertinent local ordinances if they impose conditions
more stringent than the WAC);
(1) ensure that all special safety precautions or
requirements imposed by the certifying marine chemist are
implemented and maintained throughout the work period. Should the
gas free or oxygen concentration condition of any space be in
doubt the WSF Representative may require retesting and
certification at no additional expense to WSF;
(m) provide and maintain readily accessible or have
available dewatering equipment of such quantity and capacity as
to minimize damage to the Vessel and its equipment in the event
of a worst case flooding. For the purpose of estimating required
dewatering capacity worst case flooding may be defined as
flooding occurring through the single largest installed hull
valve located below the light-ship water line, that all
watertight doors between foldable spaces are open and inoperable,
and that bulkheads separating spaces adjacent to that in which
the flooding is occurring have been breached below the light-ship
water line by holes equal in cross-section to the hull
penetration through which the flooding is occurring. Dewatering
equipment of sufficient capacity to stop the continued rise in
water level occurring in the worst case flooding scenario shall
be located close enough to the Vessel so that it can be in full
capacity operation within forty-five (45) minutes of the initial
observation and subsequent reporting of the uncontrolled
flooding; and
(n) provide and maintain additional dewatering equipment
and/or services of sufficient quantity and capacity as to begin
to dewater spaces flooded in a worst case flooding at a location
near enough to the work site so as to be able to respond to the
emergency and begin dewatering within one hour of the requirement
to provide such equipment.
30.4. Within ten (10) days after the date hereof and prior to
commencing any on-board work, the Contractor shall provide the
WSF Representative with copies of a comprehensive safety and
security plan(s) which address each of the hazards discussed in
the foregoing, which plan(s) shall be subject to approval of WSF
and subject to the Contract Documents.
30.5. The Contractor shall provide protection from damage for
all affected storerooms and their contents which may remain in
the Vessel during the work. If the Contractor deems it necessary
or prudent to protect equipment and outfit which are still aboard
the Vessel upon delivery to the Contractor, it may be removed and
stored at no additional expense to WSF. When special protection
is no longer necessary, the Contractor shall reinstall the
removed items in their proper location.
30.6. The Contractor shall erect at the site of construction,
and maintain during construction, signs satisfactory to WSF
identifying the project and indicating that WSF is participating
in the development of the project.
31. OWNER FURNISHED EQUIPMENT
31.1. Certain equipment listed and described in the
Specifications is OFE and will be furnished by WSF.
31.2. The Contractor, at its expense, shall load the OFE from a
WSF warehouse or storage facility located in the greater
metropolitan Seattle area and transport it to the Shipyard for
storage, safekeeping, and/or installation. Propulsion control
equipment provided by Ross Hill Controls will be delivered to the
Shipyard by Ross Hill Controls on or before the date requested by
the Contractor, but no sooner than sixty (60) days following the
date hereof The Contractor shall inventory and inspect the OFE
and immediately report to WSF, in writing, any shortages or
damage. The Contractor shall care for the OFE at the higher level
of manufacturers instructions or as if it were the Contractor's
and in lockable, properly environmentally and temperature
controlled, and dry warehouse.
31.3. WSF will provide the services of technical
representatives for the OFE to the extent described in the
Specifications to advise and assist the Contractor. Should the
Contractor desire additional technical support the Contractor
shall arrange for the services directly with the individual
vendor and shall bear all additional costs.
31.4. If an OFE vendor's field representative must perform work
beyond that required by WSF's original purchase specification, or
if WSF finished service period is extended because of the
Contractors lack of preparation, schedule slippage, or
negligence, WSF will charge the Contractor the amount billed for
the extra time and expenses. The OFE vendor's representation has
been purchased by WSF on a normal daytime, weekday work schedule.
Should the Contractor require the services of the vendor's
representative outside the normal schedule, it shall be solely
responsible for any and all premium compensation that may be
incurred.
31.5. The Contractor shall provide all electrical power, water
service, lubrication, lighting, and ventilation and any other
services required for installation of OFE. The Contractor shall
be responsible for proper installation of OFE and for assuring it
is in good working order upon Redelivery.
32. DANGEROUS MATERIALS
32.1. The Contractor acknowledges that although the Vessel has
been representatively surveyed for Asbestos Containing Material
("ACM") and Lead Containing Paint ("LCP"), the results of which
are contained in the, surveys, such surveys are not all inclusive
and they should not be considered more than advisory in nature.
The Contractor warrants that it has taken into account the age of
the Vessel and the materials that were in common and accepted use
by the maritime industry at the time the Vessel was constructed
and previously renovated and during the time period it has been
in service.
32.2. The Contractor acknowledges that Polychlorinated Biphenyls
("PCB's") are likely to be encountered in certain felt gasket
materials used in the marine ventilation systems, certain
fluorescent fixture ballasts and/or in some capacitors on the
Vessel.
32.3. Whether or not any toxic or hazardous materials
(including, but not limited to, ACM LCP and PCB'S) are identified
in the Contract Documents, Drawings or otherwise, the Contractor
shall be wholly responsible for complying with, and enforcing,
all Regulations pertaining to the removal of ACM LCP, PCB's and
other toxic or hazardous materials whenever and wherever
encountered in the performance of the Contract Work. Any such
work, including any such work which may arise during performance
of Change Order Work or Indefinite Quantity Work, is part of the
Contract Work and is covered by the Initial Price.
32.4. The Contractor shall be wholly responsible for all
arrangements and expense associated with the removal and disposal
of waste material and debris, including ACM LCP, PCB's and other
toxic or hazardous materials found on board. The Contractor
shall protect and indemnity WSF from any and all damages
associated with or arising therefrom.
32.5. All replacement material shall be with non-ACM substitutes
which meet current criteria for safety and fire protection. Only
non-lead bearing paints shall be applied to the Vessel.
Materials and components which contain PCB's shall not be
introduced into the Vessel.
32.6. The Contractor shall promptly provide all information or
documentation pertaining to the removal or disposal of ACM LCP,
PCB's or other toxic or hazardous waste reasonably requested by
WSF. Should the Contractor fail to provide such information or
documentation or provide erroneous information or documentation,
WSF, in addition to any other rights it might have, shall have
the right to suspend all Contract Work until such time as the
deficiencies have been rectified.
33. NO WAIVER OF LEGAL RIGHTS
WSF shall not be precluded or estopped by any measurement,
estimate, approval or certificate made either before or after the
completion of Contract Work and payment therefor from showing the
true amount and character of work performed and materials
furnished by the Contractor, or from showing that any such
measurement, estimate, approval or certificate is untrue or
incorrectly made, or that the work or materials do not conform in
fact to the Contract Documents, and said measurement, estimate,
approval or certificate shall not constitute prima facie evidence
of proper performance of the Contract Work. WSF shall not be
precluded or estopped, notwithstanding any such measurement,
estimate, approval or certificate or any payment in accordance
therewith, from recovering from the Contractor and its Sureties
such damages as it may sustain by reason of the Contractor's
failure to comply with the terms of the Contract Documents.
34. ANTITRUST BREACH
The Contractor and WSF recognize that the impact of overcharges
to WSF by the Contractor resulting from antitrust law violations
by the Contractor's suppliers and Subcontractors adversely
affects WSF rather than the Contractor. Therefore, the Contractor
agrees to assign to WSF any and all claims for such overcharges.
35. ASSIGNMENT
35.1. The Contractor shall not assign all or any part of this
Contract or the Contract Work unless WSF, in its sole discretion,
approves such assignment in writing.
35.2. The Contractor may assign moneys due or to become due
under the Contract. Such assignment will be recognized by WSF,
if given written notice thereof, to the extent permitted by law;
but any assignment of moneys shall be subject to all offsets,
withholding, and deductions provided for by law and under the
Contract.
36. COMPUTATION OF TIME
All periods of time set forth in this Contract shall be computed
by including Saturdays, Sundays and holidays.
37. PERSONAL LIABILITY OF PUBLIC OFFICIALS
No member of the Commission or officer or employee of the State,
WSF, or Government including, but not limited to, the Secretary,
the Assistant Secretary and the members of the Department shall
be personally liable for any acts or failure to act in connection
with the Contract, it being understood that in such matters they
are acting solely as agents of the Government and the State.
38. NO THIRD PARTY BENEFICIARIES
Each party's promises, obligations and duties under this Contract
are for the benefit of the other party only and not for the
benefit of any person or entity not a signatory to this Contract,
provided only that the State is a third party beneficiary of all
direct and indirect promises obligations, and duties of the
Contractor to WSF and may enforce such promises directly in
accordance with applicable law.
39. TITLE
All material and equipment purchased to perform Contract Work
shall become the property of WSF at installation upon the Vessel
or upon payment by WSF if sooner, that the Contractor shall bear
the risk of loss for all such material and equipment until
Redelivery. WSF shall have title thereto free and clear of any
lien and/or encumbrances. The Contractor shall promptly pay all
indebtedness for labor, materials, tools, equipment and any other
items used by the Contractor in the performance of the Contract
Work. Before release of the Retainage, the Contractor shall
deliver to WSF a Warranty of Freedom from Liens for such
indebtedness with an affidavit in the form of Exhibit 3 hereto to
show that all bills for labor, materials, tools, equipment, etc.,
incurred for the Contract work have been paid. The Contractor
shall not permit any lien, unpaid obligation or charge to disrupt
the schedule of Contract Work on the Vessel. If any lien, unpaid
obligation or charge results in an in rem or any other action
against WSF, the Contractor shall take all such steps as are
necessary to avoid a delay in Redelivery and shall hold WSF
harmless from all losses, costs, damages or expenses incidental
thereto.
40. NO ARRESTS OR ATTACHMENTS
40.1. The parties agree that no hen or other in rem proceeding
may attach to or otherwise affect title to the Vessel or any
other vessel or property owned by WSF in connection with any
dispute or claim arising under or in connection with this
Contract. To the extent any such fights survive this Contract,
the Contractor does waive to the fullest extent permitted by law
any in rem fights, lien fights or other fights it has or may have
under this Contract, under the law, or otherwise, against the
Vessel or any other vessel owned or operated by WSF, including
but not limited to all maritime lien fights and shall not arrest
or attach to the Vessel or any other vessel or property owned or
operated by WSF in connection with any dispute or claim arising
under or in connection with this Contract.
40.2. The Contractor shall be responsible for making certain
that equivalent restrictions on the enforcement of lien and in
rem fights are included in all of its contract Subcontractors and
suppliers of materials or services.
41. NO WAIVER OF IMMUNITY
The provisions of this Contract, including but not limited to
Articles 39 and 40, do not and are not intended to in any manner
waive or limit WSFs and the State's fight sovereign immunity or
any statutory prohibition against asserting liens or encumbrances
against the property of WSF and the State
42. NOTICES
Unless WSF or the Contractor notifies the other in writing of a
change of address or of the representative, in which event any
notice shall be mailed, telegraphed, facsimiled or delivered to
the changed address, any notice under this Contract shall be in
writing or facsimile addressed to the following representatives:
For WSF:
Carl N. Shipley, Project Engineer
Washington State Ferries
Coleman Building, Third Floor
811 First Avenue
Seattle, Washington 98104
Telephone (206) 464-6864
Facsimile (206) 587-4801
For Contractor:
Tom Moynihan, Project Manager
Todd Pacific Shipyards Corporation
1801-16th Avenue SW
P.O. Box 3806
Seattle, Washington 98124
Telephone (206) 623-1635
Facsimile (206) 621-8491
The Contract shall be deemed executed in the State of Washington
and the laws of the State of Washington shall Govern the
interpretation and application of its provisions. All claims or
causes of action under this Contract shall be brought only in the
Superior Court of Thurston County, Washington. The Contractor
waives, to the fullest extent permitted by law, any right to
challenge jurisdiction, venue or to claim that said court is an
inconvenient forum.
43. JOINT PROVISIONS
All prior understandings and agreements heretofore entered into
between WSF and the Contractor whether written or oral are
superseded by and merged in this Contract which alone fully and
completely expresses the agreement between WSF and the
Contractor, and this Contract may not be changed orally, nor may
it be modified or varied in any manner, except in a writing
signed by both parties or as specified in Articles 12 and 13. The
failure of any party to insist upon strict compliance shall not
constitute a waiver or the abrogation of such provision, nor
shall it constitute a waiver of compliance or performance in any
other instance. No course of dealing between the parties shall
operate as a waiver by either party, and no delay on the part of
either party in the exercise of any right hereunder, shall
operate as a waiver of any right of such party. In the event any
provision of this Contract or any amendment thereto is found to
be invalid, illegal or unenforceable, it shall be deemed severed
from the Contract, which shall then be construed and enforced as
though such illegal, invalid or unenforceable provision has never
been a part thereof. All Article headings are for identification
purposes only.
IN WITNESS WHEREOF, the parties hereto have entered into this
Contract by their duly authorized representatives, as of the day
and year first written above.
WASHINGTON STATE DEPARTMENT OF TRANSPORTATION
MARINE DIVISION, WASHINGTON STATE FERRIES
BY: _______________________________________________
Michael T. McCarthy
TITLE: Acting Assistant Secretary for Marine Transportation
TODD PACIFIC SHIPYARDS CORPORATION
BY: _______________________________________________
Hans K. Schaefer
TITLE: President
APPROVED AS TO FORM FOR WSDOT:
BY: _______________________________________________
Assistant Attorney General
DATE: _______________________________________________
Exhibit 10-14
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is entered into
between Todd Shipyards Corporation, a Delaware corporation
("Seller") and The Board of Trustees of the Galveston Wharves
("Purchaser") , a separate utility and agency of the City of
Galveston, Texas ("City").
W I T N E S S E T H:
In consideration of the mutual covenants set forth herein and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Seller, the parties hereto
hereby agree as follows:
Section 1. Sale and Purchase. Seller shall sell, convey, and
assign to City, and Purchaser shall cause the City to purchase and
accept from Seller, for the Purchase Price (hereinafter defined)
and on and subject to the terms and conditions herein set forth,
the following:
(a) the tracts or parcels of land situated in Galveston County,
Texas described in Exhibit A hereto together with all rights and
interests appurtenant thereto, including all of Seller's right,
title, and interest in and to adjacent streets, alleys, rights-of-
way, and any adjacent strips or gores of real estate (the "Land")
; all improvements located on the land (the "Improvements") ; and
all rights, titles, and interests appurtenant to the Land and
Improvements;
(b) all of Seller's right, title and interest in" and to (i) the
leases and agreements described on Exhibit B, which is attached
and incorporated by reference (collectively the "Leases" and
individually a "Lease") (ii) all improvements located on the
Leases (the "Leasehold Improvements"); and (iii) all rights,
titles, and interests appurtenant to the Leases and Leasehold
Improvements;
(c) all of Seller's right, title, and interest in and to the
Berthing Agreement dated March 29, 1989, between Seller and
Galveston Maritime, Inc., ('GMI ") , pertaining to the use or
occupancy of a portion of the Land (the "GMI Agreement", which is
described on Exhibit C), all rents relating thereto and prepaid
for any period subsequent to the Closing Date (hereinafter
defined) , and all deposits, security or otherwise ("Deposits"),
made by GMI under the GMI Agreement; and
(d) all of the following, to the extent they apply to the Land,
the property subject to the Leases, the Improvements, or the
Leasehold Improvements: (i) contracts or agreements pertaining to
the use or occupancy of the Land, the property subject to the
Leases, the Improvements or Leasehold Improvements, such as
maintenance, service, or utility contracts (the "Property
Agreements") , to the extent Purchaser elects to take assignment
thereof, (ii) warranties, if any, relating to the Improvements and
Leasehold Improvements, to the extent they are assign able or
transferable, (iii) licenses, permits, or similar documents
pertaining to the use or occupancy of the Land, the property
subject to the Leases, the Improvements or Leasehold Improvements,
to the extent they are assignable or transferable, and (iv) plans,
drawings, specifications, surveys, engineering reports, and other
technical information pertaining to the use or occupancy of the
Land, the property subject to the Leases, the Improvements or
Leasehold Improvements.
The above listed items are herein collectively called the
"Property". All of the Property shall be conveyed, assigned, and
transferred to City at Closing (hereinafter defined) free and
clear of all liens, claims, easements, and encumbrances whatsoever
except for the Permitted Encumbrances (hereinafter defined) . All
tangible personal property not included as part of this Agreement
and located on the Land or the property covered by the Leases, or
in the Improvements or Leasehold Improvements, including without
limitation the property described on Exhibit D hereto (the
"Excluded Property"), shall be removed from the Property prior to
the Closing Date, except as otherwise agreed by the parties.
Section 2. Purchase Price. The price for which Seller shall sell
and convey the Property to City is $6,000,000.00 ("Purchase
Price"), to be paid as follows:
(a) Purchaser shall pay $600,000.00 of the Purchase Price at
Closing in cash or cash equivalent as set forth in Section 7(a)(1)
hereof.
(b) Purchaser shall cause to be delivered to Seller a series of
subordinate-lien revenue bonds having an aggregate face amount of
$5,400,000.00 and issued by the City (collectively the "Bonds" and
individually a "Bond") , payment of which will be secured by (i) a
deed of trust (the "Deed of Trust") in the form of Exhibit E
hereto, which will encumber the Land and property described in the
Leases, and (ii) a vendor's lien reserved by Seller in the general
warranty deed to be delivered to City at Closing, as provided in a
trust indenture associated with the Bonds (the "Trust Indenture"),
which will encumber revenues of Purchaser as provided in the Trust
Indenture.
The Bonds and Trust Indenture will be in form and substance as
described in Section 9 of this Agreement.
Section 3. Delivery of Information by Seller.
(a) No later than December 6, 1993, Seller, at its sole cost and
expense, shall deliver or cause to be delivered to Purchaser the
following:
(1) commitment for Title Insurance ("Title Commitment") from
Charter Title Company, whose address is 4265 San Felipe, Suite
350, Houston, Texas 77027 (the "Title Company") setting forth the
status of the title of the Land, Improvements, the property
covered by the Leases, and Leasehold Improvements and showing all
liens, claims, encumbrances, easements, rights-of-way,
encroachments, reservations, restrictions, and all other matters
of record affecting the Land, Improvements, the property covered
by the Leases or Leasehold Improvements; and
(2) a true, complete, and legible copy of each document referred
to in the Title Commitment ("Title Commitment Documents").
(b) No later than December 6, 1993, Seller, at its sole cost and
expense, shall deliver to Purchaser a survey ("Survey") consisting
of a plat and field notes prepared by a licensed surveyor
acceptable to Purchaser and Title Company, which Survey shall (i)
reflect the actual dimensions of, and area within, the Land and
property covered by the Leases, the location of any easements,
setback lines, encroachments, or overlaps thereon or thereover,
and the outside boundary lines of all Improvements and Leasehold
Improvements, (ii) identify by recording reference all easements,
set back lines, and other matters referred to in the Title
Commitment, (iii) include the surveyor's registered number and
seal, the date of the Survey, and a certificate satisfactory to
Purchaser, (iv) reflect that there is access to and from the Land
and property covered by the Leases from a publicly dedicated
street or road, (v) be sufficient to cause the Title Company to
delete (except for "shortages in area") the printed exception for
"discrepancies, conflicts or shortages in area or boundary lines,
or encroachments, or any overlapping of improvements" in the
Owner's Title Policy to be delivered pursuant to Section 7 hereof,
(vi) reflect any area within the Land and property covered by the
Leases that has been designated by the Federal Insurance
Administration, the Army Corps of Engineers, or any other
governmental agency or body as being subject to special or
increased flooding hazards, and (vii) in general, comply with the
requirements of the Texas Society of Professional Surveyors for a
Category 1A, Condition II: Land Title Survey. For purposes of the
property description to be included in the general warranty deed
to be delivered pursuant to Section 7 hereof ' the field notes
prepared by the surveyor shall control any conflicts or
inconsistencies with Exhibit A hereto, and such field notes shall
be incorporated herein by this reference upon their completion and
approval by Purchaser. Notwithstanding the foregoing, Purchaser
agrees to contribute the sum of $10,000.00 towards the cost of
the Survey in the event Closing does not occur.
(c) No later than December 6, 1993, Seller, at its sole cost and
expense, shall deliver to Purchaser current searches of all
Uniform Commercial Code financing statements filed with the Office
of the Secretary of State of Texas and the County Clerk of
Galveston County, Texas against Seller and Seller's predecessors
in title reflecting all effective financing statements then of
record relating to the Property or any part thereof.
(d) No later than December 6, 1993, Seller, at its sole cost and
expense, shall deliver to Purchaser (i) legible copies of all
Leases, including all amendments and modifications thereof, and
all consents or waivers with respect thereto that modify or
supplement the provisions thereof in any respect, (ii) legible
copies of all Property Agreements, (iii) a schedule of all
Deposits,
(iv) legible copies of all engineering and technical reports in
the possession of Seller or its representatives that concern the
Land, Improvements, the property covered by the Leases, or
Leasehold Improvements including soils testing reports and reports
of environmental or hazardous waste inspections or surveys, (v)
legible copies of all plans and specifications that describe or
relate to the Improvements and Leasehold Improvements, (vi) a
legible copy of the GMI Agreement, each amendment or modification
thereof, and each agreement relating thereto, and (vii) legible
copies of any other agreement affecting the Property. The
documents described in this Section 3(d) are herein collectively
called the "Documents" and the information contained in the
Documents is herein collectively called the "Information".
Purchaser shall keep the Information confidential until the
Closing Date.
Section 4. Right of Inspection; Contingency Period;
Environmental Audit.
(a) From the date of execution hereof to the Closing Date,
Seller shall afford Purchaser and its representatives a continuing
right to test and inspect, at reasonable hours, the Property, and
all books, records, contracts, and other documents or data
pertaining to the ownership, operation, or maintenance of the
Property; provided, however, that in conducting its testing or
inspection Purchaser shall not unreasonably interfere with the
business and operations of the Seller or of any tenant. To the
extent permitted by law, Purchaser agrees to indemnify Seller and
hold it harmless against all injury, damage, loss, cost and
expense, including cost of repairing damage to the Property and
cost of defending claims arising out of the exercise of
Purchaser's test and inspection rights accorded by this Section
4(a).
(b) If for any reason Purchaser, in its sole and absolute
discretion, is not satisfied with the physical condition of the
Improvements or the Leasehold Improvements, or any matter in the
Documents, or any part of the Information, or is otherwise not
satisfied with the Property for any reason whatsoever, then
Purchaser shall have the right to terminate this Agreement in
accordance with Section 12 (b) hereof, by delivering to Seller a
notice of termination at any time during the period from the date
hereof until 5:00 p.m. CST on December 13, 1993 ("Contingency
Period"). If Purchaser does not so terminate this Agreement prior
to the expiration of the Contingency Period, Purchaser shall have
waived its right to terminate this Agreement under this Section 4.
(c) Prior to the expiration of the Contingency Period, Seller
shall remove, or cause to be removed, all friable asbestos and
other hazardous material, if any, from the Property, identified in
the Phase II Environmental Audit (the "Audit") prepared by
Environmental Options, Inc., a copy of which Audit shall be
delivered to Purchaser as soon as reasonably possible after
receipt thereof by Seller, but in no event less than five (5) days
before the end of the Contingency Period. If Purchaser is not
satisfied with any item contained in the Audit, Purchaser shall
have the right to terminate this Agreement in accordance with
Section 12(b) hereof.
Section 5. Title. Purchaser shall have the right to object in
writing to any liens and encumbrances reflected by the Title
Commitment or Survey. Such objection must be made within ten (10)
days after Purchaser is in receipt of all of the Survey, the Title
Commitment, and the Title Commitment Documents. All liens and
encumbrances to which Purchaser so objects are hereinafter
referred to as the "Non-Permitted Encumbrances"; if no such notice
of objection is given during the period allowed, then it shall be
deemed that all matters reflected by the Survey and Title
Commitment are "Permitted Encumbrances". Seller shall have the
right, but not the obligation, at its sole cost, to cure or remove
all Non-Permitted Encumbrances and give Purchaser written notice
thereof before the end of the Contingency Period; provided,
however, that Seller at its sole cost shall be obligated to cure
or remove at or before Closing all mortgages, deeds of trust,
judgment liens, mechanics and materialments liens, and other liens
against the Property, whether or not Purchaser objects thereto
during the period allowed. If Seller does not timely cause all of
the Non-Permitted Encumbrances to be removed or cured, and timely
written notice thereof to be given to Purchaser, then Purchaser
shall have the right either (i) to terminate this Agreement in
accordance with Section 12(b) hereof by delivering notice to
Seller before the end of the Contingency Period, or (ii) to elect
to purchase the Property subject to the Non-Permitted
Encumbrances, other than liens that Seller is obligated to cure or
remove, in which case the Non-Permitted Encumbrances (other than
liens that Seller is obligated to cure or remove) subject to which
Purchaser elects to purchase the Property shall thereafter be
Permitted Encumbrances. The GMI Agreement is hereby designated a
Permitted Encumbrance.
Section 6. Seller's Representations, Warranties, and Covenants.
Seller hereby represents and warrants to, and covenants with,
Purchaser that:
(a) Seller has full right, power, and authority to execute and
deliver this Agreement and to consummate the purchase and sale
transactions provided for herein without obtaining any further
consents or approvals from, or the taking of any other actions
with respect to, any third parties. This Agreement, when executed
and delivered by Seller and Purchaser, will constitute the valid
and binding agreement of Seller, enforceable against Seller in
accordance with its terms.
(b) Except as set forth on Schedule 6(b), Seller has good and
indefeasible title in fee simple to the Land free and clear of all
liens (except those liens that will be released at or before
Closing), and no party, except as herein set forth, has or shall
have on the Closing Date any rights in, or to acquire, the
Property.
(c) Except as set forth on Schedule 6 (c), to the best of
Seller's knowledge, but without any independent investigation by
Seller, or any obligation of Seller to make such investigation,
the Improvements and Leasehold Improvements are being maintained
in substantial compliance with all applicable laws, regulations,
insurance requirements, contracts, leases, permits, licenses,
ordinances, restrictions, building setback lines, covenants,
reservations, and easements, and Seller has received no notice,
written or oral, claiming any violation of any of the same or
requesting or requiring the performance of any repairs,
alterations, or other work in order to so comply.
(d) The Description of Leases attached hereto as Exhibit B sets
forth in all material respects a description of each Lease
including (i) the commencement date and scheduled expiration date
thereof , (ii) all renewal, expansion, and similar rights afforded
thereby, (iii) the area leased thereby, (iv) the rental paid by
the tenant thereunder, (v) the amount of the security and any
other deposits paid by the tenant thereunder, and (vi) the amount
of any rental discounts, rebates, rental concessions, brokerage
commissions, and other items payable thereunder or in connection
therewith. The Description of Leases is true and correct in all
respects and accurately represents the subject matter thereof as
of the date thereof.
(e) Except as set forth on Schedule 6 (e) , with respect to each
Lease: (i) such Lease is in full force and effect and no uncured
breach or default exists on the part of the landlord or tenant
thereunder; (ii) Seller has accepted possession of the leased
premises and has no obligation to construct, install, or repair
any improvements or facilities thereon; (iii) no rent called for
under such Lease has been paid more than thirty (30) days in
advance of its due date; and (iv) Seller is not asserting any
claim of offset or other defense in respect of its or the
landlord's obligations under its Lease.
(f) The Description of the GMI Agreement attached hereto as
Exhibit C sets forth in all material respects a description
thereof including (i) the commencement date and scheduled
expiration date thereof, (ii) all renewal, expansion, and similar
rights afforded thereby, (iii) the area leased thereby, (iv) the
rental paid by GMI thereunder, (v) the amount of the security and
any other deposits paid by GMI thereunder, and (vi) the amount of
any rental discounts, rebates, rental concessions, brokerage
commissions, and other items payable thereunder or in connection
therewith. The Description of the GMI Agreement is true and
correct in all respects and accurately represents the subject
matter thereof as of the date thereof.
(g) Except as set forth on Schedule 6 (g) , with respect to the
GMI Agreement: (i) it is in full force and effect and no uncured
breach or default exists on the part of the landlord or tenant
thereunder; (ii) GMI has accepted possession of its leased
premises in their present condition and the landlord has no
obligation to construct, install, or repair any improvements or
facilities for GMI; (iii) no rent called for under the GMI
Agreement has been paid more than thirty (30) days in advance of
its due date; (iv) GMI is not asserting any claim of offset or
other defense in respect of its obligations thereunder; and (v)
GMI is not entitled to any concession, rebate, allowance, or
period of occupancy free of rent under the GMI Agreement or any
other agreement with Seller.
(h) There is no lease or agreement (other than the GMI Agreement)
between Seller and any other person or entity, pertaining to the
use or occupancy of any portion of the Property.
(i) The copies of all Documents and other documents delivered by
Seller to Purchaser pursuant to this Agreement shall be true and
complete in all material respects and, to the best of Seller's
knowledge and belief, the Information shall be true and complete
in all material respects.
(j) Except as disclosed on Schedule 6(j), there are no actions,
suits, claims, assessments, or proceedings pending or, to the
knowledge of Seller, threatened that could materially adversely
affect the ownership, operation, or maintenance of the Property or
Seller's ability to perform hereunder.
(k) All bills and other payments due with respect to the
ownership, operation, and maintenance of the Property have been
paid or will be paid prior to Closing in the ordinary course of
business.
(1) From the date hereof until the Closing Date, Seller shall:
(i) maintain the Property in substantially the same condition as
it exists as of the date hereof; (ii) except as disclosed on
Schedule 6(e), continue all Leases, Property Agreements, the GMI
Agreement, and insurance policies or contracts relative to the
Property in full force and effect and neither cancel, amend, nor
renew any of the same without Purchaser's prior written consent;
(iii) not commit or permit to be committed any waste to the
Property; and (iv) not, without the prior written consent of
Purchaser, enter into any agreement or instrument or take any
action that would encumber the Property after Closing, that would
bind Purchaser or the Property after Closing, or that would be
outside the normal scope of maintaining and operating the
Property.
(m) There are no labor disputes, organizational campaigns, or
union contracts existing or under negotiation with respect to the
Property or the operation thereof. There are no employees engaged
in the operation or maintenance of the Property for whom Purchaser
will be responsible after Closing.
(n) Attached hereto as Exhibit F is a complete and correct list
of all Property Agreements setting forth the identity of the
parties thereto, the date of such agreement, the consideration
payable thereunder, the services to be rendered thereunder, and
the expiration date thereof. Except as otherwise expressly
indicated on Exhibit F, all of the Property Agreements are
cancelable on thirty (30) or fewer days notice, without payment of
any cancellation consideration.
(o) To the best of Seller's knowledge and except as set forth on
Schedule 6 (o) , the Property is not the site of any activity that
would violate any past or present environmental law or regulation
of any governmental body or agency having jurisdiction over the
Property. Specifically, but without limitation, to the best of
Seller's knowledge and except as set forth on Schedule 6(o): (i)
solid waste, petroleum, or petroleum products are not handled on
the Property such that they may leak or spill onto the Property or
contaminate the Property, (ii) there is no on-site contamination
resulting from activities on the Property or adjacent tracts, and
(iii) the Property contains no "hazardous materials" which shall
mean any flammables, explosives, radioactive materials, asbestos,
or other hazardous waste including without limitation substances
defined as "hazardous substances", "hazardous materials", or
"toxic substances" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980; the Hazardous Materials
Transportation Act; and the Resources Conservation and Recovery
Act, all as amended.
(p) None of the property or area covered by the GMI Agreement or
any Lease has been sublet by Seller to any person, and neither the
GMI Agreement nor any Lease has been assigned by Seller to any
person.
If (i) any of Seller's representations and warranties set forth in
this Section 6 are untrue in any material respect, or (ii) at any
time at or before Closing there is any material change with
respect to the matters represented and warranted by Seller
pursuant to this Section 6, then Seller shall give Purchaser
prompt written notice thereof, and Purchaser shall have the right
to terminate this Agreement in accordance with Section 12 (b)
hereof by delivering notice to Seller at any time at or before the
Closing. All of Seller's representations and warranties shall
survive the Closing.
Section 7. Closing. The closing ("Closing") of the sale of the
Property by Seller to City shall occur on December 16, 1993
("Closing Date"), or such later date if extended by the provisions
of Section 9(g) below. The Closing shall occur in the offices of
Title Company, or such other mutually agreed upon location,
commencing at a mutually agreeable time on the Closing Date. At
the Closing the following, which are mutually concurrent
conditions, shall occur:
(a) Purchaser, at its sole cost and expense (except for the
Mortgagee's Title Policy, which will be at Seller's sole cost and
expense) , shall deliver or cause to be delivered to Seller the
following:
(1) Cashier's check, or the check of the Title Company, made
payable to the order of Seller, or immediately available cash
funds, in the amount of the cash portion of the Purchase Price as
specified in Section 2(a) hereof, adjusted in accordance with
Section 7(c) hereof;
(2) Bonds and Trust Indenture fully executed by City;
(3) Deed of Trust fully executed and acknowledged by City;
(4) Evidence satisfactory to Seller and Title Company that the
persons executing the Closing documents on behalf of Purchaser and
City have full right, power, and authority to do so; and
(5) Mortgagee's Title Policy in the amount of $5,400,000.00.
(b) Seller, at its sole cost and expense (except for the areas
and boundaries deletion in the Owner's Policy of Title Insurance,
which, if obtained, will be at Purchaser's sole cost and expense)
, shall deliver or cause to be delivered to City or Purchaser,
whichever is appropriate, the following:
(1) General Warranty Deed in the form of Exhibit G hereto,, fully
executed and acknowledged by Seller, conveying to City the Land,
Improvements, Leases and Leasehold Improvements, subject only to
the Permitted Encumbrances, the Deed of Trust, the Trust Indenture
and a vendor's lien securing payment of the Bonds, provided,
however, that the conveyance of Seller's right, title and interest
in and to adjacent streets, alleys, rights of way, and any
adjacent strips or gores of real estate may be without warranty of
title, and the Improvements and Leasehold Improvements may be
conveyed without warranty of any kind except warranty of title;
(2) Bill of Sale and Assignment in the form of Exhibit H hereto,
fully executed and acknowledged by Seller, assigning, conveying,
and transferring all of the Property other than the Land,
Improvements, Leases and Leasehold Improvements, to City, subject
only to the Permitted Encumbrances, but without warranty of any
kind except warranty of title;
(3) Tenant Estoppel Certificate substantially in the form of
Exhibit I hereto, executed by GMI;
(4) Owner's Policy of Title Insurance in the amount of the
Purchase Price issued by Title Company (with such reinsurance as
Purchaser may require), insuring that Purchaser is the owner of
the Land, Improvements, the property covered by the Leases and
Leasehold Improvements, subject only to the Permitted Encumbrances
and the standard printed exceptions included in a Texas standard
form owner's policy of title insurance; provided, however, that
(i) the standard exception for discrepancies, conflicts, or
shortages in area shall be deleted except for "shortages in area",
(ii) such policy shall have "None of Record" endorsed regarding
restrictions except for restrictions that are Permitted
Encumbrances, (iii) the rights of parties in possession shall be
deleted, and (iv) the standard exception for taxes shall be
limited to the year in which the Closing occurs, marked "not yet
due and payable", and subsequent years and subsequent assessments
for prior years due to change in land usage or ownership;
(5) Current certificate issued by a company acceptable to
Purchaser reflecting that since the date of the searches furnished
pursuant to Section 3(c) hereof no Uniform Commercial Code
filings, chattel mortgages, assignments, pledges, or other
encumbrances have been filed in the offices of the Secretary of
State of the State of Texas or the County Clerk of Galveston
County with reference to the Property;
(6) Evidence satisfactory to Purchaser and the Title Company that
the persons executing and delivering the Closing documents on
behalf of Seller have full right, power and authority to do so;
(7) Certificate executed by Seller stating that, as of the
Closing Date, each of Seller's representations and warranties set
forth in Section 6 hereof is true and correct in all material
respects;
(8) Certificate in the form of Exhibit i hereto meeting the
requirements of Section 1445 of the Internal Revenue Code of 1986,
executed and sworn to by Seller.
(9) Such other instruments as are customarily executed in Texas
to effectuate the conveyance of property similar to the Property,
with the effect that, after the Closing, City will have succeeded
to all of the rights, titles, and interests of Seller related to
the Property and Seller will no longer have any rights, titles, or
interests in and to the Property, other than pursuant to the liens
securing payment of the Bonds.
(c) All normal and customarily proratable items, including
without limitation real estate and personal property taxes,
utility bills, insurance premiums, rents, interest, and Property
Agreement payments shall be prorated as of the Closing Date,
Seller being charged and credited for all of same up to such date
and Purchaser being charged and credited for all of same on and
after such date. If the actual amounts to be prorated are not
known as of the Closing Date, the prorations shall be made on the
basis of the best evidence then available, and thereafter, when
actual figures are received, a cash settlement will be made
between Seller and Purchaser. The provisions of this Section 7(c)
shall survive the Closing.
(d) Seller shall pay all costs incurred by Seller and liabilities
relating to the Property that arise out of or are attributable to
the period prior to the Closing Date, and shall indemnify and hold
harmless Purchaser from such costs and liabilities and from all
reasonable attorneys' fees expended by Purchaser in connection
therewith. Seller shall have the right to receive all proceeds
relating to the Property that are properly allocable to the period
before the Closing Date, and Purchaser shall have the right to
receive all proceeds relating to the Property that are properly
allocable to the period from and after the Closing Date.
Purchaser shall pay all costs incurred by Purchaser and
liabilities relating to the Property that arise out of or are
attributable to the period from and after the Closing Date, except
such costs and liabilities that arise out of or result from a
breach by Seller of its representations and warranties set forth
in Section 6 hereof, and, to the extent permitted by law,
Purchaser shall indemnify and hold harmless Seller from such
reasonable costs and liabilities and from all reasonable
attorneys, fees expended by Seller in connection therewith. This
Section 7(d) shall survive the Closing.
(e) Upon completion of the Closing, Seller shall deliver to
City possession of the Property free and clear of all tenancies of
every kind and parties in possession (except the Permitted
Encumbrances), with all parts of the Property in the same
condition as on the date hereof, normal wear only excepted.
(f) Upon completion of Closing, the City's title to the Leases
and the land covered by the Leases will merge, the Leases will
terminate, and Seller will have no further obligation under the
Leases except for payment of taxes, rent, and other liabilities
attributable to the period before the Closing Date.
Section 8. Commissions. Seller has agreed to pay a commission to
Cushman & Wakefield of Texas, Inc. upon the consummation of
Closing. Seller shall defend, indemnify, and hold harmless
Purchaser, from and against all claims by third parties for
brokerage, commission, finders, or other fees relative to this
Agreement or the sale of the Property, and all court costs,
attorneys, fees, and other costs or expenses arising therefrom,
and alleged to be due by authorization of Seller. As provided for
in the Texas Real Estate License Act, City is advised to have an
abstract of title with regard to the Property examined by an
attorney of its choice, or to obtain a policy of title insurance.
Section 9. Bonds and Trust Indenture. Notwithstanding any other
provision in this Agreement, City's obligation to purchase the
Property is subject to the following:
(a) Purchaser will use its best efforts to cause the City to
authorize and issue the Bonds pursuant to the terms of the Trust
Indenture. Purchaser shall adopt a resolution requesting the City
to issue the Bonds, and urging the City to adopt an ordinance
providing for the sale of the Bonds.
(b) Payment of the Bonds will be secured by a lien on the Land
and the property described in the Leases, and a subordinate lien
on the revenues of Purchaser as provided in the Trust Indenture.
The Deed of Trust will limit Seller from foreclosing its liens in
the event of default by Purchaser until after December 31, 1995.
(c) The Bonds will be taxable bonds bearing interest at the rate
of eight percent (8%) per annum. Interest on each Bond will be
paid semiannually beginning July 1, 1994. The Bonds may be
prepaid in whole or in part at any time without penalty.
(d) The Bonds will be issued in the following principal amounts,
having the maturity date indicated:
Principal Amount Maturity Date
$216,000.00 January 1, 1995
$216,000.00 January 1, 1996
$216,000.00 January 1, 1997
$216,000.00 January 1, 1998
$216,000.00 January 1, 1999
$216,000.00 January 1, 2000
$216,000.00 January 1, 2001
$216,000.00 January 1, 2002
$216,000.00 January 1, 2003
$3,456,000.00 January 1, 2004
(e) The ordinance, Bonds, Trust Indenture, and related documents
will be prepared by bond counsel for City with the assistance and
direction of Purchaser's financial advisor, all subject to the
approval of Seller. All matters concerning the Bonds, Trust
Indenture, and related documents must be approved in writing by
the Attorney General of the State of Texas prior to Closing.
(f) The Bonds shall be purchased by Seller on the Closing Date
accompanied by an investment letter executed by Seller.
(g) If the Bonds are not approved for sale by the Attorney
General by the Closing Date set forth in Section 7, then the
Closing Date shall be extended until the Bonds are approved for
sale; provided, however, that the Closing Date shall not be
extended past January 1, 1994, without the written agreement of
Seller and Purchaser. If the Bonds are not approved for sale by
January 1, 1994, either Seller or Purchaser shall have the right
to terminate this Agreement by notice to the other in accordance
with Section 12 hereof.
Section 10. Indemnity. Seller shall indemnify and hold Purchaser
harmless from and against any and all losses, demands, claims,
costs, expenses, and liability, asserted against Purchaser and
arising out of the matters set forth on Schedules 6(c), 6(g),
6(j), and 6(o) to this Agreement.
Section 11. Destruction, Damage, or Taking Before Closing. If,
before Closing, all or any part of the Property is destroyed or
damaged, or becomes subject to condemnation or eminent domain
proceedings, then Seller shall promptly notify Purchaser thereof.
Purchaser shall have the right to elect to proceed with the
Closing (subject to the other provisions of this Agreement) by
delivering notice thereof to Seller within five (5) business days
of receipt of Seller's notice respecting the damage, destruction,
or taking, but Purchaser shall be entitled to all insurance
proceeds or condemnation awards payable as a result of such damage
or taking and, to the extent the same may be necessary or
appropriate, Seller shall assign to Purchaser at Closing Seller's
rights to such proceeds or awards. If, within five (5) business
days of receipt of Seller's notice respecting the damage,
destruction, or taking, Purchaser notifies Seller of its intent to
terminate this Agreement, or if Purchaser gives no notice within
such period, then Purchaser shall be deemed to have terminated
this Agreement pursuant to Section 12(b) hereof.
Section 12. Termination and Remedies.
(a) If City fails to consummate the purchase of the Property
pursuant to this Agreement for any reason then Seller, as its sole
remedy, shall have the right to terminate this Agreement by
notifying Purchaser thereof, in which event neither City nor
Seller shall have any further rights or obligations hereunder.
(b) If Seller fails to consummate the sale of the Property
pursuant to this Agreement for any reason other than Purchaser's
or City's failure to perform its obligations hereunder, then
Purchaser shall have the right to: (i) terminate this Agreement by
notifying Seller thereof, in which case neither party hereto shall
have any further rights or obligations hereunder; (ii) enforce
specific performance of the obligations of Seller hereunder; or
(iii) seek all other rights, recourses, or remedies available to
Purchaser whether hereunder, at law, or in equity, said rights,
remedies, and recourses being cumulative.
Section 13. Notices. All notices provided or permitted to be
given under this Agreement must be in writing and may be served by
depositing same in the United States mail, addressed to the party
to be notified, postage prepaid and registered or certified with
return receipt requested; by delivering the same in person to such
party; by prepaid telegram or telex; or by facsimile copy
transmission. Notice given in accordance herewith shall be
effective upon receipt at the address of the addressee. For
purposes of notice, the addresses of the parties shall be as
follows:
If to Seller, to: Mr. Patrick W. E. Hodgson
Todd Shipyards Corporation
1801 16th Avenue S. W.
P. 0. Box 84788
Seattle, Washington 98134
with a copy to: Mr. Ellis L. Tudzin
McGlinchey Stafford Lang
Wortham Tower
2727 Allen Parkway, Suite 1900
Houston, Texas 77019
If to Purchaser, to: Mr. Doug J. Marchand
Port of Galveston
123 Rosenberg Avenue
P. 0. Box 328
Galveston, Texas 77553
with a copy to: Mr. Benjamin R. Powel
McLeod, Alexander, Powel & Apffel
802 Rosenberg Avenue
P. 0. Box 629
Galveston, Texas 77553
Either party hereto may change its address f or notice by giving
three (3) days prior written notice thereof to the other party.
Section 14. Assigns; Beneficiaries. This Agreement shall inure to
the benefit of and be binding on the parties hereto and their
respective heirs, legal representatives, successors, and assigns.
This Agreement is for the sole benefit of Seller, City, and
Purchaser, and no third party is intended to be a beneficiary of
this Agreement.
Section 15. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas, and
all obligations hereunder are performable in Galveston County,
Texas.
Section 16. Entire Agreement. This Agreement is the entire
agreement between Seller, City, and Purchaser concerning the sale
of the Property, and no modification hereof or subsequent
agreement relative to the subject matter hereof shall be binding
on either party unless reduced to writing and signed by the party
to be bound. Exhibits A through J and Schedules 6(b), 6(c), 6(e),
6(g), 6 (j) , and 6 (o) , attached hereto, are incorporated herein
by this reference for all purposes.
Section 17. Coastal Disclosure. The real property described in
this contract is located seaward of the Gulf Intracoastal Waterway
to its southernmost point and then seaward of the longitudinal
line also known as 97 degrees, 121, 19" which runs southerly to
the international boundary from the intersection of the center
line of the Gulf Intracoastal Waterway and the Brownsville Ship
Channel. If the property is in close proximity to a beach
fronting the Gulf of Mexico, the City is hereby advised that the
public has acquired a right of use or easement to or over the area
of any public beach by prescription, dedication, or presumption,
or has retained a right by virtue of continuous right in the
public since time immemorial, as recognized in law and custom.
The extreme seaward boundary of natural vegetation that spreads
continuously inland customarily marks the landward boundary of the
public easement. If there is no clearly marked natural vegetation
line, the landward boundary of the easement is as provided by
Sections 61.016 and 61.017, Natural Resources Code.
State law prohibits any obstruction, barrier, restraint, or
interference with the use of the public easement, including the
placement of structures seaward of the landward boundary of the
easement. STRUCTURES ERECTED SEAWARD OF THE VEGETATION LINE (OR
OTHER APPLICABLE EASEMENT BOUNDARY) OR THAT BECOME SEAWARD OF THE
VEGETATION LINE AS A RESULT OF NATURAL PROCESSES ARE SUBJECT TO A
LAWSUIT BY THE STATE OF TEXAS TO REMOVE THE STRUCTURE.
The City is hereby notified that the City should seek the advice
of an attorney or other qualified person before executing this
contract or instrument of conveyance as to the relevance of these
statutes and facts to the value of the property the purchaser is
hereby purchasing or contracting to purchase.
Section 18. Counterparts. This Agreement may be executed in any
number of counterparts, and each counterpart shall be deemed to be
an original instrument, but all such counterparts together shall
constitute but one Agreement. A photocopy or facsimile
reproduction of an original signature of a party shall be
effective to bind that party to the terms, covenants, and
conditions of this Agreement.
IN WITNESS WHEREOF, Purchaser and Seller have executed this
Agreement as of the 6th day of December, 1993.
PURCHASER : THE BOARD OF TRUSTEES OF THE GALVESTON
WHARVES, a separate utility and agency of the City of
Galveston, Texas
By: _/s/ D.J. Marchand
Name: D.J. MARCHAND
Title: GENERAL MANAGER-PORT DIRECTOR
SELLER: TODD SHIPYARDS CORPORATION, a Delaware
corporation
By:. s/ Patrick W.E. Hodgson
Name: PATRICK W.E. HODGSON
Title: CHAIRMAN AND CEO
This Agreement has been ratified and confirmed in all respects by
the City of Galveston, Texas.
SIGNED the 9th day of December, 1993.
THE CITY OF GALVESTON, TEXAS
By: /s/ Barbara K. Crews
Name: Barbara K. Crews
Title: Mayor, City of Galveston
THE STATE OF TEXAS
COUNTY OF GALVESTON
DEED OF TRUST
This Agreement is entered into between The City of Galveston,
Texas, whose mailing address is P.O. Box 779, Galveston, Texas
77553 (hereinafter termed "Grantor"), and Ellis L. Tudzin,
Trustee, whose mailing address is 11757 Katy Freeway, Suite 1400,
Houston, Texas 77079 (hereinafter termed "Trustee"), as Trustee
for the benefit of Todd Shipyards Corporation, a Delaware
corporation, whose mailing address is P.O. Box 84788, Seattle,
Washington 98124 (hereinafter termed "Beneficiary").
I. DEFINITIONS.
1.1 The term "Bonds" shall mean those certain Wharves and
Terminal Subordinate Lien Revenue Bonds, Series 1993B, having an
aggregate face value of $5,400,000.00, issued by Grantor.
1.2 The term "Indebtedness" shall mean any and all sums becoming
due and payable pursuant to the Bonds.
1.3 The term "Mortgaged Premises" shall mean and include the real
property situated in Galveston County, Texas, described on Exhibit
"A" which is attached hereto and incorporated herein for all
purposes, together with all buildings and improvements of every
kind and description now or hereafter erected or placed thereon.
1.4 The term "Trust Indenture,, shall mean the document entered
into by and between Grantor and Texas Commerce Trust Company,
National Association, as Trustee, dated as of November 18, 1993,
and relating to the Bonds.
II. CONVEYANCE IN TRUST
In consideration of Ten Dollars ($10-00) cash in hand paid, of
Beneficiary's purchase of the Bonds, and the mutual covenants
contained herein, the receipt and sufficiency of which are hereby
acknowledged, Grantor, subject to the matters set forth on Exhibit
"B" (the "Permitted Encumbrances"), hereby conveys to Trustee, and
Trustee's successors, substitutes, and assigns, the above-
described Mortgaged Premises, in trust, for the purpose of
securing payment of the Indebtedness, including all renewals,
modifications, refinancings, rearrangements, and extensions
thereof, and the full and complete performance of each and every
obligation, covenant, duty and agreement of Grantor contained
herein or in the Bonds or any other instrument executed by Grantor
pertaining to the Bonds or as security therefor. TO HAVE AND TO
HOLD the Mortgaged Premises, together with the rights, privileges
and appurtenances thereto belonging unto the Trustee and his
substitutes or successors forever, and Grantor is hereby bound to
warrant and forever defend the Mortgaged Premises unto the
Trustee, his substitutes or successors and their assigns, against
the claims of all persons claiming any interest in the Mortgaged
Premises or any part thereof, except for the Permitted
Encumbrances. All of the covenants and agreements of Grantor
herein shall survive the execution and delivery of this document
and shall continue in force until written release hereof is
executed by Beneficiary, its successors or assigns. "Accordingly,
if Grantor shall perform faithfully each and all of the covenants
and agreements herein contained and shall pay the Indebtedness in
full, then, and then only, this conveyance shall be released in
due form, upon Grantor's written request and at Grantor's expense.
No release of this conveyance or the lien thereof shall be valid
unless executed by Beneficiary, its successors or assigns.
III. ADDITIONAL SECURITY
As further security for the Indebtedness and the full and complete
performance of each and every obligation, covenant, agreement and
duty of Grantor contained herein or contained in any other
instrument executed by Grantor pertaining to the Bonds or the
security therefor:
3.1 Assignment of Condemnation Awards. To the extent of the full
amount of the Indebtedness secured hereby and of the costs and
expenses (including reasonable attorneys' fees) incurred by
Beneficiary in the collection of any award or payment, Grantor
hereby assigns to Beneficiary any and all judgments, decrees,
awards or payments, including all interest thereon, together with
the right to receive the same, which may be made with respect to
the Mortgaged Premises as a result of the exercise of the right of
eminent domain. To the extent of the outstanding balance of the
Indebtedness, all such damages, condemnation proceeds and
consideration shall be paid directly to Beneficiary, and after
first applying said sums to the payment of all costs and expenses
(including reasonable attorneys, fees) incurred by Beneficiary in
obtaining such sums, Beneficiary may, at its option, apply the
balance on the Indebtedness, in any order and whether or not then
due, or to the restoration of the Mortgaged Premises, or release
the balance to Grantor. Said application or release shall not
cure or waive any default. If Beneficiary elects to allow a
portion of the proceeds of any condemnation proceedings to be paid
to Grantor to be used in rebuilding, restoring, or repairing the
Mortgaged Premises, then the disbursement of such proceeds shall
be on such terms and subject to such conditions as Beneficiary may
reasonably specify. Grantor shall promptly notify Beneficiary of
the institution or threatened institution of any proceedings for
the condemnation of any of the Mortgaged Premises. Beneficiary
shall have the right to participate in any such condemnation
proceedings.
IV. GRANTOR'S REPRESENTATIONS AND WARRANTIES
In order to induce Beneficiary to purchase the Bonds, Grantor
represents and warrants that:
4.1 Valid Title. Except for the Permitted Encumbrances, Grantor
has good and indefeasible title in fee simple to the Mortgaged
Premises and has good right and lawful authority to mortgage and
pledge the same.
4.2 Maintenance of Lien Priority. Grantor shall take all steps
necessary to preserve and protect the validity and priority of the
liens on the Mortgaged Premises created hereby. Grantor shall
execute, acknowledge and deliver such additional instruments as
Beneficiary may deem necessary in order to preserve, protect,
continue, extend or maintain the liens and security interest
created hereby as first liens on the Mortgaged Premises.
V. COVENANTS OF GRANTOR
As long as any of the Indebtedness remains unpaid, Grantor
covenants and agrees that:
5.1 Payment of Indebtedness. Grantor shall pay the Indebtedness
promptly when due and payable in accordance with the terms of the
Bonds and all other instruments evidencing, securing, or otherwise
relating to the Indebtedness.
5.2 Insurance. Grantor shall keep the Mortgaged Premises insured
against loss or damage by fire, windstorm, flood and extended
coverage perils for the full replacement value of the Mortgaged
Premises, and all such policies shall provide that any losses
payable thereunder shall be payable as provided in the Trust
Indenture. Notwithstanding anything in the Trust Indenture to the
contrary, Grantor covenants and agrees that all insurance money
and funds received on account of damage to or loss of the
Mortgaged Premises shall promptly be applied to the repair or
restoration of such facilities to their former condition or in
such manner as will make the same afford approximately the same
services. Regardless of whether any insurance proceeds payable to
Grantor are sufficient to pay the full costs of repair or
restoration of the Mortgaged Premises, Grantor shall promptly
commence and carry out the repair or restoration of such
facilities to their former condition or in such manner as will
make the same afford approximately the same services. Grantor
shall not permit or carry on any activity within or relating to
the Mortgaged Premises that is prohibited by the terms of any
insurance policy covering any part of the Mortgaged Premises or
which permits cancellation of or increase in the premium payable
for any insurance policy covering any part of the Mortgaged
Premises. However, breach of the preceding sentence shall not be
an event of default under this Deed of Trust until Beneficiary has
given Grantor written notice of the alleged breach and Grantor has
failed to cure such alleged breach after being given thirty (30)
days time in which to do so. Grantor shall promptly deliver to
Beneficiary a Certificate of Insurance showing that the Mortgaged
Premises are insured as required herein.
5.3 Operation of Mortgaged Premises; Inspection Rights. Grantor
shall discharge or otherwise satisfy all claims for labor
performed and material furnished for any repairs, renewals, or
replacements made to the Mortgaged Premises, and will not allow
any liens against the Mortgaged Premises that would be superior in
dignity to the lien created by this Deed of Trust. Grantor at all
times shall comply with and perform all obligations under any
applicable laws, statutes, regulations, ordinances, or restrictive
covenants relating to the Mortgaged Premises and the use and
operation thereof. Beneficiary and Beneficiary's agents or
representatives shall have access to the Mortgaged Premises at all
reasonable times in order to inspect same, and verify Grantor's
compliance with Grantor's duties and obligations under this
document.
5.4 Environmental Condition. Grantor shall not (i) handle solid
waste, petroleum, or petroleum products on the Mortgaged Premises
in such manner that they leak or spill onto or contaminate the
Mortgaged Premises, or (ii) contaminate the Mortgaged Premises
with any "hazardous materials", which shall mean any flammables,
explosives, radioactive materials, asbestos, or other hazardous
waste, including without limitation substances defined as
"hazardous substances", "hazardous materials", or "toxic
substances" in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Hazardous Materials
Transportation Act, and the Resources Conservation and Recovery
Act, all as amended. To the extent allowed by law, Grantor will
indemnify and hold Beneficiary harmless from and against any and
all losses, demands, claims, costs, expenses, and liability
asserted against Beneficiary and caused by Grantor's breach of
this covenant. The provisions of this paragraph shall survive the
foreclosure, if any, of this Deed of Trust.
5.5 ADA Compliance. Grantor shall comply, to the extent
applicable to the Mortgaged Premises, with the provisions of the
Americans with Disabilities Act of 1990, as it may from time to
time be amended, but only with respect to improvements constructed
after the date of this Deed of Trust.
VI. TERMINATION OF TRUST
This Agreement and the grants and conveyances contained herein
shall become null and void upon payment in full of the
Indebtedness, and the Mortgaged Premises shall then revert to
Grantor and the entire estate, right, title and interest of the
Trustee and Beneficiary will thereupon cease.
VII. DEFAULT
7.1 Events of Default. Grantor will be in default under this
Agreement upon the happening of any of the following events or
conditions, or the happening of any other event of default as
defined elsewhere in this Agreement (hereinafter collectively
referred to as an "Event of Default"):
(a) Grantor fails to make when due any payment of principal or
interest under the Indebtedness.
(b) Grantor fails to keep or perform any of the covenants,
conditions or stipulations contained in this Agreement, the Bonds,
the Trust Indenture, or in any other instruments securing,
evidencing or relating to the Indebtedness.
(c) Any warranty or representation made in this Agreement by
Grantor is untrue or misleading in any material respect.
An Event of Default described in Section 7.1(a) is referred to
herein as a "Monetary Default". An Event of Default described in
Sections 7.1(b) and (c) is referred to herein as a "Non-Monetary
Default".
7.2 Notice and Cure for a Non-Monetary Default. Notwithstanding
any other provision of this Deed of Trust, Beneficiary may not
exercise any rights or remedies with respect to a Non-Monetary
Default, unless and until Beneficiary gives Grantor written notice
of the Non-Monetary Default and provides Grantor a thirty (30) day
period of time in which to cure it (the "Cure Period"). If
Grantor takes action to cure the Non-Monetary Default but cannot
with reasonable diligence complete the cure within the Cure
Period, the Cure Period shall be extended for a reasonable time to
allow Grantor to cure it.
7.3 Notice and Cure for a Monetary Default. Notwithstanding any
other provision of this Deed of Trust, Beneficiary may not
exercise any rights or remedies with respect to a Monetary Default
unless and until Beneficiary gives Grantor written notice of the
Monetary Default and provides Grantor a ten (10) day period of
time in which to cure it.
VIII. RIGHTS OF BENEFICIARY UPON DEFAULT
8.1 Acceleration of Indebtedness. If an Event of Default is
continuing after Beneficiary has given Grantor written notice
thereof and the applicable time period for curing the Event of
Default has elapsed, Beneficiary, at its option, may accelerate
the maturity of the Indebtedness and declare the entire balance
thereof immediately due and payable. Beneficiary must give
Grantor written notice of its intent to accelerate the maturity of
the Indebtedness as well as written notice that the maturity of
the Indebtedness has been accelerated.
8.2 Limit on Beneficiary's Right to Foreclose. Notwithstanding
any language herein to the contrary, Beneficiary may not exercise
any right to foreclose (by judicial or non-judicial sale) the lien
granted hereby or the vendor's lien retained in the deed of even
date from Beneficiary to Grantor prior to December 31, 1995.
8.3 Judicial Proceedings. Upon the occurrence of an Event of
Default, or at any time thereafter, or upon the breach of any
covenant, term or condition herein contained, Beneficiary, at
Beneficiary's option, in addition to causing the Trustee to
exercise the power of sale hereafter given, may sue Grantor for
damages on, or arising out of said default or breach, or for
specific performance of any provision contained herein, or to
enforce any other appropriate legal or equitable right.
8.4 Foreclosure Sale.
(a) Mechanics of Sale. Upon acceleration by Beneficiary of the
Indebtedness, or at any time thereafter, the Trustee, when
requested to do so by the Beneficiary, shall sell the Mortgaged
Premises at public auction to the highest bidder for cash, between
the hours of 10:00 a.m. and 4:00 p.m. on the first Tuesday in any
month, but in any event within three (3) hours of the time
designated in the notice of sale at the place designated by the
Commissioner's Court of the county in which the Mortgaged
Premises, or any part thereof, is situated, after (i) advertising
the time, place and terms of sale and the description of the
Mortgaged Premises to be sold by posting, or causing to be posted,
at least twenty-one (21) consecutive days prior to the date of
said sale, written or printed notices thereof at the designated
area of the courthouse of the county in which the Mortgaged
Premises is situated, which notice may be posted by the Trustee
acting or by any person acting for him, and (ii) filing, at least
twenty-one (21) days preceding the date of sale, a copy of the
aforesaid notice in the office of the county clerk of the county
in which the sale is to be made. Beneficiary shall, at least
twenty-one (21) days preceding the date of sale, serve written or
printed notice of the proposed sale by certified mail on each
debtor obligated to pay the Indebtedness secured by this deed of
trust according to the records of Beneficiary by the deposit of
such notice, enclosed in a postpaid wrapper, properly addressed to
such debtor at debtor's most recent address as shown by the
records of Beneficiary in a post office or official depository
under the care and custody of the United States Postal Service.
The Trustee may postpone the sale of all or any portion of the
Mortgaged Premises at any time and from time to time without
notice or public announcement. Grantor hereby authorizes and
empowers the Trustee to sell the Mortgaged Premises, as a unit or
in lots or in parcels, as the Trustee shall deem expedient. If
any sale hereunder is not completed or is defective in the opinion
of Beneficiary, such sale shall not exhaust the power of sale
hereunder and Beneficiary shall have the right to have a
subsequent sale or sales to be made by the Trustee or by any
successor or substitute trustee.
(b) Grantor's Warranties After Sale. Grantor hereby authorizes
and empowers the Trustee to execute and deliver to the purchaser
or purchasers of any of the Mortgaged Premises sold in foreclosure
sales good and sufficient deeds of conveyance thereto by fee
simple title (except for the Permitted Encumbrances), with
covenants of general warranty, and the title of such purchaser or
purchasers when so made by the Trustee, Grantor binds itself to
warrant and forever defend (except for the Permitted Encumbrances)
.
(c) Application of Proceeds. The proceeds of any and all
foreclosure sales of the Mortgaged Premises shall be applied as
follows: (1) To the payment of all necessary actions and expenses
incident to the execution of said sale or sales, including a
reasonable fee to the Trustee, not exceeding five (5%) percent of
the gross proceeds of the sale or sales of the Mortgaged Premises,
(2) to the payment of the Indebtedness, to the amount of the
accrued interest and principal legally due thereon and all other
sums secured hereby and to the payment of attorneys' fees as in
the Bonds provided, (3) to any amounts required by law to be paid
before payment to Grantor, and (4) the remainder, if any, shall be
paid to Grantor or such other person or persons entitled thereto
by law. Payment of the purchase price to Trustee shall satisfy
the obligation of the purchaser at such sale thereof, and such
purchaser shall not be bound to look to the application thereof.
(d) Deemed Redemption of Bonds. In the event Beneficiary
forecloses the lien granted herein upon the Mortgaged Premises,
the Bonds will be deemed to have been paid, discharged, and
redeemed in full, and the debt evidenced thereby extinguished.
(e) Beneficiary Bid. Beneficiary may bid and being the highest
bidder thereof, become the purchaser of any or all of the
Mortgaged Premises at any trustee's or foreclosure sale hereunder
and shall have the right to credit the amount of the bid upon the
unpaid amount of the Indebtedness, in lieu of cash payment.
(f) Judicial Foreclosure. In the event a foreclosure sale is
commenced hereunder by Trustee, Beneficiary, at any time prior to
the completion of such sale, may direct such Trustee to abandon
the sale and may thereafter institute suit for foreclosure of any
of the liens and security interests created by this Deed of Trust.
If Beneficiary shall so elect to institute a suit for collection
of the Indebtedness or any part thereof and for foreclosure of the
liens and security interests evidenced hereby, it is agreed
further that Beneficiary, at any time before entry of final
judgment:, may cause such suit to be dismissed and thereafter
direct and require that Trustee proceed to sell the Mortgaged
Premises, or any part thereof, in accordance with the terms
hereof.
(g) Remedies Cumulative. Each and all of the rights, powers and
remedies hereunder are cumulative of and in addition to all other
rights, powers, and remedies herein contained or contained in any
other instrument or document evidencing, securing, or otherwise
relating to the Indebtedness or which Beneficiary may have under
all applicable law.
(h) Disaffirmance. The purchaser at any trustee's or foreclosure
sale hereunder may disaffirm any agreement relating to the
Mortgaged Premises made in violation of any provision of this Deed
of Trust, and may take immediate possession of the Mortgaged
Premises free from, and notwithstanding the terms of, such
agreement.
IX. SPECIAL CONDITIONS
This instrument is expressly made subject to the following
special conditions.
9.1 Successor Trustees. At the option of the Beneficiary,
without cause or notice, a successor or substitute trustee may be
appointed by any officer, agent or attorney-in-fact of the
Beneficiary without procuring the resignation of the former
Trustee and without any formality other than a designation in
writing of a successor or substitute trustee, who shall thereupon
become vested with and succeed to all the powers and duties given
to the Trustee herein named, the same as if the successor or
substitute trustee had been named original Trustee herein; and
such right to appoint a successor or substitute trustee shall
exist as often and whenever the Beneficiary desires. If
Beneficiary is a corporation, such appointment shall be presumed
to be executed with authority and shall be valid and sufficient
without proof of any action by the board of directors or any
executive officer of the corporation.
9.2 No Waiver or Election. The exercise of any option given
under the terms of this Agreement shall not be considered as a
waiver of the right to exercise any other option given herein, and
the filing of a suit to foreclose the lien granted by this
Agreement either on any matured portion of the Indebtedness or for
the whole of the Indebtedness, shall never be considered an
election so as to preclude foreclosure under power of sale after a
dismissal of the suit; nor shall the filing of the necessary
notices for foreclosure, as provided in this Agreement, preclude
the prosecution of a later suit thereon. Beneficiary may remedy
any default without waiving it and may waive any default without
waiving any prior or subsequent default.
9.3 Landlord-Tenant Relationship. Any sale of the Mortgaged
Premises under this Agreement shall, without f further notice,
create the relationship of landlord and tenant at sufferance
between the purchaser and Grantor, at a reasonable rental per day,
payable daily; upon failure to surrender possession thereof,
Grantor may be removed by a writ of possession upon suit by the
purchaser.
9.4 Usury. This Agreement, the Bonds and all other agreements
between Beneficiary and Grantor are hereby expressly limited so
that in no contingency or event whatsoever, whether through
acceleration of maturity of the Indebtedness or otherwise, shall
the amount paid or agreed to be paid to the Beneficiary for the
use, forbearance or detention of the money advanced or to be
advanced hereunder exceed the highest lawful rate permissible
under the laws of the State of Texas as applicable to this
transaction. In determining whether or not the rate of interest
exceeds the highest lawful rate, Grantor and Beneficiary intend
that all sums paid hereunder which are deemed interest for the
purposes of determining usury be prorated, allocated or spread in
the manner and over the longest period of time permitted under the
applicable laws of the State of Texas. If, from any circumstances
whatsoever, fulfillment of any provision hereof, of the Bonds or
of any other agreement securing the Indebtedness, at the time
performance of such provision shall be due, shall involve the
payment of interest in excess of that authorized by law, the
obligation to be fulfilled shall be reduced to the limit so
authorized by law, and if f from any circumstances, Beneficiary
hereof shall ever receive as interest an amount which would exceed
the highest lawful rate, the amount which would be excessive shall
be applied to the reduction of the unpaid principal balance of the
Indebtedness (and not to the payment of interest) or if the unpaid
balance hall been fully paid, the excess shall be refunded to
Grantor, and Beneficiary shall not be subject to any penalty
provided for the contracting for, charging or receiving interest
in excess of the maximum lawful rate regardless of when or the
circumstances under which such refund for application was made.
9.5 Enforceability. If any provision hereof is presently or at
any time becomes invalid or unenforceable, the other provisions
hereof shall remain in full force and effect, and the remaining
provisions hereof shall be construed in favor of the Trustee and
the Beneficiary to effectuate the provisions hereof.
9.6 Application of Payments. If the lien or liens created by
this Agreement are invalid or unenforceable as to any part of the
Indebtedness or if such lien or liens are invalid or unenforceable
as to any part of the Mortgaged Premises, the unsecured or
partially secured portion of the Indebtedness and all payments
made on the Indebtedness, whether voluntary or under foreclosure
or other enforcement action or procedures, shall be considered to
have been first paid on and applied to the full payment of that
portion of the Indebtedness which is not secured or not fully
secured by the lien or liens created herein.
9.7 Meaning of Particular Terms. Whenever used, the singular
number shall include the plural, the plural the singular, the use
of any gender shall include all genders. The words "Grantor" and
"Beneficiary" shall include their heirs, executors,
administrators, successors and assigns and the word "Trustee"
shall include his successors and substitute trustees.
9.8 Release or Extension-by Beneficiary. Beneficiary may release
any part of the Mortgaged Premises or any person liable for the
Indebtedness without in any way affecting the liens hereof on any
part of the Mortgaged Premises not expressly released and may
agree with any party with an interest in the Mortgaged Premises to
extend the time for payment of all or any part of the Indebtedness
or to waive the prompt and full performance of any term, condition
or covenant of any instrument evidencing or securing the
Indebtedness.
9.9 Partial Payments. Acceptance by, Beneficiary of any payment
of less than the amount due on the Indebtedness shall be deemed
acceptance on account only and the failure to pay the entire
amount then due shall be and continue to be a default; and at any
time thereafter and until the entire amount due on the
Indebtedness has been paid, Beneficiary shall be entitled to
exercise all rights conferred on it by the parties of this
Agreement upon the occurrence of an Event of Default.
9.10 Titles not to be Considered. All section, subsection,
paragraph or other titles contained in this Agreement are for
reference purposes only and this Agreement shall be construed
without reference to said titles.
9.11 Construction of Agreement. This Agreement may be construed
as a mortgage, deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, financing statement,
hypothecation or contract, or any one or more of them, in order
fully to effectuate the lien hereof and the purposes and
agreements herein set forth.
9.12 Subrogation. To the extent that any advance of funds by
Beneficiary is used to pay any indebtedness secured by an
outstanding lien, interest, charge, or e evidence against the
Mortgaged Premises or any part thereof, such funds having been
advanced by Beneficiary at Granter's request, shall constitute a
part of the Indebtedness and Beneficiary shall be surrogated to
any and all rights, powers, equities, liens, and security
interests owned or granted to any owner or holder of such
indebtedness, irrespective of whether said security interests,
liens, charges, or encumbrances are transferred to Beneficiary or
are released of record.
9.13 Other Acts. Grantor agrees that Grantor shall execute and
deliver such other and further documents and do and perform such
other acts as may be reasonably necessary and proper in
Beneficiary's judgment to carry out the intention of the parties
as herein expressed and to effect the purpose of this Deed of
Trust.
9.14 Binding Effect. The covenants herein contained shall inure
to the benefit of Beneficiary and Trustee, their respective heirs,
personal representatives, successors, and assigns, and shall be
binding upon the respective heirs, personal representatives,
successors and assigns of Grantor, but nothing in this paragraph
shall constitute an authorization for Grantor to sell, transfer,
lease, or in any way dispose of the Mortgaged Premises or any part
thereof if otherwise prohibited by any of the terms hereof.
9.15 Defense of Title. If, while this trust is in force, the
title of Trustee to the Mortgaged Premises (excluding the
Permitted Encumbrances), or any part thereof, or any interest
therein, shall be attacked directly or indirectly, Grantor, at its
cost and expense shall take all reasonable actions necessary and
proper to defend Trustee's title to (i) that portion of the
Mortgaged Premises (excluding the Permitted Encumbrances) conveyed
by Beneficiary to Grantor by deed executed contemporaneously with
this Deed of Trust (the "Todd Property"), but only with respect to
an alleged condition or defect arising after the date of this Deed
of Trust; and (ii) that portion of the mortgaged Premises
(excluding the Permitted Encumbrances) other than the Todd
Property, regardless of when the alleged condition or defect
arose.
X. PROHIBITION AGAINST TRANSFER
10.1 Transfers. Grantor shall not, without the prior written
consent of Beneficiary, transfer, convey or mortgage all or any
part of the Mortgaged Premises to any person or entity other than
the Board of Trustees of the Galveston Wharves, absolutely or as
security for a debt or other obligation, whether done by a direct
or an indirect method, or enter into any contractual arrangement
to do so, so long as the Indebtedness remains unpaid.
10.2 Continued Liability. In the event the ownership of the
Mortgaged Premises or any part thereof becomes vested in a person
other than Grantor, Beneficiary, at Beneficiary's option, may deal
with such successor or successors in interest to this Deed of
Trust, the Mortgaged Premises and to the Indebtedness in the same
manner and to the same extent as with Grantor, without in any way
vitiating or discharging Grantor's liability hereunder or upon the
Indebtedness. No sale of the Mortgaged Premises and no
forbearance on the part of Beneficiary, or extension of the time
for the payment of the Indebtedness, shall operate to release,
discharge, modify, change, or affect, either in whole or in part,
any liability of Grantor or of any other party liable for payment
of the Indebtedness.
XI. PURCHASE MONEY LIEN
The debt evidenced by the Bonds is in part payment of the purchase
price of a portion of the Mortgaged Premises; the debt is secured
both by this Deed of Trust and by a vendor's lien on the property,
which is expressly retained in a deed to Grantor of even date.
This Deed of Trust does not waive the vendor's lien, and the two
liens and the rights created by this instrument shall be
cumulative. Beneficiary may elect to foreclose under either of
the liens without waiving the other or may foreclose under both.
The deed is incorporated into this Deed of Trust.
EXECUTED this day of , 1993,
The City of Galveston, Texas
By:
Name:
Title:
THE STATE OF TEXAS
COUNTY OF GALVESTON
This instrument was acknowledged before me this day of
1993, by of The City of Galveston,
Texas, on behalf-of the City.
Notary Public, State of Texas
AFTER RECORDING RETURN TO:
Exhibit 22-1
Subsidiaries of Todd Shipyards Corporation
Todd Pacific Shipyards Corporation
Montana Valley Land Company
TSI Management, Inc.
